BILL NUMBER: AB 50 ENROLLED
BILL TEXT
PASSED THE SENATE MARCH 24, 2011
PASSED THE ASSEMBLY MARCH 29, 2011
AMENDED IN SENATE MARCH 17, 2011
AMENDED IN ASSEMBLY FEBRUARY 18, 2011
AMENDED IN ASSEMBLY FEBRUARY 3, 2011
INTRODUCED BY Assembly Member Hill
DECEMBER 6, 2010
An act to amend Sections 17207.8 and 24347.10 of, and to add
Sections 17131.10 and 18154 to, the Revenue and Taxation Code,
relating to taxation, to take effect immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
AB 50, Hill. Income and corporation taxes: gross income:
exclusion: capital gains: exclusion: disaster loss carryovers: San
Bruno gas explosion.
The Personal Income Tax Law defines gross income as all income
from whatever source derived, unless specifically excluded. Existing
law, by reference to a specified federal statute, excludes from
income any amount received by an individual as a qualified disaster
relief payment, and defines qualified disaster for purposes of this
provision.
This bill would require the natural gas transmission line
explosion on September 9, 2010, in San Bruno, California, to be
treated as a qualified disaster for purposes of the above-described
provision.
The Personal Income Tax Law provides for a gain or loss upon the
disposition of property. Existing law, by reference to a specified
federal statute, excludes from the computation of gross income any
gain from the compulsory or involuntary conversion of property
damaged by a federally declared disaster, as provided.
This bill would require the natural gas transmission line
explosion on September 9, 2010, in San Bruno, California, to be
treated as a federally declared disaster for purposes of the
above-described provision.
The Personal Income Tax Law and the Corporation Tax Law provide
for the carryover to specified taxable years of specified losses
sustained in the County of San Mateo as a result of the explosion and
fire that occurred in September 2010.
This bill would change an obsolete statutory reference in these
laws.
This bill would take effect immediately as a tax levy.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 17131.10 is added to the Revenue and Taxation
Code, to read:
17131.10. Notwithstanding any other law, for purposes of this
part, the natural gas transmission line explosion on September 9,
2010, in San Bruno, California, shall be treated as a qualified
disaster within the meaning of Section 139 of the Internal Revenue
Code. This section shall apply to payments made on or after September
9, 2010.
SEC. 2. Section 17207.8 of the Revenue and Taxation Code is
amended to read:
17207.8. (a) An excess disaster loss, as defined in subdivision
(c), shall be carried to other taxable years as provided in
subdivision (b), with respect to losses sustained in the County of
San Mateo as a result of the explosion and fire that occurred in
September 2010.
(b) (1) In the case of any loss allowed under Section 165(c) of
the Internal Revenue Code, relating to limitation of losses of
individuals, any excess disaster loss shall be carried forward to
each of the five taxable years following the taxable year for which
the loss is claimed. However, if there is any excess disaster loss
remaining after the five-year period, then the applicable percentage,
as set forth in paragraph (1) of subdivision (b) of Section
17276.20, of that excess disaster loss shall be carried forward to
each of the next 10 taxable years.
(2) The entire amount of any excess disaster loss as defined in
subdivision (c) shall be carried to the earliest of the taxable years
to which, by reason of subdivision (b), the loss may be carried. The
portion of the loss which shall be carried to each of the other
taxable years shall be the excess, if any, of the amount of excess
disaster loss over the sum of the adjusted taxable income for each of
the prior taxable years to which that excess disaster loss is
carried.
(c) "Excess disaster loss" means a disaster loss computed pursuant
to Section 165 of the Internal Revenue Code which exceeds the
adjusted taxable income of the year of loss or, if the election under
Section 165(i) of the Internal Revenue Code is made, the adjusted
taxable income of the year preceding the loss.
(d) This section and Section 165(i) of the Internal Revenue Code
shall be applicable to any of the losses listed in subdivision (a)
sustained in any county or city in this state which was proclaimed by
the Governor to be in a state of disaster.
(e) Losses allowable under this section may not be taken into
account in computing a net operating loss deduction under Section 172
of the Internal Revenue Code.
(f) For purposes of this section, "adjusted taxable income" shall
be defined by Section 1212(b)(2)(B) of the Internal Revenue Code.
(g) For losses described in subdivision (a), the election under
Section 165(i) of the Internal Revenue Code may be made on a return
or amended return filed on or before the due date of the return
(determined with regard to extension) for the taxable year in which
the disaster occurred.
SEC. 3. Section 18154 is added to the Revenue and Taxation Code,
to read:
18154. Notwithstanding any other law, for purposes of this part,
the natural gas transmission line explosion on September 9, 2010, in
San Bruno, California, shall be treated as a federally declared
disaster within the meaning of Section 1033 of the Internal Revenue
Code.
SEC. 4. Section 24347.10 of the Revenue and Taxation Code is
amended to read:
24347.10. (a) An excess disaster loss, as defined in subdivision
(c), shall be carried to other taxable years as provided in
subdivision (b), with respect to losses sustained in the County of
San Mateo as a result of the explosion and fire that occurred in
September 2010.
(b) (1) In the case of any loss allowed under Section 165 of the
Internal Revenue Code, relating to losses, any excess disaster loss
shall be carried forward to each of the five taxable years following
the taxable year for which the loss is claimed. However, if there is
any excess disaster loss remaining after the five-year period, then
the applicable percentage, as set forth in paragraph (1) of
subdivision (b) of Section 24416.20, of that excess disaster loss
shall be carried forward to each of the next 10 taxable years.
(2) The entire amount of any excess disaster loss as defined in
subdivision (c) shall be carried to the earliest of the taxable years
to which, by reason of subdivision (b), the loss may be carried. The
portion of the loss which shall be carried to each of the other
taxable years shall be the excess, if any, of the amount of excess
disaster loss over the sum of the net income for each of the prior
taxable years to which that excess disaster loss is carried.
(c) "Excess disaster loss" means a disaster loss computed pursuant
to Section 165 of the Internal Revenue Code, which exceeds the net
income of the year of loss or, if the election under Section 165(i)
of the Internal Revenue Code is made, the net income of the year
preceding the loss.
(d) This section and Section 165(i) of the Internal Revenue Code
shall be applicable to any of the losses listed in subdivision (a)
sustained in any county or city in this state which was proclaimed by
the Governor to be in a state of disaster.
(e) Any corporation subject to Section 25101 or 25101.15 that has
disaster losses pursuant to this section shall determine the excess
disaster loss to be carried to other taxable years under the
principles specified in Section 25108 relating to net operating
losses.
(f) Losses allowable under this section may not be taken into
account in computing a net operating loss deduction under Section 172
of the Internal Revenue Code.
(g) For losses described in subdivision (a), the election under
Section 165(i) of the Internal Revenue Code may be made on a return
or amended return filed on or before the due date of the return
(determined with regard to extension) for the taxable year in which
the disaster occurred.
SEC. 5. This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.