BILL NUMBER: AB 856	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Jeffries

                        FEBRUARY 17, 2011

   An act to add Section 17144.6 to the Revenue and Taxation Code,
relating to taxation, to take effect immediately, tax levy.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 856, as introduced, Jeffries. Taxation: cancellation of
indebtedness: mortgage debt forgiveness.
   The Personal Income Tax Law conforms to specified provisions of
the federal Mortgage Forgiveness Debt Relief Act of 2007, relating to
the exclusion of the discharge of qualified principal residence
indebtedness, as defined, from a taxpayer's income if that debt is
discharged after January 1, 2007, and before January 1, 2010, as
provided. The federal Emergency Economic Stabilization Act of 2008
extended the operation of those provisions to debt that is discharged
before January 1, 2013.
   This bill would provide further conformity to those federal acts,
as provided.
   This bill would take effect immediately as a tax levy.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 17144.6 is added to the Revenue and Taxation
Code, to read:
   17144.6.  (a) Section 108 of the Internal Revenue Code, relating
to income from discharge of indebtedness, as amended by Section 2 of
the Mortgage Forgiveness Debt Relief Act of 2007 (Public Law
110-142), and as amended by Section 303 of the Emergency Economic
Stabilization Act of 2008 (Public Law 110-343), shall apply, except
as otherwise provided.
   (b) This section shall apply to discharges of indebtedness
occurring on or after January 1, 2010.
  SEC. 2.  The Legislature finds and declares that the mortgage debt
tax relief allowed to taxpayers in connection with the discharge of
qualified principal residence indebtedness, as described in this act,
serves a public purpose and does not constitute a gift of public
funds within the meaning of Section 6 of Article XVI of the
California Constitution.
  SEC. 3.  This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.