BILL NUMBER: AB 1796	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 10, 2014

INTRODUCED BY   Assembly Member Linder
    (   Coauthor:   Assembly Member  
Perea   ) 

                        FEBRUARY 18, 2014

    An act to add Section 17206.2 to the Revenue and Taxation
Code, relating to taxation, to take effect immediately, tax levy.
  An act to add Section 19304 to the Revenue and
Taxation Code, relating to taxation. 


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1796, as amended, Linder.  Tax deductions: 529 college
savings plans.   Franchise Tax Board: refunds: direct
deposit: taxpayer form instructions.  
   Existing law requires the Franchise Tax Board to make a refund to
a taxpayer of any overpayment of taxes. Existing law requires the
Franchise Tax Board to revise returns to allow a taxpayer to
designate more than one account for direct deposit of a refund. 

   The Golden State Scholarshare College Savings Trust, California's
529 College Savings Plan, is administered by the Scholarshare
Investment Board. Existing law authorizes the trust to enter into
agreements with participants on behalf of beneficiaries subject to
specified terms for higher education expenses.  
   This bill would require the Franchise Tax Board to revise taxpayer
form instructions for tax returns to include information about the
ability of a taxpayer to directly deposit a portion of a refund into
the Golden State Scholarshare College Savings Trust, as defined. This
bill would require the Scholarshare Investment Board to provide the
Franchise Tax Board with a description of that trust program before a
date specified by the Franchise Tax Board, and that the revisions be
completed in the most cost-effective manner.  
   The Personal Income Tax Law, in modified conformity with federal
income tax laws, allows various deductions in computing the income
that is subject to the taxes imposed by that law.  
   This bill, for taxable years beginning on or after January 1,
2014, would allow as a deduction under that law the lesser of (1) the
amount contributed by a qualified taxpayer, as defined, to a
qualified tuition program, as provided, or (2) $3,000 in the case of
a taxpayer who is single or is a married individual filing a separate
return, and $6,000 in the case of a taxpayer who is a married
individual filing a joint return or an individual filing a head of
household return.  
   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 19304 is added to the 
 Revenue and Taxation Code   , to read:  
   19304.  (a) The Franchise Tax Board shall revise taxpayer form
instructions, for returns required to be filed, pursuant to Article 1
(commencing with Section 18501) of Chapter 2, to include information
about the ability of a taxpayer to directly deposit a portion of the
refund into the Golden State Scholarshare College Savings Trust.
   (b) The Scholarshare Investment Board shall provide the Franchise
Tax Board with a description of the Golden State Scholarshare College
Savings Trust on or before a specified date provided by the
Franchise Tax Board. The length of the description shall be five
lines or less.
   (c) The Franchise Tax Board shall revise the taxpayer form
instructions in the most cost-effective manner.
   (d) For purposes of this section, "Golden State Scholarshare
College Savings Trust" has the meaning set forth in subdivision (e)
of Section 69980 of the Education Code.  
  SECTION 1.    Section 17206.2 is added to the
Revenue and Taxation Code, to read:
   17206.2.  (a) For taxable years beginning on or after January 1,
2014, there shall be allowed as a deduction the lesser of the amount
contributed by a qualified taxpayer during the taxable year to a
qualified tuition program under Section 529 of the Internal Revenue
Code, as modified by Section 17140.3, or the applicable amount
determined under paragraph (2) of subdivision (b).
   (b) For purposes of this section, all of the following apply:
   (1) Section 67(b) of the Internal Revenue Code, relating to the
definition of miscellaneous itemized deductions, is modified to
additionally provide that the deduction allowed under this section is
an itemized deduction that is not subject to the 2 percent floor on
itemized deductions under Section 67(a) of the Internal Revenue Code.

   (2) The amount allowed as a deduction under subdivision (a) shall
not exceed the following:
   (A) In the case of a taxpayer who is single or is a married
individual filing a separate return, three thousand dollars ($3,000).

   (B) In the case of a taxpayer who is a married individual filing a
joint return or an individual filing a head of household return, six
thousand dollars ($6,000).
   (3) "Qualified taxpayer" means an individual who, on behalf of a
beneficiary, contributes money to a qualified tuition program and
meets all of the other applicable requirements of Section 529 of the
Internal Revenue Code, as modified by Section 17140.3.
   (c) The deduction under subdivision (a) shall be taken with
respect to the taxable year in which the contribution is made and
shall be limited to the applicable dollar amount determined under
paragraph (2) of subdivision (b).  
  SEC. 2.    This act provides for a tax levy within
the meaning of Article IV of the Constitution and shall go into
immediate effect.