Amended in Senate May 28, 2013

Amended in Senate May 28, 2013

Amended in Senate March 6, 2013

Senate Bill No. 30

Introduced by Senator Calderon

(Principal coauthor: Senator Anderson)

(Coauthors: Senators Block, Correa, Evans, Fuller, Lieu, and Price)

(Coauthor: Assembly Member Harkey)

December 3, 2012

An act to amend Section 17144.5 of the Revenue and Taxation Code, relating to taxation, begin delete and declaring the urgency thereof, end delete to take effect immediately begin insert , tax levy end insert .

LEGISLATIVE COUNSEL’S DIGEST

SB 30, as amended, Calderon. 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 extend the operation of the exclusion of the discharge of qualified principal residence indebtedness to debt that is discharged on or after January 1, 2013, and before January 1, 2014. begin delete The bill would become operative only if SB 391 is enacted and takes effect. end delete

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This bill would declare that it is to take effect immediately as an urgency statute.

end delete begin insert

This bill would take effect immediately as a tax levy.

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Vote:  begin delete ²⁄₃ end delete begin insert majority end insert . Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 17144.5 of the Revenue and Taxation
Code is amended to read:

17144.5.  

(a) Section 108(a)(1)(E) of the Internal Revenue
Code is modified as follows:

(1) To provide that the amount excluded from gross income
shall not exceed $500,000 ($250,000 in the case of a married
individual filing a separate return).

(2) By substituting the phrase “January 1, 2014” for the phrase
“January 1, 2013” contained therein.

(b) Section 108(h)(2) of the Internal Revenue Code, is modified
by substituting the phrase “(within the meaning of section
163(h)(3)(B), applied by substituting ‘$800,000 ($400,000’ for
‘$1,000,000 ($500,000’ in clause (ii) thereof)” for the phrase
“(within the meaning of section 163(h)(3)(B), applied by
substituting ‘$2,000,000 ($1,000,000’ for ‘$1,000,000 ($500,000’
in clause (ii) thereof)” contained therein.

(c) This section shall apply to discharges of indebtedness
occurring on or after January 1, 2007, and, notwithstanding any
other law to the contrary, no penalties or interest shall be due with
respect to the discharge of qualified principal residence
indebtedness during the 2007 or 2009 taxable year regardless of
whether or not the taxpayer reports the discharge on his or her
return for the 2007 or 2009 taxable year.

(d) The amendments made to this section by the act adding this
subdivision shall apply to discharges occurring on or after January
1, 2013.

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SEC. 2.  

This act shall become operative only if Senate Bill
391 of the 2013-14 Regular Session is enacted and takes effect.

end delete

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SEC. 3.  

This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:

In order to provide tax relief to distressed homeowners at the
earliest possible time, it is necessary for this act to take effect
immediately.

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begin insert SEC. 2. end insert   

end insert begin insert

This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.

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