BILL NUMBER: SB 339 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY FEBRUARY 18, 2014
AMENDED IN ASSEMBLY FEBRUARY 11, 2014
AMENDED IN ASSEMBLY JUNE 24, 2013
AMENDED IN ASSEMBLY JUNE 12, 2013
AMENDED IN SENATE MAY 14, 2013
AMENDED IN SENATE APRIL 9, 2013
INTRODUCED BY Senator Cannella
(Principal coauthor: Assembly Member Gray)
FEBRUARY 20, 2013
An act to amend Section 17144.5 of the Revenue and Taxation Code,
relating to taxation, and making an appropriation therefor.
therefor, and declaring the urgency thereof, to take
effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 339, as amended, Cannella. Taxation: cancellation of
indebtedness: mortgage debt forgiveness.
The Personal Income Tax Law provides for modified conformity to
specified provisions of federal income tax law relating to the
exclusion of the discharge of qualified principal residence
indebtedness, as defined, from an individual's income if that debt is
discharged after January 1, 2007, and before January 1, 2013, as
provided. The federal American Taxpayer Relief Act of 2012 extended
the operation of those provisions to qualified principal residence
indebtedness that is discharged before January 1, 2014.
This bill would conform to the federal extension and make
legislative findings and declarations regarding the public purpose
served by the bill. The bill would also make a continuous
appropriation from the General Fund to the Franchise Tax Board in
those amounts necessary to make payments to taxpayers who have
included in income and paid tax on qualified principal residence
indebtedness that was discharged on and after January 1, 2013, and
before January 1, 2014.
This bill would declare that it is to take effect immediately as
an urgency statute.
Vote: 2/3. Appropriation: yes. 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 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).
(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 by Section 202 of the American Taxpayer
Relief Act of 2012 (Public Law 112-240) to Section 108 of the
Internal Revenue Code shall apply.
SEC. 2. The amendments made by this act that conform to the
amendments made by Section 202 of the American Taxpayer Relief Act of
2012 (Public Law 112-240) to Section 108 of the Internal Revenue
Code, apply to qualified principal residence indebtedness that is
discharged on and after January 1, 2013, and before January 1, 2014.
The Legislature finds and declares that the amendments made
by this act and the retroactive application contained in the
preceding sentence are necessary for the public purpose of conforming
state law to the amendments to the Internal Revenue Code as made by
the American Taxpayer Relief Act of 2012 (Public Law 112-240)
and , thereby prevent
preventing undue hardship to taxpayers whose
qualified principal residence indebtedness was discharged on and
after January 1, 2013, and before January 1, 2014 , and do not
constitute a gift of public funds within the meaning of Section 6 of
Article XVI of the California Constitution .
SEC. 3. Notwithstanding Section 13340 of the Government Code, and
without regard to fiscal year, there is hereby continuously
appropriated from the General Fund to the Franchise Tax Board those
amounts necessary to make the payments required by this act to
taxpayers who have included amounts in gross income by reason of the
discharge of principal residence indebtedness that was discharged on
and after January 1, 2013, and before January 1, 2014.
SEC. 4. 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 that this act take effect
immediately.