Amended in Assembly April 21, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 17

Introduced by Assembly Member Bonilla

December 1, 2014

An act to add and repeal Section 17053 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

LEGISLATIVE COUNSEL’S DIGEST

AB 17, as amended, Bonilla. Personal income begin delete tax: end delete begin insert taxes: end insert credit: qualified tuition program.

The Personal Income Tax Law begin delete and the Corporation Tax Law allow end delete begin insert allows end insert various credits against the taxes imposed by begin delete those laws. end delete begin insert that law. end insert

This bill would, for taxable years beginning on or after January 1, 2016, and before January 1, 2021, allow a credit begin insert under the Personal Income Tax Law end insert in begin delete the end delete begin insert an end insert amount begin delete of end delete begin insert equal to end insert 20% of the monetary contributions made to begin delete a end delete begin insert one or more end insert qualified tuition begin delete program end delete begin insert programs end insert , as defined, by a qualified taxpayer, as defined, begin insert during the taxable year, end insert not to exceed $500. This bill would provide begin delete for the payment of a credit amount in excess of tax liability upon an appropriation by the Legislature for that purpose. end delete begin insert that the credit amount in excess of tax liability is refundable in those years in which an appropriation for that purpose is made by the Legislature. end insert

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 17053 is added to the Revenue and
Taxation Code, to read:

17053.  

(a) (1) For begin delete taxable years end delete begin insert each taxable year end insert beginning
on or after January 1, 2016, and before January 1, 2021, there shall
be allowed to a qualified taxpayer a credit against the “net tax,”
as defined in Section 17039, in an amount as determined by
paragraph (2).

(2) The credit amount allowed pursuant to this section shall be
the lesser of the following:

(A) Twenty percent of the monetary contributions made by a
qualified taxpayer to begin delete a qualified tuition program that the qualified
taxpayer owns end delete begin insert one or more qualified tuition programs end insert during the
taxable year.

(B) Five hundred dollars ($500).

(b) For the purposes of this section:

(1) “Nonqualified withdrawal” means any payment or
distribution from a qualified tuition program that is subject to
additional tax pursuant to Section 529(c)(6) of the Internal Revenue
Code, relating to additional tax.

(2) “Qualified taxpayer” means an individual who, on behalf
of a beneficiary, contributes money to a qualified tuition program
for which the individual is the account owner and has one of the
following annual adjusted gross incomes:

begin delete

(A) If the qualified taxpayer’s filing status is single, married
filing separately, or domestic registered partner filing separately,
one hundred thousand dollars ($100,000) or less.

(B) If the qualified taxpayer files as a head of household,
surviving spouse, as defined in Section 17046, married filing
jointly, or domestic partner filing jointly, two hundred thousand
dollars ($200,000) or less.

end delete begin insert

(A) In the case of a single individual or married individual filing
a separate return, one hundred thousand dollars ($100,000) or
less.

end insert begin insert

(B) In the case of a head of household or surviving spouse, as
defined in Section 17046, or a married couple filing a joint return,
two hundred thousand dollars ($200,000) or less.

end insert

(3) “Qualified tuition program” means a qualified tuition
program, as defined in Section 529 of the Internal Revenue Code.

begin delete

(c) In the case of married taxpayers or registered domestic
partners who file separate returns, the credit may be taken by either
spouse or registered domestic partner or divided equally between
the spouses or registered domestic partners.

end delete begin delete

(d)

end delete

begin insert (c) end insert  When a qualified taxpayer receives a nonqualified
withdrawal, in addition to any tax imposed under this part, an
additional tax shall be imposed in an amount that is the lesser of
10 percent of that nonqualified withdrawal or the total amount of
credit allowed under subdivision (a) for the taxable year and all
prior taxable years in which the qualified taxpayer was allowed a
credit pursuant to this section.

begin delete

(e)

end delete

begin insert (d) end insert  That portion of any credit allowed under this section that is
in excess of tax liability shall begin insert be credited against other amounts
due, if any, and the balance, if any end insert , upon an appropriation by the
Legislature, be begin delete paid end delete begin insert refunded end insert to the qualified taxpayer.

begin delete

(f)

end delete

begin insert (e) end insert  (1) The Franchise Tax Board may prescribe rules, guidelines,
or procedures necessary or appropriate to carry out the purposes
of this section.

(2) Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code does not apply to
any standard, criterion, procedure, determination, rule, notice, or
guideline established or issued by the Franchise Tax Board
pursuant to this section.

begin delete

(g)

end delete

begin insert (f) end insert  This section shall remain in effect only until December 1,
2021, and as of that date is repealed.

SEC. 2.  

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