BILL NUMBER: AB 1736	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 10, 2016

INTRODUCED BY   Assembly Member Steinorth
    (   Coauthors:   Assembly Members 
 Achadjian,   Travis Allen,   Baker,  
Brough,   Brown,   Chang,   Dahle, 
 Beth Gaines,   Gallagher,   Hadley,  
Harper,   Jones,   Kim,   Lackey, 
 Low,   Maienschein,   Mathis,  
Mayes,   Obernolte,   Olsen,   Patterson,
  and Waldron   ) 
    (  Coauthors:   Senators  
Anderson,   Cannella,   Fuller,   Glazer,
  Morrell,  Nguyen,   Runner,  
and Vidak   ) 

                        FEBRUARY 1, 2016

   An act to add Sections 17141.5 and 17204.5 to the Revenue and
Taxation Code, relating to taxation, to take effect immediately, tax
levy.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1736, as amended, Steinorth. Personal income taxes: deduction:
 individual  homeownership savings accounts.
   The Personal Income Tax Law, in modified conformity with federal
income tax laws allows various exclusions from gross income, and
allows various deductions in computing the income that is subject to
the taxes imposed by that law, including miscellaneous itemized
deductions that are allowed only to the extent that the aggregate
amount of those deductions exceed 2% of adjusted gross income.
   This bill, on and after January 1, 2017, would allow a deduction,
not to exceed specified amounts, of the amount contributed in any
taxable year to  an individual   a 
homeownership savings account, and, would exclude from gross income
any income earned on the moneys contributed to  an individual
  a  homeownership savings account. The bill would
provide that a qualified taxpayer may withdraw amounts from 
an individual   a  homeownership savings account
to pay for qualified  individual  homeownership
savings expenses, as defined, and would provide that any amount
withdrawn from that account that is not used for these expenses would
be included as income for that taxpayer. The bill would define
various terms for its purposes.
   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 17141.5 is added to the Revenue and Taxation
Code, to read:
   17141.5.  For each taxable year beginning on or after January 1,
2017, gross income does not include, under the same conditions as
provided in Section 408 of the Internal Revenue Code, relating to
individual retirement accounts, any income accruing during the
taxable year to  an individual   a 
homeownership savings account as defined in Section 17204.5.
  SEC. 2.  Section 17204.5 is added to the Revenue and Taxation Code,
to read:
   17204.5.  (a) For each taxable year beginning on or after January
1, 2017, there shall be allowed as a deduction an amount equal to the
amount contributed by a qualified taxpayer during the taxable year
to  an individual   a  homeownership
savings account, not to exceed the amounts specified in subdivision
(b).
   (b) The deduction allowed under subdivision (a) shall not exceed
the following amounts:
   (1) Twenty thousand dollars ($20,000) for  a qualified
taxpayer who is   qualified taxpayers who are 
married filing a joint return,  a  head of household, and
surviving spouses, as defined in Section 17046.
   (2) Ten thousand dollars ($10,000) in the case of a qualified
taxpayer filing a return other than as described in paragraph (1).
   (c) Any amount withdrawn from  an individual 
 a  homeownership savings account shall be included in the
income of the payee or distributee for the taxable year in which the
payment or distribution is made, unless the payment or distribution
is used to pay for the  individual  homeownership
savings expenses of a qualified taxpayer who established the account.

   (d) For purposes of this section:
   (1)  "Individual homeownership  
"Homeownership   savings account" means a trust that
meets all of the following requirements:
   (A) Is designated as  an individual   a 
homeownership savings account by the trustee.
   (B) Is established for the exclusive benefit of any qualified
taxpayer establishing the account where the written governing
instrument creating the account provides for the following:
   (i) All contributions to the account are required to be in cash.
   (ii) The account is established to pay, pursuant to the
requirements and limitations of this section, for the qualified
 individual  homeownership savings expenses of a
qualified taxpayer establishing the account.
   (C) Is, except as otherwise required or authorized by this
section, subject to the same requirements and limitations as an
individual retirement account established under Section 408 of the
Internal Revenue Code,  relating to individual retirement
accounts,  and any regulations adopted thereunder.
   (D) Is the only  individual  homeownership
savings account established by the qualified taxpayer.
   (2) "Qualified  individual  homeownership
development expenses" means expenses, including a down payment or
 mortgage payment,   closing costs,  paid
or incurred in connection with the purchase of a qualified taxpayer's
principal residence in California for use by that taxpayer who
established the  individual  homeownership savings
account.
   (3) "Qualified taxpayer" means any individual, or individual's
spouse, who had no present ownership interest in a principal
residence during the  preceeding   preceding
 three-year period ending on the date of the purchase of the
principal residence subject to the contribution allowed by this
section.
   (4) "Trustee" shall have the same meaning as those terms have
under Section 408 of the Internal Revenue Code,  relating to
individual retirement accounts,  and any regulations adopted
thereunder.
  SEC. 3.  This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.