BILL NUMBER: SB 1148	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 25, 2016

INTRODUCED BY   Senator Stone

                        FEBRUARY 18, 2016

   An act to  amend Section 17072 of, and to add Section
17206.2 to,   repeal and add Section 17204.7 of 
the Revenue and Taxation Code, relating to taxation, to take effect
immediately, tax levy.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 1148, as amended, Stone. Personal income taxes: deductions:
 education expenses.   qualified tuition. 
   The Personal Income Tax Law,  in modified conformity with
federal income tax laws, allows various deductions from gross income
in computing adjusted gross income under that law, including
deductions for payments to individual retirement accounts, alimony
payments, and interest on educational loans.   does not
conform to a provision of federal income tax law that for taxable
years beginning before January 1, 2015, allows a deduction from gross
income for the taxable year in an amount equal to qualifying tuition
and related expenses paid by the taxpayer during the taxable year,
not to exceed $4,000, for enrollment or attendance by the taxpayer,
the taxpayer's spouse, or the taxpayer's dependent at   any
accredited postsecondary institution. That law provides for a
phaseout at certain modified adjusted gross income levels. 
   This bill, for taxable years beginning on or after January 1,
2016,  would allow a deduction in computing adjusted gross
income for those amounts paid or incurred by a qualified taxpayer, as
defined, during the taxable year for qualified education expenses,
as provided.   and before January 1, 2021, would conform
to that federal law with modifications, including modifications to
the amount of the deduction and the phaseout. 
   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 17204.7 of the  
Revenue and Taxation Code   is repealed.  
   17204.7.  Section 222 of the Internal Revenue Code, relating to
qualified tuition and related expenses, shall not apply.
   SEC. 2.    Section 17204.7 is added to the  
Revenue and Taxation Code   , to read:  
   17204.7.  (a) For taxable years beginning on or after January 1,
2016, and before January 1, 2021, Section 222 of the Internal Revenue
Code, relating to qualified tuition and related expenses, is
modified as follows:
   (1) The term "Secretary" shall be replaced by the term "Franchise
Tax Board."
   (2) The applicable dollar limit shall be determined as follows:
   (A) In the case of a taxpayer whose adjusted gross income for the
taxable year does not exceed one hundred twenty-five thousand dollars
($125,000) or two hundred fifty thousand dollars ($250,000) in the
case of a joint return, ten thousand dollars ($10,000) per
individual.
   (B) In the case of any other taxpayer, zero.
   (C) For taxable years beginning on or after January 1, 2017, the
amounts specified in subparagraph (A) shall be recomputed annually in
the same manner as the recomputation of income tax brackets under
subdivision (h) of Section 17041.
   (3) Section 222(e) of the Internal Revenue Code, relating to
termination, shall not apply.
   (b) This section shall remain in effect only until December 1,
2021, and as of that date is repealed. 
   SEC. 3.   This act provides for a tax levy within the
meaning of Article IV of the California Constitution and shall go
into immediate effect.  
  SECTION 1.    Section 17072 of the Revenue and
Taxation Code is amended to read:
   17072.  (a) Section 62 of the Internal Revenue Code, relating to
adjusted gross income defined, shall apply, except as otherwise
provided.
   (b) Section 62(a)(2)(D) of the Internal Revenue Code, relating to
certain expenses of elementary and secondary school teachers, shall
not apply.
   (c) Section 62(a)(21) of the Internal Revenue Code, relating to
attorneys fees relating to awards to whistleblowers, shall not apply.

   (d) Section 62(a) of the Internal Revenue Code is modified to
provide that the deduction under Section 17206.2 shall be allowed in
determining adjusted gross income.  
  SEC. 2.   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,
2016, there shall be allowed as a deduction the amount paid or
incurred by a qualified taxpayer during the taxable year for
qualified education expenses at a public four-year university or
community college.
   (b) For the purposes of this section, both of the following apply:

   (1) "Qualified education expenses" means both of the following:
   (A) Costs of attendance that include, but are not limited to,
payments for books, supplies, equipment, tuition, and fees, and
similar payments.
   (B) Payments of principal of a qualified education loan, as
defined in Section 221 of the Internal Revenue Code, relating to
interest on education loans.
   (2) "Qualified taxpayer" means an individual who pays or incurs
qualified education expenses during the taxable year for any natural
person including, but not limited to, the taxpayer, the taxpayer's
spouse, or any dependent of the taxpayer and who has a federal
adjusted gross income of two hundred fifty thousand dollars
($250,000) or less during the taxable year in which those expenses
are paid or incurred.
   (c) For each taxable year beginning on or after January 1, 2017,
the Franchise Tax Board shall recompute the federal adjusted gross
income limitation described in paragraph (2) of subdivision (b). That
computation shall be made in the same manner as described in
subdivision (h) of Section 17041.  
  SEC. 3.    This act provides for a tax levy within
the meaning of Article IV of the Constitution and shall go into
immediate effect.