BILL NUMBER: AB 1196	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 31, 2011

INTRODUCED BY   Assembly Member Allen

                        FEBRUARY 18, 2011

    An act relating to taxation.   An act to add
Section 17052.1 to the Revenue and Taxation Code, relating to
taxation, and making an appropriation therefor. 


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1196, as amended, Allen. Income taxes: credit: earned income.

   The Personal Income Tax Law authorizes various credits against the
taxes imposed by that law, including certain credits that are
allowed in modified conformity to credits allowed by federal income
tax laws.  
   This bill would, for taxable years beginning on or after January
1, 2012, allow a credit computed by multiplying the federal credit
amount, as defined, by 15% and subtracting therefrom the alternative
minimum tax, as specified. This bill would provide that the credit
would be refundable and would make an appropriation therefor. 

   The Personal Income Tax Law authorizes various credits against the
taxes imposed by that law.  
   This bill would state the intent of the Legislature to enact
legislation that would allow a refundable earned income tax credit in
modified conformity to federal income tax laws. 
   Vote:  majority   2/3  . Appropriation:
 no   yes  . Fiscal committee:  no
  yes  . State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 17052.1 is added to the 
 Revenue and Taxation Code   , to read:  
   17052.1.  (a) For each taxable year beginning on or after January
1, 2012, there shall be allowed as a credit against the "net tax," as
defined by Section 17039, an amount determined under subdivision
(b).
   (b) Except as otherwise provided in this section, the amount of
the credit allowed under subdivision (a) shall be computed by
multiplying the "federal credit amount," as defined in subdivision
(c), by 15 percent and subtracting therefrom the amount of tax
imposed by Section 17062, relating to the alternative minimum tax, if
any, for the same taxable year.
   (c) For purposes of this section, "federal credit amount" means
the amount determined under Section 32 of the Internal Revenue Code
as in effect on January 1, 2011.
   (d) A credit shall not be allowed under this section to any of the
following:
   (1) Any person who is treated as a nonresident for any portion of
the taxable year.
   (2) Any person who is married, within the meaning of Section
17021.5, and files a separate return for the taxable year.
   (e) If the amount allowable as a credit under this section exceeds
the tax liability computed under this part, the excess shall be
credited against other amounts due, if any, and the balance, if any,
shall be refunded to the taxpayer. Notwithstanding Section 13340 of
the Government Code, and without regard to fiscal year, there is
hereby continuously appropriated from the General Fund those amounts
necessary to make the refunds pursuant to this subdivisions.
   (f) Notwithstanding any other state law, and to the extent
permitted by federal law, amounts refunded pursuant to subdivision
(e) shall be treated the same as the federal credit defined in
subdivision (c) for the purpose of determining eligibility to receive
benefits under Division 9 (commencing with Section 10000) of the
Welfare and Institutions Code or amounts of those benefits. 

  SECTION 1.    It is the intent of the Legislature
that would allow a refundable earned income tax credit in modified
conformity to federal income tax laws.