BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 2332|
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CONSENT
Bill No: AB 2332
Author: Monning (D)
Amended: 4/12/12 in Assembly
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 9-0, 6/28/12
AYES: Wolk, Dutton, DeSaulnier, Fuller, Hernandez, Kehoe,
La Malfa, Liu, Yee
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 70-0, 5/25/12 (Consent) - See last page
for vote
SUBJECT : Income taxes: deductions: disaster losses:
County of Santa
Cruz
SOURCE : Author
DIGEST : This bill provides that any losses sustained in
the County of Santa Cruz as a result of the severe storms
that occurred in March 2011 (2011 Storms) may, at the
taxpayers election, be taken into account for the taxable
year immediately preceding the taxable year in which the
disaster occurred.
ANALYSIS :
Existing law:
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1. Allows individual and corporate taxpayers to utilize net
operating losses (NOLs) to offset their tax liabilities.
For NOLs incurred in taxable years beginning on or
after January 1, 2008, existing law provides a carryover
period of 20 years.
2. Allows NOLs attributable to taxable years beginning on
or after
January 1, 2013, to be carrybacks to each of the preceding
two taxable years, as provided.
3. Disallows the deduction for NOLs and NOL carryovers in
the 2008 to 2011 taxable years for specified taxpayers.
This bill:
1. Provides that Internal Revenue Code (IRC) Section 165(i)
shall apply to any losses sustained in the County of
Santa Cruz as a result of the 2011 Storms.
2. Provides that the election under IRC Section 165(i) may
be made on a return or amended return filed on or before
the due date of the return, determined with regard to
extension, for the taxable year in which the disaster
occurred.
3. Provides that, unless otherwise specified, any law that
suspends, defers, reduces, or otherwise diminishes the
deduction of an NOL shall not apply to a NOL
attributable to losses described above.
4. Takes immediate effect as a tax levy.
Comments
According to the author, "Between March 15 and 27, 2011,
California was struck by a storm that brought snow, heavy
rain, high winds, flooding and flow of debris and mud,
destroying and damaging public facilities and private
property throughout the state. Statewide there was more
than $50 million in damages and Santa Cruz County sustained
$15 million in damage, 30 percent of the statewide total.
In April 2011, Governor Brown issued an Emergency
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Proclamation regarding this and requested the federal
government to declare the event a major disaster. A
Presidential Declaration of a Major Disaster by Federal
Emergency Management Agency (FEMA) would pay for 75% of the
recovery costs, offsetting the recovery costs incurred by
the effected communities and local governments that are
struggling to address the damage with extremely limited
fiscal resources. Unfortunately, California's request to
FEMA that the March 2011 storm be declared a major disaster
was denied, along with the state's subsequent appeal of
this decision. In addition, because the Governor did not
invoke the California Disaster Assistance Act (CDAA), state
financial assistance was not made available to counties for
disaster recovery and economy recovery efforts. The
residents of Santa Cruz County have been struggling to make
repairs and recover from the severe March 2011 storm and
this measure is intended to provide a small amount of
financial relief."
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/6/12)
County of Santa Cruz
ASSEMBLY FLOOR : 70-0, 5/25/12
AYES: Achadjian, Alejo, Allen, Ammiano, Beall, Block,
Blumenfield, Bonilla, Bradford, Brownley, Buchanan,
Butler, Charles Calderon, Campos, Carter, Cedillo,
Chesbro, Conway, Cook, Davis, Dickinson, Donnelly, Eng,
Feuer, Fong, Furutani, Beth Gaines, Galgiani, Garrick,
Gatto, Gordon, Gorell, Hagman, Halderman, Harkey,
Hayashi, Roger Hern�ndez, Hill, Huber, Hueso, Huffman,
Jeffries, Jones, Lara, Logue, Bonnie Lowenthal, Mansoor,
Mendoza, Miller, Mitchell, Monning, Morrell, Nestande,
Nielsen, Norby, Olsen, Pan, V. Manuel P�rez, Portantino,
Skinner, Smyth, Solorio, Swanson, Torres, Valadao,
Wagner, Wieckowski, Williams, Yamada, John A. P�rez
NO VOTE RECORDED: Atkins, Bill Berryhill, Fletcher,
Fuentes, Grove, Hall, Knight, Ma, Perea, Silva
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AGB:m 8/7/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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