BILL NUMBER: SB 1544	ENROLLED
	BILL TEXT

	PASSED THE SENATE  MAY 25, 2012
	PASSED THE ASSEMBLY  AUGUST 16, 2012
	AMENDED IN SENATE  MAY 2, 2012

INTRODUCED BY   Senator Hernandez

                        FEBRUARY 24, 2012

   An act to add Sections 17207.12 and 24347.12 to the Revenue and
Taxation Code, relating to taxation, to take effect immediately, tax
levy.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 1544, Hernandez. Income taxes: disaster losses: Counties of Los
Angeles and San Bernardino.
   The Personal Income Tax Law and the Corporation Tax Law allow
individual and corporate taxpayers to utilize net operating losses
and carryovers and carrybacks of those losses for purposes of
offsetting their individual and corporate tax liabilities. Existing
law, for net operating losses incurred in taxable years beginning on
or after January 1, 2008, provides a carryover period of 20 years and
allows net operating losses attributable to taxable years beginning
on or after January 1, 2013, to be carrybacks to each of the
preceding 2 taxable years, as provided. Existing law disallows the
deduction for net operating losses and net operating loss carryovers
in the 2008 to 2011, inclusive, taxable years for a taxpayer with
over a specified amount of business income and extends the carryover
period for those net operating losses, thus allowing the taxpayer to
have the same number of years to utilize the deduction as the
taxpayer would have had if the disallowance for those taxable years
had not occurred.
   Existing law disallows net operating loss carrybacks for any net
operating losses attributable to taxable years beginning before
January 1, 2013, but would allow net operating losses attributable to
taxable years beginning on or after January 1, 2013, to be
carrybacks to each of the preceding 2 taxable years, as provided.
   This bill would conform to a specified section of the Internal
Revenue Code regarding disaster losses, which would authorize a
taxpayer to make an election to claim a deduction for any losses
sustained in the Counties of Los Angeles and San Bernardino as a
result of the severe winds that occurred in November 2011 on the tax
return for the preceding year, as provided. This bill would provide
that any provision of law that suspends, defers, reduces, or
otherwise diminishes the deduction of a net operating loss does not
apply to a net operating loss attributable to those severe winds that
occurred in November 2011 in the Counties of Los Angeles and San
Bernardino.
   This bill would make a legislative finding and declaration
relating to the statewide public purpose served by the bill.
   This bill would take effect immediately as a tax levy.


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

  SECTION 1.  Section 17207.12 is added to the Revenue and Taxation
Code, to read:
   17207.12.  (a) Section 165(i) of the Internal Revenue Code shall
be applicable to any losses sustained in the Counties of Los Angeles
and San Bernardino as a result of the severe winds that occurred in
November 2011.
   (b) For losses described in subdivision (a), the election under
Section 165(i) of the Internal Revenue Code 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.
   (c) Unless specifically provided otherwise, any law that suspends,
defers, reduces, or otherwise diminishes the deduction of a net
operating loss shall not apply to a net operating loss attributable
to the loss described in subdivision (a).
  SEC. 2.  Section 24347.12 is added to the Revenue and Taxation
Code, to read:
   24347.12.  (a) Section 165(i) of the Internal Revenue Code shall
be applicable to any losses sustained in the Counties of Los Angeles
and San Bernardino as a result of the severe winds that occurred in
November 2011.
   (b) For losses described in subdivision (a), the election under
Section 165(i) of the Internal Revenue Code 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.
   (c) Unless specifically provided otherwise, any law that suspends,
defers, reduces, or otherwise diminishes the deduction of a net
operating loss shall not apply to a net operating loss attributable
to the loss described in subdivision (a).
  SEC. 3.  The Legislature finds and declares that this act fulfills
a statewide public purpose because all of the following:
   (a) On December 9, 2011, the Governor of California made a finding
that conditions of extreme peril to public health and safety to
persons and property existed due to the severe winds occurring in
November 2011 in the Counties of Los Angeles and San Bernardino and
proclaimed a state of emergency to exist within those counties, thus
qualifying affected persons for various forms of governmental
assistance and relief.
   (b) This act is consistent with, and supplements, the proclaimed
disaster assistance and relief by providing necessary tax relief to
the affected jurisdiction and persons to allow them to maintain
essential basic services and repair damage to, and restore, their
homes and businesses.
  SEC. 4.  This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.