BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 1796
                                                                  Page  1

          Date of Hearing:   May 7, 2014

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                    AB 1796 (Linder) - As Amended:  April 10, 2014

          Policy Committee:                             Revenue &  
          TaxationVote:9-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              No

           SUMMARY  

          This bill requires the Franchise Tax Board (FTB) to revise  
          instructions for personal income tax (PIT) returns to include  
          information about the ability of a taxpayer to directly deposit  
          a portion of any refund into the Golden State Scholarshare  
          College Savings Trust (ScholarShare).

           FISCAL EFFECT  

          1)Negligible impact to the FTB.

          2)No impact to the state's income tax revenue.

           COMMENTS  

          1)  Purpose.   Existing law allows individual taxpayers to  
            designate a qualified tuition program for the deposit of their  
            PIT refund; taxpayers need only provide their account and  
            routing numbers.  The author claims that this option is not  
            widely known.  This bill gives greater prominence to the  
            ScholarShare refund deposit option in the PIT form  
            instructions, which may lead to greater taxpayer awareness of  
            the option, and potentially greater participation in the  
            ScholarShare program.

          2)  Qualified Tuition Programs.   Under state and federal law, the  
            state or an eligible education institution may establish a  
            qualified tuition program to allow taxpayers to purchase  
            tuition credit or make cash contributions to meet the  
            qualified higher education expenses of a designated  
            beneficiary.  Contributions to a qualified tuition program  








                                                                  AB 1796
                                                                  Page  2

            cannot exceed the amount necessary to provide for the  
            beneficiary's qualified higher education expenses, and  
            distributions to the beneficiary are excluded from income.


           Analysis Prepared by  :    Joel Tashjian / APPR. / (916) 319-2081