Bill Text: CA AB1172 | 2013-2014 | Regular Session | Amended

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Bill Title: Income taxes: charitable remainder trusts.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Engrossed - Dead) 2014-08-18 - Read second time. Ordered to third reading. [AB1172 Detail]

Download: California-2013-AB1172-Amended.html

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BILL NUMBER: AB 1172	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 17, 2014
	AMENDED IN ASSEMBLY  JANUARY 6, 2014
	AMENDED IN ASSEMBLY  MARCH 21, 2013

INTRODUCED BY   Assembly Member Bocanegra

                        FEBRUARY 22, 2013

    An act to add and repeal Section 169.5 of the Revenue and
Taxation Code, relating to taxation.   An act to repeal
and add Section 17755 of the Revenue and Taxation Code, relating to
taxation, to take effect immediately, tax levy. 


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1172, as amended, Bocanegra.  Property tax: portability
study.   Income taxes: charitable remainder trusts.
 
   The Personal Income Tax Law does not conform to specified
provisions of federal law relating to the taxation of specified
trusts. Existing law exempts from tax for the taxable year any
charitable remainder annuity trust or charitable remainder unitrust
unless that trust has unrelated business taxable income for the
taxable year, in which case that trust shall be subject to tax, as
provided.  
   This bill, for taxable years beginning on or after January 1,
2014, would conform, as modified, to the federal provisions for a
charitable remainder annuity trust and a charitable remainder
unitrust by providing that a trust shall remain tax-exempt, even if
that trust has unrelated business taxable income, in which case that
income shall be taxed as provided.  
   This bill would take effect immediately as a tax levy. 

   The California Constitution generally limits ad valorem taxes on
real property to 1% of the full cash value of that property. For
purposes of this limitation, "full cash value" is defined as the
assessor's valuation of real property as shown on the 1975-76 tax
bill under "full cash value" or, thereafter, the appraised value of
that real property when purchased, newly constructed, or a change in
ownership has occurred. The California Constitution authorizes the
Legislature to provide that a severely disabled person and a person
over 55 years of age may transfer the base year value, as defined, of
property that is eligible for the homeowners' property tax exemption
to a replacement dwelling that is of equal or lesser value located
within the same county as the property from which the base year value
is transferred, and if a county ordinance so providing has been
adopted, to a replacement dwelling that is located in a different
county.  
   This bill would require the California Research Bureau to provide
the Legislature, on or before December 1, 2015, with a report
regarding the revenue impact of Florida's "Save Our Homes"
portability law, which allows a homeowner to transfer the difference
between market value and assessed value from one home to another, and
the potential state and local revenue impacts of the enactment of a
similar statute in California. 
   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 17755 of the   Revenue
and Taxation Code   is repealed.  
   17755.  Section 664(c) of the Internal Revenue Code, relating to
the taxation of trusts, shall not apply and, in lieu thereof, a
charitable remainder annuity trust and a charitable remainder
unitrust shall, for any taxable year, not be subject to any tax
imposed under this part, unless that trust, for the taxable year, has
unrelated business taxable income, within the meaning of Section
23732, determined as if Chapter 4 (commencing with Section 23701) of
Part 11, applied to that trust. 
   SEC. 2.    Section 17755 is added to the  
Revenue and Taxation Code   , to read:  
   17755.  For taxable years beginning on or after January 1, 2014,
Section 664(c)(2) of the Internal Revenue Code, relating to excise
tax, shall not apply and, in lieu thereof, the unrelated business
taxable income, as defined in Section 23732, of every charitable
remainder annuity trust or charitable remainder unitrust shall be
subject to tax under Section 17651. 
   SEC. 3.    This act provides for a tax levy within
the meaning of Article IV of the Constitution and shall go into
immediate effect.  
  SECTION 1.    Section 169.5 is added to the
Revenue and Taxation Code, to read:
   169.5.  (a) On or before December 1, 2015, the California Research
Bureau shall provide the Legislature with a report regarding Florida'
s "Save Our Homes" portability statute (Fla. Stat. Sec. 193.155(8)),
evaluating the impact of the statute on Florida's state and local
revenue and the potential revenue impacts upon California if a
similar statute were enacted within the state.
   (b) (1) A report to the Legislature pursuant to this section shall
be submitted in compliance with Section 9795 of the Government Code.

   (2) Pursuant to Section 10231.5 of the Government Code, this
section is repealed on December 1, 2019.