Bill Text: CA AB211 | 2019-2020 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Personal income taxes: deduction: California qualified tuition program.

Spectrum: Bipartisan Bill

Status: (Vetoed) 2019-10-13 - Vetoed by Governor. [AB211 Detail]

Download: California-2019-AB211-Introduced.html


CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill No. 211


Introduced by Assembly Member Calderon
(Principal coauthor: Assembly Member Bonta)

January 15, 2019


An act to amend Section 17072 of, and to add Section 17206.2 to, the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 211, as introduced, Calderon. Personal income taxes: deduction: California qualified tuition program.
The Personal Income Tax Law, in modified conformity with federal income tax law, excludes from the gross income of a beneficiary of, or contributor to, a qualified tuition program, which includes a Golden State Scholarshare College Savings Trust, distributions or earnings under that program, as specified.
This bill, for taxable years beginning on or after January 1, 2019, would allow under that law a deduction against gross income in the amount equal to the monetary contribution made by a qualified taxpayer to the California qualified tuition program established pursuant to the Golden State Scholarshare Trust Act not to exceed either $5,000 or $10,000, as provided. The bill would require the Scholarshare Investment Board to report to the Legislature, on an annual basis, specified data related to this deduction and Scholarshare accounts.
This bill would take effect immediately as a tax levy.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 17072 of the Revenue and Taxation Code is amended to read:

17072.
 (a) Section 62 of the Internal Revenue Code, relating to adjusted gross income defined, shall apply, except as otherwise provided.
(b) Section 62(a)(2)(D) of the Internal Revenue Code, relating to certain expenses of elementary and secondary school teachers, shall not apply.
(c) Section 62(a)(21) of the Internal Revenue Code, relating to attorneys attorney’s fees relating to awards to whistleblowers, shall not apply.
(d) Section 62(a) of the Internal Revenue Code, relating to the general rule, is modified to provide that the deduction under Section 17206.2 shall be allowed in determining adjusted gross income.

SEC. 2.

 Section 17206.2 is added to the Revenue and Taxation Code, to read:

17206.2.
 (a) For taxable years beginning on or after January 1, 2019, there shall be allowed a deduction in the amount equal to the monetary contribution made by a qualified taxpayer during the taxable year to one or more accounts established pursuant to the California qualified tuition program on behalf of a beneficiary, but in no event shall the deduction amount exceed the following:
(1) In the case of a qualified taxpayer who is a head of household, a surviving spouse, as defined in Section 17046, or a married couple filing a joint return, ten thousand dollars ($10,000).
(2) In the case of a qualified taxpayer filing a return other than as described in paragraph (1), five thousand dollars ($5,000).
(b) For the purposes of this section, the following definitions shall apply:
(1) “Monetary contribution” means cash contributions, pursuant to Section 529(b)(2) of the Internal Revenue Code, relating to cash contributions, to the California qualified tuition program, but shall not include cash contributions to the California qualified tuition program with respect to either of the following:
(c) For the purposes of Section 529(c)(3) of the Internal Revenue Code, relating to distributions, amounts allowed as a deduction under this section shall not be treated as investment in the contract in applying Section 72 of the Internal Revenue Code, relating to annuities; certain proceeds of endowment and life insurance contracts.
(d) A qualified taxpayer shall maintain records that are adequate to substantiate any deduction allowed under this section, and shall, upon request, provide such records to the Franchise Tax Board.
(e) (1) The Franchise Tax Board may adopt regulations, standards, criteria, procedures, determinations, rules, notices, or guidelines necessary or appropriate to carry out the purposes of this section.
(2) The Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) does not apply to any regulation, standard, criterion, procedure, determination, rule, notice, or guideline established or issued by the Franchise Tax Board pursuant to this section.

SEC. 3.

 The Legislature finds and declares all of the following:
(a) Objectives of this act are as follows:
(1) To provide a tax incentive to motivate California families to open and contribute to a Scholarshare account, California’s 529 college savings plan account, for the purposes of saving for future college expenses, thereby encouraging more Californians to pursue a postsecondary education and reducing the amount of student loan debt they may accumulate upon graduation.
(2) To reduce the amount of student loan debt on a dollar-for-dollar basis, thereby increasing a person’s ability to purchase a home, car, and other products that help stimulate economic activity.
(b) The performance indicators related to this act are as follows:
(1) The number of deductions allowed by the Franchise Tax Board pursuant to Section 17206.2 of the Revenue and Taxation Code, as added by Section 2 of this act.
(2) The total dollar amount of deductions allowed by the Franchise Tax Board pursuant to Section 17206.2 of the Revenue and Taxation Code, as added by Section 2 of this act.
(3) The number of new Scholarshare accounts opened during the calendar year in which the deduction allowed by Section 17206.2 of the Revenue and Taxation Code, as added by Section 2 of this act, is in effect.
(c) The Scholarshare Investment Board shall have the following data collection and reporting requirements:
(1) Collect data on the amount of deductions allowed and income information for taxpayers allowed those deductions from the Franchise Tax Board within ____ days from the filing date of the tax return of a taxable year.
(2) Collect data on the total amount of contributions made to Scholarshare accounts by March 1 of each calendar year that the deduction may be claimed on a tax return.
(3) Survey new and existing Scholarshare account owners to collect information about their motivation to do all of the following:
(A) Open a Scholarshare account.
(B) Contribute to a Scholarshare account.
(C) Increase the frequency and amount of contributions to a Scholarshare account.
(D) Refer a Scholarshare account to friends and family.
(4) (A) On or before July 31 of each calendar year in which the deduction allowed by Section 17026.2 of the Revenue and Taxation Code, as added by Section 2 of this act, the Scholarshare Investment Board shall deliver a report to the Legislature that shall include, but not be limited to, prior year and cumulative baseline data and information described in subdivisions (b) and this subdivision.
(B) The report required pursuant to subparagraph (A) shall be submitted in compliance with Section 9795 of the Government Code.

SEC. 4.

 This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.
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