California Assembly Bill AB1779 Latest Draft

 BILL NUMBER: AB 1779AMENDED BILL TEXT AMENDED IN ASSEMBLY MAY 3, 2010 INTRODUCED BY Assembly Member Niello  (   Coauthors:   Assembly Members   Adams,   Bill Berryhill,   Blakeslee,   Conway,   DeVore,   Fuller,   Gaines,   Garrick,   Gilmore,   Hagman,   Harkey,   Jeffries,   Knight,   Nestande,   Nielsen,   Silva,  Smyth,   and Villines   )   (   Coauthors:   Senators   Cox   and Huff  )  FEBRUARY 9, 2010 An act to amend Section 17144.5 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. LEGISLATIVE COUNSEL'S DIGEST AB 1779, as amended, Niello. Taxation: cancellation of indebtedness: mortgage debt forgiveness. (1) The Personal Income Tax Law  conforms   , in modified conformity  to specified provisions of the federal Mortgage Forgiveness Debt Relief Act of 2007,  relating to the exclusion of   allows an exclusion from a taxpayer's income for  the discharge of qualified principal residence indebtedness, as defined,  from a taxpayer's income  if that debt is discharged after January 1, 2007, and before January 1,  2010   2009  , as provided. The Emergency Economic Stabilization Act of 2008 extended the operation of those  federal  provisions to debt that is discharged before January 1, 2013. This bill would provide further conformity to those federal acts,  including allowance of the exclusion for debt that is discharged before 2013,  as provided. (2) This bill would take effect immediately as a tax levy. 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 17144.5 of the Revenue and Taxation Code is amended to read: 17144.5. (a) Section 108 of the Internal Revenue Code, relating to income from discharge of indebtedness, as amended by Section 2 of the Mortgage Forgiveness Debt Relief Act of 2007 (Public Law 110-142), and as amended by Section 303 of the Emergency Economic Stabilization Act of 2008 (Public Law 110-343), shall apply, except as otherwise provided. (b) This section shall apply to discharges of indebtedness occurring on or after January 1, 2007, and, notwithstanding any other law to the contrary, no penalties or interest shall be due with respect to the discharge of qualified principal residence indebtedness during the 2007  or 2009  taxable year regardless of whether or not the taxpayer reports the discharge on his or her return for the 2007  or 2009  taxable year. SEC. 2. The Legislature finds and declares that the mortgage debt tax relief allowed to taxpayers in connection with the discharge of qualified principal residence indebtedness, as described in this act, serves a public purpose and does not constitute a gift of public funds within the meaning of Section 6 of Article XVI of the California Constitution. SEC. 3. This act provides for a tax levy within the meaning of Article IV of the Constitution and shall go into immediate effect.