<?xml version="1.0" ?>
<ns0:MeasureDoc xmlns:html="http://www.w3.org/1999/xhtml" xmlns:ns0="http://lc.ca.gov/legalservices/schemas/caml.1#" xmlns:ns3="http://www.w3.org/1999/xlink" xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance" version="1.0" xsi:schemaLocation="http://lc.ca.gov/legalservices/schemas/caml.1# xca.1.xsd">
	


	<ns0:Description>
		<ns0:Id>20250AB__023298AMD</ns0:Id>
		<ns0:VersionNum>98</ns0:VersionNum>
		<ns0:History>
			<ns0:Action>
				<ns0:ActionText>INTRODUCED</ns0:ActionText>
				<ns0:ActionDate>2025-01-13</ns0:ActionDate>
			</ns0:Action>
			<ns0:Action>
				<ns0:ActionText>AMENDED_ASSEMBLY</ns0:ActionText>
				<ns0:ActionDate>2025-04-11</ns0:ActionDate>
			</ns0:Action>
		</ns0:History>
		<ns0:LegislativeInfo>
			<ns0:SessionYear>2025</ns0:SessionYear>
			<ns0:SessionNum>0</ns0:SessionNum>
			<ns0:MeasureType>AB</ns0:MeasureType>
			<ns0:MeasureNum>232</ns0:MeasureNum>
			<ns0:MeasureState>AMD</ns0:MeasureState>
		</ns0:LegislativeInfo>
		<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Assembly Members Calderon and Gipson</ns0:AuthorText>
		<ns0:AuthorText authorType="COAUTHOR_ORIGINATING">(Coauthor: Assembly Member Valencia)</ns0:AuthorText>
		<ns0:Authors>
			<ns0:Legislator>
				<ns0:Contribution>LEAD_AUTHOR</ns0:Contribution>
				<ns0:House>ASSEMBLY</ns0:House>
				<ns0:Name>Calderon</ns0:Name>
			</ns0:Legislator>
			<ns0:Legislator>
				<ns0:Contribution>LEAD_AUTHOR</ns0:Contribution>
				<ns0:House>ASSEMBLY</ns0:House>
				<ns0:Name>Gipson</ns0:Name>
			</ns0:Legislator>
			<ns0:Legislator>
				<ns0:Contribution>COAUTHOR</ns0:Contribution>
				<ns0:House>ASSEMBLY</ns0:House>
				<ns0:Name>Valencia</ns0:Name>
			</ns0:Legislator>
		</ns0:Authors>
		<ns0:Title> An act to amend Section 17072 of, and to add Sections 17141.8 and 17207.15 to, the Revenue and Taxation Code, relating to natural disasters, to take effect immediately, tax levy. </ns0:Title>
		<ns0:RelatingClause>natural disasters, to take effect immediately, tax levy</ns0:RelatingClause>
		<ns0:GeneralSubject>
			<ns0:Subject>Natural disasters: catastrophe savings accounts: personal income tax.</ns0:Subject>
		</ns0:GeneralSubject>
		<ns0:DigestText>
			<html:p>The Personal Income Tax Law, in modified conformity with federal income tax laws, allows various deductions from gross income in calculating adjusted gross income.</html:p>
			<html:p>This bill, for taxable years beginning on or after January 1, 2026, and before January 1, 2031,
			 would allow a deduction from adjusted gross income for amounts contributed by a qualified taxpayer, as defined, to a catastrophe savings account, in accordance with specified provisions. The bill would define “catastrophe savings account” to mean a regular savings account or money market account with a financial institution that, among other requirements, is established to pay for the qualified catastrophe expenses, as defined, of a qualified taxpayer establishing the account, as provided. The bill would subject a qualified taxpayer to a specified penalty if they use a distribution from a catastrophe savings account to cover an expense other than a qualified catastrophe expense.</html:p>
			<html:p>The Personal Income Tax Law, in conformity with federal income tax law, generally defines “gross income” as income from whatever source derived, except as specifically excluded, and provides various exclusions from gross income.</html:p>
			<html:p>This bill, for taxable years beginning on or after January 1, 2026, and before January 1,
			 2031, would provide an exclusion from gross income for interest earned by a catastrophe savings account until December 1, 2030.</html:p>
			<html:p>Existing law requires any bill authorizing a new tax expenditure, as defined, to include tax credits, deductions, exclusions, or exemptions, to contain, among other things, specific goals, purposes, and objectives that the tax credit will achieve, detailed performance indicators, and data collection requirements.</html:p>
			<html:p>This bill would include findings and reporting requirements in compliance with this requirement.</html:p>
			<html:p>This bill
			 would take effect immediately as a tax levy.</html:p>
		</ns0:DigestText>
		<ns0:DigestKey>
			<ns0:VoteRequired>MAJORITY</ns0:VoteRequired>
			<ns0:Appropriation>NO</ns0:Appropriation>
			<ns0:FiscalCommittee>YES</ns0:FiscalCommittee>
			<ns0:LocalProgram>NO</ns0:LocalProgram>
		</ns0:DigestKey>
		<ns0:MeasureIndicators>
			<ns0:ImmediateEffect>YES</ns0:ImmediateEffect>
			<ns0:ImmediateEffectFlags>
				<ns0:Urgency>NO</ns0:Urgency>
				<ns0:TaxLevy>YES</ns0:TaxLevy>
				<ns0:Election>NO</ns0:Election>
				<ns0:UsualCurrentExpenses>NO</ns0:UsualCurrentExpenses>
				<ns0:BudgetBill>NO</ns0:BudgetBill>
				<ns0:Prop25TrailerBill>NO</ns0:Prop25TrailerBill>
			</ns0:ImmediateEffectFlags>
		</ns0:MeasureIndicators>
	</ns0:Description>
	<ns0:Bill id="bill">
		<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
		<ns0:BillSection id="id_D57D26D6-70F0-4E2F-B546-6D5FCA2FC0DA">
			<ns0:Num>SECTION 1.</ns0:Num>
			<ns0:ActionLine action="IS_AMENDED" ns3:href="urn:caml:codes:RTC:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'PART'%20and%20caml%3ANum%3D'10.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'CHAPTER'%20and%20caml%3ANum%3D'3.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'ARTICLE'%20and%20caml%3ANum%3D'1.'%5D%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'17072.'%5D)" ns3:label="fractionType: LAW_SECTION" ns3:type="locator">
				Section 17072 of the 
				<ns0:DocName>Revenue and Taxation Code</ns0:DocName>
				 is amended to read:
			</ns0:ActionLine>
			<ns0:Fragment>
				<ns0:LawSection id="id_594B0BD0-6D48-44FB-99A6-7E92DF77F82E">
					<ns0:Num>17072.</ns0:Num>
					<ns0:LawSectionVersion id="id_8CD098C8-6639-4B7E-AF38-0523E12079A4">
						<ns0:Content>
							<html:p>
								(a)
								<html:span class="EnSpace"/>
								Section 62 of the Internal Revenue Code, relating to adjusted gross income defined, shall apply, except as otherwise provided.
							</html:p>
							<html:p>
								(b)
								<html:span class="EnSpace"/>
								Section 62(a)(2)(D) of the Internal Revenue Code, relating to certain expenses of elementary and secondary school teachers, shall not apply.
							</html:p>
							<html:p>
								(c)
								<html:span class="EnSpace"/>
								Section 62(a)(21) of the Internal Revenue Code, relating to attorney’s fees relating to awards to whistleblowers, shall not apply.
							</html:p>
							<html:p>
								(d)
								<html:span class="EnSpace"/>
								For each taxable year beginning on or after January 1,
						2026, and before January 1, 2031, Section 62(a) of the Internal Revenue Code, relating to the general rule, is modified to provide that the deduction under Section 17207.15 shall be allowed in determining adjusted gross income.
							</html:p>
						</ns0:Content>
					</ns0:LawSectionVersion>
				</ns0:LawSection>
			</ns0:Fragment>
		</ns0:BillSection>
		<ns0:BillSection id="id_136F7149-68FE-4EEC-8C2E-C765CB1885DC">
			<ns0:Num>SEC. 2.</ns0:Num>
			<ns0:ActionLine action="IS_ADDED" ns3:href="urn:caml:codes:RTC:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2F%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'17141.8'%5D)" ns3:label="fractionType: LAW_SECTION" ns3:type="locator">
				Section 17141.8 is added to the 
				<ns0:DocName>Revenue and Taxation Code</ns0:DocName>
				, to read:
			</ns0:ActionLine>
			<ns0:Fragment>
				<ns0:LawSection id="id_46055E79-25C6-40E5-BCA7-BC71B74C4455">
					<ns0:Num>17141.8.</ns0:Num>
					<ns0:LawSectionVersion id="id_A7E488E5-840E-47B8-9D70-0224F83F0F46">
						<ns0:Content>
							<html:p>
								(a)
								<html:span class="EnSpace"/>
								For each taxable year beginning on or after January 1, 2026, and before January 1, 2031, gross income does not include interest earned by a catastrophe savings account established pursuant to
						Section 17207.15.
							</html:p>
							<html:p>
								(b)
								<html:span class="EnSpace"/>
								This section shall become inoperative on December 1, 2030.
							</html:p>
							<html:p>
								(c)
								<html:span class="EnSpace"/>
								Any interest that accrues to a catastrophe savings account after December 1, 2030, shall be included as gross income.
							</html:p>
						</ns0:Content>
					</ns0:LawSectionVersion>
				</ns0:LawSection>
			</ns0:Fragment>
		</ns0:BillSection>
		<ns0:BillSection id="id_6EAEA8C0-A853-496E-A030-E835B50F350C">
			<ns0:Num>SEC. 3.</ns0:Num>
			<ns0:ActionLine action="IS_ADDED" ns3:href="urn:caml:codes:RTC:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2F%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'17207.15'%5D)" ns3:label="fractionType: LAW_SECTION" ns3:type="locator">
				Section 17207.15 is added to the 
				<ns0:DocName>Revenue and Taxation Code</ns0:DocName>
				, to read:
			</ns0:ActionLine>
			<ns0:Fragment>
				<ns0:LawSection id="id_032ED617-6F0C-4205-9094-88DD9F734E91">
					<ns0:Num>17207.15.</ns0:Num>
					<ns0:LawSectionVersion id="id_EEAF71FC-7EC9-4BBF-A4A3-261A819C6ADE">
						<ns0:Content>
							<html:p>
								(a)
								<html:span class="EnSpace"/>
								For each taxable year beginning on or after January 1, 2026, and before January 1, 2031, there shall be allowed as a deduction the amount contributed by a qualified taxpayer to a
						catastrophe savings account established pursuant to this section.
							</html:p>
							<html:p>
								(b)
								<html:span class="EnSpace"/>
								(1)
								<html:span class="EnSpace"/>
								The total amount that may be contributed to a catastrophe savings account in a taxable year shall not exceed the following:
							</html:p>
							<html:p>
								(A)
								<html:span class="EnSpace"/>
								In the case of a qualified taxpayer whose primary residence is insured, fifteen thousand dollars ($15,000).
							</html:p>
							<html:p>
								(B)
								<html:span class="EnSpace"/>
								In the case of a qualified taxpayer whose primary residence is not insured,
						two hundred fifty thousand dollars
						($250,000).
							</html:p>
							<html:p>
								(2)
								<html:span class="EnSpace"/>
								If a qualified taxpayer contributes in excess of the limits provided in paragraph (1), the qualified taxpayer shall withdraw the amount of the excess contributions and include that amount in income for purposes of Section 17041 in the year of withdrawal.
							</html:p>
							<html:p>
								(c)
								<html:span class="EnSpace"/>
								For purposes of this section,
						the following definitions apply:
							</html:p>
							<html:p>
								(1)
								<html:span class="EnSpace"/>
								“Catastrophe savings account” means a regular savings account or money market account with a financial institution that meets all of the following requirements:
							</html:p>
							<html:p>
								(A)
								<html:span class="EnSpace"/>
								Is designated as a catastrophe savings account by the account holder.
							</html:p>
							<html:p>
								(B)
								<html:span class="EnSpace"/>
								Is established by a qualified taxpayer, or by qualified taxpayers who are spouses, for the exclusive benefit of a qualified taxpayer
						establishing the account.
							</html:p>
							<html:p>
								(C)
								<html:span class="EnSpace"/>
								Is the only catastrophe savings account established by the qualified taxpayer.
							</html:p>
							<html:p>
								(D)
								<html:span class="EnSpace"/>
								Is established by a residential property owner in this state for their primary residence.
							</html:p>
							<html:p>
								(E)
								<html:span class="EnSpace"/>
								The written governing instrument creating the account provides for both of the following:
							</html:p>
							<html:p>
								(i)
								<html:span class="EnSpace"/>
								All contributions to the account are required to be in cash.
							</html:p>
							<html:p>
								(ii)
								<html:span class="EnSpace"/>
								The account is established to pay, pursuant to the requirements of this section, for the qualified catastrophe expenses of a qualified taxpayer establishing the account.
							</html:p>
							<html:p>
								(2)
								<html:span class="EnSpace"/>
								“Qualified catastrophe expenses” means either of the following:
							</html:p>
							<html:p>
								(A)
								<html:span class="EnSpace"/>
								Expenses paid or incurred due to damage to or loss of a homeowner’s primary residence caused by a wildfire, flood, or earthquake that has been declared by the Governor to be an emergency, including a qualified deductible of a homeowners insurance policy.
							</html:p>
							<html:p>
								(B)
								<html:span class="EnSpace"/>
								Expenses paid or incurred by a homeowner to incorporate property-level mitigation efforts, as provided in subparagraph (B) of paragraph (1) of subdivision (d) of Section 2644.9 of Title 10 of the California Code of Regulations, to their primary residence.
							</html:p>
							<html:p>
								(3)
								<html:span class="EnSpace"/>
								“Qualified deductible” means the deductible for the individual’s homeowner’s
						insurance policy for a
						homeowner’s primary residence.
							</html:p>
							<html:p>
								(4)
								<html:span class="EnSpace"/>
								“Qualified taxpayer” means an individual, or a married couple if filing a joint return, who owns a primary residence in this state.
							</html:p>
							<html:p>
								(d)
								<html:span class="EnSpace"/>
								A distribution from a catastrophe savings account shall be used to cover qualified catastrophe expenses. If a qualified taxpayer uses a distribution from a catastrophe savings account to cover an expense other than a qualified catastrophe expense, the qualified taxpayer shall be subject to a penalty of 2.5 percent of the amount improperly distributed.
							</html:p>
							 
							<html:p>
								(e)
								<html:span class="EnSpace"/>
								(1)
								<html:span class="EnSpace"/>
								For purposes of complying with Section 41, as it applies to the deduction allowed by this section, the Legislature finds and declares as follows:
							</html:p>
							<html:p>
								(A)
								<html:span class="EnSpace"/>
								California is not immune from natural disasters such as wildfires, floods, and earthquakes.
							</html:p>
							<html:p>
								(B)
								<html:span class="EnSpace"/>
								California must seek a multipronged approach to address natural disasters which includes public- and private-market options and personal responsibility.
							</html:p>
							<html:p>
								(C)
								<html:span class="EnSpace"/>
								The promotion of financial resiliency benefits cities, counties, consumers, and policyholders.
							</html:p>
							<html:p>
								(D)
								<html:span class="EnSpace"/>
								Catastrophe savings accounts are intended to assist consumers in paying for expenses incurred or related to a major natural disaster.
							</html:p>
							<html:p>
								(E)
								<html:span class="EnSpace"/>
								The catastrophe savings accounts would foster pre-event mitigation and postevent recovery from catastrophes by accumulating funds that can be used to supplement insurance coverage and offset the costs of remediation and repair.
							</html:p>
							<html:p>
								(2)
								<html:span class="EnSpace"/>
								The performance
						indicators for the Legislature to use in determining if the deduction achieves its stated purpose include all of the following:
							</html:p>
							<html:p>
								(A)
								<html:span class="EnSpace"/>
								The number of taxpayers allowed a deduction pursuant to this section.
							</html:p>
							<html:p>
								(B)
								<html:span class="EnSpace"/>
								The average amount of the deduction allowed pursuant to this section.
							</html:p>
							<html:p>
								(C)
								<html:span class="EnSpace"/>
								The total amount of deductions allowed pursuant to this section.
							</html:p>
							<html:p>
								(3)
								<html:span class="EnSpace"/>
								(A)
								<html:span class="EnSpace"/>
								By May 1, 2028, and annually thereafter, the Franchise Tax Board shall submit a report to the Legislature, in accordance with Section 9795 of the Government Code, detailing the
						performance indicators listed in paragraph (2).
							</html:p>
							<html:p>
								(B)
								<html:span class="EnSpace"/>
								The disclosure provisions of this paragraph shall be treated as an exception to Section 19542.
							</html:p>
							<html:p>
								(f)
								<html:span class="EnSpace"/>
								This section shall become inoperative on December 1, 2031.
							</html:p>
						</ns0:Content>
					</ns0:LawSectionVersion>
				</ns0:LawSection>
			</ns0:Fragment>
		</ns0:BillSection>
		<ns0:BillSection id="id_48CB026C-A7DF-4A41-A76D-94BA7237563C">
			<ns0:Num>SEC. 4.</ns0:Num>
			<ns0:Content>
				<html:p>This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.</html:p>
			</ns0:Content>
		</ns0:BillSection>
	</ns0:Bill>
</ns0:MeasureDoc>