Taxation trailer bill.

This bill, beginning July 1, 2026, would increase the amount available on July 1 of each year for manufactured home property tax postponement disbursements from the above-described fund to $300,000. By increasing the limit to the amounts available for disbursement from the Senior Citizens and Disabled Citizens Property Tax Postponement Fund for property tax postponements under the manufactured home law, the bill would make an appropriation.

(2) The Personal Income Tax Law and the Corporation Tax Law allow a credit (CalCompetes tax credit) against the taxes imposed under those laws, for each taxable year beginning on and after January 1, 2014, and before January 1, 2030, in an amount as provided in a written agreement between the Governor's Office of Business and Economic Development and the taxpayer, approved by the California Competes Tax Credit Committee, and based on specified factors, including the number of jobs the taxpayer will create or retain in the state and the amount of investment in the state by the taxpayer.

This bill would extend the CalCompetes tax credit through taxable years beginning before January 1, 2035. The bill would also make conforming changes.

(3) Existing law, the Personal Income Tax Law, generally conforms to federal tax law through January 1, 2025, including conforming to federal law in its treatment of deferred compensation, except as otherwise provided.

Existing federal law, Public Law 119-21, enacted July 4, 2025, provides for a tax-deferred investment account for children known as a 530A account.

This bill, for taxable years beginning on or after January 1, 2026, would generally conform to federal law in its treatment of 530A accounts, except as specified.

(4) The Personal Income Tax Law, in modified conformity with federal income tax laws, generally defines "gross income" as income from whatever source derived, except as specifically excluded, and provides various exclusions from gross income.

Public Law 119-21 provides for gross income exclusions for employer contributions and qualified general contributions to a 530A account, as specified.

This bill, for taxable years beginning on or after January 1, 2026, would conform to those gross income exclusions for purposes of the Personal Income Tax Law.

(5) Existing federal and state law provide for the creation of ABLE accounts for the purpose of meeting the qualified disability expenses of a beneficiary and exclude these accounts from gross income. Existing federal and state law limit contributions to ABLE accounts to those made in cash, as a change in designated beneficiary, or as a qualified rollover contribution. Public Law 119-21 includes within those qualified rollover contributions specified rollover contributions from a 530A account. Existing law imposes limits on the amount of contributions that can be made to an ABLE Account and requires an ABLE program to provide adequate safeguards to prevent contributions in excess of that limit. Public Law 119-21 exempts from that requirement qualified rollover contributions from a 530A account. The Personal Income Tax Law and the Corporation Tax Law, for taxable years beginning on or after January 1, 2016, generally conform to federal law relating to qualified ABLE programs prior to Public Law 119-21.

This bill, for taxable years beginning on or after January 1, 2026, would conform to the above-described changes to qualified ABLE programs relating to 530A accounts made by Public Law 119-21 for purposes of the Personal Income Tax Law and the Corporation Tax Law. The bill would also make conforming changes relating to the requirements for making contributions to an ABLE account.

(6) Existing law imposes an annual minimum franchise tax of $800, except as provided, on every corporation incorporated in this state, qualified to transact intrastate business in this state, or doing business in this state, and an annual tax in an amount equal to the minimum franchise tax, except as provided, on every limited partnership, limited liability partnership, and limited liability company doing business in this state, as specified.

This bill, for taxable years beginning on or after January 1, 2027, and before January 1, 2030, would reduce the amount of the annual tax imposed on a limited liability company doing business in this state from $800 to $400 for the company's first taxable year.

This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.