Breaking News: Mortgage Debt Forgiveness Bill Vetoed by Governor

Posted on October 13, 2015 · Posted in Breaking News, Industry News, Latest Updates

10/12/15 – On Saturday, October 10, Governor Jerry Brown vetoed AB 99 (Perea, D-Fresno), a bill that would have resulted in state law conforming with federal law by extending tax relief for mortgage debt forgiven in 2014. While the California law had conformed to federal law in the previous year, it has been out of conformity since the extension of the federal Mortgage Debt Relief Act of 2007 for the 2014 tax year. The veto of AB 99 means that California will treat mortgage debt forgiven by a lender in 2014 as income.

In his veto message of nine tax-related bills including AB 99, Governor Brown stated, “Despite strong revenue performance over the past few years, the state’s budget has remained precariously balanced due to unexpected costs and the provision of new services. Given these financial uncertainties, I cannot support providing additional tax credits that will make balancing the state’s budget even more difficult.”

CSEA has a long-standing policy of supporting federal conformity. For this reason CSEA took a support position on this bill, along with Attorney General Kamala Harris, Board of Equalization Vice Chair George Runner, California Association of Realtors, California Bankers Association, California Credit Union League, California Mortgage Bankers Association, and California Taxpayers Association. CSEA would like to thank all Members who answered the Call to Action by contacting the Governor’s office with messages of support for AB 99.

For more information on state legislative bills watched by CSEA visit the CSEA website at www.csea.org/advocacy/legislative-bill-list.