FOR IMMEDIATE RELEASE

Alicia Isaacs, (916) 224-8488

October 10, 2015

Governor Brown Vetoes Legislation Forgiving Mortgage Debt

Legislation would have provided tax relief to thousands struggling to recover from the housing crisis
SACRAMENTO Today, Governor Jerry Brown vetoed Assembly Bill (AB) 99 by Assemblymember Henry
T. Perea (D-Fresno) which would have extended tax relief on forgiveness of mortgage debt by conforming
California law to federal law. AB 99 would have extended state income tax relief to borrowers who had
mortgage debt forgiven by their lender before January 1, 2015. This was a long anticipated measure this year for
Californians; many hopefuls have inquired on the status of the bill over the entire year.
In his press release, the Governor sighted financial uncertainties as his reasoning for vetoing this important
legislation.
Its disappointing to hear Governor Brown vetoed AB 99. This measure would have conformed state law to
federal law, saving many Californians from financial ruin. Requiring homeowners to pay income taxes on
forgiven debt puts additional stress on people already struggling to recover from the collapse of the housing
market, said Assemblymember Perea. They cant afford to pay an additional tax on money they never
received.
In recent years, state and federal law has been amended to prevent phantom income from being taxed. AB
1393, by Assemblymember Perea from last year conformed California to the Mortgage Forgiveness Debt Relief
Act for discharges of qualified principal residence indebtedness until January 1, 2014. Congress extended the
tax break through December 31, 2014 and it was recently signed into law by the President.
AB 99 was supported by the Attorney Generals Office, the Board of Equalization Member George Runner, the
California Association of Realtors, the California Bankers Association (Sponsor), the California Community
Banking Network, the California Credit Union League, the California Independent Bankers, the California
Mortgage Bankers Association, the California Society of Enrolled Agents, and the California Taxpayers
Association. Dozens of Californians took the time to write individual letters to the Governor detailing their
desperate situations and support of the bill, along with hundreds of calls from throughout California.
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