Bill Text: CA AB1109 | 2019-2020 | Regular Session | Amended
Bill Title: Preschool: privately funded pilot program: tax credits.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Failed) 2020-02-03 - From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB1109 Detail]
Download: California-2019-AB1109-Amended.html
|
Amended
IN
Assembly
April 29, 2019 |
CALIFORNIA LEGISLATURE—
2019–2020 REGULAR SESSION
| Assembly Bill | No. 1109 |
| Introduced by Assembly Member Fong |
February 21, 2019 |
An act to amend Section 41202 of, and to add and repeal Article 7.5 (commencing with Section 8239.5) of Chapter 2 of Part 6 of Division 1 of Title 1 of, the Education Code, and to add and repeal Sections 17053.89 and 23688.7 of the Revenue and Taxation Code, relating to preschool funding.
LEGISLATIVE COUNSEL'S DIGEST
AB 1109, as amended, Fong.
Preschool: privately funded pilot program: tax credits.
Existing law, the
The Child Care and Development Services Act, administered by the State Department of Education, requires the Superintendent of Public Instruction to administer childcare and development programs that offer a full range of services for eligible children from infancy to 13 years of age. Existing law requires the Superintendent to administer all California state preschool programs, including, but not limited to, part-day and full-day age and developmentally appropriate programs for 3- and 4-year-old children.
This bill would, until
January 1, 2026, authorize the department, as part of a pilot program, to accept monetary contributions made to the California Preschool Investment Fund, which this bill would create, by a person for purposes of preschool education, as provided. The bill would require the money in the fund to be used to, among other things, fund state preschools that are part of the California state preschool program located in one of the 5 counties participating in the pilot program, as provided. provided, and to reimburse state agency administrative costs incurred in connection with the program. The bill would require participating counties to report to the department’s Early Education and Support Division regarding the county’s assessment of how the pilot program is performing. The bill would require
the department to report specified program information to the Legislature following the conclusion of the program and would require any moneys remaining in the fund after January 1, 2026,
as of the date the department is reimbursed for the costs of preparing and submitting that report to be transferred to any other state fund identified by the department that provides funding for increased access to preschool programs for low-income children.
The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws.
This bill, under both laws, for taxable years beginning on or after January 1, 2021, and before January 1, 2025, would allow a credit equal to 40% of the amount contributed by the taxpayer during the taxable year to the California Preschool Investment Fund, as provided. The bill would limit the aggregate amount of credit allowed under both laws to not exceed $250,000,000 and would require the department to establish a procedure for a person to obtain from the department a receipt indicating specified information,
including the amount of monetary contributions made, for purposes of the tax credits allowed under these provisions.
This bill would, until January 1, 2026, require the total annual amount of credits claimed pursuant to these provisions to be treated as though they were proceeds of taxes for purposes of calculating the moneys to be applied by the state for the support of school districts and community college districts pursuant to a specified provision of the California Constitution.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NOBill Text
The people of the State of California do enact as follows:
SECTION 1.
Article 7.5 (commencing with Section 8239.5) is added to Chapter 2 of Part 6 of Division 1 of Title 1 of the Education Code, to read:Article 7.5. California Preschool Investment Pilot Program
8239.5.
(a) The Legislature finds and declares that by providing an additional source of funding, the state can expand the number of preschool slots and the number of subsidies provided to help reduce the waitlist for parents seeking prekindergarten childcare assistance.(b) The Legislature further finds and declares that the objective of the California Preschool Investment Fund is to increase the amount of preschool services for the five selected counties to continue to expand access to early childhood education in a sustainable way.
8239.6.
For purposes of this article, the following definitions apply:(a) “Department” means the State Department of Education.
(b) “Fund” means the California Preschool Investment Fund.
(c) “Person” means an individual, partnership, corporation, limited liability company, association, or other group, however organized.
(d) “Program” means the five-county investor funded preschool pilot program.
8239.7.
(a) On or before June 1, 2021, a county may apply to the department for consideration of inclusion in the program. For purposes of this section, a county’s local childcare and development planning council, established pursuant to Chapter 2.3 (commencing with Section 8499), shall be responsible for making the application authorized pursuant to this section.(b) On or before September 1, 2021, the department shall determine, pursuant to subdivision (c), the five counties that shall be included in the program. When making this determination, the department shall ensure that urban, suburban, and rural counties are represented in the program.
(c) The department shall make the determination of which five counties shall be included in the program by giving priority to counties that meet any of the following factors:
(1) The length of the county’s waitlist of individuals seeking public childcare assistance.
(2) The ability to increase the number of preschool slots available to children in the county.
(3) Whether the county received federal Race to the Top funds, authorized under the federal American Recovery and Reinvestment Act of 2009 (Public Law 111-5), with favorable consideration going to the counties that received the funds.
(d) This section shall become inoperative on January 1, 2026.
8239.8.
(a) (1) The department may(2) (A) The department shall establish a procedure for a person to make monetary contributions to the fund and for a person to obtain from the department a receipt that
indicates the amount of monetary contributions made by that person. The receipt shall also contain, at minimum, the date the monetary contribution was made, the name of the person who made the contribution, the amount of the monetary contribution, and whether the person has or has not been allocated a tax credit pursuant to Section 17053.89 or 23688.7 of the Revenue and Taxation Code.
(B) Subject to the annual cap described in subdivision (f) of Sections 17053.89 and 23688.7 of the Revenue and Taxation Code, the department shall allocate credits to contributors on a first-come-first-served basis.
(C) The department shall notify the Franchise Tax Board of the credits allocated on at least a monthly basis, and the Franchise Tax Board and the department shall place this information
on their respective internet websites together with information as to the amount of remaining credits, at least every calendar quarter, including information as to whether the cap described in subdivision (f) of Sections 17053.89 and 23688.7 of the Revenue and Taxation Code may be reached by the end of the calendar quarter.
(3) Moneys in the fund shall be allocated as follows:
(A) First, moneys in the fund shall be transferred to the General Fund in an amount equal to the aggregate amount of certified credits allowed pursuant to Sections 17053.89 and 23688.7 of the Revenue and Taxation Code for the taxable year.
(B) Second, upon appropriation:
(i) To
the Franchise Tax Board and Board, the department department, and the Treasurer for reimbursement of all administrative costs incurred by those agencies in connection with their duties under this article.
(ii) To the department for purposes of this article, as provided in subdivision (b).
(b) The moneys appropriated to the department pursuant to clause (ii) of subparagraph (B) of paragraph (3) of subdivision (a) shall be used to fund the California
state preschool programs, pursuant to Article 7 (commencing with Section 8235). The moneys shall only be used to support state preschools located in one of the five counties participating in the program.
(c) Moneys shall not be appropriated or allocated from the fund on and after January 1, 2026, except to reimburse the department for the costs of preparing and submitting the report pursuant to Section 8239.10, in accordance with clause (i) of subparagraph (B) of paragraph (3) of subdivision (a).
8239.9.
(a) A county selected to participate in the program pursuant to Section 8239.7 shall annually report to the department’s Early Education & Support Division. The report shall contain the county’s assessment of how the program is performing.(b) This section shall become inoperative on January 1, 2026.
8239.10.
(a) The department shall report all of the following program information to the Legislature following the conclusion of the program:(1) Contributions made to the fund, which the department shall track in consultation with the Treasurer.
(2) The number of preschool slots per participating county before and after program implementation and whether the number of slots increased in accordance with the objectives of the program, as specified in Section 8239.5.
(3) Ways in which the program could be improved.
(4) A determination of whether the program
was a success.
(b) The report submitted pursuant to subdivision (a) shall be submitted in compliance with Section 9795 of the Government Code.
(c) The department may be reimbursed upon appropriation from the fund pursuant to clause (i) of subparagraph (B) of paragraph (3) of subdivision (a) of Section 8239.8 for the costs of preparing and submitting the report pursuant to subdivision (a).
8239.10. 8239.11.
(a) This article shall remain in effect only until January 1,(b) Any moneys remaining in the fund as of January 1, 2026, the date the department is reimbursed for the costs of preparing and submitting the report pursuant to Section 8239.10 shall be transferred to any other state fund identified by the department that provides funding for increased access to preschool programs for low-income children.
SEC. 2.
Section 41202 of the Education Code is amended to read:41202.
The words and phrases set forth in subdivision (b) of Section 8 of Article XVI of the Constitution of the State of California shall have the following meanings:(a) “Moneys to be applied by the State,” as used in subdivision (b) of Section 8 of Article XVI of the California Constitution, means appropriations from the General Fund that are made for allocation to school districts, as defined, or community college districts. An appropriation that is withheld, impounded, or made without provisions for its allocation to school districts or community college districts shall not be considered to be “moneys to be applied by the State.”
(b) (1) “General Fund revenues which may be appropriated pursuant to Article XIII B,” as used in paragraph (1) of subdivision (b) of Section 8 of Article XVI of the California Constitution, means General Fund revenues that are the proceeds of taxes as defined by subdivision (c) of Section 8 of Article XIII B of the California Constitution, including, for the 1986–87 fiscal year only, any revenues that are determined to be in excess of the appropriations limit established pursuant to Article XIII B of the California Constitution for the fiscal year in which they are received. General Fund revenues for a fiscal year to which paragraph (1) of subdivision (b) of Section 8 of Article XVI of the California Constitution is being applied shall include, in that computation, only General Fund revenues for that fiscal
year that are the proceeds of taxes, as defined in subdivision (c) of Section 8 of Article XIII B of the California Constitution, and shall not include prior fiscal year revenues. Commencing with the 1995–96 fiscal year, and each fiscal year thereafter, “General Fund revenues that are the proceeds of taxes,” as defined in subdivision (c) of Section 8 of Article XIII B of the California Constitution, includes any portion of the proceeds of taxes received from the state sales tax that are transferred to the counties pursuant to, and only if, legislation is enacted during the 1995–96 fiscal year the purpose of which is to realign children’s programs. The amount of the proceeds of taxes shall be computed for any fiscal year in a manner consistent with the manner in which the amount of the proceeds of taxes was computed by the Department of Finance for purposes of
the Governor’s Budget for the Budget Act of
1986.
(2) (A) For purposes of calculating the moneys to be applied by the state, as used in subdivision (b) of Section 8 of Article XVI of the California Constitution, the General Fund revenues that are the proceeds of taxes, as defined in subdivision (c) of Section 8 of Article XIII B of the California Constitution, shall include the total annual amount of credit claimed pursuant to Sections 17053.89 and 23688.7 of the Revenue and Taxation Code as though they were proceeds of taxes.
(B) This paragraph shall become inoperative on January 1, 2026.
(c) “General Fund revenues appropriated for school districts,” as used in paragraph (1) of subdivision (b) of Section 8 of Article XVI
of the California Constitution, means the sum of appropriations made that are for allocation to school districts, as defined in Section 41302.5, regardless of whether those appropriations were made from the General Fund to the Superintendent, to the Controller, or to any other fund or state agency for the purpose of allocation to school districts. The full amount of any appropriation shall be included in the calculation of the percentage required by paragraph (1) of subdivision (b) of Article XVI of the California Constitution, without regard to any unexpended balance of any appropriation. Any reappropriation of funds appropriated in any prior year shall not be included in the sum of appropriations.
(d) “General Fund revenues appropriated for community college districts,” as used in paragraph (1) of subdivision (b) of Section 8 of
Article XVI of the California Constitution, means the sum of
appropriations made that are for allocation to community college districts, regardless of whether those appropriations were made from the General Fund to the Controller, to the Chancellor of the California Community Colleges, or to any other fund or state agency for the purpose of allocation to community college districts. The full amount of any appropriation shall be included in the calculation of the percentage required by paragraph (1) of subdivision (b) of Article XVI of the California Constitution, without regard to any unexpended balance of any appropriation. Any reappropriation of funds appropriated in any prior year shall not be included in the sum of appropriations.
(e) “Total allocations to school districts and community college districts from General Fund proceeds of taxes appropriated pursuant to Article XIII B,” as used in paragraph (2) or (3) of subdivision (b) of Section 8 of Article XVI of the California Constitution, means the sum of appropriations made that are for allocation to school districts, as defined in Section 41302.5, and community college districts, regardless of whether those appropriations were made from the General Fund to the Controller, to the Superintendent, to the Chancellor of the California Community Colleges, or to any other fund or state agency for the purpose of allocation to school districts and community college districts. The full amount of any appropriation shall be included in the calculation of the percentage required by paragraph (2) or (3) of subdivision (b) of Section 8 of Article XVI of the California Constitution, without regard to any unexpended balance of any appropriation. Any reappropriation of funds appropriated in any prior year shall not
be included in the sum of appropriations.
(f) “General Fund revenues appropriated for school districts and community college districts, respectively” and “moneys to be
applied by the state for the support of school districts and community college districts,” as used in Section 8 of Article XVI of the California Constitution, shall include funds appropriated for part-day California state preschool programs under Article 7 (commencing with Section 8235) of Chapter 2 of Part 6 of Division 1 of Title 1, funds appropriated to local educational agencies, as defined in subdivision (al) of Section 8208, to create a full day of care for children participating in the California state preschool program, and funds appropriated for the After School Education and Safety Program established pursuant to Article 22.5 (commencing with Section 8482) of Chapter 2 of Part 6 of Division 1 of Title 1, and shall not include any of the following:
(1) Any appropriation that is not made for allocation to a school district,
as defined in Section 41302.5, or to a community college district, regardless of whether the appropriation is made for any purpose that may be considered to be for the benefit to a school district, as defined in Section 41302.5, or a community college district. This paragraph shall not be construed to exclude any funding appropriated for part-day California state preschool programs under Article 7 (commencing with Section 8235) of Chapter 2 of Part 6 of Division 1 of Title 1, to create a full day of care for children participating in the California state preschool program, or for the After School Education and Safety Program established pursuant to Article 22.5 (commencing with Section 8482) of Chapter 2 of Part 6 of Division 1 of Title 1.
(2) Any appropriation made to the Teachers’ Retirement Fund or to the Public Employees’ Retirement Fund
except those appropriations for reimbursable state mandates imposed on or before January 1, 1988.
(3) Any appropriation made to service any public debt approved by the voters of this state.
(4) With the exception of the programs identified in paragraph (1), commencing with the 2011–12 fiscal year, any funds appropriated for the Child Care and Development Services Act, pursuant to Chapter 2 (commencing with Section 8200) of Part 6 of Division 1 of Title 1.
(g) “Allocated local proceeds of taxes,” as used in paragraph (2) or (3) of subdivision (b) of Section 8 of Article XVI of the California Constitution, means, for school districts as defined, those local revenues, except revenues identified pursuant to paragraph
(5) of subdivision (j) of Section 42238.02, that are used to offset state aid for school districts in calculations performed pursuant to Sections 2558 and 42238 and Chapter 7.2 (commencing with Section 56836) of Part 30.
(h) “Allocated local proceeds of taxes,” as used in paragraph (2) or (3) of subdivision (b) of Section 8 of Article XVI of the California Constitution, means, for community college districts, those local revenues that are used to offset state aid for community college districts. In no event shall the revenues or receipts derived from student fees be considered “allocated local proceeds of taxes.”
(i) For purposes of calculating the 4-percent entitlement pursuant to subdivision (a) of Section 8.5 of Article XVI of the California Constitution, “the total amount required
pursuant to Section 8(b)” shall mean the General Fund aid required for schools pursuant to subdivision (b) of Section 8 of Article XVI of the California Constitution, and shall not include allocated local proceeds of taxes.
(j) This section shall become inoperative on December 15, 2012, and, as of January 1, 2013, is repealed, only if the Schools and Local Public Safety Protection Act of 2012 (Attorney General reference number 12-0009) is not approved by the voters at the November 6, 2012, statewide general election, or if the provisions of that act that modify personal income tax rates do not become operative due to a conflict with another initiative measure that is approved at the same election and receives a greater number of affirmative votes.
SEC. 3.
Section 17053.89 is added to the Revenue and Taxation Code, to read:17053.89.
(a) For taxable years beginning on or after January 1, 2021, and before January 1, 2025, there shall be allowed as a credit against the “net tax,” as defined in Section 17039, an amount equal to 40 percent of the amount contributed by the taxpayer during the taxable year to the California Preschool Investment Fund, created by Section 8239.8 of the Education Code.(b) A credit shall only be allowed if the taxpayer has received a receipt from the State Department of Education pursuant to Section 8239.8 of the Education Code that indicates that the taxpayer has made a contribution to the California Preschool Investment Fund and that a credit would be allowed under this section.
The taxpayer shall provide the receipt upon request to the Franchise Tax Board.
(c) (1) In the case where the credit allowed by this section exceeds the “net tax,” the excess may be carried over to reduce the “net tax” in the following year, and succeeding four years if necessary, until the credit is exhausted.
(2) A deduction otherwise allowed under this part for any amount contributed by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed in subdivision (a).
(d) Credit under this section shall be allowed only for credits claimed on a timely filed original return of the taxpayer.
(e) (1) The Franchise Tax Board may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section.
(2) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code does not apply to any standard, criterion, procedure, determination, rule, notice, or guideline established or issued by the Franchise Tax Board pursuant to this section.
(f) The aggregate amount of credit that may be allowed pursuant to this section and Section 23688.7 shall not exceed two hundred fifty million dollars ($250,000,000) for each calendar year.
(g) This section is repealed on December 1, 2025.
SEC. 4.
Section 23688.7 is added to the Revenue and Taxation Code, to read:23688.7.
(a) For taxable years beginning on or after January 1, 2021, and before January 1, 2025, there shall be allowed as a credit against the “tax,” as defined in Section 23036, an amount equal to 40 percent of the amount contributed by the taxpayer during the taxable year to the California Preschool Investment Fund, created by Section 8239.8 of the Education Code.(b) A credit shall only be allowed if the taxpayer has received a receipt from the State Department of Education pursuant to Section 8239.8 of the Education Code that indicates that the taxpayer has made a contribution to the California Preschool Investment Fund and that a credit would be allowed under this section.
The taxpayer shall provide the receipt upon request to the Franchise Tax Board.
(c) (1) In the case where the credit allowed by this section exceeds the “tax,” the excess may be carried over to reduce the “tax” in the following year, and succeeding four years if necessary, until the credit is exhausted.
(2) A deduction otherwise allowed under this part for any amount contributed by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed in subdivision (a).
(d) Credit under this section shall be allowed only for credits claimed on a timely filed original return of the taxpayer.
(e) (1) The Franchise Tax Board may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section.
(2) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code does not apply to any standard, criterion, procedure, determination, rule, notice, or guideline established or issued by the Franchise Tax Board pursuant to this section.
(f) The aggregate amount of credit that may be allowed pursuant to this section and Section 17053.89 shall not exceed two hundred fifty million dollars ($250,000,000) for each calendar year.
(g) This section is repealed on December 1, 2025.
