Bill Text: CA AB1161 | 2015-2016 | Regular Session | Amended
Bill Title: Preschool: privately funded pilot program: tax credits.
Spectrum: Bipartisan Bill
Status: (Failed) 2016-11-30 - From Senate committee without further action. [AB1161 Detail]
Download: California-2015-AB1161-Amended.html
BILL NUMBER: AB 1161 AMENDED
BILL TEXT
AMENDED IN SENATE JULY 2, 2015
INTRODUCED BY Assembly Members Olsen and Atkins
(Principal coauthor: Assembly Member Steinorth)
( Principal coauthor: Senator
Hertzberg )
( Coauthors: Assembly Members
Chávez, Dodd, Gipson, Holden,
and Waldron )
( Coauthor: Senator Huff
)
FEBRUARY 27, 2015
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 17053.87 and 23687 of the Revenue and Taxation Code,
relating to preschool funding.
LEGISLATIVE COUNSEL'S DIGEST
AB 1161, as amended, Olsen. Preschool: privately funded pilot
program: tax credits.
Existing law, the Child Care and Development Services Act,
administered by the State Department of Education, requires the
Superintendent of Public Instruction to administer child care 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, 2021, 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 part of the California state
preschool program located in one of the 5 participating
counties, counties participating in the pilot program,
as provided. The bill would require participating counties to
report to the department's Early Education & Support Division
regarding the county's assessment of how the pilot program is
performing. The bill would require any moneys remaining in the fund
after January 1, 2021, 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, 2016, and before January 1, 2020, 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
State Department of Education 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.
The
This bill would, until January 1, 2021, 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.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
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. 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 child care
assistance.
8239.6. For purposes of this article, the following terms have
the following meanings:
(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) No later than On or before
June 1, 2016, a county may apply to the department for
consideration of inclusion in the program. For purposes of this
section, a county's local child care 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) No later than On or before
September 1, 2016, 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 child care 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.
8239.8. (a) (1) The department may accept monetary contributions
made by a person for funding the purposes of this article. The
California Preschool Investment Fund is hereby created in the State
Treasury to receive any monetary contributions made pursuant to this
article.
(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 17053.87 or 23687 of the Revenue and
Taxation Code.
(B) Subject to the annual cap as provided in subdivision (f) of
Sections 17053.87 and 23687 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 Web sites 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 17053.87 and 23687 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 17053.87 and 23687 of the Revenue and
Taxation Code for the taxable year.
(B) Second, upon appropriation:
(i) To the Franchise Tax Board and the department for
reimbursement of all administrative costs incurred by those agencies
in connection with their duties under this article.
(ii) To the department for the 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 8235). The moneys shall only be used to
support state preschools located in one of the five counties
participating in the program.
8239.9. 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.
8239.10. (a) This article shall remain in effect only until
January 1, 2021, and as of that date is repealed, unless a later
enacted statute, that is enacted before January 1, 2021, deletes or
extends that date.
(b) Any moneys remaining in the fund as of January 1, 2021, 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) 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 17053.87
and 23687 of the Revenue and Taxation Code as though they were
proceeds of taxes.
(B) This paragraph shall become inoperative on January 1, 2021.
(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, and 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 or 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 2575, 42238.02, 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.
SEC. 3. Section 17053.87 is added to the Revenue and Taxation
Code, to read:
17053.87. (a) For taxable years beginning on or after January 1,
2016, and before January 1, 2020, 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 23687 shall not exceed two hundred fifty
million dollars ($250,000,000) for each calendar year.
(g) This section is repealed on December 1, 2020.
SEC. 4. Section 23687 is added to the Revenue and Taxation Code,
to read:
23687. (a) For taxable years beginning on or after January 1,
2016, and before January 1, 2020, 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 17053.87 shall not exceed two hundred fifty
million dollars ($250,000,000) for each calendar year.
(g) This section is repealed on December 1, 2020.
