Bill Text: CA AB2393 | 2021-2022 | Regular Session | Amended
Bill Title: CalWORKs Educational Opportunity and Attainment Program.
Spectrum: Partisan Bill (Independent 1-0)
Status: (Engrossed - Dead) 2022-06-23 - In committee: Set, first hearing. Hearing canceled at the request of author. [AB2393 Detail]
Download: California-2021-AB2393-Amended.html
|
Amended
IN
Senate
May 31, 2022 |
|
Amended
IN
Senate
May 16, 2022 |
CALIFORNIA LEGISLATURE—
2021–2022 REGULAR SESSION
Assembly Bill
No. 2393
| Introduced by Assembly Member Mayes |
February 17, 2022 |
An act to add and repeal Section 12419.3.2 of the Government Code, to add and repeal Sections 17141.5 and 19265.5 of the Revenue and Taxation Code, and to add Section 11347 to, and to repeal and add Section 11346 of, the Welfare and Institutions Code, relating to CalWORKs.
LEGISLATIVE COUNSEL'S DIGEST
AB 2393, as amended, Mayes.
CalWORKs Educational Opportunity and Attainment Program.
(1) Existing law establishes the California Work Opportunity and Responsibility to Kids (CalWORKs) program, under which each county provides cash assistance and other benefits to qualified low-income families using federal, state, and county funds. Existing law creates the CalWORKs Educational Opportunity and Attainment Program to provide CalWORKs recipients with a one-time $500 education incentive award for the completion of a high school diploma or its equivalent and a one-time $1,000 education stipend for enrollment in an education or training program leading to a career technical education program certificate, an associate’s degree, or a bachelor’s degree. Existing law requires a county to comply with the provisions of the CalWORKs Educational Opportunity and Attainment Program only to the extent funding for this purpose is appropriated in the annual Budget
Act and available to the county.
Under this bill, the issuance of an education incentive award or education stipend would be treated in the same manner as the federal earned income refund for the purpose of determining eligibility to receive benefits for public social services, as specified, and would not be taken into account as income or resources for purposes of determining eligibility for benefits under any other state or local program to the extent that the exemption would not conflict with federal law, as specified.
The bill would, subject to an appropriation, authorize the State Department of Social Services to establish a mechanism for the issuance of the awards or stipends in the form of a tax refund payment, without modifying or otherwise affecting the county process. The bill would set forth certain terms if the department elects to establish this mechanism, including requiring the Franchise Tax Board to
determine the form and manner of the tax refund designation. The bill would also exempt the awards or stipends from a garnishment order, as specified. to the extent not in conflict with federal law.
(2) The Personal Income Tax Law imposes a tax on individual taxpayers measured by the taxpayer’s taxable income for the taxable year, but, in modified conformity with federal income tax laws, allows various exclusions from gross income. Existing law allows the California Earned Income Tax Credit against personal income tax, as specified. Existing law requires any bill authorizing a new tax expenditure, as defined to include a credit or exclusion, to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve,
detailed performance indicators, and data collection requirements, as specified.
This bill, for taxable years beginning on or after January 1, 2023, and until January 1, 2028, would exclude the education incentive awards or education stipends from the gross income of recipients for personal income tax purposes and would specify that the amount received would not be considered earned income for purposes of eligibility for the California Earned Income Tax Credit. The bill would include legislative findings relating to the purpose of the tax expenditure and would require the State Department of Social Services to submit a report to the Legislature, containing specified information, in each fiscal year during which an appropriation is made for the CalWORKs Educational Opportunity and Attainment Program.
(3) Existing law authorizes the Franchise Tax Board, as part of its administrative duties with respect
to the collection of taxes, to seize assets of a delinquent taxpayer. Existing law authorizes the board to issue an order to specified financial institutions, persons, and entities, including an officer or department of the state, to withhold and remit liquid assets of a delinquent taxpayer in order to satisfy the tax obligations of that taxpayer.
Under this bill, until January 1, 2028, the education incentive awards or education stipends would not be subject to withholding or levy for liabilities due, as specified.
(4) Existing law requires the Controller to state an account with persons that receive funds or property belonging to the state and fail to properly render account thereof to the state, and persons that fail to pay to the State Treasury any money belonging to the state. Existing law requires the Controller to offset delinquent accounts against personal income tax refunds. Existing law
authorizes the Controller to offset any amount due a state agency from a person or entity against any amount owing that person or entity by any state agency.
This bill would, until, January 1, 2028, prohibit the Controller from offsetting delinquent accounts against the payment of an education incentive award or education stipend.
(5) The California Constitution generally prohibits the total annual appropriations subject to limitation of the state from exceeding the appropriations limit for the prior fiscal year, adjusted for the change in the cost of living and the change in population, and defines “appropriations subject to limitation” to mean any authorization to expend during a fiscal year the proceeds of taxes levied by or for the state, except for, among other things, refunds of taxes.
This bill would state the intent of the Legislature that the payment
of an education incentive award or education stipend, if processed pursuant to the above-described tax refund mechanism, would constitute a refund of various taxes and would therefore be excluded from the appropriations subject to limitation.
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.
Section 12419.3.2 is added to the Government Code, to read:12419.3.2.
(a) Notwithstanding any other provision of this article, the Controller shall not offset delinquent accounts against the payment of an education incentive award or education stipend authorized pursuant to Article 3.7 (commencing with Section 11340) of Chapter 2 of Part 3 of Division 9 of the Welfare and Institutions Code.(b) This section shall remain in effect only until January 1, 2028, and as of that date is repealed.
SEC. 2.
Section 17141.5 is added to the Revenue and Taxation Code, to read:17141.5.
(a) For taxable years beginning on or after January 1, 2023, gross income does not include any amount received as an education incentive award or education stipend authorized pursuant to Article 3.7 (commencing with Section 11340) of Chapter 2 of Part 3 of Division 9 of the Welfare and Institutions Code.(b) For taxable years beginning on or after January 1, 2023, any amount received as an education incentive award or education stipend as described in subdivision (a) shall not be considered earned income for purposes of eligibility for the California Earned Income Tax Credit pursuant to Section 17052.
(c) This section shall remain in effect only until January 1, 2028, and as of that date is repealed.
SEC. 3.
Section 19265.5 is added to the Revenue and Taxation Code, to read:19265.5.
(a) Notwithstanding Section 18670 or 18671, an education incentive award or education stipend authorized pursuant to Article 3.7 (commencing with Section 11340) of Chapter 2 of Part 3 of Division 9 of the Welfare and Institutions Code shall not be subject to withholding or levy for liabilities due under Section 10878, Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), or this part.(b) This section shall remain in effect only until January 1, 2028, and as of that date is repealed.
SEC. 4.
Section 11346 of the Welfare and Institutions Code is repealed.SEC. 5.
Section 11346 is added to the Welfare and Institutions Code, to read:11346.
(a) The State Department of Social Services may establish a mechanism for the issuance of the education incentive awards or education stipends authorized pursuant to this article in the form of a tax refund payment, without modifying or otherwise affecting the county process in issuing the education incentive awards or education stipends as described in Sections 11342 and 11345.(b) If the department elects to establish the mechanism of tax refunds, both of the following apply:
(1) The designation of the payments as tax refunds shall be made in a form and manner determined by the Franchise Tax Board.
(2) The tax refund payment shall not be a refund or overpayment of income taxes under Chapter 6 (commencing with Section 19301) of Part 10.2 of Division 2 of the Revenue and Taxation Code of any liability imposed under Part 10 (commencing with Section 17001) of Division 2 of the Revenue and Taxation Code.
(c) (1) An education incentive award or education stipend authorized pursuant to this article shall be automatically exempt from a garnishment order. order, to the extent not in conflict with federal law.
(2)This subdivision does not apply to a garnishment order in connection with an action for, or a judgment awarding, child support, spousal support, family support, or a criminal restitution payable to victims.
(3)
(2) For purposes of this subdivision, “garnishment order” means a writ, order, notice, summons, judgment, levy, or similar written instruction issued by a court, a state or state agency, or a municipality or municipal corporation, including an order to freeze the assets in an account, to effect a garnishment against a debtor.
(d) Implementation of this section shall be subject to an appropriation by the Legislature for the purpose of this article as described in Section 11345.
SEC. 6.
Section 11347 is added to the Welfare and Institutions Code, to read:11347.
(a) Notwithstanding any other law, the issuance of an education incentive award or education stipend authorized pursuant to this article shall be treated in the same manner as the federal earned income refund for the purpose of determining eligibility to receive benefits under this division, excluding benefits under Chapter 7 (commencing with Section 14000) of Part 3, or amounts of those benefits.(b) Notwithstanding any other law, the issuance of an education incentive award or education stipend authorized pursuant to this article shall not be taken into account as income, and shall not be taken into account as resources for a period of 12 months from receipt, for
purposes of determining the eligibility of the award or stipend recipient, or any other individual, for benefits or assistance or the amount or extent of benefits or assistance under any state or local program not covered in subdivision (a). With respect to a state or local program, this subdivision shall be implemented only to the extent that it does not conflict with federal law relating to that program, and that any required federal approval or waiver is first obtained for that program.
SEC. 7.
For purposes of complying with Section 41 of the Revenue and Taxation Code, both of the following apply:(a) The Legislature finds and declares that the purpose of the tax expenditure allowed by Section 17141.5 of the Revenue and Taxation Code is to provide low-income families participating in the CalWORKs program with incentives to complete, or enroll in, education programs and, in turn, make progress in professional success and financial stability.
(b) In each fiscal year during which an appropriation is made for the purpose of this article, in order to provide information on this
tax expenditure, the State Department of Social Services shall, in consultation with the Franchise Tax Board, notwithstanding Section 19542 of the Revenue and Taxation Code, prepare a written report that shall include the number of eligible recipients issued an education incentive award or education stipend as authorized pursuant to Article 3.7 (commencing with Section 11340) of Chapter 2 of Part 3 of Division 9 of the Welfare and Institutions Code. The department shall submit the written report to the Legislature by April 1 of each fiscal year during which an appropriation is made for the purpose of this article, in accordance with Section 9795 of the Government Code.
