Bill Text: CA AB2421 | 2013-2014 | Regular Session | Amended
Bill Title: Corporation Tax Law: credits: Homeless and Foster Youth
Sponsorship: Bipartisan Bill
Status: (Introduced - Dead) 2014-08-14 - In committee: Set, second hearing. Held under submission. [AB2421 Detail]
Download: California-2013-AB2421-Amended.html
BILL NUMBER: AB 2421 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 4, 2014
AMENDED IN ASSEMBLY JUNE 17, 2014
AMENDED IN ASSEMBLY APRIL 22, 2014
AMENDED IN ASSEMBLY APRIL 1, 2014
INTRODUCED BY Assembly Member Nestande
(Coauthors: Assembly Members Allen, Maienschein, and Olsen)
(Coauthor: Senator Cannella)
FEBRUARY 21, 2014
An act to add and repeal Section 23692 of the Revenue and Taxation
Code, relating to taxation, to take effect immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
AB 2421, as amended, Nestande. Corporation Tax Law: credits:
Homeless and Foster Youth Opportunities Investment Act.
The Corporation Tax Law allows various credits against the taxes
imposed by that law.
This bill, for taxable years beginning on or after January 1,
2015, and before January 1, 2020, would allow a credit against the
taxes imposed under that law for 50% of monetary contributions to
qualified K-College education scholarship organizations, as defined,
to fund qualified K-College education scholarships, as defined. The
bill would provide that the credit would not exceed $200,000 per
taxpayer, that the credit would be awarded on a first-come,
first-served basis, and that the credit would have an aggregate cap
of $10,000,000 for each calendar year. The bill would require the
Franchise Tax Board and the State Department of Education to
administer the credit, as specified.
This bill would take effect immediately as a tax levy.
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. This act shall be known and may be cited as the
Homeless and Foster Youth Opportunities Investment Act.
SEC. 2. The Legislature finds and declares the following:
(a) Providing tax incentives to encourage private investments for
the common good is sound public policy.
(b) Expanding educational opportunities and improving the quality
of, and access to, educational services within the state are valid
public purposes that the Legislature may promote using its sovereign
power to determine tax policy.
(c) Creative tax policy can inspire greater charitable
contributions and public-private partnerships that ensure additional
resources for the education of all children in California.
(d) Encouraging voluntary support for education, without prejudice
for or against any state-sanctioned educational enterprise promotes
the state's interest and common good in providing the highest quality
education to all children in the state.
(e) At a time when fiscal realities challenging California's
education system demand innovative ways to deliver vital education
services to public and private pupils in kindergarten and grades 1 to
12, inclusive, and in college, charitable giving for educational
purposes should be stimulated.
(f) California benefits from ensuring the accessibility and
viability of strong public, as well as, private school and college
options in educating students, especially for those with the greatest
needs: our homeless and foster youth.
SEC. 3. Section 23692 is added to the Revenue and Taxation Code,
to read:
23692. (a) For each taxable year beginning on or after January 1,
2015, and before January 1, 2020, there shall be allowed as a credit
against the "tax," as defined in Section 23036, not to exceed
two hundred thousand dollars ($200,000), an amount equal to 50
percent of the an approved monetary
contribution made by a taxpayer during the taxable year, not
to exceed two hundred thousand dollars ($200,000)
year to a qualified K-College education scholarship
organization to fund qualified K-College education
scholarships. scholarships in accordance with this
section.
(b) For purposes of this section:
(1) "Credit certificate" means the certificate issued by the State
Department of Education pursuant to subdivision (c).
(1)
(2) "Qualified K-College education scholarship
organization" or "ESO" means an organization in this state that
the State Department of Education has determined meets the
following requirements:
(A) Is organized and operated with a purpose of providing
qualified K-College education scholarships to specified pupils
attending a public, charter, or private school in California.
(B) (i) If the organization has three or more years of audited
financial statements, distributes to specified pupils at least 80
percent of contributions for which a credit is claimed for qualified
K-College education scholarships .
(ii) If the organization has fewer than three years of audited
financial statements, distributes at least 90 percent of
contributions for which a credit is claimed for qualified K-College
education scholarships .
(C) Makes qualified K-College education scholarships available for
specified pupils from more than one school.
(D) Retains data on the progress of the specified pupils
participating in qualified K-College education scholarships on
nationally available norm-referenced tests to evaluate the program's
efficacy.
(E) Submits to the Franchise Tax Board
State Department of Education financial and compliance audit
reports performed by a certified public accountant.
(F) Submits to the State Department of Education quarterly reports
on the number of qualified K-College education scholarship
recipients and the schools that the recipients attend.
(G) Applies to participate in this credit program with the State
Department of Education.
(H) Is formed as any of the following:
(i) A nonprofit public benefit corporation described in Part 2
(commencing with Section 5110) of Division 2 of Title 1 of the
Corporations Code.
(ii) A nonprofit religious corporation described in Part 4
(commencing with Section 9110) of Division 2 of Title 1 of the
Corporations Code.
(iii) A duly authorized foreign nonprofit corporation that has
complied with the registration requirements under Section 6910 of,
and Chapter 21 (commencing with Section 2100) of Division 1 of Title
1 of, the Corporations Code.
(I) Is exempt from federal income tax as an organization described
in Section 501(c)(3) of the Internal Revenue Code.
(2)
(3) "Qualified education-related expenses" means
expenses paid or incurred for the purchase of books, services, and
other materials that support academic success, including computers,
software, tutoring, and other academic support.
(3)
(4) "Qualified K-College education scholarship" means
any of the following:
(A) Financial assistance for a specified pupil to partially or
fully pay for the fees associated with the general costs of
transportation to attend a public, charter, or private school or to
attend school-related activities and other educationally beneficial
programs.
(B) Financial assistance for a specified pupil to attend college
courses after graduation from high school provided by any public
college or independent, nonprofit college where the specified pupil
has been admitted to attend.
(C) Financial assistance for a specified pupil attending a public,
charter, or private school for qualified education-related expenses,
not provided by the McKinney-Vento Homeless Assistance Act of 1987
(Public Law 100-77).
(4)
(5) "Specified pupil" means an individual who has
applied for a K-College education scholarship and who is either
within foster care, has been placed in a foster care system within
the State of California, or has been placed with a relative caretaker
through child protective services at any time prior to graduating
high school, or who was at any time prior to graduating high school,
or is currently a homeless youth as defined in Section 11139.3 of the
Government Code or the McKinney-Vento Homeless Assistance Act of
1987 (Public Law 100-77). A specified pupil is not required to be
previously enrolled in a public school or charter school to
participate.
(5)
(6) (A) "Private school" means a person, firm,
association, partnership, limited liability company, or corporation
offering or conducting private school instruction in the State of
California on the elementary or high school level, that meets all of
the following requirements:
(i) Is accredited by the Western Association of Schools and
Colleges or an affiliated organization.
(ii) Has filed a current private school affidavit with the State
Department of Education in accordance with Section 33190 of the
Education Code.
(iii) Complies with applicable provisions of the Health and Safety
Code.
(iv) Complies with applicable provisions of the California Fair
Employment and Housing Act (Part 2.8 (commencing with Section 12900)
of Division 3 of Title 2 of the Government Code).
(v) Utilizes background checks in connection with hiring all
school employees, consistent with the standards set forth in
subdivision (a) of Section 44237 of the Education Code.
(vi) Requires a specified pupil to take a nationally available
norm-referenced test.
(vii) Has obtained, if it has been in operation for less than
three years, a surety bond or letter of credit in an amount equal to
the value of the education scholarship payments for one quarter.
(B) "Private school" also means an institution that meets the
definition of a "qualifying institution" in paragraph (1) of
subdivision (l) of Section 69432.7 of the Education Code.
(C) "Private school" does not include a program of instruction
offered by a tutor or a nonaccredited private school to a pupil who
is exempt from compulsory full-time education under Article 3
(commencing with Section 48220) of Chapter 2 of Part 27 of Division 4
of Title 2 of the Education Code.
(c) The taxpayer shall receive a certification by the State
Department of Education upon a determination that the contribution
meets the requirements of this section.
(c) In a form and manner prescribed by the State Department of
Education, a taxpayer seeking a credit under this section for a
monetary contribution to a qualified K-College education scholarship
organization shall request approval to make a specified contribution
and tax credit amount from the State Department of Education. After
receiving approval to make a contribution, the taxpayer may make the
approved contribution. The State Department of Education and the
qualified K-College education scholarship shall verify the amount and
date of the contribution and issue a tax credit certificate to the
taxpayer reflecting the approved amount of the tax credit, and notify
the Franchise Tax Board of the contribution and approved credit
amount. A taxpayer shall make a contribution within 30 calendar days
of the date the contribution has been approved by the State
Department of Education in order to claim the credit. The taxpayer
shall provide a copy of the credit certificate upon request to the
Franchise Tax Board.
(d) 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 five years if necessary, until the
credit is exhausted.
(e) This credit shall be in lieu of any other credit or deduction
that the taxpayer may otherwise claim pursuant to this part with
respect to a monetary contribution described in subdivision (a).
(f) This credit shall be claimed on a timely filed original
return.
(f) The credit allowed under this section shall be claimed on a
timely filed original return and only with respect to contributions
where the taxpayer has received a tax credit certificate from the
State Department of Education.
(g) The State Department of Education may prescribe rules,
guidelines, or procedures appropriate to carry out the purposes of
this section, including any guidelines regarding the limitation on
total credits allowable under this section.
(g)
(h) (1) The aggregate amount of credits allowed under
this section shall not exceed ten million dollars ($10,000,000) for
each calendar year.
(2) The allocation of credits shall be on a first-come,
first-served basis.
(3) The Legislature may increase the amount in paragraph (1).
(h)
(i) The Franchise Tax Board and the
State Department of Education shall administer this credit.
do all of the following:
(1) Establish application forms and procedures to determine
eligibility of an entity as a qualified K-College educational
scholarship organization, including the following:
(A) Accept and evaluate applications received that an applicant
meets the requirements of a qualified K-College education scholarship
organization. The State Department of Education may suspend or
revoke an organization's qualified K-College education scholarship
organization status if the State Department of Education finds that
the organization no longer meets the requirements of this section.
(B) Determine and designate organizations that meet the
requirements of a qualified K-College education scholarship
organization.
(C) Maintain and post a listing of qualified K-College education
scholarship organizations on the State Department of Education's
Internet Web site. The list shall be published annually by March 1.
(2) On or after January 1, 2015, and before January 1, 2020,
allocate tax credits to taxpayers that make an approved monetary
contribution.
(A) Establish a procedure for taxpayers to file with the State
Department of Education a written application, on a form jointly
prescribed by the State Department of Education and the Franchise Tax
Board for the approval of a monetary contribution in accordance with
this section. The application shall include, but not be limited to,
the following information:
(i) The name and taxpayer identification number of the donor.
(ii) The name and taxpayer identification number of the qualified
K-College education scholarship organization.
(iii) The proposed amount of monetary contribution.
(B) Establish criteria, consistent with the requirements of this
section, for allocating tax credits.
(C) (i) Process and approve, or reject, all requests for approval
of a monetary contribution on a first-come-first-served basis, based
on the date the request for approval is received by the State
Department of Education.
(ii) If requests for approval of a monetary contribution are
received from two or more taxpayers on the same day, and the amount
of credits of those requests exceeds the amount of credits available
for allocation, the remaining available credits shall be allocated
among those taxpayers on a pro rata basis.
(D) Subject to the annual cap established as provided in
subdivision (h), allocate credits under this section.
(3) Certify and issue tax credit certificates to taxpayers for
approved monetary contributions made.
(A) Establish a verification procedure for the amount of monetary
contributions made to qualified K-College education scholarship
organizations.
(B) Establish audit requirements that shall be satisfied before a
credit certificate may be issued by the State Department of
Education.
(4) Track aggregate amount of tax credits allocated to taxpayers.
(5) Provide the Franchise Tax Board with a list of taxpayers and
the tax credit amounts allocated to each qualified taxpayer by the
State Department of Education. The list shall include the names and
taxpayer identification numbers, including taxpayer identification
numbers of each partner or shareholder, as applicable, of the
qualified taxpayer.
(1)
(j) The Franchise Tax Board shall perform all of the
following:
(A) Adopt rules and regulations as necessary or appropriate to
implement this credit.
(B) Track credits claimed.
(C) Post aggregate totals of the credits claimed on the Internet
Web site of the Franchise Tax Board.
(D) Determine when the aggregate total of the credits reaches ten
million dollars ($10,000,000) for a calender year.
(2) The State Department of Education shall do the following:
(A) Adopt rules and regulations necessary to determine whether the
following meet the requirements of this section:
(i) An ESO.
(ii) A contribution.
(B) Submit a list of eligible ESOs that comply with the
requirements of this section to the Franchise Tax Board annually by
March 15.
(C) Establish application forms and procedures.
(D) Certify that the contributions meet the requirements of this
section.
(1) Assist the State Department of Education in creating a form
for taxpayers to submit requesting approval of a monetary
contribution to a qualified K-College education scholarship
organization for the credit under this section and a certificate to
be provided to taxpayers of the approved tax credit amount.
(2) Establish a procedure to verify that the amount of tax credit
claimed on a tax return has been approved and certified by the State
Department of Education.
(i)
(k) Chapter 3.5 (commencing with Section 11340) of Part
1 of Division 3 of Title 2 of the Government Code does not apply to
the guidelines or regulations adopted pursuant to this section.
(j)
(l) This section shall remain in effect only until
December 1, 2020, and as of that date is repealed.
SEC. 4. This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.
