Bill Text: CA SB693 | 2013-2014 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Personal income tax: credits: qualified teachers.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2014-02-03 - Returned to Secretary of Senate pursuant to Joint Rule 56. [SB693 Detail]

Download: California-2013-SB693-Amended.html

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BILL NUMBER: SB 693	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JANUARY 6, 2014
	AMENDED IN SENATE  APRIL 11, 2013

INTRODUCED BY   Senator Correa

                        FEBRUARY 22, 2013

   An act to add and repeal Sections  17052.5 and 17052.7
  17052.5, 17052.7, and 17158  of the Revenue and
Taxation Code, relating to taxation, to take effect immediately, tax
levy.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 693, as amended, Correa. Personal income tax: credits: 
exclusions:  school expenses.
   The Personal Income Tax Law  imposes a tax based upon gross
income, and defines gross income as all income from whatever source
derived, unless specifically excluded. The Personal Income Tax Law
 allows various credits against the tax imposed by that law.
   This bill would, for taxable years beginning on or after January
1, 2014, and before January 1, 2019, allow  either an exclusion
from gross income or  a credit against that tax to 
low-income and middle-income   qualified  parents
and guardians , as defined,  for education-related expenses,
as defined,  not to exceed $500, and a credit against that
tax to qualified taxpayers,   in specified amounts. This
bill would also allow a credit against that tax for qualified
teachers,  as defined, for instructional materials and classroom
supplies, not to exceed $250.
   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.    The Legislature finds and declares all
of the following:  
   (a) While ensuring the quality education of all of California's
school children is a shared responsibility of the general public, it
is foremost the duty of individual parents and teachers.  
   (b) State tax relief for education can help empower and engage
low- and middle-income families in personally caring for their own
school children's learning needs, which they know most intimately.
 
   (c) State tax relief for education expenses, leveraged with
current federal deductions, can further support and strengthen new
teachers for successful careers in their noble profession. 
   SECTION 1.   SEC. 2.   Section 17052.5
is added to the Revenue and Taxation Code, to read:
   17052.5.  (a) For each taxable year beginning on or after January
1, 2014, and before January 1, 2019, there shall be allowed as a
credit against the "net tax," as defined in Section 17039, the
qualified amount that was paid or incurred for qualified
education-related expenses for one or more dependent children by a
 low-income or middle-income   qualified 
parent or guardian during the taxable year.
   (b) For purposes of this section:
   (1) "Dependent children" means children who attend kindergarten or
any  of  grades 1 to 12, inclusive, in California at a
public, charter, or private school that has a current private school
affidavit on file with the State Department of Education in the
taxable year and who meet the requirements of Section  152(c)
(1)(B), (D),   152(c)(1)(D)  and (E) of the
Internal Revenue Code. 
   (2) "Qualified amount" means the following:  
   (A) If the qualified education-related expenses are two hundred
fifty dollars ($250) or less, the amount paid or incurred for those
expenses.  
   (B) If the qualified education-related expenses are more than two
hundred fifty dollars ($250) and less than one thousand two hundred
fifty dollars ($1,250), two hundred fifty dollars ($250) plus 25
percent of the difference between the amount paid or incurred for
those expenses and two hundred fifty dollars ($250). 

   (C) If the qualified education-related expenses are more than one
thousand two hundred fifty dollars ($1,250), five hundred dollars
($500).  
   (3) (A) "Qualified education-related expenses" means the costs of
textbooks, school supplies, including, but not limited to, pens,
paper, pencils, notebooks, calculators, and rulers, school uniforms,
computers, computer hardware, and educational computer software used
to learn academic subjects, tuition, tutoring, psychoeducational
diagnostic evaluations to assess the cognitive and academic abilities
of pupils, special education services for pupils who have an
individualized education program or its equivalent, academic
after-school programs, out-of-school enrichment programs, public
transportation, third-party transportation, and the rental or
purchase of educational equipment required for classes held during
the regular school year.  
   (2) "Household income" has the same meaning as "adjusted gross
income," as defined in Section 17072.  
   (3) "Qualified amount" means the amount paid for incurred for
qualified education expenses.  
   (4) (A) "Qualified education-related expenses" means the
kindergarten or any of grades 1 to 12, inclusive, costs of: textbooks
and school supplies, including, but not limited to, pens, paper,
pencils, notebooks, calculators, and rulers; the rental or purchase
of educational equipment required for classes during the regular
school day; school uniforms that are not part of a cocurricular
activity; computers, computer hardware, and educational computer
software used to lean academic subjects; tuition for a private school
with kindergarten or any of grades 1 to 12, inclusive, for college
courses at public institutions or independent nonprofit colleges, or
for summer school courses that satisfy high school graduation
requirements; psychoeducational diagnostic evaluations to assess the
cognitive and academic abilities of pupils; special education and
related services for pupils who have an individualized education
program; out-of-school enrichment programs, tutoring, and summer
programs that are academic in nature; and public transportation or
third-party transportation expenses for traveling directly to and
from school. 
   (B) "Qualified education-related expenses" shall not include any
expenses for the items described in subparagraph (A) that are used in
a trade or business. 
   (4) "Low-income or middle-income 
    (5)     "Qualified  parent or guardian"
means a parent or legal guardian of a full-time pupil who is under
21 years of age at the close of the school year who meets both of the
following requirements:
   (A) Both the pupil and the parent or guardian reside in California
when the qualified education-related expenses  were
  are  paid or incurred.
   (B) The household income does not exceed  300 
 200  percent of the federal Income Eligibility Guidelines
published by the Food and Nutrition Service of the United States
Department of Agriculture for use in determining eligibility for
reduced price meals. 
   (5) "Tuition" means tuition for a private school with kindergarten
or any grades 1 to 12, inclusive, or for college courses or summer
school courses that satisfy high school graduation requirements.
 
   (c) (1) The credit amount shall be limited to five hundred dollars
($500) per household.  
   (2) If more than one parent or guardian qualifies for this credit,
the following applies:  
   (A) The credit shall be allowed to the parent or guardian having
custody for the greater portion of the calendar year. 

   (B) If the child resides with more than one parent or guardian for
the same amount of time during the taxable year, the parent or
guardian with the highest adjusted gross income shall be allowed the
credit.  
   (c) The total amount of credit available pursuant to this section
per qualified parent or guardian shall not exceed five hundred
dollars ($500) per taxable year, except as provided in paragraphs (1)
and (2).  
   (1) If the qualified parent or guardian is a married individual, a
credit pursuant to this section shall be allowed only if the
qualified parent or guardian and the qualified parent or guardian's
spouse file a joint return for the taxable year in which the credit
is claimed.  
   (2) If qualified parents or guardians file individual returns, the
total combined credit amount allowed pursuant to this section on
both returns shall not exceed five hundred dollars ($500). 
   (d) 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.
   (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 shall 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) (1) The credit allowed by this section shall be in lieu of any
exclusion allowed by Section 17158.  
   (2) The credit allowed by this section shall not be allowed by for
any expense incurred by a qualified teacher for instructional
material and classroom supplies, as defined by Section 17052.7. 

   (f) 
    (g)  This section shall remain in effect only until
December 1, 2019, and as of that date is repealed, unless a later
enacted statute, that is enacted before January 1, 2019, deletes or
extends that date.
   SEC. 2.   SEC. 3.   Section 17052.7 is
added to the Revenue and Taxation Code, to read:
   17052.7.  (a)  (1)    For each taxable year
beginning on or after January 1, 2014, and before January 1, 2019,
there shall be allowed as a credit against the "net tax," as defined
in Section 17039, an amount equal to the amount paid or incurred by a
qualified  taxpayer   teacher  during the
taxable year for instructional materials and classroom supplies, not
to exceed two hundred fifty dollars ($250)  , except as provided
in paragraph (2)  . 
   (2) Subject to the maximum credit amount allowed per qualified
teacher, for qualified teachers who are married and filing a joint
return there shall be allowed a credit not to exceed five hundred
dollars ($500). 
   (b) For purposes of this section:
   (1) "Instructional materials and classroom supplies" means any
unreimbursed expenses, otherwise deductible as a trade or business
expense, for books, supplies, computer equipment, including related
software and services and other equipment, and supplementary
materials used in the classroom  , including, but not limited to,
supplies for courses in health and physical education  .

   (2) "Qualified taxpayer" means a person who works at least 900
hours in the school year as a teacher, instructor, counselor,
principal, or aide in a school for kindergarten or any grades 1 to
12, inclusive.  
   (c) A qualified taxpayer shall be allowed this credit only for the
first three years of employment as a teacher, instructor, counselor,
principal, or aide in a school for kindergarten or any grades 1 to
12, inclusive.  
   (2) "Qualified teacher" means a teacher who meets all of the
following requirements:  
   (A) The individual has worked at least 900 hours in the school
year as a teacher, in a school offering instruction in kindergarten
or any of grades 1 to 12, inclusive, in California at a public,
charter, or private school that has a current private school
affidavit on file with the State Department of Education in the
taxable year.  
   (B) The teacher is primarily engaged in the duty of imparting
knowledge to pupils by teaching, instructing, or lecturing. 

   (C) The teacher customarily and regularly exercises discretion and
independent judgment in performing the duties of a teacher. 

   (D) The teacher is not employed as a tutor, teaching assistant,
instructional aide, student teacher, day care provider, vocational
instructor, or similar position.  
   (c) The credit allowed pursuant to this section shall be available
as follows:  
   (1) For taxable years beginning on or after January 1, 2014, and
before January 1, 2015, the credit shall be available only to
qualified teachers with no more than one year of employment as a
qualified teacher.  
   (2) For taxable years beginning on or after January 1, 2015, and
before January 1, 2016, the credit shall be available only to
qualified teachers with no more than two consecutive years of
employment as a qualified teacher.  
   (3) For taxable years beginning on or after January 1, 2016, and
before January 1, 2019, the credit shall be available only to
qualified teachers with no more than three consecutive years of
employment as a qualified teacher. 
   (d) 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.
   (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 shall 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 credit allowed by Section 17052.6 shall not be allowed for
any expense incurred by a qualified teacher for instructional
material and classroom supplies, as defined by paragraph (1) of
subdivision (b).  
   (f) 
    (g)  This section shall remain in effect only until
December 1, 2019, and as of that date is repealed, unless a later
enacted statute, that is enacted before January 1, 2019, deletes or
extends that date.
   SEC. 4.    Section 17158 is added to the  
Revenue and Taxation Code   , to read:  
   17158.  (a) For each taxable year beginning on or after January 1,
2014, and before January 1, 2019, gross income shall not include the
qualified amount paid or incurred for qualified education-related
expenses for one or more dependent children by a qualified parent or
guardian during the taxable year.
   (b) For purposes of this section:
   (1) "Dependent children" means children who attend kindergarten or
any of grades 1 to 12, inclusive, in California at a public,
charter, or private school that has a current private school
affidavit on file with the State Department of Education in the
taxable year and who meet the requirements of Section 152(c)(1)(D)
and (E) of the Internal Revenue Code.
   (2) "Qualified amount" means the amount paid for incurred for
qualified education expenses.
   (3) (A) "Qualified education-related expenses" means the
kindergarten or any of grades 1 to 12, inclusive, costs of: textbooks
and school supplies, including, but not limited to, pens, paper,
pencils, notebooks, calculators, and rulers; the rental or purchase
of educational equipment required for classes during the regular
school day; school uniforms that are not part of a cocurricular
activity; computers, computer hardware, and educational computer
software used to lean academic subjects; tuition for a private school
with kindergarten or any of grades 1 to 12, inclusive, for college
courses at public institutions or independent nonprofit colleges, or
for summer school courses that satisfy high school graduation
requirements; psychoeducational diagnostic evaluations to assess the
cognitive and academic abilities of pupils; special education and
related services for pupils who have an individualized education
program; out-of-school enrichment programs, tutoring, and summer
programs that are academic in nature; and public transportation or
third-party transportation expenses for traveling directly to and
from school.
   (B) "Qualified education-related expenses" shall not include any
expenses for the items described in subparagraph (A) that are used in
a trade or business.
   (4) "Qualified parent or guardian" means a parent or legal
guardian of a full-time pupil who is under 21 years of age at the
close of the school year who meets both of the following
requirements:
   (A) Both the pupil and the parent or guardian reside in California
when the qualified education-related expenses are paid or incurred.
   (B) The household income does not exceed 200 percent of the
federal Income Eligibility Guidelines published by the Food and
Nutrition Service of the United States Department of Agriculture for
use in determining eligibility for reduced price meals.
   (c) The total qualified amount excluded from gross income shall
not exceed two thousand five hundred dollars ($2,500) per taxable
year per qualified parent or guardian, except as provided in
paragraphs (1) and (2).
   (1) If the qualified parent or guardian is a married individual,
an exclusion pursuant to this section shall be allowed only if the
qualified parent or guardian and the qualified parent or guardian's
spouse file a joint return for the taxable year in which the
exclusion is claimed.
   (2) If qualified parents or guardians file individual returns, the
total combined exclusion amount allowed pursuant to this section on
both returns shall not exceed two thousand five hundred dollars
($2,500).
   (d) (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 shall not apply to any
standard, criterion, procedure, determination, rule, notice, or
guideline established or issued by the Franchise Tax Board pursuant
to this section.
   (e) The exclusion allowed by this section shall be in lieu of any
credit allowed by Section 17052.5.
   (f) This section shall remain in effect only until December 1,
2019, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2019, deletes or extends
that date. 
   SEC. 3.   SEC. 5.   This act provides
for a tax levy within the meaning of Article IV of the Constitution
and shall go into immediate effect.