BILL NUMBER: SB 323 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Oropeza
FEBRUARY 25, 2009
An act to amend Section 69984 of the Education Code, and to add
and repeal Chapter 3.5 (commencing with Section 18900) of Part 10.2
of Division 2 of the Revenue and Taxation Code, relating to taxation.
LEGISLATIVE COUNSEL'S DIGEST
SB 323, as introduced, Oropeza. Taxation: deposits: qualified
tuition programs.
The Golden State Scholarshare Trust Act establishes the Golden
State Scholarshare Trust, under the administration of the
Scholarshare Investment Board, to provide financial aid for
postsecondary education costs of participating students. The act
requires the board to segregate moneys received by the trust into 2
funds, one of which is the administrative fund. Existing law requires
the funds in the administrative fund to be available for
expenditure, upon appropriation by the Legislature, for specified
purposes.
This bill would expand the purpose for which funds in the
administrative fund can be expended, to include reimbursement of the
Franchise Tax Board's actual cost of implementing and maintaining a
specified designation on the form the of return.
The Personal Income Tax Law imposes taxes on taxable income which
are administered by the Franchise Tax Board. Existing law authorizes
taxpayers to contribute amounts in excess of their tax liability for
the support of specified funds.
This bill would, until December 31, 2014, authorize a taxpayer to
designate on his or her tax return that a contribution in excess of
tax liability, as specified, be deposited by the Franchise Tax Board
into a qualified tuition program account, as specified. This bill
would require the Franchise Tax Board to revise the form of the
return to include the necessary information that will allow a
taxpayer to make this designation, as provided. This bill would
require the Scholarshare Investment Board to reimburse the Franchise
Tax Board for the actual cost of implementing and maintaining this
designation on the form of the return, as provided.
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. Section 69984 of the Education Code is amended to read:
69984. (a) (1) The board shall segregate moneys received by the
Scholarshare trust into two funds, which shall be identified as the
program fund and the administrative fund. Notwithstanding Section
13340 of the Government Code, the program fund is hereby continuously
appropriated, without regard to fiscal years, to the board for the
purposes of this article. Funds in the administrative fund shall be
available for expenditure, upon appropriation, for the purposes
specified in this article and in Chapter 3.5 (commencing with
Section 18900) of Part 10.2 of Division 2 of the Revenue and Taxation
Code .
(2) (A) The board shall separately account for any moneys received
by an entity exempt from taxation under Section 501(c)(3) of the
Internal Revenue Code or a state or local government agency,
depositing the money for the benefit of a beneficiary to be named
later pursuant to the operation of a bona fide scholarship program.
(B) There is hereby created the Scholarshare Investment Board,
that consists of the Treasurer, the Director of Finance, the
Secretary of Education, a member of the Student Aid Commission
appointed by the Governor, a member of the public appointed by the
Governor, a representative from a California public institution of
higher education appointed by the Senate Committee on Rules, and a
representative from a California independent college or university or
a state-approved college, university, or vocational/technical school
appointed by the Speaker of the Assembly. The Treasurer shall serve
as chair of the board. The board shall annually prepare and adopt a
written statement of investment policy. The board shall consider the
statement of investment policy and any changes in the investment
policy at a public hearing. The board shall approve the investment
management entity or entities consistent with subparagraph (D).
(C) Not later than 30 days after the close of each month, the
investment manager shall place on file for public inspection during
business hours a report with respect to investment performance. The
investment manager shall report the following information, to the
extent applicable, to the board within 30 days following the end of
each month:
(i) The type of investment, name of the issuer, date of maturity,
par and dollar amount invested in each security, investment, and
money within the program fund.
(ii) The weighted average maturity of the investments within the
program fund.
(iii) Any amounts in the program fund that are under the
management of an investment manager.
(iv) The market value as of the date of the report and the source
of this valuation for any security within the program fund.
(v) A description of the compliance with the statement of
investment policy.
(D) Moneys in the program fund may be invested or reinvested by
the Treasurer or may be invested in whole or in part under contract
with an investment manager, as determined by the board.
(b) Transfers may be made from the program fund to the
administrative fund for the purpose of paying operating costs
associated with administering the Scholarshare trust and as required
by this article. On an annual basis, expenditures from the
administrative fund shall not exceed more than 1 percent of the total
program fund. All costs of administration of the Scholarshare trust
shall be paid out of the administrative fund.
(c) All moneys paid by participants in connection with
participation agreements shall be deposited as received into the
program fund, and shall be promptly invested and accounted for
separately. Deposits and interest thereon accumulated on behalf of
participants in the program fund of the Scholarshare trust may be
used for payments to any institution of higher education.
SEC. 2. Chapter 3.5 (commencing with Section 18900) is added to
Part 10.2 of Division 2 of the Revenue and Taxation Code, to read:
CHAPTER 3.5. DIRECTED DEPOSITS
18900. (a) A taxpayer may designate on the tax return that a
contribution in excess of tax liability, if any, be deposited to the
credit of the taxpayer's qualified tuition program, as defined in
Section 529 of the Internal Revenue Code, including, but not limited
to, the Scholarshare qualified tuition program.
(b) The designation shall be allowed only if the designation is a
full dollar amount that is in excess of one dollar ($1).
(c) The Franchise Tax Board shall revise the form of the return to
include a space to allow the designation permitted under subdivision
(a), and any other information that may be necessary to carry out
this chapter, including, but not limited to, the following:
(1) The amount of the designation.
(2) The account number and named beneficiary of the qualified
tuition program.
(d) If the payments and the designation reported on the return do
not exceed the tax liability, if any, shown thereon, the tax return
shall be treated as though the designation had not been made.
(e) The designation authorized under subdivision (a) shall be
limited to one qualified tuition program.
18901. If a taxpayer designates a voluntary contribution pursuant
to Chapter 3 (commencing with Section 18701) and a directed deposit
pursuant to this chapter, and the amount in excess of tax liability
is less than the total amount designated, the amount in excess of tax
liability shall be allocated among the designees on a pro rata
basis.
18902. The Scholarshare Investment Board shall reimburse the
Franchise Tax Board through an interagency agreement for the actual
costs incurred by the Franchise Tax Board pursuant to this section to
implement and maintain this chapter. The total costs reimbursed by
the Scholarshare Investment Board shall not exceed four hundred
seventy-five thousand dollars ($475,000).
18903. This chapter shall remain in effect only until December
31, 2014, and as of that date is repealed, unless a later enacted
statute, that is enacted before December 31, 2014, deletes or extends
that date.