Amended in Assembly January 6, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 943

Introduced by Assembly Member Nestande

February 22, 2013

An act to add and repeal Sections begin delete 1705.83, 17053.84, 23683, and 23684 end delete begin insert 23691 and 23692 end insert of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

LEGISLATIVE COUNSEL’S DIGEST

AB 943, as amended, Nestande. begin delete Income taxes: credits: qualified scholarships: qualified programs. end delete begin insert Corporation Tax Law: credits: end insert begin insert K-12 education programs and scholarships. end insert

The begin delete Personal Income Tax Law and the end delete Corporation Tax Law begin delete allow end delete begin insert allows end insert various credits against the begin delete taxes end delete begin insert tax end insert imposed by that law.

This bill, for taxable years beginning on or after January 1, begin delete 2013, end delete begin insert 2015, end insert and before January 1, begin delete 2017, end delete begin insert 2020, end insert would allow a credit against the begin delete taxes end delete begin insert tax end insert imposed under begin delete those laws end delete begin insert that law end insert for monetary contributions to nonprofit organizations to fund qualified scholarships for specified pupils begin insert end insert begin insert for transportation costs or end insert to attend private schools, as defined, or to fund grants for begin delete qualified end delete begin insert K-12 education innovative end insert programs relating to science, technology, engineering, and math literacy, and the arts for begin insert private, end insert public begin insert , end insert and charter schools, as defined.

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:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert This act shall be known and may be cited as the
Education Investment Incentives Act. end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert The Legislature finds and declares the following: end insert

begin insert

(a) Providing tax incentives to encourage private investments
for the common good is sound public policy.

end insert begin insert

(b) Expanding educational opportunities and improving the
quality and access of educational services within the state are
valid public purposes that the Legislature may promote using its
sovereign power to determine tax policy.

end insert begin insert

(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.

end insert begin insert

(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.

end insert begin insert

(e) At a time when fiscal realities challenging California school
communities demand innovative ways to deliver vital education
services to public and private pupils in kindergarten and grades
1 to 12, inclusive, charitable giving for educational purposes
should be stimulated.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 23691 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

begin insert

begin insert 23691. end insert   

(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,
an amount equal to 50 percent of a monetary contribution provided
by a taxpayer to a nonprofit education improvement organization
to fund a qualified grant for a K-12 education innovative program
for pupils attending private, public, or charter schools.

(b) For purposes of this section:

(1) “Charter school” means a California school established
pursuant to Part 26.8 (commencing with Section 47600) of Division
4 of Title 2 of the Education Code providing elementary or high
school education that is located in an eligible school attendance
area, as defined in Section 1113 of the federal Elementary and
Secondary Education Act (20 U.S.C. Sec. 6301 et seq.).

(2) “Education improvement organization (EIO)” means a
charitable institution in this state organized and operated as any
of the following type of institution: (A) art museum, (B) science
center, (C) institution of higher education, (D) districtwide
educational enrichment program, or (E) any other organization
with the primary purpose to provide monetary support to a K-12
education innovative program, that meets all of the following
requirements:

(i) Contributes at least 80 percent of the qualified grants to a
California public or private school for funding K-12 education
innovative programs.

(ii) (I) Does not have a person that has been convicted of any
sex offense as defined in Section 44010 of the Education Code
supervising or assisting a pupil participating in a K-12 education
innovative program.

(II) For the purposes of this section, a plea or verdict of guilty,
a finding of guilt by a court in a trial without jury, or a conviction
following a plea of nolo contendere shall be deemed to be a
conviction.

(iii) Requires each employee or volunteer, whether prospective
or current, who will directly and personally supervise or assist
any pupil to comply with the provisions of Section 44237 of the
Education Code in order to ascertain whether the prospective or
current employee or volunteer has been convicted of any sex
offense as defined in Section 44010 of the Education Code.

(iv) Applied to receive a qualified grant with the Franchise Tax
Board.

(3) “Nonprofit” means an organization that meets all of the
following requirements:

(A) 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) Any other charitable corporation, as defined by Section
12582.1 of the Government Code.

(iv) A duly authorized foreign nonprofit corporation that has
complied with all registration requirements under Section 6910
of, and Chapter 21 (commencing with Section 2100) of Division
1 of Title 1 of, the Corporations Code.

(B) Is an organization exempt from federal income tax as an
organization described in Section 501(c)(3) of the Internal Revenue
Code.

(4) (A) “Qualified grant” means a grant that does all the
following:

(i) Includes guidelines that detail what specific programs may
be funded by the grant moneys.

(ii) Limits the amount of grant moneys that may be used for
administration or overhead costs.

(iii) Is included on a list created by the State Department of
Education pursuant to subdivision (i).

(B) A qualified grant may include cash payments to a California
private, public, or charter school to carry on a K-12 education
innovative program or may include costs incurred by an EIO in
providing a program to, or in conjunction with, a California
private, public, or charter school.

(5) “K-12 education innovative program” means instruction,
programs, or other activities in science, technology, engineering,
and math learning, or the visual and performing arts for a private,
public, or charter school with a kindergarten or any grades 1 to
12, inclusive, that involve one or more of the following:

(A) An advanced academic or similar program that is not part
of the regular program of a private, public, or charter school, but
enhances the curriculum of the school.

(B) A creative focus or delivery, including Internet-based and
distance learning technologies, methodology, or skill training that
enriches the academic program of the school.

(C) An integration of out-of-school time programs, offered
before or after school hours, on weekends, as a summer program,
or as a year-round program, that reinforces learning in the areas
of science, technology, engineering, and mathematics, or visual
and performing arts education of the curriculum year round.

(D) A cocurricular activity for pupils that is an elected
educational activity that supplements education, including, but
not limited to, gifted programs, visual and performing arts,
academic clubs, and educational field trips.

(6) “Private school” means a person, firm, association,
partnership, or corporation offering or conducting private school
instruction in the State of California that meets all of the following
requirements:

(A) Is accredited by the Western Association of Schools and
Colleges or an affiliated organization.

(B) Has filed a current private school affidavit with the State
Department of Education in accordance with Section 33190 of the
Education Code.

(C) Complies with applicable provisions of the Health and
Safety Code.

(D) Complies with applicable provisions of the Fair Employment
and Housing Act (Part 2.8 (commencing with Section 12900) of
Division 3 of Title 2 of the Government Code).

(E) 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.

(7) “Public school” means any California day or evening
elementary, middle, junior high, or high school established by
statute or by municipal or district authority that is located in an
eligible school attendance area, as defined in Section 1113 of the
federal Elementary and Secondary Education Act (20 U.S.C. Sec.
6301 et seq.).

(c) The amount of the credit shall not exceed 50 percent of the
“tax” of the taxpayer for a taxable year.

(d) The taxpayer shall receive a certification by the Franchise
Tax Board upon determining that the contribution meets the
requirements of this section and shall apply with the Franchise
Tax Board to receive a credit.

(e) 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.

(f) 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).

(g) This credit shall be claimed on a timely filed original return.

(h) (1) The aggregate amount of credits allowed under this
section and Section 23692 shall not exceed fifty million dollars
($50,000,000) for each calendar year.

(2) The allocation of credits shall be on a first-come, first-serve
basis.

(3) The Legislature may increase the amount in paragraph (1).

(i) The Franchise Tax Board and the State Department of
Education shall administer this credit.

(1) The Franchise Tax Board shall perform all of the following:

(A) Promulgate rules and regulations as necessary or
appropriate to implement this credit.

(B) Establish application forms and procedures.

(C) Track credits claimed.

(D) Post aggregate totals of the credits claimed on the Internet
Web site of the Franchise Tax Board.

(E) Determine when the aggregate total of credits reaches fifty
million dollars ($50,000,000).

(F) Certify that the contributions meet the requirements of this
section.

(2) The State Department of Education shall do the following:

(A) Adopt rules necessary to determine whether the following
meet the requirements of this section:

(i) An EIO.

(ii) A private school.

(iii) 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.

(j) Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code shall not apply to
the guidelines or regulations adopted pursuant to this section.

(k) This section shall remain in effect only until December 1,
2020, and as of that date is repealed.

end insert

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 23692 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

begin insert

begin insert 23692. end insert   

(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,
an amount equal to 50 percent of the monetary contribution
provided by a taxpayer to a nonprofit education scholarship
organization to fund qualified K-12 education scholarships for a
specified pupil to attend private school or to fund partial or full
payments of fees associated with the general costs of transportation
to attend a private, public, or charter school.

(b) For purposes of this section:

(1) “Education scholarship organization (ESO)” means a
charitable institution in this state that meets the following:

(A) Is organized and operated with the primary purpose of
providing qualified K-12 education scholarships to pupils attending
a private school in California.

(B) (i) Allocates at least 80 percent of contributions for which
a credit is claimed for qualified K-12 education scholarships for
ESOs with three or more years of audits.

(ii) Allocates at least 90 percent of contributions for which a
credit is claimed for qualified K-12 education scholarships for
ESOs with less than three years of audits.

(C) Makes qualified K-12 education scholarships available for
pupils from more than one school.

(D) Retains data on the progress of the pupils participating in
qualified K-12 education scholarships on nationally available
norm-referenced tests to evaluate the program’s efficacy.

(E) Submits to the Franchise Tax Board 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-12 education scholarship
recipients and the schools that the recipients attend.

(G) Applies to participate in this credit program with the
Franchise Tax Board.

(2) “Nonprofit” means an organization that meets all of the
following requirements:

(A) 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) Any other charitable corporation, as defined by Section
12582.1 of the Government Code.

(iv) 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.

(B) Is an organization exempt from federal income tax as an
organization described in Section 501(c)(3) of the Internal Revenue
Code.

(2) “Qualified K-12 education scholarship” means either of
the following:

(A) An award of tuition assistance amounting to at least 65
percent of the basic state per-pupil funding, or a private school’s
actual tuition and fees, whichever is less, that meets all of the
following requirements:

(i) An initial K-12 education scholarship shall be awarded to
a specified pupil who attended a public or charter school the
previous year or is entering transitional kindergarten through
grade 1.

(ii) May be renewed at the request of the specified pupil for
each school year until graduation from high school.

(iii) Shall be portable and follow the specified pupil from one
school to another.

(iv) Shall be provided to a private school of the specified pupil’s
choosing under the following conditions:

(I) Each ESO shall establish criteria for granting scholarships
that meet the requirements of this section.

(II) The pupil receiving the assistance shall remain a specified
pupil.

(III) The specified pupil shall attend a private school.

(IV) The specified pupil shall remain enrolled and in attendance
at the private school throughout the school year unless excused
by the applicable program for illness or other good cause.

(V) The specified pupil and a parent or legal guardian of the
specified pupil shall comply with all applicable policies of the
private school.

(VI) A parent or legal guardian of the specified pupil shall
ensure that the pupil has reliable transportation to and from the
applicable program.

(B) Financial assistance for a specified pupil to partially or
fully pay for the fees associated with the general costs of
transportation to attend a private, public, or charter school.

(3) “Specified pupil” means a minor who has applied for a
K-12 education scholarship and who meets any of the following
requirements:

(A) Is a pupil with special needs who has been identified by a
school district as having a disability under the federal Individuals
with Disabilities Education Act (20 U.S.C. Sec. 1400 et seq.).

(B) Is a pupil within foster care who has been placed in a foster
care system within the State of California at any time prior to
graduating high school.

(i) A specified pupil in this subparagraph is not required to be
previously enrolled in a public school or charter school to
participate.

(ii) A specified pupil remains eligible for a scholarship until he
or she graduates from high school or leaves the foster care
program.

(4) “Private school” means a person, firm, association,
partnership, 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:

(A) Is accredited by the Western Association of Schools and
Colleges or an affiliated organization.

(B) Has filed a current private school affidavit with the State
Department of Education in accordance with Section 33190 of the
Education Code.

(C) Complies with applicable provisions of the Health and
Safety Code.

(D) Complies with applicable provisions of the Fair Employment
and Housing Act (Part 2.8 (commencing with Section 12900) of
Division 3 of Title 2 of the Government Code).

(E) 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.

(F) Requires a specified pupil to take a nationally available
norm-referenced test.

(G) 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.

(c) The amount of the credit shall not exceed 50 percent of the
“tax” of the taxpayer for a taxable year.

(d) The taxpayer shall receive a certification by the Franchise
Tax Board upon a determination that the contribution meets the
requirements of this section and shall apply with the Franchise
Tax Board to receive a credit.

(e) 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.

(f) 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).

(g) This credit shall be claimed on a timely filed original return.

(h) (1) The aggregate amount of credits allowed under this
section and Section 23691 shall not exceed fifty million dollars
($50,000,000) for each calendar year.

(2) The allocation of credits shall be on a first-come, first-serve
basis.

(3) The Legislature may increase the amount in paragraph (1).

(i) The Franchise Tax Board and the State Department of
Education shall administer this credit.

(1) The Franchise Tax Board shall perform all of the following:

(A) Promulgate rules and regulations as necessary or
appropriate to implement this credit.

(B) Establish application forms and procedures.

(C) Track credits claimed.

(D) Post aggregate totals of the credits claimed on the Internet
Web site of the Franchise Tax Board.

(E) Determine when the aggregate total of the credits reaches
fifty million dollars ($50,000,000).

(F) Certify that the contributions meet the requirements of this
section needed to receive a credit.

(2) The State Department of Education shall do the following:

(A) Adopt rules necessary to determine whether the following
meet the requirements of this section:

(i) An ESO.

(ii) A private school.

(iii) 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.

(j) 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.

(k) This section shall remain in effect only until December 1,
2020, and as of that date is repealed.

end insert

begin insert

begin insert SEC. 5. end insert   

end insert begin insert

This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.

end insert

begin delete

  

SECTION 1.  

Section 17053.83 is added to the Revenue and
Taxation Code, to read:

17053.83.  

(a) For each taxable year beginning on or after
January 1, 2013, and before January 1, 2017, there shall be allowed
as a credit against the “net tax,” as defined in Section 17039, an
amount equal to the monetary amount contributed by a taxpayer
to a nonprofit organization to fund a qualified scholarship. The
credit shall not exceed 50 percent of the “net tax” for the taxable
year.

(b) For purposes of this section:

(1) “Nonprofit organization” means an organization that is
tax-exempt under Section 501(c)(3) of the Internal Revenue Code.

(2) “Private school” means a person, firm, association,
partnership, or corporation offering or conducting private school
instruction on the elementary or high school level.

(3) “Qualified scholarship” means a scholarship for a pupil with
special needs or a pupil in foster care to attend a private school
that meets all of the following:

(A) The pupil remains eligible for the scholarship until he or
she graduates from high school or leaves the foster care program.

(B) The scholarship may be used at any private school if the
pupil’s residence changes and attendance at a particular private
school is not feasible.

(C) Eligibility for the scholarship shall be based on family
income, not to exceed 250 percent of the federal poverty guidelines.
A partial scholarship may be granted if the family income of a
pupil that was awarded a scholarship in the previous year increases
in the following year.

(c) A nonprofit organization that provides qualified scholarships
shall retain data on the educational improvement of scholarship
recipients so that the efficacy of the qualified scholarship program
may be evaluated.

(d) The aggregate amount of credit allowed to all taxpayers
under this section and Section 23684 shall not exceed fifty million
dollars ($50,000,000) for all taxable years.

(e) 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 the succeeding years if necessary,
until the credit is exhausted.

(f) The credit under this section shall be in addition to any
deduction under this part to which the taxpayer may be entitled.

(g) (1) The Franchise Tax Board shall promulgate rules and
regulations as necessary or appropriate to implement 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.

(h) This section shall remain in effect only until December 1,
2017, and as of that date is repealed.

SEC. 2.  

Section 17053.84 is added to the Revenue and Taxation
Code, to read:

17053.84.  

(a) For each taxable year beginning on or after
January 1, 2013, and before January 1, 2017, there shall be allowed
as a credit against the “net tax,” as defined in Section 17039, an
amount equal to the monetary amount contributed by a taxpayer
to a nonprofit organization to provide a grant for a qualified
program. The credit shall not exceed 50 percent of the “net tax”
for the taxable year.

(b) For purposes of this section:

(1) “Charter school” means a school established pursuant to
Part 26.8 (commencing with Section 47600) of Title 2 of the
Education Code providing elementary or high school education.

(2) “Nonprofit organization” means an organization that is
tax-exempt under Section 501(c)(3) of the Internal Revenue Code.

(3) “Public school” means any day or evening elementary school
and any day or evening high school established by statute, or by
municipal or district authority.

(4) “Qualified program” means a program in science,
technology, engineering, and math literacy, and the arts for public
and charter schools that is both of the following:

(A) An advanced academic or similar program that is not part
of the regular program of a public or charter school, but enhances
the curriculum of the public or charter school.

(B) A cocurricular activity for pupils that is an optional,
noncredit educational activity that supplements education,
including, but not limited to, gifted programs, visual and
performing arts, music arts, academic clubs, and educational field
trips.

(c) A grant provided by the nonprofit organization for a qualified
program shall be provided to a specific public or charter school,
or more than one school, of the nonprofit organization’s choosing.
A grant shall include guidelines that detail what specific programs
may be funded by the grant moneys and shall prohibit the use of
grant moneys for administration or overhead costs.

(d) The aggregate amount of credit allowed to all taxpayers
under this section and Section 23683 shall not exceed fifty million
dollars ($50,000,000) for all taxable years.

(e) 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 the succeeding years if necessary,
until the credit is exhausted.

(f) The credit under this section shall be in addition to any
deduction under this part to which the taxpayer may be entitled.

(g) (1) The Franchise Tax Board shall promulgate rules and
regulations as necessary or appropriate to implement 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.

(h) This section shall remain in effect only until December 1,
2017, and as of that date is repealed.

SEC. 3.  

Section 23683 is added to the Revenue and Taxation
Code, to read:

23683.  

(a) For each taxable year beginning on or after January
1, 2013, and before January 1, 2017, there shall be allowed as a
credit against the “tax,” as defined in Section 23036, an amount
equal to the monetary amount contributed by a taxpayer to a
nonprofit organization to fund a qualified scholarship. The credit
shall not exceed 50 percent of the “tax” for the taxable year.

(b) For purposes of this section:

(1) “Nonprofit organization” means an organization that is
tax-exempt under Section 501(c)(3) of the Internal Revenue Code.

(2) “Private school” means a person, firm, association,
partnership, or corporation offering or conducting private school
instruction on the elementary or high school level.

(3) “Qualified scholarship” means a scholarship for a pupil with
special needs, a pupil in foster care, or a pupil from a low-income
family, to attend a private school that meets all of the following:

(A) The pupil remains eligible for the scholarship until he or
she graduates from high school or leaves the foster care program.

(B) The scholarship may be used at any private school if the
pupil’s residence changes and attendance at a particular private
school is not feasible.

(C) Eligibility for the scholarship shall be based on family
income, not to exceed 250 percent of the federal poverty guidelines.
A partial scholarship may be granted if the family income of a
pupil that was awarded a scholarship in the previous year increases
in the following year.

(c) A nonprofit organization that provides qualified scholarships
shall retain data on the educational improvement of scholarship
recipients so that the efficacy of the qualified scholarship program
may be evaluated.

(d) The aggregate amount of credit allowed to all taxpayers
under this section and Section 23684 shall not exceed fifty million
dollars ($50,000,000) for all taxable years.

(e) 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 the succeeding years if necessary, until the
credit is exhausted.

(f) The credit under this section shall be in addition to any
deduction under this part to which the taxpayer may be entitled.

(g) (1) The Franchise Tax Board shall promulgate rules and
regulations as necessary or appropriate to implement 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.

(h) This section shall remain in effect only until December 1,
2017, and as of that date is repealed.

SEC. 4.  

Section 23684 is added to the Revenue and Taxation
Code, to read:

23684.  

(a) For each taxable year beginning on or after January
1, 2013, and before January 1, 2017, there shall be allowed as a
credit against the “tax,” as defined in Section 23036, an amount
equal to the monetary amount contributed by a taxpayer to a
nonprofit organization to provide a grant for a qualified program.
The credit shall not exceed 50 percent of the “tax” for the taxable
year.

(b) For purposes of this section:

(1) “Charter school” means a school established pursuant to
Part 26.8 (commencing with Section 47600) of Title 2 of the
Education Code providing elementary or high school education.

(2) “Nonprofit organization” means an organization that is
tax-exempt under Section 501(c)(3) of the Internal Revenue Code.

(3) “Public school” means any day or evening elementary school
and any day or evening high school established by statute, or by
municipal or district authority.

(4) “Qualified program” means a program in science,
technology, engineering, and math literacy, and the arts for public
and charter schools that is both of the following:

(A) An advanced academic or similar program that is not part
of the regular program of a public or charter school, but enhances
the curriculum of the public or charter school.

(B) A cocurricular activity for pupils that is an optional,
noncredit educational activity that supplements education,
including, but not limited to, gifted programs, visual and
performing arts, music arts, academic clubs, and educational field
trips.

(c) A grant provided by the nonprofit organization for a qualified
program shall be provided to a specific public or charter school,
or more than one school, of the nonprofit organization’s choosing.
A grant shall include guidelines that detail what specific programs
may be funded by the grant moneys and shall prohibit the use of
grant moneys for administration or overhead costs.

(d) The aggregate amount of credit allowed to all taxpayers
under this section and Section 23683 shall not exceed fifty million
dollars ($50,000,000) for all taxable years.

(e) 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 the succeeding years if necessary, until the
credit is exhausted.

(f) The credit under this section shall be in addition to any
deduction under this part to which the taxpayer may be entitled.

(g) (1) The Franchise Tax Board shall promulgate rules and
regulations as necessary or appropriate to implement 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.

(h) This section shall remain in effect only until December 1,
2017, and as of that date is repealed.

SEC. 5.  

This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.

end delete