BILL NUMBER: AB 2421 AMENDED
BILL TEXT
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 college or K-12
K-College education scholarships for specified pupils
to attend private schools, as defined, or for transportation costs
to attend private, public, or charter schools , 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-serve first-served
basis, and that the credit would have an aggregate cap of
$50,000,000 $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 school communities demand 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, an amount equal to
50 percent of the monetary contribution made by a taxpayer during the
taxable year, not to exceed two hundred thousand dollars ($200,000)
to a qualified K-College education scholarship
organization to fund qualified college or K-12
K-College 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) "Qualified K-College education scholarship
organization" or "ESO" means an organization in this state that meets
the following requirements:
(A) Is organized and operated with a purpose of providing
qualified college or K-12 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
college or K-12 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
college or K-12 K-College education scholarships
.
(C) Makes qualified college or K-12
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 college or K-12
K-College 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 college or K-12
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) "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.
(2)
(3) "Qualified college or K-12
K-College education scholarship" means any 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 college or K-12 education scholarship shall be
awarded to a specified pupil in kindergarten through grade 12 or in
college.
(ii) May be renewed at the request of the specified pupil for each
school year until graduation from high school or college.
(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)
(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 private, public,
or charter , or private school or to
attend school-related activities and other educationally beneficial
programs.
(C)
(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.
(D)
(C) Financial assistance for a specified pupil
to purchase books and other materials to support academic success,
including, but not limited to, computers and software, tutoring, and
other academic support. 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).
(3)
(4) "Specified pupil" means an individual who has
applied for a college or K-12 K-College
education scholarship and who is either within foster care
or , 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.
(4)
(5) (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.
(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.
(g) (1) The aggregate amount of credits allowed under this section
shall not exceed fifty ten million
dollars ($50,000,000) ($10,000,000) for
each calendar year.
(2) The allocation of credits shall be on a first-come,
first-serve first-served basis.
(3) The Legislature may increase the amount in paragraph (1).
(h) 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) 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
fifty ten million dollars
($50,000,000) ($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.
(i) 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) 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.