Amended in Senate April 18, 2013

Senate Bill No. 594

Introduced by Senator Steinberg

February 22, 2013

An act to add Part 38 (commencing with Section 64200) to Division 4 of Title 2 of the Education Code, and to add Sections 17057.6 and 23610.6 to the Revenue and Taxation Code, relating to education.

LEGISLATIVE COUNSEL’S DIGEST

SB 594, as amended, Steinberg. California Career Pathways Investment.

The Personal Income Tax Law and The Corporation Tax Law authorize various credits against the taxes imposed by those laws.

This bill, in accordance with legislative findings contained in this bill and for calendar years beginning on or after January 1, 2014, would, for a business entity, as described, that provides career technical education, authorize a credit against those taxes, subject to specified limitations, in an amount equal to that allocated by the California Career Pathways begin insert State end insert Investment Committee, a committee established by this bill. This bill would require each school district and community district to create a Career Pathways Investment Trust Fund, the funds in which would be used for the purposes of financing program and administrative costs relating to the operation of career pathways programs, as provided.

This bill would impose specified duties on school districts with regard to career pathways programs.

Existing law authorizes the governing board of a community college district to establish contract education programs within or outside the state by agreement with any public or private agency, corporation, association, or any other person or body, to provide specific educational programs or training to meet the specific needs of these bodies. Existing law authorizes the governing board of any school district to initiate and carry on any program or activity, or may otherwise act in any manner that is not in conflict with or inconsistent with, or preempted by, any law and that is not in conflict with the purposes for which school districts are established.

This bill would begin insert , among other things, end insert authorize begin delete a school district or a community college district end delete begin insert the California Career Pathways State Investment Committee and a business entity end insert to enter into begin delete social impact bonds end delete begin insert Workforce Development Bonds end insert , as defined, in accordance with applicable laws, to fund career pathways programs begin delete , as defined end delete begin insert operated by the business entity and a school district, community college district, or a consortium of school districts and community college districts. The bill would authorize a local educational agency or community college district to issue lease revenue bonds, as specified, or enter into loan or lease agreements, to finance the operation of career pathways programs end insert .

 The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement shall be made pursuant to these statutory provisions for costs mandated by the state pursuant to this act, but would recognize that local agencies and school districts may pursue any available remedies to seek reimbursement for these costs.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert It is the intent of the Legislature to appropriate
two hundred fifty million dollars ($250,000,000) from the General
Fund in the 2013-14 fiscal year to the Career Pathways State
Revolving Fund. The source of funds for that appropriation may
include state apportionments for purposes of Section 8 of Article
XVI of the California Constitution and offsetting budget savings
derived from reforms to the Enterprise Zone Act (Chapter 12.8
(commencing with Section 7070) of Division 7 of Title 1 of the
Government Code) and the New Jobs Tax Credit. end insert

begin delete SECTION 1. end delete
begin insert SEC. 2. end insert   

Part 38 (commencing with Section 64200) is added to
Division 4 of Title 2 of the Education Code, to read:

 

PART 38.  Career Pathways Investment Credit
and Trust Fund

 

64200.  

(a) The Legislature finds and declares the following:

(1) After five years of deep recession and high rates of
unemployment, the California economy has begun to recover.

(2) One of the most important actions California can take to
hasten that recovery is to invest in the development of a skilled
workforce to perform well-paying jobs in growing and emerging
sectors of its regional economies.

(3) The begin delete fastest growing end delete begin insert fastest-growing end insert occupations are expected
to be those that require scientific, technical, engineering, or
mathematics (STEM) skills, such as jobs in biotechnology, digital
media arts, begin insert agricultural technology, end insert green technology, or
computer-related and health-related fields.

(4) California’s systems of public education, which includes
primary and secondary schools, technical training, apprenticeship,
two-year and four-year colleges, and graduate schools, play a
critical role in workforce preparation, one that could be
significantly strengthened by a tighter focus on education and
training that delivers the skills and capacities most called for in
high-opportunity sectors.

(5) This kind of workforce preparation is best accomplished in
concert with regional business and industry, so that students receive
the most current and relevant education that prepares them to
compete for good jobs in their communities after graduation from
high school or postsecondary education and training.

(6) Work-based educational and training opportunities enhance
the employment prospects of low- and moderate-income
individuals and contribute to the stability and economic
development of their communities.

(b) It is the intent of the Legislature that federal bank regulators,
specifically, the Federal Reserve bank, the Office of the
Comptroller of the Currency, the Federal Deposit Insurance
Corporation, and the Office of Thrift Supervision, give credit to
federally insured banks and thrifts on their compliance exams
under the begin insert federal end insert Community Reinvestment Act of 1977 begin insert (Public
Law 95-128) end insert for grants, investments, and loans to educational
institutions, nonprofit organizations, and businesses in support of
career pathways programs.

(c) It is the intent of the Legislature to establish begin insert state end insert fiscal
incentives, such as begin insert Workforce Development Bonds, grants, loans,
and end insert tax credits, that encourage California businesses and industry
to enter into partnerships with schools and community colleges
that strengthen the nature and quality of education provided by
those institutions. These partnerships will connect high school
pupils and teachers, and college students and faculty, to real-world
experience that provides sustained exposure to applied academics,
skill development, work-related experience, and potential future
employment. This experience will keep students on track to
graduation, further education, and productive careers.

(d) The dissolution of redevelopment agencies will increase
property tax revenues to K-14 school begin insert districts end insert and community
college districts, including the one-time distribution of
redevelopment agency cash assets expected to occur in the 2012-13
and 2013-14 fiscal years. It is the intent of the Legislature that
school begin insert districts end insert and community college districts capitalize the
Career Pathways Trust Funds established pursuant to this act for
begin delete the end delete purposes of funding grants and loans to businesses and
offsetting administrative costs of the program.

64201.  

For the purposes of this part:

(a) “Applicant” means a business entity that enters into a
contract or memorandum of understanding with a local educational
agency, community college, or workforce investment board to
provide career technical education that connects pupils to
real-world experience and provides sustained exposure to applied
academics, skill development, work-related education, and potential
future employment, and that applies to the committee for begin insert state
financial assistance, including Workforce Development Bonds and end insert
the career pathways investment credit.

(b) “Authentic application” means an activity in the context of
a middle, high school, or community college course that requires
pupils to work actively with academic and technical concepts,
facts, and skills in a realistic, work-like setting that emulates the
problems encountered by professionals and the practices they use
to address them. These applications typically require pupils to
examine a task from a variety of perspectives, to draw upon
multiple resources, to collaborate with others, and to accomplish
tasks and projects by working in teams rather than individually.

(c) “Budget” means an estimate of all qualified expenditures to
be paid or incurred in providing the career pathways program over
the period for which the applicant is applying for the career
pathways investment credit.

(d) “Career pathways programs” means programs that support
the following:

(1)  begin delete High school pathways programs delivered through high
schools, regional occupation centers or programs, California
Partnership Academies and other career academies, alternative
education programs, including continuation schools and programs
administered by county offices of education, or adult education
programs, that integrate end delete begin insert Integrated end insert academic and technical learning
begin delete to prepare end delete begin insert that prepares end insert pupils for both postsecondary education
and careers in high-growth or high-need sectors of the economy.
These programs include core academic courses emphasizing
authentic applications, sequences or clusters of three or more
courses that align with the begin delete State Board of Education approved end delete
begin insert Office of the Chancellor of the California Community
Colleges-approved or state board-approved end insert career technical
education standards and frameworks that also integrate key
academic concepts and skills, work-based learning opportunities,
begin insert and end insert additional services like counseling or supplementary
instruction in reading, writing, and mathematics. begin insert These programs
may be delivered through high schools, regional occupational
centers or programs, California Partnership Academies or other
career academies, alternative education programs, including
continuation schools and programs administered by county offices
of education, adult education programs, or community colleges. end insert

(2) Curriculum and professional development.

(3) Middle school begin insert and early high school end insert career exploration
activities.

(4) Externship begin insert and fellowship end insert opportunities that expose middle
school and high school teachers begin insert and community college faculty end insert to
the skills and competencies that pupils need for successful
employment in high-growth sectors of the California economy.

(5) Active engagement by business and industry in pathway
design and implementation, work-based learning, assessment of
student work, and other aspects of effective preparation for success
in further postsecondary education and careers.

begin insert

(6) Workplace learning and educational opportunities that
prepare pupils for careers in high-skilled, high-growth, and
emerging employment sectors, including, but not limited to,
biotechnology research and development, engineering and
construction, advanced manufacturing, health sciences and
nursing, environmental sciences, and agricultural technology.

end insert begin insert

(7) Programs that provide employment services and support to
individuals with exceptional needs, including autistic individuals.

end insert begin insert

(e) “Career Pathways Investment Trust Fund” means a fund
established in each local educational agency or community college
district for the purpose of financing program and administrative
costs relating to the operation of career pathways programs.

end insert begin insert

(f) “Career Pathways State Revolving Fund” means a fund
established in the State Treasury for the purpose of providing state
financial assistance to local educational agencies, community
college districts, and business entities that have entered into
agreements to implement and operate career pathways programs.
State financial assistance may include grants, loans, and the
repayment of Workforce Development Bonds.

end insert begin delete

(e)

end delete

begin insert (g) end insert  “Committee” means the California Career Pathways begin insert State end insert
Investment Committee.

begin delete

(f)

end delete

begin insert (h) end insert  “Qualified expenditures” includes the following:

(1) Paid jobs or internships for high school pupils or community
college students that are related to course work in a career pathway
program.

(2) Support and supervision for unpaid internships or other
work-based learning opportunities that give pupils the opportunity
to connect what they are learning in high school or community
college to its application in the real world.

(3) Teacher or faculty externships.

(4) Contributions to programs administered by postsecondary
institutions that provide support to middle school, high school, or
community college career pathways programs. This support may
include, but shall not be limited to, teacher training, curriculum
development, and other forms of technical assistance.

(5) Equipment and instructional materials, including equipment
and software to support technology-based instruction that provides
begin delete all of end delete begin insert one or more of end insert the following:

(A) Accelerated learning opportunities.

(B) Identification of skill and knowledge gaps.

(C) Targeted remediation to prepare pupils for college and
careers.

(6) Employees to provide instruction, in partnership with
credentialed teachers employed by the school district or faculty
employed by the community college, at the begin delete school site or end delete begin insert schoolsite
or community end insert college campus.

(7) Contributions to support staff who link career pathway
programs with regional business entities and assist in the
development of the memoranda of understanding provided in
subdivision begin delete (f) end delete begin insert (h) end insert of Section begin delete 64203 end delete begin insert 64204 end insert . The staff may be
employed by local education agencies, community colleges, or
regional intermediary organizations.

begin delete

(g)

end delete

begin insert (i) end insert   begin delete “Social impact bond” end delete begin insert “Workforce Development Bond” end insert means
a contract between begin delete a school district or a community college district
and private investors who provide capital in exchange for a share
of governmental payments that become available if performance
targets end delete begin insert the California Career Pathways State Investment Committee
and an applicant who agrees to provide capital to fund a career
pathways program jointly operated by the applicant and a school
district or community college district, or a consortium of school
districts and community college districts. The contract shall specify
that the California Career Pathways State Investment Committee
shall repay the bond if performance targets established for the
career pathways program end insert are met. Financial returns to begin delete investors end delete
begin insert the applicant end insert may vary pursuant to the measured level of
performance. begin delete The bond issuer may use operating funds from the
sale of the bonds to contract with service providers to deliver the
services necessary to meet the performance targets. end delete begin insert Proceeds from
the sale of the bonds shall be disbursed by the committee to the
Career Pathways Investment Trust Fund for the local educational
agency or community college district, and may be used for career
pathways program operations, development of rigorous and
career-relevant curriculum by the applicant and the school district,
community college district, or consortium of school districts and
community college districts, paid internships, post-high-school
financial aid for college, licensing and credentialing programs,
and wage subsidies for full-time employment for pupils who
successfully complete a career pathways program. end insert

begin delete

64202.  

A school district or community college district may
enter into social impact bonds, in accordance with applicable laws,
to fund career pathways programs.

end delete begin insert

begin insert 64202. end insert   

(a) A local educational agency or community college
district may issue lease revenue bonds secured by the lease of any
property of the local educational agency or community college
district pursuant to subdivision (b), or enter into loan or lease
agreements not subject to Section 18 of Article XVI of the
California Constitution with the committee or private entities, to
finance the operation of career pathways programs.

(b) For purposes of the lease revenue bonds authorized in
subdivision (a), and notwithstanding any other law, a local
educational agency or community college district may lease any
property of the local educational agency or community college
district. The local educational agency or community college district
may enter into any other agreements or execute any other
documents necessary or desirable to carry out the purposes of this
subdivision.

(c) A local educational agency or community college district
may enter into contracts or agreements with banks, insurers, or
other financial institutions or parties that it determines are
necessary or desirable to improve the security and marketability
of, or to manage interest rates or other risks associated with, the
lease revenue bonds issued pursuant to this section.

end insert begin insert

begin insert 64203. end insert   

(a) A Career Pathways Investment Trust Fund is hereby
established in each local educational agency or community college
district for the purpose of financing program and administrative
costs relating to the operation of career pathways programs. The
trust fund may accept revenues from any source, including one-time
property tax revenues resulting from the dissolution of the assets
of the former redevelopment agencies, proceeds from the sale of
Workforce Development Bonds, other tax revenues, grants, loans,
and contributions or employment training funds made available
through the employment training panel or workforce investment
boards. The trust fund shall be administered by each local
educational agency or community college district.

(b) Moneys in a Career Pathways Investment Trust Fund shall
be used for any of the following purposes:

(1) Qualified expenditures.

(2) Administrative costs.

(3) Grants, loans, and program costs associated with career
pathways programs.

end insert

begin delete 64203. end delete
begin insert 64204. end insert   

(a) The California Career Pathways begin insert State end insert Investment
Committee is hereby established in state government.

(b) The committee shall be composed of the following members:

(1) The Chancellor of the California Community Colleges, or
his or her designee, who will serve as the chairperson of the
committee.

(2) The begin delete Chancellor of the California Community Colleges, end delete
begin insert Superintendent end insert or his or her designee.

(3) The Chair of the California Workforce Investment Board,
or his or her designee.

(4) One appointee of the Senate Committee on Rules, who begin insert shall
represent the business community and end insert will serve a four-year term.

(5) One appointee of the Speaker of the Assembly, who will
serve a four-year term.

(c) The committee is granted the sole authority to allocate to
begin delete applicants end delete begin insert local educational agencies, community college districts,
and applicants moneys appropriated to the Career Pathways State
Revolving Fund for state financial assistance, including grants,
loans, and the repayment of Workforce Development Bonds issued
by the committee. The committee is also granted the sole authority
to allocate to applicants end insert the Career Pathways Investment Credits
authorized begin delete in the annual Budget Act, end delete pursuant to Section begin delete 64205 end delete
begin insert 64206 end insert .

(d) The committee shall establish criteria and guidelines for
evaluating applications for begin delete Career Pathways Investment Credits, end delete
begin insert state financial assistance, end insert including requirements for commitments
of financial or other resources by applicants or a local begin delete education end delete
begin insert educational end insert agency, community college begin insert district end insert , or workforce
investment board. begin insert The committee shall give priority in allocating
state financial assistance to the following: end insert

begin insert

(1) Local educational agencies and community college districts
that have an unemployment rate higher than the statewide average
unemployment rate for the most recent calendar year, as
determined by the Employment Development Department, or a
high school graduation rate lower than the statewide high school
graduation rate for the most recent calendar year, as determined
by the committee using the California Longitudinal Pupil
Achievement Data System.

end insert begin insert

(2) Local educational agencies and community college districts
that include in their application a significant amount of private
funding support from their business partners.

end insert begin insert

(3) Local educational agencies and community college districts
that include in their application articulated pathways connecting
high school and postsecondary certificate and degree programs
in their region.

end insert begin insert

(4) Local educational agencies and community college districts
that are not seeking state financial assistance for existing activities.
However, priority in allocating state financial assistance shall be
given to applicants that seek to expand or augment existing
investments in career pathways programs.

end insert begin insert

(e) The committee may allocate the proceeds from the sale of
Workforce Development Bonds to applicants that have entered
into memoranda of understanding with a local educational agency
or community college district to fund career pathways programs.

end insert begin insert

(f) The committee shall develop performance criteria for
determining the financial returns to private entities investing in
Workforce Development Bonds. The performance criteria shall
include, but are not limited to, high school pupil and community
college student achievement and opportunity in the following areas:

end insert begin insert

(1) High school graduation.

end insert begin insert

(2) Completion of postsecondary programs that culminate in a
certificate or degree.

end insert begin insert

(3) Attainment of industry-recognized credentials that are valued
in high-growth, high-need, or emerging economic sectors.

end insert begin insert

(4) Provision of internships to high school pupils and community
college students.

end insert begin insert

(5) Provision of paid summer jobs for high school pupils and
community college students.

end insert begin insert

(6) Provision of externships for high school teachers and
community college faculty.

end insert begin insert

(7) Provision of scholarships or other financial assistance for
students pursuing postsecondary education or training in a relevant
career pathway.

end insert begin insert

(8) Offer of paid employment or apprenticeship to high school
pupils or community college students who are participants or
graduates of a career pathways program.

end insert begin delete

(e)

end delete

begin insert (g) end insert  The committee may prepare forms, establish procedures,
set priorities, assess, and perform other administrative functions
as necessary.

begin delete

(f)

end delete

begin insert (h) end insert  The Superintendent begin delete of Public Instruction end delete , the Chancellor of
the Community Colleges, and the California Workforce Investment
Board shall enter into a memorandum of understanding to allocate
staff resources to the committee. The costs to these entities shall
be offset by fees charged to applicants for Career Pathways Tax
Credits.

begin delete

64204.  

Moneys in the Career Pathways Investment Trust Fund
shall be used for any of the following purposes:

(a) Qualified expenditures.

(b) Administrative costs.

(c) Grants, loans, and program costs associated with career
pathways programs.

end delete begin insert

begin insert 64205. end insert   

(a) There is hereby created in the State Treasury the
California Career Pathways State Revolving Fund for the purpose
of providing financial assistance to local educational agencies,
community college districts, and business entities that have entered
into agreements to implement and operate career pathways
programs. Within the fund there shall also be established a Career
Pathways Financing Account, a Career Pathways Grant Account,
a Career Pathways Loan Account, and additional accounts and
subaccounts that the committee may establish from time to time.

(b) Moneys in the Career Pathways Financing Account shall
be used to repay Workforce Development Bonds issued by the
committee, or other bonds or financing agreements entered into
by the committee.

(c) Moneys in the Career Pathways Grant Account shall be used
to award grants from the committee to local educational agencies
and community college districts.

(d) Moneys in the Career Pathways Loan Account shall be used
to make loans from the committee to local educational agencies
and community college districts.

(e) Notwithstanding Section 13340 of the Government Code,
all moneys in the Career Pathways State Revolving Fund shall be
continuously appropriated without regard to fiscal year for the
support of the committee and for expenditure for the purposes
stated in this part.

(f) All expenses incurred in carrying out the purposes of this
part shall be payable solely from funds provided pursuant to this
part, and no liability or obligation shall be imposed upon the state
and none shall be incurred by the committee beyond the extent to
which money shall have been provided pursuant to this part.

end insert

begin delete 64205. end delete
begin insert 64206. end insert   

For calendar years beginning on or after January 1,
2014, the committee shall allocate the Career Pathways Investment
Credit in an amount authorized in the Budget Act for that calendar
year. For purposes of this section, the committee shall do all of
the following:

(a) Allocate the career pathways investment credit for up to five
calendar years for each application the committee approves, as
long as the amount allocated does not exceed the amount authorized
in the Budget Act.

(b) (1) Give priority in allocating tax credits to the following:

(A) Applicants that have entered into a contract or memorandum
of understanding with local educational agencies, community
colleges, or workforce investment boards in communities that have
an unemployment rate higher than the statewide unemployment
rate, as determined by the United States Census, and a high school
graduation rate lower than the statewide high school graduation
rate, as determined by the committee using the California
Longitudinal Pupil Achievement Data System.

(B) Applicants that have entered into a contract or memorandum
of understanding with local educational agencies, community
colleges, or workforce investment boards with proportions of
private funding support that exceed the one-to-one match
requirement described in paragraph (1) of subdivision (e).

(C) Applicants that have entered into a contract or memorandum
of understanding with local educational agencies or community
colleges that offer articulated pathways connecting high school
and postsecondary certificate and degree programs in their region.

(D) Applicants that are not seeking tax credits for existing
activities. However, priority shall be given to applicants that seek
to expand or augment existing investments in career pathway
programs.

(2) To the maximum extent practicable, subject to paragraph
(1), give priority in allocating career pathways investment credits
to applicants that seek to expand or augment existing investments
in career pathway programs.

(3) The committee shall not give priority to any applicant by
virtue of the date of submission of its application, except to allocate
credits where two or more applicants have the same rating.

(c) An applicant shall enter into an enforceable contract or
memorandum of understanding with the committee to comply with
the requirements of this part, Sections 17057.6 and 23610.6 of the
Revenue and Taxation Code, any applicable state laws, and any
additional requirements the department deems necessary or
appropriate to serve the purposes of this part. The contract or
memorandum of understanding shall also provide for legal action
to obtain begin delete specified end delete begin insert specific end insert performance or monetary damages for
breach of contract and shall require regular programmatic audits.

(d) Adopt criteria that awards credits to applicants that
demonstrate that either the applicant or the local educational
agency, community college, or workforce investment board meets
the following criteria:

(1) The effectiveness of the career pathway program toward
preparing students for productive, high-wage employment in
growing or high-need sectors of the California economy.
Effectiveness criteria shall include:

(A) Pathway completion rates.

(B) High school graduation rates or community college
completion rates, as appropriate.

(C) Percentages of students attaining an industry certification.

(D) Percentages of students transitioning successfully to
postsecondary education or apprenticeship.

(E) Employment and earnings after high school.

(2) The level of the applicant’s investment in, oversight of, and
ability to leverage and sustain current career pathways programs
and current career technical education programs.

(e) Develop and provide forms for the purposes of informing
potential applicants of the purposes of this part.

(f) The amount of the credit reserved for a calendar year shall
not exceed 50 percent of the qualified expenditures estimated by
the applicant for the calendar year.

(g) The committee shall report to the Franchise Tax Board, once
each year, the identity of the qualified taxpayers for whom the
career pathways credits are allocated each year.

(h) The committee may, in its discretion, consult with the
Treasurer and the California Tax Credit Allocation Committee
regarding the allocation of tax credits. If a request for consultation
is made, the Treasurer and the California Tax Credit Allocation
Committee shall aid the committee.

(i)  Establish audit requirements. The committee may share
information established during an audit with the Franchise Tax
Board.

begin insert

(j) It is the intent of the Legislature, subsequent to the enactment
of the act adding this section, to reduce the statutory cap on the
authorization for the new jobs tax credit enacted by Chapter 17
of the Statutes of 2009, Third Extraordinary Session, from four
hundred million dollars ($400,000,000) to three hundred million
dollars ($300,000,000) and to authorize one hundred million
dollars ($100,000,000) for the Career Pathways Investment Credit,
effective January 1, 2014.

end insert

begin delete

64206.  

A Career Pathways Investment Trust Fund is hereby
established in each school or community college district for the
purpose of financing program and administrative costs relating to
the operation of career pathways programs. The trust fund may
accept revenues from any source, including one-time property tax
revenues resulting from the dissolution of the assets of the former
redevelopment agencies, proceeds from the sale of social impact
bonds, other tax revenues, grants, loans, and contributions or
employment training funds made available through the employment
training panel or workforce investment boards. The trust fund shall
be administered by each school or community college district.

end delete

begin delete SEC. 2. end delete
begin insert SEC. 3. end insert   

Section 17057.6 is added to the Revenue and Taxation
Code, to read:

17057.6.  

(a) For each taxable year beginning on or after
January 1, 2014, there shall be allowed to a qualified taxpayer as
a credit against the “net tax,” as defined in Section 17039, an
amount equal to that allocated to a qualified taxpayer by the
California Career Pathways Investment Committee pursuant to
Section begin delete 64204 end delete begin insert 64206 end insert of the Education Code.

(b) For purposes of this section a “qualified taxpayer” means
an applicant, as defined in Section 64201 of the Education Code,
who is either the sole owner if an individual, partners if the
taxpayer is a partnership, or shareholders if the taxpayer is an “S”
corporation, and who was awarded an allocation of the career
pathways investment credit by the California Career Pathways
Investment Committee.

(c) In the case where the credit allowed under this section
exceeds the “net tax,” the excess credit may be carried over to
reduce the “net tax” in the following taxable year, and succeeding
taxable years, if necessary, until the credit has been exhausted.

(d) If a qualified taxpayer fails to comply with the requirements
of this section or with Part 38 (commencing with Section 64200)
of Division 4 of Title 2 of the Education Code, the credit shall be
disallowed and assessed and collected under Section 19051 until
the requirements are satisfied.

begin delete SEC. 3. end delete
begin insert SEC. 4. end insert   

Section 23610.6 is added to the Revenue and Taxation
Code, to read:

23610.6.  

(a) For each taxable year beginning on or after
January 1, 2014, there shall be allowed to a qualified taxpayer as
a credit against the “tax,” as defined in Section 23036, an amount
equal to that allocated to a qualified taxpayer by the California
Career Pathways Investment Committee pursuant to Section begin delete 64204 end delete
begin insert 64206 end insert of the Education Code.

(b) For purposes of this section a “qualified taxpayer” means
an applicant, as defined in Section 64201 of the Education Code,
that is subject to the taxes imposed by this part.

(c) In the case where the credit allowed under this section
exceeds the “tax,” the excess credit may be carried over to reduce
the “tax” in the following taxable year, and succeeding taxable
years, if necessary, until the credit has been exhausted.

(d) If a qualified taxpayer fails to comply with the requirements
of this section or with Part 38 (commencing with Section 64200)
of Division 4 of Title 2 of the Education Code, the credit shall be
disallowed and assessed and collected under Section 19051 until
the requirements are satisfied.

begin delete SEC. 4. end delete
begin insert SEC. 5. end insert   

 No reimbursement shall be made pursuant to Part 7
(commencing with Section 17500) of Division 4 of Title 2 of the
Government Code for costs mandated by the state pursuant to this
act. It is recognized, however, that a local agency or school district
may pursue any remedies to obtain reimbursement available to it
under Part 7 (commencing with Section 17500) and any other
provisions of law.