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 State Investment Committee, a committee established by this bill. This bill would
begin delete require each school districtend delete
and community district begin delete to createend delete a Career Pathways Investment Trust Fund, the begin delete fundsend delete in which would be used for begin delete theend delete 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
begin delete mayend delete 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, among other things, authorize the California Career Pathways State Investment Committee and a
begin delete business entityend delete to enter into begin delete Workforce Development Bonds, as defined, in accordance with applicable laws,end delete to fund career pathways programs operated by the begin delete business entity and aend delete school district, community college district, or a consortium of school districts and community college begin delete 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 programsend delete.
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:
It is the intent of the Legislature to appropriate
2two hundred fifty million dollars ($250,000,000) from the General
3Fund in the 2013-14 fiscal year to the Career Pathways State
4Revolving Fund. The source of funds for that appropriation may
5include state apportionments for purposes of Section 8 of Article
6XVI of the California Constitution and offsetting budget savings
P3 1derived from reforms to the Enterprise Zone Act (Chapter 12.8
2(commencing with Section 7070) of Division 7 of Title 1 of the
3Government Code) and the New Jobs Tax Credit.
Part 38 (commencing with Section 64200) is added to
5Division 4 of Title 2 of the Education Code, to read:
(a) The Legislature finds and declares the following:
11(1) After five years of deep recession and high rates of
12unemployment, the California economy has begun to recover.
13(2) One of the most important actions California can take to
14hasten that recovery is to invest in the development of a skilled
15workforce to perform well-paying jobs in growing and emerging
16sectors of its regional economies.
17(3) The fastest-growing occupations are expected to be those
18that require scientific, technical, engineering, or mathematics
19(STEM) skills, such as jobs in biotechnology, digital media arts,
20agricultural technology, green technology, or computer-related
21and health-related fields.
22(4) California’s systems of public education, which includes
23primary and secondary schools, technical training, apprenticeship,
24two-year and four-year colleges, and graduate schools, play a
25critical role in workforce preparation, one that could be
26significantly strengthened by a tighter focus on education and
27training that delivers the skills and capacities most called for in
29(5) This kind of workforce preparation is best accomplished in
30 concert with regional business and industry, so that students receive
31the most current and relevant education that prepares them to
32compete for good jobs in their communities after graduation from
33high school or postsecondary education and training.
34(6) Work-based educational and training opportunities enhance
35the employment prospects of low- and moderate-income
36individuals and contribute to the stability and economic
37development of their communities.
38(b) It is the intent of the Legislature that federal bank regulators,
39specifically, the Federal Reserve bank, the Office of the
40Comptroller of the Currency, the Federal Deposit Insurance
P4 1Corporation, and the Office of Thrift Supervision, give credit to
2federally insured banks and thrifts on their compliance
begin delete examsend delete
3 under the federal Community Reinvestment Act of
41977 (Public Law 95-128) for grants, investments, and loans to
5educational institutions, nonprofit organizations, and businesses
6in support of career pathways programs.
7(c) It is the intent of the Legislature to establish state fiscal
8incentives, such as
begin delete Workforce Development Bonds, grants, loans,end delete
9 and tax credits, that
10encourage California businesses and industry to enter into
11partnerships with schools and community colleges that strengthen
12the nature and quality of education provided by those institutions.
13These partnerships will connect high school pupils and teachers,
14and college students and faculty, to real-world experience that
15provides sustained exposure to applied academics, skill
16development, work-related experience, and potential future
17employment. This experience will keep students on track to
18graduation, further education, and productive careers.
19(d) The dissolution of redevelopment agencies will increase
20property tax revenues to K-14 school districts and community
21college districts, including the one-time distribution of
22redevelopment agency cash assets expected to occur in the 2012-13
23and 2013-14 fiscal years. It is the intent of the Legislature that
24school districts and community college districts capitalize the
25Career Pathways Trust Funds established pursuant to
26this act for purposes of
begin delete funding grants and loans to businesses and .
27offsetting administrative costs of the programend delete
begin delete theend delete purposes of this part:
31(a) “Applicant” means a business entity that enters into a
32contract or memorandum of understanding with a local educational
33agency, community college, or workforce investment board to
34provide career technical education that connects pupils to
35real-world experience and provides sustained exposure to applied
36academics, skill development, work-related education, and potential
37future employment, and that applies to the committee for
begin delete state
the career pathways investment credit.
38financial assistance, including Workforce Development Bonds
P5 1(b) “Authentic application” means an activity in the context
2a middle, high school, or community college course that requires
3pupils to work actively with academic and technical concepts,
4facts, and skills in a realistic, work-like setting that emulates the
5problems encountered by professionals and the practices they use
6to address them. These applications typically require pupils to
7examine a task from a variety of perspectives, to draw upon
8multiple resources, to collaborate with others, and to accomplish
9tasks and projects by working in teams rather than individually.
4 10(c)end delete
11 “Budget” means an estimate of all qualified expenditures to
12be paid or incurred in providing the career pathways program over
13the period for which the applicant is applying for the career
14pathways investment credit.
8 38(d)end delete
39 “Career pathways programs” means programs that support
P6 1(1) Integrated academic and technical learning that prepares
2pupils for both postsecondary education and careers in high-growth
3or high-need sectors of the economy. These programs include core
4academic courses emphasizing authentic applications, sequences
5or clusters of three or more courses that align with the Office of
6the Chancellor of the California Community Colleges-approved
7or state board-approved career technical education standards and
8frameworks that also integrate key academic concepts and skills,
9work-based learning opportunities, and additional services like
10counseling or supplementary instruction in reading, writing, and
11mathematics. These programs may be delivered through high
12schools, regional occupational centers or programs, California
13Partnership Academies or other career academies, alternative
14education programs, including continuation schools and programs
15administered by county offices of education, adult education
16programs, or community colleges.
17(2) Curriculum and professional development.
18(3) Middle school and early high school career exploration
20(4) Externship and fellowship opportunities that expose middle
21school and high school teachers and community college faculty
22to the skills and competencies that pupils need for successful
23employment in high-growth sectors of the California economy.
24(5) Active engagement by business and industry in pathway
25design and implementation, work-based learning, assessment of
26student work, and other aspects of effective preparation for success
27in further postsecondary education and careers.
28(6) Workplace learning and educational opportunities that
29prepare pupils for careers in high-skilled, high-growth, and
30emerging employment sectors, including, but not limited to,
31biotechnology research and development, engineering and
32construction, advanced manufacturing, health sciences and nursing,
33environmental sciences, and agricultural technology.
34(7) Programs that provide employment services and support to
35individuals with exceptional needs, including autistic individuals.
36(e) “Career Pathways Investment Trust Fund” means a fund
37established in each local educational agency or community college
38district for the purpose of financing program and administrative
39costs relating to the operation of career pathways programs.
P7 1(f) “Career Pathways State Revolving Fund” means a fund
2established in the State Treasury for the purpose of providing state
3financial assistance to local educational agencies, community
4college districts, and business entities that have entered into
5agreements to implement and operate career pathways programs.
6State financial assistance may include
begin delete grants, loans, and the .
7repayment of Workforce Development Bondsend delete
9(g) “Committee” means the California Career Pathways State
11(h) “Qualified expenditures” includes the following:
38 Paid jobs or internships for high school pupils or community
39college students that are related to course work in a career
begin delete pathwayend delete
P8 1(2)end delete
2 Support and supervision for unpaid internships or other
3work-based learning opportunities that give pupils the opportunity
4to connect what they are learning in high school or community
5college to its application in the real world.
7 Teacher or faculty externships.
9 Contributions to programs administered by postsecondary
10institutions that provide support to middle school, high school, or
11community college career pathways programs. This support may
12include, but shall not be limited to, teacher training, curriculum
13development, and other forms of technical assistance.
15 Equipment and instructional materials, including equipment
16and software to support technology-based instruction that provides
17one or more of the following:
18(A) Accelerated learning opportunities.
19(B) Identification of skill and knowledge gaps.
20(C) Targeted remediation to prepare pupils for college and
23 Employees to provide instruction, in partnership with
24credentialed teachers employed by the school district or faculty
25employed by the community college, at the schoolsite or
26community college campus.
28 Contributions to support staff who link career
begin delete pathwayend delete
29 programs with regional business entities and assist in
30the development of the memoranda of understanding provided in
31subdivision (h) of Section 64204. The staff may be employed by
begin delete educationend delete agencies, community colleges, or
33regional intermediary organizations.
19 34(i) “Workforce Development Bond” means a contract between
35 the California Career Pathways State Investment Committee and
36an applicant who agrees to provide capital to fund a career
37pathways program jointly operated by the applicant and a school
38district or community college district, or a consortium of school
39districts and community college districts. The contract shall specify
40that the California Career Pathways State Investment Committee
P9 1shall repay the bond if performance targets established for the
2career pathways program are met. Financial returns to the applicant
3may vary pursuant to the measured level of performance. Proceeds
4from the sale of the bonds shall be disbursed by the committee to
5the Career Pathways Investment Trust Fund for the local
6educational agency or community college district, and may be
7used for career pathways program operations, development of
8rigorous and career-relevant curriculum by the applicant and the
9school district, community college district, or consortium of school
10districts and community college districts, paid internships,
11post-high-school financial aid for college, licensing and
12credentialing programs, and wage subsidies for full-time
13employment for pupils who successfully complete a career
(a) A local educational agency or community college
16district may issue lease revenue bonds secured by the lease of any
17property of the local educational agency or community college
18district pursuant to subdivision (b), or enter into loan or lease
19agreements not subject to Section 18 of Article XVI of the
20California Constitution with the committee or private entities, to
21finance the operation of career pathways programs.
22(b) For purposes of the lease revenue bonds authorized in
23subdivision (a), and notwithstanding any other law, a local
24educational agency or community college district may lease any
25property of the local educational agency or community college
26district. The local educational agency or community college district
27may enter into any other agreements or execute any other
28documents necessary or desirable to carry out the purposes of this
30(c) A local educational agency or community college district
31may enter into contracts or agreements with banks, insurers, or
32other financial institutions or parties that it determines are
33necessary or desirable to improve the security and marketability
34of, or to manage interest rates or other risks associated with, the
35lease revenue bonds issued pursuant to this section.
(a) A Career Pathways Investment Trust Fund is hereby
37established in each local educational agency
begin delete orend delete community
38college district for the purpose of financing program and
39administrative costs relating to the operation of career pathways
40programs. The trust fund may accept revenues from any source,
P10 1including one-time property tax revenues resulting from the
2dissolution of the assets of the former redevelopment agencies,
begin delete proceeds from the sale of Workforce Development Bonds,end delete
4tax revenues, grants,
begin deleteloans,end deleteand contributions or employment
5training funds made available through the employment training
6panel or workforce investment boards. The trust fund shall be
7administered by each local educational agency or community
9(b) Moneys in a Career Pathways Investment Trust Fund
begin delete shallend delete
10 be used for any of the following purposes:
11(1) Qualified expenditures.end delete
12(2) Administrative costs.end delete
13(3) Grants, loans, and program costs associated with career
(a) The California Career Pathways State Investment
25Committee is hereby established in state government.
26(b) The committee shall be composed of the following members:
27(1) The Chancellor of the California Community Colleges, or
28his or her designee, who will serve as the chairperson of the
30(2) The Superintendent or his or her designee.
31(3) The Chair of the California Workforce Investment Board,
32or his or her designee.
33(4) One appointee of the Senate Committee on Rules, who shall
34represent the business community and will serve a four-year term.
35(5) One appointee of the Speaker of the Assembly, who will
36serve a four-year term.
37(c) The committee is granted the sole authority to allocate to
38local educational agencies, community college districts, and
39applicants moneys appropriated to the Career Pathways State
40Revolving Fund for state financial assistance, including
begin delete grants, and the
P11 1loans,end delete
begin delete repaymentend delete of begin delete Workforce by the committee. The committee is also granted
2Development Bonds issuedend delete
5the sole authority to allocate to applicants the Career Pathways
6Investment Credits authorized pursuant to Section 64206.
7(d) The committee shall establish criteria and guidelines for
8evaluating applications for state financial assistance, including
9requirements for commitments of financial or other resources by
10applicants or a local educational agency, community college
11district, or workforce investment board. The committee shall give
12priority in allocating state financial assistance to the following:
38 18(1)end delete
19 Local educational agencies and community college districts
20that have an unemployment rate higher than the statewide average
21unemployment rate for the most recent calendar year, as determined
22by the Employment Development Department, or a high school
23graduation rate lower than the statewide high school graduation
24rate for the most recent calendar year, as determined by the
25committee using the California Longitudinal Pupil Achievement
6 27(2)end delete
28 Local educational agencies and community college districts
29that include in their application a significant amount of private
30funding support from their business partners.
9 31(3)end delete
32 Local educational agencies and community college districts
33that include in their application articulated pathways connecting
34high school and postsecondary certificate and degree programs in
13 36(4)end delete
37 Local educational agencies and
community college districts
38that are not seeking state financial assistance for existing activities.
39However, priority in allocating state financial assistance shall be
P12 1given to applicants that seek to expand or augment existing
2investments in career pathways programs.
3(e) The committee may allocate the proceeds from the sale
4Workforce Development Bonds to applicants that have entered
5into memoranda of understanding with a local educational agency
6or community college district to fund career pathways programs.
22 7(f)end delete
8 The committee shall develop performance criteria for
9determining the financial returns to private entities
begin delete investing in . The performance criteria shall include,
10Workforce Development Bondsend delete
15but are not limited to, high school pupil and community college
16student achievement and opportunity in the following areas:
17(1) High school graduation.
18(2) Completion of postsecondary programs that culminate in a
19certificate or degree.
20(3) Attainment of industry-recognized credentials that are valued
21in high-growth, high-need, or emerging economic sectors.
22(4) Provision of internships to high school pupils and community
24(5) Provision of paid summer jobs for high school pupils and
25community college students.
26(6) Provision of externships for high school teachers and
27community college faculty.
28(7) Provision of scholarships or other financial assistance for
29students pursuing postsecondary education or training in a relevant
31(8) Offer of paid employment or apprenticeship to high school
32pupils or community college students who are participants or
33graduates of a career pathways program.
38(g) The committee may prepare forms, establish procedures,
39set priorities, assess, and perform other administrative functions
P13 1(h) The Superintendent, the Chancellor of the Community
2Colleges, and the California Workforce Investment Board shall
3enter into a memorandum of understanding to allocate staff
4resources to the committee. The costs to these entities shall be
5offset by fees charged to applicants for Career Pathways Tax
(a) There is hereby created in the State Treasury the
8California Career Pathways State Revolving Fund for the purpose
9of providing financial assistance to local educational agencies,
10community college districts, and business entities that have entered
11into agreements to implement and operate career pathways
12programs. Within the fund there shall also be established a Career
13Pathways Financing Account, a Career Pathways Grant Account,
begin delete a Career Pathways Loan Account,end delete and additional accounts and
15subaccounts that the committee may establish from time to time.
16(b) Moneys in the Career Pathways
Financing Account shall be
begin delete repay Workforce Development Bonds issued by the or other
begin delete bonds orend delete financing agreements entered into by
22(c) Moneys in the Career Pathways Grant Account shall be used
23to award grants from the committee to local educational agencies
24and community college districts.
25(d) Moneys in the Career Pathways Loan Account shall be used
26to make loans from the committee to local educational agencies
27and community college districts.
P12 1 28(e)end delete
29 Notwithstanding Section 13340 of the Government Code,
30all moneys in the Career Pathways State Revolving Fund shall be
31continuously appropriated without regard to fiscal year for the
32support of the committee and for expenditure for the purposes
33stated in this part.
6 34(f)end delete
35 All expenses incurred in carrying out the purposes of this
36part shall be payable solely from funds provided pursuant to this
37part, and no liability or obligation shall be imposed upon the state
38and none shall be incurred by the committee beyond the extent to
39which money shall have been provided pursuant to this part.
For calendar years beginning on or after January 1,
22014, the committee shall allocate the
begin delete Career Pathways Investment in an amount authorized
4in the Budget Act for that calendar year. For purposes of this
5section, the committee shall do all of the following:
6(a) Allocate the career pathways investment credit for up to five
7calendar years for each application the committee approves, as
8long as the amount allocated does not exceed the amount authorized
9in the Budget Act.
10(b) (1) Give priority in allocating tax credits to the following:
11(A) Applicants that have entered into a contract or memorandum
12of understanding with local educational agencies, community
13colleges, or workforce investment boards in communities that have an
15unemployment rate higher than the statewide unemployment rate,
16as determined by the United States Census, and a high school
17graduation rate lower than the statewide high school graduation
18rate, as determined by the committee using the California
19Longitudinal Pupil Achievement Data System.
20(B) Applicants that have entered into a contract or memorandum
21of understanding with local educational agencies, community
22colleges, or workforce investment boards with
begin delete proportions of .
23private funding support that exceed the one-to-one match
24requirement described in paragraph (1) of subdivision (e)end delete
27(C) Applicants that have entered into a contract or memorandum
28of understanding with local educational agencies or community
29colleges that offer articulated pathways connecting high school
30and postsecondary certificate and degree programs in their region.
31(D) Applicants that are not seeking tax credits for existing
32activities. However, priority shall be given to applicants that seek
33to expand or augment existing investments in career
begin delete pathwayend delete
35(2) To the maximum extent practicable, subject to paragraph
36(1), give priority in allocating career pathways investment credits
37to applicants that seek to expand or augment existing investments
begin delete pathwayend delete programs.
P15 1(3) The committee shall not give priority to any applicant by
2virtue of the date of submission of its application, except to allocate
3credits where two or more applicants have the same rating.
4(c) An applicant shall enter into an enforceable contract or
5memorandum of understanding with the committee to comply with
6the requirements of this part, Sections 17057.6 and 23610.6 of the
7Revenue and Taxation Code, any applicable state laws, and any
8additional requirements the department deems necessary or
9appropriate to serve the purposes of this part. The contract or
10memorandum of understanding shall also provide for legal action
11to obtain specific performance or monetary damages for breach
12of contract and shall require regular programmatic audits.
begin delete criteriaend delete that begin delete awardsend delete credits to applicants
14that demonstrate that either the applicant or the local educational
15agency, community college, or workforce investment board
begin delete meetsend delete
16 the following
19(1) The effectiveness of the career
begin delete pathwayend delete program
20toward preparing students for productive, high-wage employment
21in growing or high-need sectors of the California economy.
22Effectiveness criteria shall include:
23(A) Pathway completion rates.
24(B) High school graduation rates or community college
25completion rates, as appropriate.
26(C) Percentages of students attaining an industry certification.
27(D) Percentages of students transitioning successfully to
28postsecondary education or apprenticeship.
29(E) Employment and earnings after high school.
30(2) The level of the applicant’s investment in, oversight of, and
31ability to leverage and sustain current career pathways programs
32and current career technical education programs.
33(e) Develop and provide forms for
begin delete theend delete purposes of informing
34potential applicants of the purposes of this part.
35(f) The amount of the credit reserved for a calendar year shall
36not exceed 50 percent of the qualified expenditures estimated by
37the applicant for the calendar year.
38(g) The committee shall report to the Franchise Tax Board, once
39each year, the identity of the qualified taxpayers for whom the
40career pathways credits are allocated each year.
P16 1(h) The committee may, in its discretion, consult with the
2Treasurer and the California Tax Credit Allocation Committee
3regarding the allocation of tax credits. If a request for consultation
4is made, the Treasurer and the California Tax Credit Allocation
5Committee shall aid the committee.
6(i) Establish audit requirements. The committee may share
7information established during an audit with the Franchise Tax
9(j) It is the
intent of the Legislature, subsequent to the enactment
10of the act adding this section, to reduce the statutory cap on the
11authorization for the new jobs tax credit enacted by Chapter 17 of
12the Statutes of 2009, Third Extraordinary Session, from four
13hundred million dollars ($400,000,000) to three hundred million
14dollars ($300,000,000) and to authorize one hundred million dollars
15($100,000,000) for the Career Pathways Investment Credit,
16effective January 1, 2014.
Section 17057.6 is added to the Revenue and Taxation
18Code, to read:
(a) For each taxable year beginning on or after
20January 1, 2014, there shall be allowed to a qualified taxpayer as
21a credit against the “net tax,” as defined in Section 17039, an
22amount equal to that allocated to a qualified taxpayer by the
23California Career Pathways Investment Committee pursuant to
24Section 64206 of the Education Code.
25(b) For purposes of this section a “qualified taxpayer” means
26an applicant, as defined in Section 64201 of the Education Code,
27who is either the sole owner if an individual, partners if the
28taxpayer is a partnership, or shareholders if the taxpayer is an “S”
29corporation, and who was awarded an allocation of the career
30pathways investment credit by the California Career Pathways
32(c) In the case where the credit allowed under this section
33exceeds the “net tax,” the excess credit may be carried over to
34reduce the “net tax” in the following taxable year, and succeeding
35taxable years, if necessary, until the credit has been exhausted.
36(d) If a qualified taxpayer fails to comply with the requirements
37of this section or with Part 38 (commencing with Section 64200)
38of Division 4 of Title 2 of the Education Code, the credit shall be
39disallowed and assessed and collected under Section 19051 until
40the requirements are satisfied.
Section 23610.6 is added to the Revenue and Taxation
2Code, to read:
(a) For each taxable year beginning on or after
4January 1, 2014, there shall be allowed to a qualified taxpayer as
5a credit against the “tax,” as defined in Section 23036, an amount
6equal to that allocated to a qualified taxpayer by the California
7Career Pathways Investment Committee pursuant to Section 64206
8of the Education Code.
9(b) For purposes of this section a “qualified taxpayer” means
10an applicant, as defined in Section 64201 of the Education Code,
11that is subject to the taxes imposed by this part.
12(c) In the case where the credit allowed under this section
13exceeds the “tax,” the excess credit may be carried over to reduce
14the “tax” in the following taxable year, and succeeding taxable
15years, if necessary, until the credit has been exhausted.
16(d) If a qualified taxpayer fails to comply with the requirements
17of this section or with Part 38 (commencing with Section 64200)
18of Division 4 of Title 2 of the Education Code, the credit shall be
19disallowed and assessed and collected under Section 19051 until
20the requirements are satisfied.
No reimbursement shall be made pursuant to Part 7
22(commencing with Section 17500) of Division 4 of Title 2 of the
23Government Code for costs mandated by the state pursuant to this
24act. It is recognized, however, that a local agency or school district
25may pursue any remedies to obtain reimbursement available to it
26under Part 7 (commencing with Section 17500) and any other
27provisions of law.