Amended in Assembly August 7, 2013

Amended in Senate May 24, 2013

Amended in Senate April 18, 2013

Senate BillNo. 594


Introduced by Senatorbegin delete Steinbergend deletebegin insert Hillend insert

February 22, 2013


begin deleteAn 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. end deletebegin insertAn act to add Sections 8314.1, 8314.2, and 54964.5 to the Government Code, relating to campaign activity.end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 594, as amended, begin deleteSteinbergend delete begin insertHillend insert. begin deleteCalifornia Career Pathways Investment. end deletebegin insertUse of public resources.end insert

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(1) Existing law prohibits the use of public funds for campaign activities.

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This bill would prohibit a nonprofit organization from using, or permitting another to use, public resources, including but not limited to public resources received in exchange for consideration, from a local agency for campaign activities. This bill would also prohibit an officer, employee, or agent of a nonprofit organization from expending, or authorizing the expenditure of, public resources from a local agency to support or oppose a ballot measure or candidate. This bill would define, among other terms, “public resources” to include, but not be limited to, cash, lands, buildings, funds, and facilities, and “nonprofit organization” to mean an entity incorporated under the California Nonprofit Corporation Law or a nonprofit organization that qualifies for exempt status under the federal Internal Revenue Code of 1986, except as specified. This bill would authorize a civil cause of action for a violation of these prohibitions and damages that include, but are not limited to, 3 times the value of the unlawful use of the public resources. This bill would authorize the Attorney General, a district attorney, and a city attorney of a city having a population in excess of 750,000 to seek the civil remedies.

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(2) Existing law requires qualifying individuals and political organizations to report specified information, including, but not limited to, political contributions, in statements filed with the Fair Political Practices Commission.

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This bill would require an auditable nonprofit organization that engages in campaign activity to deposit into a separate bank account all “specific source or sources of funds” it receives and to pay for all campaign activity from that separate bank account. This bill would define, among other terms, “auditable nonprofit organization” to mean a nonprofit organization for which public resources from one or more local agencies account for more than 20% of the organization’s annual gross revenue, as specified, and “specific source or sources of funds” to mean any funds received by the auditable nonprofit organization that have been designated for campaign activity use or any other funds received by the nonprofit organization, including funds received in exchange for consideration, as specified.

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This bill would further require an auditable nonprofit organization that engages in campaign activity to periodically disclose to the Attorney General, and post on its Internet Web site in a certain manner, the identity and amount of each specific source or sources of funds it receives for campaign activity, a description of the campaign activity, and the identity and amount of payments the organization makes from the required separate bank account, as specified. This bill would require the Attorney General to regularly audit each auditable nonprofit organization, issue a written audit report, and transmit the report to the district attorney for the county in which the auditable nonprofit organization is domiciled. This bill would require the Attorney General to assess a monetary penalty against an auditable nonprofit organization for a violation of these disclosure requirements, as specified.

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

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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 establish in each local educational agency and community college district a Career Pathways Investment Trust Fund, the moneys in which would be used for purposes of financing program and administrative costs relating to the operation of career pathways programs, as provided.

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

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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 to 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.

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This bill would, among other things, authorize the California Career Pathways State Investment Committee and a school district or districts, or a community college district or districts, to enter into a pay-for-performance contract for a career pathways pay-for-performance pilot project to fund career pathways programs operated by the school district, community college district, or a consortium of school districts and community college districts, and under which a business entity partner may be compensated for its costs.

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 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.

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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.

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Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: begin deleteyes end deletebegin insertnoend insert.

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

P4    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 8314.1 is added to the end insertbegin insertGovernment Codeend insertbegin insert,
2to read:end insert

begin insert
3

begin insert8314.1.end insert  

(a) It is unlawful for any nonprofit organization to
4use or permit others to use public resources, including, but not
5limited to, public resources received in exchange for consideration,
6from any local agency for any campaign activity not authorized
7by law.

8(b) For purposes of this section:

9(1) “Campaign activity” means a payment that is used for
10communications that expressly advocates for the approval or
11rejection of a clearly identified ballot measure or the election or
12defeat of a clearly identified candidate by the voters, or constitutes
13a campaign contribution.

14(2) “Local agency” shall include those entities listed in Section
1554951 and a public entity created pursuant to the Joint Exercise
16of Powers Act (Chapter 5 (commencing with Section 6500) of
17Division 7 of Title 1) by one or more entities listed in Section
1854951, but “local agency” shall not include a county
19superintendent of schools, a school district, or a community college
20district.

21(3) “Nonprofit organization” means an entity incorporated
22under the Nonprofit Corporation Law (Division 2 (commencing
23with Section 5000) of Title 1 of the Corporations Code) or a
24nonprofit organization that qualifies for exempt status under
25Section 115 or 501(c), excluding Section 501(c)(3), of the Internal
26Revenue Code of 1986.

27(4) “Public resources” means any property or asset owned by
28a local agency, including, but not limited to, cash, land, buildings,
29facilities, funds, equipment, supplies, telephones, computers,
30vehicles, travel, and local government compensated time that is
31provided to a nonprofit organization.

32(5) “Use” means a use of public resources from one or more
33local agencies that is substantial enough to result in a gain or
34advantage to the user or a loss to any local agency for which any
35monetary value may be estimated.

36(c) This section does not prohibit the use of public resources
37for providing information to the public about the possible effects
38of any bond issuance or other ballot measure on state activities,
P5    1operations, or policies, provided that the informational activities
2are otherwise authorized by the California Constitution or the
3laws of this state, and the information provided constitutes a fair
4and impartial presentation of relevant facts to aid the electorate
5in reaching an informed judgment regarding the bond issue or
6ballot measure.

7(d) (1) Any nonprofit organization that intentionally or
8negligently violates this section is liable for a civil penalty not to
9exceed one thousand dollars ($1,000) for each day on which a
10violation occurs, plus three times the value of the unlawful use of
11public resources. The penalty shall be assessed and recovered in
12a civil action brought in the name of the people of the State of
13California by the Attorney General or by any district attorney or
14any city attorney of a city having a population in excess of 750,000.
15If two or more nonprofit organizations are responsible for a
16violation, they shall be jointly and severally liable for the penalty.
17If the action is brought by the Attorney General, the moneys
18recovered shall be paid into the General Fund. If the action is
19brought by a district attorney, the moneys recovered shall be paid
20to the treasurer of the county in which the judgment was entered.
21If the action is brought by a city attorney, the moneys recovered
22shall be paid to the treasury of that city.

23(2) A civil action alleging a violation of this section shall not
24be commenced more than four years after the date of the alleged
25violation.

end insert
26begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 8314.2 is added to the end insertbegin insertGovernment Codeend insertbegin insert, to
27read:end insert

begin insert
28

begin insert8314.2.end insert  

(a) An auditable nonprofit organization that engages
29in campaign activity, either directly or through the control of
30another entity, shall deposit into a separate bank account all
31specific source or sources of funds received and shall pay for all
32campaign activity from that separate bank account.

33(b) For purposes of this section:

34(1) “Auditable nonprofit organization” means a nonprofit
35organization for which public resources from one or more local
36agencies account for more than 20 percent of the organization’s
37annual gross revenue in the current fiscal year or either of the
38previous two fiscal years, including gross revenue from public
39resources received in exchange for consideration.

P6    1(2) “Specific source or sources of funds” shall mean any funds
2received by the auditable nonprofit organization that have been
3designated for campaign activity use or any other funds received
4by the nonprofit organization, including, but not limited to, funds
5received in exchange for consideration, that are used, in whole or
6in part, within a two-year period from receipt for campaign
7activity.

8(3) Unless otherwise defined herein, the definitions found in
9subdivision (b) of Section 8314.1 shall apply to this section.

10(c) Fifteen days after the end of each quarter, beginning with
11the first quarter of each odd year through the fourth quarter of
12the following even year, an auditable nonprofit organization that
13engages in campaign activity, either directly or through the control
14of another entity, at any point during that quarter shall disclose
15the following information for that quarter:

16(1) The name and amount of each specific source or sources of
17funds used for campaign activity, provided that the aggregate
18amount of funds received since January 1 of the most recent odd
19year by an auditable nonprofit corporation from that specific
20source or sources of funds is at least two hundred fifty dollars
21($250).

22(2) The name of the payee and amount of all payments
23aggregating two hundred fifty dollars ($250) or more made from
24the single bank account required under subdivision (a).

25(3) A description of each campaign activity.

26(d) Fifteen days after the end of each even year, an auditable
27nonprofit organization that engages in campaign activity, either
28directly or through the control of another entity, at any point during
29that even year or the prior odd year shall disclose all the following
30information for those two calendar years:

31(1) The name and amount of any specific source or sources of
32funds used for campaign activity, provided that the aggregate
33amount of funds received since January 1 of the most recent odd
34year by an auditable nonprofit corporation from that specific
35source or sources of funds is at least two hundred fifty dollars
36($250).

37(2) The name of the payee and amount of all payments made
38from the single bank account required under subdivision (a).

39(3) A description of each campaign activity.

P7    1(e) Each auditable nonprofit organization that engages in
2campaign activity, either directly or through the control of another
3entity, shall display on its Internet Web site the information it is
4required to disclose under this section. The information shall be
5clearly described and identified on a separate Internet Web page,
6which shall be linked from the home page of the organization’s
7Internet Web site. The link to this Internet Web page from the home
8page shall be as visible as all similar links.

9(f) The Attorney General shall conduct a biennial audit of each
10auditable nonprofit organization. Each auditable nonprofit
11organization shall provide records to the Attorney General that
12substantiate the information required to be disclosed by this
13section. The audit shall determine whether the organization
14complied with the requirements of Sections 8314.1 and this section.
15The Attorney General shall issue a written audit report and
16transmit it to the district attorney for the county in which the
17auditable nonprofit organization is domiciled.

18(g) If the audit determines that an auditable nonprofit
19organization has violated Section 8314.1 or this section, the
20Attorney General may impose a fine upon the auditable nonprofit
21organization in an amount up to ten thousand dollars($10,000)
22for each violation.

end insert
23begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 54964.5 is added to the end insertbegin insertGovernment Codeend insertbegin insert, to
24read:end insert

begin insert
25

begin insert54964.5.end insert  

(a) An officer, employee, or agent of a nonprofit
26organization may not expend or authorize the expenditure of any
27public resources from any local agency to support or oppose the
28approval or rejection of a ballot measure or the election or defeat
29of a candidate by the voters.

30(b) As used in this section, the following terms shall have the
31following meanings:

32(1) “Ballot measure” means a state or local initiative,
33referendum, or recall measure certified to appear on a regular or
34special election ballot.

35(2) “Candidate” means an individual who has qualified to have
36his or her name listed on the ballot, or who has qualified to have
37write-in votes on his or her behalf counted by elections officials,
38for nomination or election to an elective office at any regular or
39special primary or general election, and includes any officeholder
40who is the subject of a recall election.

P8    1(3) “Expenditure” means a payment that is used for
2communications that expressly advocate the approval or rejection
3of a clearly identified ballot measure, or the election or defeat of
4a clearly identified candidate, by the voters or that constitutes a
5campaign contribution.

6(4) “Local agency” shall include those entities listed in Section
754951 and a public entity created pursuant to the Joint Exercise
8of Powers Act (Chapter 5 (commencing with Section 6500) of
9Division 7 of Title 1) by one or more entities listed in Section
1054951, but “local agency” shall not include a county
11superintendent of schools, an elementary school, high school, or
12unified school district, or a community college district.

13(5) “Nonprofit organization” means any entity incorporated
14under the Nonprofit Corporation Law (Division 2 (commencing
15with Section 5000) of Title 1 of the Corporations Code) or a
16nonprofit organization that qualifies for exempt status under
17Section 115 or 501(c), excluding 501(c)(3), of the Internal Revenue
18Code of 1986.

19(6) “Public resources” means any property or asset owned by
20any local agency, including, but not limited to, cash, land,
21buildings, facilities, funds, equipment, supplies, telephones,
22computers, vehicles, travel, and local government compensated
23time that is provided to a nonprofit organization.

24(c) This section does not prohibit the use of public resources
25for providing information to the public about the possible effects
26of any bond issuance or other ballot measure on state activities,
27operations, or policies, provided that the informational activities
28are otherwise authorized by the California Constitution or the
29laws of this state, and the information provided constitutes a fair
30and impartial presentation of relevant facts to aid the electorate
31in reaching an informed judgment regarding the bond issue or
32ballot measure.

33(d) (1) Any person who intentionally or negligently violates
34this section is liable for a civil penalty not to exceed one thousand
35dollars ($1,000) for each day on which a violation occurs, plus
36three times the value of the unlawful use of public resources. The
37penalty shall be assessed and recovered in a civil action brought
38in the name of the people of the State of California by the Attorney
39General or by any district attorney or any city attorney of a city
40having a population in excess of 750,000. If two or more persons
P9    1 are responsible for any violation, they shall be jointly and severally
2liable for the penalty. If the action is brought by the Attorney
3General, the moneys recovered shall be paid into the General
4Fund. If the action is brought by a district attorney, the moneys
5recovered shall be paid to the treasurer of the county in which the
6judgment was entered. If the action is brought by a city attorney,
7the moneys recovered shall be paid to the treasury of that city.

8(2) A civil action alleging a violation of this section shall not
9be commenced more than four years after the date of the alleged
10violation.

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11

SECTION 1.  

It is the intent of the Legislature to appropriate
12two hundred fifty million dollars ($250,000,000) from the General
13Fund in the 2013-14 fiscal year to the Career Pathways State
14Revolving Fund. The source of funds for that appropriation may
15include state apportionments for purposes of Section 8 of Article
16XVI of the California Constitution and offsetting budget savings
17derived from reforms to the Enterprise Zone Act (Chapter 12.8
18(commencing with Section 7070) of Division 7 of Title 1 of the
19Government Code) and the New Jobs Tax Credit.

20

SEC. 2.  

Part 38 (commencing with Section 64200) is added to
21Division 4 of Title 2 of the Education Code, to read:

22 

23PART 38.  Career Pathways Investment Credit
24and Trust Fund

25

 

26

64200.  

(a) The Legislature finds and declares the following:

27(1) After five years of deep recession and high rates of
28unemployment, the California economy has begun to recover.

29(2) One of the most important actions California can take to
30hasten that recovery is to invest in the development of a skilled
31workforce to perform well-paying jobs in growing and emerging
32sectors of its regional economies.

33(3) The fastest-growing occupations are expected to be those
34that require scientific, technical, engineering, or mathematics
35(STEM) skills, such as jobs in biotechnology, digital media arts,
36agricultural technology, green technology, or computer-related
37and health-related fields.

38(4) California’s systems of public education, which includes
39primary and secondary schools, technical training, apprenticeship,
40two-year and four-year colleges, and graduate schools, play a
P10   1critical role in workforce preparation, one that could be
2significantly strengthened by a tighter focus on education and
3training that delivers the skills and capacities most called for in
4high-opportunity sectors.

5(5) This kind of workforce preparation is best accomplished in
6 concert with regional business and industry, so that students receive
7the most current and relevant education that prepares them to
8compete for good jobs in their communities after graduation from
9high school or postsecondary education and training.

10(6) Work-based educational and training opportunities enhance
11the employment prospects of low- and moderate-income
12individuals and contribute to the stability and economic
13development of their communities.

14(b) It is the intent of the Legislature that federal bank regulators,
15specifically, the Federal Reserve bank, the Office of the
16Comptroller of the Currency, the Federal Deposit Insurance
17Corporation, and the Office of Thrift Supervision, give credit to
18federally insured banks and thrifts on their compliance
19 examinations under the federal Community Reinvestment Act of
201977 (Public Law 95-128) for grants, investments, and loans to
21educational institutions, nonprofit organizations, and businesses
22in support of career pathways programs.

23(c) It is the intent of the Legislature to establish state fiscal
24incentives, such as pay-for-performance contracts, grants, and tax
25credits, that encourage California businesses and industry to enter
26into partnerships with schools and community colleges that
27strengthen the nature and quality of education provided by those
28institutions. These partnerships will connect high school pupils
29and teachers, and college students and faculty, to real-world
30experience that provides sustained exposure to applied academics,
31skill development, work-related experience, and potential future
32employment. This experience will keep students on track to
33graduation, further education, and productive careers.

34(d) The dissolution of redevelopment agencies will increase
35property tax revenues to K-14 school districts and community
36college districts, including the one-time distribution of
37redevelopment agency cash assets expected to occur in the 2012-13
38and 2013-14 fiscal years. It is the intent of the Legislature that
39school districts and community college districts capitalize the
40Career Pathways Investment Trust Funds established pursuant to
P11   1this act for purposes of financing program and administrative costs
2relating to the operation of career pathways programs.

3

64201.  

For purposes of this part:

4(a) “Applicant” means a business entity that enters into a
5contract or memorandum of understanding with a local educational
6agency, community college, or workforce investment board to
7provide career technical education that connects pupils to
8real-world experience and provides sustained exposure to applied
9academics, skill development, work-related education, and potential
10future employment, and that applies to the committee for the career
11pathways investment credit.

12(b) “Budget” means an estimate of all qualified expenditures to
13be paid or incurred in providing the career pathways program over
14the period for which the applicant is applying for the career
15pathways investment credit.

16(c) “Career Pathways Investment Trust Fund” means a fund
17established in each local educational agency and community
18college district for the purpose of financing program and
19administrative costs relating to the operation of career pathways
20programs.

21(d) “Career pathways pay-for-performance pilot project” means
22a career pathways program approved for funding by the committee
23under a pay-for-performance contract between the committee and
24the school district or districts or community college district or
25districts. The pay-for-performance contract shall specify the
26accountability and performance measurements that determine the
27extent to which a business entity partnering with the school districts
28or districts or community college district or districts may be
29compensated for its costs. The amount of compensation shall vary
30in accordance with demonstrated performance. Performance
31measures shall include all of the following:

32(1) Demonstrated improvement in academic performance.

33(2) Demonstrated improvement in postsecondary enrollment.

34(3) Decreased dropout rates.

35(4) Demonstrated improvement in transitions to appropriate
36employment, apprenticeships, or any other job training school, if
37applicable.

38(5) Measurements of pupil, parent, and employer satisfaction.

39(e) “Career pathways programs” means programs that support
40the following:

P12   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
19activities.

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(f) “Career Pathways State Revolving Fund” means a fund
37established in the State Treasury for the purpose of providing state
38financial assistance to local educational agencies, community
39college districts, and business entities that have entered into
40agreements to implement and operate career pathways programs.
P13   1State financial assistance may include grants and
2pay-for-performance contracts.

3(g) “Committee” means the California Career Pathways State
4Investment Committee.

5(h) “Qualified expenditures” includes the following:

6(1) The costs of work-based learning specialists that convene,
7connect, measure, and broker partnerships between local
8educational agencies and business entities, including the costs of
9all of the following activities:

10(A) Matching pupils with work-based learning opportunities,
11including school year or summer internships and paid employment
12within a career pathway.

13(B) Using schoolsite mentors as liaisons between local
14educational agencies, business entities, parents, and community
15partners.

16(C) Providing technical assistance to help local educational
17entities and business entities design comprehensive career pathways
18programs.

19(D) Providing technical assistance to help teachers integrate
20school-based and work-based learning with academic and career
21technical subject matters.

22(E) Brokering the involvement of business entities in
23school-based and work-based activities.

24(F) Assisting pupils in finding appropriate work, continuing
25pupils’ education or training, and linking pupils to other community
26services.

27(G) Evaluating outcomes to assess career pathways program
28success, particularly in regard to pupil subgroups.

29(H) Linking existing youth development activities with employer
30and industry strategies to upgrade worker skills.

31(2) Paid jobs or internships for high school pupils or community
32college students that are related to course work in a career pathways
33program.

34(3) Support and supervision for unpaid internships or other
35work-based learning opportunities that give pupils the opportunity
36to connect what they are learning in high school or community
37college to its application in the real world.

38(4) Teacher or faculty externships.

39(5) Contributions to programs administered by postsecondary
40institutions that provide support to middle school, high school, or
P14   1community college career pathways programs. This support may
2include, but shall not be limited to, teacher training, curriculum
3development, and other forms of technical assistance.

4(6) Equipment and instructional materials, including equipment
5and software to support technology-based instruction that provides
6one or more of the following:

7(A) Accelerated learning opportunities.

8(B) Identification of skill and knowledge gaps.

9(C) Targeted remediation to prepare pupils for college and
10careers.

11(7) Employees to provide instruction, in partnership with
12credentialed teachers employed by the school district or faculty
13employed by the community college, at the schoolsite or
14community college campus.

15(8) Contributions to support staff who link career pathways
16programs with regional business entities and assist in the
17development of the memoranda of understanding provided in
18subdivision (h) of Section 64204. The staff may be employed by
19local educational agencies, community colleges, or regional
20intermediary organizations.

21

64203.  

(a) A Career Pathways Investment Trust Fund is hereby
22established in each local educational agency and community
23college district for the purpose of financing program and
24administrative costs relating to the operation of career pathways
25programs. The trust fund may accept revenues from any source,
26including one-time property tax revenues resulting from the
27dissolution of the assets of the former redevelopment agencies,
28 other tax revenues, grants, and contributions or employment
29training funds made available through the employment training
30panel or workforce investment boards. The trust fund shall be
31administered by each local educational agency or community
32college district.

33(b) Moneys in a Career Pathways Investment Trust Fund may
34be used for any of the following purposes:

35(1) Career pathways program operations.

36(2) Development of rigorous and career-relevant curriculum by
37the applicant and the school district, community college district,
38or consortium of school districts and community college districts.

39(3) Paid internships.

P15   1(4) Post-high-school financial aid for college, licensing, and
2credentialing programs.

3(5) Wage subsidies for full-time employment for pupils who
4successfully complete a career pathways program.

5

64204.  

(a) The California Career Pathways State Investment
6Committee is hereby established in state government.

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

8(1) The Chancellor of the California Community Colleges, or
9his or her designee, who will serve as the chairperson of the
10committee.

11(2) The Superintendent or his or her designee.

12(3) The Chair of the California Workforce Investment Board,
13or his or her designee.

14(4) One appointee of the Senate Committee on Rules, who shall
15represent the business community and will serve a four-year term.

16(5) One appointee of the Speaker of the Assembly, who will
17serve a four-year term.

18(c) The committee is granted the sole authority to allocate to
19local educational agencies, community college districts, and
20applicants moneys appropriated to the Career Pathways State
21Revolving Fund for state financial assistance, including grants and
22the payment of pay-for-performance contracts entered into by the
23committee as part of a career pathways pay-for-performance pilot
24project. The committee is also granted the sole authority to allocate
25to applicants the Career Pathways Investment Credits authorized
26pursuant to Section 64206.

27(d) The committee shall establish criteria and guidelines for
28evaluating applications for state financial assistance, including
29requirements for commitments of financial or other resources by
30applicants or a local educational agency, community college
31district, or workforce investment board. The committee shall give
32priority in allocating state financial assistance to the following:

33(1) Proposals that would fund a work-based learning specialist
34to convene, connect, measure, and broker efforts to establish or
35enhance a locally defined career pathways program that provides
36connections between local educational agencies and business
37entities.

38(2) Local educational agencies and community college districts
39that have an unemployment rate higher than the statewide average
40unemployment rate for the most recent calendar year, as determined
P16   1by the Employment Development Department, or a high school
2graduation rate lower than the statewide high school graduation
3rate for the most recent calendar year, as determined by the
4committee using the California Longitudinal Pupil Achievement
5Data System.

6(3) Local educational agencies and community college districts
7that include in their application a significant amount of private
8funding support from their business partners.

9(4) Local educational agencies and community college districts
10that include in their application articulated pathways connecting
11high school and postsecondary certificate and degree programs in
12their region.

13(5) Local educational agencies and community college districts
14that are not seeking state financial assistance for existing activities.
15However, priority in allocating state financial assistance shall be
16given to applicants that seek to expand or augment existing
17investments in career pathways programs.

18(e) The committee shall develop performance criteria for
19determining the financial returns to private entities participating
20in a career pathways pay-for-performance pilot project. The
21performance-based compensation to be paid to private entities by
22educational agency participants for each pay-for-performance
23contract shall be specified in the contract. The performance criteria
24shall include, but are not limited to, high school pupil and
25community college student achievement and opportunity in the
26following areas:

27(1) High school graduation.

28(2) Completion of postsecondary programs that culminate in a
29certificate or degree.

30(3) Attainment of industry-recognized credentials that are valued
31in high-growth, high-need, or emerging economic sectors.

32(4) Provision of internships to high school pupils and community
33college students.

34(5) Provision of paid summer jobs for high school pupils and
35community college students.

36(6) Provision of externships for high school teachers and
37community college faculty.

38(7) Provision of scholarships or other financial assistance for
39students pursuing postsecondary education or training in a relevant
40career pathway.

P17   1(8) Offer of paid employment or apprenticeship to high school
2pupils or community college students who are participants or
3graduates of a career pathways program.

4(f) The committee may spend up to ten million dollars
5($10,000,000) of the amount appropriated to the California Career
6Pathways State Revolving Fund for the career pathways
7pay-for-performance pilot project.

8(g) The committee may prepare forms, establish procedures,
9set priorities, assess, and perform other administrative functions
10as necessary.

11(h) The Superintendent, the Chancellor of the Community
12Colleges, and the California Workforce Investment Board shall
13enter into a memorandum of understanding to allocate staff
14resources to the committee. The costs to these entities shall be
15offset by fees charged to applicants for Career Pathways Tax
16Credits.

17

64205.  

(a) There is hereby created in the State Treasury the
18California Career Pathways State Revolving Fund for the purpose
19of providing financial assistance to local educational agencies,
20community college districts, and business entities that have entered
21into agreements to implement and operate career pathways
22programs. Within the fund there shall also be established a Career
23Pathways Financing Account, a Career Pathways Grant Account,
24and additional accounts and subaccounts that the committee may
25establish from time to time.

26(b) Moneys in the Career Pathways Financing Account shall be
27used to pay pay-for-performance contracts entered into by the
28committee as part of a career pathways pay-for-performance pilot
29project, or other financing agreements entered into by the
30committee.

31(c) Moneys in the Career Pathways Grant Account shall be used
32to award grants from the committee to local educational agencies
33and community college districts.

34(d) Notwithstanding Section 13340 of the Government Code,
35all moneys in the Career Pathways State Revolving Fund shall be
36continuously appropriated without regard to fiscal year for the
37support of the committee and for expenditure for the purposes
38stated in this part.

39(e) All expenses incurred in carrying out the purposes of this
40part shall be payable solely from funds provided pursuant to this
P18   1part, and no liability or obligation shall be imposed upon the state
2and none shall be incurred by the committee beyond the extent to
3which money shall have been provided pursuant to this part.

4

64206.  

For calendar years beginning on or after January 1,
52014, the committee shall allocate the career pathways investment
6credit in an amount authorized in the Budget Act for that calendar
7year. For purposes of this section, the committee shall do all of
8the following:

9(a) Allocate the career pathways investment credit for up to five
10calendar years for each application the committee approves, as
11long as the amount allocated does not exceed the amount authorized
12in the Budget Act.

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

14(A) Applicants that have entered into a contract or memorandum
15of understanding with local educational agencies, community
16colleges, or workforce investment boards, as specified in
17subdivision (a) of Section 64201, in communities that have an
18unemployment rate higher than the statewide unemployment rate,
19as determined by the United States Census, and a high school
20graduation rate lower than the statewide high school graduation
21rate, as determined by the committee using the California
22Longitudinal Pupil Achievement Data System.

23(B) Applicants that have entered into a contract or memorandum
24of understanding with local educational agencies, community
25colleges, or workforce investment boards with an applicant
26financial commitment that exceeds the commitment of public
27funds.

28(C) Applicants that have entered into a contract or memorandum
29of understanding with local educational agencies or community
30colleges that offer articulated pathways connecting high school
31and postsecondary certificate and degree programs in their region.

32(D) Applicants that are not seeking tax credits for existing
33activities. However, priority shall be given to applicants that seek
34to expand or augment existing investments in career pathways
35programs.

36(2) To the maximum extent practicable, subject to paragraph
37(1), give priority in allocating career pathways investment credits
38to applicants that seek to expand or augment existing investments
39in career pathways programs.

P19   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.

13(d) Adopt rules that award credits to applicants that demonstrate
14that either the applicant or the local educational agency, community
15college, or workforce investment board with which it has entered
16into a memorandum of understanding pursuant to this part
17performed well in regard to the following criteria:

18(1) The effectiveness of the career pathways program toward
19preparing students for productive, high-wage employment in
20growing or high-need sectors of the California economy.
21Effectiveness criteria shall include:

22(A) Pathway completion rates.

23(B) High school graduation rates or community college
24completion rates, as appropriate.

25(C) Percentages of students attaining an industry certification.

26(D) Percentages of students transitioning successfully to
27postsecondary education or apprenticeship.

28(E) Employment and earnings after high school.

29(2) The level of the applicant’s investment in, oversight of, and
30ability to leverage and sustain current career pathways programs
31and current career technical education programs.

32(e) Develop and provide forms for purposes of informing
33potential applicants of the purposes of this part.

34(f) The amount of the credit reserved for a calendar year shall
35not exceed 50 percent of the qualified expenditures estimated by
36the applicant for the calendar year.

37(g) The committee shall report to the Franchise Tax Board, once
38each year, the identity of the qualified taxpayers for whom the
39career pathways investment credits are allocated each year.

P20   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
8Board.

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.

17

SEC. 3.  

Section 17057.6 is added to the Revenue and Taxation
18Code
, to read:

19

17057.6.  

(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
31Investment Committee.

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.

P21   1

SEC. 4.  

Section 23610.6 is added to the Revenue and Taxation
2Code
, to read:

3

23610.6.  

(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.

21

SEC. 5.  

 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.

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