BILL NUMBER: SB 1356 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 1, 2012
AMENDED IN SENATE APRIL 9, 2012
INTRODUCED BY Senator De León
FEBRUARY 24, 2012
An act to add and repeal Sections 17053.86 and 23686 of the
Revenue and Taxation Code, relating to taxation.
LEGISLATIVE COUNSEL'S DIGEST
SB 1356, as amended, De León. Income taxes: credits: contributions
to education funds.
The Personal Income Tax Law and the Corporation Tax Law allow
various credits against the taxes imposed by those laws.
This bill, under both laws, for taxable years beginning on or
after January 1, 2013, and before January 1, 2018
2016 , would allow a credit equal to 65%
a certain percentage of a contribution to the
Higher Education Investment Tax Credit Program Special Fund,
established by this bill, for specified education purposes, as
provided. This bill would specify that the aggregate amount of credit
that may be allocated under both laws shall not exceed $500,000,000
for each calendar year , and would require the Treasurer to
perform certain duties with regard to allocating and certifying the
tax credits allowed under these provisions .
This bill would become operative only if SB 1466 of the 2011-12
Regular Session is enacted and takes effect on or before January 1,
2013.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 17053.86 is added to the Revenue and Taxation
Code, to read:
17053.86. (a) (1) For each taxable year beginning on or after
January 1, 2013, and before January 1, 2018
2016 , there shall be allowed a credit against the "net tax,"
as defined in Section 17039, an amount equal to 65 percent
of the amount contributed during the taxable year to the Higher
Education Investment Tax Credit Program Special Fund.
the following:
(A) For taxable years on and after
January 1, 2013, and before January 1, 2014, 60 percent of
the amount contributed by the taxpayer during the 2013 taxable year
to the Higher Education Investment Tax Credit Program Special Fund,
as allocated and certified by the Treasurer.
(B) For taxable years on and after January 1, 2014, and before
January 1, 2015, 55 percent of the amount contributed by the taxpayer
during the 2014 taxable year to the Higher Education Investment Tax
Credit Program Special Fund, as allocated and certified by the
Treasurer.
(C) For taxable years on and after January 1, 2015, and before
January 1, 2016, 50 percent of the amount contributed by the taxpayer
during the 2015 taxable year to the Higher Education Investment Tax
Credit Program Special Fund, as allocated and certified by the
Treasurer.
(2) Contributions shall be made only in cash.
(b) (1) The aggregate amount of credit that may be allocated
and certified pursuant to this section and Section 23686 shall
not exceed five hundred million dollars ($500,000,000) for the 2013
calendar year and five hundred million dollars ($500,000,000) for
each calendar year thereafter.
(2) (A) Credit under this section and Section 23686 shall be
allowed only for credits claimed on timely filed original returns
received by the Franchise Tax Board on or before the cut-off date
established by the Franchise Tax Board and shall be allocated on a
first-come-first-served basis. The date a return is received shall be
determined by the Franchise Tax Board.
(B) For purposes of this subdivision, the cut-off date shall be
the last day of the calendar quarter within which the Franchise Tax
Board estimates it will have received timely filed original returns
claiming credits under this section and Section 23686 totaling five
hundred million dollars ($500,000,000) for the calendar year.
(2) (A) For purposes of this section, the Treasurer shall do all
of the following:
(i) On or after January 1, 2013, and before January 1, 2016,
allocate and certify tax credits to taxpayers under this section.
(ii) Establish a procedure for taxpayers to contribute to the
Higher Education Investment Tax Credit Program Special Fund and to
obtain from the Treasurer a certification for the credit allowed by
this section.
(iii) On or after January 1, 2013, and before January 1, 2015,
notify the taxpayer within seven days of receipt of a contribution of
the contribution amount that is eligible for a credit. If the
allocation and certification would be limited or denied because the
five hundred million dollar ($500,000,000) cap set forth in paragraph
(1) of subdivision (b) has been reached, the Treasurer shall offer
the taxpayer a choice between either the return of the contribution
or the receipt of the certification for the next taxable year.
(iv) On or after January 1, 2015, and before January 1, 2016,
notify the taxpayer within seven days of receipt of a contribution,
the contribution amount that is eligible for a credit. If the
allocation and certification would be limited or denied because the
five hundred million dollar ($500,000,000) cap set forth in paragraph
(1) of subdivision (b) has been reached, the Treasurer shall offer
the taxpayer the option of a return of all of the contribution or the
portion of the contribution that would be limited, as applicable.
(v) Provide to the Franchise Tax Board a copy of each credit
certificate issued for the calendar year by March 1 of the calendar
year immediately following the year in which those certificates are
issued.
(3) (A) The determinations of the Franchise Tax Board with respect
to the cut-off date disallowance of a credit
, the date a return is received, and whether a return has been
timely filed for purposes of this subdivision shall not be reviewed
in any administrative or judicial proceeding.
(B) Any disallowance of a credit claimed due to a determination
under this subdivision , including the application of the
limitation specified in paragraph (1), shall be treated as
a mathematical error appearing on the return. Any amount of tax
resulting from such disallowance may be assessed by the Franchise Tax
Board in the same manner as provided by Section 19051.
(4) The Franchise Tax Board shall periodically provide
notice on its Internet Web site with respect to the amount of credit
under this section and Section 23686 claimed on timely filed original
returns received by the Franchise Tax Board.
(c) (1) In the case where the credit allowed by this section
exceeds the "net tax," the excess may be carried over to reduce the
"net tax" in the following year, and succeeding five years if
necessary, until the credit is exhausted.
(2) A deduction shall not be allowed under this part for amounts
taken into account under this section in calculating the credit
allowed by this section.
(d) (1) The Higher Education Investment Tax Credit Program Special
Fund is hereby created as a special fund in the State Treasury. All
revenue in this special fund, upon appropriation by the Legislature,
shall be allocated to the Student Aid Commission for purposes of
awarding Cal Grants to students eligible pursuant
to Section 69432.75 of the Education Code.
(2) The tax credit allowed by subdivision (a) of this section and
subdivision (a) of Section 23686 for donations to the Higher
Education Investment Tax Credit Program Special Fund shall be known
as the Higher Education Investment Tax Credit Program.
(e) (1) The Franchise Tax Board may prescribe rules, guidelines,
or procedures necessary or appropriate to carry out the purposes of
this section, including any guidelines regarding the limitation on
total credits allowable under this section and Section 23686.
(2) Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code does not apply to any
standard, criterion, procedure, determination, rule, notice, or
guideline established or issued by the Franchise Tax Board pursuant
to this section.
(f) This section shall remain in effect only until December 1,
2018 2016 , and as of that date is
repealed.
SEC. 2. Section 23686 is added to the Revenue and Taxation Code,
to read:
23686. (a) (1) For each taxable year beginning on or after
January 1, 2013, and before January 1, 2018
2016 , there shall be allowed a credit against the "tax," as
defined in Section 23036, an amount equal to 65 percent of
the amount contributed during the taxable year to the Higher
Education Investment Tax Credit Program Special Fund, created by
subdivision (d) of Section 17053.86. the following:
(A) For taxable years on and after January 1, 2013, and before
January 1, 2014, 60 percent of the amount contributed by the taxpayer
during the 2013 taxable year to the Higher Education Investment Tax
Credit Program Special Fund, as allocated and certified by the
Treasurer.
(B) For taxable years on and after January 1, 2014, and before
January 1, 2015, 55 percent of the amount contributed by the taxpayer
during the 2014 taxable year to the Higher Education Investment Tax
Credit Program Special Fund, as allocated and certified by the
Treasurer.
(C) For taxable years on and after January 1, 2015, and before
January 1, 2016, 50 percent of the amount contributed by the taxpayer
during the 2015 taxable year to the Higher Education Investment Tax
Credit Program Special Fund, as allocated and certified by the
Treasurer.
(2) Contributions shall be made only in cash.
(b) (1) The aggregate amount of credit that may be allocated
and certified pursuant to this section and Section 17053.86
shall not exceed five hundred million dollars ($500,000,000) for the
2013 calendar year and five hundred million dollars ($500,000,000)
for each calendar year thereafter.
(2) (A) Credit under this section and Section 17053.86 shall be
allowed only for credits claimed on timely filed original returns
received by the Franchise Tax Board on or before the cut-off date
established by the Franchise Tax Board and shall be allocated on a
first-come-first-served basis. The date a return is received shall be
determined by the Franchise Tax Board.
(B) For purposes of this subdivision, the cut-off date shall be
the last day of the calendar quarter within which the Franchise Tax
Board estimates it will have received timely filed original returns
claiming credits under this section and Section 17053.86 totaling
five hundred million dollars ($500,000,000) for the calendar year.
(2) (A) For purposes of this section, the Treasurer shall do all
of the following:
(i) On or after January 1, 2013, and before January 1, 2016,
allocate and certify tax credits to taxpayers under this section.
(ii) Establish a procedure for taxpayers to contribute to the
Higher Education Investment Tax Credit Program Special Fund and to
obtain from the Treasurer a certification for the credit allowed by
this section.
(iii) On or after January 1, 2013, and before January 1, 2015,
notify the taxpayer within seven days of receipt of a contribution of
the contribution amount that is eligible for a credit. If the
allocation and certification would be limited or denied because the
five hundred million dollar ($500,000,000) cap set forth in paragraph
(1) of subdivision (b) has been reached, the Treasurer shall offer
the taxpayer a choice between either the return of the contribution
or the receipt of the certification for the next taxable year.
(iv) On or after January 1, 2015, and before January 1, 2016,
notify the taxpayer within seven days of receipt of a contribution,
the contribution amount that is eligible for a credit. If the
allocation and certification would be limited or denied because the
five hundred million dollar ($500,000,000) cap set forth in paragraph
(1) of subdivision (b) has been reached, the Treasurer shall offer
the taxpayer the option of a return of all of the contribution or the
portion of the contribution that would be limited, as applicable.
(v) Provide to the Franchise Tax Board a copy of each credit
certificate issued for the calendar year by March 1 of the calendar
year immediately following the year in which those certificates are
issued.
(3) (A) The determinations of the Franchise Tax Board with respect
to the cut-off date disallowance of a credit
, the date a return is received, and whether a return has been
timely filed for purposes of this subdivision shall not be reviewed
in any administrative or judicial proceeding.
(B) Any disallowance of a credit claimed due to a determination
under this subdivision , including the application of the
limitation specified in paragraph (1), shall be treated as
a mathematical error appearing on the return. Any amount of tax
resulting from such disallowance may be assessed by the Franchise Tax
Board in the same manner as provided by Section 19051.
(4) The Franchise Tax Board shall periodically provide notice on
its Internet Web site with respect to the amount of credit under this
section and Section 17053.86 claimed on timely filed original
returns received by the Franchise Tax Board.
(c) (1) In the case where the credit allowed by this section
exceeds the "tax," the excess may be carried over to reduce the "tax"
in the following year, and succeeding five years if necessary, until
the credit is exhausted.
(2) A deduction shall not be allowed under this part for amounts
taken into account under this section in calculating the credit
allowed by this section.
(d) (1) The Franchise Tax Board may prescribe rules, guidelines,
or procedures necessary or appropriate to carry out the purposes of
this section, including any guidelines regarding the limitation on
total credits allowable under this section and Section 17053.86.
(2) Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code does not apply to any
standard, criterion, procedure, determination, rule, notice, or
guideline established or issued by the Franchise Tax Board pursuant
to this section.
(e) This section shall remain in effect only until December 1,
2018 2016 , and as of that date is
repealed.
SEC. 3. This act shall become operative only if Senate Bill 1466
of the 2011-12 Regular Session is enacted and takes effect on or
before January 1, 2013.