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AB-2217 Income taxes: credits: Bridget “Biddy” Mason Golden State Credit Program.(2017-2018)

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Date Published: 08/24/2018 09:00 PM
AB2217:v93#DOCUMENT

Amended  IN  Senate  August 24, 2018
Amended  IN  Senate  August 23, 2018
Amended  IN  Senate  August 17, 2018
Amended  IN  Assembly  May 02, 2018
Amended  IN  Assembly  April 05, 2018
Amended  IN  Assembly  March 20, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill
No. 2217

Introduced by Assembly Member Burke
(Coauthor: Senator Allen)

February 12, 2018

An act to add and repeal Part 10.4 (commencing with Section 20400) of Division 2 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 2217, as amended, Burke. Income taxes: credits: Bridget “Biddy” Mason Golden State Credit Program.
The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws.
This bill, before January 1, 2020, 2021, would require the Treasurer to establish a procedure to accept monetary transfers from qualified entities and to transfer golden state credits (GSC) to qualified entities. This bill, on and after January 1, 2020, 2021, and before January, 1, 2025, 2026, would allow the Treasurer to transfer to a qualified entity one GSC for each $0.90 that the qualified entity transfers to the Treasurer, and would limit the amount of GSCs to be transferred to $50,000,00 per calendar year, as provided. This bill would require any moneys received by the Treasurer, less costs, to be deposited into the General Fund. This bill, on and after January 1, 2020, 2021, and before January 1, 2025, 2026, would allow a qualified entity to transfer to a donating taxpayer one GSC for each $1 that the donating taxpayer contributes to the qualified entity. This bill would define a qualified entity to include, among others, an organization exempt from federal income taxation as an organization described in Section 501(c)(3) of the Internal Revenue Code that is in active status, as provided, a private college or university that participates in the Cal Grant program, as provided, a California Community College, a nonprofit charter school located in the state, or a K–12 public school district located in the state.
The bill would allow a qualified entity to submit a claim for refund to the Treasurer equal to the amount that the qualified entity transferred to the Treasurer for GSCs that the qualified entity was unable to transfer to a donating taxpayer before the end of the calendar year in which the GSC was received. The bill, upon appropriation by the Legislature from the General Fund to the Treasurer of an amount necessary to make refunds claimed, would require the Treasurer to make refunds to qualified entities, as specified.
This bill, for each taxable year beginning on or after January 1, 2020, 2021, and before January 1, 2025, 2026, would allow a credit against the taxes imposed by the Personal Income Tax Law and the Corporation Tax Law in an amount equal to 80% of the amount contributed during the taxable year by the taxpayer to a qualified entity from which the taxpayer was transferred GSCs.
The bill would further provide that the Bridget “Biddy” Mason Golden State Credit Program would become inoperative if the Treasurer, upon consultation with the Franchise Tax Board, determines that donations made pursuant to the program do not qualify for a deduction under federal income tax law.
This bill would take effect immediately as a tax levy.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 It is the intent of the Legislature by enacting this act to do both of the following:
(a) Encourage increased civic engagement and philanthropy through voluntary contributions to both qualifying nonprofits or organizations and educational institutions.
(b) Raise additional revenues for vital services that increase social welfare, provide critical educational opportunities, and support public goods.

SEC. 2.

 Part 10.4 (commencing with Section 20400) is added to Division 2 of the Revenue and Taxation Code, to read:

PART 10.4. Bridget “Biddy” Mason Golden State Credit Program

20400.
 This part shall be known, and may be cited, as the Bridget “Biddy” Mason Golden State Credit Program.

20401.
 For purposes of this part:
(a) “GSC” means a Golden State Credit.
(b) (1) “Qualified entity” means an organization exempt from federal income taxation as an organization described in Section 501(c)(3) of the Internal Revenue Code that is in active status as listed on the Secretary of State’s Internet Web site, a private college or university that participates in the Cal Grant program and is an organization described in Section 501(c)(3) of the Internal Revenue Code that is in active status as listed on the Secretary of State’s Internet Web site, the California State University Chancellor’s Office, the University of California or its campuses, a community college located in the state, a nonprofit charter school located in the state, or a K–12 public school district located in the state.
(2) Notwithstanding paragraph (1), a “qualified entity” shall not include a private foundation as defined in Section 509 of the Internal Revenue Code.

20402.
 (a) (1) Before January 1, 2020, 2021, the Treasurer shall establish a procedure to accept monetary transfers from qualified entities and to transfer GSCs to those qualified entities. On and after January 1, 2020, 2021, and before January 1, 2025, 2026, the Treasurer may transfer to a qualified entity one GSC for each ninety cents ($0.90) that the qualified entity transfers to the Treasurer.
(2) Moneys received by the Treasurer pursuant to paragraph (1) shall first be allocated to the Treasurer for reimbursement of all costs incurred by the Treasurer in connection with the Treasurer’s duties under this part. All remaining moneys shall be deposited into the General Fund.
(3) The aggregate amount of GSCs that may be transferred to qualified entities in any calendar year pursuant to this section shall be an amount equal to the sum of both of the following:
(A) Fifty million dollars ($50,000,000) in GSCs for the 2020 2021 calendar year and each calendar year thereafter.
(B) The unused transfer amount, if any, for the preceding calendar year.
(b) On and after January 1, 2020, 2021, and before January 1, 2025, 2026, a qualified entity may transfer to a donating taxpayer one GSC for each dollar ($1) that the donating taxpayer contributes to the qualified entity. The qualified entity shall provide the donating taxpayer with documentation reflecting the amount of GSCs transferred to the donating taxpayer for the contribution.
(c) A qualified entity’s net revenues derived from contributions from donating taxpayers receiving GSCs shall supplement, and shall not supplant, any revenues received by the qualified entity for any other purpose.
(d) (1) A qualified entity may submit a claim for refund to the Treasurer equal to the amount that the qualified entity transferred to the Treasurer for GSCs that the qualified entity was unable to transfer to a donating taxpayer before the end of the calendar year in which the GSC was received by the qualified entity. A claim for refund shall be submitted on or before the February 1 next following the calendar year in which the GSC was received by the qualified entity, and shall be submitted in the form and manner as determined by the Treasurer.
(2) The Treasurer shall verify that a GSC for which a refund is requested was not transferred to a donating taxpayer before the refund is made. No refund shall exceed the amount transferred by the qualified entity to the Treasurer.
(3) Upon appropriation by the Legislature from the General Fund to the Treasurer of an amount necessary to make refunds claimed pursuant to this section, the Treasurer shall make refunds to qualified entities.

20403.
 (a) (1) For each taxable year beginning on or after January 1, 2020, 2021, and before January 1, 2025, 2026, a credit in an amount as determined pursuant to paragraph (2) shall be allowed against the “net tax,” as defined in Section 17039, or “tax,” as defined in Section 23036, as applicable, to a taxpayer that contributed to a qualified entity and was transferred GSCs from that qualified entity during the taxable year.
(2) The credit allowed by this section shall be in an amount equal to 80 percent of the amount contributed during the taxable year by the taxpayer to a qualified entity from which the taxpayer was transferred GSCs.
(3) Notwithstanding subdivision (a) of Section 23803, no credit under this section shall be allowed to an “S” corporation at the entity level.
(b) The taxpayer shall provide the documentation provided by a qualified entity pursuant to subdivision (b) of Section 20402 at the request of the Franchise Tax Board.
(c) In the case where the credit allowed by this section exceeds the “net tax” or “tax,” as applicable, the excess may be carried over to reduce the “net tax” or “tax” in the following year, and succeeding six years, if necessary, until the credit is exhausted.
(d) A credit allowed by this section shall be in lieu of any charitable deduction otherwise allowed by this division.

20404.
 (a) It is the intent of the Legislature to comply with Section 41.
(b) It is the further intent of the Legislature that the Legislature shall not consider potential reductions in the minimum education funding guarantee pursuant to Proposition 98 as a result of this part in future decisions regarding education funding.

20405.
 The Franchise Tax Board and the State Treasurer may prescribe any regulations that may be necessary or appropriate to implement the purposes of this part. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the Franchise Tax Board or the Treasurer pursuant to this section.

20406.
 (a) This part shall become inoperative if the Treasurer, in consultation with the Franchise Tax Board, determines that donations made pursuant to this part do not qualify for an income tax deduction pursuant to federal income tax law. The Treasurer shall post the determination on its Internet Web site and the credit described in Section 20403 shall not be allowed beginning in the taxable year in which the determination is posted.
(b) This part shall remain in effect only until December 1, 2025, 2026, and as of that date is repealed.

SEC. 3.

 This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.