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AB-586 Personal income taxes: deductions: qualified teacher: professional development expenses. (2017-2018)

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Date Published: 04/20/2017 09:00 PM
AB586:v96#DOCUMENT

Amended  IN  Assembly  April 20, 2017
Amended  IN  Assembly  March 14, 2017
Amended  IN  Assembly  March 08, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 586


Introduced by Assembly Member Holden

February 14, 2017


An act to amend Section 17072 of, and to add Sections 17053.51 and and repeal Section 17208 to, of, the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 586, as amended, Holden. Personal income taxes: credits: deductions: qualified teacher: professional development expenses.

(1)The Personal Income Tax Law allows various credits against the taxes imposed by that law. Existing law requires any bill authorizing a new personal income tax credit to contain, among other things, specific goals, purposes, and objectives that the tax credit will achieve, detailed performance indicators, and data collection requirements, as provided.

This bill, for each taxable year beginning on or after January 1, 2017, and before January 1, 2022, would allow as a credit an amount equal to 50% of teacher professional development expenses paid or incurred, up to $500, by a qualified taxpayer during the taxable year, as provided. The bill also would include that additional information required for any bill authorizing a new personal income tax credit.

This bill would require the Commission on Teacher Credentialing and the Franchise Tax Board to make specified reports to the Legislature regarding the tax credit. The bill would limit the amount available for the allowed credit, as specified, and would require the Franchise Tax Board to allocate the credits on a first-come-first-served basis. The bill would also require the Legislature to review the credit and deduction, described below, before January 1, 2022.

(2)The

The Personal Income Tax Law, in modified conformity with federal income tax laws, allows various deductions from gross income in computing adjusted gross income under that law, including deductions for payments to individual retirement accounts, alimony payments, and interest on educational loans. That law also allows an itemized deduction for unreimbursed employee expenses, including those of a teacher, that exceed 2% of adjusted gross income.
This bill, for each taxable year beginning on or after January 1, 2017, 2018, and before January 1, 2022, 2023, would allow as a deduction from gross income an amount equal to the amount paid or incurred, up to $2,500, for teacher professional development expenses by a qualified taxpayer during the taxable year as provided. for no more than 3 taxable years. The bill also would require the Legislature to review the deduction before January 1, 2023.

(3)This bill would allow a qualified taxpayer either the credit or the deduction, as described above, but not both, for no more than 3 taxable years.

(4)This

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.Section 17053.51 is added to the Revenue and Taxation Code, to read:
17053.51.

(a)(1)For each taxable year beginning on or after January 1, 2017, and before January 1, 2022, there shall be allowed as a credit against the “net tax,” as defined in Section 17039, an amount equal to 50 percent of teacher professional development expenses paid or incurred, not to exceed five hundred dollars ($500) by a qualified taxpayer during the taxable year.

(2)A credit pursuant to this section or a deduction pursuant to Section 17208, or both, may be allowed in the aggregate for no more than three taxable years.

(b)For purposes of this section:

(1)“Qualified taxpayer” means a taxpayer who meets all of the following requirements:

(A)Completed a teacher preparation program or fulfilled the requirements of the early completion option described in Section 44468 of the Education Code and is in possession of a preliminary general education (multiple or single subject) teaching credential or a preliminary special education teaching credential.

(B)Enrolled in a program, approved by the Commission on Teacher Credentialing, in order to earn a general education clear credential or an education specialist instruction clear credential.

(C)Is not otherwise reimbursed for the teacher professional development expenses.

(2)“Teacher professional development expenses” means enrollment fees associated with the completion of a second tier teaching credential program, including, but not limited to, general education induction, general education clear, and clear education specialist induction, approved by the Commission on Teacher Credentialing.

(c)In the case of spouses filing a joint return, the maximum amount of five hundred dollars ($500) described in subdivision (a) shall instead be one thousand dollars ($1,000) if both individuals are qualified taxpayers.

(d)The total aggregate amount of the credit that may be allowed to all qualified taxpayers pursuant to this section shall not exceed the following:

(1)Two million dollars ($2,000,000) for fiscal year 2017–18.

(2)Three million dollars ($3,000,000) for fiscal year 2018–19.

(3)Five million dollars ($5,000,000) for each of fiscal year 2019–20, 2020–21, and 2021–22.

(e)(1)The Franchise Tax Board shall allocate the credit to the qualified taxpayers on a first-come-first-served basis, determined by the date the qualified taxpayer’s timely filed original tax return is received by the Franchise Tax Board.

(2)Any disallowance of a credit claimed due to the limitations specified in this subdivision shall be treated as a mathematical error appearing on the return. Any amount of tax resulting from that disallowance may be assessed by the Franchise Tax Board in the same manner as provided in Section 19051.

(f)The credit allowed under this section must be claimed on a timely filed original return.

(g)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 taxable year, and succeeding five years if necessary, until the credit is exhausted.

(h)(1) The Franchise Tax Board may issue regulations necessary or appropriate to carry out the purposes of this section.

(2)The Administrative Procedure Act (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, standard, criterion, guideline, procedure, determination, or notice established or issued by the Franchise Tax Board pursuant to this section.

(i)(1)A deduction shall not be allowed under Section 17208 if a credit is allowed under this section.

(2)A deduction shall not be allowed under any other provision of Article 6 (commencing with Section 17201) of Chapter 3 for any amount paid or incurred for expenses allowed pursuant to subdivision (a).

(j)This section shall remain in effect only until December 1, 2022, and as of that date is repealed.

SEC. 2.SECTION 1.

 Section 17072 of the Revenue and Taxation Code is amended to read:

17072.
 (a) Section 62 of the Internal Revenue Code, relating to adjusted gross income defined, shall apply, except as otherwise provided.
(b) Section 62(a)(2)(D) of the Internal Revenue Code, relating to certain expenses of elementary and secondary school teachers, shall not apply.
(c) Section 62(a)(21) of the Internal Revenue Code, relating to attorneys fees relating to awards to whistleblowers, shall not apply.
(d) Section 62(a) of the Internal Revenue Code is modified to provide that the deduction under Section 17208 shall be allowed in determining adjusted gross income.

SEC. 3.SEC. 2.

 Section 17208 is added to the Revenue and Taxation Code, to read:

17208.
 (a) (1) For each taxable year beginning on or after January 1, 2017, 2018, and before January 1, 2022, 2023, there shall be allowed as a deduction an amount equal to the amount paid or incurred, not to exceed two thousand five hundred dollars ($2,500), for teacher professional development expenses by a qualified taxpayer during the taxable year.
(2) A credit pursuant to this section or a deduction pursuant to Section 17053.51, or both, this section may be allowed in the aggregate for no more than three taxable years.
(b) For purposes of this section:
(1) “Qualified taxpayer” means a taxpayer who meets all of the following requirements:
(A) Completed a teacher preparation program or fulfilled the requirements of the early completion option described in Section 44468 of the Education Code and is in possession of a preliminary general education (multiple or single subject) teaching credential or a preliminary special education teaching credential.
(B) Enrolled in a program, approved by the Commission on Teacher Credentialing, in order to earn a general education clear credential or an education specialist instruction clear credential.
(C) Is not otherwise reimbursed for the teacher professional development expenses.
(2) “Teacher professional development expenses” means enrollment fees associated with the completion of a second tier teaching credential program, including, but not limited to, general education induction, general education clear, and clear education specialist induction, approved by the Commission on Teacher Credentialing.
(c) (1)A deduction shall not be allowed under any other provision of this article for any amount paid or incurred for expenses allowed pursuant to subdivision (a).

(2)A credit shall not be allowed under Section 17053.51 for any amount paid or incurred if a deduction is allowed pursuant to this section.

(d) (1) The Franchise Tax Board may issue regulations necessary or appropriate to carry out the purposes of this section.
(2) The Administrative Procedure Act (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, standard, criterion, guideline, procedure, determination, or notice established or issued by the Franchise Tax Board pursuant to this section.
(e) This section shall remain in effect only until December 1, 2022, 2023, and as of that date is repealed.

SEC. 4.

(a)For purposes of complying with Section 41 of the Revenue and Taxation Code, the Legislature finds and declares as follows:

(1)The specified goal of the personal income tax credit described in Section 17053.51 of the Revenue and Taxation Code is to strengthen the professional preparation of California’s elementary and secondary school educators by supporting new teachers who are already pursuing a clear credential at personal costs and by encouraging more clear credentialed teachers.

(2)The effectiveness of the teacher tax credit shall be measured by the number of new teachers claiming the credit. The Commission on Teacher Credentialing shall report to the Legislature the number of California teachers with preliminary credentials who are enrolled in commission-approved programs to clear their credential. The Franchise Tax Board shall annually report to the Legislature the number of taxpayers allowed the credit described in Section 17053.51 of the Revenue and Taxation Code. These reports shall be submitted pursuant to Section 9795 of the Government Code.

(b)The

SEC. 3.

 The Legislature shall review the credit described in Section 17053.51 of, and the deduction described in Section 17208 of, of the Revenue and Taxation Code, Code before January 1, 2022. 2023.

SEC. 5.SEC. 4.

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