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SB-539 Taxation: credits: College Access Tax Credit.(2017-2018)

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Date Published: 05/14/2018 09:00 PM
SB539:v96#DOCUMENT

Amended  IN  Assembly  May 14, 2018
Amended  IN  Senate  April 26, 2017
Amended  IN  Senate  April 03, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 539


Introduced by Senators De León and Portantino

February 16, 2017


An act to add Part 54.8 (commencing with Section 88910) to Division 7 of Title 3 of the Education Code, relating to community colleges. amend Sections 12207, 17053.87, and 23687 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


SB 539, as amended, De León. The Community College Student Achievement Program. Taxation: credits: College Access Tax Credit.
Existing insurance tax law, the Personal Income Tax Law, and the Corporation Tax Law allow various credits against the taxes imposed by those laws, including a credit, for taxable years beginning on or after January 1, 2017, and before January 1, 2023, equal to 50% of a contribution to the College Access Tax Credit Fund, as allocated and certified by the California Educational Facilities Authority. Those laws limit the aggregate amount of credit that is authorized to be allocated and certified to $500,000,000.
This bill would increase the limit on the contribution amount from 50% to 75%. The bill would also increase the limit on the aggregate credit amount from $500,000,000 to $750,000,000.
This bill would take effect immediately as a tax levy.

Existing law establishes the California Community Colleges, under the administration of the Board of Governors of the California Community Colleges, as one of the segments of public postsecondary education in this state. The board appoints a chief executive officer known as the Chancellor of the California Community Colleges. Under existing law, community college districts are authorized, among other things, to maintain and operate campuses, employ faculty and other employees, and provide instruction to students.

This bill, commencing with the 2017–18 academic year, would establish the Community College Completion Grant Program, under the administration of the chancellor, to create guided pathways, defined as comprehensive sets of community college programs and services focused on improving student success. The program would require a participating governing board of a community college district, in order to receive program funds, to demonstrate in its application for funding that participating community colleges within the district will develop, in collaboration with the district as necessary, a plan to implement a guided pathway that includes specified elements. The bill would, only in fiscal years in which funding has been provided for this purpose in the annual Budget Act or another statute, require participating community colleges to award grants to its students who meet specified requirements. The bill would require the chancellor to report to the Legislature, on or before April 1, 2019, regarding grant award recipients for the 2018–19 award year, as specified.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 12207 of the Revenue and Taxation Code is amended to read:

12207.
 (a) For the taxable years beginning on or after January 1, 2017, and before January 1, 2023, there shall be allowed as a credit against the “tax,” as described in Section 12202 or 12231, an amount equal to 50 75 percent of the amount contributed by the taxpayer for the taxable year to the College Access Tax Credit Fund, as allocated and certified by the California Educational Facilities Authority.
(b) (1) The aggregate amount of credit that may be allocated and certified pursuant to this section, Section 17053.87, and Section 23687 shall be an amount equal to five hundred million dollars ($500,000,000). seven hundred fifty million dollars ($750,000,000).
(2) (A) For the purposes of this section, the California Educational Facilities Authority shall do all of the following:
(i) On a first-come-first-served basis, allocate and certify tax credits to taxpayers under this section.
(ii) Establish a procedure for taxpayers to contribute to the College Access Tax Credit Fund and to obtain from the California Educational Facilities Authority a certification for the credit allowed by this section. The procedure shall require the California Educational Facilities Authority to certify the contribution amount eligible for credit within 45 days following receipt of the contribution.
(iii) Provide to the Department of Insurance 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.
(B) (i) The California Educational Facilities Authority shall adopt any regulations necessary or appropriate to implement this paragraph.
(ii) 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 regulation adopted by the California Educational Facilities Authority pursuant to clause (i).
(c) 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.
(d) The tax credit allowed by subdivision (a), subdivision (a) of Section 17053.87, and subdivision (a) of Section 23687 for donations to the College Access Tax Credit Fund shall be known as the College Access Tax Credit.
(e) This section shall remain in effect only until December 1, 2023, and as of that date is repealed.

SEC. 2.

 Section 17053.87 of the Revenue and Taxation Code is amended to read:

17053.87.
 (a) For the taxable years beginning on or after January 1, 2017, and before January 1, 2023, there shall be allowed as a credit against the “net tax,” as defined in Section 17039, an amount equal to 50 75 percent of the amount contributed by the taxpayer for the taxable year to the College Access Tax Credit Fund, as allocated and certified by the California Educational Facilities Authority.
(b) (1) The aggregate amount of credit that may be allocated and certified pursuant to this section, Section 12207, and Section 23687 shall be an amount equal to five hundred million dollars ($500,000,000). seven hundred fifty million dollars ($750,000,000).
(2) (A) For the purposes of this section, the California Educational Facilities Authority shall do all of the following:
(i) On a first-come-first-served basis, allocate and certify tax credits to taxpayers under this section.
(ii) Establish a procedure for taxpayers to contribute to the College Access Tax Credit Fund and to obtain from the California Educational Facilities Authority a certification for the credit allowed by this section. The procedure shall require the California Educational Facilities Authority to certify the contribution amount eligible for credit within 45 days following receipt of the contribution.
(iii) 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.
(B) (i) The California Educational Facilities Authority shall adopt any regulations necessary or appropriate to implement this paragraph.
(ii) 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 regulation adopted by the California Educational Facilities Authority pursuant to clause (i).
(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 College Access Tax Credit Fund is hereby created as a special fund in the State Treasury. All revenue in this special fund shall be allocated as follows:
(A) First to the General Fund in an amount equal to the aggregate amount of certified credits allowed pursuant to this section and Section 23687 for the taxable year. Funds allocated to the General Fund shall be considered General Fund revenues for purposes of Sections 8 and 8.5 of Article XVI of the California Constitution.
(B) Second, upon appropriation, to the Department of Insurance, the Franchise Tax Board, the California Educational Facilities Authority, the Controller, and the Student Aid Commission for reimbursement of all administrative costs incurred by those agencies in connection with their duties under this section, Section 12207, Section 23687, and Section 69431.7 of the Education Code.
(C) Third, notwithstanding Section 13340 of the Government Code, the remaining revenue shall be continuously appropriated to the Student Aid Commission for purposes of awarding Cal Grants to students subject to Section 69431.7 of the Education Code.
(2) The tax credit allowed by subdivision (a), subdivision (a) of Section 12207, and subdivision (a) of Section 23687 for donations to the College Access Tax Credit Fund shall be known as the College Access Tax Credit.
(e) This section shall remain in effect only until December 1, 2023, and as of that date is repealed.

SEC. 3.

 Section 23687 of the Revenue and Taxation Code is amended to read:

23687.
 (a) For taxable years beginning on or after January 1, 2017, and before January 1, 2023, there shall be allowed as a credit against the “tax,” as defined in Section 23036, an amount equal to 50 75 percent of the amount contributed by the taxpayer for the taxable year to the College Access Tax Credit Fund, as allocated and certified by the California Educational Facilities Authority.
(b) (1) The aggregate amount of credit that may be allocated and certified pursuant to this section, Section 12207, and Section 17053.87 shall be an amount equal to five hundred million dollars ($500,000,000). seven hundred fifty million dollars ($750,000,000).
(2) (A) For the purposes of this section, the California Educational Facilities Authority shall do all of the following:
(i) On a first-come-first-served basis, allocate and certify tax credits to taxpayers under this section.
(ii) Establish a procedure for taxpayers to contribute to the College Access Tax Credit Fund and to obtain from the California Educational Facilities Authority a certification for the credit allowed by this section. The procedure shall require the California Educational Facilities Authority to certify the contribution amount eligible for credit within 45 days following receipt of the contribution.
(iii) 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.
(B) (i) The California Educational Facilities Authority shall adopt any regulations necessary or appropriate to implement this paragraph.
(ii) 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 regulation adopted by the California Educational Facilities Authority pursuant to clause (i).
(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) The tax credit allowed by subdivision (a), subdivision (a) of Section 12207, and subdivision (a) of Section 17053.87 for donations to the College Access Tax Credit Fund shall be known as the College Access Tax Credit.
(e) This section shall remain in effect only until December 1, 2023, and as of that date is repealed.

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.
SECTION 1.

The Legislature finds and declares all of the following:

(a)The Public Policy Institute of California reports that, in 2030, 38 percent of jobs will require at least a baccalaureate degree. However, if current trends persist, only 33 percent of working-age California adults will have a baccalaureate degree by 2030.

(b)Approximately 2.1 million students attend California community colleges. In 2015–16, the California Community Colleges awarded over 74,000 certificates and 130,000 degrees and transferred over 103,000 students to four-year universities.

(c)The Public Policy Institute of California reports approximately one in 10 community college students transfers to a four-year university. However, only about 40 percent of those community college students succeed in transferring. Students who do transfer to the University of California and the California State University have high rates of success, with the vast majority earning a baccalaureate degree.

(d)Eighty percent of entering community college students are enrolled in at least one remedial mathematics or English course during their college careers. Eighty-six percent of students enrolled in remedial education courses are low income and 87 percent are Latino or African American.

(e)California will not meet its workforce demands without more community college students earning certification to obtain a higher-paying job or transferring to a four-year university to complete a baccalaureate degree program.

SEC. 2.Part 54.8 (commencing with Section 88910) is added to Division 7 of Title 3 of the Education Code, to read:
54.8.The Community College Completion Grant Program
88910.

For purposes of this part, the following terms have the following meanings:

(a)“Academic year” means the total of two consecutive semesters or three quarters, commencing with the opening of the fall term. Each semester or quarter is approximately the same length.

(b)“Associate degree for transfer” means an associate degree established according to the criteria established in Section 66746.

(c)“Award year” means one academic year plus one summer term, or the equivalent, of attendance at a qualifying institution.

(d)“Cost of attendance” means the student’s tuition and fees, books and supplies, room, board, transportation expenses, including, but not limited to, purchasing regional transit passes, and other student expenses used to calculate a student’s financial need for federal student financial aid programs under Title IV of the federal Higher Education Act of 1965, as amended (20 U.S.C. Sec. 1070 et seq.)

(e)“Financial need” means a student’s financial need calculated pursuant to the federal financial need methodology, as established by Title IV of the federal Higher Education Act of 1965, as amended (20 U.S.C. Sec. 1070 et seq.).

(f)“Guided pathway” means a comprehensive set of community college programs and services focused on improving student success that includes all of the following:

(1)Clearly structured, coherent academic program maps for all academic programs that meet all of the following:

(A)Reflect curriculum aligned with university transfer programs and labor market needs.

(B)Provide detailed course sequences and progress milestones.

(C)Represent the most efficient path for students to complete academic programs while maintaining the quality of these programs.

(2)Student advising and support services that help students transition from high school to community college, explore academic and vocational fields, chose a major, develop a full education plan, and obtain contextualized, integrated academic support to help them pass program gateway courses.

(3)Procedures and systems to track students’ progress in following their education plans, identify students at risk of not progressing in a program, and intervene promptly with advising, academic, and other supports to help those students resume progress or develop a more viable education plan.

(4)Program-specific student learning outcomes aligned with student goals for transfer or employment, effective teaching practices, and applied learning experiences.

88911.

(a)Commencing with the 2017–18 academic year, there shall be established the Community College Completion Grant Program under the administration of the Chancellor of the California Community Colleges. The purpose of the program is to establish guided pathways to accomplish all of the following objectives:

(1)Assist students in completing a program of study leading to an associate degree for transfer, an associate degree, otherwise transfer to a four-year university, or a career technical education certificate.

(2)Improve student completion rates.

(3)Reduce time to degree.

(4)Increase student ability to obtain high-paying jobs.

(b)In order to receive funding under this program, the governing board of a community college district shall demonstrate in its application for funding that each participating community college within the district will, in collaboration with the district as necessary, develop a plan to implement all of the components for a guided pathway. The plan shall include all of the following elements:

(1)A completed implementation and readiness assessment for the guided pathway, as provided by the chancellor for each participating college.

(2)A process and timeline for developing each component of the guided pathway.

(3)The college’s detailed policies regarding the use of information from high school records and other assessment measures to determine each student’s course placement and academic support needs.

(4)A description of all of the following:

(A)How the community college district plans to work with the governing board of school districts to ensure high school pupils are prepared to enroll and complete college-level courses by the time of their high school graduation, which may include, but not necessarily be limited to, participating in dual enrollment programs established pursuant to Section 76004.

(B)How the community college district plans to collaborate with the University of California and the California State University to develop transfer pathways to the University of California and the California State University.

(C)How the basic skills program offered by the participating community college will ensure that students who are deemed unprepared for college level mathematics or English receive intensive curriculum support to complete a guided pathway in a timely manner.

(D)(i)How the community college plans to coordinate its programs established pursuant to the Awards for Innovation in for Higher Education Program established in Article 2.6 (commencing with Section 66010.96) of Chapter 2 of Part 40 of Division 5, associate degree for transfer established in Article 3 (commencing with Section 66745) of Chapter 9.2 of Part 40 of Division 5, zero-textbook-cost degrees established pursuant to Article 4 (commencing with Section 78050) of Chapter 1 of Part 48, the Student Success and Support Program established in Article 1 (commencing with Section 78210) of Chapter 2 of Part 48, the Student Success for Basic Skills Program, including funding for student equity plans, established in Part 54.3 (commencing with Section 88815), and the Strong Workforce Program established in Part 54.5 (commencing with Section 88820) with the implementation of the guided pathway plan. It is the intent of the Legislature for the community college to evaluate these programs as offered by the community college to determine how best to coordinate their purposes and outcome goals with the implementation of the guided pathway plan.

(ii)The description required in this subparagraph shall include a detailed description of the community college’s expenditure plan for implementing this subparagraph.

(C)It is the intent of the Legislature that the Budget Act of 2017 include a one-time appropriation to support the requirements of this section.

88912.

(a)Commencing with the 2017–18 academic year, each participating community college shall provide a grant award to a student pursuant to subdivision (b). The purpose of the grant award is to provide the student with additional financial aid to help offset his or her total cost of community college attendance.

(b)A student attending a community college may receive a grant award pursuant to this section if the student meets all of the following requirements:

(1)The student has received an award under the Full-Time Success Grant program established pursuant to Schedule (1) of Item 6870-102-0001 of the Budget Act of 2015 for each term in which he or she receives an award under this section.

(2)The student is enrolled in a program of study and has completed an education plan identifying courses, sequence of courses, key progress milestones, and other requirements the student must complete to earn an associate degree or career technical education certificate or meet transfer requirements.

(3)The student is not incarcerated.

(4)The student is not in default on any student loan and has not failed to repay a federal or state student grant when required to do so.

(5)(A)The student maintains a grade point average of at least 2.0 and complies with all of the following:

(i)Enrolls in 15 or more credit units per semester, or the equivalent number of units per quarter, to be considered on track to obtain an associate degree for transfer or an associate degree, or to otherwise transfer to a four-year university, within two academic years.

(ii)Enrolls in a sufficient number of units per semester, quarter, or summer term, as determined by the community college, to be considered on track to receive a certificate for a career technical education program within the published length of time.

(iii)Enrolls in summer coursework after enrolling in 12 or more credits per the primary semester, or the applicable number of units per quarter, as applicable, to be considered on track to receive an associate degree for transfer or an associate degree, or to otherwise transfer to a four-year university, within two academic years.

(B)For the purposes of subparagraph (A), credits earned while participating in a dual enrollment program shall count towards the requisite number of units required.

(6)The student earns a sufficient number of credits per award year to be considered on track to complete an associate degree for transfer or an associate degree, or to otherwise transfer to a four-year university, within two academic years, or complete a career technical education certificate within the published time for the career technical education program.

(7)The student is a California resident or is exempt from paying nonresident tuition under Section 68130.5 or 76140.

(c)(1) To the extent practicable, a grant award shall be awarded at the same time as a recipient’s overall financial aid package.

(2)The grant award shall be four thousand dollars ($4,000), shall be considered a supplemental grant, and shall not supplant any other grant, fee waiver, or scholarship aid received by the student, including, but not necessarily limited to, federal grants, Cal Grant awards, institutional grants, merit-based scholarships, athletic scholarships, and full-time student success grants.

(3)The grant award shall be based upon the financial need of the applicant, and shall not exceed the calculated financial need for any individual applicant. The minimum level of financial need of applicants shall be determined by the commission pursuant to Section 69432.9.

(d)Each participating community college shall administer the grant award pursuant to the requirements of this section.

(e)This section shall not be operative in a fiscal year unless funding has been provided for this section for that fiscal year in the annual Budget Act or another statute.

88913.

(a)On or before April 1, 2019, the chancellor shall report to the Legislature all of the following for the 2018–19 award year:

(1)The number of grant award recipients who met the requirements of paragraph (5) of subdivision (b) of Section 88912.

(2)The number of grant award recipients who met the requirements of paragraph (6) of subdivision (b) of Section 88912, disaggregated by recipients who are pursuing an associate degree for transfer, an associate degree, or a career technical education certificate, including the type of career technical education certificate.

(3)The number of grant award recipients who enrolled in and successfully completed a transfer-level mathematics or English course, or an equivalent course to earn a career technical education certificate, that is required for their academic program during their first year of enrollment.

(4)The number of grant award recipients who enrolled in and successfully completed at least nine units in their major during their first year of enrollment.

(5)The average grade point average of grant award recipients.

(b)Student information reported pursuant to subdivision (a) shall be disaggregated by race, ethnicity, gender, and socioeconomic status.

(c)(1)The requirement for submitting a report imposed under subdivision (a) is inoperative on April 1, 2023, pursuant to Section 10231.5 of the Government Code.

(2)A report to be submitted pursuant to subdivision (a) shall be submitted in compliance with Section 9795 of the Government Code.

88914.

The board of governors may adopt regulations to administer the Community College Completion Grant Program.