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SB-807 Personal income taxes: credit: exclusion: Teacher Recruitment and Retention Act of 2017.(2017-2018)

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Date Published: 02/17/2017 09:00 PM
SB807:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 807


Introduced by Senators Stern and Galgiani
(Coauthors: Assembly Members Limón and Santiago)

February 17, 2017


An act to add and repeal Sections 17053 and 17153 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


SB 807, as introduced, Stern. Personal income taxes: credit: exclusion: Teacher Recruitment and Retention Act of 2017.
The Personal Income Tax Law allows various credits against the taxes imposed by that law.
This bill, for taxable years beginning on or after January 1, 2017, and before January 1, 2027, would allow a credit under the Personal Income Tax Law in an amount equal to the costs paid or incurred by a qualified taxpayer, as defined to include specified teachers, to earn a clear credential, as specified.
The Personal Income Tax Law, in conformity with federal income tax law, generally defines gross income as income from whatever source derived, except as specifically excluded, and provides various exclusions from gross income.
This bill would provide an exclusion from gross income for qualified income received on or after January 1, 2017, and before January 1, 2027, by an eligible teacher, as defined, for specified educational work.
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.

 (a) This act shall be known and may be cited as the Teacher Recruitment and Retention Act of 2017.
(b) Pursuant to subdivision (a) of Section 41 of the Revenue and Taxation Code, the Legislature finds and declares all of the following:
(1) Research demonstrates the most important in-school factor affecting pupil achievement is the classroom teacher. Pupils with effective teachers are more likely to earn higher salaries, attend college, and save more for retirement and are less likely to be teenage parents.
(2) Over 30 percent of new teachers in California leave the profession in the first five years. According to the California State Teachers’ Retirement System, teachers leave the profession at a rate six times greater than other public employees, and 50 percent faster than first responders.
(3) The shortage of teachers in California is reaching critical levels in a number of teaching disciplines and geographic areas of the state and is projected to get worse with the oncoming wave of baby boomer retirements.
(4) Aspiring teachers in California often report the path for completing requirements for a preliminary credential, induction, and clearing a credential is uneven and costly. Some teachers face unexpected mandatory paycheck deductions and program closures for training required to clear a credential and legally teach in California, making it unnecessarily difficult to remain in teaching.
(5) Teacher shortages affect turnover within and across districts; and, on average, high teacher turnover rates have a negative impact on pupil achievement, and the effect is more pronounced in high-minority, high-poverty schools.
(6) The Teacher Recruitment and Retention Act of 2017 structurally addresses the current and growing shortage of teachers in schools and districts across the state by addressing challenges of entering the field of teaching, supporting novice teachers, and incentivizing effective teachers to remain in the classroom, recognizing the significance of their contribution to the children and the people of the State of California.

SEC. 2.

 Section 17053 is added to the Revenue and Taxation Code, to read:

17053.
 (a) For each taxable year beginning on or after January 1, 2017, and before January 1, 2027, there shall be allowed to a qualified taxpayer a credit against the “net tax,” as defined in Section 17039, that is imposed on qualified income in an amount equal to the qualified costs paid or incurred during the taxable year to earn a clear teaching credential.
(b) For purposes of this section:
(1) “Qualified costs” include those paid or incurred for any of the following:
(A) Participation in a program of beginning teacher support assessment.
(B) Tuition for a master’s degree leading to a clear teaching credential.
(C) Certification assessments, including performance assessments.
(D) Tuition for years four and five in an integrated program of professional preparation, as described in Section 44259.1 of the Education Code.
(2) “Qualified income” means any income received by the qualified taxpayer from a teaching position in which at least 50 percent of the work time is spent instructing pupils.
(3) “Qualified taxpayer” means a taxpayer who is a teacher of record in a California school. A taxpayer does not need to have a clear teaching credential or a full-time position as a teacher of record to be a “qualified taxpayer” for purposes of the credit allowed by this section.
(c) 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 four years if necessary, until the credit is exhausted.
(d) The Franchise Tax Board may issue any regulations necessary or appropriate to implement the purposes of this section and may, in its discretion, consult with the Commission on Teacher Credentialing and the State Board of Education. The Commission on Teacher Credentialing and the State Board of Education shall not issue any regulations with regard to this section without consultation with the Franchise Tax Board.
(e) This section shall remain in effect only until December 1, 2027, and as of that date is repealed.

SEC. 3.

 Section 17153 is added to the Revenue and Taxation Code, to read:

17153.
 (a) Gross income does not include any qualified income received on or after January 1, 2017, and before January 1, 2027, by an eligible teacher.
(b) For purposes of this section:
(1) “Eligible teacher” is a taxpayer who meets all of the following requirements:
(A) Is a teacher of record in a California public school teaching any of the grades kindergarten through 12th grade, inclusive.
(B) Holds a clear teaching credential.
(C) For the first year in which the exclusion allowed by this section applies, is in at least the sixth school year, as described by Section 37200 of the Education Code, as a teacher of record in a California school.
(2) “Qualified income” means any income received by an eligible teacher from a teaching position in which at least 50 percent of the work time is spent instructing pupils.
(c) The Franchise Tax Board may issue any regulations necessary or appropriate to implement the purposes of this section and may, in its discretion, consult with the Commission on Teacher Credentialing and the State Board of Education. The Commission on Teacher Credentialing and the State Board of Education shall not issue any regulations with regard to this section without consultation with the Franchise Tax Board.
(d) This section shall remain in effect only until December 1, 2027, 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.