SB 227: Education finance: Local Schools and Colleges Voluntary Contribution Fund: personal income taxes: credits.

(1)Existing law establishes a governing board to establish and administer a unit known as the County Office Fiscal Crisis and Management Assistance Team. Among other duties, this unit provides fiscal management assistance, at the request of any school district, charter school, county office of education, or community college district.

This bill would authorize authorize, until January 1, 2023, this governing board to receive voluntary contributions made by individuals to school districts, charter schools, child care centers operated by local educational agencies, and community college districts. The bill would require these contributed moneys to be deposited in the Local Schools and Colleges Voluntary Contribution Fund, which the bill would establish in a county treasury, as specified, under the administration of the County Office Fiscal Crisis and Management Assistance Team. The bill would create 2 new subaccounts of the fund, the Baseline Schools and Colleges Subaccount and the Supplemental Schools and Colleges Subaccount, into which the moneys deposited in the Local Schools and Colleges Voluntary Contribution Fund would be deposited, as specified.

The bill would require the funds deposited in the Baseline Schools and Colleges Subaccount described above to be transferred to the State Treasury to reimburse the General Fund for that subaccounts share of meeting the constitutional minimum funding requirement for local educational agencies and community college districts.

The bill would require the funds deposited in the Supplemental Schools and Colleges Subaccount to be allocated, on the basis of average daily attendance, to local educational agencies and community college districts, as specified, thereby making an appropriation.

Because the bill would create new duties for a county treasury, it would constitute a state-mandated local program. Because the bill would require the deposit of a new source of moneys into a continuously appropriated fund, it would make an appropriation.

(2)The Personal Income Tax Law allows various credits against the tax imposed by that law.

This bill, for taxable years beginning on or after January 1, 2018, and before January 1, 2023, would allow a credit under the Personal Income Tax Law in an amount equal to 85% of the amount contributed by the taxpayer to the Local Schools and Colleges Voluntary Contribution Fund, as identified in the certification required by this bill to be issued by the County Office Fiscal Crisis and Management Assistance Team.

This bill would require the County Office Fiscal Crisis and Management Assistance Team to establish a procedure for any taxpayer to obtain from the office a certification for the credit allowed, as specified. The bill would require the County Office Fiscal Crisis and Management Assistance Team to provide the Franchise Tax Board with a copy of the certifications issued, as provided. This bill would limit the aggregate amount of credits allowable for the 201819 fiscal year and each fiscal year thereafter, through the 202223 fiscal year, plus any unallocated credit amount for the preceding fiscal year to $45,000,000,000.

This bill would, if the amount allowable as a credit under this bill exceeds the taxpayers tax liability for the taxable year, require the excess to be credited against other amounts due, if any, and the balance, if any, upon appropriation by the Legislature, to be paid from the ____ Fund and refunded to the taxpayer.

The Personal Income Tax Law provides for an alternative minimum tax and provides that, except for specified credits, no credit shall reduce the regular tax, as defined, below the tentative minimum tax.

This bill, for taxable years beginning on or after January 1, 2018, and before January 1, 2023, would allow the credit to reduce the regular tax below the tentative minimum tax.

(3)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.