SB 539: Cal Grants: taxes: 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, a special fund in the State Treasury, 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 credit percentage on the contribution amount from 50% to 75% for taxable years beginning on or after January 1, 2018. The bill would also increase the limit on the aggregate credit amount to $1,000,000,000 for the 2018 calendar year and each calendar year thereafter.

Under existing law, after specified transfers to the General Fund and any reimbursement for administrative costs are made, any remaining moneys in the College Access Tax Credit Fund are continuously appropriated to the Student Aid Commission for purposes of supplementing awards made for access costs, defined as living expenses and expenses for transportation, supplies, and books, under the Cal Grant Program. Existing law provides that Cal Grant Program awards include Cal Grant A Entitlement Awards, Cal Grant B Entitlement Awards, California Community College Transfer Entitlement Awards, Competitive Cal Grant A and B Awards, Cal Grant C Awards, and Cal Grant T Awards. These Cal Grant Program awards may be used for, among other things, tuition or student fees.

This bill would instead provide, upon appropriation by the Legislature, that the remaining revenues from contributions to the College Access Tax Credit Fund made on and after January 1, 2019, be allocated to the Student Aid Commission to make annual disbursements to make Cal Grant Program awards. If contributions to the College Access Tax Credit Fund exceed $10,000,000 in a calendar year, this bill would require 15% of the moneys allocated to the commission to be allocated to supplement awards for access costs, as specified.

This bill would take effect immediately as a tax levy.