AB 300: Pupil support programs: Cal Grant K–12.

Existing law, the Ortiz-Pacheco-Poochigian-Vasconcellos Cal Grant Program, under the administration of the Student Aid Commission, establishes specified grant awards for students of qualifying postsecondary educational institutions, and establishes eligibility requirements and maximum levels for those awards, as provided.

This bill would establish a program entitled Cal Grant K12 under the administration of a scholarship-granting organization for purposes of receiving donations and granting scholarships to pupils meeting certain requirements, including being in kindergarten or any of grades 1 to 12, inclusive, to be used for qualified educational expenses, as defined, and including certain expenses associated with online learning. The bill would authorize private schools and education service providers, including local educational agencies, to participate under the program. The bill would require the scholarship-granting organization to administer the program by, among other things, establishing and publicizing an application process, selecting eligible pupils, allocating grants, overseeing pupil accounts, developing a system to allow access to account funds by electronic means, and demonstrating financial accountability to the California Department of Tax and Fee Administration. The bill would impose certain requirements on parents, pupils, private schools, and education service providers as a condition of participating in the program.

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, for taxable years beginning on or after January 1, 2022, would exclude from gross income for purposes of the Personal Income Tax Law the amount of any scholarship payment received by the taxpayer, or a dependent of the taxpayer, pursuant to the Cal Grant K12.

The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws.

This bill would allow a credit against those taxes for each taxable year beginning on or after January 1, 2022, for qualified contributions made during the taxable year to the scholarship-granting organization for purposes of the Cal Grant K12. The bill would allow the portion of the credit that exceeds the taxes owed for the taxable year to be carried over for 3 years.

Existing law requires a bill that would authorize a new tax expenditure under the Personal Income Tax Law or the Corporation Tax Law to identify specific goals, purposes, and objectives that the tax expenditure will achieve, and detailed performance indicators and data collection requirements for determining whether the tax expenditure achieves these goals, purposes, and objectives.

This bill would state the intent of the Legislature to comply with the additional information requirement for any bill authorizing a new tax expenditure.