BILL NUMBER: SB 594 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Steinberg
FEBRUARY 22, 2013
An act to add Part 38 (commencing with Section 64200) to Division
4 of Title 2 of the Education Code, and to add Sections 17057.6 and
23610.6 to the Revenue and Taxation Code, relating to education.
LEGISLATIVE COUNSEL'S DIGEST
SB 594, as introduced, Steinberg. California Career Pathways
Investment.
The Personal Income Tax Law and The Corporation Tax Law authorize
various credits against the taxes imposed by those laws.
This bill, in accordance with legislative findings contained in
this bill and for calendar years beginning on or after January 1,
2014, would, for a business entity, as described, that provides
career technical education, authorize a credit against those taxes,
subject to specified limitations, in an amount equal to that
allocated by the California Career Pathways Investment Committee, a
committee established by this bill. This bill would require each
school district and community district to create a Career Pathways
Investment Trust Fund, the funds in which would be used for the
purposes of financing program and administrative costs relating to
the operation of career pathways programs, as provided.
This bill would impose specified duties on school districts with
regard to career pathways programs.
Existing law authorizes the governing board of a community college
district to establish contract education programs within or outside
the state by agreement with any public or private agency,
corporation, association, or any other person or body, to provide
specific educational programs or training to meet the specific needs
of these bodies. Existing law authorizes the governing board of any
school district to initiate and carry on any program or activity, or
may otherwise act in any manner that is not in conflict with or
inconsistent with, or preempted by, any law and that is not in
conflict with the purposes for which school districts are
established.
This bill would authorize a school district or a community college
district to enter into social impact bonds, as defined, in
accordance with applicable laws, to fund career pathways programs, as
defined.
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 no reimbursement shall be made
pursuant to these statutory provisions for costs mandated by the
state pursuant to this act, but would recognize that local agencies
and school districts may pursue any available remedies to seek
reimbursement for these costs.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Part 38 (commencing with Section 64200) is added to
Division 4 of Title 2 of the Education Code, to read:
PART 38. Career Pathways Investment Credit and Trust Fund
64200. (a) The Legislature finds and declares the following:
(1) After five years of deep recession and high rates of
unemployment, the California economy has begun to recover.
(2) One of the most important actions California can take to
hasten that recovery is to invest in the development of a skilled
workforce to perform well-paying jobs in growing and emerging sectors
of its regional economies.
(3) The fastest growing occupations are expected to be those that
require scientific, technical, engineering, or mathematics (STEM)
skills, such as jobs in biotechnology, digital media arts, green
technology, or computer-related and health-related fields.
(4) California's systems of public education, which includes
primary and secondary schools, technical training, apprenticeship,
two-year and four-year colleges, and graduate schools, play a
critical role in workforce preparation, one that could be
significantly strengthened by a tighter focus on education and
training that delivers the skills and capacities most called for in
high-opportunity sectors.
(5) This kind of workforce preparation is best accomplished in
concert with regional business and industry, so that students receive
the most current and relevant education that prepares them to
compete for good jobs in their communities after graduation from high
school or postsecondary education and training.
(6) Work-based educational and training opportunities enhance the
employment prospects of low- and moderate-income individuals and
contribute to the stability and economic development of their
communities.
(b) It is the intent of the Legislature that federal bank
regulators, specifically, the Federal Reserve Bank, the Office of the
Comptroller of the Currency, the Federal Deposit Insurance
Corporation, and the Office of Thrift Supervision, give credit to
federally insured banks and thrifts on their compliance exams under
the Community Reinvestment Act of 1977 for grants, investments, and
loans to educational institutions, nonprofit organizations, and
businesses in support of career pathways programs.
(c) It is the intent of the Legislature to establish fiscal
incentives, such as tax credits, that encourage California businesses
and industry to enter into partnerships with schools and community
colleges that strengthen the nature and quality of education provided
by those institutions. These partnerships will connect high school
pupils and teachers, and college students and faculty, to real world
experience that provides sustained exposure to applied academics,
skill development, work-related experience, and potential future
employment. This experience will keep students on track to
graduation, further education, and productive careers.
(d) The dissolution of redevelopment agencies will increase
property tax revenues to K-14 school and community college districts,
including the one-time distribution of redevelopment agency cash
assets expected to occur in the 2012-13 and 2013-14 fiscal years. It
is the intent of the Legislature that school and community college
districts capitalize the Career Pathways Trust Funds established
pursuant to this act for the purposes of funding grants and loans to
businesses and offsetting administrative costs of the program.
64201. For the purposes of this part:
(a) "Applicant" means a business entity that enters into a
contract or memorandum of understanding with a local educational
agency, community college, or workforce investment board to provide
career technical education that connects pupils to real-world
experience and provides sustained exposure to applied academics,
skill development, work-related education, and potential future
employment, and that applies to the committee for the Career Pathways
Investment Credit.
(b) "Authentic application" means an activity in the context of a
middle, high school, or community college course that requires pupils
to work actively with academic and technical concepts, facts, and
skills in a realistic, work-like setting that emulates the problems
encountered by professionals and the practices they use to address
them. These applications typically require pupils to examine a task
from a variety of perspectives, to draw upon multiple resources, to
collaborate with others, and to accomplish tasks and projects by
working in teams rather than individually.
(c) "Budget" means an estimate of all qualified expenditures to be
paid or incurred in providing the career pathways program over the
period for which the applicant is applying for the career pathways
investment credit.
(d) "Career pathways programs" means programs that support the
following:
(1) High school pathways programs delivered through high schools,
regional occupation centers or programs, California Partnership
Academies and other career academies, alternative education programs,
including continuation schools and programs administered by county
offices of education, or adult education programs, that integrate
academic and technical learning to prepare pupils for both
postsecondary education and careers in high-growth or high-need
sectors of the economy. These programs include core academic courses
emphasizing authentic applications, sequences or clusters of three or
more courses that align with the State Board of Education approved
career technical education standards and frameworks that also
integrate key academic concepts and skills, work-based learning
opportunities, additional services like counseling or supplementary
instruction in reading, writing, and mathematics.
(2) Curriculum and professional development.
(3) Middle school career exploration activities.
(4) Externship opportunities that expose middle school and high
school teachers to the skills and competencies that pupils need for
successful employment in high-growth sectors of the California
economy.
(5) Active engagement by business and industry in pathway design
and implementation, work-based learning, assessment of student work,
and other aspects of effective preparation for success in further
postsecondary education and careers.
(e) "Committee" means the California Career Pathways Investment
Committee.
(f) "Qualified expenditures" includes the following:
(1) Paid jobs or internships for high school pupils or community
college students that are related to course work in a career pathway
program.
(2) Support and supervision for unpaid internships or other
work-based learning opportunities that give pupils the opportunity to
connect what they are learning in high school or community college
to its application in the real world.
(3) Teacher or faculty externships.
(4) Contributions to programs administered by postsecondary
institutions that provide support to middle school, high school, or
community college career pathways programs. This support may include,
but shall not be limited to, teacher training, curriculum
development, and other forms of technical assistance.
(5) Equipment and instructional materials, including equipment and
software to support technology-based instruction that provides all
of the following:
(A) Accelerated learning opportunities.
(B) Identification of skill and knowledge gaps.
(C) Targeted remediation to prepare pupils for college and
careers.
(6) Employees to provide instruction, in partnership with
credentialed teachers employed by the school district or faculty
employed by the community college, at the school site or college
campus.
(7) Contributions to support staff who link career pathway
programs with regional business entities and assist in the
development of the memoranda of understanding provided in subdivision
(f) of Section 64203. The staff may be employed by local education
agencies, community colleges, or regional intermediary organizations.
(g) "Social impact bond" means a contract between a school
district or a community college district and private investors who
provide capital in exchange for a share of governmental payments that
become available if performance targets are met. Financial returns
to investors may vary pursuant to the measured level of performance.
The bond issuer may use operating funds from the sale of the bonds to
contract with service providers to deliver the services necessary to
meet the performance targets.
64202. A school district or community college district may enter
into social impact bonds, in accordance with applicable laws, to fund
career pathways programs.
64203. (a) The California Career Pathways Investment Committee is
hereby established in state government.
(b) The committee shall be composed of the following members:
(1) The Chancellor of the California Community Colleges, or his or
her designee, who will serve as the chairperson of the committee.
(2) The Chancellor of the California Community Colleges, or his or
her designee.
(3) The Chair of the California Workforce Investment Board, or his
or her designee.
(4) One appointee of the Senate Committee on Rules, who will serve
a four-year term.
(5) One appointee of the Speaker of the Assembly, who will serve a
four-year term.
(c) The committee is granted the sole authority to allocate to
applicants the Career Pathways Investment Credits authorized in the
annual Budget Act, pursuant to Section 64205.
(d) The committee shall establish criteria and guidelines for
evaluating applications for Career Pathways Investment Credits,
including requirements for commitments of financial or other
resources by applicants or a local education agency, community
college, or workforce investment board.
(e) The committee may prepare forms, establish procedures, set
priorities, assess, and perform other administrative functions as
necessary.
(f) The Superintendent of Public Instruction, the Chancellor of
the Community Colleges, and the California Workforce Investment Board
shall enter into a memorandum of understanding to allocate staff
resources to the committee. The costs to these entities shall be
offset by fees charged to applicants for Career Pathways Tax Credits.
64204. Moneys in the Career Pathways Investment Trust Fund shall
be used for any of the following purposes:
(a) Qualified expenditures.
(b) Administrative costs.
(c) Grants, loans, and program costs associated with career
pathways programs.
64205. For calendar years beginning on or after January 1, 2014,
the committee shall allocate the Career Pathways Investment Credit in
an amount authorized in the Budget Act for that calendar year. For
purposes of this section, the committee shall do all of the
following:
(a) Allocate the career pathways investment credit for up to 5
calendar years for each application the committee approves, as long
as the amount allocated does not exceed the amount authorized in the
Budget Act.
(b) (1) Give priority in allocating tax credits to the following:
(A) Applicants that have entered into a contract or memorandum of
understanding with local educational agencies, community colleges, or
workforce investment boards in communities that have an unemployment
rate higher than the statewide unemployment rate, as determined by
the United States Census, and a high school graduation rate lower
than the statewide high school graduation rate, as determined by the
committee using the California Longitudinal Pupil Achievement Data
System.
(B) Applicants that have entered into a contract or memorandum of
understanding with local educational agencies, community colleges, or
workforce investment boards with proportions of private funding
support that exceed the one-to-one match requirement described in
paragraph (1) of subdivision (e).
(C) Applicants that have entered into a contract or memorandum of
understanding with local educational agencies or community colleges
that offer articulated pathways connecting high school and
postsecondary certificate and degree programs in their region.
(D) Applicants that are not seeking tax credits for existing
activities. However, priority shall be given to applicants that seek
to expand or augment existing investments in career pathway programs.
(2) To the maximum extent practicable, subject to paragraph (1),
give priority in allocating career pathways investment credits to
applicants that seek to expand or augment existing investments in
career pathway programs.
(3) The committee shall not give priority to any applicant by
virtue of the date of submission of its application, except to
allocate credits where two or more applicants have the same rating.
(c) An applicant shall enter into an enforceable contract or
memorandum of understanding with the committee to comply with the
requirements of this part, Sections 17057.6 and 23610.6 of the
Revenue and Taxation Code, any applicable state laws, and any
additional requirements the department deems necessary or appropriate
to serve the purposes of this part. The contract or memorandum of
understanding shall also provide for legal action to obtain specified
performance or monetary damages for breach of contract and shall
require regular programmatic audits.
(d) Adopt criteria that awards credits to applicants that
demonstrate that either the applicant or the local educational
agency, community college, or workforce investment board meets the
following criteria:
(1) The effectiveness of the career pathway program toward
preparing students for productive, high-wage employment in growing or
high-need sectors of the California economy. Effectiveness criteria
shall include:
(A) Pathway completion rates.
(B) High school graduation rates or community college completion
rates, as appropriate.
(C) Percentages of students attaining an industry certification.
(D) Percentages of students transitioning successfully to
postsecondary education or apprenticeship.
(E) Employment and earnings after high school.
(2) The level of the applicant's investment in, oversight of, and
ability to leverage and sustain current career pathways programs and
current career technical education programs.
(e) Develop and provide forms for the purposes of informing
potential applicants of the purposes of this part.
(f) The amount of the credit reserved for a calendar year shall
not exceed 50 percent of the qualified expenditures estimated by the
applicant for the calendar year.
(g) The committee shall report to the Franchise Tax Board, once
each year, the identity of the qualified taxpayers for whom the
career pathways credits are allocated each year.
(h) The committee may, in its discretion, consult with the
Treasurer and the California Tax Credit Allocation Committee
regarding the allocation of tax credits. If a request for
consultation is made, the Treasurer and the California Tax Credit
Allocation Committee shall aid the committee.
(i) Establish audit requirements. The committee may share
information established during an audit with the Franchise Tax Board.
64206. A Career Pathways Investment Trust Fund is hereby
established in each school or community college district for the
purpose of financing program and administrative costs relating to the
operation of career pathways programs. The trust fund may accept
revenues from any source, including one-time property tax revenues
resulting from the dissolution of the assets of the former
redevelopment agencies, proceeds from the sale of social impact
bonds, other tax revenues, grants, loans, and contributions or
employment training funds made available through the employment
training panel or workforce investment boards. The trust fund shall
be administered by each school or community college district.
SEC. 2. Section 17057.6 is added to the Revenue and Taxation Code,
to read:
17057.6. (a) For each taxable year beginning on or after January
1, 2014, there shall be allowed to a qualified taxpayer as a credit
against the "net tax," as defined in Section 17039, an amount equal
to that allocated to a qualified taxpayer by the California Career
Pathways Investment Committee pursuant to Section 64204 of the
Education Code.
(b) For purposes of this section a "qualified taxpayer" means an
applicant, as defined in Section 64201 of the Education Code, who is
either the sole owner if an individual, partners if the taxpayer is a
partnership, or shareholders if the taxpayer is an "S" corporation,
and who was awarded an allocation of the career pathways investment
credit by the California Career Pathways Investment Committee.
(c) In the case where the credit allowed under this section
exceeds the "net tax," the excess credit may be carried over to
reduce the "net tax" in the following taxable year, and succeeding
taxable years, if necessary, until the credit has been exhausted.
(d) If a qualified taxpayer fails to comply with the requirements
of this section or with Part 38 (commencing with Section 64200) of
Division 4 of Title 2 of the Education Code, the credit shall be
disallowed and assessed and collected under Section 19051 until the
requirements are satisfied.
SEC. 3. Section 23610.6 is added to the Revenue and Taxation Code,
to read:
23610.6. (a) For each taxable year beginning on or after January
1, 2014, there shall be allowed to a qualified taxpayer as a credit
against the "tax," as defined in Section 23036, an amount equal to
that allocated to a qualified taxpayer by the California Career
Pathways Investment Committee pursuant to Section 64204 of the
Education Code.
(b) For purposes of this section a "qualified taxpayer" means an
applicant, as defined in Section 64201 of the Education Code, that is
subject to the taxes imposed by this part.
(c) In the case where the credit allowed under this section
exceeds the "tax," the excess credit may be carried over to reduce
the "tax" in the following taxable year, and succeeding taxable
years, if necessary, until the credit has been exhausted.
(d) If a qualified taxpayer fails to comply with the requirements
of this section or with Part 38 (commencing with Section 64200) of
Division 4 of Title 2 of the Education Code, the credit shall be
disallowed and assessed and collected under Section 19051 until the
requirements are satisfied.
SEC. 4. No reimbursement shall be made pursuant to Part 7
(commencing with Section 17500) of Division 4 of Title 2 of the
Government Code for costs mandated by the state pursuant to this act.
It is recognized, however, that a local agency or school district
may pursue any remedies to obtain reimbursement available to it under
Part 7 (commencing with Section 17500) and any other provisions of
law.