Bill Text: CA AB2018 | 2021-2022 | Regular Session | Amended
Bill Title: Personal Income Tax Law: refundable credit: student loan debt.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2022-04-18 - In committee: Set, first hearing. Hearing canceled at the request of author. [AB2018 Detail]
Download: California-2021-AB2018-Amended.html
|
Amended
IN
Assembly
March 17, 2022 |
CALIFORNIA LEGISLATURE—
2021–2022 REGULAR SESSION
Assembly Bill
No. 2018
| Introduced by Assembly Member Santiago |
February 14, 2022 |
An act to add and repeal Section 17052.13 of the Revenue and Taxation Code, relating to student financial aid. taxation, to take effect immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
AB 2018, as amended, Santiago.
Student financial aid: Student Debt Fund. Personal Income Tax Law: refundable credit: student loan debt.
The Personal Income Tax Law allows various credits against the taxes imposed by that law. Existing law establishes the continuously appropriated Tax Relief and Refund Account and provides that payments required to be made to taxpayers or other persons from the Personal Income Tax Fund are to be paid from that account, including any amount to be paid as a refundable tax credit in excess of any tax liabilities.
This bill would, for the taxable year beginning on or after January 1, 2022, and before January 1, 2023, allow a credit against those taxes for a qualified taxpayer in a specified amount. The bill would define “qualified taxpayer” for this purpose to mean a taxpayer with a degree from a university headquartered in the state who
has worked in public service, as defined, for at least 5 years, and who has at least $5,000 in federal student loan debt, as defined. The bill would provide the amount of the credit would be equal to the lesser of the federal student loan debt of the qualified taxpayer or $10,000. This bill would require the amount of the credit exceeding the taxpayer’s liability to be credited against other amounts due, if any, and would require the balance, upon appropriation by the Legislature, to be paid from the Tax Relief and Refund Account and refunded to the taxpayer.
Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
This bill would require the Franchise Tax Board to submit, on or before January 10, 2024, a report to the Legislature on the number of qualified taxpayers allowed the credit and the total dollar value of credits allowed. The bill would provide findings and declarations relating to the goals, purposes, and objectives of the tax credit.
This bill would take effect immediately as a tax levy.
Existing law establishes the Student Aid Commission as the primary state agency for the administration of state-authorized student financial aid programs available to students attending all segments of postsecondary education.
This bill would express the intent of the Legislature to enact subsequent legislation that would create the Student Debt Fund in the State Treasury for the purpose of providing grants to California residents who graduated or obtained an undergraduate degree from a college or university with its headquarters located in California to repay student loan debt for undergraduate degrees.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee:Bill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 17052.13 is added to the Revenue and Taxation Code, to read:17052.13.
(a) For the taxable year beginning on or after January 1, 2022, and before January 1, 2023, there shall be allowed against the “net tax,” as defined by Section 17039, a student loan rebate credit to a qualified taxpayer in an amount determined under subdivision (c).(b) For purposes of this section, the following definitions shall apply:
(1) “Federal student loan debt” means debt based on any subsidized or unsubsidized loan made by the federal government to the qualified taxpayer to finance postsecondary education expenses, including tuition, fees, books, supplies, room and board, transportation, and personal expenses.
(2) “Public service” means service rendered as an officer or employee of the United States, this state, or any city, county, or political subdivision in the state.
(3) “Qualified taxpayer” shall mean an individual that satisfies all of the following:
(A) Graduated with a degree from a private or public university headquartered in the state.
(B) Has worked in public service for at least five years.
(C) Has gross income of no more than one hundred thousand dollars ($100,000).
(D) Has at least five thousand dollars ($5,000) of federal student loan debt.
(c) The credit
allowed under subdivision (a) shall be equal to the lesser of the following:
(1) The federal student loan debt of the qualified taxpayer.
(2) Ten thousand dollars ($10,000).
(d) If the amount allowable as a credit under this section exceeds the tax liability computed under this part for the taxable year, the excess shall be credited against other amounts due, if any, and the balance, if any, shall be paid, upon appropriation by the Legislature, from the Tax Relief and Refund Account and refunded to the qualified taxpayer.
(e) The Legislature finds and declares that, to the extent they are otherwise qualified for a credit under this section, undocumented persons are eligible for the tax credit authorized by this section within the meaning of subsection
(d) of Section 1621 of Title 8 of the United States Code.
(f) This section shall be effective only until December 1, 2023, and as of that date is repealed.
SEC. 2.
(a) For purposes of complying with Section 41 of the Revenue and Taxation Code, the purpose of the tax credit allowed pursuant to Section 17052.13 of the Revenue and Taxation Code, as added by this act, is to provide financial assistance to public servants burdened with student debt incurred while attending California universities.(b) The performance indicators for the Legislature to use in determining whether the tax credit achieves its stated purpose shall be the number of taxpayers allowed
the credit, and the total dollar value of credits allowed.
(c) (1) The Franchise Tax Board shall, no later than January 10, 2024, submit a report to the Legislature, in compliance with Section 9795 of the Government Code, reporting the number of taxpayers allowed the credit, and the total dollar value of credits allowed.
(2) The disclosure provisions of this subdivision shall be treated as an exception to Section 19542 under Article 2 (commencing with Section 19542) of Chapter 7 of Part 10.2 of the Revenue and Taxation Code.
SEC. 3.
This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.It is the intent of the Legislature to enact subsequent legislation that would do both of the following:
(a)Create the Student Debt Fund in the State Treasury for the purpose of providing grants to eligible applicants to repay student loan debt for undergraduate degrees.
(b)Make an applicant eligible for a grant described in subdivision (a) if the applicant is a California resident and graduated or obtained an undergraduate degree from a college or university with its headquarters located in California.
