Bill Text: CA AB2578 | 2011-2012 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Franchise Tax Board: information: tax refund deposits:

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2012-05-25 - In committee: Set, second hearing. Held under submission. [AB2578 Detail]

Download: California-2011-AB2578-Amended.html

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BILL NUMBER: AB 2578	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 9, 2012

INTRODUCED BY   Assembly Member Solorio

                        FEBRUARY 24, 2012

   An act to  amend Section 69984 of the Education Code,
relating to student financial aid, and making an appropriation
therefor.   add Section 19534 to the Revenue and
Taxation Code, relating to taxation. 



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2578, as amended, Solorio.  Student financial aid:
Golden State Scholarshare Trust.   Franchise Tax Board:
information: tax refund deposits: tax-advantaged savings plans. 

   Existing law requires the Franchise Tax Board to make a refund to
a taxpayer of any overpayment of taxes. Existing law authorizes the
Franchise Tax Board to electronically deposit a taxpayer's refund
into the taxpayer's checking or savings account.  
   This bill would require the Franchise Tax Board to include
information on its Internet Web site, taxpayer form instructions, and
any other publications for taxpayers, stating that on tax returns,
the taxpayer has the ability or option to directly deposit all or a
portion of a tax refund into an account under specified
tax-advantaged savings plans.  
   The Golden State Scholarshare Trust Act establishes the Golden
State Scholarshare Trust, under the administration of the
Scholarshare Investment Board, to provide financial aid for
postsecondary education costs of participating students. Under the
act, the board segregates moneys received by the Scholarshare Trust
into 2 funds, the program fund and the administrative fund. Moneys in
the program fund are continuously appropriated to the board for
purposes of the act, and moneys in the administrative fund are
available upon appropriation for costs of administration of the
Scholarshare trust. Existing law requires that, on an annual basis,
expenditures from the administrative fund not exceed more than 1% of
the total program fund.  
   This bill would require, commencing on January 1, 2013, that
contributions by participants who make their contributions pursuant
to a qualified state tuition plan, as provided in a designated
section of the Internal Revenue Code of 1986, be matched by an equal
amount of state funds. The bill would require these state matching
funds to be transferred from the administrative fund to the program
fund, and credited to the appropriate account. The bill would exempt
these matching funds from the 1% limit on expenditures from the
administrative fund. Because the bill would direct the transfer of
funds into the continuously appropriated program fund, it would
constitute an appropriation. 
   Vote: majority. Appropriation:  yes   no
 . Fiscal committee: yes. State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 19534 is added to the 
 Revenue and Taxation Code   , to read:  
   19534.  The Franchise Tax Board shall include information on its
Internet Web site, taxpayer form instructions, and any other
publications for taxpayers, stating that on returns required to be
filed pursuant to Article 1 (commencing with Section 18501) of
Chapter 2 of Part 10.2 of Division 2, the taxpayer has the ability or
option to directly deposit all or a portion of a tax refund into an
account under the following tax-advantaged savings plans:
   (a) A plan that meets the requirements of Section 401(k) of Title
26 of the United States Code.
   (b) A plan that meets the requirements of Section 403(b) of Title
26 of the United States Code.
   (c) A plan that meets the requirements of Section 457 of Title 26
of the United States Code.
   (d) A plan that meets the requirements of Section 529 of Title 26
of the United States Code.
   (e) A Roth 401(k) plan that meets the requirements of Section 402A
of Title 26 of the United States Code.
   (f) A Roth IRA plan that meets the requirements of Section 408A of
Title 26 of the United States Code.
   (g) A simplified employee pension individual retirement
arrangement (SEP-IRA) plan that meets the requirements of Section 408
(k) of Title 26 of the United States Code.
   (h) A savings incentive match plan for employees (SIMPLE)
retirement plan that meets the requirements of Section 408(p) of
Title 26 of the United States Code.
   (i) A traditional individual retirement account (traditional IRA)
plan that meets the requirements of Section 408 of Title 26 of the
United States Code.  
  SECTION 1.    Section 69984 of the Education Code
is amended to read:
   69984.  (a) (1) The board shall segregate moneys received by the
Scholarshare trust into two funds, which shall be identified as the
program fund and the administrative fund. Notwithstanding Section
13340 of the Government Code, the program fund is hereby continuously
appropriated, without regard to fiscal years, to the board for the
purposes of this article. Funds in the administrative fund shall be
available for expenditure, upon appropriation, for the purposes
specified in this article.
   (2) (A) The board shall separately account for any moneys received
by an entity exempt from taxation under Section 501(c)(3) of the
Internal Revenue Code or a state or local government agency,
depositing the money for the benefit of a beneficiary to be named
later pursuant to the operation of a bona fide scholarship program.
   (B) There is hereby created the Scholarshare Investment Board,
that consists of the Treasurer, the Director of Finance, the
executive director of the State Board of Education, a member of the
Student Aid Commission appointed by the Governor, a member of the
public appointed by the Governor, a representative from a California
public institution of higher education appointed by the Senate
Committee on Rules, and a representative from a California
independent college or university or a state-approved college,
university, or vocational/technical school appointed by the Speaker
of the Assembly. The Treasurer shall serve as chair of the board. The
board shall annually prepare and adopt a written statement of
investment policy. The board shall consider the statement of
investment policy and any changes in the investment policy at a
public hearing. The board shall approve the investment management
entity or entities consistent with subparagraph (D).
   (C) Not later than 30 days after the close of each month, the
investment manager shall place on file for public inspection during
business hours a report with respect to investment performance. The
investment manager shall report the following information, to the
extent applicable, to the board within 30 days following the end of
each month:
   (i) The type of investment, name of the issuer, date of maturity,
par and dollar amount invested in each security, investment, and
money within the program fund.
   (ii) The weighted average maturity of the investments within the
program fund.
   (iii) Any amounts in the program fund that are under the
management of an investment manager.
   (iv) The market value as of the date of the report and the source
of this valuation for any security within the program fund.
   (v) A description of the compliance with the statement of
investment policy.
   (D) Moneys in the program fund may be invested or reinvested by
the Treasurer or may be invested in whole or in part under contract
with an investment manager, as determined by the board.
   (b) (1) Transfers may be made from the program fund to the
administrative fund for the purpose of paying operating costs
associated with administering the Scholarshare trust and as required
by this article. Except for funds transferred pursuant to paragraph
(2), on an annual basis, expenditures from the administrative fund
shall not exceed more than 1 percent of the total program fund. All
costs of administration of the Scholarshare trust shall be paid out
of the administrative fund.
   (2) Commencing on January 1, 2013, contributions by participants
who make their contributions pursuant to a qualified state tuition
plan, as provided in Section 529 of the Internal Revenue Code of
1986, as it is amended from time to time, shall be matched by an
equal amount of state funds. These matching funds shall be
transferred from the administrative fund to the program fund, and
credited to the appropriate account.
   (c) All moneys paid by participants in connection with
participation agreements shall be deposited as received into the
program fund, and shall be promptly invested and accounted for
separately. Deposits and interest thereon accumulated on behalf of
participants in the program fund of the Scholarshare trust may be
used for payments to any institution of higher education.