CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION Senate Bill No. 529Introduced by Senator Choi(Coauthors: Senators Alvarado-Gil, Jones, Ochoa Bogh, and Seyarto)February 20, 2025 An act to amend Section 17072 of, and to add Section 17206.2 to, the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. LEGISLATIVE COUNSEL'S DIGESTSB 529, as introduced, Choi. Personal income taxes: deduction: California qualified tuition program. The Personal Income Tax Law, in modified conformity with federal income tax law, excludes from the gross income distributions to a beneficiary of, and earnings by a contributor to, a qualified tuition program, which includes a Golden State Scholarshare College Savings Trust, if specified conditions are met.This bill, for taxable years beginning on or after January 1, 2026, would allow under that law a deduction against gross income in the amount equal to the monetary contribution made by a qualified taxpayer, as defined, to the California qualified tuition program established pursuant to the Golden State Scholarshare Trust Act not to exceed either $5,000 or $10,000, as provided. The bill would require, with exceptions, in the case of any distribution in excess of qualified higher education expenses, as defined, that the aggregate amount of the deduction allowed that reduced the qualified taxpayers gross income in any taxable year be added to the gross income of the qualified taxpayer in the taxable year of the distribution, as provided.Existing law requires any bill authorizing a new tax deduction to contain, among other things, specific goals, purposes, and objectives that the tax deduction will achieve, detailed performance indicators, and data collection requirements.The bill would make specified findings detailing the goals, purposes, and objectives of the above-described tax deduction, performance indicators for determining whether the deduction meets those goals, purposes, and objectives, and data collection requirements. This bill would take effect immediately as a tax levy.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. Section 17072 of the Revenue and Taxation Code is amended to read:17072. (a) Section 62 of the Internal Revenue Code, relating to adjusted gross income defined, shall apply, except as otherwise provided.(b) Section 62(a)(2)(D) of the Internal Revenue Code, relating to certain expenses of elementary and secondary school teachers, shall not apply.(c) Section 62(a)(21) of the Internal Revenue Code, relating to attorneys attorneys fees relating to awards to whistleblowers, shall not apply.(d) Section 62(a) of the Internal Revenue Code, relating to the general rule, is modified to provide that the deduction under Section 17206.2 shall be allowed in determining adjusted gross income.SEC. 2. Section 17206.2 is added to the Revenue and Taxation Code, to read:17206.2. (a) For taxable years beginning on or after January 1, 2026, there shall be allowed a deduction in the amount equal to the monetary contribution made by a qualified taxpayer during the taxable year to one or more accounts established pursuant to the California qualified tuition program on behalf of a beneficiary, but in no event shall the deduction amount exceed the following:(1) In the case of a qualified taxpayer who is a head of household, a surviving spouse, as defined in Section 17046, or a married couple filing a joint return, ten thousand dollars ($10,000).(2) In the case of a qualified taxpayer filing a return other than as described in paragraph (1), five thousand dollars ($5,000).(b) For the purposes of this section, the following definitions shall apply:(1) California qualified tuition program means a qualified tuition program, as defined in Section 529 of the Internal Revenue Code, relating to qualified tuition programs, and as established pursuant to the Golden State Scholarshare Trust Act (Article 19 (commencing with Section 69980) of Chapter 2 of Part 42 of Division 5 of Title 3 of the Education Code).(2) Monetary contribution means cash contributions, pursuant to Section 529(b)(2) of the Internal Revenue Code, relating to cash contributions, to the California qualified tuition program, but shall not include cash contributions to the California qualified tuition program with respect to either of the following:(A) Any amount transferred to the California qualified tuition program from a qualified tuition program established pursuant to Section 529 of the Internal Revenue Code, relating to qualified tuition programs, that is not the California qualified tuition program.(B) Any amount transferred from the credit of one beneficiary under the California qualified tuition program to the credit of another beneficiary under the California qualified tuition program.(3) Qualified higher education expenses means qualified higher education expenses, as defined in Section 529(e)(3) of the Internal Revenue Code.(4) Qualified taxpayer means an individual, or a married couple if filing a joint return, who, on behalf of a beneficiary, contributes money to a California qualified tuition program for which the taxpayer, or a spouse in the case of a married couple filing a joint return, is the account owner and whose adjusted gross income does not exceed the following:(A) In the case of a taxpayer who is a head of household, a surviving spouse, as defined in Section 17046, or a married couple filing a joint return, one hundred fifty thousand dollars ($150,000).(B) In the case of a taxpayer filing a return other than as described in subparagraph (A), seventy-five thousand dollars ($75,000).(c) For each taxable year beginning on or after January 1, 2021, the Franchise Tax Board shall recompute the adjusted gross income limits specified in paragraph (2) of subdivision (b) by multiplying the adjusted gross income limit for the preceding taxable year by the inflation adjustment factor computed pursuant to subparagraph (A) of paragraph (2) of subdivision (h) of Section 17041, rounded off to the nearest dollar.(d) (1) In the case of any distribution in excess of qualified higher education expenses, the aggregate amount of the deduction allowed under subdivision (a) that reduced the qualified taxpayers gross income in any taxable year shall be added to the gross income of the qualified taxpayer in the taxable year of the distribution to the extent that the distribution is attributable to the aggregate amount of contributions for which a deduction is allowed under this section in taxable years beginning on or after January 1, 2026.(2) Paragraph (1) shall not apply to that portion of a distribution that, within 60 days of the distribution, is transferred to another California qualified tuition program.(e) For the purposes of Section 529(c)(3) of the Internal Revenue Code, relating to distributions, amounts allowed as a deduction under this section shall not be treated as investment in the contract in applying Section 72 of the Internal Revenue Code, relating to annuities; certain proceeds of endowment and life insurance contracts.(f) A qualified taxpayer shall maintain records that are adequate to substantiate any deduction allowed under this section, and shall, upon request, provide such records to the Franchise Tax Board.(g) (1) The Franchise Tax Board may adopt regulations necessary or appropriate to carry out the purposes of this section.(2) The Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) does not apply to any standard, criterion, procedure, determination, rule, notice, or guideline established or issued by the Franchise Tax Board pursuant to this section.(h) For purposes of complying with Section 41, the Legislature finds and declares the following:(1) Objectives of this act are as follows:(A) To provide a tax incentive to motivate California families to open and contribute to a Scholarshare account, Californias 529 college savings plan account, for the purposes of saving for future college expenses, thereby encouraging more Californians to pursue a postsecondary education and reducing the amount of student loan debt they may accumulate upon graduation.(B) To reduce the amount of student loan debt on a dollar-for-dollar basis, thereby increasing a persons ability to purchase a home, car, and other products that help stimulate economic activity.(2) The performance indicators related to this act are as follows:(A) The number of deductions allowed pursuant to this section.(B) The total dollar amount of deductions allowed pursuant to this section.(C) The number of new Scholarshare accounts opened during the calendar year in which the deduction allowed by this section is in effect.(3) The Scholarshare Investment Board shall have the following data collection and reporting requirements:(A) Collect data on the amount of deductions allowed, and aggregated income information for taxpayers allowed those deductions, for the taxable year, from the Franchise Tax Board when this data is finalized, but no later than April 1 of the second calendar year following the taxable year. Upon the request of the Scholarshare Investment Board, the Franchise Tax Board shall provide this information to the Scholarshare Investment Board.(B) Collect data on the total amount of contributions made to Scholarshare accounts by March 1 of each calendar year that the deduction may be claimed on a tax return.(C) Survey new and existing Scholarshare account owners to collect information about their motivation to do all of the following:(i) Open a Scholarshare account.(ii) Contribute to a Scholarshare account.(iii) Increase the frequency and amount of contributions to a Scholarshare account.(iv) Refer a Scholarshare account to friends and family.(4) (A) On or before July 1, 2027, and annually thereafter, the Scholarshare Investment Board shall deliver a report to the Legislature that shall include, but not be limited to, prior year and cumulative baseline data and information described in paragraph (3).(B) The report required pursuant to subparagraph (A) shall be submitted in compliance with Section 9795 of the Government 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.
CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION Senate Bill No. 529Introduced by Senator Choi(Coauthors: Senators Alvarado-Gil, Jones, Ochoa Bogh, and Seyarto)February 20, 2025 An act to amend Section 17072 of, and to add Section 17206.2 to, the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. LEGISLATIVE COUNSEL'S DIGESTSB 529, as introduced, Choi. Personal income taxes: deduction: California qualified tuition program. The Personal Income Tax Law, in modified conformity with federal income tax law, excludes from the gross income distributions to a beneficiary of, and earnings by a contributor to, a qualified tuition program, which includes a Golden State Scholarshare College Savings Trust, if specified conditions are met.This bill, for taxable years beginning on or after January 1, 2026, would allow under that law a deduction against gross income in the amount equal to the monetary contribution made by a qualified taxpayer, as defined, to the California qualified tuition program established pursuant to the Golden State Scholarshare Trust Act not to exceed either $5,000 or $10,000, as provided. The bill would require, with exceptions, in the case of any distribution in excess of qualified higher education expenses, as defined, that the aggregate amount of the deduction allowed that reduced the qualified taxpayers gross income in any taxable year be added to the gross income of the qualified taxpayer in the taxable year of the distribution, as provided.Existing law requires any bill authorizing a new tax deduction to contain, among other things, specific goals, purposes, and objectives that the tax deduction will achieve, detailed performance indicators, and data collection requirements.The bill would make specified findings detailing the goals, purposes, and objectives of the above-described tax deduction, performance indicators for determining whether the deduction meets those goals, purposes, and objectives, and data collection requirements. This bill would take effect immediately as a tax levy.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO
CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION
Senate Bill
No. 529
Introduced by Senator Choi(Coauthors: Senators Alvarado-Gil, Jones, Ochoa Bogh, and Seyarto)February 20, 2025
Introduced by Senator Choi(Coauthors: Senators Alvarado-Gil, Jones, Ochoa Bogh, and Seyarto)
February 20, 2025
An act to amend Section 17072 of, and to add Section 17206.2 to, the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
## LEGISLATIVE COUNSEL'S DIGEST
SB 529, as introduced, Choi. Personal income taxes: deduction: California qualified tuition program.
The Personal Income Tax Law, in modified conformity with federal income tax law, excludes from the gross income distributions to a beneficiary of, and earnings by a contributor to, a qualified tuition program, which includes a Golden State Scholarshare College Savings Trust, if specified conditions are met.This bill, for taxable years beginning on or after January 1, 2026, would allow under that law a deduction against gross income in the amount equal to the monetary contribution made by a qualified taxpayer, as defined, to the California qualified tuition program established pursuant to the Golden State Scholarshare Trust Act not to exceed either $5,000 or $10,000, as provided. The bill would require, with exceptions, in the case of any distribution in excess of qualified higher education expenses, as defined, that the aggregate amount of the deduction allowed that reduced the qualified taxpayers gross income in any taxable year be added to the gross income of the qualified taxpayer in the taxable year of the distribution, as provided.Existing law requires any bill authorizing a new tax deduction to contain, among other things, specific goals, purposes, and objectives that the tax deduction will achieve, detailed performance indicators, and data collection requirements.The bill would make specified findings detailing the goals, purposes, and objectives of the above-described tax deduction, performance indicators for determining whether the deduction meets those goals, purposes, and objectives, and data collection requirements. This bill would take effect immediately as a tax levy.
The Personal Income Tax Law, in modified conformity with federal income tax law, excludes from the gross income distributions to a beneficiary of, and earnings by a contributor to, a qualified tuition program, which includes a Golden State Scholarshare College Savings Trust, if specified conditions are met.
This bill, for taxable years beginning on or after January 1, 2026, would allow under that law a deduction against gross income in the amount equal to the monetary contribution made by a qualified taxpayer, as defined, to the California qualified tuition program established pursuant to the Golden State Scholarshare Trust Act not to exceed either $5,000 or $10,000, as provided. The bill would require, with exceptions, in the case of any distribution in excess of qualified higher education expenses, as defined, that the aggregate amount of the deduction allowed that reduced the qualified taxpayers gross income in any taxable year be added to the gross income of the qualified taxpayer in the taxable year of the distribution, as provided.
Existing law requires any bill authorizing a new tax deduction to contain, among other things, specific goals, purposes, and objectives that the tax deduction will achieve, detailed performance indicators, and data collection requirements.
The bill would make specified findings detailing the goals, purposes, and objectives of the above-described tax deduction, performance indicators for determining whether the deduction meets those goals, purposes, and objectives, and data collection requirements.
This bill would take effect immediately as a tax levy.
## Digest Key
## Bill Text
The people of the State of California do enact as follows:SECTION 1. Section 17072 of the Revenue and Taxation Code is amended to read:17072. (a) Section 62 of the Internal Revenue Code, relating to adjusted gross income defined, shall apply, except as otherwise provided.(b) Section 62(a)(2)(D) of the Internal Revenue Code, relating to certain expenses of elementary and secondary school teachers, shall not apply.(c) Section 62(a)(21) of the Internal Revenue Code, relating to attorneys attorneys fees relating to awards to whistleblowers, shall not apply.(d) Section 62(a) of the Internal Revenue Code, relating to the general rule, is modified to provide that the deduction under Section 17206.2 shall be allowed in determining adjusted gross income.SEC. 2. Section 17206.2 is added to the Revenue and Taxation Code, to read:17206.2. (a) For taxable years beginning on or after January 1, 2026, there shall be allowed a deduction in the amount equal to the monetary contribution made by a qualified taxpayer during the taxable year to one or more accounts established pursuant to the California qualified tuition program on behalf of a beneficiary, but in no event shall the deduction amount exceed the following:(1) In the case of a qualified taxpayer who is a head of household, a surviving spouse, as defined in Section 17046, or a married couple filing a joint return, ten thousand dollars ($10,000).(2) In the case of a qualified taxpayer filing a return other than as described in paragraph (1), five thousand dollars ($5,000).(b) For the purposes of this section, the following definitions shall apply:(1) California qualified tuition program means a qualified tuition program, as defined in Section 529 of the Internal Revenue Code, relating to qualified tuition programs, and as established pursuant to the Golden State Scholarshare Trust Act (Article 19 (commencing with Section 69980) of Chapter 2 of Part 42 of Division 5 of Title 3 of the Education Code).(2) Monetary contribution means cash contributions, pursuant to Section 529(b)(2) of the Internal Revenue Code, relating to cash contributions, to the California qualified tuition program, but shall not include cash contributions to the California qualified tuition program with respect to either of the following:(A) Any amount transferred to the California qualified tuition program from a qualified tuition program established pursuant to Section 529 of the Internal Revenue Code, relating to qualified tuition programs, that is not the California qualified tuition program.(B) Any amount transferred from the credit of one beneficiary under the California qualified tuition program to the credit of another beneficiary under the California qualified tuition program.(3) Qualified higher education expenses means qualified higher education expenses, as defined in Section 529(e)(3) of the Internal Revenue Code.(4) Qualified taxpayer means an individual, or a married couple if filing a joint return, who, on behalf of a beneficiary, contributes money to a California qualified tuition program for which the taxpayer, or a spouse in the case of a married couple filing a joint return, is the account owner and whose adjusted gross income does not exceed the following:(A) In the case of a taxpayer who is a head of household, a surviving spouse, as defined in Section 17046, or a married couple filing a joint return, one hundred fifty thousand dollars ($150,000).(B) In the case of a taxpayer filing a return other than as described in subparagraph (A), seventy-five thousand dollars ($75,000).(c) For each taxable year beginning on or after January 1, 2021, the Franchise Tax Board shall recompute the adjusted gross income limits specified in paragraph (2) of subdivision (b) by multiplying the adjusted gross income limit for the preceding taxable year by the inflation adjustment factor computed pursuant to subparagraph (A) of paragraph (2) of subdivision (h) of Section 17041, rounded off to the nearest dollar.(d) (1) In the case of any distribution in excess of qualified higher education expenses, the aggregate amount of the deduction allowed under subdivision (a) that reduced the qualified taxpayers gross income in any taxable year shall be added to the gross income of the qualified taxpayer in the taxable year of the distribution to the extent that the distribution is attributable to the aggregate amount of contributions for which a deduction is allowed under this section in taxable years beginning on or after January 1, 2026.(2) Paragraph (1) shall not apply to that portion of a distribution that, within 60 days of the distribution, is transferred to another California qualified tuition program.(e) For the purposes of Section 529(c)(3) of the Internal Revenue Code, relating to distributions, amounts allowed as a deduction under this section shall not be treated as investment in the contract in applying Section 72 of the Internal Revenue Code, relating to annuities; certain proceeds of endowment and life insurance contracts.(f) A qualified taxpayer shall maintain records that are adequate to substantiate any deduction allowed under this section, and shall, upon request, provide such records to the Franchise Tax Board.(g) (1) The Franchise Tax Board may adopt regulations necessary or appropriate to carry out the purposes of this section.(2) The Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) does not apply to any standard, criterion, procedure, determination, rule, notice, or guideline established or issued by the Franchise Tax Board pursuant to this section.(h) For purposes of complying with Section 41, the Legislature finds and declares the following:(1) Objectives of this act are as follows:(A) To provide a tax incentive to motivate California families to open and contribute to a Scholarshare account, Californias 529 college savings plan account, for the purposes of saving for future college expenses, thereby encouraging more Californians to pursue a postsecondary education and reducing the amount of student loan debt they may accumulate upon graduation.(B) To reduce the amount of student loan debt on a dollar-for-dollar basis, thereby increasing a persons ability to purchase a home, car, and other products that help stimulate economic activity.(2) The performance indicators related to this act are as follows:(A) The number of deductions allowed pursuant to this section.(B) The total dollar amount of deductions allowed pursuant to this section.(C) The number of new Scholarshare accounts opened during the calendar year in which the deduction allowed by this section is in effect.(3) The Scholarshare Investment Board shall have the following data collection and reporting requirements:(A) Collect data on the amount of deductions allowed, and aggregated income information for taxpayers allowed those deductions, for the taxable year, from the Franchise Tax Board when this data is finalized, but no later than April 1 of the second calendar year following the taxable year. Upon the request of the Scholarshare Investment Board, the Franchise Tax Board shall provide this information to the Scholarshare Investment Board.(B) Collect data on the total amount of contributions made to Scholarshare accounts by March 1 of each calendar year that the deduction may be claimed on a tax return.(C) Survey new and existing Scholarshare account owners to collect information about their motivation to do all of the following:(i) Open a Scholarshare account.(ii) Contribute to a Scholarshare account.(iii) Increase the frequency and amount of contributions to a Scholarshare account.(iv) Refer a Scholarshare account to friends and family.(4) (A) On or before July 1, 2027, and annually thereafter, the Scholarshare Investment Board shall deliver a report to the Legislature that shall include, but not be limited to, prior year and cumulative baseline data and information described in paragraph (3).(B) The report required pursuant to subparagraph (A) shall be submitted in compliance with Section 9795 of the Government 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.
The people of the State of California do enact as follows:
## The people of the State of California do enact as follows:
SECTION 1. Section 17072 of the Revenue and Taxation Code is amended to read:17072. (a) Section 62 of the Internal Revenue Code, relating to adjusted gross income defined, shall apply, except as otherwise provided.(b) Section 62(a)(2)(D) of the Internal Revenue Code, relating to certain expenses of elementary and secondary school teachers, shall not apply.(c) Section 62(a)(21) of the Internal Revenue Code, relating to attorneys attorneys fees relating to awards to whistleblowers, shall not apply.(d) Section 62(a) of the Internal Revenue Code, relating to the general rule, is modified to provide that the deduction under Section 17206.2 shall be allowed in determining adjusted gross income.
SECTION 1. Section 17072 of the Revenue and Taxation Code is amended to read:
### SECTION 1.
17072. (a) Section 62 of the Internal Revenue Code, relating to adjusted gross income defined, shall apply, except as otherwise provided.(b) Section 62(a)(2)(D) of the Internal Revenue Code, relating to certain expenses of elementary and secondary school teachers, shall not apply.(c) Section 62(a)(21) of the Internal Revenue Code, relating to attorneys attorneys fees relating to awards to whistleblowers, shall not apply.(d) Section 62(a) of the Internal Revenue Code, relating to the general rule, is modified to provide that the deduction under Section 17206.2 shall be allowed in determining adjusted gross income.
17072. (a) Section 62 of the Internal Revenue Code, relating to adjusted gross income defined, shall apply, except as otherwise provided.(b) Section 62(a)(2)(D) of the Internal Revenue Code, relating to certain expenses of elementary and secondary school teachers, shall not apply.(c) Section 62(a)(21) of the Internal Revenue Code, relating to attorneys attorneys fees relating to awards to whistleblowers, shall not apply.(d) Section 62(a) of the Internal Revenue Code, relating to the general rule, is modified to provide that the deduction under Section 17206.2 shall be allowed in determining adjusted gross income.
17072. (a) Section 62 of the Internal Revenue Code, relating to adjusted gross income defined, shall apply, except as otherwise provided.(b) Section 62(a)(2)(D) of the Internal Revenue Code, relating to certain expenses of elementary and secondary school teachers, shall not apply.(c) Section 62(a)(21) of the Internal Revenue Code, relating to attorneys attorneys fees relating to awards to whistleblowers, shall not apply.(d) Section 62(a) of the Internal Revenue Code, relating to the general rule, is modified to provide that the deduction under Section 17206.2 shall be allowed in determining adjusted gross income.
17072. (a) Section 62 of the Internal Revenue Code, relating to adjusted gross income defined, shall apply, except as otherwise provided.
(b) Section 62(a)(2)(D) of the Internal Revenue Code, relating to certain expenses of elementary and secondary school teachers, shall not apply.
(c) Section 62(a)(21) of the Internal Revenue Code, relating to attorneys attorneys fees relating to awards to whistleblowers, shall not apply.
(d) Section 62(a) of the Internal Revenue Code, relating to the general rule, is modified to provide that the deduction under Section 17206.2 shall be allowed in determining adjusted gross income.
SEC. 2. Section 17206.2 is added to the Revenue and Taxation Code, to read:17206.2. (a) For taxable years beginning on or after January 1, 2026, there shall be allowed a deduction in the amount equal to the monetary contribution made by a qualified taxpayer during the taxable year to one or more accounts established pursuant to the California qualified tuition program on behalf of a beneficiary, but in no event shall the deduction amount exceed the following:(1) In the case of a qualified taxpayer who is a head of household, a surviving spouse, as defined in Section 17046, or a married couple filing a joint return, ten thousand dollars ($10,000).(2) In the case of a qualified taxpayer filing a return other than as described in paragraph (1), five thousand dollars ($5,000).(b) For the purposes of this section, the following definitions shall apply:(1) California qualified tuition program means a qualified tuition program, as defined in Section 529 of the Internal Revenue Code, relating to qualified tuition programs, and as established pursuant to the Golden State Scholarshare Trust Act (Article 19 (commencing with Section 69980) of Chapter 2 of Part 42 of Division 5 of Title 3 of the Education Code).(2) Monetary contribution means cash contributions, pursuant to Section 529(b)(2) of the Internal Revenue Code, relating to cash contributions, to the California qualified tuition program, but shall not include cash contributions to the California qualified tuition program with respect to either of the following:(A) Any amount transferred to the California qualified tuition program from a qualified tuition program established pursuant to Section 529 of the Internal Revenue Code, relating to qualified tuition programs, that is not the California qualified tuition program.(B) Any amount transferred from the credit of one beneficiary under the California qualified tuition program to the credit of another beneficiary under the California qualified tuition program.(3) Qualified higher education expenses means qualified higher education expenses, as defined in Section 529(e)(3) of the Internal Revenue Code.(4) Qualified taxpayer means an individual, or a married couple if filing a joint return, who, on behalf of a beneficiary, contributes money to a California qualified tuition program for which the taxpayer, or a spouse in the case of a married couple filing a joint return, is the account owner and whose adjusted gross income does not exceed the following:(A) In the case of a taxpayer who is a head of household, a surviving spouse, as defined in Section 17046, or a married couple filing a joint return, one hundred fifty thousand dollars ($150,000).(B) In the case of a taxpayer filing a return other than as described in subparagraph (A), seventy-five thousand dollars ($75,000).(c) For each taxable year beginning on or after January 1, 2021, the Franchise Tax Board shall recompute the adjusted gross income limits specified in paragraph (2) of subdivision (b) by multiplying the adjusted gross income limit for the preceding taxable year by the inflation adjustment factor computed pursuant to subparagraph (A) of paragraph (2) of subdivision (h) of Section 17041, rounded off to the nearest dollar.(d) (1) In the case of any distribution in excess of qualified higher education expenses, the aggregate amount of the deduction allowed under subdivision (a) that reduced the qualified taxpayers gross income in any taxable year shall be added to the gross income of the qualified taxpayer in the taxable year of the distribution to the extent that the distribution is attributable to the aggregate amount of contributions for which a deduction is allowed under this section in taxable years beginning on or after January 1, 2026.(2) Paragraph (1) shall not apply to that portion of a distribution that, within 60 days of the distribution, is transferred to another California qualified tuition program.(e) For the purposes of Section 529(c)(3) of the Internal Revenue Code, relating to distributions, amounts allowed as a deduction under this section shall not be treated as investment in the contract in applying Section 72 of the Internal Revenue Code, relating to annuities; certain proceeds of endowment and life insurance contracts.(f) A qualified taxpayer shall maintain records that are adequate to substantiate any deduction allowed under this section, and shall, upon request, provide such records to the Franchise Tax Board.(g) (1) The Franchise Tax Board may adopt regulations necessary or appropriate to carry out the purposes of this section.(2) The Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) does not apply to any standard, criterion, procedure, determination, rule, notice, or guideline established or issued by the Franchise Tax Board pursuant to this section.(h) For purposes of complying with Section 41, the Legislature finds and declares the following:(1) Objectives of this act are as follows:(A) To provide a tax incentive to motivate California families to open and contribute to a Scholarshare account, Californias 529 college savings plan account, for the purposes of saving for future college expenses, thereby encouraging more Californians to pursue a postsecondary education and reducing the amount of student loan debt they may accumulate upon graduation.(B) To reduce the amount of student loan debt on a dollar-for-dollar basis, thereby increasing a persons ability to purchase a home, car, and other products that help stimulate economic activity.(2) The performance indicators related to this act are as follows:(A) The number of deductions allowed pursuant to this section.(B) The total dollar amount of deductions allowed pursuant to this section.(C) The number of new Scholarshare accounts opened during the calendar year in which the deduction allowed by this section is in effect.(3) The Scholarshare Investment Board shall have the following data collection and reporting requirements:(A) Collect data on the amount of deductions allowed, and aggregated income information for taxpayers allowed those deductions, for the taxable year, from the Franchise Tax Board when this data is finalized, but no later than April 1 of the second calendar year following the taxable year. Upon the request of the Scholarshare Investment Board, the Franchise Tax Board shall provide this information to the Scholarshare Investment Board.(B) Collect data on the total amount of contributions made to Scholarshare accounts by March 1 of each calendar year that the deduction may be claimed on a tax return.(C) Survey new and existing Scholarshare account owners to collect information about their motivation to do all of the following:(i) Open a Scholarshare account.(ii) Contribute to a Scholarshare account.(iii) Increase the frequency and amount of contributions to a Scholarshare account.(iv) Refer a Scholarshare account to friends and family.(4) (A) On or before July 1, 2027, and annually thereafter, the Scholarshare Investment Board shall deliver a report to the Legislature that shall include, but not be limited to, prior year and cumulative baseline data and information described in paragraph (3).(B) The report required pursuant to subparagraph (A) shall be submitted in compliance with Section 9795 of the Government Code.
SEC. 2. Section 17206.2 is added to the Revenue and Taxation Code, to read:
### SEC. 2.
17206.2. (a) For taxable years beginning on or after January 1, 2026, there shall be allowed a deduction in the amount equal to the monetary contribution made by a qualified taxpayer during the taxable year to one or more accounts established pursuant to the California qualified tuition program on behalf of a beneficiary, but in no event shall the deduction amount exceed the following:(1) In the case of a qualified taxpayer who is a head of household, a surviving spouse, as defined in Section 17046, or a married couple filing a joint return, ten thousand dollars ($10,000).(2) In the case of a qualified taxpayer filing a return other than as described in paragraph (1), five thousand dollars ($5,000).(b) For the purposes of this section, the following definitions shall apply:(1) California qualified tuition program means a qualified tuition program, as defined in Section 529 of the Internal Revenue Code, relating to qualified tuition programs, and as established pursuant to the Golden State Scholarshare Trust Act (Article 19 (commencing with Section 69980) of Chapter 2 of Part 42 of Division 5 of Title 3 of the Education Code).(2) Monetary contribution means cash contributions, pursuant to Section 529(b)(2) of the Internal Revenue Code, relating to cash contributions, to the California qualified tuition program, but shall not include cash contributions to the California qualified tuition program with respect to either of the following:(A) Any amount transferred to the California qualified tuition program from a qualified tuition program established pursuant to Section 529 of the Internal Revenue Code, relating to qualified tuition programs, that is not the California qualified tuition program.(B) Any amount transferred from the credit of one beneficiary under the California qualified tuition program to the credit of another beneficiary under the California qualified tuition program.(3) Qualified higher education expenses means qualified higher education expenses, as defined in Section 529(e)(3) of the Internal Revenue Code.(4) Qualified taxpayer means an individual, or a married couple if filing a joint return, who, on behalf of a beneficiary, contributes money to a California qualified tuition program for which the taxpayer, or a spouse in the case of a married couple filing a joint return, is the account owner and whose adjusted gross income does not exceed the following:(A) In the case of a taxpayer who is a head of household, a surviving spouse, as defined in Section 17046, or a married couple filing a joint return, one hundred fifty thousand dollars ($150,000).(B) In the case of a taxpayer filing a return other than as described in subparagraph (A), seventy-five thousand dollars ($75,000).(c) For each taxable year beginning on or after January 1, 2021, the Franchise Tax Board shall recompute the adjusted gross income limits specified in paragraph (2) of subdivision (b) by multiplying the adjusted gross income limit for the preceding taxable year by the inflation adjustment factor computed pursuant to subparagraph (A) of paragraph (2) of subdivision (h) of Section 17041, rounded off to the nearest dollar.(d) (1) In the case of any distribution in excess of qualified higher education expenses, the aggregate amount of the deduction allowed under subdivision (a) that reduced the qualified taxpayers gross income in any taxable year shall be added to the gross income of the qualified taxpayer in the taxable year of the distribution to the extent that the distribution is attributable to the aggregate amount of contributions for which a deduction is allowed under this section in taxable years beginning on or after January 1, 2026.(2) Paragraph (1) shall not apply to that portion of a distribution that, within 60 days of the distribution, is transferred to another California qualified tuition program.(e) For the purposes of Section 529(c)(3) of the Internal Revenue Code, relating to distributions, amounts allowed as a deduction under this section shall not be treated as investment in the contract in applying Section 72 of the Internal Revenue Code, relating to annuities; certain proceeds of endowment and life insurance contracts.(f) A qualified taxpayer shall maintain records that are adequate to substantiate any deduction allowed under this section, and shall, upon request, provide such records to the Franchise Tax Board.(g) (1) The Franchise Tax Board may adopt regulations necessary or appropriate to carry out the purposes of this section.(2) The Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) does not apply to any standard, criterion, procedure, determination, rule, notice, or guideline established or issued by the Franchise Tax Board pursuant to this section.(h) For purposes of complying with Section 41, the Legislature finds and declares the following:(1) Objectives of this act are as follows:(A) To provide a tax incentive to motivate California families to open and contribute to a Scholarshare account, Californias 529 college savings plan account, for the purposes of saving for future college expenses, thereby encouraging more Californians to pursue a postsecondary education and reducing the amount of student loan debt they may accumulate upon graduation.(B) To reduce the amount of student loan debt on a dollar-for-dollar basis, thereby increasing a persons ability to purchase a home, car, and other products that help stimulate economic activity.(2) The performance indicators related to this act are as follows:(A) The number of deductions allowed pursuant to this section.(B) The total dollar amount of deductions allowed pursuant to this section.(C) The number of new Scholarshare accounts opened during the calendar year in which the deduction allowed by this section is in effect.(3) The Scholarshare Investment Board shall have the following data collection and reporting requirements:(A) Collect data on the amount of deductions allowed, and aggregated income information for taxpayers allowed those deductions, for the taxable year, from the Franchise Tax Board when this data is finalized, but no later than April 1 of the second calendar year following the taxable year. Upon the request of the Scholarshare Investment Board, the Franchise Tax Board shall provide this information to the Scholarshare Investment Board.(B) Collect data on the total amount of contributions made to Scholarshare accounts by March 1 of each calendar year that the deduction may be claimed on a tax return.(C) Survey new and existing Scholarshare account owners to collect information about their motivation to do all of the following:(i) Open a Scholarshare account.(ii) Contribute to a Scholarshare account.(iii) Increase the frequency and amount of contributions to a Scholarshare account.(iv) Refer a Scholarshare account to friends and family.(4) (A) On or before July 1, 2027, and annually thereafter, the Scholarshare Investment Board shall deliver a report to the Legislature that shall include, but not be limited to, prior year and cumulative baseline data and information described in paragraph (3).(B) The report required pursuant to subparagraph (A) shall be submitted in compliance with Section 9795 of the Government Code.
17206.2. (a) For taxable years beginning on or after January 1, 2026, there shall be allowed a deduction in the amount equal to the monetary contribution made by a qualified taxpayer during the taxable year to one or more accounts established pursuant to the California qualified tuition program on behalf of a beneficiary, but in no event shall the deduction amount exceed the following:(1) In the case of a qualified taxpayer who is a head of household, a surviving spouse, as defined in Section 17046, or a married couple filing a joint return, ten thousand dollars ($10,000).(2) In the case of a qualified taxpayer filing a return other than as described in paragraph (1), five thousand dollars ($5,000).(b) For the purposes of this section, the following definitions shall apply:(1) California qualified tuition program means a qualified tuition program, as defined in Section 529 of the Internal Revenue Code, relating to qualified tuition programs, and as established pursuant to the Golden State Scholarshare Trust Act (Article 19 (commencing with Section 69980) of Chapter 2 of Part 42 of Division 5 of Title 3 of the Education Code).(2) Monetary contribution means cash contributions, pursuant to Section 529(b)(2) of the Internal Revenue Code, relating to cash contributions, to the California qualified tuition program, but shall not include cash contributions to the California qualified tuition program with respect to either of the following:(A) Any amount transferred to the California qualified tuition program from a qualified tuition program established pursuant to Section 529 of the Internal Revenue Code, relating to qualified tuition programs, that is not the California qualified tuition program.(B) Any amount transferred from the credit of one beneficiary under the California qualified tuition program to the credit of another beneficiary under the California qualified tuition program.(3) Qualified higher education expenses means qualified higher education expenses, as defined in Section 529(e)(3) of the Internal Revenue Code.(4) Qualified taxpayer means an individual, or a married couple if filing a joint return, who, on behalf of a beneficiary, contributes money to a California qualified tuition program for which the taxpayer, or a spouse in the case of a married couple filing a joint return, is the account owner and whose adjusted gross income does not exceed the following:(A) In the case of a taxpayer who is a head of household, a surviving spouse, as defined in Section 17046, or a married couple filing a joint return, one hundred fifty thousand dollars ($150,000).(B) In the case of a taxpayer filing a return other than as described in subparagraph (A), seventy-five thousand dollars ($75,000).(c) For each taxable year beginning on or after January 1, 2021, the Franchise Tax Board shall recompute the adjusted gross income limits specified in paragraph (2) of subdivision (b) by multiplying the adjusted gross income limit for the preceding taxable year by the inflation adjustment factor computed pursuant to subparagraph (A) of paragraph (2) of subdivision (h) of Section 17041, rounded off to the nearest dollar.(d) (1) In the case of any distribution in excess of qualified higher education expenses, the aggregate amount of the deduction allowed under subdivision (a) that reduced the qualified taxpayers gross income in any taxable year shall be added to the gross income of the qualified taxpayer in the taxable year of the distribution to the extent that the distribution is attributable to the aggregate amount of contributions for which a deduction is allowed under this section in taxable years beginning on or after January 1, 2026.(2) Paragraph (1) shall not apply to that portion of a distribution that, within 60 days of the distribution, is transferred to another California qualified tuition program.(e) For the purposes of Section 529(c)(3) of the Internal Revenue Code, relating to distributions, amounts allowed as a deduction under this section shall not be treated as investment in the contract in applying Section 72 of the Internal Revenue Code, relating to annuities; certain proceeds of endowment and life insurance contracts.(f) A qualified taxpayer shall maintain records that are adequate to substantiate any deduction allowed under this section, and shall, upon request, provide such records to the Franchise Tax Board.(g) (1) The Franchise Tax Board may adopt regulations necessary or appropriate to carry out the purposes of this section.(2) The Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) does not apply to any standard, criterion, procedure, determination, rule, notice, or guideline established or issued by the Franchise Tax Board pursuant to this section.(h) For purposes of complying with Section 41, the Legislature finds and declares the following:(1) Objectives of this act are as follows:(A) To provide a tax incentive to motivate California families to open and contribute to a Scholarshare account, Californias 529 college savings plan account, for the purposes of saving for future college expenses, thereby encouraging more Californians to pursue a postsecondary education and reducing the amount of student loan debt they may accumulate upon graduation.(B) To reduce the amount of student loan debt on a dollar-for-dollar basis, thereby increasing a persons ability to purchase a home, car, and other products that help stimulate economic activity.(2) The performance indicators related to this act are as follows:(A) The number of deductions allowed pursuant to this section.(B) The total dollar amount of deductions allowed pursuant to this section.(C) The number of new Scholarshare accounts opened during the calendar year in which the deduction allowed by this section is in effect.(3) The Scholarshare Investment Board shall have the following data collection and reporting requirements:(A) Collect data on the amount of deductions allowed, and aggregated income information for taxpayers allowed those deductions, for the taxable year, from the Franchise Tax Board when this data is finalized, but no later than April 1 of the second calendar year following the taxable year. Upon the request of the Scholarshare Investment Board, the Franchise Tax Board shall provide this information to the Scholarshare Investment Board.(B) Collect data on the total amount of contributions made to Scholarshare accounts by March 1 of each calendar year that the deduction may be claimed on a tax return.(C) Survey new and existing Scholarshare account owners to collect information about their motivation to do all of the following:(i) Open a Scholarshare account.(ii) Contribute to a Scholarshare account.(iii) Increase the frequency and amount of contributions to a Scholarshare account.(iv) Refer a Scholarshare account to friends and family.(4) (A) On or before July 1, 2027, and annually thereafter, the Scholarshare Investment Board shall deliver a report to the Legislature that shall include, but not be limited to, prior year and cumulative baseline data and information described in paragraph (3).(B) The report required pursuant to subparagraph (A) shall be submitted in compliance with Section 9795 of the Government Code.
17206.2. (a) For taxable years beginning on or after January 1, 2026, there shall be allowed a deduction in the amount equal to the monetary contribution made by a qualified taxpayer during the taxable year to one or more accounts established pursuant to the California qualified tuition program on behalf of a beneficiary, but in no event shall the deduction amount exceed the following:(1) In the case of a qualified taxpayer who is a head of household, a surviving spouse, as defined in Section 17046, or a married couple filing a joint return, ten thousand dollars ($10,000).(2) In the case of a qualified taxpayer filing a return other than as described in paragraph (1), five thousand dollars ($5,000).(b) For the purposes of this section, the following definitions shall apply:(1) California qualified tuition program means a qualified tuition program, as defined in Section 529 of the Internal Revenue Code, relating to qualified tuition programs, and as established pursuant to the Golden State Scholarshare Trust Act (Article 19 (commencing with Section 69980) of Chapter 2 of Part 42 of Division 5 of Title 3 of the Education Code).(2) Monetary contribution means cash contributions, pursuant to Section 529(b)(2) of the Internal Revenue Code, relating to cash contributions, to the California qualified tuition program, but shall not include cash contributions to the California qualified tuition program with respect to either of the following:(A) Any amount transferred to the California qualified tuition program from a qualified tuition program established pursuant to Section 529 of the Internal Revenue Code, relating to qualified tuition programs, that is not the California qualified tuition program.(B) Any amount transferred from the credit of one beneficiary under the California qualified tuition program to the credit of another beneficiary under the California qualified tuition program.(3) Qualified higher education expenses means qualified higher education expenses, as defined in Section 529(e)(3) of the Internal Revenue Code.(4) Qualified taxpayer means an individual, or a married couple if filing a joint return, who, on behalf of a beneficiary, contributes money to a California qualified tuition program for which the taxpayer, or a spouse in the case of a married couple filing a joint return, is the account owner and whose adjusted gross income does not exceed the following:(A) In the case of a taxpayer who is a head of household, a surviving spouse, as defined in Section 17046, or a married couple filing a joint return, one hundred fifty thousand dollars ($150,000).(B) In the case of a taxpayer filing a return other than as described in subparagraph (A), seventy-five thousand dollars ($75,000).(c) For each taxable year beginning on or after January 1, 2021, the Franchise Tax Board shall recompute the adjusted gross income limits specified in paragraph (2) of subdivision (b) by multiplying the adjusted gross income limit for the preceding taxable year by the inflation adjustment factor computed pursuant to subparagraph (A) of paragraph (2) of subdivision (h) of Section 17041, rounded off to the nearest dollar.(d) (1) In the case of any distribution in excess of qualified higher education expenses, the aggregate amount of the deduction allowed under subdivision (a) that reduced the qualified taxpayers gross income in any taxable year shall be added to the gross income of the qualified taxpayer in the taxable year of the distribution to the extent that the distribution is attributable to the aggregate amount of contributions for which a deduction is allowed under this section in taxable years beginning on or after January 1, 2026.(2) Paragraph (1) shall not apply to that portion of a distribution that, within 60 days of the distribution, is transferred to another California qualified tuition program.(e) For the purposes of Section 529(c)(3) of the Internal Revenue Code, relating to distributions, amounts allowed as a deduction under this section shall not be treated as investment in the contract in applying Section 72 of the Internal Revenue Code, relating to annuities; certain proceeds of endowment and life insurance contracts.(f) A qualified taxpayer shall maintain records that are adequate to substantiate any deduction allowed under this section, and shall, upon request, provide such records to the Franchise Tax Board.(g) (1) The Franchise Tax Board may adopt regulations necessary or appropriate to carry out the purposes of this section.(2) The Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) does not apply to any standard, criterion, procedure, determination, rule, notice, or guideline established or issued by the Franchise Tax Board pursuant to this section.(h) For purposes of complying with Section 41, the Legislature finds and declares the following:(1) Objectives of this act are as follows:(A) To provide a tax incentive to motivate California families to open and contribute to a Scholarshare account, Californias 529 college savings plan account, for the purposes of saving for future college expenses, thereby encouraging more Californians to pursue a postsecondary education and reducing the amount of student loan debt they may accumulate upon graduation.(B) To reduce the amount of student loan debt on a dollar-for-dollar basis, thereby increasing a persons ability to purchase a home, car, and other products that help stimulate economic activity.(2) The performance indicators related to this act are as follows:(A) The number of deductions allowed pursuant to this section.(B) The total dollar amount of deductions allowed pursuant to this section.(C) The number of new Scholarshare accounts opened during the calendar year in which the deduction allowed by this section is in effect.(3) The Scholarshare Investment Board shall have the following data collection and reporting requirements:(A) Collect data on the amount of deductions allowed, and aggregated income information for taxpayers allowed those deductions, for the taxable year, from the Franchise Tax Board when this data is finalized, but no later than April 1 of the second calendar year following the taxable year. Upon the request of the Scholarshare Investment Board, the Franchise Tax Board shall provide this information to the Scholarshare Investment Board.(B) Collect data on the total amount of contributions made to Scholarshare accounts by March 1 of each calendar year that the deduction may be claimed on a tax return.(C) Survey new and existing Scholarshare account owners to collect information about their motivation to do all of the following:(i) Open a Scholarshare account.(ii) Contribute to a Scholarshare account.(iii) Increase the frequency and amount of contributions to a Scholarshare account.(iv) Refer a Scholarshare account to friends and family.(4) (A) On or before July 1, 2027, and annually thereafter, the Scholarshare Investment Board shall deliver a report to the Legislature that shall include, but not be limited to, prior year and cumulative baseline data and information described in paragraph (3).(B) The report required pursuant to subparagraph (A) shall be submitted in compliance with Section 9795 of the Government Code.
17206.2. (a) For taxable years beginning on or after January 1, 2026, there shall be allowed a deduction in the amount equal to the monetary contribution made by a qualified taxpayer during the taxable year to one or more accounts established pursuant to the California qualified tuition program on behalf of a beneficiary, but in no event shall the deduction amount exceed the following:
(1) In the case of a qualified taxpayer who is a head of household, a surviving spouse, as defined in Section 17046, or a married couple filing a joint return, ten thousand dollars ($10,000).
(2) In the case of a qualified taxpayer filing a return other than as described in paragraph (1), five thousand dollars ($5,000).
(b) For the purposes of this section, the following definitions shall apply:
(1) California qualified tuition program means a qualified tuition program, as defined in Section 529 of the Internal Revenue Code, relating to qualified tuition programs, and as established pursuant to the Golden State Scholarshare Trust Act (Article 19 (commencing with Section 69980) of Chapter 2 of Part 42 of Division 5 of Title 3 of the Education Code).
(2) Monetary contribution means cash contributions, pursuant to Section 529(b)(2) of the Internal Revenue Code, relating to cash contributions, to the California qualified tuition program, but shall not include cash contributions to the California qualified tuition program with respect to either of the following:
(A) Any amount transferred to the California qualified tuition program from a qualified tuition program established pursuant to Section 529 of the Internal Revenue Code, relating to qualified tuition programs, that is not the California qualified tuition program.
(B) Any amount transferred from the credit of one beneficiary under the California qualified tuition program to the credit of another beneficiary under the California qualified tuition program.
(3) Qualified higher education expenses means qualified higher education expenses, as defined in Section 529(e)(3) of the Internal Revenue Code.
(4) Qualified taxpayer means an individual, or a married couple if filing a joint return, who, on behalf of a beneficiary, contributes money to a California qualified tuition program for which the taxpayer, or a spouse in the case of a married couple filing a joint return, is the account owner and whose adjusted gross income does not exceed the following:
(A) In the case of a taxpayer who is a head of household, a surviving spouse, as defined in Section 17046, or a married couple filing a joint return, one hundred fifty thousand dollars ($150,000).
(B) In the case of a taxpayer filing a return other than as described in subparagraph (A), seventy-five thousand dollars ($75,000).
(c) For each taxable year beginning on or after January 1, 2021, the Franchise Tax Board shall recompute the adjusted gross income limits specified in paragraph (2) of subdivision (b) by multiplying the adjusted gross income limit for the preceding taxable year by the inflation adjustment factor computed pursuant to subparagraph (A) of paragraph (2) of subdivision (h) of Section 17041, rounded off to the nearest dollar.
(d) (1) In the case of any distribution in excess of qualified higher education expenses, the aggregate amount of the deduction allowed under subdivision (a) that reduced the qualified taxpayers gross income in any taxable year shall be added to the gross income of the qualified taxpayer in the taxable year of the distribution to the extent that the distribution is attributable to the aggregate amount of contributions for which a deduction is allowed under this section in taxable years beginning on or after January 1, 2026.
(2) Paragraph (1) shall not apply to that portion of a distribution that, within 60 days of the distribution, is transferred to another California qualified tuition program.
(e) For the purposes of Section 529(c)(3) of the Internal Revenue Code, relating to distributions, amounts allowed as a deduction under this section shall not be treated as investment in the contract in applying Section 72 of the Internal Revenue Code, relating to annuities; certain proceeds of endowment and life insurance contracts.
(f) A qualified taxpayer shall maintain records that are adequate to substantiate any deduction allowed under this section, and shall, upon request, provide such records to the Franchise Tax Board.
(g) (1) The Franchise Tax Board may adopt regulations necessary or appropriate to carry out the purposes of this section.
(2) The Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) does not apply to any standard, criterion, procedure, determination, rule, notice, or guideline established or issued by the Franchise Tax Board pursuant to this section.
(h) For purposes of complying with Section 41, the Legislature finds and declares the following:
(1) Objectives of this act are as follows:
(A) To provide a tax incentive to motivate California families to open and contribute to a Scholarshare account, Californias 529 college savings plan account, for the purposes of saving for future college expenses, thereby encouraging more Californians to pursue a postsecondary education and reducing the amount of student loan debt they may accumulate upon graduation.
(B) To reduce the amount of student loan debt on a dollar-for-dollar basis, thereby increasing a persons ability to purchase a home, car, and other products that help stimulate economic activity.
(2) The performance indicators related to this act are as follows:
(A) The number of deductions allowed pursuant to this section.
(B) The total dollar amount of deductions allowed pursuant to this section.
(C) The number of new Scholarshare accounts opened during the calendar year in which the deduction allowed by this section is in effect.
(3) The Scholarshare Investment Board shall have the following data collection and reporting requirements:
(A) Collect data on the amount of deductions allowed, and aggregated income information for taxpayers allowed those deductions, for the taxable year, from the Franchise Tax Board when this data is finalized, but no later than April 1 of the second calendar year following the taxable year. Upon the request of the Scholarshare Investment Board, the Franchise Tax Board shall provide this information to the Scholarshare Investment Board.
(B) Collect data on the total amount of contributions made to Scholarshare accounts by March 1 of each calendar year that the deduction may be claimed on a tax return.
(C) Survey new and existing Scholarshare account owners to collect information about their motivation to do all of the following:
(i) Open a Scholarshare account.
(ii) Contribute to a Scholarshare account.
(iii) Increase the frequency and amount of contributions to a Scholarshare account.
(iv) Refer a Scholarshare account to friends and family.
(4) (A) On or before July 1, 2027, and annually thereafter, the Scholarshare Investment Board shall deliver a report to the Legislature that shall include, but not be limited to, prior year and cumulative baseline data and information described in paragraph (3).
(B) The report required pursuant to subparagraph (A) shall be submitted in compliance with Section 9795 of the Government 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.
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.
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.
### SEC. 3.