California Senate Bill SB640 Amended / Bill

 BILL NUMBER: SB 640AMENDED BILL TEXT AMENDED IN SENATE MAY 12, 2011 AMENDED IN SENATE APRIL 27, 2011 INTRODUCED BY Senator Runner FEBRUARY 18, 2011 An act to add and repeal Sections 17053.50 and 23650 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. LEGISLATIVE COUNSEL'S DIGEST SB 640, as amended, Runner. Income and corporation taxes: tax credit: employment. The Personal Income Tax Law and the Corporation Tax Law authorize various credits against the taxes imposed by those laws. This bill would, until  a specified date   the last day of the calendar quarter within which the Franchise Tax Board estimates it will   receive   returns claiming credits that cumulatively total $50,000,000  , under both laws, provide a tax credit, in an amount as specified, to a  qualified  taxpayer for each qualified employee, as defined, who actively received unemployment insurance benefits for 6 months immediately prior to the time the  qualified  taxpayer hires the qualified employee.  This bill would define a "qualified taxpayer" to mean a taxpayer that, as of the last day of the preceding taxable year, employed a total of 50 or fewer employees.  This bill would take effect immediately as a tax levy. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. This act shall be known, and may be cited, as the California Employment Recovery Act of 2011. SEC. 2. Section 17053.50 is added to the Revenue and Taxation Code, to read: 17053.50. (a) For taxable years beginning on or after January 1, 2011, there shall be allowed as a credit against the "net tax," as defined in Section 17039, a qualified amount for each qualified employee employed by  the   a qualified  taxpayer in a qualified job during the taxable year. (b) For purposes of this section, the following definitions apply: (1) (A) "Qualified amount" shall be equal to the sum of five hundred dollars ($500) per month for each qualified employee employed by  the   a qualified  taxpayer in a qualified job, multiplied by the number of consecutive calendar months that  the   a qualified  taxpayer employs the qualified employee in a qualified job, but not to exceed 12 consecutive calendar months. Where a qualified employee has worked at least two weeks in a month for  the   a qualified taxpayer and earned a gross salary of at least seven hundred fifty dollars ($750), the 12 consecutive calendar month limitation may include two two-week pay periods. The qualified amount for a two-week pay period shall be two hundred fifty dollars ($250). (B) The aggregate qualified amount allowed for any qualified employee shall not exceed six thousand dollars ($6,000). (2) "Qualified employee" means any person who actively received unemployment insurance benefits for not less than six months immediately prior to the time he or she was hired for the first time by  the   a qualified  taxpayer for a qualified job. (3) "Qualified job" means a nonseasonal, full-time employment position within the State of California that would qualify the employee for benefits under the Unemployment Insurance Code, not including any benefits received under Section 1279.5 of the Unemployment Insurance Code, and result in a gross salary of not less than one thousand five hundred dollars ($1,500) in any month in which  the   a qualified  taxpayer seeks to apply the credit authorized by this section.  (4) "Qualified taxpayer" means a taxpayer that, as of the last day of the preceding taxable year, employed a total of 50 or fewer employees.  (c) The credit allowed by this section shall be in lieu of any other credit that  the   a qualified  taxpayer may otherwise claim pursuant to this part with respect to a qualified employee. (d) In the case where the credit allowed by this section exceeds the "net tax," the excess may be carried over to reduce the "net tax" in the following year, and the five succeeding years if necessary, until the credit is exhausted.  (e) This section shall remain in effect only until January 1 of the calendar year after the full calendar year in which California's average unemployment rate falls below 10 percent, and as of that January 1 is repealed.   (e) (1) (A) A credit under this section and Section 23650 shall be allowed only if it is claimed on timely filed original returns received by the Franchise Tax Board on or before the cutoff date established by the Franchise Tax Board.   (B) For purposes of this paragraph, the cutoff date shall be the last day of the calendar quarter within which the Franchise Tax Board estimates it will have received timely filed original returns claiming credits under this section and Section 23650 that cumulatively total fifty million dollars ($50,000,000) for all taxable years.   (2) The date a return is received shall be determined by the Franchise Tax Board.   (3) (A) The determinations of the Franchise Tax Board with respect to the cutoff date, the date a return is received, and whether a return has been timely filed for purposes of this subdivision may not be reviewed in any administrative or judicial proceeding.   (B) Any disallowance of a credit claimed due to a determination under this subdivision, including the application of the limitation specified in paragraph (1), shall be treated as a mathematical error appearing on the return. Any amount of tax resulting from such disallowance may be assessed by the Franchise Tax Board in the same manner as provided by Section 19051.   (4) The Franchise Tax Board shall periodically provide notice on its Internet Web site with respect to the amount of credit under this section and Section 23650 claimed on timely filed original returns received by the Franchise Tax Board.   (f) The qualified taxpayer shall include with the timely filed original return in a form and manner to be prescribed by the Franchise Tax Board the title of the qualified job and the amount of wages subject to Division 6 (commencing with Section 13000) of the Unemployment Insurance Code paid by the qualified taxpayer to the qualified employee.   (g) (1) The Franchise Tax Board may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section, including any guidelines regarding the limitation on total credits allowable under this section and Section 23650 and guidelines necessary to prevent the avoidance of the purposes of this section through split-ups, shell corporations, partnerships, tiered ownership structures, or otherwise.   (2) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall 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) This section shall remain in effect only until December 1 of the calendar year after the year of the cutoff date, and as of that December 1 is repealed.  SEC. 3. Section 23650 is added to the Revenue and Taxation Code, to read: 23650. (a) For taxable years beginning on or after January 1, 2011, there shall be allowed as a credit against the "tax," as defined in Section 23036, a qualified amount for each qualified employee employed by  the   a qualified  taxpayer in a qualified job during the taxable year. (b) For purposes of this section, the following definitions apply: (1) (A) "Qualified amount" shall be equal to the sum of five hundred dollars ($500) per month for each qualified employee employed by  the   a qualified  taxpayer in a qualified job, multiplied by the number of consecutive calendar months that  the   a qualified  taxpayer employs the qualified employee in a qualified job, but not to exceed 12 consecutive calendar months. Where a qualified employee has worked at least two weeks in a month for  the   a qualified  taxpayer and earned a gross salary of at least seven hundred fifty dollars ($750), the 12 consecutive calendar month limitation may include two two-week pay periods. The qualified amount for a two-week pay period shall be two hundred fifty dollars ($250). (B) The aggregate qualified amount allowed for any qualified employee shall not exceed six thousand dollars ($6,000). (2) "Qualified employee" means any person who actively received unemployment insurance benefits for  at least   not less than  six months immediately prior to the time he or she was hired for the first time by  the   a qualified  taxpayer for a qualified job. (3) "Qualified job" means a nonseasonal, full-time employment position within the State of California that would qualify the employee for benefits under the Unemployment Insurance Code, not including any benefits received under Section 1279.5 of the Unemployment Insurance Code, and result in a gross salary of not less than one thousand five hundred dollars ($1,500) in any month in which  the   a qualified  taxpayer seeks to apply the credit authorized by this section.  (4) "Qualified taxpayer" means a taxpayer that, as of the last day of the preceding taxable year, employed a total of 50 or fewer employees.  (c) The credit allowed by this section shall be in lieu of any other credit that  the   a qualified  taxpayer may otherwise claim pursuant to this part with respect to a qualified employee. (d) In the case where the credit allowed by this section exceeds the "tax," the excess may be carried over to reduce the "tax" in the following year, and the five succeeding years if necessary, until the credit is exhausted.  (e) This section shall remain in effect only until January 1 of the calendar year after the full calendar year in which California's average unemployment rate falls below 10 percent, and as of that January 1 is repealed.   (e) (1) (A) A credit under this section and Section 17053.50 shall be allowed only if it is claimed on timely filed original returns received by the Franchise Tax Board on or before the cutoff date established by the Franchise Tax Board.   (B) For purposes of this paragraph, the cutoff date shall be the last day of the calendar quarter within which the Franchise Tax Board estimates it will have received timely filed original returns claiming credits under this section and Section 17053.50 that cumulatively total fifty million dollars ($50,000,000) for all taxable years.   (2) The date a return is received shall be determined by the Franchise Tax Board.   (3) (A) The determinations of the Franchise Tax Board with respect to the cutoff date, the date a return is received, and whether a return has been timely filed for purposes of this subdivision may not be reviewed in any administrative or judicial proceeding.   (B) Any disallowance of a credit claimed due to a determination under this subdivision, including the application of the limitation specified in paragraph (1), shall be treated as a mathematical error appearing on the return. Any amount of tax resulting from such disallowance may be assessed by the Franchise Tax Board in the same manner as provided by Section 19051.   (4) The Franchise Tax Board shall periodically provide notice on its Internet Web site with respect to the amount of credit under this section and Section 17053.50 claimed on timely filed original returns received by the Franchise Tax Board.   (f) The qualified taxpayer shall include with the timely filed original return in a form and manner to be prescribed by the Franchise Tax Board the title of the qualified job and the amount of wages subject to Division 6 (commencing with Section 13000) of the Unemployment Insurance Code paid by the qualified taxpayer to the qualified employee.   (g) (1) The Franchise Tax Board may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section, including any guidelines regarding the limitation on total credits allowable under this section and Section 17053.50 and guidelines necessary to prevent the avoidance of the purposes of this section through split-ups, shell corporations, partnerships, tiered ownership structures, or otherwise.   (2) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall 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) This section shall remain in effect only until December 1 of the calendar year after the year of the cutoff date, and as of that December 1 is repealed.  SEC. 4. This act provides for a tax levy within the meaning of Article IV of the Constitution and shall go into immediate effect.