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| 1 | + | CALIFORNIA LEGISLATURE 20172018 REGULAR SESSION Assembly Bill No. 2974Introduced by Assembly Member ReyesFebruary 16, 2018 An act to amend Section 23689 of the Revenue and Taxation Code, relating to taxation. LEGISLATIVE COUNSEL'S DIGESTAB 2974, as introduced, Reyes. Corporation tax credits.The Corporation Tax Law allows various credits against the taxes imposed by that law, including, for each taxable year beginning on and after January 1, 2014, and before January 1, 2025, a credit in an amount as provided in a written agreement between the Governors Office of Business and Economic Development and the taxpayer, determined by the California Competes Tax Credit Committee based on specified factors.This bill would make nonsubstantive changes to this credit.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: NO Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. Section 23689 of the Revenue and Taxation Code is amended to read:23689. (a) (1) For each taxable year beginning on and after January 1, 2014, and before January 1, 2025, there shall be allowed as a credit against the tax, as defined in Section 23036, an amount as determined by the committee pursuant to paragraph (2) and approved pursuant to Section 18410.2.(2) The credit under this section shall be allocated by GO-Biz with respect to the 201314 fiscal year through and including the 201718 fiscal year. The amount of credit allocated to a taxpayer with respect to a fiscal year pursuant to this section shall be as set forth in a written agreement between GO-Biz and the taxpayer and shall be based on the following factors:(A) The number of jobs the taxpayer will create or retain in this state.(B) The compensation paid paid, or proposed to be paid paid, by the taxpayer to its employees, including wages and fringe benefits.(C) The amount of investment in this state by the taxpayer.(D) The extent of unemployment or poverty in the area according to the United States Census in which the taxpayers project or business is proposed or located.(E) The incentives available to the taxpayer in this state, including incentives from the state, local government, and other entities.(F) The incentives available to the taxpayer in other states.(G) The duration of the proposed project and the duration the taxpayer commits to remain in this state.(H) The overall economic impact in this state of the taxpayers project or business.(I) The strategic importance of the taxpayers project or business to the state, region, or locality.(J) The opportunity for future growth and expansion in this state by the taxpayers business.(K) The extent to which the anticipated benefit to the state exceeds the projected benefit to the taxpayer from the tax credit.(3) The written agreement entered into pursuant to paragraph (2) shall include:(A) Terms and conditions that include the taxable year or years for which the credit allocated shall be allowed, a minimum compensation level, and a minimum job retention period.(B) Provisions indicating whether the credit is to be allocated in full upon approval or in increments based on mutually agreed upon milestones when satisfactorily met by the taxpayer.(C) Provisions that allow the committee to recapture the credit, in whole or in part, if the taxpayer fails to fulfill the terms and conditions of the written agreement.(b) For purposes of this section:(1) Committee means the California Competes Tax Credit Committee established pursuant to Section 18410.2.(2) GO-Biz means the Governors Office of Business and Economic Development.(c) For purposes of this section, GO-Biz shall do the following:(1) Give priority to a taxpayer whose project or business is located or proposed to be located in an area of high unemployment or poverty.(2) Negotiate with a taxpayer the terms and conditions of proposed written agreements that provide the credit allowed pursuant to this section to a taxpayer.(3) Provide the negotiated written agreement to the committee for its approval pursuant to Section 18410.2.(4) Inform the Franchise Tax Board of the terms and conditions of the written agreement upon approval of the written agreement by the committee.(5) Inform the Franchise Tax Board of any recapture, in whole or in part, of a previously allocated credit upon approval of the recapture by the committee.(6) Post on its Internet Web site all of the following:(A) The name of each taxpayer allocated a credit pursuant to this section.(B) The estimated amount of the investment by each taxpayer.(C) The estimated number of jobs created or retained.(D) The amount of the credit allocated to the taxpayer.(E) The amount of the credit recaptured from the taxpayer, if applicable.(F) The primary location where the taxpayer has committed to increasing the net number of jobs or make investments. The primary location shall be listed by city or, in the case of unincorporated areas, by county.(G) Information that identifies each tax credit award that was given a priority for being located in a high unemployment or poverty area, pursuant to paragraph (1).(H) Information that identifies each tax credit award that is being counted toward the requirement of paragraph (3) of subdivision (g).(7) When determining whether to enter into a written agreement with a taxpayer pursuant to this section, GO-Biz may consider other factors, including, but not limited to, the following:(A) The financial solvency of the taxpayer and the taxpayers ability to finance its proposed expansion.(B) The taxpayers current and prior compliance with federal and state laws.(C) Current and prior litigation involving the taxpayer.(D) The reasonableness of the fee arrangement between the taxpayer and any third party providing any services related to the credit allowed pursuant to this section.(E) Any other factors GO-Biz deems necessary to ensure that the administration of the credit allowed pursuant to this section is a model of accountability and transparency and that the effective use of the limited amount of credit available is maximized.(d) For purposes of this section, the Franchise Tax Board shall do all of the following:(1) (A) Except as provided in subparagraph (B), review the books and records of all taxpayers allocated a credit pursuant to this section to ensure compliance with the terms and conditions of the written agreement between the taxpayer and GO-Biz.(B) In the case of a taxpayer that is a small business, as defined in Section 23626, review the books and records of the taxpayer allocated a credit pursuant to this section to ensure compliance with the terms and conditions of the written agreement between the taxpayer and GO-Biz when, in the sole discretion of the Franchise Tax Board, a review of those books and records is appropriate or necessary in the best interests of the state.(2) Notwithstanding Section 19542: 19542, both of the following:(A) Notify GO-Biz of a possible breach of the written agreement by a taxpayer and provide detailed information regarding the basis for that determination.(B) Provide information to GO-Biz with respect to whether a taxpayer is a small business, as defined in Section 23626.(e) In the case where the credit allowed under this section exceeds the tax, as defined in Section 23036, for a taxable year, the excess credit may be carried over to reduce the tax in the following taxable year, and succeeding five taxable years, if necessary, until the credit has been exhausted.(f) Any recapture, in whole or in part, of a credit approved by the committee pursuant to Section 18410.2 shall be treated as a mathematical error appearing on the return. Any amount of tax resulting from that recapture shall be assessed by the Franchise Tax Board in the same manner as provided by Section 19051. The amount of tax resulting from the recapture shall be added to the tax otherwise due by the taxpayer for the taxable year in which the committees recapture determination occurred.(g) (1) The aggregate amount of credit that may be allocated in any fiscal year pursuant to this section and Section 17059.2 shall be an amount equal to the sum of subparagraphs (A), (B), and (C), less the amount specified in subparagraphs (D) and (E):(A) Thirty million dollars ($30,000,000) for the 201314 fiscal year, one hundred fifty million dollars ($150,000,000) for the 201415 fiscal year, and two hundred million dollars ($200,000,000) for each fiscal year from 201516 to 201718, inclusive.(B) The unallocated credit amount, if any, from the preceding fiscal year.(C) The amount of any previously allocated credits that have been recaptured.(D) The amount estimated by the Director of Finance, in consultation with the Franchise Tax Board and the State Board of Equalization, to be necessary to limit the aggregation of the estimated amount of exemptions claimed pursuant to Section 6377.1 and of the amounts estimated to be claimed pursuant to this section and Sections 17053.73, 17059.2, and 23626 to no more than seven hundred fifty million dollars ($750,000,000) for either the current fiscal year or the next fiscal year.(i) The Director of Finance shall notify the Chairperson of the Joint Legislative Budget Committee of the estimated annual allocation authorized by this paragraph. Any allocation pursuant to these provisions shall be made no sooner than 30 days after written notification has been provided to the Chairperson of the Joint Legislative Budget Committee and the chairpersons of the committees of each house of the Legislature that consider appropriations, or not sooner than whatever lesser time the Chairperson of the Joint Legislative Budget Committee, or his or her designee, may determine.(ii) In no event shall the amount estimated in this subparagraph be less than zero dollars ($0).(E) (i) For the 201516 fiscal year and each fiscal year thereafter, the amount of credit estimated by the Director of Finance to be allowed to all qualified taxpayers for that fiscal year pursuant to subparagraph (A) or subparagraph (B) of paragraph (1) of subdivision (c) of Section 23636.(ii) If the amount available per fiscal year pursuant to this section and Section 17059.2 is less than the aggregate amount of credit estimated by the Director of Finance to be allowed to qualified taxpayers pursuant to subparagraph (A) or subparagraph (B) of paragraph (1) of subdivision (c) of Section 23636, the aggregate amount allowed pursuant to Section 23636 shall not be reduced and, in addition to the reduction required by clause (i), the aggregate amount of credit that may be allocated pursuant to this section and Section 17059.2 for the next fiscal year shall be reduced by the amount of that deficit.(iii) It is the intent of the Legislature that the reductions specified in this subparagraph of the aggregate amount of credit that may be allocated pursuant to this section and Section 17059.2 shall continue if the repeal dates of the credits allowed by this section and Section 17059.2 are removed or extended.(2) (A) In addition to the other amounts determined pursuant to paragraph (1), the Director of Finance may increase the aggregate amount of credit that may be allocated pursuant to this section and Section 17059.2 by up to twenty-five million dollars ($25,000,000) per fiscal year through the 201718 fiscal year. The amount of any increase made pursuant to this paragraph, when combined with any increase made pursuant to paragraph (2) of subdivision (g) of Section 17059.2, shall not exceed twenty-five million dollars ($25,000,000) per fiscal year through the 201718 fiscal year.(B) It is the intent of the Legislature that the Director of Finance increase the aggregate amount under subparagraph (A) in order to mitigate the reduction of the amount available due to the credit allowed to all qualified taxpayers pursuant to subparagraph (A) or (B) of paragraph (1) of subdivision (c) of Section 23636.(3) Each fiscal year, 25 percent of the aggregate amount of the credit that may be allocated pursuant to this section and Section 17059.2 shall be reserved for small business, as defined in Section 17053.73 or 23626.(4) Each fiscal year, no more than 20 percent of the aggregate amount of the credit that may be allocated pursuant to this section shall be allocated to any one taxpayer.(h) GO-Biz may prescribe rules and regulations as necessary to carry out the purposes of this section. Any rule or regulation prescribed pursuant to this section may be by adoption of an emergency regulation in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.(i) (1) A written agreement between GO-Biz and a taxpayer with respect to the credit authorized by this section shall not restrict, broaden, or otherwise alter the ability of the taxpayer to assign that credit or any portion thereof in accordance with Section 23663.(2) A written agreement between GO-Biz and a taxpayer with respect to the credit authorized by this section must comply with existing law on the date the agreement is executed.(j) (1) Upon the effective date of this section, the Department of Finance shall estimate the total dollar amount of credits that will be claimed under this section with respect to each fiscal year from the 201314 fiscal year to the 202425 fiscal year, inclusive.(2) The Franchise Tax Board shall annually provide to the Joint Legislative Budget Committee, by no later than March 1, a report of the total dollar amount of the credits claimed under this section with respect to the relevant fiscal year. The report shall compare the total dollar amount of credits claimed under this section with respect to that fiscal year with the departments estimate with respect to that same fiscal year. If the total dollar amount of credits claimed for the fiscal year is less than the estimate for that fiscal year, the report shall identify options for increasing annual claims of the credit so as to meet estimated amounts.(k) This section is repealed on December 1, 2025. | |
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| 3 | + | CALIFORNIA LEGISLATURE 20172018 REGULAR SESSION Assembly Bill No. 2974Introduced by Assembly Member ReyesFebruary 16, 2018 An act to amend Section 23689 of the Revenue and Taxation Code, relating to taxation. LEGISLATIVE COUNSEL'S DIGESTAB 2974, as introduced, Reyes. Corporation tax credits.The Corporation Tax Law allows various credits against the taxes imposed by that law, including, for each taxable year beginning on and after January 1, 2014, and before January 1, 2025, a credit in an amount as provided in a written agreement between the Governors Office of Business and Economic Development and the taxpayer, determined by the California Competes Tax Credit Committee based on specified factors.This bill would make nonsubstantive changes to this credit.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: NO Local Program: NO | |
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| 5 | - | Amended IN Assembly March 19, 2018 | |
| 6 | 5 | ||
| 7 | - | Amended IN Assembly March 19, 2018 | |
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| 8 | 8 | ||
| 9 | 9 | CALIFORNIA LEGISLATURE 20172018 REGULAR SESSION | |
| 10 | 10 | ||
| 11 | 11 | Assembly Bill No. 2974 | |
| 12 | 12 | ||
| 13 | 13 | Introduced by Assembly Member ReyesFebruary 16, 2018 | |
| 14 | 14 | ||
| 15 | 15 | Introduced by Assembly Member Reyes | |
| 16 | 16 | February 16, 2018 | |
| 17 | 17 | ||
| 18 | - | An act to amend Section 23689 of the Revenue and Taxation Code, relating to taxation. | |
| 18 | + | An act to amend Section 23689 of the Revenue and Taxation Code, relating to taxation. | |
| 19 | 19 | ||
| 20 | 20 | LEGISLATIVE COUNSEL'S DIGEST | |
| 21 | 21 | ||
| 22 | 22 | ## LEGISLATIVE COUNSEL'S DIGEST | |
| 23 | 23 | ||
| 24 | - | AB 2974, as | |
| 24 | + | AB 2974, as introduced, Reyes. Corporation tax credits. | |
| 25 | 25 | ||
| 26 | - | The federal Workforce Innovation and Opportunity Act of 2014 provides for various workforce investment activities and requires that local workforce development boards be established in each local area of a state, which are required to submit a local plan that meets specified requirements. Existing law establishes local workforce development boards to perform duties related to the implementation and coordination of local workforce development activities and requires each local board to perform specified duties consistent with the federal Workforce Innovation and Opportunity Act, including leading efforts to engage with a diverse range of employers and with entities in the region involved to do specified things. This bill would also require a local board to lead those efforts in order to provide support to the efforts of employers to align with public contracting needs in a manner that will support local workforce opportunities. By increasing the duties of the local workforce development board, this bill would impose a state-mandated local program.The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.The Corporation Tax Law allows various credits against the taxes imposed by that law, including, for each taxable year beginning on and after January 1, 2014, and before January 1, 2025, a credit in an amount as provided in a written agreement between the Governors Office of Business and Economic Development and the taxpayer, determined by the California Competes Tax Credit Committee based on specified factors.This bill would make nonsubstantive changes to this credit. | |
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| 28 | - | The federal Workforce Innovation and Opportunity Act of 2014 provides for various workforce investment activities and requires that local workforce development boards be established in each local area of a state, which are required to submit a local plan that meets specified requirements. Existing law establishes local workforce development boards to perform duties related to the implementation and coordination of local workforce development activities and requires each local board to perform specified duties consistent with the federal Workforce Innovation and Opportunity Act, including leading efforts to engage with a diverse range of employers and with entities in the region involved to do specified things. | |
| 29 | - | ||
| 30 | - | This bill would also require a local board to lead those efforts in order to provide support to the efforts of employers to align with public contracting needs in a manner that will support local workforce opportunities. By increasing the duties of the local workforce development board, this bill would impose a state-mandated local program. | |
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| 32 | - | The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. | |
| 33 | - | ||
| 34 | - | This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above. | |
| 26 | + | The Corporation Tax Law allows various credits against the taxes imposed by that law, including, for each taxable year beginning on and after January 1, 2014, and before January 1, 2025, a credit in an amount as provided in a written agreement between the Governors Office of Business and Economic Development and the taxpayer, determined by the California Competes Tax Credit Committee based on specified factors.This bill would make nonsubstantive changes to this credit. | |
| 35 | 27 | ||
| 36 | 28 | The Corporation Tax Law allows various credits against the taxes imposed by that law, including, for each taxable year beginning on and after January 1, 2014, and before January 1, 2025, a credit in an amount as provided in a written agreement between the Governors Office of Business and Economic Development and the taxpayer, determined by the California Competes Tax Credit Committee based on specified factors. | |
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| 38 | - | ||
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| 40 | 30 | This bill would make nonsubstantive changes to this credit. | |
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| 43 | 31 | ||
| 44 | 32 | ## Digest Key | |
| 45 | 33 | ||
| 46 | 34 | ## Bill Text | |
| 47 | 35 | ||
| 48 | - | The people of the State of California do enact as follows:SECTION 1. | |
| 36 | + | The people of the State of California do enact as follows:SECTION 1. Section 23689 of the Revenue and Taxation Code is amended to read:23689. (a) (1) For each taxable year beginning on and after January 1, 2014, and before January 1, 2025, there shall be allowed as a credit against the tax, as defined in Section 23036, an amount as determined by the committee pursuant to paragraph (2) and approved pursuant to Section 18410.2.(2) The credit under this section shall be allocated by GO-Biz with respect to the 201314 fiscal year through and including the 201718 fiscal year. The amount of credit allocated to a taxpayer with respect to a fiscal year pursuant to this section shall be as set forth in a written agreement between GO-Biz and the taxpayer and shall be based on the following factors:(A) The number of jobs the taxpayer will create or retain in this state.(B) The compensation paid paid, or proposed to be paid paid, by the taxpayer to its employees, including wages and fringe benefits.(C) The amount of investment in this state by the taxpayer.(D) The extent of unemployment or poverty in the area according to the United States Census in which the taxpayers project or business is proposed or located.(E) The incentives available to the taxpayer in this state, including incentives from the state, local government, and other entities.(F) The incentives available to the taxpayer in other states.(G) The duration of the proposed project and the duration the taxpayer commits to remain in this state.(H) The overall economic impact in this state of the taxpayers project or business.(I) The strategic importance of the taxpayers project or business to the state, region, or locality.(J) The opportunity for future growth and expansion in this state by the taxpayers business.(K) The extent to which the anticipated benefit to the state exceeds the projected benefit to the taxpayer from the tax credit.(3) The written agreement entered into pursuant to paragraph (2) shall include:(A) Terms and conditions that include the taxable year or years for which the credit allocated shall be allowed, a minimum compensation level, and a minimum job retention period.(B) Provisions indicating whether the credit is to be allocated in full upon approval or in increments based on mutually agreed upon milestones when satisfactorily met by the taxpayer.(C) Provisions that allow the committee to recapture the credit, in whole or in part, if the taxpayer fails to fulfill the terms and conditions of the written agreement.(b) For purposes of this section:(1) Committee means the California Competes Tax Credit Committee established pursuant to Section 18410.2.(2) GO-Biz means the Governors Office of Business and Economic Development.(c) For purposes of this section, GO-Biz shall do the following:(1) Give priority to a taxpayer whose project or business is located or proposed to be located in an area of high unemployment or poverty.(2) Negotiate with a taxpayer the terms and conditions of proposed written agreements that provide the credit allowed pursuant to this section to a taxpayer.(3) Provide the negotiated written agreement to the committee for its approval pursuant to Section 18410.2.(4) Inform the Franchise Tax Board of the terms and conditions of the written agreement upon approval of the written agreement by the committee.(5) Inform the Franchise Tax Board of any recapture, in whole or in part, of a previously allocated credit upon approval of the recapture by the committee.(6) Post on its Internet Web site all of the following:(A) The name of each taxpayer allocated a credit pursuant to this section.(B) The estimated amount of the investment by each taxpayer.(C) The estimated number of jobs created or retained.(D) The amount of the credit allocated to the taxpayer.(E) The amount of the credit recaptured from the taxpayer, if applicable.(F) The primary location where the taxpayer has committed to increasing the net number of jobs or make investments. The primary location shall be listed by city or, in the case of unincorporated areas, by county.(G) Information that identifies each tax credit award that was given a priority for being located in a high unemployment or poverty area, pursuant to paragraph (1).(H) Information that identifies each tax credit award that is being counted toward the requirement of paragraph (3) of subdivision (g).(7) When determining whether to enter into a written agreement with a taxpayer pursuant to this section, GO-Biz may consider other factors, including, but not limited to, the following:(A) The financial solvency of the taxpayer and the taxpayers ability to finance its proposed expansion.(B) The taxpayers current and prior compliance with federal and state laws.(C) Current and prior litigation involving the taxpayer.(D) The reasonableness of the fee arrangement between the taxpayer and any third party providing any services related to the credit allowed pursuant to this section.(E) Any other factors GO-Biz deems necessary to ensure that the administration of the credit allowed pursuant to this section is a model of accountability and transparency and that the effective use of the limited amount of credit available is maximized.(d) For purposes of this section, the Franchise Tax Board shall do all of the following:(1) (A) Except as provided in subparagraph (B), review the books and records of all taxpayers allocated a credit pursuant to this section to ensure compliance with the terms and conditions of the written agreement between the taxpayer and GO-Biz.(B) In the case of a taxpayer that is a small business, as defined in Section 23626, review the books and records of the taxpayer allocated a credit pursuant to this section to ensure compliance with the terms and conditions of the written agreement between the taxpayer and GO-Biz when, in the sole discretion of the Franchise Tax Board, a review of those books and records is appropriate or necessary in the best interests of the state.(2) Notwithstanding Section 19542: 19542, both of the following:(A) Notify GO-Biz of a possible breach of the written agreement by a taxpayer and provide detailed information regarding the basis for that determination.(B) Provide information to GO-Biz with respect to whether a taxpayer is a small business, as defined in Section 23626.(e) In the case where the credit allowed under this section exceeds the tax, as defined in Section 23036, for a taxable year, the excess credit may be carried over to reduce the tax in the following taxable year, and succeeding five taxable years, if necessary, until the credit has been exhausted.(f) Any recapture, in whole or in part, of a credit approved by the committee pursuant to Section 18410.2 shall be treated as a mathematical error appearing on the return. Any amount of tax resulting from that recapture shall be assessed by the Franchise Tax Board in the same manner as provided by Section 19051. The amount of tax resulting from the recapture shall be added to the tax otherwise due by the taxpayer for the taxable year in which the committees recapture determination occurred.(g) (1) The aggregate amount of credit that may be allocated in any fiscal year pursuant to this section and Section 17059.2 shall be an amount equal to the sum of subparagraphs (A), (B), and (C), less the amount specified in subparagraphs (D) and (E):(A) Thirty million dollars ($30,000,000) for the 201314 fiscal year, one hundred fifty million dollars ($150,000,000) for the 201415 fiscal year, and two hundred million dollars ($200,000,000) for each fiscal year from 201516 to 201718, inclusive.(B) The unallocated credit amount, if any, from the preceding fiscal year.(C) The amount of any previously allocated credits that have been recaptured.(D) The amount estimated by the Director of Finance, in consultation with the Franchise Tax Board and the State Board of Equalization, to be necessary to limit the aggregation of the estimated amount of exemptions claimed pursuant to Section 6377.1 and of the amounts estimated to be claimed pursuant to this section and Sections 17053.73, 17059.2, and 23626 to no more than seven hundred fifty million dollars ($750,000,000) for either the current fiscal year or the next fiscal year.(i) The Director of Finance shall notify the Chairperson of the Joint Legislative Budget Committee of the estimated annual allocation authorized by this paragraph. Any allocation pursuant to these provisions shall be made no sooner than 30 days after written notification has been provided to the Chairperson of the Joint Legislative Budget Committee and the chairpersons of the committees of each house of the Legislature that consider appropriations, or not sooner than whatever lesser time the Chairperson of the Joint Legislative Budget Committee, or his or her designee, may determine.(ii) In no event shall the amount estimated in this subparagraph be less than zero dollars ($0).(E) (i) For the 201516 fiscal year and each fiscal year thereafter, the amount of credit estimated by the Director of Finance to be allowed to all qualified taxpayers for that fiscal year pursuant to subparagraph (A) or subparagraph (B) of paragraph (1) of subdivision (c) of Section 23636.(ii) If the amount available per fiscal year pursuant to this section and Section 17059.2 is less than the aggregate amount of credit estimated by the Director of Finance to be allowed to qualified taxpayers pursuant to subparagraph (A) or subparagraph (B) of paragraph (1) of subdivision (c) of Section 23636, the aggregate amount allowed pursuant to Section 23636 shall not be reduced and, in addition to the reduction required by clause (i), the aggregate amount of credit that may be allocated pursuant to this section and Section 17059.2 for the next fiscal year shall be reduced by the amount of that deficit.(iii) It is the intent of the Legislature that the reductions specified in this subparagraph of the aggregate amount of credit that may be allocated pursuant to this section and Section 17059.2 shall continue if the repeal dates of the credits allowed by this section and Section 17059.2 are removed or extended.(2) (A) In addition to the other amounts determined pursuant to paragraph (1), the Director of Finance may increase the aggregate amount of credit that may be allocated pursuant to this section and Section 17059.2 by up to twenty-five million dollars ($25,000,000) per fiscal year through the 201718 fiscal year. The amount of any increase made pursuant to this paragraph, when combined with any increase made pursuant to paragraph (2) of subdivision (g) of Section 17059.2, shall not exceed twenty-five million dollars ($25,000,000) per fiscal year through the 201718 fiscal year.(B) It is the intent of the Legislature that the Director of Finance increase the aggregate amount under subparagraph (A) in order to mitigate the reduction of the amount available due to the credit allowed to all qualified taxpayers pursuant to subparagraph (A) or (B) of paragraph (1) of subdivision (c) of Section 23636.(3) Each fiscal year, 25 percent of the aggregate amount of the credit that may be allocated pursuant to this section and Section 17059.2 shall be reserved for small business, as defined in Section 17053.73 or 23626.(4) Each fiscal year, no more than 20 percent of the aggregate amount of the credit that may be allocated pursuant to this section shall be allocated to any one taxpayer.(h) GO-Biz may prescribe rules and regulations as necessary to carry out the purposes of this section. Any rule or regulation prescribed pursuant to this section may be by adoption of an emergency regulation in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.(i) (1) A written agreement between GO-Biz and a taxpayer with respect to the credit authorized by this section shall not restrict, broaden, or otherwise alter the ability of the taxpayer to assign that credit or any portion thereof in accordance with Section 23663.(2) A written agreement between GO-Biz and a taxpayer with respect to the credit authorized by this section must comply with existing law on the date the agreement is executed.(j) (1) Upon the effective date of this section, the Department of Finance shall estimate the total dollar amount of credits that will be claimed under this section with respect to each fiscal year from the 201314 fiscal year to the 202425 fiscal year, inclusive.(2) The Franchise Tax Board shall annually provide to the Joint Legislative Budget Committee, by no later than March 1, a report of the total dollar amount of the credits claimed under this section with respect to the relevant fiscal year. The report shall compare the total dollar amount of credits claimed under this section with respect to that fiscal year with the departments estimate with respect to that same fiscal year. If the total dollar amount of credits claimed for the fiscal year is less than the estimate for that fiscal year, the report shall identify options for increasing annual claims of the credit so as to meet estimated amounts.(k) This section is repealed on December 1, 2025. | |
| 49 | 37 | ||
| 50 | 38 | The people of the State of California do enact as follows: | |
| 51 | 39 | ||
| 52 | 40 | ## The people of the State of California do enact as follows: | |
| 53 | 41 | ||
| 54 | - | SECTION 1. Section | |
| 42 | + | SECTION 1. Section 23689 of the Revenue and Taxation Code is amended to read:23689. (a) (1) For each taxable year beginning on and after January 1, 2014, and before January 1, 2025, there shall be allowed as a credit against the tax, as defined in Section 23036, an amount as determined by the committee pursuant to paragraph (2) and approved pursuant to Section 18410.2.(2) The credit under this section shall be allocated by GO-Biz with respect to the 201314 fiscal year through and including the 201718 fiscal year. The amount of credit allocated to a taxpayer with respect to a fiscal year pursuant to this section shall be as set forth in a written agreement between GO-Biz and the taxpayer and shall be based on the following factors:(A) The number of jobs the taxpayer will create or retain in this state.(B) The compensation paid paid, or proposed to be paid paid, by the taxpayer to its employees, including wages and fringe benefits.(C) The amount of investment in this state by the taxpayer.(D) The extent of unemployment or poverty in the area according to the United States Census in which the taxpayers project or business is proposed or located.(E) The incentives available to the taxpayer in this state, including incentives from the state, local government, and other entities.(F) The incentives available to the taxpayer in other states.(G) The duration of the proposed project and the duration the taxpayer commits to remain in this state.(H) The overall economic impact in this state of the taxpayers project or business.(I) The strategic importance of the taxpayers project or business to the state, region, or locality.(J) The opportunity for future growth and expansion in this state by the taxpayers business.(K) The extent to which the anticipated benefit to the state exceeds the projected benefit to the taxpayer from the tax credit.(3) The written agreement entered into pursuant to paragraph (2) shall include:(A) Terms and conditions that include the taxable year or years for which the credit allocated shall be allowed, a minimum compensation level, and a minimum job retention period.(B) Provisions indicating whether the credit is to be allocated in full upon approval or in increments based on mutually agreed upon milestones when satisfactorily met by the taxpayer.(C) Provisions that allow the committee to recapture the credit, in whole or in part, if the taxpayer fails to fulfill the terms and conditions of the written agreement.(b) For purposes of this section:(1) Committee means the California Competes Tax Credit Committee established pursuant to Section 18410.2.(2) GO-Biz means the Governors Office of Business and Economic Development.(c) For purposes of this section, GO-Biz shall do the following:(1) Give priority to a taxpayer whose project or business is located or proposed to be located in an area of high unemployment or poverty.(2) Negotiate with a taxpayer the terms and conditions of proposed written agreements that provide the credit allowed pursuant to this section to a taxpayer.(3) Provide the negotiated written agreement to the committee for its approval pursuant to Section 18410.2.(4) Inform the Franchise Tax Board of the terms and conditions of the written agreement upon approval of the written agreement by the committee.(5) Inform the Franchise Tax Board of any recapture, in whole or in part, of a previously allocated credit upon approval of the recapture by the committee.(6) Post on its Internet Web site all of the following:(A) The name of each taxpayer allocated a credit pursuant to this section.(B) The estimated amount of the investment by each taxpayer.(C) The estimated number of jobs created or retained.(D) The amount of the credit allocated to the taxpayer.(E) The amount of the credit recaptured from the taxpayer, if applicable.(F) The primary location where the taxpayer has committed to increasing the net number of jobs or make investments. The primary location shall be listed by city or, in the case of unincorporated areas, by county.(G) Information that identifies each tax credit award that was given a priority for being located in a high unemployment or poverty area, pursuant to paragraph (1).(H) Information that identifies each tax credit award that is being counted toward the requirement of paragraph (3) of subdivision (g).(7) When determining whether to enter into a written agreement with a taxpayer pursuant to this section, GO-Biz may consider other factors, including, but not limited to, the following:(A) The financial solvency of the taxpayer and the taxpayers ability to finance its proposed expansion.(B) The taxpayers current and prior compliance with federal and state laws.(C) Current and prior litigation involving the taxpayer.(D) The reasonableness of the fee arrangement between the taxpayer and any third party providing any services related to the credit allowed pursuant to this section.(E) Any other factors GO-Biz deems necessary to ensure that the administration of the credit allowed pursuant to this section is a model of accountability and transparency and that the effective use of the limited amount of credit available is maximized.(d) For purposes of this section, the Franchise Tax Board shall do all of the following:(1) (A) Except as provided in subparagraph (B), review the books and records of all taxpayers allocated a credit pursuant to this section to ensure compliance with the terms and conditions of the written agreement between the taxpayer and GO-Biz.(B) In the case of a taxpayer that is a small business, as defined in Section 23626, review the books and records of the taxpayer allocated a credit pursuant to this section to ensure compliance with the terms and conditions of the written agreement between the taxpayer and GO-Biz when, in the sole discretion of the Franchise Tax Board, a review of those books and records is appropriate or necessary in the best interests of the state.(2) Notwithstanding Section 19542: 19542, both of the following:(A) Notify GO-Biz of a possible breach of the written agreement by a taxpayer and provide detailed information regarding the basis for that determination.(B) Provide information to GO-Biz with respect to whether a taxpayer is a small business, as defined in Section 23626.(e) In the case where the credit allowed under this section exceeds the tax, as defined in Section 23036, for a taxable year, the excess credit may be carried over to reduce the tax in the following taxable year, and succeeding five taxable years, if necessary, until the credit has been exhausted.(f) Any recapture, in whole or in part, of a credit approved by the committee pursuant to Section 18410.2 shall be treated as a mathematical error appearing on the return. Any amount of tax resulting from that recapture shall be assessed by the Franchise Tax Board in the same manner as provided by Section 19051. The amount of tax resulting from the recapture shall be added to the tax otherwise due by the taxpayer for the taxable year in which the committees recapture determination occurred.(g) (1) The aggregate amount of credit that may be allocated in any fiscal year pursuant to this section and Section 17059.2 shall be an amount equal to the sum of subparagraphs (A), (B), and (C), less the amount specified in subparagraphs (D) and (E):(A) Thirty million dollars ($30,000,000) for the 201314 fiscal year, one hundred fifty million dollars ($150,000,000) for the 201415 fiscal year, and two hundred million dollars ($200,000,000) for each fiscal year from 201516 to 201718, inclusive.(B) The unallocated credit amount, if any, from the preceding fiscal year.(C) The amount of any previously allocated credits that have been recaptured.(D) The amount estimated by the Director of Finance, in consultation with the Franchise Tax Board and the State Board of Equalization, to be necessary to limit the aggregation of the estimated amount of exemptions claimed pursuant to Section 6377.1 and of the amounts estimated to be claimed pursuant to this section and Sections 17053.73, 17059.2, and 23626 to no more than seven hundred fifty million dollars ($750,000,000) for either the current fiscal year or the next fiscal year.(i) The Director of Finance shall notify the Chairperson of the Joint Legislative Budget Committee of the estimated annual allocation authorized by this paragraph. Any allocation pursuant to these provisions shall be made no sooner than 30 days after written notification has been provided to the Chairperson of the Joint Legislative Budget Committee and the chairpersons of the committees of each house of the Legislature that consider appropriations, or not sooner than whatever lesser time the Chairperson of the Joint Legislative Budget Committee, or his or her designee, may determine.(ii) In no event shall the amount estimated in this subparagraph be less than zero dollars ($0).(E) (i) For the 201516 fiscal year and each fiscal year thereafter, the amount of credit estimated by the Director of Finance to be allowed to all qualified taxpayers for that fiscal year pursuant to subparagraph (A) or subparagraph (B) of paragraph (1) of subdivision (c) of Section 23636.(ii) If the amount available per fiscal year pursuant to this section and Section 17059.2 is less than the aggregate amount of credit estimated by the Director of Finance to be allowed to qualified taxpayers pursuant to subparagraph (A) or subparagraph (B) of paragraph (1) of subdivision (c) of Section 23636, the aggregate amount allowed pursuant to Section 23636 shall not be reduced and, in addition to the reduction required by clause (i), the aggregate amount of credit that may be allocated pursuant to this section and Section 17059.2 for the next fiscal year shall be reduced by the amount of that deficit.(iii) It is the intent of the Legislature that the reductions specified in this subparagraph of the aggregate amount of credit that may be allocated pursuant to this section and Section 17059.2 shall continue if the repeal dates of the credits allowed by this section and Section 17059.2 are removed or extended.(2) (A) In addition to the other amounts determined pursuant to paragraph (1), the Director of Finance may increase the aggregate amount of credit that may be allocated pursuant to this section and Section 17059.2 by up to twenty-five million dollars ($25,000,000) per fiscal year through the 201718 fiscal year. The amount of any increase made pursuant to this paragraph, when combined with any increase made pursuant to paragraph (2) of subdivision (g) of Section 17059.2, shall not exceed twenty-five million dollars ($25,000,000) per fiscal year through the 201718 fiscal year.(B) It is the intent of the Legislature that the Director of Finance increase the aggregate amount under subparagraph (A) in order to mitigate the reduction of the amount available due to the credit allowed to all qualified taxpayers pursuant to subparagraph (A) or (B) of paragraph (1) of subdivision (c) of Section 23636.(3) Each fiscal year, 25 percent of the aggregate amount of the credit that may be allocated pursuant to this section and Section 17059.2 shall be reserved for small business, as defined in Section 17053.73 or 23626.(4) Each fiscal year, no more than 20 percent of the aggregate amount of the credit that may be allocated pursuant to this section shall be allocated to any one taxpayer.(h) GO-Biz may prescribe rules and regulations as necessary to carry out the purposes of this section. Any rule or regulation prescribed pursuant to this section may be by adoption of an emergency regulation in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.(i) (1) A written agreement between GO-Biz and a taxpayer with respect to the credit authorized by this section shall not restrict, broaden, or otherwise alter the ability of the taxpayer to assign that credit or any portion thereof in accordance with Section 23663.(2) A written agreement between GO-Biz and a taxpayer with respect to the credit authorized by this section must comply with existing law on the date the agreement is executed.(j) (1) Upon the effective date of this section, the Department of Finance shall estimate the total dollar amount of credits that will be claimed under this section with respect to each fiscal year from the 201314 fiscal year to the 202425 fiscal year, inclusive.(2) The Franchise Tax Board shall annually provide to the Joint Legislative Budget Committee, by no later than March 1, a report of the total dollar amount of the credits claimed under this section with respect to the relevant fiscal year. The report shall compare the total dollar amount of credits claimed under this section with respect to that fiscal year with the departments estimate with respect to that same fiscal year. If the total dollar amount of credits claimed for the fiscal year is less than the estimate for that fiscal year, the report shall identify options for increasing annual claims of the credit so as to meet estimated amounts.(k) This section is repealed on December 1, 2025. | |
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| 56 | - | SECTION 1. Section | |
| 44 | + | SECTION 1. Section 23689 of the Revenue and Taxation Code is amended to read: | |
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| 58 | 46 | ### SECTION 1. | |
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| 48 | + | 23689. (a) (1) For each taxable year beginning on and after January 1, 2014, and before January 1, 2025, there shall be allowed as a credit against the tax, as defined in Section 23036, an amount as determined by the committee pursuant to paragraph (2) and approved pursuant to Section 18410.2.(2) The credit under this section shall be allocated by GO-Biz with respect to the 201314 fiscal year through and including the 201718 fiscal year. The amount of credit allocated to a taxpayer with respect to a fiscal year pursuant to this section shall be as set forth in a written agreement between GO-Biz and the taxpayer and shall be based on the following factors:(A) The number of jobs the taxpayer will create or retain in this state.(B) The compensation paid paid, or proposed to be paid paid, by the taxpayer to its employees, including wages and fringe benefits.(C) The amount of investment in this state by the taxpayer.(D) The extent of unemployment or poverty in the area according to the United States Census in which the taxpayers project or business is proposed or located.(E) The incentives available to the taxpayer in this state, including incentives from the state, local government, and other entities.(F) The incentives available to the taxpayer in other states.(G) The duration of the proposed project and the duration the taxpayer commits to remain in this state.(H) The overall economic impact in this state of the taxpayers project or business.(I) The strategic importance of the taxpayers project or business to the state, region, or locality.(J) The opportunity for future growth and expansion in this state by the taxpayers business.(K) The extent to which the anticipated benefit to the state exceeds the projected benefit to the taxpayer from the tax credit.(3) The written agreement entered into pursuant to paragraph (2) shall include:(A) Terms and conditions that include the taxable year or years for which the credit allocated shall be allowed, a minimum compensation level, and a minimum job retention period.(B) Provisions indicating whether the credit is to be allocated in full upon approval or in increments based on mutually agreed upon milestones when satisfactorily met by the taxpayer.(C) Provisions that allow the committee to recapture the credit, in whole or in part, if the taxpayer fails to fulfill the terms and conditions of the written agreement.(b) For purposes of this section:(1) Committee means the California Competes Tax Credit Committee established pursuant to Section 18410.2.(2) GO-Biz means the Governors Office of Business and Economic Development.(c) For purposes of this section, GO-Biz shall do the following:(1) Give priority to a taxpayer whose project or business is located or proposed to be located in an area of high unemployment or poverty.(2) Negotiate with a taxpayer the terms and conditions of proposed written agreements that provide the credit allowed pursuant to this section to a taxpayer.(3) Provide the negotiated written agreement to the committee for its approval pursuant to Section 18410.2.(4) Inform the Franchise Tax Board of the terms and conditions of the written agreement upon approval of the written agreement by the committee.(5) Inform the Franchise Tax Board of any recapture, in whole or in part, of a previously allocated credit upon approval of the recapture by the committee.(6) Post on its Internet Web site all of the following:(A) The name of each taxpayer allocated a credit pursuant to this section.(B) The estimated amount of the investment by each taxpayer.(C) The estimated number of jobs created or retained.(D) The amount of the credit allocated to the taxpayer.(E) The amount of the credit recaptured from the taxpayer, if applicable.(F) The primary location where the taxpayer has committed to increasing the net number of jobs or make investments. The primary location shall be listed by city or, in the case of unincorporated areas, by county.(G) Information that identifies each tax credit award that was given a priority for being located in a high unemployment or poverty area, pursuant to paragraph (1).(H) Information that identifies each tax credit award that is being counted toward the requirement of paragraph (3) of subdivision (g).(7) When determining whether to enter into a written agreement with a taxpayer pursuant to this section, GO-Biz may consider other factors, including, but not limited to, the following:(A) The financial solvency of the taxpayer and the taxpayers ability to finance its proposed expansion.(B) The taxpayers current and prior compliance with federal and state laws.(C) Current and prior litigation involving the taxpayer.(D) The reasonableness of the fee arrangement between the taxpayer and any third party providing any services related to the credit allowed pursuant to this section.(E) Any other factors GO-Biz deems necessary to ensure that the administration of the credit allowed pursuant to this section is a model of accountability and transparency and that the effective use of the limited amount of credit available is maximized.(d) For purposes of this section, the Franchise Tax Board shall do all of the following:(1) (A) Except as provided in subparagraph (B), review the books and records of all taxpayers allocated a credit pursuant to this section to ensure compliance with the terms and conditions of the written agreement between the taxpayer and GO-Biz.(B) In the case of a taxpayer that is a small business, as defined in Section 23626, review the books and records of the taxpayer allocated a credit pursuant to this section to ensure compliance with the terms and conditions of the written agreement between the taxpayer and GO-Biz when, in the sole discretion of the Franchise Tax Board, a review of those books and records is appropriate or necessary in the best interests of the state.(2) Notwithstanding Section 19542: 19542, both of the following:(A) Notify GO-Biz of a possible breach of the written agreement by a taxpayer and provide detailed information regarding the basis for that determination.(B) Provide information to GO-Biz with respect to whether a taxpayer is a small business, as defined in Section 23626.(e) In the case where the credit allowed under this section exceeds the tax, as defined in Section 23036, for a taxable year, the excess credit may be carried over to reduce the tax in the following taxable year, and succeeding five taxable years, if necessary, until the credit has been exhausted.(f) Any recapture, in whole or in part, of a credit approved by the committee pursuant to Section 18410.2 shall be treated as a mathematical error appearing on the return. Any amount of tax resulting from that recapture shall be assessed by the Franchise Tax Board in the same manner as provided by Section 19051. The amount of tax resulting from the recapture shall be added to the tax otherwise due by the taxpayer for the taxable year in which the committees recapture determination occurred.(g) (1) The aggregate amount of credit that may be allocated in any fiscal year pursuant to this section and Section 17059.2 shall be an amount equal to the sum of subparagraphs (A), (B), and (C), less the amount specified in subparagraphs (D) and (E):(A) Thirty million dollars ($30,000,000) for the 201314 fiscal year, one hundred fifty million dollars ($150,000,000) for the 201415 fiscal year, and two hundred million dollars ($200,000,000) for each fiscal year from 201516 to 201718, inclusive.(B) The unallocated credit amount, if any, from the preceding fiscal year.(C) The amount of any previously allocated credits that have been recaptured.(D) The amount estimated by the Director of Finance, in consultation with the Franchise Tax Board and the State Board of Equalization, to be necessary to limit the aggregation of the estimated amount of exemptions claimed pursuant to Section 6377.1 and of the amounts estimated to be claimed pursuant to this section and Sections 17053.73, 17059.2, and 23626 to no more than seven hundred fifty million dollars ($750,000,000) for either the current fiscal year or the next fiscal year.(i) The Director of Finance shall notify the Chairperson of the Joint Legislative Budget Committee of the estimated annual allocation authorized by this paragraph. Any allocation pursuant to these provisions shall be made no sooner than 30 days after written notification has been provided to the Chairperson of the Joint Legislative Budget Committee and the chairpersons of the committees of each house of the Legislature that consider appropriations, or not sooner than whatever lesser time the Chairperson of the Joint Legislative Budget Committee, or his or her designee, may determine.(ii) In no event shall the amount estimated in this subparagraph be less than zero dollars ($0).(E) (i) For the 201516 fiscal year and each fiscal year thereafter, the amount of credit estimated by the Director of Finance to be allowed to all qualified taxpayers for that fiscal year pursuant to subparagraph (A) or subparagraph (B) of paragraph (1) of subdivision (c) of Section 23636.(ii) If the amount available per fiscal year pursuant to this section and Section 17059.2 is less than the aggregate amount of credit estimated by the Director of Finance to be allowed to qualified taxpayers pursuant to subparagraph (A) or subparagraph (B) of paragraph (1) of subdivision (c) of Section 23636, the aggregate amount allowed pursuant to Section 23636 shall not be reduced and, in addition to the reduction required by clause (i), the aggregate amount of credit that may be allocated pursuant to this section and Section 17059.2 for the next fiscal year shall be reduced by the amount of that deficit.(iii) It is the intent of the Legislature that the reductions specified in this subparagraph of the aggregate amount of credit that may be allocated pursuant to this section and Section 17059.2 shall continue if the repeal dates of the credits allowed by this section and Section 17059.2 are removed or extended.(2) (A) In addition to the other amounts determined pursuant to paragraph (1), the Director of Finance may increase the aggregate amount of credit that may be allocated pursuant to this section and Section 17059.2 by up to twenty-five million dollars ($25,000,000) per fiscal year through the 201718 fiscal year. The amount of any increase made pursuant to this paragraph, when combined with any increase made pursuant to paragraph (2) of subdivision (g) of Section 17059.2, shall not exceed twenty-five million dollars ($25,000,000) per fiscal year through the 201718 fiscal year.(B) It is the intent of the Legislature that the Director of Finance increase the aggregate amount under subparagraph (A) in order to mitigate the reduction of the amount available due to the credit allowed to all qualified taxpayers pursuant to subparagraph (A) or (B) of paragraph (1) of subdivision (c) of Section 23636.(3) Each fiscal year, 25 percent of the aggregate amount of the credit that may be allocated pursuant to this section and Section 17059.2 shall be reserved for small business, as defined in Section 17053.73 or 23626.(4) Each fiscal year, no more than 20 percent of the aggregate amount of the credit that may be allocated pursuant to this section shall be allocated to any one taxpayer.(h) GO-Biz may prescribe rules and regulations as necessary to carry out the purposes of this section. Any rule or regulation prescribed pursuant to this section may be by adoption of an emergency regulation in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.(i) (1) A written agreement between GO-Biz and a taxpayer with respect to the credit authorized by this section shall not restrict, broaden, or otherwise alter the ability of the taxpayer to assign that credit or any portion thereof in accordance with Section 23663.(2) A written agreement between GO-Biz and a taxpayer with respect to the credit authorized by this section must comply with existing law on the date the agreement is executed.(j) (1) Upon the effective date of this section, the Department of Finance shall estimate the total dollar amount of credits that will be claimed under this section with respect to each fiscal year from the 201314 fiscal year to the 202425 fiscal year, inclusive.(2) The Franchise Tax Board shall annually provide to the Joint Legislative Budget Committee, by no later than March 1, a report of the total dollar amount of the credits claimed under this section with respect to the relevant fiscal year. The report shall compare the total dollar amount of credits claimed under this section with respect to that fiscal year with the departments estimate with respect to that same fiscal year. If the total dollar amount of credits claimed for the fiscal year is less than the estimate for that fiscal year, the report shall identify options for increasing annual claims of the credit so as to meet estimated amounts.(k) This section is repealed on December 1, 2025. | |
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| 50 | + | 23689. (a) (1) For each taxable year beginning on and after January 1, 2014, and before January 1, 2025, there shall be allowed as a credit against the tax, as defined in Section 23036, an amount as determined by the committee pursuant to paragraph (2) and approved pursuant to Section 18410.2.(2) The credit under this section shall be allocated by GO-Biz with respect to the 201314 fiscal year through and including the 201718 fiscal year. The amount of credit allocated to a taxpayer with respect to a fiscal year pursuant to this section shall be as set forth in a written agreement between GO-Biz and the taxpayer and shall be based on the following factors:(A) The number of jobs the taxpayer will create or retain in this state.(B) The compensation paid paid, or proposed to be paid paid, by the taxpayer to its employees, including wages and fringe benefits.(C) The amount of investment in this state by the taxpayer.(D) The extent of unemployment or poverty in the area according to the United States Census in which the taxpayers project or business is proposed or located.(E) The incentives available to the taxpayer in this state, including incentives from the state, local government, and other entities.(F) The incentives available to the taxpayer in other states.(G) The duration of the proposed project and the duration the taxpayer commits to remain in this state.(H) The overall economic impact in this state of the taxpayers project or business.(I) The strategic importance of the taxpayers project or business to the state, region, or locality.(J) The opportunity for future growth and expansion in this state by the taxpayers business.(K) The extent to which the anticipated benefit to the state exceeds the projected benefit to the taxpayer from the tax credit.(3) The written agreement entered into pursuant to paragraph (2) shall include:(A) Terms and conditions that include the taxable year or years for which the credit allocated shall be allowed, a minimum compensation level, and a minimum job retention period.(B) Provisions indicating whether the credit is to be allocated in full upon approval or in increments based on mutually agreed upon milestones when satisfactorily met by the taxpayer.(C) Provisions that allow the committee to recapture the credit, in whole or in part, if the taxpayer fails to fulfill the terms and conditions of the written agreement.(b) For purposes of this section:(1) Committee means the California Competes Tax Credit Committee established pursuant to Section 18410.2.(2) GO-Biz means the Governors Office of Business and Economic Development.(c) For purposes of this section, GO-Biz shall do the following:(1) Give priority to a taxpayer whose project or business is located or proposed to be located in an area of high unemployment or poverty.(2) Negotiate with a taxpayer the terms and conditions of proposed written agreements that provide the credit allowed pursuant to this section to a taxpayer.(3) Provide the negotiated written agreement to the committee for its approval pursuant to Section 18410.2.(4) Inform the Franchise Tax Board of the terms and conditions of the written agreement upon approval of the written agreement by the committee.(5) Inform the Franchise Tax Board of any recapture, in whole or in part, of a previously allocated credit upon approval of the recapture by the committee.(6) Post on its Internet Web site all of the following:(A) The name of each taxpayer allocated a credit pursuant to this section.(B) The estimated amount of the investment by each taxpayer.(C) The estimated number of jobs created or retained.(D) The amount of the credit allocated to the taxpayer.(E) The amount of the credit recaptured from the taxpayer, if applicable.(F) The primary location where the taxpayer has committed to increasing the net number of jobs or make investments. The primary location shall be listed by city or, in the case of unincorporated areas, by county.(G) Information that identifies each tax credit award that was given a priority for being located in a high unemployment or poverty area, pursuant to paragraph (1).(H) Information that identifies each tax credit award that is being counted toward the requirement of paragraph (3) of subdivision (g).(7) When determining whether to enter into a written agreement with a taxpayer pursuant to this section, GO-Biz may consider other factors, including, but not limited to, the following:(A) The financial solvency of the taxpayer and the taxpayers ability to finance its proposed expansion.(B) The taxpayers current and prior compliance with federal and state laws.(C) Current and prior litigation involving the taxpayer.(D) The reasonableness of the fee arrangement between the taxpayer and any third party providing any services related to the credit allowed pursuant to this section.(E) Any other factors GO-Biz deems necessary to ensure that the administration of the credit allowed pursuant to this section is a model of accountability and transparency and that the effective use of the limited amount of credit available is maximized.(d) For purposes of this section, the Franchise Tax Board shall do all of the following:(1) (A) Except as provided in subparagraph (B), review the books and records of all taxpayers allocated a credit pursuant to this section to ensure compliance with the terms and conditions of the written agreement between the taxpayer and GO-Biz.(B) In the case of a taxpayer that is a small business, as defined in Section 23626, review the books and records of the taxpayer allocated a credit pursuant to this section to ensure compliance with the terms and conditions of the written agreement between the taxpayer and GO-Biz when, in the sole discretion of the Franchise Tax Board, a review of those books and records is appropriate or necessary in the best interests of the state.(2) Notwithstanding Section 19542: 19542, both of the following:(A) Notify GO-Biz of a possible breach of the written agreement by a taxpayer and provide detailed information regarding the basis for that determination.(B) Provide information to GO-Biz with respect to whether a taxpayer is a small business, as defined in Section 23626.(e) In the case where the credit allowed under this section exceeds the tax, as defined in Section 23036, for a taxable year, the excess credit may be carried over to reduce the tax in the following taxable year, and succeeding five taxable years, if necessary, until the credit has been exhausted.(f) Any recapture, in whole or in part, of a credit approved by the committee pursuant to Section 18410.2 shall be treated as a mathematical error appearing on the return. Any amount of tax resulting from that recapture shall be assessed by the Franchise Tax Board in the same manner as provided by Section 19051. The amount of tax resulting from the recapture shall be added to the tax otherwise due by the taxpayer for the taxable year in which the committees recapture determination occurred.(g) (1) The aggregate amount of credit that may be allocated in any fiscal year pursuant to this section and Section 17059.2 shall be an amount equal to the sum of subparagraphs (A), (B), and (C), less the amount specified in subparagraphs (D) and (E):(A) Thirty million dollars ($30,000,000) for the 201314 fiscal year, one hundred fifty million dollars ($150,000,000) for the 201415 fiscal year, and two hundred million dollars ($200,000,000) for each fiscal year from 201516 to 201718, inclusive.(B) The unallocated credit amount, if any, from the preceding fiscal year.(C) The amount of any previously allocated credits that have been recaptured.(D) The amount estimated by the Director of Finance, in consultation with the Franchise Tax Board and the State Board of Equalization, to be necessary to limit the aggregation of the estimated amount of exemptions claimed pursuant to Section 6377.1 and of the amounts estimated to be claimed pursuant to this section and Sections 17053.73, 17059.2, and 23626 to no more than seven hundred fifty million dollars ($750,000,000) for either the current fiscal year or the next fiscal year.(i) The Director of Finance shall notify the Chairperson of the Joint Legislative Budget Committee of the estimated annual allocation authorized by this paragraph. Any allocation pursuant to these provisions shall be made no sooner than 30 days after written notification has been provided to the Chairperson of the Joint Legislative Budget Committee and the chairpersons of the committees of each house of the Legislature that consider appropriations, or not sooner than whatever lesser time the Chairperson of the Joint Legislative Budget Committee, or his or her designee, may determine.(ii) In no event shall the amount estimated in this subparagraph be less than zero dollars ($0).(E) (i) For the 201516 fiscal year and each fiscal year thereafter, the amount of credit estimated by the Director of Finance to be allowed to all qualified taxpayers for that fiscal year pursuant to subparagraph (A) or subparagraph (B) of paragraph (1) of subdivision (c) of Section 23636.(ii) If the amount available per fiscal year pursuant to this section and Section 17059.2 is less than the aggregate amount of credit estimated by the Director of Finance to be allowed to qualified taxpayers pursuant to subparagraph (A) or subparagraph (B) of paragraph (1) of subdivision (c) of Section 23636, the aggregate amount allowed pursuant to Section 23636 shall not be reduced and, in addition to the reduction required by clause (i), the aggregate amount of credit that may be allocated pursuant to this section and Section 17059.2 for the next fiscal year shall be reduced by the amount of that deficit.(iii) It is the intent of the Legislature that the reductions specified in this subparagraph of the aggregate amount of credit that may be allocated pursuant to this section and Section 17059.2 shall continue if the repeal dates of the credits allowed by this section and Section 17059.2 are removed or extended.(2) (A) In addition to the other amounts determined pursuant to paragraph (1), the Director of Finance may increase the aggregate amount of credit that may be allocated pursuant to this section and Section 17059.2 by up to twenty-five million dollars ($25,000,000) per fiscal year through the 201718 fiscal year. The amount of any increase made pursuant to this paragraph, when combined with any increase made pursuant to paragraph (2) of subdivision (g) of Section 17059.2, shall not exceed twenty-five million dollars ($25,000,000) per fiscal year through the 201718 fiscal year.(B) It is the intent of the Legislature that the Director of Finance increase the aggregate amount under subparagraph (A) in order to mitigate the reduction of the amount available due to the credit allowed to all qualified taxpayers pursuant to subparagraph (A) or (B) of paragraph (1) of subdivision (c) of Section 23636.(3) Each fiscal year, 25 percent of the aggregate amount of the credit that may be allocated pursuant to this section and Section 17059.2 shall be reserved for small business, as defined in Section 17053.73 or 23626.(4) Each fiscal year, no more than 20 percent of the aggregate amount of the credit that may be allocated pursuant to this section shall be allocated to any one taxpayer.(h) GO-Biz may prescribe rules and regulations as necessary to carry out the purposes of this section. Any rule or regulation prescribed pursuant to this section may be by adoption of an emergency regulation in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.(i) (1) A written agreement between GO-Biz and a taxpayer with respect to the credit authorized by this section shall not restrict, broaden, or otherwise alter the ability of the taxpayer to assign that credit or any portion thereof in accordance with Section 23663.(2) A written agreement between GO-Biz and a taxpayer with respect to the credit authorized by this section must comply with existing law on the date the agreement is executed.(j) (1) Upon the effective date of this section, the Department of Finance shall estimate the total dollar amount of credits that will be claimed under this section with respect to each fiscal year from the 201314 fiscal year to the 202425 fiscal year, inclusive.(2) The Franchise Tax Board shall annually provide to the Joint Legislative Budget Committee, by no later than March 1, a report of the total dollar amount of the credits claimed under this section with respect to the relevant fiscal year. The report shall compare the total dollar amount of credits claimed under this section with respect to that fiscal year with the departments estimate with respect to that same fiscal year. If the total dollar amount of credits claimed for the fiscal year is less than the estimate for that fiscal year, the report shall identify options for increasing annual claims of the credit so as to meet estimated amounts.(k) This section is repealed on December 1, 2025. | |
| 63 | 51 | ||
| 64 | - | ||
| 52 | + | 23689. (a) (1) For each taxable year beginning on and after January 1, 2014, and before January 1, 2025, there shall be allowed as a credit against the tax, as defined in Section 23036, an amount as determined by the committee pursuant to paragraph (2) and approved pursuant to Section 18410.2.(2) The credit under this section shall be allocated by GO-Biz with respect to the 201314 fiscal year through and including the 201718 fiscal year. The amount of credit allocated to a taxpayer with respect to a fiscal year pursuant to this section shall be as set forth in a written agreement between GO-Biz and the taxpayer and shall be based on the following factors:(A) The number of jobs the taxpayer will create or retain in this state.(B) The compensation paid paid, or proposed to be paid paid, by the taxpayer to its employees, including wages and fringe benefits.(C) The amount of investment in this state by the taxpayer.(D) The extent of unemployment or poverty in the area according to the United States Census in which the taxpayers project or business is proposed or located.(E) The incentives available to the taxpayer in this state, including incentives from the state, local government, and other entities.(F) The incentives available to the taxpayer in other states.(G) The duration of the proposed project and the duration the taxpayer commits to remain in this state.(H) The overall economic impact in this state of the taxpayers project or business.(I) The strategic importance of the taxpayers project or business to the state, region, or locality.(J) The opportunity for future growth and expansion in this state by the taxpayers business.(K) The extent to which the anticipated benefit to the state exceeds the projected benefit to the taxpayer from the tax credit.(3) The written agreement entered into pursuant to paragraph (2) shall include:(A) Terms and conditions that include the taxable year or years for which the credit allocated shall be allowed, a minimum compensation level, and a minimum job retention period.(B) Provisions indicating whether the credit is to be allocated in full upon approval or in increments based on mutually agreed upon milestones when satisfactorily met by the taxpayer.(C) Provisions that allow the committee to recapture the credit, in whole or in part, if the taxpayer fails to fulfill the terms and conditions of the written agreement.(b) For purposes of this section:(1) Committee means the California Competes Tax Credit Committee established pursuant to Section 18410.2.(2) GO-Biz means the Governors Office of Business and Economic Development.(c) For purposes of this section, GO-Biz shall do the following:(1) Give priority to a taxpayer whose project or business is located or proposed to be located in an area of high unemployment or poverty.(2) Negotiate with a taxpayer the terms and conditions of proposed written agreements that provide the credit allowed pursuant to this section to a taxpayer.(3) Provide the negotiated written agreement to the committee for its approval pursuant to Section 18410.2.(4) Inform the Franchise Tax Board of the terms and conditions of the written agreement upon approval of the written agreement by the committee.(5) Inform the Franchise Tax Board of any recapture, in whole or in part, of a previously allocated credit upon approval of the recapture by the committee.(6) Post on its Internet Web site all of the following:(A) The name of each taxpayer allocated a credit pursuant to this section.(B) The estimated amount of the investment by each taxpayer.(C) The estimated number of jobs created or retained.(D) The amount of the credit allocated to the taxpayer.(E) The amount of the credit recaptured from the taxpayer, if applicable.(F) The primary location where the taxpayer has committed to increasing the net number of jobs or make investments. The primary location shall be listed by city or, in the case of unincorporated areas, by county.(G) Information that identifies each tax credit award that was given a priority for being located in a high unemployment or poverty area, pursuant to paragraph (1).(H) Information that identifies each tax credit award that is being counted toward the requirement of paragraph (3) of subdivision (g).(7) When determining whether to enter into a written agreement with a taxpayer pursuant to this section, GO-Biz may consider other factors, including, but not limited to, the following:(A) The financial solvency of the taxpayer and the taxpayers ability to finance its proposed expansion.(B) The taxpayers current and prior compliance with federal and state laws.(C) Current and prior litigation involving the taxpayer.(D) The reasonableness of the fee arrangement between the taxpayer and any third party providing any services related to the credit allowed pursuant to this section.(E) Any other factors GO-Biz deems necessary to ensure that the administration of the credit allowed pursuant to this section is a model of accountability and transparency and that the effective use of the limited amount of credit available is maximized.(d) For purposes of this section, the Franchise Tax Board shall do all of the following:(1) (A) Except as provided in subparagraph (B), review the books and records of all taxpayers allocated a credit pursuant to this section to ensure compliance with the terms and conditions of the written agreement between the taxpayer and GO-Biz.(B) In the case of a taxpayer that is a small business, as defined in Section 23626, review the books and records of the taxpayer allocated a credit pursuant to this section to ensure compliance with the terms and conditions of the written agreement between the taxpayer and GO-Biz when, in the sole discretion of the Franchise Tax Board, a review of those books and records is appropriate or necessary in the best interests of the state.(2) Notwithstanding Section 19542: 19542, both of the following:(A) Notify GO-Biz of a possible breach of the written agreement by a taxpayer and provide detailed information regarding the basis for that determination.(B) Provide information to GO-Biz with respect to whether a taxpayer is a small business, as defined in Section 23626.(e) In the case where the credit allowed under this section exceeds the tax, as defined in Section 23036, for a taxable year, the excess credit may be carried over to reduce the tax in the following taxable year, and succeeding five taxable years, if necessary, until the credit has been exhausted.(f) Any recapture, in whole or in part, of a credit approved by the committee pursuant to Section 18410.2 shall be treated as a mathematical error appearing on the return. Any amount of tax resulting from that recapture shall be assessed by the Franchise Tax Board in the same manner as provided by Section 19051. The amount of tax resulting from the recapture shall be added to the tax otherwise due by the taxpayer for the taxable year in which the committees recapture determination occurred.(g) (1) The aggregate amount of credit that may be allocated in any fiscal year pursuant to this section and Section 17059.2 shall be an amount equal to the sum of subparagraphs (A), (B), and (C), less the amount specified in subparagraphs (D) and (E):(A) Thirty million dollars ($30,000,000) for the 201314 fiscal year, one hundred fifty million dollars ($150,000,000) for the 201415 fiscal year, and two hundred million dollars ($200,000,000) for each fiscal year from 201516 to 201718, inclusive.(B) The unallocated credit amount, if any, from the preceding fiscal year.(C) The amount of any previously allocated credits that have been recaptured.(D) The amount estimated by the Director of Finance, in consultation with the Franchise Tax Board and the State Board of Equalization, to be necessary to limit the aggregation of the estimated amount of exemptions claimed pursuant to Section 6377.1 and of the amounts estimated to be claimed pursuant to this section and Sections 17053.73, 17059.2, and 23626 to no more than seven hundred fifty million dollars ($750,000,000) for either the current fiscal year or the next fiscal year.(i) The Director of Finance shall notify the Chairperson of the Joint Legislative Budget Committee of the estimated annual allocation authorized by this paragraph. Any allocation pursuant to these provisions shall be made no sooner than 30 days after written notification has been provided to the Chairperson of the Joint Legislative Budget Committee and the chairpersons of the committees of each house of the Legislature that consider appropriations, or not sooner than whatever lesser time the Chairperson of the Joint Legislative Budget Committee, or his or her designee, may determine.(ii) In no event shall the amount estimated in this subparagraph be less than zero dollars ($0).(E) (i) For the 201516 fiscal year and each fiscal year thereafter, the amount of credit estimated by the Director of Finance to be allowed to all qualified taxpayers for that fiscal year pursuant to subparagraph (A) or subparagraph (B) of paragraph (1) of subdivision (c) of Section 23636.(ii) If the amount available per fiscal year pursuant to this section and Section 17059.2 is less than the aggregate amount of credit estimated by the Director of Finance to be allowed to qualified taxpayers pursuant to subparagraph (A) or subparagraph (B) of paragraph (1) of subdivision (c) of Section 23636, the aggregate amount allowed pursuant to Section 23636 shall not be reduced and, in addition to the reduction required by clause (i), the aggregate amount of credit that may be allocated pursuant to this section and Section 17059.2 for the next fiscal year shall be reduced by the amount of that deficit.(iii) It is the intent of the Legislature that the reductions specified in this subparagraph of the aggregate amount of credit that may be allocated pursuant to this section and Section 17059.2 shall continue if the repeal dates of the credits allowed by this section and Section 17059.2 are removed or extended.(2) (A) In addition to the other amounts determined pursuant to paragraph (1), the Director of Finance may increase the aggregate amount of credit that may be allocated pursuant to this section and Section 17059.2 by up to twenty-five million dollars ($25,000,000) per fiscal year through the 201718 fiscal year. The amount of any increase made pursuant to this paragraph, when combined with any increase made pursuant to paragraph (2) of subdivision (g) of Section 17059.2, shall not exceed twenty-five million dollars ($25,000,000) per fiscal year through the 201718 fiscal year.(B) It is the intent of the Legislature that the Director of Finance increase the aggregate amount under subparagraph (A) in order to mitigate the reduction of the amount available due to the credit allowed to all qualified taxpayers pursuant to subparagraph (A) or (B) of paragraph (1) of subdivision (c) of Section 23636.(3) Each fiscal year, 25 percent of the aggregate amount of the credit that may be allocated pursuant to this section and Section 17059.2 shall be reserved for small business, as defined in Section 17053.73 or 23626.(4) Each fiscal year, no more than 20 percent of the aggregate amount of the credit that may be allocated pursuant to this section shall be allocated to any one taxpayer.(h) GO-Biz may prescribe rules and regulations as necessary to carry out the purposes of this section. Any rule or regulation prescribed pursuant to this section may be by adoption of an emergency regulation in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.(i) (1) A written agreement between GO-Biz and a taxpayer with respect to the credit authorized by this section shall not restrict, broaden, or otherwise alter the ability of the taxpayer to assign that credit or any portion thereof in accordance with Section 23663.(2) A written agreement between GO-Biz and a taxpayer with respect to the credit authorized by this section must comply with existing law on the date the agreement is executed.(j) (1) Upon the effective date of this section, the Department of Finance shall estimate the total dollar amount of credits that will be claimed under this section with respect to each fiscal year from the 201314 fiscal year to the 202425 fiscal year, inclusive.(2) The Franchise Tax Board shall annually provide to the Joint Legislative Budget Committee, by no later than March 1, a report of the total dollar amount of the credits claimed under this section with respect to the relevant fiscal year. The report shall compare the total dollar amount of credits claimed under this section with respect to that fiscal year with the departments estimate with respect to that same fiscal year. If the total dollar amount of credits claimed for the fiscal year is less than the estimate for that fiscal year, the report shall identify options for increasing annual claims of the credit so as to meet estimated amounts.(k) This section is repealed on December 1, 2025. | |
| 65 | 53 | ||
| 66 | 54 | ||
| 67 | 55 | ||
| 68 | - | 14206. Consistent with the requirements of the Workforce Innovation and Opportunity Act, the local board shall do all of the following: | |
| 69 | - | ||
| 70 | - | (a) In partnership with the chief elected official for the local area involved, develop and submit a local plan to the Governor that meets the requirements of the Workforce Innovation and Opportunity Act. If the local area is part of a planning region that includes other local areas, the local board shall collaborate with the other local boards and chief elected officials from such other local areas in the preparation and submission of a regional plan as described in the Workforce and Innovation and Opportunity Act. | |
| 71 | - | ||
| 72 | - | (b) In order to assist in the development and implementation of the local plan, the local board shall do all of the following: | |
| 73 | - | ||
| 74 | - | (1) Carry out analyses of the economic conditions in the region, the needed knowledge and skills for the region, the workforce in the region, and workforce development activities, including education and training, in the region described in Section 3123(b)(1)(D) of Title 29 of the United States Code, and regularly update such information. | |
| 75 | - | ||
| 76 | - | (2) Assist the Governor in developing the statewide workforce and labor market information system described in Section 15(e) of the Wagner-Peyser Act (29 U.S.C. Sec. 49l2(e)), specifically in the collection, analysis, and utilization of workforce and labor market information for the region. | |
| 77 | - | ||
| 78 | - | (3) Conduct such other research, data collection, and analysis related to the workforce needs of the regional economy as the board, after receiving input from a wide array of stakeholders, determines to be necessary to carry out its functions. | |
| 79 | - | ||
| 80 | - | (c) Convene local workforce development system stakeholders to assist in the development of the local plan under Section 3123 of Title 29 of the United States Code and in identifying nonfederal expertise and resources to leverage support for workforce development activities. The local board, including standing committees, may engage such stakeholders in carrying out the functions described in this subdivision. | |
| 81 | - | ||
| 82 | - | (d) Lead efforts to engage with a diverse range of employers and with entities in the region involved to do all of the following: | |
| 83 | - | ||
| 84 | - | (1) Promote business representation, particularly representatives with optimal policymaking or hiring authority from employers whose employment opportunities reflect existing and emerging employment opportunities in the region, on the local board. | |
| 85 | - | ||
| 86 | - | (2) Develop effective linkages, including the use of intermediaries, with employers in the region to support employer utilization of the local workforce development system and to support local workforce investment activities. | |
| 87 | - | ||
| 88 | - | (3) Ensure that workforce investment activities meet the needs of employers and support economic growth in the region, by enhancing communication, coordination, and collaboration among employers, economic development entities, and service providers. | |
| 89 | - | ||
| 90 | - | (4) Develop and implement proven or promising strategies for meeting the employment and skill needs of workers and employers, like the establishment of industry and sector partnerships, that provide the skilled workforce needed by employers in the region, and that expand employment and career advancement opportunities for workforce development system participants in in-demand industry sectors or occupations. | |
| 91 | - | ||
| 92 | - | (5) Provide support to the efforts of employers to align with public contracting needs in a manner that will support local workforce opportunities. | |
| 93 | - | ||
| 94 | - | (e) With representatives of secondary and postsecondary education programs, lead efforts in the local area to develop and implement career pathways within the local area by aligning the employment, training, education, and supportive services that are needed by adults and youth, particularly individuals with barriers to employment. | |
| 95 | - | ||
| 96 | - | (f) Lead efforts in the local area to accomplish both of the following: | |
| 97 | - | ||
| 98 | - | (1) Identify and promote proven and promising strategies and initiatives for meeting the needs of employers, and workers and jobseekers, including individuals with barriers to employment, in the local workforce development system, including providing physical and programmatic accessibility, in accordance with Section 3248 of Title 29 of the United States Code, if applicable, and applicable provisions of the Americans with Disabilities Act of 1990 (42 U.S.C. Sec. 12101 et seq.), to the one-stop delivery system. | |
| 99 | - | ||
| 100 | - | (2) Identify and disseminate information on proven and promising practices carried out in other local areas for meeting these needs. | |
| 101 | - | ||
| 102 | - | (g) Develop strategies for using technology to maximize the accessibility and effectiveness of the local workforce development system for employers, and workers and jobseekers, by doing all of the following: | |
| 103 | - | ||
| 104 | - | (1) Facilitating connections among the intake and case management information systems of the one-stop partner programs to support a comprehensive workforce development system in the local area. | |
| 105 | - | ||
| 106 | - | (2) Facilitating access to services provided through the one-stop delivery system involved, including facilitating the access in remote areas. | |
| 107 | - | ||
| 108 | - | (3) Identifying strategies for better meeting the needs of individuals with barriers to employment, including strategies that augment traditional service delivery, and increase access to services and programs of the one-stop delivery system, such as improving digital literacy skills. | |
| 109 | - | ||
| 110 | - | (4) Leveraging resources and capacity within the local workforce development system, including resources and capacity for services for individuals with barriers to employment. | |
| 111 | - | ||
| 112 | - | (h) In partnership with the chief elected official for the local area, shall conduct oversight for local youth workforce investment activities as required under the federal Workforce Innovation and Opportunity Act, ensure the appropriate use and management of the funds as required under the Workforce Innovation and Opportunity Act, and, for workforce development activities, ensure the appropriate use, management, and investment of funds to maximize performance outcomes as required under the federal Workforce Innovation and Opportunity Act. | |
| 113 | - | ||
| 114 | - | (i) Negotiate and reach agreement on local performance accountability measures, as described in Section 3141(c) of Title 29 of the United States Code, with the chief elected official and the Governor. | |
| 115 | - | ||
| 116 | - | (j) Select and provide access to system operators, service providers, trainers, and educators, in a manner consistent with the requirements of the Workforce Innovation and Opportunity Act and applicable state laws, including all of the following: | |
| 117 | - | ||
| 118 | - | (1) Consistent with Section 3151(d) of Title 29 of the United States Code, and with the agreement of the chief elected official for the local area, designate or certify one-stop operators as described in Section 3151(d)(2)(A) of Title 29 of the United States Code and terminate for cause the eligibility of these operators. | |
| 119 | - | ||
| 120 | - | (2) Consistent with Section 3153 of Title 29 of the United States Code, identify eligible providers of youth workforce investment activities in the local area by awarding grants or contracts on a competitive basis, except as provided in Section 3153(b) of Title 29 of the United States Code, based on the recommendations of the youth standing committee, if such a committee is established for the local area and terminate for cause the eligibility of these providers. | |
| 121 | - | ||
| 122 | - | (3) Consistent with Section 3152 of Title 29 of the United States Code and paragraph (4) of subdivision (d) of Section 14020, identify eligible providers of training services in the local area. | |
| 123 | - | ||
| 124 | - | (4) If the one-stop operator does not provide career services described in Section 3174(c)(2) of Title 29 of the United States Code in a local area, identify eligible providers of those career services in the local area by awarding contracts. | |
| 125 | - | ||
| 126 | - | (5) Consistent with Section 3152 of Title 29 of the United States Code and paragraphs (2) and (3) of Section 3174(c) of Title 29 of the United States Code, work with the state to ensure there are sufficient numbers and types of providers of career services and training services, including eligible providers with expertise in assisting individuals with disabilities and eligible providers with expertise in assisting adults in need of adult education and literacy activities, serving the local area and providing the services involved in a manner that maximizes consumer choice, as well as providing opportunities that lead to competitive integrated employment for individuals with disabilities. | |
| 127 | - | ||
| 128 | - | (k) Consistent with the requirements of the Workforce Innovation and Opportunity Act, coordinate activities with education and training providers in the local area, including providers of workforce development activities, providers of adult education and literacy activities under Title II of the Workforce Innovation and Opportunity Act, providers of career and technical education, as defined in Section 2302 of Title 20 of the United States Code, and local agencies administering plans under Title I of the Rehabilitation Act of 1973 (29 U.S.C. Sec. 720 et seq.), other than Section 112 or Part C of that Title (29 U.S.C. Sec. 732, 741). | |
| 129 | - | ||
| 130 | - | SEC. 2. If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code. | |
| 131 | - | ||
| 132 | - | SEC. 2. If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code. | |
| 133 | - | ||
| 134 | - | SEC. 2. If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code. | |
| 135 | - | ||
| 136 | - | ### SEC. 2. | |
| 137 | - | ||
| 138 | - | ||
| 139 | - | ||
| 140 | - | ||
| 141 | - | ||
| 142 | - | (a)(1)For each taxable year beginning on and after January 1, 2014, and before January 1, 2025, there shall be allowed as a credit against the tax, as defined in Section 23036, an amount as determined by the committee pursuant to paragraph (2) and approved pursuant to Section 18410.2. | |
| 143 | - | ||
| 144 | - | ||
| 56 | + | 23689. (a) (1) For each taxable year beginning on and after January 1, 2014, and before January 1, 2025, there shall be allowed as a credit against the tax, as defined in Section 23036, an amount as determined by the committee pursuant to paragraph (2) and approved pursuant to Section 18410.2. | |
| 145 | 57 | ||
| 146 | 58 | (2) The credit under this section shall be allocated by GO-Biz with respect to the 201314 fiscal year through and including the 201718 fiscal year. The amount of credit allocated to a taxpayer with respect to a fiscal year pursuant to this section shall be as set forth in a written agreement between GO-Biz and the taxpayer and shall be based on the following factors: | |
| 147 | 59 | ||
| 148 | - | ||
| 149 | - | ||
| 150 | 60 | (A) The number of jobs the taxpayer will create or retain in this state. | |
| 151 | 61 | ||
| 152 | - | ||
| 153 | - | ||
| 154 | - | (B)The compensation paid, or proposed to be paid, by the taxpayer to its employees, including wages and fringe benefits. | |
| 155 | - | ||
| 156 | - | ||
| 62 | + | (B) The compensation paid paid, or proposed to be paid paid, by the taxpayer to its employees, including wages and fringe benefits. | |
| 157 | 63 | ||
| 158 | 64 | (C) The amount of investment in this state by the taxpayer. | |
| 159 | 65 | ||
| 160 | - | ||
| 161 | - | ||
| 162 | 66 | (D) The extent of unemployment or poverty in the area according to the United States Census in which the taxpayers project or business is proposed or located. | |
| 163 | - | ||
| 164 | - | ||
| 165 | 67 | ||
| 166 | 68 | (E) The incentives available to the taxpayer in this state, including incentives from the state, local government, and other entities. | |
| 167 | 69 | ||
| 168 | - | ||
| 169 | - | ||
| 170 | 70 | (F) The incentives available to the taxpayer in other states. | |
| 171 | - | ||
| 172 | - | ||
| 173 | 71 | ||
| 174 | 72 | (G) The duration of the proposed project and the duration the taxpayer commits to remain in this state. | |
| 175 | 73 | ||
| 176 | - | ||
| 177 | - | ||
| 178 | 74 | (H) The overall economic impact in this state of the taxpayers project or business. | |
| 179 | - | ||
| 180 | - | ||
| 181 | 75 | ||
| 182 | 76 | (I) The strategic importance of the taxpayers project or business to the state, region, or locality. | |
| 183 | 77 | ||
| 184 | - | ||
| 185 | - | ||
| 186 | 78 | (J) The opportunity for future growth and expansion in this state by the taxpayers business. | |
| 187 | - | ||
| 188 | - | ||
| 189 | 79 | ||
| 190 | 80 | (K) The extent to which the anticipated benefit to the state exceeds the projected benefit to the taxpayer from the tax credit. | |
| 191 | 81 | ||
| 192 | - | ||
| 193 | - | ||
| 194 | 82 | (3) The written agreement entered into pursuant to paragraph (2) shall include: | |
| 195 | - | ||
| 196 | - | ||
| 197 | 83 | ||
| 198 | 84 | (A) Terms and conditions that include the taxable year or years for which the credit allocated shall be allowed, a minimum compensation level, and a minimum job retention period. | |
| 199 | 85 | ||
| 200 | - | ||
| 201 | - | ||
| 202 | 86 | (B) Provisions indicating whether the credit is to be allocated in full upon approval or in increments based on mutually agreed upon milestones when satisfactorily met by the taxpayer. | |
| 203 | - | ||
| 204 | - | ||
| 205 | 87 | ||
| 206 | 88 | (C) Provisions that allow the committee to recapture the credit, in whole or in part, if the taxpayer fails to fulfill the terms and conditions of the written agreement. | |
| 207 | 89 | ||
| 208 | - | ||
| 209 | - | ||
| 210 | 90 | (b) For purposes of this section: | |
| 211 | - | ||
| 212 | - | ||
| 213 | 91 | ||
| 214 | 92 | (1) Committee means the California Competes Tax Credit Committee established pursuant to Section 18410.2. | |
| 215 | 93 | ||
| 216 | - | ||
| 217 | - | ||
| 218 | 94 | (2) GO-Biz means the Governors Office of Business and Economic Development. | |
| 219 | - | ||
| 220 | - | ||
| 221 | 95 | ||
| 222 | 96 | (c) For purposes of this section, GO-Biz shall do the following: | |
| 223 | 97 | ||
| 224 | - | ||
| 225 | - | ||
| 226 | 98 | (1) Give priority to a taxpayer whose project or business is located or proposed to be located in an area of high unemployment or poverty. | |
| 227 | - | ||
| 228 | - | ||
| 229 | 99 | ||
| 230 | 100 | (2) Negotiate with a taxpayer the terms and conditions of proposed written agreements that provide the credit allowed pursuant to this section to a taxpayer. | |
| 231 | 101 | ||
| 232 | - | ||
| 233 | - | ||
| 234 | 102 | (3) Provide the negotiated written agreement to the committee for its approval pursuant to Section 18410.2. | |
| 235 | - | ||
| 236 | - | ||
| 237 | 103 | ||
| 238 | 104 | (4) Inform the Franchise Tax Board of the terms and conditions of the written agreement upon approval of the written agreement by the committee. | |
| 239 | 105 | ||
| 240 | - | ||
| 241 | - | ||
| 242 | 106 | (5) Inform the Franchise Tax Board of any recapture, in whole or in part, of a previously allocated credit upon approval of the recapture by the committee. | |
| 243 | - | ||
| 244 | - | ||
| 245 | 107 | ||
| 246 | 108 | (6) Post on its Internet Web site all of the following: | |
| 247 | 109 | ||
| 248 | - | ||
| 249 | - | ||
| 250 | 110 | (A) The name of each taxpayer allocated a credit pursuant to this section. | |
| 251 | - | ||
| 252 | - | ||
| 253 | 111 | ||
| 254 | 112 | (B) The estimated amount of the investment by each taxpayer. | |
| 255 | 113 | ||
| 256 | - | ||
| 257 | - | ||
| 258 | 114 | (C) The estimated number of jobs created or retained. | |
| 259 | - | ||
| 260 | - | ||
| 261 | 115 | ||
| 262 | 116 | (D) The amount of the credit allocated to the taxpayer. | |
| 263 | 117 | ||
| 264 | - | ||
| 265 | - | ||
| 266 | 118 | (E) The amount of the credit recaptured from the taxpayer, if applicable. | |
| 267 | - | ||
| 268 | - | ||
| 269 | 119 | ||
| 270 | 120 | (F) The primary location where the taxpayer has committed to increasing the net number of jobs or make investments. The primary location shall be listed by city or, in the case of unincorporated areas, by county. | |
| 271 | 121 | ||
| 272 | - | ||
| 273 | - | ||
| 274 | 122 | (G) Information that identifies each tax credit award that was given a priority for being located in a high unemployment or poverty area, pursuant to paragraph (1). | |
| 275 | - | ||
| 276 | - | ||
| 277 | 123 | ||
| 278 | 124 | (H) Information that identifies each tax credit award that is being counted toward the requirement of paragraph (3) of subdivision (g). | |
| 279 | 125 | ||
| 280 | - | ||
| 281 | - | ||
| 282 | 126 | (7) When determining whether to enter into a written agreement with a taxpayer pursuant to this section, GO-Biz may consider other factors, including, but not limited to, the following: | |
| 283 | - | ||
| 284 | - | ||
| 285 | 127 | ||
| 286 | 128 | (A) The financial solvency of the taxpayer and the taxpayers ability to finance its proposed expansion. | |
| 287 | 129 | ||
| 288 | - | ||
| 289 | - | ||
| 290 | 130 | (B) The taxpayers current and prior compliance with federal and state laws. | |
| 291 | - | ||
| 292 | - | ||
| 293 | 131 | ||
| 294 | 132 | (C) Current and prior litigation involving the taxpayer. | |
| 295 | 133 | ||
| 296 | - | ||
| 297 | - | ||
| 298 | 134 | (D) The reasonableness of the fee arrangement between the taxpayer and any third party providing any services related to the credit allowed pursuant to this section. | |
| 299 | - | ||
| 300 | - | ||
| 301 | 135 | ||
| 302 | 136 | (E) Any other factors GO-Biz deems necessary to ensure that the administration of the credit allowed pursuant to this section is a model of accountability and transparency and that the effective use of the limited amount of credit available is maximized. | |
| 303 | 137 | ||
| 304 | - | ||
| 305 | - | ||
| 306 | 138 | (d) For purposes of this section, the Franchise Tax Board shall do all of the following: | |
| 307 | - | ||
| 308 | - | ||
| 309 | 139 | ||
| 310 | 140 | (1) (A) Except as provided in subparagraph (B), review the books and records of all taxpayers allocated a credit pursuant to this section to ensure compliance with the terms and conditions of the written agreement between the taxpayer and GO-Biz. | |
| 311 | 141 | ||
| 312 | - | ||
| 313 | - | ||
| 314 | 142 | (B) In the case of a taxpayer that is a small business, as defined in Section 23626, review the books and records of the taxpayer allocated a credit pursuant to this section to ensure compliance with the terms and conditions of the written agreement between the taxpayer and GO-Biz when, in the sole discretion of the Franchise Tax Board, a review of those books and records is appropriate or necessary in the best interests of the state. | |
| 315 | 143 | ||
| 316 | - | ||
| 317 | - | ||
| 318 | - | (2)Notwithstanding Section 19542, both of the following: | |
| 319 | - | ||
| 320 | - | ||
| 144 | + | (2) Notwithstanding Section 19542: 19542, both of the following: | |
| 321 | 145 | ||
| 322 | 146 | (A) Notify GO-Biz of a possible breach of the written agreement by a taxpayer and provide detailed information regarding the basis for that determination. | |
| 323 | 147 | ||
| 324 | - | ||
| 325 | - | ||
| 326 | 148 | (B) Provide information to GO-Biz with respect to whether a taxpayer is a small business, as defined in Section 23626. | |
| 327 | - | ||
| 328 | - | ||
| 329 | 149 | ||
| 330 | 150 | (e) In the case where the credit allowed under this section exceeds the tax, as defined in Section 23036, for a taxable year, the excess credit may be carried over to reduce the tax in the following taxable year, and succeeding five taxable years, if necessary, until the credit has been exhausted. | |
| 331 | 151 | ||
| 332 | - | ||
| 333 | - | ||
| 334 | 152 | (f) Any recapture, in whole or in part, of a credit approved by the committee pursuant to Section 18410.2 shall be treated as a mathematical error appearing on the return. Any amount of tax resulting from that recapture shall be assessed by the Franchise Tax Board in the same manner as provided by Section 19051. The amount of tax resulting from the recapture shall be added to the tax otherwise due by the taxpayer for the taxable year in which the committees recapture determination occurred. | |
| 335 | - | ||
| 336 | - | ||
| 337 | 153 | ||
| 338 | 154 | (g) (1) The aggregate amount of credit that may be allocated in any fiscal year pursuant to this section and Section 17059.2 shall be an amount equal to the sum of subparagraphs (A), (B), and (C), less the amount specified in subparagraphs (D) and (E): | |
| 339 | 155 | ||
| 340 | - | ||
| 341 | - | ||
| 342 | 156 | (A) Thirty million dollars ($30,000,000) for the 201314 fiscal year, one hundred fifty million dollars ($150,000,000) for the 201415 fiscal year, and two hundred million dollars ($200,000,000) for each fiscal year from 201516 to 201718, inclusive. | |
| 343 | - | ||
| 344 | - | ||
| 345 | 157 | ||
| 346 | 158 | (B) The unallocated credit amount, if any, from the preceding fiscal year. | |
| 347 | 159 | ||
| 348 | - | ||
| 349 | - | ||
| 350 | 160 | (C) The amount of any previously allocated credits that have been recaptured. | |
| 351 | - | ||
| 352 | - | ||
| 353 | 161 | ||
| 354 | 162 | (D) The amount estimated by the Director of Finance, in consultation with the Franchise Tax Board and the State Board of Equalization, to be necessary to limit the aggregation of the estimated amount of exemptions claimed pursuant to Section 6377.1 and of the amounts estimated to be claimed pursuant to this section and Sections 17053.73, 17059.2, and 23626 to no more than seven hundred fifty million dollars ($750,000,000) for either the current fiscal year or the next fiscal year. | |
| 355 | 163 | ||
| 356 | - | ||
| 357 | - | ||
| 358 | 164 | (i) The Director of Finance shall notify the Chairperson of the Joint Legislative Budget Committee of the estimated annual allocation authorized by this paragraph. Any allocation pursuant to these provisions shall be made no sooner than 30 days after written notification has been provided to the Chairperson of the Joint Legislative Budget Committee and the chairpersons of the committees of each house of the Legislature that consider appropriations, or not sooner than whatever lesser time the Chairperson of the Joint Legislative Budget Committee, or his or her designee, may determine. | |
| 359 | - | ||
| 360 | - | ||
| 361 | 165 | ||
| 362 | 166 | (ii) In no event shall the amount estimated in this subparagraph be less than zero dollars ($0). | |
| 363 | 167 | ||
| 364 | - | ||
| 365 | - | ||
| 366 | 168 | (E) (i) For the 201516 fiscal year and each fiscal year thereafter, the amount of credit estimated by the Director of Finance to be allowed to all qualified taxpayers for that fiscal year pursuant to subparagraph (A) or subparagraph (B) of paragraph (1) of subdivision (c) of Section 23636. | |
| 367 | - | ||
| 368 | - | ||
| 369 | 169 | ||
| 370 | 170 | (ii) If the amount available per fiscal year pursuant to this section and Section 17059.2 is less than the aggregate amount of credit estimated by the Director of Finance to be allowed to qualified taxpayers pursuant to subparagraph (A) or subparagraph (B) of paragraph (1) of subdivision (c) of Section 23636, the aggregate amount allowed pursuant to Section 23636 shall not be reduced and, in addition to the reduction required by clause (i), the aggregate amount of credit that may be allocated pursuant to this section and Section 17059.2 for the next fiscal year shall be reduced by the amount of that deficit. | |
| 371 | 171 | ||
| 372 | - | ||
| 373 | - | ||
| 374 | 172 | (iii) It is the intent of the Legislature that the reductions specified in this subparagraph of the aggregate amount of credit that may be allocated pursuant to this section and Section 17059.2 shall continue if the repeal dates of the credits allowed by this section and Section 17059.2 are removed or extended. | |
| 375 | - | ||
| 376 | - | ||
| 377 | 173 | ||
| 378 | 174 | (2) (A) In addition to the other amounts determined pursuant to paragraph (1), the Director of Finance may increase the aggregate amount of credit that may be allocated pursuant to this section and Section 17059.2 by up to twenty-five million dollars ($25,000,000) per fiscal year through the 201718 fiscal year. The amount of any increase made pursuant to this paragraph, when combined with any increase made pursuant to paragraph (2) of subdivision (g) of Section 17059.2, shall not exceed twenty-five million dollars ($25,000,000) per fiscal year through the 201718 fiscal year. | |
| 379 | 175 | ||
| 380 | - | ||
| 381 | - | ||
| 382 | 176 | (B) It is the intent of the Legislature that the Director of Finance increase the aggregate amount under subparagraph (A) in order to mitigate the reduction of the amount available due to the credit allowed to all qualified taxpayers pursuant to subparagraph (A) or (B) of paragraph (1) of subdivision (c) of Section 23636. | |
| 383 | - | ||
| 384 | - | ||
| 385 | 177 | ||
| 386 | 178 | (3) Each fiscal year, 25 percent of the aggregate amount of the credit that may be allocated pursuant to this section and Section 17059.2 shall be reserved for small business, as defined in Section 17053.73 or 23626. | |
| 387 | 179 | ||
| 388 | - | ||
| 389 | - | ||
| 390 | 180 | (4) Each fiscal year, no more than 20 percent of the aggregate amount of the credit that may be allocated pursuant to this section shall be allocated to any one taxpayer. | |
| 391 | - | ||
| 392 | - | ||
| 393 | 181 | ||
| 394 | 182 | (h) GO-Biz may prescribe rules and regulations as necessary to carry out the purposes of this section. Any rule or regulation prescribed pursuant to this section may be by adoption of an emergency regulation in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. | |
| 395 | 183 | ||
| 396 | - | ||
| 397 | - | ||
| 398 | 184 | (i) (1) A written agreement between GO-Biz and a taxpayer with respect to the credit authorized by this section shall not restrict, broaden, or otherwise alter the ability of the taxpayer to assign that credit or any portion thereof in accordance with Section 23663. | |
| 399 | - | ||
| 400 | - | ||
| 401 | 185 | ||
| 402 | 186 | (2) A written agreement between GO-Biz and a taxpayer with respect to the credit authorized by this section must comply with existing law on the date the agreement is executed. | |
| 403 | 187 | ||
| 404 | - | ||
| 405 | - | ||
| 406 | 188 | (j) (1) Upon the effective date of this section, the Department of Finance shall estimate the total dollar amount of credits that will be claimed under this section with respect to each fiscal year from the 201314 fiscal year to the 202425 fiscal year, inclusive. | |
| 407 | 189 | ||
| 408 | - | ||
| 409 | - | ||
| 410 | 190 | (2) The Franchise Tax Board shall annually provide to the Joint Legislative Budget Committee, by no later than March 1, a report of the total dollar amount of the credits claimed under this section with respect to the relevant fiscal year. The report shall compare the total dollar amount of credits claimed under this section with respect to that fiscal year with the departments estimate with respect to that same fiscal year. If the total dollar amount of credits claimed for the fiscal year is less than the estimate for that fiscal year, the report shall identify options for increasing annual claims of the credit so as to meet estimated amounts. | |
| 411 | - | ||
| 412 | - | ||
| 413 | 191 | ||
| 414 | 192 | (k) This section is repealed on December 1, 2025. |