California 2019 2019-2020 Regular Session

California Senate Bill SB1210 Introduced / Bill

Filed 02/20/2020

                    CALIFORNIA LEGISLATURE 20192020 REGULAR SESSION Senate Bill No. 1210Introduced by Senator Bradford(Coauthor: Senator Galgiani)(Coauthor: Assembly Member Mayes)February 20, 2020 An act to add Article 6 (commencing with Section 12264) to Chapter 3 of Part 7 of Division 2 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. LEGISLATIVE COUNSEL'S DIGESTSB 1210, as introduced, Bradford. Insurance taxation: credit: California Jobs and Upward Mobility Progression (JUMP) Act.Existing statutory law imposes taxes on the gross premiums of an insurer, as defined, and allows various credits against those taxes. The California Constitution imposes exactions against insurers from another state or country under specified conditions.This bill would allow a credit against those taxes for a taxable year beginning on or after January 1, 2021, and before January 1, 2031, in an amount equal to a cash investment in a growth fund, as defined, that meets specified requirements. The bill would require the Treasurer to, among other things, accept applications beginning January 1, 2021, for approval as a growth fund that meet specified requirements, including that the application include an estimate of the total new full-time employees that will result from the applicants growth investments, as defined. The bill also would require the Treasurer to recapture any tax credit allowed and revoke the tax credit certificates issued to a taxpayer if the taxpayer engages in specified behavior, including not investing 60% of its investment authority in growth investments in this state within 2 years, and 100% of its investment authority in growth investments in this state within 3 years, of the date on which a growth fund has collected the investment authority authorized by the Treasurer.The bill would require a growth fund to annually certify under penalty of perjury that the growth fund has not violated any of the grounds for revocation and recapture of credits. By expanding the crime of perjury, this bill would create 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 no reimbursement is required by this act for a specified reason.This bill would take effect immediately as a tax levy.Digest Key Vote: MAJORITY  Appropriation: NO  Fiscal Committee: YES  Local Program: YES Bill TextThe people of the State of California do enact as follows:SECTION 1. The Legislature finds and declares all of the following:(a) According to a 2018 report taken from American Community Survey Data, California is seeing the second fastest growing income inequality and the largest wage gap between middle income and high wage earners of all 50 states.(b) California workers are increasingly commuting long distances to find suitable living wage employment or affordable housing.(c) Income inequality creates a tax burden on the state, as families with shrinking incomes must rely more heavily on state services.(d) The growing disparity in income inequality is further compounded by the struggles entrepreneurs and small business owners in Californias Opportunity Zones and rural areas face in securing affordable, flexible financing to grow their businesses and create well-paying jobs with benefits in their own communities.(e) Since the global financial crisis, the availability of senior lending from banks for small businesses and startups, particularly those in underserved areas, has significantly changed. Today, small business loans of less than $1 million account for less than 20 percent of the overall bank loan portfolios nationally, down from over 40 percent in 2004. These banks are making fewer small loans, precisely the type of investments on which underserved small businesses rely.(f) The 2017 California Small Business Credit Survey found that 42 percent of firms experienced a financial challenge in paying operating expenses and 39 percent of firms experienced a financial challenge in credit availability.(g) The best way to achieve a California for All is through a postperformance tax credit program with strong, important safeguards to protect the taxpayer and ensure policy goals are met.(h) While California has many available programs and incentives, most are geared toward keeping or attracting big businesses, with only a small percentage of investments or tax credits being utilized by existing small businesses.(i) To accelerate wage mobility and improve California workers ability to earn living wages with benefits closer to home, it is the intent of the Legislature to incentivize experienced, federally licensed investors to raise up to $500 million exclusively for investment to deploy in targeted small businesses in Californias Opportunity Zones and rural areas.SEC. 2. Article 6 (commencing with Section 12264) is added to Chapter 3 of Part 7 of Division 2 of the Revenue and Taxation Code, to read: Article 6. Jobs and Upward Mobility Progression (JUMP) Act12264. As used in this article:(a) (1) Affiliate means an entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, another entity.(2) For the purposes of this subdivision, an entity is controlled by another entity if the controlling entity holds, directly or indirectly, the majority voting or ownership interest in the controlled entity or has control over the day-to-day operations of the controlled entity.(b) Closing date means the date on which a growth fund has collected all amounts specified by Section 12268.(c) (1) Employment offset means an amount calculated annually that is equal to the sum of both of the following:(A) The product of twenty-five thousand dollars ($25,000) and the number of new full-time employees of a growth funds growth businesses.(B) A one-time amount of ten thousand dollars ($10,000) for each full-time employee hired by a growth business that is a targeted employee.(2) (A) The number of new full-time employees of a growth funds growth businesses referenced in subparagraph (A) of paragraph (1) shall be calculated annually as the difference between the following:(i) The average monthly number of full-time employees at a growth business in the preceding calendar year or portion thereof if the initial growth investment occurred in the year.(ii) The number of full-time employees at the growth business on the date of the initial growth investment.(B) If the resulting difference between the amounts derived from clauses (i) and (ii) of subparagraph (A) is less than zero, the number of new full-time employees shall be deemed to be zero.(d) Full-time employee means any of the following:(1) An employment position that is filled at a growth business.(2) An employment position that receives wages that are at least 100 percent of the county median wage.(3) An employment position that is paid hourly wages for an average of at least 35 hours per week or any other period of time generally accepted by custom, industry, or practice as full-time employment.(4) An employment position that is salaried and paid for full-time employment within the meaning of Section 515 of the Labor Code.(e) Growth business means a business that, at the time a growth fund initially invests in the business, meets all of the following requirements:(1) The business has, together with its affiliates, fewer than 100 employees.(2) The business has aggregate gross receipts, less returns and allowances reportable to the state, of less than ten million dollars ($10,000,000) during the previous taxable year.(3) The business has its principal business operations in at least one growth zone in the state.(4) The business is engaged in North American Industry Classification System sector 11, 22, 23, 31, 32, 33, 48, 49, 54, or 62 or, if not engaged in those industries, the Treasurer determines that the investment will create desirable economic outcomes related to income mobility.(f) Growth fund means an entity certified by the Treasurer pursuant to Section 12267.(g) (1) Growth investment means a capital or equity investment in a growth business or a loan to a growth business with a stated maturity of at least one year after the date of issuance.(2) Growth investment does not include the provision of a revolving line of credit.(h) Growth zone means any of the following:(1) An opportunity zone located in the state.(2) A census tract in the state meeting either of the following requirements:(A) The census tract has a poverty rate that is greater than 20 percent.(B) The census tract has a median family income that does not exceed the following:(i) If the census tract is not located in a metropolitan area, the statewide median family income.(ii) If the census tract is located in a metropolitan area, the greater of the statewide median family income and the metropolitan area median family income.(3) All locations outside of census places with a population greater than or equal to 50,000 as of the latest decennial census and their adjacent and contiguous urbanized areas.(i) Investment authority means the amount certified by the Treasurer pursuant to Section 12267.(j) Investor contribution means a cash investment in a growth fund that meets both of the following requirements:(1) The cash investment is equal to the amount specified for that entity in the Treasurers approval of the growth funds application pursuant to Section 12267.(2) The cash investment purchased any of the following:(A) An equity interest in the growth fund.(B) A debt instrument that has a maturity date of at least six years from the closing date and a repayment schedule that is not greater than level principal amortization over six years.(k) Opportunity zone means a qualified opportunity zone, as defined by Section 1400Z-1 of Title 26 of the United States Code.(l) (1) Principal business operations means the location that meets either of the following requirements:(A) At least 60 percent of a business employees work at the location.(B) Employees who are paid at least 60 percent of the business payroll work at the location.(2) A business that has agreed to relocate employees using the proceeds of a growth investment to establish its principal business operations in a growth zone shall be deemed to have its principal business operations in a growth zone if it satisfies the requirements of paragraph (1) within 180 days after receiving a growth investment.(m) (1) State clawback amount means the difference between both of the following:(A) The growth funds total investor contributions.(B) The sum of the annual employment offsets reported by the growth fund pursuant to Section 12272.(2) If the amount derived from paragraph (1) is zero or less than zero, the state clawback amount shall be zero.(n) Targeted employee means a qualified new full-time employee who meets any of the following requirements:(1) (A) The employee was unemployed for the six months immediately preceding being hired and did not complete a baccalaureate, postgraduate, or professional degree at a college or university within the 12 months immediately preceding being hired.(B) For purposes of this paragraph, a person is unemployed when that person satisfies all of the following requirements:(i) The person is not receiving wages subject to withholding.(ii) The person is not self-employed.(iii) The person is not a full-time student at a high school, college, university, or postsecondary education institution.(2) The employee is a veteran separated from the Armed Forces of the United States in the preceding 12 months.(3) The employee received the federal Earned Income Tax Credit in the prior taxable year.(4) The employee has been convicted of a felony.(5) The employee is a current recipient of benefits pursuant to Article 3.2 (commencing with Section 11320) of Chapter 2 of Part 3 of Division 9 of the Welfare and Institutions Code.(6) The employee is provided, or reimbursed for, education or training leading to an official skill certification.(7) The employee is provided housing, a relocation bonus, or other housing assistance, by the qualifying growth business, that exceeds a value of ten thousand dollars ($10,000).(8) The employee is employed by a growth business in an area where a borrower would be qualified pursuant to Section 4279.108(c)(1) of the Code of Federal Regulations.(o) Treasurer means the State Treasurer.12265. (a) For taxable years beginning on or after January 1, 2021, and before January 1, 2031, there shall be allowed as a credit against the taxes imposed by this part and against the exactions imposed by paragraph (3) of subdivision (f) of Section 28 of Article XIII of the State Constitution, a JUMP Act tax credit in an amount equal to an investor contribution, as defined in Section 12264.(b) If the credit allowed by this section exceeds the taxes described in subdivision (a), the excess may be carried over to reduce those taxes in the following year, and the succeeding four years if necessary, until the credit is exhausted.(c) The credit is nonrefundable and may not be sold, transferred, or allocated to an entity other than an affiliate that was an affiliate of the taxpayer on the date that the taxpayer signed its affidavit included in the growth funds application pursuant to subdivision (a) of Section 12266.(d) A taxpayer claiming a credit under this section shall submit a copy of the tax credit certificate issued pursuant to Section 12267 with the taxpayers return for each taxable year for which the credit is claimed.(e) (1) The aggregate amount of investment authority that may be certified pursuant to Section 12267 shall be five hundred million dollars ($500,000,000) and the aggregate amount of credit that may be allocated and certified pursuant to this section shall be an amount equal to seventy-five million dollars ($75,000,000) in any taxable year and three hundred million dollars ($300,000,000) in total for all taxable years for which the JUMP Act tax credit is authorized.(2) If requests for investment authority and credits exceed the limitations described in paragraph (1), the Treasurer shall proportionally reduce the investment authority and credits certified for each approved application as necessary to avoid exceeding the limit.12266. (a) Beginning January 1, 2021, the Treasurer shall accept applications for approval as a growth fund, pursuant to rules and regulations adopted by the Treasurer, which shall meet all of the following requirements:(1) The total investment authority sought by the applicant shall not exceed five hundred million dollars ($500,000,000).(2) The application shall include evidence of all of the following:(A) A certification by an executive officer of the applicant that certifies that the applicant or an affiliate of the applicant is licensed as a rural business investment company under Section 2009cc of Title 7 of the United States Code or as a small business investment company under Section 681 of Title 15 of the United States Code.(B) At least one principal in a rural business investment company or a small business investment company is, and has been for at least four years, an officer or employee of the applicant or an affiliate of the applicant on the date the application is submitted.(C) As of the date the application is submitted, the applicant or affiliates of the applicant have invested at least one hundred million dollars ($100,000,000) in nonpublic companies located in non-metropolitan counties as defined by the Office of Management and Budget within the Office of the President of the United States on the basis of county or county-equivalent units or one hundred million dollars ($100,000,000) in opportunity zones.(3) The application shall include an estimate of the total new full-time employees that will result from the applicants growth investments.(4) The application shall include a signed affidavit from each taxpayer stating the amount of investor contribution the taxpayer will make. At least 60 percent of a growth funds requested investment authority shall consist of investor contributions.(5) The application shall include the growth funds federal employer identification number.(6) The application shall include a one-time application fee of ten thousand dollars ($10,000).(b) (1) The Treasurer shall review an application received pursuant to this section in the order in which it was received and shall either approve or deny the application within 45 days of receipt.(2) Applications that are received on the same day shall be deemed to have been received simultaneously.(c) The Treasurer may approve investment authority only in an aggregate amount that is not greater than five hundred million dollars ($500,000,000).(d) The Treasurer shall deny an application only if any of the following are true:(1) The application is incomplete.(2) The applicant does not meet the requirements of paragraph (2) or (4) of subdivision (a).(3) The Treasurer has already approved the maximum amount of investment authority allowed pursuant to subdivision (c).(e) (1) If the Treasurer denies an application, the applicant, within 15 business days after receiving notice of the denial, may provide additional information to the Treasurer to cure any defects in the application, except for failure to comply with paragraph (4) of subdivision (a).(2) The Treasurer shall review and reconsider applications corrected pursuant to paragraph (1) within thirty days.(3) If the Treasurer subsequently approves the application, the application shall be considered approved as of its original submission date and shall receive the pro rata allocation of investment authority that the applicant would have received if it had been approved on the original date of submission.12267. (a) After approving an application submitted pursuant to Section 12266, the Treasurer shall certify all of the following:(1) The applicant is a growth fund.(2) The amount of the applicants approved investment authority.(3) The investor contributions required from each investor that submitted an affidavit with the growth funds application.(b) Upon receipt of the documentation required by Section 12268, the Treasurer shall provide a tax credit certificate to each taxpayer that has made an investor contribution in the amount of the investor contribution.12268. (a) (1) Within 60 days of receiving the certification described in subdivision (a) of Section 12267, a growth fund shall collect all investor contributions and collect additional investments of cash that, when added to the investor contributions, equal the growth funds investment authority.(2) At least 10 percent of the growth funds investment authority shall consist of equity investments contributed directly or indirectly by affiliates of the growth fund.(3) Within 65 days after receiving the certification described in subdivision (a) of Section 12267, a growth fund shall send to the Treasurer the date on which the investment authority was collected and documentation that it has collected the amounts required by subdivision (a).(b) If the growth fund fails to fully comply with paragraphs (1) and (2) of subdivision (a), the Treasurer shall revoke the growth funds certification.12269. (a) A qualified growth fund shall be charged an annual fee, payable to the Treasurer, of 0.02 percent of the investment authority authorized.(b) (1) The initial annual fee is due and payable to the Treasurer within 65 days after receiving the certification issued pursuant to Section 12267.(2) After payment of the initial annual fee, the annual fee shall be due and payable to the Treasurer before March 1.(c) An annual fee shall not be required once a growth fund has exited the program pursuant to Section 12271.12270. (a) The Treasurer shall recapture, based on information in the growth funds annual report or its failure to make the certification set forth in paragraph (7) of subdivision (a) of Section 12272, any tax credit allowed pursuant to this article and revoke the tax credit certificates issued pursuant to Section 12267 if any of the following occur with respect to a growth fund before the growth fund exits the program in accordance with Section 12271:(1) The growth fund does not invest 60 percent of its investment authority in growth investments in this state within two years and 100 percent of its investment authority in growth investments in this state within three years of the closing date.(2) The growth fund, after initially satisfying paragraph (1), fails to maintain growth investments equal to 100 percent of its investment authority until the seventh anniversary of the closing date.(3) The growth fund makes a distribution or payment that results in the growth fund having less than 100 percent of its investment authority invested in growth investments in this state or available for investment in growth investments and held in cash, bank deposits, and marketable securities.(4) The growth fund fails to make growth investments in growth businesses with principal business operations in an area qualified under Section 4279.108(c)(1) of Title 7 of the Code of Federal Regulations that when added together equal at least 6 percent of the growth funds capital investment authority.(5) The growth fund invests in a growth business that directly or through an affiliate does any of the following:(A) Owns an investment in the growth fund.(B) Has the right to acquire an ownership interest in the growth fund.(C) Makes a loan to the growth fund.(D) (i) Makes an investment in the growth fund, an affiliate of the growth fund, or an investor in the growth fund.(ii) For purposes of this paragraph, a growth fund is not considered an affiliate of a growth business solely because of its growth investment.(b) For purposes of paragraphs (1) and (2) of subdivision (a), both of the following apply:(1) An investment is deemed to be maintained even if it is sold or repaid, so long as the growth fund reinvests an amount equal to the capital returned or recovered from the original investment, exclusive of any profits realized, in other growth investments in this state within 12 months of the receipt of that capital.(2) Amounts received periodically by a growth fund shall be treated as continuously invested in growth investments if the amounts are reinvested in one or more growth investments by the end of the calendar year following receipt of those amounts.(c) Paragraph (5) of subdivision (a) shall not apply to investments in publicly traded securities made by a growth business or an owner or affiliate of the growth business.(d) (1) Before making a growth investment, a growth fund may request a written determination from the Treasurer as to whether the business in which it proposes to invest satisfies the definition of a growth business to which the Treasurer shall respond no more than 15 business days from the date of receipt thereof.(2) If the Treasurer fails to issue a determination letter pursuant to paragraph (1), the business in which the growth fund proposes to invest shall be considered a growth business.(e) The maximum amount of growth investments in a particular growth business, including amounts invested in affiliates of the growth business, that a growth fund may count in satisfying the requirements of paragraphs (1) and (2) of subdivision (a) is the greater of five million dollars ($5,000,000) or 10 percent of its investment authority, exclusive of repaid or redeemed growth investments.(f) (1) Before revoking a tax credit certificate or recapturing credits pursuant to this section, the Treasurer shall notify the growth fund of the reasons for the pending revocation or recapture.(2) The growth fund shall have 90 days from the date the notice was received to correct a violation outlined in the notice to the satisfaction of the Treasurer and avoid recapture of tax credits and revocation of the tax credit certificate.(g) The Treasurer shall not revoke a tax credit certificate or recapture credits after a growth fund exits from the program in accordance with Section 12271.12271. (a) (1) A growth fund may, but only on or after the seventh anniversary of the closing date, apply to the Treasurer to exit the program, and upon exiting, shall no longer be subject to the provisions of this article, except as provided in subdivision (c).(2) The Treasurer shall approve or deny an application made pursuant to subdivision (a) within 30 days of receipt.(3) The Treasurer shall approve an application made pursuant to this section if, with respect to the applicant, no tax credit certificates have been revoked and the growth fund has not received a notice of revocation or recapture that has not been cured.(4) The Treasurer shall not unreasonably deny an application submitted pursuant to this section.(5) If the Treasurer denies an application, the notice of denial shall include the reasons for the determination.(b) After its exit from the program, a growth fund may not make distributions to its equity holders or pay any fees in excess of its investment authority until it has paid any state clawback amount due.(c) Each growth fund shall continue to report annually to the Treasurer both of the following:(1) The number of new full-time employees at each growth business, and that number shall continue to reduce the state clawback amount.(2) Employment offset until its state clawback amount equals zero or it has distributed all of its assets.12272. (a) Each growth fund shall submit an annual report to the Treasurer on or before the fifth business day after each anniversary of the closing date before its exit from the program pursuant to Section 12271. The report shall identify each growth investment made by the growth fund and shall include all of the following:(1) A bank statement evidencing each growth investment if not previously reported.(2) The name, location, and industry of each growth business receiving a growth investment, including either the determination letter set forth in Section 12270 or evidence that the business qualified as a growth business at the time the investment was made, if not previously reported.(3) For each growth business receiving a growth investment, evidence for the Treasurer to verify the number of full-time employees at each growth business on the date of the growth funds initial growth investment.(4) The number of new full-time employees at each growth business, the average salary of those employees, and evidence sufficient for the Treasurer to verify whether a new full-time employee is a targeted employee.(5) A calculation of the growth funds employment offset for that year.(6) The cumulative amount of growth investments made in each growth business.(7) A certification under penalty of perjury that the growth fund has not violated any of the grounds for revocation and recapture of credits set forth in subdivision (a) of Section 12270.(8) Any other information required by the Treasurer for purposes of carrying out the Treasurers duties under this article.(b) The growth fund is not required to provide information with respect to growth investments that have been redeemed or repaid as part of the annual report required by this section but shall provide that information if available.12273. (a) If the Treasurer revokes a growth funds certification pursuant to subdivision (b) of Section 12268 or a tax credit certificate pursuant to Section 12270, the associated investment authority and investor contributions will not count toward the limit on total investment authority and investor contributions set forth in subdivision (c) of Section 12266.(b) (1) The Treasurer shall first award reverted investment authority pro rata to each growth fund that was awarded less than the requested investment authority for which it applied, and that growth fund may allocate the associated investor contribution authority to any taxpayer with state premium tax liability in its discretion.(2) The Treasurer may award any remaining investment authority to new applicants.12274. (a) The Treasurer may adopt rules and regulations for the purpose of implementing the provisions of this article.(b) The Treasurer shall adopt forms and notices necessary to implement this article.(c) The Treasurer shall notify the Department of Insurance of the name of any insurance company allocated tax credits under this act and the amount of those credits.SEC. 3. For purposes of complying with Section 41 of the Revenue and Taxation Code, with respect to Article 6 (commencing with Section 12264) of Chapter 3 of Part 7 of Division 2 of the Revenue and Taxation Code as added by this act, the Legislature finds as follows:(a) The California Jobs and Upward Mobility Progression (JUMP) Act concerns communities underserved by traditional small business lending and flexible growth capital. Despite having the worlds fifth largest economy, California has the second fastest growing income inequality of all 50 states and the largest wage gap between middle-income and high-wage earners, often forcing workers in underserved areas to commute long distances to find suitable employment or affordable housing. This tax credit addresses these issues by incentivizing federally licensed Small Business Administration (SBA) and United States Department of Agriculture (USDA) investors to raise funds exclusively for investment in California small businesses located in distressed areas throughout the state, including all 879 designated opportunity zones. This tax credit will enable small businesses to grow and create quality well-paying jobs, thereby accelerating wage mobility and improving quality of life for California residents.(b) To measure whether the credit achieves its intended purpose, the Treasurer shall, on July 1, 2022, and annually thereafter in each year the program is in effect, submit a report, in compliance with Section 9795 of the Government Code, to the Legislature containing all of the following:(1) Bank statements evidencing each funds growth investments.(2) The name, location, and industry of each growth business receiving a growth investment.(3) A verifiable number of full-time employees at each growth business receiving a growth investment on the date of the growth funds initial growth investment.(4) A verifiable average salary of new full-time employees at each growth business that demonstrates a new full-time employee is a targeted employee in accordance with the program.(5) A calculation of the growth funds employment offset for that year.(6) The cumulative amount of growth investments made in each growth business as a result of this credit.(c) The Treasurer shall submit the report required by this section to the Senate Committee on Budget and Fiscal Review, the Assembly Committee on Budget, the Senate and Assembly Committees on Appropriations, the Senate Committee on Governance and Finance, and the Assembly Committee on Revenue and Taxation.SEC. 4. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.SEC. 5. This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.

 CALIFORNIA LEGISLATURE 20192020 REGULAR SESSION Senate Bill No. 1210Introduced by Senator Bradford(Coauthor: Senator Galgiani)(Coauthor: Assembly Member Mayes)February 20, 2020 An act to add Article 6 (commencing with Section 12264) to Chapter 3 of Part 7 of Division 2 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. LEGISLATIVE COUNSEL'S DIGESTSB 1210, as introduced, Bradford. Insurance taxation: credit: California Jobs and Upward Mobility Progression (JUMP) Act.Existing statutory law imposes taxes on the gross premiums of an insurer, as defined, and allows various credits against those taxes. The California Constitution imposes exactions against insurers from another state or country under specified conditions.This bill would allow a credit against those taxes for a taxable year beginning on or after January 1, 2021, and before January 1, 2031, in an amount equal to a cash investment in a growth fund, as defined, that meets specified requirements. The bill would require the Treasurer to, among other things, accept applications beginning January 1, 2021, for approval as a growth fund that meet specified requirements, including that the application include an estimate of the total new full-time employees that will result from the applicants growth investments, as defined. The bill also would require the Treasurer to recapture any tax credit allowed and revoke the tax credit certificates issued to a taxpayer if the taxpayer engages in specified behavior, including not investing 60% of its investment authority in growth investments in this state within 2 years, and 100% of its investment authority in growth investments in this state within 3 years, of the date on which a growth fund has collected the investment authority authorized by the Treasurer.The bill would require a growth fund to annually certify under penalty of perjury that the growth fund has not violated any of the grounds for revocation and recapture of credits. By expanding the crime of perjury, this bill would create 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 no reimbursement is required by this act for a specified reason.This bill would take effect immediately as a tax levy.Digest Key Vote: MAJORITY  Appropriation: NO  Fiscal Committee: YES  Local Program: YES 





 CALIFORNIA LEGISLATURE 20192020 REGULAR SESSION

 Senate Bill 

No. 1210

Introduced by Senator Bradford(Coauthor: Senator Galgiani)(Coauthor: Assembly Member Mayes)February 20, 2020

Introduced by Senator Bradford(Coauthor: Senator Galgiani)(Coauthor: Assembly Member Mayes)
February 20, 2020

 An act to add Article 6 (commencing with Section 12264) to Chapter 3 of Part 7 of Division 2 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. 

LEGISLATIVE COUNSEL'S DIGEST

## LEGISLATIVE COUNSEL'S DIGEST

SB 1210, as introduced, Bradford. Insurance taxation: credit: California Jobs and Upward Mobility Progression (JUMP) Act.

Existing statutory law imposes taxes on the gross premiums of an insurer, as defined, and allows various credits against those taxes. The California Constitution imposes exactions against insurers from another state or country under specified conditions.This bill would allow a credit against those taxes for a taxable year beginning on or after January 1, 2021, and before January 1, 2031, in an amount equal to a cash investment in a growth fund, as defined, that meets specified requirements. The bill would require the Treasurer to, among other things, accept applications beginning January 1, 2021, for approval as a growth fund that meet specified requirements, including that the application include an estimate of the total new full-time employees that will result from the applicants growth investments, as defined. The bill also would require the Treasurer to recapture any tax credit allowed and revoke the tax credit certificates issued to a taxpayer if the taxpayer engages in specified behavior, including not investing 60% of its investment authority in growth investments in this state within 2 years, and 100% of its investment authority in growth investments in this state within 3 years, of the date on which a growth fund has collected the investment authority authorized by the Treasurer.The bill would require a growth fund to annually certify under penalty of perjury that the growth fund has not violated any of the grounds for revocation and recapture of credits. By expanding the crime of perjury, this bill would create 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 no reimbursement is required by this act for a specified reason.This bill would take effect immediately as a tax levy.

Existing statutory law imposes taxes on the gross premiums of an insurer, as defined, and allows various credits against those taxes. The California Constitution imposes exactions against insurers from another state or country under specified conditions.

This bill would allow a credit against those taxes for a taxable year beginning on or after January 1, 2021, and before January 1, 2031, in an amount equal to a cash investment in a growth fund, as defined, that meets specified requirements. The bill would require the Treasurer to, among other things, accept applications beginning January 1, 2021, for approval as a growth fund that meet specified requirements, including that the application include an estimate of the total new full-time employees that will result from the applicants growth investments, as defined. The bill also would require the Treasurer to recapture any tax credit allowed and revoke the tax credit certificates issued to a taxpayer if the taxpayer engages in specified behavior, including not investing 60% of its investment authority in growth investments in this state within 2 years, and 100% of its investment authority in growth investments in this state within 3 years, of the date on which a growth fund has collected the investment authority authorized by the Treasurer.

The bill would require a growth fund to annually certify under penalty of perjury that the growth fund has not violated any of the grounds for revocation and recapture of credits. By expanding the crime of perjury, this bill would create 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 no reimbursement is required by this act for a specified reason.

This bill would take effect immediately as a tax levy.

## Digest Key

## Bill Text

The people of the State of California do enact as follows:SECTION 1. The Legislature finds and declares all of the following:(a) According to a 2018 report taken from American Community Survey Data, California is seeing the second fastest growing income inequality and the largest wage gap between middle income and high wage earners of all 50 states.(b) California workers are increasingly commuting long distances to find suitable living wage employment or affordable housing.(c) Income inequality creates a tax burden on the state, as families with shrinking incomes must rely more heavily on state services.(d) The growing disparity in income inequality is further compounded by the struggles entrepreneurs and small business owners in Californias Opportunity Zones and rural areas face in securing affordable, flexible financing to grow their businesses and create well-paying jobs with benefits in their own communities.(e) Since the global financial crisis, the availability of senior lending from banks for small businesses and startups, particularly those in underserved areas, has significantly changed. Today, small business loans of less than $1 million account for less than 20 percent of the overall bank loan portfolios nationally, down from over 40 percent in 2004. These banks are making fewer small loans, precisely the type of investments on which underserved small businesses rely.(f) The 2017 California Small Business Credit Survey found that 42 percent of firms experienced a financial challenge in paying operating expenses and 39 percent of firms experienced a financial challenge in credit availability.(g) The best way to achieve a California for All is through a postperformance tax credit program with strong, important safeguards to protect the taxpayer and ensure policy goals are met.(h) While California has many available programs and incentives, most are geared toward keeping or attracting big businesses, with only a small percentage of investments or tax credits being utilized by existing small businesses.(i) To accelerate wage mobility and improve California workers ability to earn living wages with benefits closer to home, it is the intent of the Legislature to incentivize experienced, federally licensed investors to raise up to $500 million exclusively for investment to deploy in targeted small businesses in Californias Opportunity Zones and rural areas.SEC. 2. Article 6 (commencing with Section 12264) is added to Chapter 3 of Part 7 of Division 2 of the Revenue and Taxation Code, to read: Article 6. Jobs and Upward Mobility Progression (JUMP) Act12264. As used in this article:(a) (1) Affiliate means an entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, another entity.(2) For the purposes of this subdivision, an entity is controlled by another entity if the controlling entity holds, directly or indirectly, the majority voting or ownership interest in the controlled entity or has control over the day-to-day operations of the controlled entity.(b) Closing date means the date on which a growth fund has collected all amounts specified by Section 12268.(c) (1) Employment offset means an amount calculated annually that is equal to the sum of both of the following:(A) The product of twenty-five thousand dollars ($25,000) and the number of new full-time employees of a growth funds growth businesses.(B) A one-time amount of ten thousand dollars ($10,000) for each full-time employee hired by a growth business that is a targeted employee.(2) (A) The number of new full-time employees of a growth funds growth businesses referenced in subparagraph (A) of paragraph (1) shall be calculated annually as the difference between the following:(i) The average monthly number of full-time employees at a growth business in the preceding calendar year or portion thereof if the initial growth investment occurred in the year.(ii) The number of full-time employees at the growth business on the date of the initial growth investment.(B) If the resulting difference between the amounts derived from clauses (i) and (ii) of subparagraph (A) is less than zero, the number of new full-time employees shall be deemed to be zero.(d) Full-time employee means any of the following:(1) An employment position that is filled at a growth business.(2) An employment position that receives wages that are at least 100 percent of the county median wage.(3) An employment position that is paid hourly wages for an average of at least 35 hours per week or any other period of time generally accepted by custom, industry, or practice as full-time employment.(4) An employment position that is salaried and paid for full-time employment within the meaning of Section 515 of the Labor Code.(e) Growth business means a business that, at the time a growth fund initially invests in the business, meets all of the following requirements:(1) The business has, together with its affiliates, fewer than 100 employees.(2) The business has aggregate gross receipts, less returns and allowances reportable to the state, of less than ten million dollars ($10,000,000) during the previous taxable year.(3) The business has its principal business operations in at least one growth zone in the state.(4) The business is engaged in North American Industry Classification System sector 11, 22, 23, 31, 32, 33, 48, 49, 54, or 62 or, if not engaged in those industries, the Treasurer determines that the investment will create desirable economic outcomes related to income mobility.(f) Growth fund means an entity certified by the Treasurer pursuant to Section 12267.(g) (1) Growth investment means a capital or equity investment in a growth business or a loan to a growth business with a stated maturity of at least one year after the date of issuance.(2) Growth investment does not include the provision of a revolving line of credit.(h) Growth zone means any of the following:(1) An opportunity zone located in the state.(2) A census tract in the state meeting either of the following requirements:(A) The census tract has a poverty rate that is greater than 20 percent.(B) The census tract has a median family income that does not exceed the following:(i) If the census tract is not located in a metropolitan area, the statewide median family income.(ii) If the census tract is located in a metropolitan area, the greater of the statewide median family income and the metropolitan area median family income.(3) All locations outside of census places with a population greater than or equal to 50,000 as of the latest decennial census and their adjacent and contiguous urbanized areas.(i) Investment authority means the amount certified by the Treasurer pursuant to Section 12267.(j) Investor contribution means a cash investment in a growth fund that meets both of the following requirements:(1) The cash investment is equal to the amount specified for that entity in the Treasurers approval of the growth funds application pursuant to Section 12267.(2) The cash investment purchased any of the following:(A) An equity interest in the growth fund.(B) A debt instrument that has a maturity date of at least six years from the closing date and a repayment schedule that is not greater than level principal amortization over six years.(k) Opportunity zone means a qualified opportunity zone, as defined by Section 1400Z-1 of Title 26 of the United States Code.(l) (1) Principal business operations means the location that meets either of the following requirements:(A) At least 60 percent of a business employees work at the location.(B) Employees who are paid at least 60 percent of the business payroll work at the location.(2) A business that has agreed to relocate employees using the proceeds of a growth investment to establish its principal business operations in a growth zone shall be deemed to have its principal business operations in a growth zone if it satisfies the requirements of paragraph (1) within 180 days after receiving a growth investment.(m) (1) State clawback amount means the difference between both of the following:(A) The growth funds total investor contributions.(B) The sum of the annual employment offsets reported by the growth fund pursuant to Section 12272.(2) If the amount derived from paragraph (1) is zero or less than zero, the state clawback amount shall be zero.(n) Targeted employee means a qualified new full-time employee who meets any of the following requirements:(1) (A) The employee was unemployed for the six months immediately preceding being hired and did not complete a baccalaureate, postgraduate, or professional degree at a college or university within the 12 months immediately preceding being hired.(B) For purposes of this paragraph, a person is unemployed when that person satisfies all of the following requirements:(i) The person is not receiving wages subject to withholding.(ii) The person is not self-employed.(iii) The person is not a full-time student at a high school, college, university, or postsecondary education institution.(2) The employee is a veteran separated from the Armed Forces of the United States in the preceding 12 months.(3) The employee received the federal Earned Income Tax Credit in the prior taxable year.(4) The employee has been convicted of a felony.(5) The employee is a current recipient of benefits pursuant to Article 3.2 (commencing with Section 11320) of Chapter 2 of Part 3 of Division 9 of the Welfare and Institutions Code.(6) The employee is provided, or reimbursed for, education or training leading to an official skill certification.(7) The employee is provided housing, a relocation bonus, or other housing assistance, by the qualifying growth business, that exceeds a value of ten thousand dollars ($10,000).(8) The employee is employed by a growth business in an area where a borrower would be qualified pursuant to Section 4279.108(c)(1) of the Code of Federal Regulations.(o) Treasurer means the State Treasurer.12265. (a) For taxable years beginning on or after January 1, 2021, and before January 1, 2031, there shall be allowed as a credit against the taxes imposed by this part and against the exactions imposed by paragraph (3) of subdivision (f) of Section 28 of Article XIII of the State Constitution, a JUMP Act tax credit in an amount equal to an investor contribution, as defined in Section 12264.(b) If the credit allowed by this section exceeds the taxes described in subdivision (a), the excess may be carried over to reduce those taxes in the following year, and the succeeding four years if necessary, until the credit is exhausted.(c) The credit is nonrefundable and may not be sold, transferred, or allocated to an entity other than an affiliate that was an affiliate of the taxpayer on the date that the taxpayer signed its affidavit included in the growth funds application pursuant to subdivision (a) of Section 12266.(d) A taxpayer claiming a credit under this section shall submit a copy of the tax credit certificate issued pursuant to Section 12267 with the taxpayers return for each taxable year for which the credit is claimed.(e) (1) The aggregate amount of investment authority that may be certified pursuant to Section 12267 shall be five hundred million dollars ($500,000,000) and the aggregate amount of credit that may be allocated and certified pursuant to this section shall be an amount equal to seventy-five million dollars ($75,000,000) in any taxable year and three hundred million dollars ($300,000,000) in total for all taxable years for which the JUMP Act tax credit is authorized.(2) If requests for investment authority and credits exceed the limitations described in paragraph (1), the Treasurer shall proportionally reduce the investment authority and credits certified for each approved application as necessary to avoid exceeding the limit.12266. (a) Beginning January 1, 2021, the Treasurer shall accept applications for approval as a growth fund, pursuant to rules and regulations adopted by the Treasurer, which shall meet all of the following requirements:(1) The total investment authority sought by the applicant shall not exceed five hundred million dollars ($500,000,000).(2) The application shall include evidence of all of the following:(A) A certification by an executive officer of the applicant that certifies that the applicant or an affiliate of the applicant is licensed as a rural business investment company under Section 2009cc of Title 7 of the United States Code or as a small business investment company under Section 681 of Title 15 of the United States Code.(B) At least one principal in a rural business investment company or a small business investment company is, and has been for at least four years, an officer or employee of the applicant or an affiliate of the applicant on the date the application is submitted.(C) As of the date the application is submitted, the applicant or affiliates of the applicant have invested at least one hundred million dollars ($100,000,000) in nonpublic companies located in non-metropolitan counties as defined by the Office of Management and Budget within the Office of the President of the United States on the basis of county or county-equivalent units or one hundred million dollars ($100,000,000) in opportunity zones.(3) The application shall include an estimate of the total new full-time employees that will result from the applicants growth investments.(4) The application shall include a signed affidavit from each taxpayer stating the amount of investor contribution the taxpayer will make. At least 60 percent of a growth funds requested investment authority shall consist of investor contributions.(5) The application shall include the growth funds federal employer identification number.(6) The application shall include a one-time application fee of ten thousand dollars ($10,000).(b) (1) The Treasurer shall review an application received pursuant to this section in the order in which it was received and shall either approve or deny the application within 45 days of receipt.(2) Applications that are received on the same day shall be deemed to have been received simultaneously.(c) The Treasurer may approve investment authority only in an aggregate amount that is not greater than five hundred million dollars ($500,000,000).(d) The Treasurer shall deny an application only if any of the following are true:(1) The application is incomplete.(2) The applicant does not meet the requirements of paragraph (2) or (4) of subdivision (a).(3) The Treasurer has already approved the maximum amount of investment authority allowed pursuant to subdivision (c).(e) (1) If the Treasurer denies an application, the applicant, within 15 business days after receiving notice of the denial, may provide additional information to the Treasurer to cure any defects in the application, except for failure to comply with paragraph (4) of subdivision (a).(2) The Treasurer shall review and reconsider applications corrected pursuant to paragraph (1) within thirty days.(3) If the Treasurer subsequently approves the application, the application shall be considered approved as of its original submission date and shall receive the pro rata allocation of investment authority that the applicant would have received if it had been approved on the original date of submission.12267. (a) After approving an application submitted pursuant to Section 12266, the Treasurer shall certify all of the following:(1) The applicant is a growth fund.(2) The amount of the applicants approved investment authority.(3) The investor contributions required from each investor that submitted an affidavit with the growth funds application.(b) Upon receipt of the documentation required by Section 12268, the Treasurer shall provide a tax credit certificate to each taxpayer that has made an investor contribution in the amount of the investor contribution.12268. (a) (1) Within 60 days of receiving the certification described in subdivision (a) of Section 12267, a growth fund shall collect all investor contributions and collect additional investments of cash that, when added to the investor contributions, equal the growth funds investment authority.(2) At least 10 percent of the growth funds investment authority shall consist of equity investments contributed directly or indirectly by affiliates of the growth fund.(3) Within 65 days after receiving the certification described in subdivision (a) of Section 12267, a growth fund shall send to the Treasurer the date on which the investment authority was collected and documentation that it has collected the amounts required by subdivision (a).(b) If the growth fund fails to fully comply with paragraphs (1) and (2) of subdivision (a), the Treasurer shall revoke the growth funds certification.12269. (a) A qualified growth fund shall be charged an annual fee, payable to the Treasurer, of 0.02 percent of the investment authority authorized.(b) (1) The initial annual fee is due and payable to the Treasurer within 65 days after receiving the certification issued pursuant to Section 12267.(2) After payment of the initial annual fee, the annual fee shall be due and payable to the Treasurer before March 1.(c) An annual fee shall not be required once a growth fund has exited the program pursuant to Section 12271.12270. (a) The Treasurer shall recapture, based on information in the growth funds annual report or its failure to make the certification set forth in paragraph (7) of subdivision (a) of Section 12272, any tax credit allowed pursuant to this article and revoke the tax credit certificates issued pursuant to Section 12267 if any of the following occur with respect to a growth fund before the growth fund exits the program in accordance with Section 12271:(1) The growth fund does not invest 60 percent of its investment authority in growth investments in this state within two years and 100 percent of its investment authority in growth investments in this state within three years of the closing date.(2) The growth fund, after initially satisfying paragraph (1), fails to maintain growth investments equal to 100 percent of its investment authority until the seventh anniversary of the closing date.(3) The growth fund makes a distribution or payment that results in the growth fund having less than 100 percent of its investment authority invested in growth investments in this state or available for investment in growth investments and held in cash, bank deposits, and marketable securities.(4) The growth fund fails to make growth investments in growth businesses with principal business operations in an area qualified under Section 4279.108(c)(1) of Title 7 of the Code of Federal Regulations that when added together equal at least 6 percent of the growth funds capital investment authority.(5) The growth fund invests in a growth business that directly or through an affiliate does any of the following:(A) Owns an investment in the growth fund.(B) Has the right to acquire an ownership interest in the growth fund.(C) Makes a loan to the growth fund.(D) (i) Makes an investment in the growth fund, an affiliate of the growth fund, or an investor in the growth fund.(ii) For purposes of this paragraph, a growth fund is not considered an affiliate of a growth business solely because of its growth investment.(b) For purposes of paragraphs (1) and (2) of subdivision (a), both of the following apply:(1) An investment is deemed to be maintained even if it is sold or repaid, so long as the growth fund reinvests an amount equal to the capital returned or recovered from the original investment, exclusive of any profits realized, in other growth investments in this state within 12 months of the receipt of that capital.(2) Amounts received periodically by a growth fund shall be treated as continuously invested in growth investments if the amounts are reinvested in one or more growth investments by the end of the calendar year following receipt of those amounts.(c) Paragraph (5) of subdivision (a) shall not apply to investments in publicly traded securities made by a growth business or an owner or affiliate of the growth business.(d) (1) Before making a growth investment, a growth fund may request a written determination from the Treasurer as to whether the business in which it proposes to invest satisfies the definition of a growth business to which the Treasurer shall respond no more than 15 business days from the date of receipt thereof.(2) If the Treasurer fails to issue a determination letter pursuant to paragraph (1), the business in which the growth fund proposes to invest shall be considered a growth business.(e) The maximum amount of growth investments in a particular growth business, including amounts invested in affiliates of the growth business, that a growth fund may count in satisfying the requirements of paragraphs (1) and (2) of subdivision (a) is the greater of five million dollars ($5,000,000) or 10 percent of its investment authority, exclusive of repaid or redeemed growth investments.(f) (1) Before revoking a tax credit certificate or recapturing credits pursuant to this section, the Treasurer shall notify the growth fund of the reasons for the pending revocation or recapture.(2) The growth fund shall have 90 days from the date the notice was received to correct a violation outlined in the notice to the satisfaction of the Treasurer and avoid recapture of tax credits and revocation of the tax credit certificate.(g) The Treasurer shall not revoke a tax credit certificate or recapture credits after a growth fund exits from the program in accordance with Section 12271.12271. (a) (1) A growth fund may, but only on or after the seventh anniversary of the closing date, apply to the Treasurer to exit the program, and upon exiting, shall no longer be subject to the provisions of this article, except as provided in subdivision (c).(2) The Treasurer shall approve or deny an application made pursuant to subdivision (a) within 30 days of receipt.(3) The Treasurer shall approve an application made pursuant to this section if, with respect to the applicant, no tax credit certificates have been revoked and the growth fund has not received a notice of revocation or recapture that has not been cured.(4) The Treasurer shall not unreasonably deny an application submitted pursuant to this section.(5) If the Treasurer denies an application, the notice of denial shall include the reasons for the determination.(b) After its exit from the program, a growth fund may not make distributions to its equity holders or pay any fees in excess of its investment authority until it has paid any state clawback amount due.(c) Each growth fund shall continue to report annually to the Treasurer both of the following:(1) The number of new full-time employees at each growth business, and that number shall continue to reduce the state clawback amount.(2) Employment offset until its state clawback amount equals zero or it has distributed all of its assets.12272. (a) Each growth fund shall submit an annual report to the Treasurer on or before the fifth business day after each anniversary of the closing date before its exit from the program pursuant to Section 12271. The report shall identify each growth investment made by the growth fund and shall include all of the following:(1) A bank statement evidencing each growth investment if not previously reported.(2) The name, location, and industry of each growth business receiving a growth investment, including either the determination letter set forth in Section 12270 or evidence that the business qualified as a growth business at the time the investment was made, if not previously reported.(3) For each growth business receiving a growth investment, evidence for the Treasurer to verify the number of full-time employees at each growth business on the date of the growth funds initial growth investment.(4) The number of new full-time employees at each growth business, the average salary of those employees, and evidence sufficient for the Treasurer to verify whether a new full-time employee is a targeted employee.(5) A calculation of the growth funds employment offset for that year.(6) The cumulative amount of growth investments made in each growth business.(7) A certification under penalty of perjury that the growth fund has not violated any of the grounds for revocation and recapture of credits set forth in subdivision (a) of Section 12270.(8) Any other information required by the Treasurer for purposes of carrying out the Treasurers duties under this article.(b) The growth fund is not required to provide information with respect to growth investments that have been redeemed or repaid as part of the annual report required by this section but shall provide that information if available.12273. (a) If the Treasurer revokes a growth funds certification pursuant to subdivision (b) of Section 12268 or a tax credit certificate pursuant to Section 12270, the associated investment authority and investor contributions will not count toward the limit on total investment authority and investor contributions set forth in subdivision (c) of Section 12266.(b) (1) The Treasurer shall first award reverted investment authority pro rata to each growth fund that was awarded less than the requested investment authority for which it applied, and that growth fund may allocate the associated investor contribution authority to any taxpayer with state premium tax liability in its discretion.(2) The Treasurer may award any remaining investment authority to new applicants.12274. (a) The Treasurer may adopt rules and regulations for the purpose of implementing the provisions of this article.(b) The Treasurer shall adopt forms and notices necessary to implement this article.(c) The Treasurer shall notify the Department of Insurance of the name of any insurance company allocated tax credits under this act and the amount of those credits.SEC. 3. For purposes of complying with Section 41 of the Revenue and Taxation Code, with respect to Article 6 (commencing with Section 12264) of Chapter 3 of Part 7 of Division 2 of the Revenue and Taxation Code as added by this act, the Legislature finds as follows:(a) The California Jobs and Upward Mobility Progression (JUMP) Act concerns communities underserved by traditional small business lending and flexible growth capital. Despite having the worlds fifth largest economy, California has the second fastest growing income inequality of all 50 states and the largest wage gap between middle-income and high-wage earners, often forcing workers in underserved areas to commute long distances to find suitable employment or affordable housing. This tax credit addresses these issues by incentivizing federally licensed Small Business Administration (SBA) and United States Department of Agriculture (USDA) investors to raise funds exclusively for investment in California small businesses located in distressed areas throughout the state, including all 879 designated opportunity zones. This tax credit will enable small businesses to grow and create quality well-paying jobs, thereby accelerating wage mobility and improving quality of life for California residents.(b) To measure whether the credit achieves its intended purpose, the Treasurer shall, on July 1, 2022, and annually thereafter in each year the program is in effect, submit a report, in compliance with Section 9795 of the Government Code, to the Legislature containing all of the following:(1) Bank statements evidencing each funds growth investments.(2) The name, location, and industry of each growth business receiving a growth investment.(3) A verifiable number of full-time employees at each growth business receiving a growth investment on the date of the growth funds initial growth investment.(4) A verifiable average salary of new full-time employees at each growth business that demonstrates a new full-time employee is a targeted employee in accordance with the program.(5) A calculation of the growth funds employment offset for that year.(6) The cumulative amount of growth investments made in each growth business as a result of this credit.(c) The Treasurer shall submit the report required by this section to the Senate Committee on Budget and Fiscal Review, the Assembly Committee on Budget, the Senate and Assembly Committees on Appropriations, the Senate Committee on Governance and Finance, and the Assembly Committee on Revenue and Taxation.SEC. 4. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.SEC. 5. This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.

The people of the State of California do enact as follows:

## The people of the State of California do enact as follows:

SECTION 1. The Legislature finds and declares all of the following:(a) According to a 2018 report taken from American Community Survey Data, California is seeing the second fastest growing income inequality and the largest wage gap between middle income and high wage earners of all 50 states.(b) California workers are increasingly commuting long distances to find suitable living wage employment or affordable housing.(c) Income inequality creates a tax burden on the state, as families with shrinking incomes must rely more heavily on state services.(d) The growing disparity in income inequality is further compounded by the struggles entrepreneurs and small business owners in Californias Opportunity Zones and rural areas face in securing affordable, flexible financing to grow their businesses and create well-paying jobs with benefits in their own communities.(e) Since the global financial crisis, the availability of senior lending from banks for small businesses and startups, particularly those in underserved areas, has significantly changed. Today, small business loans of less than $1 million account for less than 20 percent of the overall bank loan portfolios nationally, down from over 40 percent in 2004. These banks are making fewer small loans, precisely the type of investments on which underserved small businesses rely.(f) The 2017 California Small Business Credit Survey found that 42 percent of firms experienced a financial challenge in paying operating expenses and 39 percent of firms experienced a financial challenge in credit availability.(g) The best way to achieve a California for All is through a postperformance tax credit program with strong, important safeguards to protect the taxpayer and ensure policy goals are met.(h) While California has many available programs and incentives, most are geared toward keeping or attracting big businesses, with only a small percentage of investments or tax credits being utilized by existing small businesses.(i) To accelerate wage mobility and improve California workers ability to earn living wages with benefits closer to home, it is the intent of the Legislature to incentivize experienced, federally licensed investors to raise up to $500 million exclusively for investment to deploy in targeted small businesses in Californias Opportunity Zones and rural areas.

SECTION 1. The Legislature finds and declares all of the following:(a) According to a 2018 report taken from American Community Survey Data, California is seeing the second fastest growing income inequality and the largest wage gap between middle income and high wage earners of all 50 states.(b) California workers are increasingly commuting long distances to find suitable living wage employment or affordable housing.(c) Income inequality creates a tax burden on the state, as families with shrinking incomes must rely more heavily on state services.(d) The growing disparity in income inequality is further compounded by the struggles entrepreneurs and small business owners in Californias Opportunity Zones and rural areas face in securing affordable, flexible financing to grow their businesses and create well-paying jobs with benefits in their own communities.(e) Since the global financial crisis, the availability of senior lending from banks for small businesses and startups, particularly those in underserved areas, has significantly changed. Today, small business loans of less than $1 million account for less than 20 percent of the overall bank loan portfolios nationally, down from over 40 percent in 2004. These banks are making fewer small loans, precisely the type of investments on which underserved small businesses rely.(f) The 2017 California Small Business Credit Survey found that 42 percent of firms experienced a financial challenge in paying operating expenses and 39 percent of firms experienced a financial challenge in credit availability.(g) The best way to achieve a California for All is through a postperformance tax credit program with strong, important safeguards to protect the taxpayer and ensure policy goals are met.(h) While California has many available programs and incentives, most are geared toward keeping or attracting big businesses, with only a small percentage of investments or tax credits being utilized by existing small businesses.(i) To accelerate wage mobility and improve California workers ability to earn living wages with benefits closer to home, it is the intent of the Legislature to incentivize experienced, federally licensed investors to raise up to $500 million exclusively for investment to deploy in targeted small businesses in Californias Opportunity Zones and rural areas.

SECTION 1. The Legislature finds and declares all of the following:

### SECTION 1.

(a) According to a 2018 report taken from American Community Survey Data, California is seeing the second fastest growing income inequality and the largest wage gap between middle income and high wage earners of all 50 states.

(b) California workers are increasingly commuting long distances to find suitable living wage employment or affordable housing.

(c) Income inequality creates a tax burden on the state, as families with shrinking incomes must rely more heavily on state services.

(d) The growing disparity in income inequality is further compounded by the struggles entrepreneurs and small business owners in Californias Opportunity Zones and rural areas face in securing affordable, flexible financing to grow their businesses and create well-paying jobs with benefits in their own communities.

(e) Since the global financial crisis, the availability of senior lending from banks for small businesses and startups, particularly those in underserved areas, has significantly changed. Today, small business loans of less than $1 million account for less than 20 percent of the overall bank loan portfolios nationally, down from over 40 percent in 2004. These banks are making fewer small loans, precisely the type of investments on which underserved small businesses rely.

(f) The 2017 California Small Business Credit Survey found that 42 percent of firms experienced a financial challenge in paying operating expenses and 39 percent of firms experienced a financial challenge in credit availability.

(g) The best way to achieve a California for All is through a postperformance tax credit program with strong, important safeguards to protect the taxpayer and ensure policy goals are met.

(h) While California has many available programs and incentives, most are geared toward keeping or attracting big businesses, with only a small percentage of investments or tax credits being utilized by existing small businesses.

(i) To accelerate wage mobility and improve California workers ability to earn living wages with benefits closer to home, it is the intent of the Legislature to incentivize experienced, federally licensed investors to raise up to $500 million exclusively for investment to deploy in targeted small businesses in Californias Opportunity Zones and rural areas.

SEC. 2. Article 6 (commencing with Section 12264) is added to Chapter 3 of Part 7 of Division 2 of the Revenue and Taxation Code, to read: Article 6. Jobs and Upward Mobility Progression (JUMP) Act12264. As used in this article:(a) (1) Affiliate means an entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, another entity.(2) For the purposes of this subdivision, an entity is controlled by another entity if the controlling entity holds, directly or indirectly, the majority voting or ownership interest in the controlled entity or has control over the day-to-day operations of the controlled entity.(b) Closing date means the date on which a growth fund has collected all amounts specified by Section 12268.(c) (1) Employment offset means an amount calculated annually that is equal to the sum of both of the following:(A) The product of twenty-five thousand dollars ($25,000) and the number of new full-time employees of a growth funds growth businesses.(B) A one-time amount of ten thousand dollars ($10,000) for each full-time employee hired by a growth business that is a targeted employee.(2) (A) The number of new full-time employees of a growth funds growth businesses referenced in subparagraph (A) of paragraph (1) shall be calculated annually as the difference between the following:(i) The average monthly number of full-time employees at a growth business in the preceding calendar year or portion thereof if the initial growth investment occurred in the year.(ii) The number of full-time employees at the growth business on the date of the initial growth investment.(B) If the resulting difference between the amounts derived from clauses (i) and (ii) of subparagraph (A) is less than zero, the number of new full-time employees shall be deemed to be zero.(d) Full-time employee means any of the following:(1) An employment position that is filled at a growth business.(2) An employment position that receives wages that are at least 100 percent of the county median wage.(3) An employment position that is paid hourly wages for an average of at least 35 hours per week or any other period of time generally accepted by custom, industry, or practice as full-time employment.(4) An employment position that is salaried and paid for full-time employment within the meaning of Section 515 of the Labor Code.(e) Growth business means a business that, at the time a growth fund initially invests in the business, meets all of the following requirements:(1) The business has, together with its affiliates, fewer than 100 employees.(2) The business has aggregate gross receipts, less returns and allowances reportable to the state, of less than ten million dollars ($10,000,000) during the previous taxable year.(3) The business has its principal business operations in at least one growth zone in the state.(4) The business is engaged in North American Industry Classification System sector 11, 22, 23, 31, 32, 33, 48, 49, 54, or 62 or, if not engaged in those industries, the Treasurer determines that the investment will create desirable economic outcomes related to income mobility.(f) Growth fund means an entity certified by the Treasurer pursuant to Section 12267.(g) (1) Growth investment means a capital or equity investment in a growth business or a loan to a growth business with a stated maturity of at least one year after the date of issuance.(2) Growth investment does not include the provision of a revolving line of credit.(h) Growth zone means any of the following:(1) An opportunity zone located in the state.(2) A census tract in the state meeting either of the following requirements:(A) The census tract has a poverty rate that is greater than 20 percent.(B) The census tract has a median family income that does not exceed the following:(i) If the census tract is not located in a metropolitan area, the statewide median family income.(ii) If the census tract is located in a metropolitan area, the greater of the statewide median family income and the metropolitan area median family income.(3) All locations outside of census places with a population greater than or equal to 50,000 as of the latest decennial census and their adjacent and contiguous urbanized areas.(i) Investment authority means the amount certified by the Treasurer pursuant to Section 12267.(j) Investor contribution means a cash investment in a growth fund that meets both of the following requirements:(1) The cash investment is equal to the amount specified for that entity in the Treasurers approval of the growth funds application pursuant to Section 12267.(2) The cash investment purchased any of the following:(A) An equity interest in the growth fund.(B) A debt instrument that has a maturity date of at least six years from the closing date and a repayment schedule that is not greater than level principal amortization over six years.(k) Opportunity zone means a qualified opportunity zone, as defined by Section 1400Z-1 of Title 26 of the United States Code.(l) (1) Principal business operations means the location that meets either of the following requirements:(A) At least 60 percent of a business employees work at the location.(B) Employees who are paid at least 60 percent of the business payroll work at the location.(2) A business that has agreed to relocate employees using the proceeds of a growth investment to establish its principal business operations in a growth zone shall be deemed to have its principal business operations in a growth zone if it satisfies the requirements of paragraph (1) within 180 days after receiving a growth investment.(m) (1) State clawback amount means the difference between both of the following:(A) The growth funds total investor contributions.(B) The sum of the annual employment offsets reported by the growth fund pursuant to Section 12272.(2) If the amount derived from paragraph (1) is zero or less than zero, the state clawback amount shall be zero.(n) Targeted employee means a qualified new full-time employee who meets any of the following requirements:(1) (A) The employee was unemployed for the six months immediately preceding being hired and did not complete a baccalaureate, postgraduate, or professional degree at a college or university within the 12 months immediately preceding being hired.(B) For purposes of this paragraph, a person is unemployed when that person satisfies all of the following requirements:(i) The person is not receiving wages subject to withholding.(ii) The person is not self-employed.(iii) The person is not a full-time student at a high school, college, university, or postsecondary education institution.(2) The employee is a veteran separated from the Armed Forces of the United States in the preceding 12 months.(3) The employee received the federal Earned Income Tax Credit in the prior taxable year.(4) The employee has been convicted of a felony.(5) The employee is a current recipient of benefits pursuant to Article 3.2 (commencing with Section 11320) of Chapter 2 of Part 3 of Division 9 of the Welfare and Institutions Code.(6) The employee is provided, or reimbursed for, education or training leading to an official skill certification.(7) The employee is provided housing, a relocation bonus, or other housing assistance, by the qualifying growth business, that exceeds a value of ten thousand dollars ($10,000).(8) The employee is employed by a growth business in an area where a borrower would be qualified pursuant to Section 4279.108(c)(1) of the Code of Federal Regulations.(o) Treasurer means the State Treasurer.12265. (a) For taxable years beginning on or after January 1, 2021, and before January 1, 2031, there shall be allowed as a credit against the taxes imposed by this part and against the exactions imposed by paragraph (3) of subdivision (f) of Section 28 of Article XIII of the State Constitution, a JUMP Act tax credit in an amount equal to an investor contribution, as defined in Section 12264.(b) If the credit allowed by this section exceeds the taxes described in subdivision (a), the excess may be carried over to reduce those taxes in the following year, and the succeeding four years if necessary, until the credit is exhausted.(c) The credit is nonrefundable and may not be sold, transferred, or allocated to an entity other than an affiliate that was an affiliate of the taxpayer on the date that the taxpayer signed its affidavit included in the growth funds application pursuant to subdivision (a) of Section 12266.(d) A taxpayer claiming a credit under this section shall submit a copy of the tax credit certificate issued pursuant to Section 12267 with the taxpayers return for each taxable year for which the credit is claimed.(e) (1) The aggregate amount of investment authority that may be certified pursuant to Section 12267 shall be five hundred million dollars ($500,000,000) and the aggregate amount of credit that may be allocated and certified pursuant to this section shall be an amount equal to seventy-five million dollars ($75,000,000) in any taxable year and three hundred million dollars ($300,000,000) in total for all taxable years for which the JUMP Act tax credit is authorized.(2) If requests for investment authority and credits exceed the limitations described in paragraph (1), the Treasurer shall proportionally reduce the investment authority and credits certified for each approved application as necessary to avoid exceeding the limit.12266. (a) Beginning January 1, 2021, the Treasurer shall accept applications for approval as a growth fund, pursuant to rules and regulations adopted by the Treasurer, which shall meet all of the following requirements:(1) The total investment authority sought by the applicant shall not exceed five hundred million dollars ($500,000,000).(2) The application shall include evidence of all of the following:(A) A certification by an executive officer of the applicant that certifies that the applicant or an affiliate of the applicant is licensed as a rural business investment company under Section 2009cc of Title 7 of the United States Code or as a small business investment company under Section 681 of Title 15 of the United States Code.(B) At least one principal in a rural business investment company or a small business investment company is, and has been for at least four years, an officer or employee of the applicant or an affiliate of the applicant on the date the application is submitted.(C) As of the date the application is submitted, the applicant or affiliates of the applicant have invested at least one hundred million dollars ($100,000,000) in nonpublic companies located in non-metropolitan counties as defined by the Office of Management and Budget within the Office of the President of the United States on the basis of county or county-equivalent units or one hundred million dollars ($100,000,000) in opportunity zones.(3) The application shall include an estimate of the total new full-time employees that will result from the applicants growth investments.(4) The application shall include a signed affidavit from each taxpayer stating the amount of investor contribution the taxpayer will make. At least 60 percent of a growth funds requested investment authority shall consist of investor contributions.(5) The application shall include the growth funds federal employer identification number.(6) The application shall include a one-time application fee of ten thousand dollars ($10,000).(b) (1) The Treasurer shall review an application received pursuant to this section in the order in which it was received and shall either approve or deny the application within 45 days of receipt.(2) Applications that are received on the same day shall be deemed to have been received simultaneously.(c) The Treasurer may approve investment authority only in an aggregate amount that is not greater than five hundred million dollars ($500,000,000).(d) The Treasurer shall deny an application only if any of the following are true:(1) The application is incomplete.(2) The applicant does not meet the requirements of paragraph (2) or (4) of subdivision (a).(3) The Treasurer has already approved the maximum amount of investment authority allowed pursuant to subdivision (c).(e) (1) If the Treasurer denies an application, the applicant, within 15 business days after receiving notice of the denial, may provide additional information to the Treasurer to cure any defects in the application, except for failure to comply with paragraph (4) of subdivision (a).(2) The Treasurer shall review and reconsider applications corrected pursuant to paragraph (1) within thirty days.(3) If the Treasurer subsequently approves the application, the application shall be considered approved as of its original submission date and shall receive the pro rata allocation of investment authority that the applicant would have received if it had been approved on the original date of submission.12267. (a) After approving an application submitted pursuant to Section 12266, the Treasurer shall certify all of the following:(1) The applicant is a growth fund.(2) The amount of the applicants approved investment authority.(3) The investor contributions required from each investor that submitted an affidavit with the growth funds application.(b) Upon receipt of the documentation required by Section 12268, the Treasurer shall provide a tax credit certificate to each taxpayer that has made an investor contribution in the amount of the investor contribution.12268. (a) (1) Within 60 days of receiving the certification described in subdivision (a) of Section 12267, a growth fund shall collect all investor contributions and collect additional investments of cash that, when added to the investor contributions, equal the growth funds investment authority.(2) At least 10 percent of the growth funds investment authority shall consist of equity investments contributed directly or indirectly by affiliates of the growth fund.(3) Within 65 days after receiving the certification described in subdivision (a) of Section 12267, a growth fund shall send to the Treasurer the date on which the investment authority was collected and documentation that it has collected the amounts required by subdivision (a).(b) If the growth fund fails to fully comply with paragraphs (1) and (2) of subdivision (a), the Treasurer shall revoke the growth funds certification.12269. (a) A qualified growth fund shall be charged an annual fee, payable to the Treasurer, of 0.02 percent of the investment authority authorized.(b) (1) The initial annual fee is due and payable to the Treasurer within 65 days after receiving the certification issued pursuant to Section 12267.(2) After payment of the initial annual fee, the annual fee shall be due and payable to the Treasurer before March 1.(c) An annual fee shall not be required once a growth fund has exited the program pursuant to Section 12271.12270. (a) The Treasurer shall recapture, based on information in the growth funds annual report or its failure to make the certification set forth in paragraph (7) of subdivision (a) of Section 12272, any tax credit allowed pursuant to this article and revoke the tax credit certificates issued pursuant to Section 12267 if any of the following occur with respect to a growth fund before the growth fund exits the program in accordance with Section 12271:(1) The growth fund does not invest 60 percent of its investment authority in growth investments in this state within two years and 100 percent of its investment authority in growth investments in this state within three years of the closing date.(2) The growth fund, after initially satisfying paragraph (1), fails to maintain growth investments equal to 100 percent of its investment authority until the seventh anniversary of the closing date.(3) The growth fund makes a distribution or payment that results in the growth fund having less than 100 percent of its investment authority invested in growth investments in this state or available for investment in growth investments and held in cash, bank deposits, and marketable securities.(4) The growth fund fails to make growth investments in growth businesses with principal business operations in an area qualified under Section 4279.108(c)(1) of Title 7 of the Code of Federal Regulations that when added together equal at least 6 percent of the growth funds capital investment authority.(5) The growth fund invests in a growth business that directly or through an affiliate does any of the following:(A) Owns an investment in the growth fund.(B) Has the right to acquire an ownership interest in the growth fund.(C) Makes a loan to the growth fund.(D) (i) Makes an investment in the growth fund, an affiliate of the growth fund, or an investor in the growth fund.(ii) For purposes of this paragraph, a growth fund is not considered an affiliate of a growth business solely because of its growth investment.(b) For purposes of paragraphs (1) and (2) of subdivision (a), both of the following apply:(1) An investment is deemed to be maintained even if it is sold or repaid, so long as the growth fund reinvests an amount equal to the capital returned or recovered from the original investment, exclusive of any profits realized, in other growth investments in this state within 12 months of the receipt of that capital.(2) Amounts received periodically by a growth fund shall be treated as continuously invested in growth investments if the amounts are reinvested in one or more growth investments by the end of the calendar year following receipt of those amounts.(c) Paragraph (5) of subdivision (a) shall not apply to investments in publicly traded securities made by a growth business or an owner or affiliate of the growth business.(d) (1) Before making a growth investment, a growth fund may request a written determination from the Treasurer as to whether the business in which it proposes to invest satisfies the definition of a growth business to which the Treasurer shall respond no more than 15 business days from the date of receipt thereof.(2) If the Treasurer fails to issue a determination letter pursuant to paragraph (1), the business in which the growth fund proposes to invest shall be considered a growth business.(e) The maximum amount of growth investments in a particular growth business, including amounts invested in affiliates of the growth business, that a growth fund may count in satisfying the requirements of paragraphs (1) and (2) of subdivision (a) is the greater of five million dollars ($5,000,000) or 10 percent of its investment authority, exclusive of repaid or redeemed growth investments.(f) (1) Before revoking a tax credit certificate or recapturing credits pursuant to this section, the Treasurer shall notify the growth fund of the reasons for the pending revocation or recapture.(2) The growth fund shall have 90 days from the date the notice was received to correct a violation outlined in the notice to the satisfaction of the Treasurer and avoid recapture of tax credits and revocation of the tax credit certificate.(g) The Treasurer shall not revoke a tax credit certificate or recapture credits after a growth fund exits from the program in accordance with Section 12271.12271. (a) (1) A growth fund may, but only on or after the seventh anniversary of the closing date, apply to the Treasurer to exit the program, and upon exiting, shall no longer be subject to the provisions of this article, except as provided in subdivision (c).(2) The Treasurer shall approve or deny an application made pursuant to subdivision (a) within 30 days of receipt.(3) The Treasurer shall approve an application made pursuant to this section if, with respect to the applicant, no tax credit certificates have been revoked and the growth fund has not received a notice of revocation or recapture that has not been cured.(4) The Treasurer shall not unreasonably deny an application submitted pursuant to this section.(5) If the Treasurer denies an application, the notice of denial shall include the reasons for the determination.(b) After its exit from the program, a growth fund may not make distributions to its equity holders or pay any fees in excess of its investment authority until it has paid any state clawback amount due.(c) Each growth fund shall continue to report annually to the Treasurer both of the following:(1) The number of new full-time employees at each growth business, and that number shall continue to reduce the state clawback amount.(2) Employment offset until its state clawback amount equals zero or it has distributed all of its assets.12272. (a) Each growth fund shall submit an annual report to the Treasurer on or before the fifth business day after each anniversary of the closing date before its exit from the program pursuant to Section 12271. The report shall identify each growth investment made by the growth fund and shall include all of the following:(1) A bank statement evidencing each growth investment if not previously reported.(2) The name, location, and industry of each growth business receiving a growth investment, including either the determination letter set forth in Section 12270 or evidence that the business qualified as a growth business at the time the investment was made, if not previously reported.(3) For each growth business receiving a growth investment, evidence for the Treasurer to verify the number of full-time employees at each growth business on the date of the growth funds initial growth investment.(4) The number of new full-time employees at each growth business, the average salary of those employees, and evidence sufficient for the Treasurer to verify whether a new full-time employee is a targeted employee.(5) A calculation of the growth funds employment offset for that year.(6) The cumulative amount of growth investments made in each growth business.(7) A certification under penalty of perjury that the growth fund has not violated any of the grounds for revocation and recapture of credits set forth in subdivision (a) of Section 12270.(8) Any other information required by the Treasurer for purposes of carrying out the Treasurers duties under this article.(b) The growth fund is not required to provide information with respect to growth investments that have been redeemed or repaid as part of the annual report required by this section but shall provide that information if available.12273. (a) If the Treasurer revokes a growth funds certification pursuant to subdivision (b) of Section 12268 or a tax credit certificate pursuant to Section 12270, the associated investment authority and investor contributions will not count toward the limit on total investment authority and investor contributions set forth in subdivision (c) of Section 12266.(b) (1) The Treasurer shall first award reverted investment authority pro rata to each growth fund that was awarded less than the requested investment authority for which it applied, and that growth fund may allocate the associated investor contribution authority to any taxpayer with state premium tax liability in its discretion.(2) The Treasurer may award any remaining investment authority to new applicants.12274. (a) The Treasurer may adopt rules and regulations for the purpose of implementing the provisions of this article.(b) The Treasurer shall adopt forms and notices necessary to implement this article.(c) The Treasurer shall notify the Department of Insurance of the name of any insurance company allocated tax credits under this act and the amount of those credits.

SEC. 2. Article 6 (commencing with Section 12264) is added to Chapter 3 of Part 7 of Division 2 of the Revenue and Taxation Code, to read:

### SEC. 2.

 Article 6. Jobs and Upward Mobility Progression (JUMP) Act12264. As used in this article:(a) (1) Affiliate means an entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, another entity.(2) For the purposes of this subdivision, an entity is controlled by another entity if the controlling entity holds, directly or indirectly, the majority voting or ownership interest in the controlled entity or has control over the day-to-day operations of the controlled entity.(b) Closing date means the date on which a growth fund has collected all amounts specified by Section 12268.(c) (1) Employment offset means an amount calculated annually that is equal to the sum of both of the following:(A) The product of twenty-five thousand dollars ($25,000) and the number of new full-time employees of a growth funds growth businesses.(B) A one-time amount of ten thousand dollars ($10,000) for each full-time employee hired by a growth business that is a targeted employee.(2) (A) The number of new full-time employees of a growth funds growth businesses referenced in subparagraph (A) of paragraph (1) shall be calculated annually as the difference between the following:(i) The average monthly number of full-time employees at a growth business in the preceding calendar year or portion thereof if the initial growth investment occurred in the year.(ii) The number of full-time employees at the growth business on the date of the initial growth investment.(B) If the resulting difference between the amounts derived from clauses (i) and (ii) of subparagraph (A) is less than zero, the number of new full-time employees shall be deemed to be zero.(d) Full-time employee means any of the following:(1) An employment position that is filled at a growth business.(2) An employment position that receives wages that are at least 100 percent of the county median wage.(3) An employment position that is paid hourly wages for an average of at least 35 hours per week or any other period of time generally accepted by custom, industry, or practice as full-time employment.(4) An employment position that is salaried and paid for full-time employment within the meaning of Section 515 of the Labor Code.(e) Growth business means a business that, at the time a growth fund initially invests in the business, meets all of the following requirements:(1) The business has, together with its affiliates, fewer than 100 employees.(2) The business has aggregate gross receipts, less returns and allowances reportable to the state, of less than ten million dollars ($10,000,000) during the previous taxable year.(3) The business has its principal business operations in at least one growth zone in the state.(4) The business is engaged in North American Industry Classification System sector 11, 22, 23, 31, 32, 33, 48, 49, 54, or 62 or, if not engaged in those industries, the Treasurer determines that the investment will create desirable economic outcomes related to income mobility.(f) Growth fund means an entity certified by the Treasurer pursuant to Section 12267.(g) (1) Growth investment means a capital or equity investment in a growth business or a loan to a growth business with a stated maturity of at least one year after the date of issuance.(2) Growth investment does not include the provision of a revolving line of credit.(h) Growth zone means any of the following:(1) An opportunity zone located in the state.(2) A census tract in the state meeting either of the following requirements:(A) The census tract has a poverty rate that is greater than 20 percent.(B) The census tract has a median family income that does not exceed the following:(i) If the census tract is not located in a metropolitan area, the statewide median family income.(ii) If the census tract is located in a metropolitan area, the greater of the statewide median family income and the metropolitan area median family income.(3) All locations outside of census places with a population greater than or equal to 50,000 as of the latest decennial census and their adjacent and contiguous urbanized areas.(i) Investment authority means the amount certified by the Treasurer pursuant to Section 12267.(j) Investor contribution means a cash investment in a growth fund that meets both of the following requirements:(1) The cash investment is equal to the amount specified for that entity in the Treasurers approval of the growth funds application pursuant to Section 12267.(2) The cash investment purchased any of the following:(A) An equity interest in the growth fund.(B) A debt instrument that has a maturity date of at least six years from the closing date and a repayment schedule that is not greater than level principal amortization over six years.(k) Opportunity zone means a qualified opportunity zone, as defined by Section 1400Z-1 of Title 26 of the United States Code.(l) (1) Principal business operations means the location that meets either of the following requirements:(A) At least 60 percent of a business employees work at the location.(B) Employees who are paid at least 60 percent of the business payroll work at the location.(2) A business that has agreed to relocate employees using the proceeds of a growth investment to establish its principal business operations in a growth zone shall be deemed to have its principal business operations in a growth zone if it satisfies the requirements of paragraph (1) within 180 days after receiving a growth investment.(m) (1) State clawback amount means the difference between both of the following:(A) The growth funds total investor contributions.(B) The sum of the annual employment offsets reported by the growth fund pursuant to Section 12272.(2) If the amount derived from paragraph (1) is zero or less than zero, the state clawback amount shall be zero.(n) Targeted employee means a qualified new full-time employee who meets any of the following requirements:(1) (A) The employee was unemployed for the six months immediately preceding being hired and did not complete a baccalaureate, postgraduate, or professional degree at a college or university within the 12 months immediately preceding being hired.(B) For purposes of this paragraph, a person is unemployed when that person satisfies all of the following requirements:(i) The person is not receiving wages subject to withholding.(ii) The person is not self-employed.(iii) The person is not a full-time student at a high school, college, university, or postsecondary education institution.(2) The employee is a veteran separated from the Armed Forces of the United States in the preceding 12 months.(3) The employee received the federal Earned Income Tax Credit in the prior taxable year.(4) The employee has been convicted of a felony.(5) The employee is a current recipient of benefits pursuant to Article 3.2 (commencing with Section 11320) of Chapter 2 of Part 3 of Division 9 of the Welfare and Institutions Code.(6) The employee is provided, or reimbursed for, education or training leading to an official skill certification.(7) The employee is provided housing, a relocation bonus, or other housing assistance, by the qualifying growth business, that exceeds a value of ten thousand dollars ($10,000).(8) The employee is employed by a growth business in an area where a borrower would be qualified pursuant to Section 4279.108(c)(1) of the Code of Federal Regulations.(o) Treasurer means the State Treasurer.12265. (a) For taxable years beginning on or after January 1, 2021, and before January 1, 2031, there shall be allowed as a credit against the taxes imposed by this part and against the exactions imposed by paragraph (3) of subdivision (f) of Section 28 of Article XIII of the State Constitution, a JUMP Act tax credit in an amount equal to an investor contribution, as defined in Section 12264.(b) If the credit allowed by this section exceeds the taxes described in subdivision (a), the excess may be carried over to reduce those taxes in the following year, and the succeeding four years if necessary, until the credit is exhausted.(c) The credit is nonrefundable and may not be sold, transferred, or allocated to an entity other than an affiliate that was an affiliate of the taxpayer on the date that the taxpayer signed its affidavit included in the growth funds application pursuant to subdivision (a) of Section 12266.(d) A taxpayer claiming a credit under this section shall submit a copy of the tax credit certificate issued pursuant to Section 12267 with the taxpayers return for each taxable year for which the credit is claimed.(e) (1) The aggregate amount of investment authority that may be certified pursuant to Section 12267 shall be five hundred million dollars ($500,000,000) and the aggregate amount of credit that may be allocated and certified pursuant to this section shall be an amount equal to seventy-five million dollars ($75,000,000) in any taxable year and three hundred million dollars ($300,000,000) in total for all taxable years for which the JUMP Act tax credit is authorized.(2) If requests for investment authority and credits exceed the limitations described in paragraph (1), the Treasurer shall proportionally reduce the investment authority and credits certified for each approved application as necessary to avoid exceeding the limit.12266. (a) Beginning January 1, 2021, the Treasurer shall accept applications for approval as a growth fund, pursuant to rules and regulations adopted by the Treasurer, which shall meet all of the following requirements:(1) The total investment authority sought by the applicant shall not exceed five hundred million dollars ($500,000,000).(2) The application shall include evidence of all of the following:(A) A certification by an executive officer of the applicant that certifies that the applicant or an affiliate of the applicant is licensed as a rural business investment company under Section 2009cc of Title 7 of the United States Code or as a small business investment company under Section 681 of Title 15 of the United States Code.(B) At least one principal in a rural business investment company or a small business investment company is, and has been for at least four years, an officer or employee of the applicant or an affiliate of the applicant on the date the application is submitted.(C) As of the date the application is submitted, the applicant or affiliates of the applicant have invested at least one hundred million dollars ($100,000,000) in nonpublic companies located in non-metropolitan counties as defined by the Office of Management and Budget within the Office of the President of the United States on the basis of county or county-equivalent units or one hundred million dollars ($100,000,000) in opportunity zones.(3) The application shall include an estimate of the total new full-time employees that will result from the applicants growth investments.(4) The application shall include a signed affidavit from each taxpayer stating the amount of investor contribution the taxpayer will make. At least 60 percent of a growth funds requested investment authority shall consist of investor contributions.(5) The application shall include the growth funds federal employer identification number.(6) The application shall include a one-time application fee of ten thousand dollars ($10,000).(b) (1) The Treasurer shall review an application received pursuant to this section in the order in which it was received and shall either approve or deny the application within 45 days of receipt.(2) Applications that are received on the same day shall be deemed to have been received simultaneously.(c) The Treasurer may approve investment authority only in an aggregate amount that is not greater than five hundred million dollars ($500,000,000).(d) The Treasurer shall deny an application only if any of the following are true:(1) The application is incomplete.(2) The applicant does not meet the requirements of paragraph (2) or (4) of subdivision (a).(3) The Treasurer has already approved the maximum amount of investment authority allowed pursuant to subdivision (c).(e) (1) If the Treasurer denies an application, the applicant, within 15 business days after receiving notice of the denial, may provide additional information to the Treasurer to cure any defects in the application, except for failure to comply with paragraph (4) of subdivision (a).(2) The Treasurer shall review and reconsider applications corrected pursuant to paragraph (1) within thirty days.(3) If the Treasurer subsequently approves the application, the application shall be considered approved as of its original submission date and shall receive the pro rata allocation of investment authority that the applicant would have received if it had been approved on the original date of submission.12267. (a) After approving an application submitted pursuant to Section 12266, the Treasurer shall certify all of the following:(1) The applicant is a growth fund.(2) The amount of the applicants approved investment authority.(3) The investor contributions required from each investor that submitted an affidavit with the growth funds application.(b) Upon receipt of the documentation required by Section 12268, the Treasurer shall provide a tax credit certificate to each taxpayer that has made an investor contribution in the amount of the investor contribution.12268. (a) (1) Within 60 days of receiving the certification described in subdivision (a) of Section 12267, a growth fund shall collect all investor contributions and collect additional investments of cash that, when added to the investor contributions, equal the growth funds investment authority.(2) At least 10 percent of the growth funds investment authority shall consist of equity investments contributed directly or indirectly by affiliates of the growth fund.(3) Within 65 days after receiving the certification described in subdivision (a) of Section 12267, a growth fund shall send to the Treasurer the date on which the investment authority was collected and documentation that it has collected the amounts required by subdivision (a).(b) If the growth fund fails to fully comply with paragraphs (1) and (2) of subdivision (a), the Treasurer shall revoke the growth funds certification.12269. (a) A qualified growth fund shall be charged an annual fee, payable to the Treasurer, of 0.02 percent of the investment authority authorized.(b) (1) The initial annual fee is due and payable to the Treasurer within 65 days after receiving the certification issued pursuant to Section 12267.(2) After payment of the initial annual fee, the annual fee shall be due and payable to the Treasurer before March 1.(c) An annual fee shall not be required once a growth fund has exited the program pursuant to Section 12271.12270. (a) The Treasurer shall recapture, based on information in the growth funds annual report or its failure to make the certification set forth in paragraph (7) of subdivision (a) of Section 12272, any tax credit allowed pursuant to this article and revoke the tax credit certificates issued pursuant to Section 12267 if any of the following occur with respect to a growth fund before the growth fund exits the program in accordance with Section 12271:(1) The growth fund does not invest 60 percent of its investment authority in growth investments in this state within two years and 100 percent of its investment authority in growth investments in this state within three years of the closing date.(2) The growth fund, after initially satisfying paragraph (1), fails to maintain growth investments equal to 100 percent of its investment authority until the seventh anniversary of the closing date.(3) The growth fund makes a distribution or payment that results in the growth fund having less than 100 percent of its investment authority invested in growth investments in this state or available for investment in growth investments and held in cash, bank deposits, and marketable securities.(4) The growth fund fails to make growth investments in growth businesses with principal business operations in an area qualified under Section 4279.108(c)(1) of Title 7 of the Code of Federal Regulations that when added together equal at least 6 percent of the growth funds capital investment authority.(5) The growth fund invests in a growth business that directly or through an affiliate does any of the following:(A) Owns an investment in the growth fund.(B) Has the right to acquire an ownership interest in the growth fund.(C) Makes a loan to the growth fund.(D) (i) Makes an investment in the growth fund, an affiliate of the growth fund, or an investor in the growth fund.(ii) For purposes of this paragraph, a growth fund is not considered an affiliate of a growth business solely because of its growth investment.(b) For purposes of paragraphs (1) and (2) of subdivision (a), both of the following apply:(1) An investment is deemed to be maintained even if it is sold or repaid, so long as the growth fund reinvests an amount equal to the capital returned or recovered from the original investment, exclusive of any profits realized, in other growth investments in this state within 12 months of the receipt of that capital.(2) Amounts received periodically by a growth fund shall be treated as continuously invested in growth investments if the amounts are reinvested in one or more growth investments by the end of the calendar year following receipt of those amounts.(c) Paragraph (5) of subdivision (a) shall not apply to investments in publicly traded securities made by a growth business or an owner or affiliate of the growth business.(d) (1) Before making a growth investment, a growth fund may request a written determination from the Treasurer as to whether the business in which it proposes to invest satisfies the definition of a growth business to which the Treasurer shall respond no more than 15 business days from the date of receipt thereof.(2) If the Treasurer fails to issue a determination letter pursuant to paragraph (1), the business in which the growth fund proposes to invest shall be considered a growth business.(e) The maximum amount of growth investments in a particular growth business, including amounts invested in affiliates of the growth business, that a growth fund may count in satisfying the requirements of paragraphs (1) and (2) of subdivision (a) is the greater of five million dollars ($5,000,000) or 10 percent of its investment authority, exclusive of repaid or redeemed growth investments.(f) (1) Before revoking a tax credit certificate or recapturing credits pursuant to this section, the Treasurer shall notify the growth fund of the reasons for the pending revocation or recapture.(2) The growth fund shall have 90 days from the date the notice was received to correct a violation outlined in the notice to the satisfaction of the Treasurer and avoid recapture of tax credits and revocation of the tax credit certificate.(g) The Treasurer shall not revoke a tax credit certificate or recapture credits after a growth fund exits from the program in accordance with Section 12271.12271. (a) (1) A growth fund may, but only on or after the seventh anniversary of the closing date, apply to the Treasurer to exit the program, and upon exiting, shall no longer be subject to the provisions of this article, except as provided in subdivision (c).(2) The Treasurer shall approve or deny an application made pursuant to subdivision (a) within 30 days of receipt.(3) The Treasurer shall approve an application made pursuant to this section if, with respect to the applicant, no tax credit certificates have been revoked and the growth fund has not received a notice of revocation or recapture that has not been cured.(4) The Treasurer shall not unreasonably deny an application submitted pursuant to this section.(5) If the Treasurer denies an application, the notice of denial shall include the reasons for the determination.(b) After its exit from the program, a growth fund may not make distributions to its equity holders or pay any fees in excess of its investment authority until it has paid any state clawback amount due.(c) Each growth fund shall continue to report annually to the Treasurer both of the following:(1) The number of new full-time employees at each growth business, and that number shall continue to reduce the state clawback amount.(2) Employment offset until its state clawback amount equals zero or it has distributed all of its assets.12272. (a) Each growth fund shall submit an annual report to the Treasurer on or before the fifth business day after each anniversary of the closing date before its exit from the program pursuant to Section 12271. The report shall identify each growth investment made by the growth fund and shall include all of the following:(1) A bank statement evidencing each growth investment if not previously reported.(2) The name, location, and industry of each growth business receiving a growth investment, including either the determination letter set forth in Section 12270 or evidence that the business qualified as a growth business at the time the investment was made, if not previously reported.(3) For each growth business receiving a growth investment, evidence for the Treasurer to verify the number of full-time employees at each growth business on the date of the growth funds initial growth investment.(4) The number of new full-time employees at each growth business, the average salary of those employees, and evidence sufficient for the Treasurer to verify whether a new full-time employee is a targeted employee.(5) A calculation of the growth funds employment offset for that year.(6) The cumulative amount of growth investments made in each growth business.(7) A certification under penalty of perjury that the growth fund has not violated any of the grounds for revocation and recapture of credits set forth in subdivision (a) of Section 12270.(8) Any other information required by the Treasurer for purposes of carrying out the Treasurers duties under this article.(b) The growth fund is not required to provide information with respect to growth investments that have been redeemed or repaid as part of the annual report required by this section but shall provide that information if available.12273. (a) If the Treasurer revokes a growth funds certification pursuant to subdivision (b) of Section 12268 or a tax credit certificate pursuant to Section 12270, the associated investment authority and investor contributions will not count toward the limit on total investment authority and investor contributions set forth in subdivision (c) of Section 12266.(b) (1) The Treasurer shall first award reverted investment authority pro rata to each growth fund that was awarded less than the requested investment authority for which it applied, and that growth fund may allocate the associated investor contribution authority to any taxpayer with state premium tax liability in its discretion.(2) The Treasurer may award any remaining investment authority to new applicants.12274. (a) The Treasurer may adopt rules and regulations for the purpose of implementing the provisions of this article.(b) The Treasurer shall adopt forms and notices necessary to implement this article.(c) The Treasurer shall notify the Department of Insurance of the name of any insurance company allocated tax credits under this act and the amount of those credits.

 Article 6. Jobs and Upward Mobility Progression (JUMP) Act12264. As used in this article:(a) (1) Affiliate means an entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, another entity.(2) For the purposes of this subdivision, an entity is controlled by another entity if the controlling entity holds, directly or indirectly, the majority voting or ownership interest in the controlled entity or has control over the day-to-day operations of the controlled entity.(b) Closing date means the date on which a growth fund has collected all amounts specified by Section 12268.(c) (1) Employment offset means an amount calculated annually that is equal to the sum of both of the following:(A) The product of twenty-five thousand dollars ($25,000) and the number of new full-time employees of a growth funds growth businesses.(B) A one-time amount of ten thousand dollars ($10,000) for each full-time employee hired by a growth business that is a targeted employee.(2) (A) The number of new full-time employees of a growth funds growth businesses referenced in subparagraph (A) of paragraph (1) shall be calculated annually as the difference between the following:(i) The average monthly number of full-time employees at a growth business in the preceding calendar year or portion thereof if the initial growth investment occurred in the year.(ii) The number of full-time employees at the growth business on the date of the initial growth investment.(B) If the resulting difference between the amounts derived from clauses (i) and (ii) of subparagraph (A) is less than zero, the number of new full-time employees shall be deemed to be zero.(d) Full-time employee means any of the following:(1) An employment position that is filled at a growth business.(2) An employment position that receives wages that are at least 100 percent of the county median wage.(3) An employment position that is paid hourly wages for an average of at least 35 hours per week or any other period of time generally accepted by custom, industry, or practice as full-time employment.(4) An employment position that is salaried and paid for full-time employment within the meaning of Section 515 of the Labor Code.(e) Growth business means a business that, at the time a growth fund initially invests in the business, meets all of the following requirements:(1) The business has, together with its affiliates, fewer than 100 employees.(2) The business has aggregate gross receipts, less returns and allowances reportable to the state, of less than ten million dollars ($10,000,000) during the previous taxable year.(3) The business has its principal business operations in at least one growth zone in the state.(4) The business is engaged in North American Industry Classification System sector 11, 22, 23, 31, 32, 33, 48, 49, 54, or 62 or, if not engaged in those industries, the Treasurer determines that the investment will create desirable economic outcomes related to income mobility.(f) Growth fund means an entity certified by the Treasurer pursuant to Section 12267.(g) (1) Growth investment means a capital or equity investment in a growth business or a loan to a growth business with a stated maturity of at least one year after the date of issuance.(2) Growth investment does not include the provision of a revolving line of credit.(h) Growth zone means any of the following:(1) An opportunity zone located in the state.(2) A census tract in the state meeting either of the following requirements:(A) The census tract has a poverty rate that is greater than 20 percent.(B) The census tract has a median family income that does not exceed the following:(i) If the census tract is not located in a metropolitan area, the statewide median family income.(ii) If the census tract is located in a metropolitan area, the greater of the statewide median family income and the metropolitan area median family income.(3) All locations outside of census places with a population greater than or equal to 50,000 as of the latest decennial census and their adjacent and contiguous urbanized areas.(i) Investment authority means the amount certified by the Treasurer pursuant to Section 12267.(j) Investor contribution means a cash investment in a growth fund that meets both of the following requirements:(1) The cash investment is equal to the amount specified for that entity in the Treasurers approval of the growth funds application pursuant to Section 12267.(2) The cash investment purchased any of the following:(A) An equity interest in the growth fund.(B) A debt instrument that has a maturity date of at least six years from the closing date and a repayment schedule that is not greater than level principal amortization over six years.(k) Opportunity zone means a qualified opportunity zone, as defined by Section 1400Z-1 of Title 26 of the United States Code.(l) (1) Principal business operations means the location that meets either of the following requirements:(A) At least 60 percent of a business employees work at the location.(B) Employees who are paid at least 60 percent of the business payroll work at the location.(2) A business that has agreed to relocate employees using the proceeds of a growth investment to establish its principal business operations in a growth zone shall be deemed to have its principal business operations in a growth zone if it satisfies the requirements of paragraph (1) within 180 days after receiving a growth investment.(m) (1) State clawback amount means the difference between both of the following:(A) The growth funds total investor contributions.(B) The sum of the annual employment offsets reported by the growth fund pursuant to Section 12272.(2) If the amount derived from paragraph (1) is zero or less than zero, the state clawback amount shall be zero.(n) Targeted employee means a qualified new full-time employee who meets any of the following requirements:(1) (A) The employee was unemployed for the six months immediately preceding being hired and did not complete a baccalaureate, postgraduate, or professional degree at a college or university within the 12 months immediately preceding being hired.(B) For purposes of this paragraph, a person is unemployed when that person satisfies all of the following requirements:(i) The person is not receiving wages subject to withholding.(ii) The person is not self-employed.(iii) The person is not a full-time student at a high school, college, university, or postsecondary education institution.(2) The employee is a veteran separated from the Armed Forces of the United States in the preceding 12 months.(3) The employee received the federal Earned Income Tax Credit in the prior taxable year.(4) The employee has been convicted of a felony.(5) The employee is a current recipient of benefits pursuant to Article 3.2 (commencing with Section 11320) of Chapter 2 of Part 3 of Division 9 of the Welfare and Institutions Code.(6) The employee is provided, or reimbursed for, education or training leading to an official skill certification.(7) The employee is provided housing, a relocation bonus, or other housing assistance, by the qualifying growth business, that exceeds a value of ten thousand dollars ($10,000).(8) The employee is employed by a growth business in an area where a borrower would be qualified pursuant to Section 4279.108(c)(1) of the Code of Federal Regulations.(o) Treasurer means the State Treasurer.12265. (a) For taxable years beginning on or after January 1, 2021, and before January 1, 2031, there shall be allowed as a credit against the taxes imposed by this part and against the exactions imposed by paragraph (3) of subdivision (f) of Section 28 of Article XIII of the State Constitution, a JUMP Act tax credit in an amount equal to an investor contribution, as defined in Section 12264.(b) If the credit allowed by this section exceeds the taxes described in subdivision (a), the excess may be carried over to reduce those taxes in the following year, and the succeeding four years if necessary, until the credit is exhausted.(c) The credit is nonrefundable and may not be sold, transferred, or allocated to an entity other than an affiliate that was an affiliate of the taxpayer on the date that the taxpayer signed its affidavit included in the growth funds application pursuant to subdivision (a) of Section 12266.(d) A taxpayer claiming a credit under this section shall submit a copy of the tax credit certificate issued pursuant to Section 12267 with the taxpayers return for each taxable year for which the credit is claimed.(e) (1) The aggregate amount of investment authority that may be certified pursuant to Section 12267 shall be five hundred million dollars ($500,000,000) and the aggregate amount of credit that may be allocated and certified pursuant to this section shall be an amount equal to seventy-five million dollars ($75,000,000) in any taxable year and three hundred million dollars ($300,000,000) in total for all taxable years for which the JUMP Act tax credit is authorized.(2) If requests for investment authority and credits exceed the limitations described in paragraph (1), the Treasurer shall proportionally reduce the investment authority and credits certified for each approved application as necessary to avoid exceeding the limit.12266. (a) Beginning January 1, 2021, the Treasurer shall accept applications for approval as a growth fund, pursuant to rules and regulations adopted by the Treasurer, which shall meet all of the following requirements:(1) The total investment authority sought by the applicant shall not exceed five hundred million dollars ($500,000,000).(2) The application shall include evidence of all of the following:(A) A certification by an executive officer of the applicant that certifies that the applicant or an affiliate of the applicant is licensed as a rural business investment company under Section 2009cc of Title 7 of the United States Code or as a small business investment company under Section 681 of Title 15 of the United States Code.(B) At least one principal in a rural business investment company or a small business investment company is, and has been for at least four years, an officer or employee of the applicant or an affiliate of the applicant on the date the application is submitted.(C) As of the date the application is submitted, the applicant or affiliates of the applicant have invested at least one hundred million dollars ($100,000,000) in nonpublic companies located in non-metropolitan counties as defined by the Office of Management and Budget within the Office of the President of the United States on the basis of county or county-equivalent units or one hundred million dollars ($100,000,000) in opportunity zones.(3) The application shall include an estimate of the total new full-time employees that will result from the applicants growth investments.(4) The application shall include a signed affidavit from each taxpayer stating the amount of investor contribution the taxpayer will make. At least 60 percent of a growth funds requested investment authority shall consist of investor contributions.(5) The application shall include the growth funds federal employer identification number.(6) The application shall include a one-time application fee of ten thousand dollars ($10,000).(b) (1) The Treasurer shall review an application received pursuant to this section in the order in which it was received and shall either approve or deny the application within 45 days of receipt.(2) Applications that are received on the same day shall be deemed to have been received simultaneously.(c) The Treasurer may approve investment authority only in an aggregate amount that is not greater than five hundred million dollars ($500,000,000).(d) The Treasurer shall deny an application only if any of the following are true:(1) The application is incomplete.(2) The applicant does not meet the requirements of paragraph (2) or (4) of subdivision (a).(3) The Treasurer has already approved the maximum amount of investment authority allowed pursuant to subdivision (c).(e) (1) If the Treasurer denies an application, the applicant, within 15 business days after receiving notice of the denial, may provide additional information to the Treasurer to cure any defects in the application, except for failure to comply with paragraph (4) of subdivision (a).(2) The Treasurer shall review and reconsider applications corrected pursuant to paragraph (1) within thirty days.(3) If the Treasurer subsequently approves the application, the application shall be considered approved as of its original submission date and shall receive the pro rata allocation of investment authority that the applicant would have received if it had been approved on the original date of submission.12267. (a) After approving an application submitted pursuant to Section 12266, the Treasurer shall certify all of the following:(1) The applicant is a growth fund.(2) The amount of the applicants approved investment authority.(3) The investor contributions required from each investor that submitted an affidavit with the growth funds application.(b) Upon receipt of the documentation required by Section 12268, the Treasurer shall provide a tax credit certificate to each taxpayer that has made an investor contribution in the amount of the investor contribution.12268. (a) (1) Within 60 days of receiving the certification described in subdivision (a) of Section 12267, a growth fund shall collect all investor contributions and collect additional investments of cash that, when added to the investor contributions, equal the growth funds investment authority.(2) At least 10 percent of the growth funds investment authority shall consist of equity investments contributed directly or indirectly by affiliates of the growth fund.(3) Within 65 days after receiving the certification described in subdivision (a) of Section 12267, a growth fund shall send to the Treasurer the date on which the investment authority was collected and documentation that it has collected the amounts required by subdivision (a).(b) If the growth fund fails to fully comply with paragraphs (1) and (2) of subdivision (a), the Treasurer shall revoke the growth funds certification.12269. (a) A qualified growth fund shall be charged an annual fee, payable to the Treasurer, of 0.02 percent of the investment authority authorized.(b) (1) The initial annual fee is due and payable to the Treasurer within 65 days after receiving the certification issued pursuant to Section 12267.(2) After payment of the initial annual fee, the annual fee shall be due and payable to the Treasurer before March 1.(c) An annual fee shall not be required once a growth fund has exited the program pursuant to Section 12271.12270. (a) The Treasurer shall recapture, based on information in the growth funds annual report or its failure to make the certification set forth in paragraph (7) of subdivision (a) of Section 12272, any tax credit allowed pursuant to this article and revoke the tax credit certificates issued pursuant to Section 12267 if any of the following occur with respect to a growth fund before the growth fund exits the program in accordance with Section 12271:(1) The growth fund does not invest 60 percent of its investment authority in growth investments in this state within two years and 100 percent of its investment authority in growth investments in this state within three years of the closing date.(2) The growth fund, after initially satisfying paragraph (1), fails to maintain growth investments equal to 100 percent of its investment authority until the seventh anniversary of the closing date.(3) The growth fund makes a distribution or payment that results in the growth fund having less than 100 percent of its investment authority invested in growth investments in this state or available for investment in growth investments and held in cash, bank deposits, and marketable securities.(4) The growth fund fails to make growth investments in growth businesses with principal business operations in an area qualified under Section 4279.108(c)(1) of Title 7 of the Code of Federal Regulations that when added together equal at least 6 percent of the growth funds capital investment authority.(5) The growth fund invests in a growth business that directly or through an affiliate does any of the following:(A) Owns an investment in the growth fund.(B) Has the right to acquire an ownership interest in the growth fund.(C) Makes a loan to the growth fund.(D) (i) Makes an investment in the growth fund, an affiliate of the growth fund, or an investor in the growth fund.(ii) For purposes of this paragraph, a growth fund is not considered an affiliate of a growth business solely because of its growth investment.(b) For purposes of paragraphs (1) and (2) of subdivision (a), both of the following apply:(1) An investment is deemed to be maintained even if it is sold or repaid, so long as the growth fund reinvests an amount equal to the capital returned or recovered from the original investment, exclusive of any profits realized, in other growth investments in this state within 12 months of the receipt of that capital.(2) Amounts received periodically by a growth fund shall be treated as continuously invested in growth investments if the amounts are reinvested in one or more growth investments by the end of the calendar year following receipt of those amounts.(c) Paragraph (5) of subdivision (a) shall not apply to investments in publicly traded securities made by a growth business or an owner or affiliate of the growth business.(d) (1) Before making a growth investment, a growth fund may request a written determination from the Treasurer as to whether the business in which it proposes to invest satisfies the definition of a growth business to which the Treasurer shall respond no more than 15 business days from the date of receipt thereof.(2) If the Treasurer fails to issue a determination letter pursuant to paragraph (1), the business in which the growth fund proposes to invest shall be considered a growth business.(e) The maximum amount of growth investments in a particular growth business, including amounts invested in affiliates of the growth business, that a growth fund may count in satisfying the requirements of paragraphs (1) and (2) of subdivision (a) is the greater of five million dollars ($5,000,000) or 10 percent of its investment authority, exclusive of repaid or redeemed growth investments.(f) (1) Before revoking a tax credit certificate or recapturing credits pursuant to this section, the Treasurer shall notify the growth fund of the reasons for the pending revocation or recapture.(2) The growth fund shall have 90 days from the date the notice was received to correct a violation outlined in the notice to the satisfaction of the Treasurer and avoid recapture of tax credits and revocation of the tax credit certificate.(g) The Treasurer shall not revoke a tax credit certificate or recapture credits after a growth fund exits from the program in accordance with Section 12271.12271. (a) (1) A growth fund may, but only on or after the seventh anniversary of the closing date, apply to the Treasurer to exit the program, and upon exiting, shall no longer be subject to the provisions of this article, except as provided in subdivision (c).(2) The Treasurer shall approve or deny an application made pursuant to subdivision (a) within 30 days of receipt.(3) The Treasurer shall approve an application made pursuant to this section if, with respect to the applicant, no tax credit certificates have been revoked and the growth fund has not received a notice of revocation or recapture that has not been cured.(4) The Treasurer shall not unreasonably deny an application submitted pursuant to this section.(5) If the Treasurer denies an application, the notice of denial shall include the reasons for the determination.(b) After its exit from the program, a growth fund may not make distributions to its equity holders or pay any fees in excess of its investment authority until it has paid any state clawback amount due.(c) Each growth fund shall continue to report annually to the Treasurer both of the following:(1) The number of new full-time employees at each growth business, and that number shall continue to reduce the state clawback amount.(2) Employment offset until its state clawback amount equals zero or it has distributed all of its assets.12272. (a) Each growth fund shall submit an annual report to the Treasurer on or before the fifth business day after each anniversary of the closing date before its exit from the program pursuant to Section 12271. The report shall identify each growth investment made by the growth fund and shall include all of the following:(1) A bank statement evidencing each growth investment if not previously reported.(2) The name, location, and industry of each growth business receiving a growth investment, including either the determination letter set forth in Section 12270 or evidence that the business qualified as a growth business at the time the investment was made, if not previously reported.(3) For each growth business receiving a growth investment, evidence for the Treasurer to verify the number of full-time employees at each growth business on the date of the growth funds initial growth investment.(4) The number of new full-time employees at each growth business, the average salary of those employees, and evidence sufficient for the Treasurer to verify whether a new full-time employee is a targeted employee.(5) A calculation of the growth funds employment offset for that year.(6) The cumulative amount of growth investments made in each growth business.(7) A certification under penalty of perjury that the growth fund has not violated any of the grounds for revocation and recapture of credits set forth in subdivision (a) of Section 12270.(8) Any other information required by the Treasurer for purposes of carrying out the Treasurers duties under this article.(b) The growth fund is not required to provide information with respect to growth investments that have been redeemed or repaid as part of the annual report required by this section but shall provide that information if available.12273. (a) If the Treasurer revokes a growth funds certification pursuant to subdivision (b) of Section 12268 or a tax credit certificate pursuant to Section 12270, the associated investment authority and investor contributions will not count toward the limit on total investment authority and investor contributions set forth in subdivision (c) of Section 12266.(b) (1) The Treasurer shall first award reverted investment authority pro rata to each growth fund that was awarded less than the requested investment authority for which it applied, and that growth fund may allocate the associated investor contribution authority to any taxpayer with state premium tax liability in its discretion.(2) The Treasurer may award any remaining investment authority to new applicants.12274. (a) The Treasurer may adopt rules and regulations for the purpose of implementing the provisions of this article.(b) The Treasurer shall adopt forms and notices necessary to implement this article.(c) The Treasurer shall notify the Department of Insurance of the name of any insurance company allocated tax credits under this act and the amount of those credits.

 Article 6. Jobs and Upward Mobility Progression (JUMP) Act

 Article 6. Jobs and Upward Mobility Progression (JUMP) Act

12264. As used in this article:(a) (1) Affiliate means an entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, another entity.(2) For the purposes of this subdivision, an entity is controlled by another entity if the controlling entity holds, directly or indirectly, the majority voting or ownership interest in the controlled entity or has control over the day-to-day operations of the controlled entity.(b) Closing date means the date on which a growth fund has collected all amounts specified by Section 12268.(c) (1) Employment offset means an amount calculated annually that is equal to the sum of both of the following:(A) The product of twenty-five thousand dollars ($25,000) and the number of new full-time employees of a growth funds growth businesses.(B) A one-time amount of ten thousand dollars ($10,000) for each full-time employee hired by a growth business that is a targeted employee.(2) (A) The number of new full-time employees of a growth funds growth businesses referenced in subparagraph (A) of paragraph (1) shall be calculated annually as the difference between the following:(i) The average monthly number of full-time employees at a growth business in the preceding calendar year or portion thereof if the initial growth investment occurred in the year.(ii) The number of full-time employees at the growth business on the date of the initial growth investment.(B) If the resulting difference between the amounts derived from clauses (i) and (ii) of subparagraph (A) is less than zero, the number of new full-time employees shall be deemed to be zero.(d) Full-time employee means any of the following:(1) An employment position that is filled at a growth business.(2) An employment position that receives wages that are at least 100 percent of the county median wage.(3) An employment position that is paid hourly wages for an average of at least 35 hours per week or any other period of time generally accepted by custom, industry, or practice as full-time employment.(4) An employment position that is salaried and paid for full-time employment within the meaning of Section 515 of the Labor Code.(e) Growth business means a business that, at the time a growth fund initially invests in the business, meets all of the following requirements:(1) The business has, together with its affiliates, fewer than 100 employees.(2) The business has aggregate gross receipts, less returns and allowances reportable to the state, of less than ten million dollars ($10,000,000) during the previous taxable year.(3) The business has its principal business operations in at least one growth zone in the state.(4) The business is engaged in North American Industry Classification System sector 11, 22, 23, 31, 32, 33, 48, 49, 54, or 62 or, if not engaged in those industries, the Treasurer determines that the investment will create desirable economic outcomes related to income mobility.(f) Growth fund means an entity certified by the Treasurer pursuant to Section 12267.(g) (1) Growth investment means a capital or equity investment in a growth business or a loan to a growth business with a stated maturity of at least one year after the date of issuance.(2) Growth investment does not include the provision of a revolving line of credit.(h) Growth zone means any of the following:(1) An opportunity zone located in the state.(2) A census tract in the state meeting either of the following requirements:(A) The census tract has a poverty rate that is greater than 20 percent.(B) The census tract has a median family income that does not exceed the following:(i) If the census tract is not located in a metropolitan area, the statewide median family income.(ii) If the census tract is located in a metropolitan area, the greater of the statewide median family income and the metropolitan area median family income.(3) All locations outside of census places with a population greater than or equal to 50,000 as of the latest decennial census and their adjacent and contiguous urbanized areas.(i) Investment authority means the amount certified by the Treasurer pursuant to Section 12267.(j) Investor contribution means a cash investment in a growth fund that meets both of the following requirements:(1) The cash investment is equal to the amount specified for that entity in the Treasurers approval of the growth funds application pursuant to Section 12267.(2) The cash investment purchased any of the following:(A) An equity interest in the growth fund.(B) A debt instrument that has a maturity date of at least six years from the closing date and a repayment schedule that is not greater than level principal amortization over six years.(k) Opportunity zone means a qualified opportunity zone, as defined by Section 1400Z-1 of Title 26 of the United States Code.(l) (1) Principal business operations means the location that meets either of the following requirements:(A) At least 60 percent of a business employees work at the location.(B) Employees who are paid at least 60 percent of the business payroll work at the location.(2) A business that has agreed to relocate employees using the proceeds of a growth investment to establish its principal business operations in a growth zone shall be deemed to have its principal business operations in a growth zone if it satisfies the requirements of paragraph (1) within 180 days after receiving a growth investment.(m) (1) State clawback amount means the difference between both of the following:(A) The growth funds total investor contributions.(B) The sum of the annual employment offsets reported by the growth fund pursuant to Section 12272.(2) If the amount derived from paragraph (1) is zero or less than zero, the state clawback amount shall be zero.(n) Targeted employee means a qualified new full-time employee who meets any of the following requirements:(1) (A) The employee was unemployed for the six months immediately preceding being hired and did not complete a baccalaureate, postgraduate, or professional degree at a college or university within the 12 months immediately preceding being hired.(B) For purposes of this paragraph, a person is unemployed when that person satisfies all of the following requirements:(i) The person is not receiving wages subject to withholding.(ii) The person is not self-employed.(iii) The person is not a full-time student at a high school, college, university, or postsecondary education institution.(2) The employee is a veteran separated from the Armed Forces of the United States in the preceding 12 months.(3) The employee received the federal Earned Income Tax Credit in the prior taxable year.(4) The employee has been convicted of a felony.(5) The employee is a current recipient of benefits pursuant to Article 3.2 (commencing with Section 11320) of Chapter 2 of Part 3 of Division 9 of the Welfare and Institutions Code.(6) The employee is provided, or reimbursed for, education or training leading to an official skill certification.(7) The employee is provided housing, a relocation bonus, or other housing assistance, by the qualifying growth business, that exceeds a value of ten thousand dollars ($10,000).(8) The employee is employed by a growth business in an area where a borrower would be qualified pursuant to Section 4279.108(c)(1) of the Code of Federal Regulations.(o) Treasurer means the State Treasurer.



12264. As used in this article:

(a) (1) Affiliate means an entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, another entity.

(2) For the purposes of this subdivision, an entity is controlled by another entity if the controlling entity holds, directly or indirectly, the majority voting or ownership interest in the controlled entity or has control over the day-to-day operations of the controlled entity.

(b) Closing date means the date on which a growth fund has collected all amounts specified by Section 12268.

(c) (1) Employment offset means an amount calculated annually that is equal to the sum of both of the following:

(A) The product of twenty-five thousand dollars ($25,000) and the number of new full-time employees of a growth funds growth businesses.

(B) A one-time amount of ten thousand dollars ($10,000) for each full-time employee hired by a growth business that is a targeted employee.

(2) (A) The number of new full-time employees of a growth funds growth businesses referenced in subparagraph (A) of paragraph (1) shall be calculated annually as the difference between the following:

(i) The average monthly number of full-time employees at a growth business in the preceding calendar year or portion thereof if the initial growth investment occurred in the year.

(ii) The number of full-time employees at the growth business on the date of the initial growth investment.

(B) If the resulting difference between the amounts derived from clauses (i) and (ii) of subparagraph (A) is less than zero, the number of new full-time employees shall be deemed to be zero.

(d) Full-time employee means any of the following:

(1) An employment position that is filled at a growth business.

(2) An employment position that receives wages that are at least 100 percent of the county median wage.

(3) An employment position that is paid hourly wages for an average of at least 35 hours per week or any other period of time generally accepted by custom, industry, or practice as full-time employment.

(4) An employment position that is salaried and paid for full-time employment within the meaning of Section 515 of the Labor Code.

(e) Growth business means a business that, at the time a growth fund initially invests in the business, meets all of the following requirements:

(1) The business has, together with its affiliates, fewer than 100 employees.

(2) The business has aggregate gross receipts, less returns and allowances reportable to the state, of less than ten million dollars ($10,000,000) during the previous taxable year.

(3) The business has its principal business operations in at least one growth zone in the state.

(4) The business is engaged in North American Industry Classification System sector 11, 22, 23, 31, 32, 33, 48, 49, 54, or 62 or, if not engaged in those industries, the Treasurer determines that the investment will create desirable economic outcomes related to income mobility.

(f) Growth fund means an entity certified by the Treasurer pursuant to Section 12267.

(g) (1) Growth investment means a capital or equity investment in a growth business or a loan to a growth business with a stated maturity of at least one year after the date of issuance.

(2) Growth investment does not include the provision of a revolving line of credit.

(h) Growth zone means any of the following:

(1) An opportunity zone located in the state.

(2) A census tract in the state meeting either of the following requirements:

(A) The census tract has a poverty rate that is greater than 20 percent.

(B) The census tract has a median family income that does not exceed the following:

(i) If the census tract is not located in a metropolitan area, the statewide median family income.

(ii) If the census tract is located in a metropolitan area, the greater of the statewide median family income and the metropolitan area median family income.

(3) All locations outside of census places with a population greater than or equal to 50,000 as of the latest decennial census and their adjacent and contiguous urbanized areas.

(i) Investment authority means the amount certified by the Treasurer pursuant to Section 12267.

(j) Investor contribution means a cash investment in a growth fund that meets both of the following requirements:

(1) The cash investment is equal to the amount specified for that entity in the Treasurers approval of the growth funds application pursuant to Section 12267.

(2) The cash investment purchased any of the following:

(A) An equity interest in the growth fund.

(B) A debt instrument that has a maturity date of at least six years from the closing date and a repayment schedule that is not greater than level principal amortization over six years.

(k) Opportunity zone means a qualified opportunity zone, as defined by Section 1400Z-1 of Title 26 of the United States Code.

(l) (1) Principal business operations means the location that meets either of the following requirements:

(A) At least 60 percent of a business employees work at the location.

(B) Employees who are paid at least 60 percent of the business payroll work at the location.

(2) A business that has agreed to relocate employees using the proceeds of a growth investment to establish its principal business operations in a growth zone shall be deemed to have its principal business operations in a growth zone if it satisfies the requirements of paragraph (1) within 180 days after receiving a growth investment.

(m) (1) State clawback amount means the difference between both of the following:

(A) The growth funds total investor contributions.

(B) The sum of the annual employment offsets reported by the growth fund pursuant to Section 12272.

(2) If the amount derived from paragraph (1) is zero or less than zero, the state clawback amount shall be zero.

(n) Targeted employee means a qualified new full-time employee who meets any of the following requirements:

(1) (A) The employee was unemployed for the six months immediately preceding being hired and did not complete a baccalaureate, postgraduate, or professional degree at a college or university within the 12 months immediately preceding being hired.

(B) For purposes of this paragraph, a person is unemployed when that person satisfies all of the following requirements:

(i) The person is not receiving wages subject to withholding.

(ii) The person is not self-employed.

(iii) The person is not a full-time student at a high school, college, university, or postsecondary education institution.

(2) The employee is a veteran separated from the Armed Forces of the United States in the preceding 12 months.

(3) The employee received the federal Earned Income Tax Credit in the prior taxable year.

(4) The employee has been convicted of a felony.

(5) The employee is a current recipient of benefits pursuant to Article 3.2 (commencing with Section 11320) of Chapter 2 of Part 3 of Division 9 of the Welfare and Institutions Code.

(6) The employee is provided, or reimbursed for, education or training leading to an official skill certification.

(7) The employee is provided housing, a relocation bonus, or other housing assistance, by the qualifying growth business, that exceeds a value of ten thousand dollars ($10,000).

(8) The employee is employed by a growth business in an area where a borrower would be qualified pursuant to Section 4279.108(c)(1) of the Code of Federal Regulations.

(o) Treasurer means the State Treasurer.

12265. (a) For taxable years beginning on or after January 1, 2021, and before January 1, 2031, there shall be allowed as a credit against the taxes imposed by this part and against the exactions imposed by paragraph (3) of subdivision (f) of Section 28 of Article XIII of the State Constitution, a JUMP Act tax credit in an amount equal to an investor contribution, as defined in Section 12264.(b) If the credit allowed by this section exceeds the taxes described in subdivision (a), the excess may be carried over to reduce those taxes in the following year, and the succeeding four years if necessary, until the credit is exhausted.(c) The credit is nonrefundable and may not be sold, transferred, or allocated to an entity other than an affiliate that was an affiliate of the taxpayer on the date that the taxpayer signed its affidavit included in the growth funds application pursuant to subdivision (a) of Section 12266.(d) A taxpayer claiming a credit under this section shall submit a copy of the tax credit certificate issued pursuant to Section 12267 with the taxpayers return for each taxable year for which the credit is claimed.(e) (1) The aggregate amount of investment authority that may be certified pursuant to Section 12267 shall be five hundred million dollars ($500,000,000) and the aggregate amount of credit that may be allocated and certified pursuant to this section shall be an amount equal to seventy-five million dollars ($75,000,000) in any taxable year and three hundred million dollars ($300,000,000) in total for all taxable years for which the JUMP Act tax credit is authorized.(2) If requests for investment authority and credits exceed the limitations described in paragraph (1), the Treasurer shall proportionally reduce the investment authority and credits certified for each approved application as necessary to avoid exceeding the limit.



12265. (a) For taxable years beginning on or after January 1, 2021, and before January 1, 2031, there shall be allowed as a credit against the taxes imposed by this part and against the exactions imposed by paragraph (3) of subdivision (f) of Section 28 of Article XIII of the State Constitution, a JUMP Act tax credit in an amount equal to an investor contribution, as defined in Section 12264.

(b) If the credit allowed by this section exceeds the taxes described in subdivision (a), the excess may be carried over to reduce those taxes in the following year, and the succeeding four years if necessary, until the credit is exhausted.

(c) The credit is nonrefundable and may not be sold, transferred, or allocated to an entity other than an affiliate that was an affiliate of the taxpayer on the date that the taxpayer signed its affidavit included in the growth funds application pursuant to subdivision (a) of Section 12266.

(d) A taxpayer claiming a credit under this section shall submit a copy of the tax credit certificate issued pursuant to Section 12267 with the taxpayers return for each taxable year for which the credit is claimed.

(e) (1) The aggregate amount of investment authority that may be certified pursuant to Section 12267 shall be five hundred million dollars ($500,000,000) and the aggregate amount of credit that may be allocated and certified pursuant to this section shall be an amount equal to seventy-five million dollars ($75,000,000) in any taxable year and three hundred million dollars ($300,000,000) in total for all taxable years for which the JUMP Act tax credit is authorized.

(2) If requests for investment authority and credits exceed the limitations described in paragraph (1), the Treasurer shall proportionally reduce the investment authority and credits certified for each approved application as necessary to avoid exceeding the limit.

12266. (a) Beginning January 1, 2021, the Treasurer shall accept applications for approval as a growth fund, pursuant to rules and regulations adopted by the Treasurer, which shall meet all of the following requirements:(1) The total investment authority sought by the applicant shall not exceed five hundred million dollars ($500,000,000).(2) The application shall include evidence of all of the following:(A) A certification by an executive officer of the applicant that certifies that the applicant or an affiliate of the applicant is licensed as a rural business investment company under Section 2009cc of Title 7 of the United States Code or as a small business investment company under Section 681 of Title 15 of the United States Code.(B) At least one principal in a rural business investment company or a small business investment company is, and has been for at least four years, an officer or employee of the applicant or an affiliate of the applicant on the date the application is submitted.(C) As of the date the application is submitted, the applicant or affiliates of the applicant have invested at least one hundred million dollars ($100,000,000) in nonpublic companies located in non-metropolitan counties as defined by the Office of Management and Budget within the Office of the President of the United States on the basis of county or county-equivalent units or one hundred million dollars ($100,000,000) in opportunity zones.(3) The application shall include an estimate of the total new full-time employees that will result from the applicants growth investments.(4) The application shall include a signed affidavit from each taxpayer stating the amount of investor contribution the taxpayer will make. At least 60 percent of a growth funds requested investment authority shall consist of investor contributions.(5) The application shall include the growth funds federal employer identification number.(6) The application shall include a one-time application fee of ten thousand dollars ($10,000).(b) (1) The Treasurer shall review an application received pursuant to this section in the order in which it was received and shall either approve or deny the application within 45 days of receipt.(2) Applications that are received on the same day shall be deemed to have been received simultaneously.(c) The Treasurer may approve investment authority only in an aggregate amount that is not greater than five hundred million dollars ($500,000,000).(d) The Treasurer shall deny an application only if any of the following are true:(1) The application is incomplete.(2) The applicant does not meet the requirements of paragraph (2) or (4) of subdivision (a).(3) The Treasurer has already approved the maximum amount of investment authority allowed pursuant to subdivision (c).(e) (1) If the Treasurer denies an application, the applicant, within 15 business days after receiving notice of the denial, may provide additional information to the Treasurer to cure any defects in the application, except for failure to comply with paragraph (4) of subdivision (a).(2) The Treasurer shall review and reconsider applications corrected pursuant to paragraph (1) within thirty days.(3) If the Treasurer subsequently approves the application, the application shall be considered approved as of its original submission date and shall receive the pro rata allocation of investment authority that the applicant would have received if it had been approved on the original date of submission.



12266. (a) Beginning January 1, 2021, the Treasurer shall accept applications for approval as a growth fund, pursuant to rules and regulations adopted by the Treasurer, which shall meet all of the following requirements:

(1) The total investment authority sought by the applicant shall not exceed five hundred million dollars ($500,000,000).

(2) The application shall include evidence of all of the following:

(A) A certification by an executive officer of the applicant that certifies that the applicant or an affiliate of the applicant is licensed as a rural business investment company under Section 2009cc of Title 7 of the United States Code or as a small business investment company under Section 681 of Title 15 of the United States Code.

(B) At least one principal in a rural business investment company or a small business investment company is, and has been for at least four years, an officer or employee of the applicant or an affiliate of the applicant on the date the application is submitted.

(C) As of the date the application is submitted, the applicant or affiliates of the applicant have invested at least one hundred million dollars ($100,000,000) in nonpublic companies located in non-metropolitan counties as defined by the Office of Management and Budget within the Office of the President of the United States on the basis of county or county-equivalent units or one hundred million dollars ($100,000,000) in opportunity zones.

(3) The application shall include an estimate of the total new full-time employees that will result from the applicants growth investments.

(4) The application shall include a signed affidavit from each taxpayer stating the amount of investor contribution the taxpayer will make. At least 60 percent of a growth funds requested investment authority shall consist of investor contributions.

(5) The application shall include the growth funds federal employer identification number.

(6) The application shall include a one-time application fee of ten thousand dollars ($10,000).

(b) (1) The Treasurer shall review an application received pursuant to this section in the order in which it was received and shall either approve or deny the application within 45 days of receipt.

(2) Applications that are received on the same day shall be deemed to have been received simultaneously.

(c) The Treasurer may approve investment authority only in an aggregate amount that is not greater than five hundred million dollars ($500,000,000).

(d) The Treasurer shall deny an application only if any of the following are true:

(1) The application is incomplete.

(2) The applicant does not meet the requirements of paragraph (2) or (4) of subdivision (a).

(3) The Treasurer has already approved the maximum amount of investment authority allowed pursuant to subdivision (c).

(e) (1) If the Treasurer denies an application, the applicant, within 15 business days after receiving notice of the denial, may provide additional information to the Treasurer to cure any defects in the application, except for failure to comply with paragraph (4) of subdivision (a).

(2) The Treasurer shall review and reconsider applications corrected pursuant to paragraph (1) within thirty days.

(3) If the Treasurer subsequently approves the application, the application shall be considered approved as of its original submission date and shall receive the pro rata allocation of investment authority that the applicant would have received if it had been approved on the original date of submission.

12267. (a) After approving an application submitted pursuant to Section 12266, the Treasurer shall certify all of the following:(1) The applicant is a growth fund.(2) The amount of the applicants approved investment authority.(3) The investor contributions required from each investor that submitted an affidavit with the growth funds application.(b) Upon receipt of the documentation required by Section 12268, the Treasurer shall provide a tax credit certificate to each taxpayer that has made an investor contribution in the amount of the investor contribution.



12267. (a) After approving an application submitted pursuant to Section 12266, the Treasurer shall certify all of the following:

(1) The applicant is a growth fund.

(2) The amount of the applicants approved investment authority.

(3) The investor contributions required from each investor that submitted an affidavit with the growth funds application.

(b) Upon receipt of the documentation required by Section 12268, the Treasurer shall provide a tax credit certificate to each taxpayer that has made an investor contribution in the amount of the investor contribution.

12268. (a) (1) Within 60 days of receiving the certification described in subdivision (a) of Section 12267, a growth fund shall collect all investor contributions and collect additional investments of cash that, when added to the investor contributions, equal the growth funds investment authority.(2) At least 10 percent of the growth funds investment authority shall consist of equity investments contributed directly or indirectly by affiliates of the growth fund.(3) Within 65 days after receiving the certification described in subdivision (a) of Section 12267, a growth fund shall send to the Treasurer the date on which the investment authority was collected and documentation that it has collected the amounts required by subdivision (a).(b) If the growth fund fails to fully comply with paragraphs (1) and (2) of subdivision (a), the Treasurer shall revoke the growth funds certification.



12268. (a) (1) Within 60 days of receiving the certification described in subdivision (a) of Section 12267, a growth fund shall collect all investor contributions and collect additional investments of cash that, when added to the investor contributions, equal the growth funds investment authority.

(2) At least 10 percent of the growth funds investment authority shall consist of equity investments contributed directly or indirectly by affiliates of the growth fund.

(3) Within 65 days after receiving the certification described in subdivision (a) of Section 12267, a growth fund shall send to the Treasurer the date on which the investment authority was collected and documentation that it has collected the amounts required by subdivision (a).

(b) If the growth fund fails to fully comply with paragraphs (1) and (2) of subdivision (a), the Treasurer shall revoke the growth funds certification.

12269. (a) A qualified growth fund shall be charged an annual fee, payable to the Treasurer, of 0.02 percent of the investment authority authorized.(b) (1) The initial annual fee is due and payable to the Treasurer within 65 days after receiving the certification issued pursuant to Section 12267.(2) After payment of the initial annual fee, the annual fee shall be due and payable to the Treasurer before March 1.(c) An annual fee shall not be required once a growth fund has exited the program pursuant to Section 12271.



12269. (a) A qualified growth fund shall be charged an annual fee, payable to the Treasurer, of 0.02 percent of the investment authority authorized.

(b) (1) The initial annual fee is due and payable to the Treasurer within 65 days after receiving the certification issued pursuant to Section 12267.

(2) After payment of the initial annual fee, the annual fee shall be due and payable to the Treasurer before March 1.

(c) An annual fee shall not be required once a growth fund has exited the program pursuant to Section 12271.

12270. (a) The Treasurer shall recapture, based on information in the growth funds annual report or its failure to make the certification set forth in paragraph (7) of subdivision (a) of Section 12272, any tax credit allowed pursuant to this article and revoke the tax credit certificates issued pursuant to Section 12267 if any of the following occur with respect to a growth fund before the growth fund exits the program in accordance with Section 12271:(1) The growth fund does not invest 60 percent of its investment authority in growth investments in this state within two years and 100 percent of its investment authority in growth investments in this state within three years of the closing date.(2) The growth fund, after initially satisfying paragraph (1), fails to maintain growth investments equal to 100 percent of its investment authority until the seventh anniversary of the closing date.(3) The growth fund makes a distribution or payment that results in the growth fund having less than 100 percent of its investment authority invested in growth investments in this state or available for investment in growth investments and held in cash, bank deposits, and marketable securities.(4) The growth fund fails to make growth investments in growth businesses with principal business operations in an area qualified under Section 4279.108(c)(1) of Title 7 of the Code of Federal Regulations that when added together equal at least 6 percent of the growth funds capital investment authority.(5) The growth fund invests in a growth business that directly or through an affiliate does any of the following:(A) Owns an investment in the growth fund.(B) Has the right to acquire an ownership interest in the growth fund.(C) Makes a loan to the growth fund.(D) (i) Makes an investment in the growth fund, an affiliate of the growth fund, or an investor in the growth fund.(ii) For purposes of this paragraph, a growth fund is not considered an affiliate of a growth business solely because of its growth investment.(b) For purposes of paragraphs (1) and (2) of subdivision (a), both of the following apply:(1) An investment is deemed to be maintained even if it is sold or repaid, so long as the growth fund reinvests an amount equal to the capital returned or recovered from the original investment, exclusive of any profits realized, in other growth investments in this state within 12 months of the receipt of that capital.(2) Amounts received periodically by a growth fund shall be treated as continuously invested in growth investments if the amounts are reinvested in one or more growth investments by the end of the calendar year following receipt of those amounts.(c) Paragraph (5) of subdivision (a) shall not apply to investments in publicly traded securities made by a growth business or an owner or affiliate of the growth business.(d) (1) Before making a growth investment, a growth fund may request a written determination from the Treasurer as to whether the business in which it proposes to invest satisfies the definition of a growth business to which the Treasurer shall respond no more than 15 business days from the date of receipt thereof.(2) If the Treasurer fails to issue a determination letter pursuant to paragraph (1), the business in which the growth fund proposes to invest shall be considered a growth business.(e) The maximum amount of growth investments in a particular growth business, including amounts invested in affiliates of the growth business, that a growth fund may count in satisfying the requirements of paragraphs (1) and (2) of subdivision (a) is the greater of five million dollars ($5,000,000) or 10 percent of its investment authority, exclusive of repaid or redeemed growth investments.(f) (1) Before revoking a tax credit certificate or recapturing credits pursuant to this section, the Treasurer shall notify the growth fund of the reasons for the pending revocation or recapture.(2) The growth fund shall have 90 days from the date the notice was received to correct a violation outlined in the notice to the satisfaction of the Treasurer and avoid recapture of tax credits and revocation of the tax credit certificate.(g) The Treasurer shall not revoke a tax credit certificate or recapture credits after a growth fund exits from the program in accordance with Section 12271.



12270. (a) The Treasurer shall recapture, based on information in the growth funds annual report or its failure to make the certification set forth in paragraph (7) of subdivision (a) of Section 12272, any tax credit allowed pursuant to this article and revoke the tax credit certificates issued pursuant to Section 12267 if any of the following occur with respect to a growth fund before the growth fund exits the program in accordance with Section 12271:

(1) The growth fund does not invest 60 percent of its investment authority in growth investments in this state within two years and 100 percent of its investment authority in growth investments in this state within three years of the closing date.

(2) The growth fund, after initially satisfying paragraph (1), fails to maintain growth investments equal to 100 percent of its investment authority until the seventh anniversary of the closing date.

(3) The growth fund makes a distribution or payment that results in the growth fund having less than 100 percent of its investment authority invested in growth investments in this state or available for investment in growth investments and held in cash, bank deposits, and marketable securities.

(4) The growth fund fails to make growth investments in growth businesses with principal business operations in an area qualified under Section 4279.108(c)(1) of Title 7 of the Code of Federal Regulations that when added together equal at least 6 percent of the growth funds capital investment authority.

(5) The growth fund invests in a growth business that directly or through an affiliate does any of the following:

(A) Owns an investment in the growth fund.

(B) Has the right to acquire an ownership interest in the growth fund.

(C) Makes a loan to the growth fund.

(D) (i) Makes an investment in the growth fund, an affiliate of the growth fund, or an investor in the growth fund.

(ii) For purposes of this paragraph, a growth fund is not considered an affiliate of a growth business solely because of its growth investment.

(b) For purposes of paragraphs (1) and (2) of subdivision (a), both of the following apply:

(1) An investment is deemed to be maintained even if it is sold or repaid, so long as the growth fund reinvests an amount equal to the capital returned or recovered from the original investment, exclusive of any profits realized, in other growth investments in this state within 12 months of the receipt of that capital.

(2) Amounts received periodically by a growth fund shall be treated as continuously invested in growth investments if the amounts are reinvested in one or more growth investments by the end of the calendar year following receipt of those amounts.

(c) Paragraph (5) of subdivision (a) shall not apply to investments in publicly traded securities made by a growth business or an owner or affiliate of the growth business.

(d) (1) Before making a growth investment, a growth fund may request a written determination from the Treasurer as to whether the business in which it proposes to invest satisfies the definition of a growth business to which the Treasurer shall respond no more than 15 business days from the date of receipt thereof.

(2) If the Treasurer fails to issue a determination letter pursuant to paragraph (1), the business in which the growth fund proposes to invest shall be considered a growth business.

(e) The maximum amount of growth investments in a particular growth business, including amounts invested in affiliates of the growth business, that a growth fund may count in satisfying the requirements of paragraphs (1) and (2) of subdivision (a) is the greater of five million dollars ($5,000,000) or 10 percent of its investment authority, exclusive of repaid or redeemed growth investments.

(f) (1) Before revoking a tax credit certificate or recapturing credits pursuant to this section, the Treasurer shall notify the growth fund of the reasons for the pending revocation or recapture.

(2) The growth fund shall have 90 days from the date the notice was received to correct a violation outlined in the notice to the satisfaction of the Treasurer and avoid recapture of tax credits and revocation of the tax credit certificate.

(g) The Treasurer shall not revoke a tax credit certificate or recapture credits after a growth fund exits from the program in accordance with Section 12271.

12271. (a) (1) A growth fund may, but only on or after the seventh anniversary of the closing date, apply to the Treasurer to exit the program, and upon exiting, shall no longer be subject to the provisions of this article, except as provided in subdivision (c).(2) The Treasurer shall approve or deny an application made pursuant to subdivision (a) within 30 days of receipt.(3) The Treasurer shall approve an application made pursuant to this section if, with respect to the applicant, no tax credit certificates have been revoked and the growth fund has not received a notice of revocation or recapture that has not been cured.(4) The Treasurer shall not unreasonably deny an application submitted pursuant to this section.(5) If the Treasurer denies an application, the notice of denial shall include the reasons for the determination.(b) After its exit from the program, a growth fund may not make distributions to its equity holders or pay any fees in excess of its investment authority until it has paid any state clawback amount due.(c) Each growth fund shall continue to report annually to the Treasurer both of the following:(1) The number of new full-time employees at each growth business, and that number shall continue to reduce the state clawback amount.(2) Employment offset until its state clawback amount equals zero or it has distributed all of its assets.



12271. (a) (1) A growth fund may, but only on or after the seventh anniversary of the closing date, apply to the Treasurer to exit the program, and upon exiting, shall no longer be subject to the provisions of this article, except as provided in subdivision (c).

(2) The Treasurer shall approve or deny an application made pursuant to subdivision (a) within 30 days of receipt.

(3) The Treasurer shall approve an application made pursuant to this section if, with respect to the applicant, no tax credit certificates have been revoked and the growth fund has not received a notice of revocation or recapture that has not been cured.

(4) The Treasurer shall not unreasonably deny an application submitted pursuant to this section.

(5) If the Treasurer denies an application, the notice of denial shall include the reasons for the determination.

(b) After its exit from the program, a growth fund may not make distributions to its equity holders or pay any fees in excess of its investment authority until it has paid any state clawback amount due.

(c) Each growth fund shall continue to report annually to the Treasurer both of the following:

(1) The number of new full-time employees at each growth business, and that number shall continue to reduce the state clawback amount.

(2) Employment offset until its state clawback amount equals zero or it has distributed all of its assets.

12272. (a) Each growth fund shall submit an annual report to the Treasurer on or before the fifth business day after each anniversary of the closing date before its exit from the program pursuant to Section 12271. The report shall identify each growth investment made by the growth fund and shall include all of the following:(1) A bank statement evidencing each growth investment if not previously reported.(2) The name, location, and industry of each growth business receiving a growth investment, including either the determination letter set forth in Section 12270 or evidence that the business qualified as a growth business at the time the investment was made, if not previously reported.(3) For each growth business receiving a growth investment, evidence for the Treasurer to verify the number of full-time employees at each growth business on the date of the growth funds initial growth investment.(4) The number of new full-time employees at each growth business, the average salary of those employees, and evidence sufficient for the Treasurer to verify whether a new full-time employee is a targeted employee.(5) A calculation of the growth funds employment offset for that year.(6) The cumulative amount of growth investments made in each growth business.(7) A certification under penalty of perjury that the growth fund has not violated any of the grounds for revocation and recapture of credits set forth in subdivision (a) of Section 12270.(8) Any other information required by the Treasurer for purposes of carrying out the Treasurers duties under this article.(b) The growth fund is not required to provide information with respect to growth investments that have been redeemed or repaid as part of the annual report required by this section but shall provide that information if available.



12272. (a) Each growth fund shall submit an annual report to the Treasurer on or before the fifth business day after each anniversary of the closing date before its exit from the program pursuant to Section 12271. The report shall identify each growth investment made by the growth fund and shall include all of the following:

(1) A bank statement evidencing each growth investment if not previously reported.

(2) The name, location, and industry of each growth business receiving a growth investment, including either the determination letter set forth in Section 12270 or evidence that the business qualified as a growth business at the time the investment was made, if not previously reported.

(3) For each growth business receiving a growth investment, evidence for the Treasurer to verify the number of full-time employees at each growth business on the date of the growth funds initial growth investment.

(4) The number of new full-time employees at each growth business, the average salary of those employees, and evidence sufficient for the Treasurer to verify whether a new full-time employee is a targeted employee.

(5) A calculation of the growth funds employment offset for that year.

(6) The cumulative amount of growth investments made in each growth business.

(7) A certification under penalty of perjury that the growth fund has not violated any of the grounds for revocation and recapture of credits set forth in subdivision (a) of Section 12270.

(8) Any other information required by the Treasurer for purposes of carrying out the Treasurers duties under this article.

(b) The growth fund is not required to provide information with respect to growth investments that have been redeemed or repaid as part of the annual report required by this section but shall provide that information if available.

12273. (a) If the Treasurer revokes a growth funds certification pursuant to subdivision (b) of Section 12268 or a tax credit certificate pursuant to Section 12270, the associated investment authority and investor contributions will not count toward the limit on total investment authority and investor contributions set forth in subdivision (c) of Section 12266.(b) (1) The Treasurer shall first award reverted investment authority pro rata to each growth fund that was awarded less than the requested investment authority for which it applied, and that growth fund may allocate the associated investor contribution authority to any taxpayer with state premium tax liability in its discretion.(2) The Treasurer may award any remaining investment authority to new applicants.



12273. (a) If the Treasurer revokes a growth funds certification pursuant to subdivision (b) of Section 12268 or a tax credit certificate pursuant to Section 12270, the associated investment authority and investor contributions will not count toward the limit on total investment authority and investor contributions set forth in subdivision (c) of Section 12266.

(b) (1) The Treasurer shall first award reverted investment authority pro rata to each growth fund that was awarded less than the requested investment authority for which it applied, and that growth fund may allocate the associated investor contribution authority to any taxpayer with state premium tax liability in its discretion.

(2) The Treasurer may award any remaining investment authority to new applicants.

12274. (a) The Treasurer may adopt rules and regulations for the purpose of implementing the provisions of this article.(b) The Treasurer shall adopt forms and notices necessary to implement this article.(c) The Treasurer shall notify the Department of Insurance of the name of any insurance company allocated tax credits under this act and the amount of those credits.



12274. (a) The Treasurer may adopt rules and regulations for the purpose of implementing the provisions of this article.

(b) The Treasurer shall adopt forms and notices necessary to implement this article.

(c) The Treasurer shall notify the Department of Insurance of the name of any insurance company allocated tax credits under this act and the amount of those credits.

SEC. 3. For purposes of complying with Section 41 of the Revenue and Taxation Code, with respect to Article 6 (commencing with Section 12264) of Chapter 3 of Part 7 of Division 2 of the Revenue and Taxation Code as added by this act, the Legislature finds as follows:(a) The California Jobs and Upward Mobility Progression (JUMP) Act concerns communities underserved by traditional small business lending and flexible growth capital. Despite having the worlds fifth largest economy, California has the second fastest growing income inequality of all 50 states and the largest wage gap between middle-income and high-wage earners, often forcing workers in underserved areas to commute long distances to find suitable employment or affordable housing. This tax credit addresses these issues by incentivizing federally licensed Small Business Administration (SBA) and United States Department of Agriculture (USDA) investors to raise funds exclusively for investment in California small businesses located in distressed areas throughout the state, including all 879 designated opportunity zones. This tax credit will enable small businesses to grow and create quality well-paying jobs, thereby accelerating wage mobility and improving quality of life for California residents.(b) To measure whether the credit achieves its intended purpose, the Treasurer shall, on July 1, 2022, and annually thereafter in each year the program is in effect, submit a report, in compliance with Section 9795 of the Government Code, to the Legislature containing all of the following:(1) Bank statements evidencing each funds growth investments.(2) The name, location, and industry of each growth business receiving a growth investment.(3) A verifiable number of full-time employees at each growth business receiving a growth investment on the date of the growth funds initial growth investment.(4) A verifiable average salary of new full-time employees at each growth business that demonstrates a new full-time employee is a targeted employee in accordance with the program.(5) A calculation of the growth funds employment offset for that year.(6) The cumulative amount of growth investments made in each growth business as a result of this credit.(c) The Treasurer shall submit the report required by this section to the Senate Committee on Budget and Fiscal Review, the Assembly Committee on Budget, the Senate and Assembly Committees on Appropriations, the Senate Committee on Governance and Finance, and the Assembly Committee on Revenue and Taxation.

SEC. 3. For purposes of complying with Section 41 of the Revenue and Taxation Code, with respect to Article 6 (commencing with Section 12264) of Chapter 3 of Part 7 of Division 2 of the Revenue and Taxation Code as added by this act, the Legislature finds as follows:(a) The California Jobs and Upward Mobility Progression (JUMP) Act concerns communities underserved by traditional small business lending and flexible growth capital. Despite having the worlds fifth largest economy, California has the second fastest growing income inequality of all 50 states and the largest wage gap between middle-income and high-wage earners, often forcing workers in underserved areas to commute long distances to find suitable employment or affordable housing. This tax credit addresses these issues by incentivizing federally licensed Small Business Administration (SBA) and United States Department of Agriculture (USDA) investors to raise funds exclusively for investment in California small businesses located in distressed areas throughout the state, including all 879 designated opportunity zones. This tax credit will enable small businesses to grow and create quality well-paying jobs, thereby accelerating wage mobility and improving quality of life for California residents.(b) To measure whether the credit achieves its intended purpose, the Treasurer shall, on July 1, 2022, and annually thereafter in each year the program is in effect, submit a report, in compliance with Section 9795 of the Government Code, to the Legislature containing all of the following:(1) Bank statements evidencing each funds growth investments.(2) The name, location, and industry of each growth business receiving a growth investment.(3) A verifiable number of full-time employees at each growth business receiving a growth investment on the date of the growth funds initial growth investment.(4) A verifiable average salary of new full-time employees at each growth business that demonstrates a new full-time employee is a targeted employee in accordance with the program.(5) A calculation of the growth funds employment offset for that year.(6) The cumulative amount of growth investments made in each growth business as a result of this credit.(c) The Treasurer shall submit the report required by this section to the Senate Committee on Budget and Fiscal Review, the Assembly Committee on Budget, the Senate and Assembly Committees on Appropriations, the Senate Committee on Governance and Finance, and the Assembly Committee on Revenue and Taxation.

SEC. 3. For purposes of complying with Section 41 of the Revenue and Taxation Code, with respect to Article 6 (commencing with Section 12264) of Chapter 3 of Part 7 of Division 2 of the Revenue and Taxation Code as added by this act, the Legislature finds as follows:

### SEC. 3.

(a) The California Jobs and Upward Mobility Progression (JUMP) Act concerns communities underserved by traditional small business lending and flexible growth capital. Despite having the worlds fifth largest economy, California has the second fastest growing income inequality of all 50 states and the largest wage gap between middle-income and high-wage earners, often forcing workers in underserved areas to commute long distances to find suitable employment or affordable housing. This tax credit addresses these issues by incentivizing federally licensed Small Business Administration (SBA) and United States Department of Agriculture (USDA) investors to raise funds exclusively for investment in California small businesses located in distressed areas throughout the state, including all 879 designated opportunity zones. This tax credit will enable small businesses to grow and create quality well-paying jobs, thereby accelerating wage mobility and improving quality of life for California residents.

(b) To measure whether the credit achieves its intended purpose, the Treasurer shall, on July 1, 2022, and annually thereafter in each year the program is in effect, submit a report, in compliance with Section 9795 of the Government Code, to the Legislature containing all of the following:

(1) Bank statements evidencing each funds growth investments.

(2) The name, location, and industry of each growth business receiving a growth investment.

(3) A verifiable number of full-time employees at each growth business receiving a growth investment on the date of the growth funds initial growth investment.

(4) A verifiable average salary of new full-time employees at each growth business that demonstrates a new full-time employee is a targeted employee in accordance with the program.

(5) A calculation of the growth funds employment offset for that year.

(6) The cumulative amount of growth investments made in each growth business as a result of this credit.

(c) The Treasurer shall submit the report required by this section to the Senate Committee on Budget and Fiscal Review, the Assembly Committee on Budget, the Senate and Assembly Committees on Appropriations, the Senate Committee on Governance and Finance, and the Assembly Committee on Revenue and Taxation.

SEC. 4. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.

SEC. 4. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.

SEC. 4. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.

### SEC. 4.

SEC. 5. This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.

SEC. 5. This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.

SEC. 5. This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.

### SEC. 5.