Amended IN Senate March 20, 2024 CALIFORNIA LEGISLATURE 20232024 REGULAR SESSION Senate Bill No. 1419Introduced by Senator RubioFebruary 16, 2024An act relating to food deserts. An act to add Chapter 15 (commencing with Section 49030) to Division 17 of the Food and Agricultural Code, and to add and repeal Sections 17053.74 and 23627 of the Revenue and Taxation Code, relating to food.LEGISLATIVE COUNSEL'S DIGESTSB 1419, as amended, Rubio. Food deserts. deserts: grants: personal income tax and corporation tax credits.(1) Existing law creates the Office of Farm to Fork within the Department of Food and Agriculture, and requires the office, to the extent that resources are available, to work with various entities, as prescribed, to increase the amount of agricultural products available to underserved communities and schools in the state. Existing law requires the office, among other things, to identify distribution barriers that affect limited food access and work to overcome those barriers through various actions and to coordinate with school districts and representatives to, among other things, increase the nutritional profile of foods provided in schools.This bill would create the Food Desert Elimination Grant Program under the administration of the department for the purpose of expanding access to healthy foods in food deserts, as defined, in the state, and areas at risk of becoming food deserts, by providing grants to grocery store operators, as specified. The bill would create the Food Desert Elimination Fund in the General Fund and would authorize the fund to be expended by the department, upon appropriation, for purposes of the program. The bill would authorize the department to award grants to grocery store operators seeking to locate grocery stores in food deserts and to award grants, totaling no more than 20% of the total program funding, for equipment upgrades for grocery stores located in food deserts to expand or provide healthy foods for sale. The bill would require, no later than January 1, 2026, the department to adopt regulations to implement these provisions. The bill would make the implementation of these provisions contingent on an appropriation by the Legislature.(2) The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws. This bill would, for taxable years beginning on or after January 1, 2025, and before January 1, 2030, allow a credit against the taxes imposed by those laws for portions of the wages paid by a taxpayer engaged in the operation of a grocery store in a food desert. The bill would require a taxpayer to request a tentative credit reservation from the Franchise Tax Board by, among other things, providing under penalty of perjury a certification of employment for each qualified full-time employee, as defined. By expanding the crime of perjury, the bill would impose a state-mandated local program. (3) Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals that the tax expenditure will achieve, detailed performance indicators, and data collection requirements. This bill would include additional information required for any bill authorizing a new tax expenditure. (4) 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.Existing law generally establishes various programs to decrease hunger and promote good nutrition throughout the state. Existing law specifically establishes the Office of Farm to Fork to work with various agencies, groups, and organizations, including the agricultural industry, to increase the amount of agricultural products available to underserved communities and schools in this state. The duties of the office include, among others, promoting greater retail sale of healthy food in underserved communities and working with stakeholders to identify urban and rural communities that lack access to healthy food, determine current barriers to food access, and share information to encourage best practices.This bill would state the intent of the Legislature to enact legislation to decrease food deserts in underserved communities.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: NOYES Local Program: NOYES Bill TextThe people of the State of California do enact as follows:SECTION 1. This act shall be known, and may be cited, as the Food Desert Elimination Act of 2024.SEC. 2. Chapter 15 (commencing with Section 49030) is added to Division 17 of the Food and Agricultural Code, to read: CHAPTER 15. Food Deserts Article 1. General Provisions49030. Unless the context otherwise requires, the definitions in this article govern the construction of this chapter.49031. Department means the Department of Food and Agriculture.49032. Food desert means a food desert as determined by the Economic Research Service within the United States Department of Agriculture.49033. Grocery store means a retail store in this state of over 15,000 square feet that is a retail seller of groceries, as described in Code 445110 of the North American Industry Classification System (NAICS) published by the United States Office of Management and Budget, 2022 edition. Article 2. Food Desert Elimination Grant Program49040. (a) The Food Desert Elimination Grant Program is hereby created under the administration of the Department of Food and Agriculture for the purpose of expanding access to healthy foods in food deserts in the state, and areas at risk of becoming food deserts, by providing grants to grocery store operators.(b) The Food Desert Elimination Fund is hereby created in the General Fund and may be expended by the department, upon appropriation, for the purposes of this article.49041. The department may award a grant for one or more of the following purposes to a grocery store operator seeking to locate a grocery store in a food desert:(a) A market and site feasibility study.(b) Salaries and benefits to grocery store employees.(c) Rents or downpayments to acquire a facility located in a food desert.(d) Capital improvements, planning, renovations, land acquisition, demolition, and durable and nondurable equipment purchases.(e) Other costs determined eligible by the department.49042. The department may award a grant for equipment upgrades to a grocery store located in a food desert for the purpose of expanding the grocery store or providing healthy foods for sale. The department shall use no more than 20 percent of the total program funding for this purpose.49043. No later than January 1, 2026, the department shall adopt regulations to implement this article.49044. The implementation of this article is contingent upon an appropriation for its purposes by the Legislature in the annual Budget Act or another act.SEC. 3. Section 17053.74 is added to the Revenue and Taxation Code, to read:17053.74. (a) (1) For each taxable year beginning on or after January 1, 2025, and before January 1, 2030, there shall be allowed to a qualified taxpayer that hires a qualified full-time employee and pays or incurs qualified wages attributable to work performed by the qualified full-time employee in a grocery store located in a food desert, and that receives a tentative credit reservation for that qualified full-time employee, a credit against the net tax, as defined in Section 17039, in an amount calculated under this section. (2) The amount of the credit allowable under this section for a taxable year shall be equal to the product of the tentative credit amount for the taxable year and the applicable percentage for that taxable year. (3) The credit allowed by this section may be claimed only on a timely filed original return of the qualified taxpayer and only with respect to a qualified full-time employee for whom the qualified taxpayer has received a tentative credit reservation. (b) For purposes of this section, the following shall apply:(1) The tentative credit amount for a taxable year shall be 35 percent of the qualified wages paid by the qualified taxpayer during the taxable year to the qualified full-time employee. (2) The applicable percentage for a taxable year shall be equal to a fraction, the numerator of which is the net increase in the total number of full-time employees employed in this state during the taxable year, determined on an annual full-time equivalent basis, as compared with the total number of full-time employees employed in this state during the base year, determined on the same basis, and the denominator of which shall be the total number of qualified full-time employees employed in this state during the taxable year. The applicable percentage shall not exceed 100 percent. (3) Base year means the 2024 taxable year, except in the case of a qualified taxpayer who first hires a qualified full-time employee in a taxable year beginning on or after January 1, 2025, the base year means the taxable year immediately preceding the taxable year in which a qualified full-time employee was first hired by the qualified taxpayer. (4) Acquired includes any gift, inheritance, transfer incident to divorce, or any other transfer, whether or not for consideration.(5) Annual full-time equivalent means either of the following: (A) In the case of a full-time employee paid hourly qualified wages, annual full-time equivalent means the total number of hours worked for the qualified taxpayer by the employee, not to exceed 2,000 hours per employee, divided by 2,000. (B) In the case of a salaried full-time employee, annual full-time equivalent means the total number of weeks worked for the qualified taxpayer by the employee divided by 52. (6) Food desert means a food desert as determined by the Economic Research Service within the United States Department of Agriculture.(7) Grocery store means a retail store in this state of over 15,000 square feet that is a retail seller of groceries, as described in Code 445110 of the North American Industry Classification System (NAICS) published by the United States Office of Management and Budget, 2022 edition.(8) Minimum wage means the wage established pursuant to Chapter 1 (commencing with Section 1171) of Part 4 of Division 2 of the Labor Code. (9) Qualified full-time employee means an individual who meets all of the following requirements: (A) Receives starting wages that are at least ____ percent of the minimum wage.(B) Is hired by the qualified taxpayer on or after January 1, 2025.(C) Is hired by the qualified taxpayer after the date the Economic Research Service determines that the location is within a food desert.(D) Satisfies either of the following conditions: (i) Is paid qualified wages by the qualified taxpayer for services not less than an average of 35 hours per week. (ii) Is a salaried employee and was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer. (10) (A) Qualified taxpayer means a taxpayer that operates a grocery store located in a food desert.(B) In the case of any passthrough entity, the determination of whether a taxpayer is a qualified taxpayer under this section shall be made at the entity level and any credit under this section or Section 23627 shall be allowed to the passthru entity and passthrough to the partners and shareholders in accordance with applicable provisions of this part or Part 11 (commencing with Section 23001). For purposes of this subdivision, the term passthrough entity means any partnership or S corporation.(11) Qualified wages means those wages subject to withholding pursuant to Division 6 (commencing with Section 13000) of the Unemployment Insurance Code that meet all of the following requirements: (A) That portion of wages paid or incurred by the qualified taxpayer during the taxable year to each qualified full-time employee that exceeds 150 percent of minimum wage, but does not exceed 350 percent of minimum wage. (B) Wages paid or incurred during the 60-month period beginning with the first day the qualified full-time employee commences employment with the qualified taxpayer. In the case of any employee who is reemployed, including a regularly occurring seasonal increase, in the trade or business operations of the qualified taxpayer, this reemployment shall not be treated as constituting commencement of employment for purposes of this section. (12) Seasonal employment means employment by a qualified taxpayer that has regular and predictable substantial reductions in trade or business operations.(c) The net increase in full-time employees of a qualified taxpayer shall be determined as provided by this subdivision: (1) (A) The net increase in full-time employees shall be determined on an annual full-time equivalent basis by subtracting from the amount determined in subparagraph (C) the amount determined in subparagraph (B). (B) The total number of full-time employees employed in the base year by the taxpayer and by any trade or business acquired by the taxpayer during the current taxable year. (C) The total number of full-time employees employed in the current taxable year by the taxpayer and by any trade or business acquired during the current taxable year. (2) For taxpayers who first commence doing business in this state during the taxable year, the number of full-time employees for the base year shall be zero. (d) For purposes of this section:(1) All employees of the trades or businesses that are treated as related under Section 267, 318, or 707 of the Internal Revenue Code shall be treated as employed by a single taxpayer.(2) In determining whether the taxpayer has first commenced doing business in this state during the taxable year, the provisions of subdivision (f) of Section 17276, without application of paragraph (7) of that subdivision, shall apply.(e) (1) To be eligible for the credit allowed by this section, a qualified taxpayer shall, upon hiring a qualified full-time employee, request a tentative credit reservation from the Franchise Tax Board within 30 days of complying with the Employment Development Departments new hire reporting requirements as provided in Section 1088.5 of the Unemployment Insurance Code, in the form and manner prescribed by the Franchise Tax Board. (2) To obtain a tentative credit reservation with respect to a qualified full-time employee, the qualified taxpayer shall provide necessary information, as determined by the Franchise Tax Board, including the name, social security number, the start date of employment, and the rate of pay of the qualified full-time employee. (3) The qualified taxpayer shall provide the Franchise Tax Board an annual certification of employment with respect to each qualified full-time employee hired in a previous taxable year on or before, the 15th day of the third month of the taxable year. The certification shall be made under penalty of perjury and shall include necessary information, as determined by the Franchise Tax Board, including the name, social security number, start date of employment, and rate of pay for each qualified full-time employee employed by the qualified taxpayer. (4) A tentative credit reservation provided to a taxpayer with respect to an employee of that taxpayer shall not constitute a determination by the Franchise Tax Board with respect to any of the requirements of this section regarding a taxpayers eligibility for the credit authorized by this section. (f) The Franchise Tax Board shall do all of the following: (1) Approve a tentative credit reservation with respect to a qualified full-time employee hired during a calendar year. (2) Determine the aggregate tentative reservation amount for a calendar year. (3) Notwithstanding Section 19542, provide as a searchable database on its internet website, for each taxable year beginning on or after January 1, 2025, and before January 1, 2030, the employer names, amounts of tax credit claimed, and number of new jobs created for each taxable year pursuant to this section and Section 23627. (g) The Department of Agriculture shall, by January 1, 2026, provide the Franchise Tax Board with a list of the designated food deserts.(h) For purposes of this section:(1) All employees of the trades or businesses that are treated as related under Section 267, 318, or 707 of the Internal Revenue Code shall be treated as employed by a single taxpayer.(2) All employees of trades or businesses that are not incorporated, and that are under common control, shall be treated as employed by a single taxpayer.(3) The credit, if any, allowable by this section with respect to each trade or business shall be determined by reference to its proportionate share of the expense of the qualified wages giving rise to the credit, and shall be allocated to that trade or business in that manner.(4) Principles that apply in the case of controlled groups of corporations, as specified in subdivision (h) of Section 23627, shall apply with respect to determining employment.(5) If an employer acquires the major portion of a trade or business of another employer, hereinafter in this paragraph referred to as the predecessor, or the major portion of a separate unit of a trade or business of a predecessor, then, for purposes of applying this section, other than subdivision (i), for any taxable year ending after that acquisition, the employment relationship between a qualified full-time employee and an employer shall not be treated as terminated if the employee continues to be employed in that trade or business.(i) (1) If the employment of any qualified full-time employee, with respect to whom qualified wages are taken into account under subdivision (a), is terminated by the qualified taxpayer at any time during the first 36 months after commencing employment with the qualified taxpayer, whether or not consecutive, the tax imposed by this part for the taxable year in which that employment is terminated shall be increased by an amount equal to the credit allowed under subdivision (a) for that taxable year and all prior taxable years attributable to qualified wages paid or incurred with respect to that employee. (2) Paragraph (1) does not apply to any of the following: (A) A termination of employment of a qualified full-time employee who voluntarily leaves the employment of the qualified taxpayer. (B) A termination of employment of a qualified full-time employee who, before the close of the period referred to in paragraph (1), becomes disabled and unable to perform the services of that employment, unless that disability is removed before the close of that period and the qualified taxpayer fails to offer reemployment to that employee. (C) A termination of employment of a qualified full-time employee, if it is determined that the termination was due to the misconduct, as defined in Sections 1256-30 to 1256-43, inclusive, of Title 22 of the California Code of Regulations, of that employee. (D) A termination of employment of a qualified full-time employee due to a substantial reduction in the trade or business operations of the qualified taxpayer, including reductions due to seasonal employment. (E) A termination of employment of a qualified full-time employee, if that employee is replaced by other qualified full-time employees so as to create a net increase in both the number of employees and the hours of employment. (F) A termination of employment of a qualified full-time employee, when that employment is considered seasonal employment and the qualified employee is rehired on a seasonal basis. (3) For purposes of paragraph (1), the employment relationship between the qualified taxpayer and a qualified full-time employee shall not be treated as terminated by reason of a mere change in the form of conducting the trade or business of the qualified taxpayer, if the qualified full-time employee continues to be employed in that trade or business and the qualified taxpayer retains a substantial interest in that trade or business. (4) An increase in tax under paragraph (1) shall not be treated as tax imposed by this part for purposes of determining the amount of any credit allowable under this part. (j) In the case in which the credit allowed by this section exceeds the net tax, the excess may be carried over to reduce the net tax in the following year, and the succeeding four years if necessary, until the credit is exhausted. (k) In the case of an estate or trust, both of the following apply:(1) The qualified wages for a taxable year shall be apportioned between the estate or trust and the beneficiaries on the basis of the income of the estate or trust allocable to each.(2) A beneficiary to whom any qualified wages have been apportioned under paragraph (1) shall be treated, for purposes of this part, as the employer with respect to those wages.(l) The Franchise Tax Board may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section, including any guidelines regarding the allocation of the credit allowed under this section. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section.(m) (1) For the purpose of complying with Section 41 as it applies to the credit allowed under this section and Section 23627, the Legislature finds and declares the following:(A) The goal, purpose, and objective of the credit is to incentivize grocery store operators to create economic development in food deserts and increase food access throughout California.(B) The performance indicators for the Legislature to use in determining whether the credit achieves its goal shall be the number of taxpayers allowed a credit under this section or Section 23627 and the average dollar value of credits allowed.(2) (A) No later than December 1, 2025, and each December 1 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in compliance with Section 9795 of the Government Code, detailing the number of taxpayers allowed a credit under this section or Section 23627 and the average dollar value of credits allowed.(B) The disclosure requirements of this paragraph shall be treated as an exception to Section 19542.(n) (1) This section shall remain in effect only until December 1, 2035, and as of that date is repealed.(2) Notwithstanding paragraph (1) of subdivision (a), this section shall continue to be operative for taxable years beginning on or after January 1, 2030, but only with respect to qualified full-time employees who commenced employment with a qualified taxpayer in a food desert in a taxable year beginning before January 1, 2030. (3) This section shall remain operative for any qualified taxpayer with respect to any qualified full-time employee after the food desert is no longer designated as such for the remaining period, if any, of the 60-month period after the original date of hiring of an otherwise qualified full-time employee and any wages paid or incurred with respect to those qualified full-time employees after the food desert is no longer designated as such shall be treated as qualified wages under this section, provided the employee satisfies any other requirements of paragraphs (9) and (11) of subdivision (b), as if the food desert was still designated.SEC. 4. Section 23627 is added to the Revenue and Taxation Code, to read:23627. (a) (1) For each taxable year beginning on or after January 1, 2025, and before January 1, 2030, there shall be allowed to a qualified taxpayer that hires a qualified full-time employee and pays or incurs qualified wages attributable to work performed by the qualified full-time employee in a grocery store located in a food desert, and that receives a tentative credit reservation for that qualified full-time employee, a credit against the tax, as defined in Section 23036, in an amount calculated under this section.(2) The amount of the credit allowable under this section for a taxable year shall be equal to the product of the tentative credit amount for the taxable year and the applicable percentage for that taxable year. (3) The credit allowed by this section may be claimed only on a timely filed original return of the qualified taxpayer and only with respect to a qualified full-time employee for whom the qualified taxpayer has received a tentative credit reservation. (b) For purposes of this section, the following shall apply:(1) The tentative credit amount for a taxable year shall be 35 percent of the qualified wages paid by the qualified taxpayer during the taxable year to the qualified full-time employee. (2) The applicable percentage for a taxable year shall be equal to a fraction, the numerator of which is the net increase in the total number of full-time employees employed in this state during the taxable year, determined on an annual full-time equivalent basis, as compared with the total number of full-time employees employed in this state during the base year, determined on the same basis, and the denominator of which shall be the total number of qualified full-time employees employed in this state during the taxable year. The applicable percentage shall not exceed 100 percent. (3) Base year means the 2024 taxable year, except in the case of a qualified taxpayer who first hires a qualified full-time employee in a taxable year beginning on or after January 1, 2025, the base year means the taxable year immediately preceding the taxable year in which a qualified full-time employee was first hired by the qualified taxpayer. (4) Acquired includes any gift, inheritance, transfer incident to divorce, or any other transfer, whether or not for consideration.(5) Annual full-time equivalent means either of the following: (A) In the case of a full-time employee paid hourly qualified wages, annual full-time equivalent means the total number of hours worked for the qualified taxpayer by the employee, not to exceed 2,000 hours per employee, divided by 2,000. (B) In the case of a salaried full-time employee, annual full-time equivalent means the total number of weeks worked for the qualified taxpayer by the employee divided by 52. (6) Food desert means a food desert as determined by the Economic Research Service within the United States Department of Agriculture.(7) Grocery store means a retail store in this state of over 15,000 square feet that is a retail seller of groceries, as described in Code 445110 of the North American Industry Classification System (NAICS) published by the United States Office of Management and Budget, 2022 edition.(8) Minimum wage means the wage established pursuant to Chapter 1 (commencing with Section 1171) of Part 4 of Division 2 of the Labor Code. (9) Qualified full-time employee means an individual who meets all of the following requirements: (A) Receives starting wages that are at least ____ percent of the minimum wage.(B) Is hired by the qualified taxpayer on or after January 1, 2025.(C) Is hired by the qualified taxpayer after the date the Economic Research Service determines that the location is within a food desert.(D) Satisfies either of the following conditions: (i) Is paid qualified wages by the qualified taxpayer for services not less than an average of 35 hours per week. (ii) Is a salaried employee and was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer. (10) Qualified taxpayer means a taxpayer that operates a grocery store located in a food desert.(11) Qualified wages means those wages subject to withholding pursuant to Division 6 (commencing with Section 13000) of the Unemployment Insurance Code that meet all of the following requirements: (A) That portion of wages paid or incurred by the qualified taxpayer during the taxable year to each qualified full-time employee that exceeds 150 percent of minimum wage, but does not exceed 350 percent of minimum wage. (B) Wages paid or incurred during the 60-month period beginning with the first day the qualified full-time employee commences employment with the qualified taxpayer. In the case of any employee who is reemployed, including a regularly occurring seasonal increase, in the trade or business operations of the qualified taxpayer, this reemployment shall not be treated as constituting commencement of employment for purposes of this section. (12) Seasonal employment means employment by a qualified taxpayer that has regular and predictable substantial reductions in trade or business operations.(c) The net increase in full-time employees of a qualified taxpayer shall be determined as provided by this subdivision: (1) (A) The net increase in full-time employees shall be determined on an annual full-time equivalent basis by subtracting from the amount determined in subparagraph (C) the amount determined in subparagraph (B). (B) The total number of full-time employees employed in the base year by the taxpayer and by any trade or business acquired by the taxpayer during the current taxable year. (C) The total number of full-time employees employed in the current taxable year by the taxpayer and by any trade or business acquired during the current taxable year. (2) For taxpayers who first commence doing business in this state during the taxable year, the number of full-time employees for the base year shall be zero. (d) For purposes of this section:(1) All employees of the trades or businesses that are treated as related under Section 267, 318, or 707 of the Internal Revenue Code shall be treated as employed by a single taxpayer.(2) In determining whether the taxpayer has first commenced doing business in this state during the taxable year, the provisions of subdivision (f) of Section 17276, without application of paragraph (7) of that subdivision, shall apply.(e) (1) To be eligible for the credit allowed by this section, a qualified taxpayer shall, upon hiring a qualified full-time employee, request a tentative credit reservation from the Franchise Tax Board within 30 days of complying with the Employment Development Departments new hire reporting requirements as provided in Section 1088.5 of the Unemployment Insurance Code, in the form and manner prescribed by the Franchise Tax Board. (2) To obtain a tentative credit reservation with respect to a qualified full-time employee, the qualified taxpayer shall provide necessary information, as determined by the Franchise Tax Board, including the name, social security number, the start date of employment, and the rate of pay of the qualified full-time employee. (3) The qualified taxpayer shall provide the Franchise Tax Board an annual certification of employment with respect to each qualified full-time employee hired in a previous taxable year on or before, the 15th day of the third month of the taxable year. The certification shall be made under penalty of perjury and shall include necessary information, as determined by the Franchise Tax Board, including the name, social security number, start date of employment, and rate of pay for each qualified full-time employee employed by the qualified taxpayer. (4) A tentative credit reservation provided to a taxpayer with respect to an employee of that taxpayer shall not constitute a determination by the Franchise Tax Board with respect to any of the requirements of this section regarding a taxpayers eligibility for the credit authorized by this section. (f) The Franchise Tax Board shall do all of the following: (1) Approve a tentative credit reservation with respect to a qualified full-time employee hired during a calendar year. (2) Determine the aggregate tentative reservation amount for a calendar year. (3) Notwithstanding Section 19542, provide as a searchable database on its internet website, for each taxable year beginning on or after January 1, 2025, and before January 1, 2030, the employer names, amounts of tax credit claimed, and number of new jobs created for each taxable year pursuant to this section and Section 17053.74. (g) The Department of Agriculture shall, by January 1, 2026, provide the Franchise Tax Board with a list of the designated food deserts.(h) (1) For purposes of this section:(A) All employees of the trades or businesses that are treated as related under Section 267, 318, or 707 of the Internal Revenue Code shall be treated as employed by a single qualified taxpayer.(B) All employees of all corporations that are members of the same controlled group of corporations shall be treated as employed by a single qualified taxpayer.(C) The credit, if any, allowable by this section to each member shall be determined by reference to its proportionate share of the expense of the qualified wages giving rise to the credit, and shall be allocated in that manner.(D) If a qualified taxpayer acquires the major portion of a trade or business of another taxpayer, hereinafter in this paragraph referred to as the predecessor, or the major portion of a separate unit of a trade or business of a predecessor, then, for purposes of applying this section for any taxable year ending after that acquisition, the employment relationship between a qualified full-time employee and a qualified taxpayer shall not be treated as terminated if the employee continues to be employed in that trade or business.(2) For purposes of this subdivision, controlled group of corporations means a controlled group of corporations as defined in Section 1563(a) of the Internal Revenue Code, except that:(A) More than 50 percent shall be substituted for at least 80 percent each place it appears in Section 1563(a)(1) of the Internal Revenue Code.(B) The determination shall be made without regard to subsections (a)(4) and (e)(3)(C) of Section 1563 of the Internal Revenue Code.(3) Rules similar to the rules provided in Sections 46(e) and 46(h) of the Internal Revenue Code, as in effect on November 4, 1990, shall apply to both of the following:(A) An organization to which Section 593 of the Internal Revenue Code applies.(B) A regulated investment company or a real estate investment trust subject to taxation under this part.(i) (1) If the employment of any qualified full-time employee, with respect to whom qualified wages are taken into account under subdivision (a), is terminated by the qualified taxpayer at any time during the first 36 months after commencing employment with the qualified taxpayer, whether or not consecutive, the tax imposed by this part for the taxable year in which that employment is terminated shall be increased by an amount equal to the credit allowed under subdivision (a) for that taxable year and all prior taxable years attributable to qualified wages paid or incurred with respect to that employee. (2) Paragraph (1) does not apply to any of the following: (A) A termination of employment of a qualified full-time employee who voluntarily leaves the employment of the qualified taxpayer. (B) A termination of employment of a qualified full-time employee who, before the close of the period referred to in paragraph (1), becomes disabled and unable to perform the services of that employment, unless that disability is removed before the close of that period and the qualified taxpayer fails to offer reemployment to that employee. (C) A termination of employment of a qualified full-time employee, if it is determined that the termination was due to the misconduct, as defined in Sections 1256-30 to 1256-43, inclusive, of Title 22 of the California Code of Regulations, of that employee. (D) A termination of employment of a qualified full-time employee due to a substantial reduction in the trade or business operations of the qualified taxpayer, including reductions due to seasonal employment. (E) A termination of employment of a qualified full-time employee, if that employee is replaced by other qualified full-time employees so as to create a net increase in both the number of employees and the hours of employment. (F) A termination of employment of a qualified full-time employee, when that employment is considered seasonal employment and the qualified employee is rehired on a seasonal basis. (3) For purposes of paragraph (1), the employment relationship between the qualified taxpayer and a qualified full-time employee shall not be treated as terminated by reason of a mere change in the form of conducting the trade or business of the qualified taxpayer, if the qualified full-time employee continues to be employed in that trade or business and the qualified taxpayer retains a substantial interest in that trade or business. (4) An increase in tax under paragraph (1) shall not be treated as tax imposed by this part for purposes of determining the amount of any credit allowable under this part. (j) In the case in which the credit allowed by this section exceeds the net tax, the excess may be carried over to reduce the net tax in the following year, and the succeeding four years if necessary, until the credit is exhausted. (k) In the case of an estate or trust, both of the following apply:(1) The qualified wages for a taxable year shall be apportioned between the estate or trust and the beneficiaries on the basis of the income of the estate or trust allocable to each.(2) A beneficiary to whom any qualified wages have been apportioned under paragraph (1) shall be treated, for purposes of this part, as the employer with respect to those wages.(l) The Franchise Tax Board may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section, including any guidelines regarding the allocation of the credit allowed under this section. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section.(m) (1) This section shall remain in effect only until December 1, 2035, and as of that date is repealed.(2) Notwithstanding paragraph (1) of subdivision (a), this section shall continue to be operative for taxable years beginning on or after January 1, 2030, but only with respect to qualified full-time employees who commenced employment with a qualified taxpayer in a food desert in a taxable year beginning before January 1, 2030. (3) This section shall remain operative for any qualified taxpayer with respect to any qualified full-time employee after the food desert is no longer designated as such for the remaining period, if any, of the 60-month period after the original date of hiring of an otherwise qualified full-time employee and any wages paid or incurred with respect to those qualified full-time employees after the food desert is no longer designated as such shall be treated as qualified wages under this section, provided the employee satisfies any other requirements of paragraphs (9) and (11) of subdivision (b), as if the food desert was still designated.SEC. 5. 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.SECTION 1.It is the intent of the Legislature to enact legislation to decrease food deserts in underserved communities.
Amended IN Senate March 20, 2024 CALIFORNIA LEGISLATURE 20232024 REGULAR SESSION Senate Bill No. 1419Introduced by Senator RubioFebruary 16, 2024An act relating to food deserts. An act to add Chapter 15 (commencing with Section 49030) to Division 17 of the Food and Agricultural Code, and to add and repeal Sections 17053.74 and 23627 of the Revenue and Taxation Code, relating to food.LEGISLATIVE COUNSEL'S DIGESTSB 1419, as amended, Rubio. Food deserts. deserts: grants: personal income tax and corporation tax credits.(1) Existing law creates the Office of Farm to Fork within the Department of Food and Agriculture, and requires the office, to the extent that resources are available, to work with various entities, as prescribed, to increase the amount of agricultural products available to underserved communities and schools in the state. Existing law requires the office, among other things, to identify distribution barriers that affect limited food access and work to overcome those barriers through various actions and to coordinate with school districts and representatives to, among other things, increase the nutritional profile of foods provided in schools.This bill would create the Food Desert Elimination Grant Program under the administration of the department for the purpose of expanding access to healthy foods in food deserts, as defined, in the state, and areas at risk of becoming food deserts, by providing grants to grocery store operators, as specified. The bill would create the Food Desert Elimination Fund in the General Fund and would authorize the fund to be expended by the department, upon appropriation, for purposes of the program. The bill would authorize the department to award grants to grocery store operators seeking to locate grocery stores in food deserts and to award grants, totaling no more than 20% of the total program funding, for equipment upgrades for grocery stores located in food deserts to expand or provide healthy foods for sale. The bill would require, no later than January 1, 2026, the department to adopt regulations to implement these provisions. The bill would make the implementation of these provisions contingent on an appropriation by the Legislature.(2) The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws. This bill would, for taxable years beginning on or after January 1, 2025, and before January 1, 2030, allow a credit against the taxes imposed by those laws for portions of the wages paid by a taxpayer engaged in the operation of a grocery store in a food desert. The bill would require a taxpayer to request a tentative credit reservation from the Franchise Tax Board by, among other things, providing under penalty of perjury a certification of employment for each qualified full-time employee, as defined. By expanding the crime of perjury, the bill would impose a state-mandated local program. (3) Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals that the tax expenditure will achieve, detailed performance indicators, and data collection requirements. This bill would include additional information required for any bill authorizing a new tax expenditure. (4) 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.Existing law generally establishes various programs to decrease hunger and promote good nutrition throughout the state. Existing law specifically establishes the Office of Farm to Fork to work with various agencies, groups, and organizations, including the agricultural industry, to increase the amount of agricultural products available to underserved communities and schools in this state. The duties of the office include, among others, promoting greater retail sale of healthy food in underserved communities and working with stakeholders to identify urban and rural communities that lack access to healthy food, determine current barriers to food access, and share information to encourage best practices.This bill would state the intent of the Legislature to enact legislation to decrease food deserts in underserved communities.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: NOYES Local Program: NOYES
Amended IN Senate March 20, 2024
Amended IN Senate March 20, 2024
CALIFORNIA LEGISLATURE 20232024 REGULAR SESSION
Senate Bill
No. 1419
Introduced by Senator RubioFebruary 16, 2024
Introduced by Senator Rubio
February 16, 2024
An act relating to food deserts. An act to add Chapter 15 (commencing with Section 49030) to Division 17 of the Food and Agricultural Code, and to add and repeal Sections 17053.74 and 23627 of the Revenue and Taxation Code, relating to food.
LEGISLATIVE COUNSEL'S DIGEST
## LEGISLATIVE COUNSEL'S DIGEST
SB 1419, as amended, Rubio. Food deserts. deserts: grants: personal income tax and corporation tax credits.
(1) Existing law creates the Office of Farm to Fork within the Department of Food and Agriculture, and requires the office, to the extent that resources are available, to work with various entities, as prescribed, to increase the amount of agricultural products available to underserved communities and schools in the state. Existing law requires the office, among other things, to identify distribution barriers that affect limited food access and work to overcome those barriers through various actions and to coordinate with school districts and representatives to, among other things, increase the nutritional profile of foods provided in schools.This bill would create the Food Desert Elimination Grant Program under the administration of the department for the purpose of expanding access to healthy foods in food deserts, as defined, in the state, and areas at risk of becoming food deserts, by providing grants to grocery store operators, as specified. The bill would create the Food Desert Elimination Fund in the General Fund and would authorize the fund to be expended by the department, upon appropriation, for purposes of the program. The bill would authorize the department to award grants to grocery store operators seeking to locate grocery stores in food deserts and to award grants, totaling no more than 20% of the total program funding, for equipment upgrades for grocery stores located in food deserts to expand or provide healthy foods for sale. The bill would require, no later than January 1, 2026, the department to adopt regulations to implement these provisions. The bill would make the implementation of these provisions contingent on an appropriation by the Legislature.(2) The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws. This bill would, for taxable years beginning on or after January 1, 2025, and before January 1, 2030, allow a credit against the taxes imposed by those laws for portions of the wages paid by a taxpayer engaged in the operation of a grocery store in a food desert. The bill would require a taxpayer to request a tentative credit reservation from the Franchise Tax Board by, among other things, providing under penalty of perjury a certification of employment for each qualified full-time employee, as defined. By expanding the crime of perjury, the bill would impose a state-mandated local program. (3) Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals that the tax expenditure will achieve, detailed performance indicators, and data collection requirements. This bill would include additional information required for any bill authorizing a new tax expenditure. (4) 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.Existing law generally establishes various programs to decrease hunger and promote good nutrition throughout the state. Existing law specifically establishes the Office of Farm to Fork to work with various agencies, groups, and organizations, including the agricultural industry, to increase the amount of agricultural products available to underserved communities and schools in this state. The duties of the office include, among others, promoting greater retail sale of healthy food in underserved communities and working with stakeholders to identify urban and rural communities that lack access to healthy food, determine current barriers to food access, and share information to encourage best practices.This bill would state the intent of the Legislature to enact legislation to decrease food deserts in underserved communities.
(1) Existing law creates the Office of Farm to Fork within the Department of Food and Agriculture, and requires the office, to the extent that resources are available, to work with various entities, as prescribed, to increase the amount of agricultural products available to underserved communities and schools in the state. Existing law requires the office, among other things, to identify distribution barriers that affect limited food access and work to overcome those barriers through various actions and to coordinate with school districts and representatives to, among other things, increase the nutritional profile of foods provided in schools.
This bill would create the Food Desert Elimination Grant Program under the administration of the department for the purpose of expanding access to healthy foods in food deserts, as defined, in the state, and areas at risk of becoming food deserts, by providing grants to grocery store operators, as specified. The bill would create the Food Desert Elimination Fund in the General Fund and would authorize the fund to be expended by the department, upon appropriation, for purposes of the program. The bill would authorize the department to award grants to grocery store operators seeking to locate grocery stores in food deserts and to award grants, totaling no more than 20% of the total program funding, for equipment upgrades for grocery stores located in food deserts to expand or provide healthy foods for sale. The bill would require, no later than January 1, 2026, the department to adopt regulations to implement these provisions. The bill would make the implementation of these provisions contingent on an appropriation by the Legislature.
(2) The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws.
This bill would, for taxable years beginning on or after January 1, 2025, and before January 1, 2030, allow a credit against the taxes imposed by those laws for portions of the wages paid by a taxpayer engaged in the operation of a grocery store in a food desert. The bill would require a taxpayer to request a tentative credit reservation from the Franchise Tax Board by, among other things, providing under penalty of perjury a certification of employment for each qualified full-time employee, as defined. By expanding the crime of perjury, the bill would impose a state-mandated local program.
(3) Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
This bill would include additional information required for any bill authorizing a new tax expenditure.
(4) 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.
Existing law generally establishes various programs to decrease hunger and promote good nutrition throughout the state. Existing law specifically establishes the Office of Farm to Fork to work with various agencies, groups, and organizations, including the agricultural industry, to increase the amount of agricultural products available to underserved communities and schools in this state. The duties of the office include, among others, promoting greater retail sale of healthy food in underserved communities and working with stakeholders to identify urban and rural communities that lack access to healthy food, determine current barriers to food access, and share information to encourage best practices.
This bill would state the intent of the Legislature to enact legislation to decrease food deserts in underserved communities.
## Digest Key
## Bill Text
The people of the State of California do enact as follows:SECTION 1. This act shall be known, and may be cited, as the Food Desert Elimination Act of 2024.SEC. 2. Chapter 15 (commencing with Section 49030) is added to Division 17 of the Food and Agricultural Code, to read: CHAPTER 15. Food Deserts Article 1. General Provisions49030. Unless the context otherwise requires, the definitions in this article govern the construction of this chapter.49031. Department means the Department of Food and Agriculture.49032. Food desert means a food desert as determined by the Economic Research Service within the United States Department of Agriculture.49033. Grocery store means a retail store in this state of over 15,000 square feet that is a retail seller of groceries, as described in Code 445110 of the North American Industry Classification System (NAICS) published by the United States Office of Management and Budget, 2022 edition. Article 2. Food Desert Elimination Grant Program49040. (a) The Food Desert Elimination Grant Program is hereby created under the administration of the Department of Food and Agriculture for the purpose of expanding access to healthy foods in food deserts in the state, and areas at risk of becoming food deserts, by providing grants to grocery store operators.(b) The Food Desert Elimination Fund is hereby created in the General Fund and may be expended by the department, upon appropriation, for the purposes of this article.49041. The department may award a grant for one or more of the following purposes to a grocery store operator seeking to locate a grocery store in a food desert:(a) A market and site feasibility study.(b) Salaries and benefits to grocery store employees.(c) Rents or downpayments to acquire a facility located in a food desert.(d) Capital improvements, planning, renovations, land acquisition, demolition, and durable and nondurable equipment purchases.(e) Other costs determined eligible by the department.49042. The department may award a grant for equipment upgrades to a grocery store located in a food desert for the purpose of expanding the grocery store or providing healthy foods for sale. The department shall use no more than 20 percent of the total program funding for this purpose.49043. No later than January 1, 2026, the department shall adopt regulations to implement this article.49044. The implementation of this article is contingent upon an appropriation for its purposes by the Legislature in the annual Budget Act or another act.SEC. 3. Section 17053.74 is added to the Revenue and Taxation Code, to read:17053.74. (a) (1) For each taxable year beginning on or after January 1, 2025, and before January 1, 2030, there shall be allowed to a qualified taxpayer that hires a qualified full-time employee and pays or incurs qualified wages attributable to work performed by the qualified full-time employee in a grocery store located in a food desert, and that receives a tentative credit reservation for that qualified full-time employee, a credit against the net tax, as defined in Section 17039, in an amount calculated under this section. (2) The amount of the credit allowable under this section for a taxable year shall be equal to the product of the tentative credit amount for the taxable year and the applicable percentage for that taxable year. (3) The credit allowed by this section may be claimed only on a timely filed original return of the qualified taxpayer and only with respect to a qualified full-time employee for whom the qualified taxpayer has received a tentative credit reservation. (b) For purposes of this section, the following shall apply:(1) The tentative credit amount for a taxable year shall be 35 percent of the qualified wages paid by the qualified taxpayer during the taxable year to the qualified full-time employee. (2) The applicable percentage for a taxable year shall be equal to a fraction, the numerator of which is the net increase in the total number of full-time employees employed in this state during the taxable year, determined on an annual full-time equivalent basis, as compared with the total number of full-time employees employed in this state during the base year, determined on the same basis, and the denominator of which shall be the total number of qualified full-time employees employed in this state during the taxable year. The applicable percentage shall not exceed 100 percent. (3) Base year means the 2024 taxable year, except in the case of a qualified taxpayer who first hires a qualified full-time employee in a taxable year beginning on or after January 1, 2025, the base year means the taxable year immediately preceding the taxable year in which a qualified full-time employee was first hired by the qualified taxpayer. (4) Acquired includes any gift, inheritance, transfer incident to divorce, or any other transfer, whether or not for consideration.(5) Annual full-time equivalent means either of the following: (A) In the case of a full-time employee paid hourly qualified wages, annual full-time equivalent means the total number of hours worked for the qualified taxpayer by the employee, not to exceed 2,000 hours per employee, divided by 2,000. (B) In the case of a salaried full-time employee, annual full-time equivalent means the total number of weeks worked for the qualified taxpayer by the employee divided by 52. (6) Food desert means a food desert as determined by the Economic Research Service within the United States Department of Agriculture.(7) Grocery store means a retail store in this state of over 15,000 square feet that is a retail seller of groceries, as described in Code 445110 of the North American Industry Classification System (NAICS) published by the United States Office of Management and Budget, 2022 edition.(8) Minimum wage means the wage established pursuant to Chapter 1 (commencing with Section 1171) of Part 4 of Division 2 of the Labor Code. (9) Qualified full-time employee means an individual who meets all of the following requirements: (A) Receives starting wages that are at least ____ percent of the minimum wage.(B) Is hired by the qualified taxpayer on or after January 1, 2025.(C) Is hired by the qualified taxpayer after the date the Economic Research Service determines that the location is within a food desert.(D) Satisfies either of the following conditions: (i) Is paid qualified wages by the qualified taxpayer for services not less than an average of 35 hours per week. (ii) Is a salaried employee and was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer. (10) (A) Qualified taxpayer means a taxpayer that operates a grocery store located in a food desert.(B) In the case of any passthrough entity, the determination of whether a taxpayer is a qualified taxpayer under this section shall be made at the entity level and any credit under this section or Section 23627 shall be allowed to the passthru entity and passthrough to the partners and shareholders in accordance with applicable provisions of this part or Part 11 (commencing with Section 23001). For purposes of this subdivision, the term passthrough entity means any partnership or S corporation.(11) Qualified wages means those wages subject to withholding pursuant to Division 6 (commencing with Section 13000) of the Unemployment Insurance Code that meet all of the following requirements: (A) That portion of wages paid or incurred by the qualified taxpayer during the taxable year to each qualified full-time employee that exceeds 150 percent of minimum wage, but does not exceed 350 percent of minimum wage. (B) Wages paid or incurred during the 60-month period beginning with the first day the qualified full-time employee commences employment with the qualified taxpayer. In the case of any employee who is reemployed, including a regularly occurring seasonal increase, in the trade or business operations of the qualified taxpayer, this reemployment shall not be treated as constituting commencement of employment for purposes of this section. (12) Seasonal employment means employment by a qualified taxpayer that has regular and predictable substantial reductions in trade or business operations.(c) The net increase in full-time employees of a qualified taxpayer shall be determined as provided by this subdivision: (1) (A) The net increase in full-time employees shall be determined on an annual full-time equivalent basis by subtracting from the amount determined in subparagraph (C) the amount determined in subparagraph (B). (B) The total number of full-time employees employed in the base year by the taxpayer and by any trade or business acquired by the taxpayer during the current taxable year. (C) The total number of full-time employees employed in the current taxable year by the taxpayer and by any trade or business acquired during the current taxable year. (2) For taxpayers who first commence doing business in this state during the taxable year, the number of full-time employees for the base year shall be zero. (d) For purposes of this section:(1) All employees of the trades or businesses that are treated as related under Section 267, 318, or 707 of the Internal Revenue Code shall be treated as employed by a single taxpayer.(2) In determining whether the taxpayer has first commenced doing business in this state during the taxable year, the provisions of subdivision (f) of Section 17276, without application of paragraph (7) of that subdivision, shall apply.(e) (1) To be eligible for the credit allowed by this section, a qualified taxpayer shall, upon hiring a qualified full-time employee, request a tentative credit reservation from the Franchise Tax Board within 30 days of complying with the Employment Development Departments new hire reporting requirements as provided in Section 1088.5 of the Unemployment Insurance Code, in the form and manner prescribed by the Franchise Tax Board. (2) To obtain a tentative credit reservation with respect to a qualified full-time employee, the qualified taxpayer shall provide necessary information, as determined by the Franchise Tax Board, including the name, social security number, the start date of employment, and the rate of pay of the qualified full-time employee. (3) The qualified taxpayer shall provide the Franchise Tax Board an annual certification of employment with respect to each qualified full-time employee hired in a previous taxable year on or before, the 15th day of the third month of the taxable year. The certification shall be made under penalty of perjury and shall include necessary information, as determined by the Franchise Tax Board, including the name, social security number, start date of employment, and rate of pay for each qualified full-time employee employed by the qualified taxpayer. (4) A tentative credit reservation provided to a taxpayer with respect to an employee of that taxpayer shall not constitute a determination by the Franchise Tax Board with respect to any of the requirements of this section regarding a taxpayers eligibility for the credit authorized by this section. (f) The Franchise Tax Board shall do all of the following: (1) Approve a tentative credit reservation with respect to a qualified full-time employee hired during a calendar year. (2) Determine the aggregate tentative reservation amount for a calendar year. (3) Notwithstanding Section 19542, provide as a searchable database on its internet website, for each taxable year beginning on or after January 1, 2025, and before January 1, 2030, the employer names, amounts of tax credit claimed, and number of new jobs created for each taxable year pursuant to this section and Section 23627. (g) The Department of Agriculture shall, by January 1, 2026, provide the Franchise Tax Board with a list of the designated food deserts.(h) For purposes of this section:(1) All employees of the trades or businesses that are treated as related under Section 267, 318, or 707 of the Internal Revenue Code shall be treated as employed by a single taxpayer.(2) All employees of trades or businesses that are not incorporated, and that are under common control, shall be treated as employed by a single taxpayer.(3) The credit, if any, allowable by this section with respect to each trade or business shall be determined by reference to its proportionate share of the expense of the qualified wages giving rise to the credit, and shall be allocated to that trade or business in that manner.(4) Principles that apply in the case of controlled groups of corporations, as specified in subdivision (h) of Section 23627, shall apply with respect to determining employment.(5) If an employer acquires the major portion of a trade or business of another employer, hereinafter in this paragraph referred to as the predecessor, or the major portion of a separate unit of a trade or business of a predecessor, then, for purposes of applying this section, other than subdivision (i), for any taxable year ending after that acquisition, the employment relationship between a qualified full-time employee and an employer shall not be treated as terminated if the employee continues to be employed in that trade or business.(i) (1) If the employment of any qualified full-time employee, with respect to whom qualified wages are taken into account under subdivision (a), is terminated by the qualified taxpayer at any time during the first 36 months after commencing employment with the qualified taxpayer, whether or not consecutive, the tax imposed by this part for the taxable year in which that employment is terminated shall be increased by an amount equal to the credit allowed under subdivision (a) for that taxable year and all prior taxable years attributable to qualified wages paid or incurred with respect to that employee. (2) Paragraph (1) does not apply to any of the following: (A) A termination of employment of a qualified full-time employee who voluntarily leaves the employment of the qualified taxpayer. (B) A termination of employment of a qualified full-time employee who, before the close of the period referred to in paragraph (1), becomes disabled and unable to perform the services of that employment, unless that disability is removed before the close of that period and the qualified taxpayer fails to offer reemployment to that employee. (C) A termination of employment of a qualified full-time employee, if it is determined that the termination was due to the misconduct, as defined in Sections 1256-30 to 1256-43, inclusive, of Title 22 of the California Code of Regulations, of that employee. (D) A termination of employment of a qualified full-time employee due to a substantial reduction in the trade or business operations of the qualified taxpayer, including reductions due to seasonal employment. (E) A termination of employment of a qualified full-time employee, if that employee is replaced by other qualified full-time employees so as to create a net increase in both the number of employees and the hours of employment. (F) A termination of employment of a qualified full-time employee, when that employment is considered seasonal employment and the qualified employee is rehired on a seasonal basis. (3) For purposes of paragraph (1), the employment relationship between the qualified taxpayer and a qualified full-time employee shall not be treated as terminated by reason of a mere change in the form of conducting the trade or business of the qualified taxpayer, if the qualified full-time employee continues to be employed in that trade or business and the qualified taxpayer retains a substantial interest in that trade or business. (4) An increase in tax under paragraph (1) shall not be treated as tax imposed by this part for purposes of determining the amount of any credit allowable under this part. (j) In the case in which the credit allowed by this section exceeds the net tax, the excess may be carried over to reduce the net tax in the following year, and the succeeding four years if necessary, until the credit is exhausted. (k) In the case of an estate or trust, both of the following apply:(1) The qualified wages for a taxable year shall be apportioned between the estate or trust and the beneficiaries on the basis of the income of the estate or trust allocable to each.(2) A beneficiary to whom any qualified wages have been apportioned under paragraph (1) shall be treated, for purposes of this part, as the employer with respect to those wages.(l) The Franchise Tax Board may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section, including any guidelines regarding the allocation of the credit allowed under this section. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section.(m) (1) For the purpose of complying with Section 41 as it applies to the credit allowed under this section and Section 23627, the Legislature finds and declares the following:(A) The goal, purpose, and objective of the credit is to incentivize grocery store operators to create economic development in food deserts and increase food access throughout California.(B) The performance indicators for the Legislature to use in determining whether the credit achieves its goal shall be the number of taxpayers allowed a credit under this section or Section 23627 and the average dollar value of credits allowed.(2) (A) No later than December 1, 2025, and each December 1 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in compliance with Section 9795 of the Government Code, detailing the number of taxpayers allowed a credit under this section or Section 23627 and the average dollar value of credits allowed.(B) The disclosure requirements of this paragraph shall be treated as an exception to Section 19542.(n) (1) This section shall remain in effect only until December 1, 2035, and as of that date is repealed.(2) Notwithstanding paragraph (1) of subdivision (a), this section shall continue to be operative for taxable years beginning on or after January 1, 2030, but only with respect to qualified full-time employees who commenced employment with a qualified taxpayer in a food desert in a taxable year beginning before January 1, 2030. (3) This section shall remain operative for any qualified taxpayer with respect to any qualified full-time employee after the food desert is no longer designated as such for the remaining period, if any, of the 60-month period after the original date of hiring of an otherwise qualified full-time employee and any wages paid or incurred with respect to those qualified full-time employees after the food desert is no longer designated as such shall be treated as qualified wages under this section, provided the employee satisfies any other requirements of paragraphs (9) and (11) of subdivision (b), as if the food desert was still designated.SEC. 4. Section 23627 is added to the Revenue and Taxation Code, to read:23627. (a) (1) For each taxable year beginning on or after January 1, 2025, and before January 1, 2030, there shall be allowed to a qualified taxpayer that hires a qualified full-time employee and pays or incurs qualified wages attributable to work performed by the qualified full-time employee in a grocery store located in a food desert, and that receives a tentative credit reservation for that qualified full-time employee, a credit against the tax, as defined in Section 23036, in an amount calculated under this section.(2) The amount of the credit allowable under this section for a taxable year shall be equal to the product of the tentative credit amount for the taxable year and the applicable percentage for that taxable year. (3) The credit allowed by this section may be claimed only on a timely filed original return of the qualified taxpayer and only with respect to a qualified full-time employee for whom the qualified taxpayer has received a tentative credit reservation. (b) For purposes of this section, the following shall apply:(1) The tentative credit amount for a taxable year shall be 35 percent of the qualified wages paid by the qualified taxpayer during the taxable year to the qualified full-time employee. (2) The applicable percentage for a taxable year shall be equal to a fraction, the numerator of which is the net increase in the total number of full-time employees employed in this state during the taxable year, determined on an annual full-time equivalent basis, as compared with the total number of full-time employees employed in this state during the base year, determined on the same basis, and the denominator of which shall be the total number of qualified full-time employees employed in this state during the taxable year. The applicable percentage shall not exceed 100 percent. (3) Base year means the 2024 taxable year, except in the case of a qualified taxpayer who first hires a qualified full-time employee in a taxable year beginning on or after January 1, 2025, the base year means the taxable year immediately preceding the taxable year in which a qualified full-time employee was first hired by the qualified taxpayer. (4) Acquired includes any gift, inheritance, transfer incident to divorce, or any other transfer, whether or not for consideration.(5) Annual full-time equivalent means either of the following: (A) In the case of a full-time employee paid hourly qualified wages, annual full-time equivalent means the total number of hours worked for the qualified taxpayer by the employee, not to exceed 2,000 hours per employee, divided by 2,000. (B) In the case of a salaried full-time employee, annual full-time equivalent means the total number of weeks worked for the qualified taxpayer by the employee divided by 52. (6) Food desert means a food desert as determined by the Economic Research Service within the United States Department of Agriculture.(7) Grocery store means a retail store in this state of over 15,000 square feet that is a retail seller of groceries, as described in Code 445110 of the North American Industry Classification System (NAICS) published by the United States Office of Management and Budget, 2022 edition.(8) Minimum wage means the wage established pursuant to Chapter 1 (commencing with Section 1171) of Part 4 of Division 2 of the Labor Code. (9) Qualified full-time employee means an individual who meets all of the following requirements: (A) Receives starting wages that are at least ____ percent of the minimum wage.(B) Is hired by the qualified taxpayer on or after January 1, 2025.(C) Is hired by the qualified taxpayer after the date the Economic Research Service determines that the location is within a food desert.(D) Satisfies either of the following conditions: (i) Is paid qualified wages by the qualified taxpayer for services not less than an average of 35 hours per week. (ii) Is a salaried employee and was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer. (10) Qualified taxpayer means a taxpayer that operates a grocery store located in a food desert.(11) Qualified wages means those wages subject to withholding pursuant to Division 6 (commencing with Section 13000) of the Unemployment Insurance Code that meet all of the following requirements: (A) That portion of wages paid or incurred by the qualified taxpayer during the taxable year to each qualified full-time employee that exceeds 150 percent of minimum wage, but does not exceed 350 percent of minimum wage. (B) Wages paid or incurred during the 60-month period beginning with the first day the qualified full-time employee commences employment with the qualified taxpayer. In the case of any employee who is reemployed, including a regularly occurring seasonal increase, in the trade or business operations of the qualified taxpayer, this reemployment shall not be treated as constituting commencement of employment for purposes of this section. (12) Seasonal employment means employment by a qualified taxpayer that has regular and predictable substantial reductions in trade or business operations.(c) The net increase in full-time employees of a qualified taxpayer shall be determined as provided by this subdivision: (1) (A) The net increase in full-time employees shall be determined on an annual full-time equivalent basis by subtracting from the amount determined in subparagraph (C) the amount determined in subparagraph (B). (B) The total number of full-time employees employed in the base year by the taxpayer and by any trade or business acquired by the taxpayer during the current taxable year. (C) The total number of full-time employees employed in the current taxable year by the taxpayer and by any trade or business acquired during the current taxable year. (2) For taxpayers who first commence doing business in this state during the taxable year, the number of full-time employees for the base year shall be zero. (d) For purposes of this section:(1) All employees of the trades or businesses that are treated as related under Section 267, 318, or 707 of the Internal Revenue Code shall be treated as employed by a single taxpayer.(2) In determining whether the taxpayer has first commenced doing business in this state during the taxable year, the provisions of subdivision (f) of Section 17276, without application of paragraph (7) of that subdivision, shall apply.(e) (1) To be eligible for the credit allowed by this section, a qualified taxpayer shall, upon hiring a qualified full-time employee, request a tentative credit reservation from the Franchise Tax Board within 30 days of complying with the Employment Development Departments new hire reporting requirements as provided in Section 1088.5 of the Unemployment Insurance Code, in the form and manner prescribed by the Franchise Tax Board. (2) To obtain a tentative credit reservation with respect to a qualified full-time employee, the qualified taxpayer shall provide necessary information, as determined by the Franchise Tax Board, including the name, social security number, the start date of employment, and the rate of pay of the qualified full-time employee. (3) The qualified taxpayer shall provide the Franchise Tax Board an annual certification of employment with respect to each qualified full-time employee hired in a previous taxable year on or before, the 15th day of the third month of the taxable year. The certification shall be made under penalty of perjury and shall include necessary information, as determined by the Franchise Tax Board, including the name, social security number, start date of employment, and rate of pay for each qualified full-time employee employed by the qualified taxpayer. (4) A tentative credit reservation provided to a taxpayer with respect to an employee of that taxpayer shall not constitute a determination by the Franchise Tax Board with respect to any of the requirements of this section regarding a taxpayers eligibility for the credit authorized by this section. (f) The Franchise Tax Board shall do all of the following: (1) Approve a tentative credit reservation with respect to a qualified full-time employee hired during a calendar year. (2) Determine the aggregate tentative reservation amount for a calendar year. (3) Notwithstanding Section 19542, provide as a searchable database on its internet website, for each taxable year beginning on or after January 1, 2025, and before January 1, 2030, the employer names, amounts of tax credit claimed, and number of new jobs created for each taxable year pursuant to this section and Section 17053.74. (g) The Department of Agriculture shall, by January 1, 2026, provide the Franchise Tax Board with a list of the designated food deserts.(h) (1) For purposes of this section:(A) All employees of the trades or businesses that are treated as related under Section 267, 318, or 707 of the Internal Revenue Code shall be treated as employed by a single qualified taxpayer.(B) All employees of all corporations that are members of the same controlled group of corporations shall be treated as employed by a single qualified taxpayer.(C) The credit, if any, allowable by this section to each member shall be determined by reference to its proportionate share of the expense of the qualified wages giving rise to the credit, and shall be allocated in that manner.(D) If a qualified taxpayer acquires the major portion of a trade or business of another taxpayer, hereinafter in this paragraph referred to as the predecessor, or the major portion of a separate unit of a trade or business of a predecessor, then, for purposes of applying this section for any taxable year ending after that acquisition, the employment relationship between a qualified full-time employee and a qualified taxpayer shall not be treated as terminated if the employee continues to be employed in that trade or business.(2) For purposes of this subdivision, controlled group of corporations means a controlled group of corporations as defined in Section 1563(a) of the Internal Revenue Code, except that:(A) More than 50 percent shall be substituted for at least 80 percent each place it appears in Section 1563(a)(1) of the Internal Revenue Code.(B) The determination shall be made without regard to subsections (a)(4) and (e)(3)(C) of Section 1563 of the Internal Revenue Code.(3) Rules similar to the rules provided in Sections 46(e) and 46(h) of the Internal Revenue Code, as in effect on November 4, 1990, shall apply to both of the following:(A) An organization to which Section 593 of the Internal Revenue Code applies.(B) A regulated investment company or a real estate investment trust subject to taxation under this part.(i) (1) If the employment of any qualified full-time employee, with respect to whom qualified wages are taken into account under subdivision (a), is terminated by the qualified taxpayer at any time during the first 36 months after commencing employment with the qualified taxpayer, whether or not consecutive, the tax imposed by this part for the taxable year in which that employment is terminated shall be increased by an amount equal to the credit allowed under subdivision (a) for that taxable year and all prior taxable years attributable to qualified wages paid or incurred with respect to that employee. (2) Paragraph (1) does not apply to any of the following: (A) A termination of employment of a qualified full-time employee who voluntarily leaves the employment of the qualified taxpayer. (B) A termination of employment of a qualified full-time employee who, before the close of the period referred to in paragraph (1), becomes disabled and unable to perform the services of that employment, unless that disability is removed before the close of that period and the qualified taxpayer fails to offer reemployment to that employee. (C) A termination of employment of a qualified full-time employee, if it is determined that the termination was due to the misconduct, as defined in Sections 1256-30 to 1256-43, inclusive, of Title 22 of the California Code of Regulations, of that employee. (D) A termination of employment of a qualified full-time employee due to a substantial reduction in the trade or business operations of the qualified taxpayer, including reductions due to seasonal employment. (E) A termination of employment of a qualified full-time employee, if that employee is replaced by other qualified full-time employees so as to create a net increase in both the number of employees and the hours of employment. (F) A termination of employment of a qualified full-time employee, when that employment is considered seasonal employment and the qualified employee is rehired on a seasonal basis. (3) For purposes of paragraph (1), the employment relationship between the qualified taxpayer and a qualified full-time employee shall not be treated as terminated by reason of a mere change in the form of conducting the trade or business of the qualified taxpayer, if the qualified full-time employee continues to be employed in that trade or business and the qualified taxpayer retains a substantial interest in that trade or business. (4) An increase in tax under paragraph (1) shall not be treated as tax imposed by this part for purposes of determining the amount of any credit allowable under this part. (j) In the case in which the credit allowed by this section exceeds the net tax, the excess may be carried over to reduce the net tax in the following year, and the succeeding four years if necessary, until the credit is exhausted. (k) In the case of an estate or trust, both of the following apply:(1) The qualified wages for a taxable year shall be apportioned between the estate or trust and the beneficiaries on the basis of the income of the estate or trust allocable to each.(2) A beneficiary to whom any qualified wages have been apportioned under paragraph (1) shall be treated, for purposes of this part, as the employer with respect to those wages.(l) The Franchise Tax Board may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section, including any guidelines regarding the allocation of the credit allowed under this section. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section.(m) (1) This section shall remain in effect only until December 1, 2035, and as of that date is repealed.(2) Notwithstanding paragraph (1) of subdivision (a), this section shall continue to be operative for taxable years beginning on or after January 1, 2030, but only with respect to qualified full-time employees who commenced employment with a qualified taxpayer in a food desert in a taxable year beginning before January 1, 2030. (3) This section shall remain operative for any qualified taxpayer with respect to any qualified full-time employee after the food desert is no longer designated as such for the remaining period, if any, of the 60-month period after the original date of hiring of an otherwise qualified full-time employee and any wages paid or incurred with respect to those qualified full-time employees after the food desert is no longer designated as such shall be treated as qualified wages under this section, provided the employee satisfies any other requirements of paragraphs (9) and (11) of subdivision (b), as if the food desert was still designated.SEC. 5. 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.SECTION 1.It is the intent of the Legislature to enact legislation to decrease food deserts in underserved communities.
The people of the State of California do enact as follows:
## The people of the State of California do enact as follows:
SECTION 1. This act shall be known, and may be cited, as the Food Desert Elimination Act of 2024.
SECTION 1. This act shall be known, and may be cited, as the Food Desert Elimination Act of 2024.
SECTION 1. This act shall be known, and may be cited, as the Food Desert Elimination Act of 2024.
### SECTION 1.
SEC. 2. Chapter 15 (commencing with Section 49030) is added to Division 17 of the Food and Agricultural Code, to read: CHAPTER 15. Food Deserts Article 1. General Provisions49030. Unless the context otherwise requires, the definitions in this article govern the construction of this chapter.49031. Department means the Department of Food and Agriculture.49032. Food desert means a food desert as determined by the Economic Research Service within the United States Department of Agriculture.49033. Grocery store means a retail store in this state of over 15,000 square feet that is a retail seller of groceries, as described in Code 445110 of the North American Industry Classification System (NAICS) published by the United States Office of Management and Budget, 2022 edition. Article 2. Food Desert Elimination Grant Program49040. (a) The Food Desert Elimination Grant Program is hereby created under the administration of the Department of Food and Agriculture for the purpose of expanding access to healthy foods in food deserts in the state, and areas at risk of becoming food deserts, by providing grants to grocery store operators.(b) The Food Desert Elimination Fund is hereby created in the General Fund and may be expended by the department, upon appropriation, for the purposes of this article.49041. The department may award a grant for one or more of the following purposes to a grocery store operator seeking to locate a grocery store in a food desert:(a) A market and site feasibility study.(b) Salaries and benefits to grocery store employees.(c) Rents or downpayments to acquire a facility located in a food desert.(d) Capital improvements, planning, renovations, land acquisition, demolition, and durable and nondurable equipment purchases.(e) Other costs determined eligible by the department.49042. The department may award a grant for equipment upgrades to a grocery store located in a food desert for the purpose of expanding the grocery store or providing healthy foods for sale. The department shall use no more than 20 percent of the total program funding for this purpose.49043. No later than January 1, 2026, the department shall adopt regulations to implement this article.49044. The implementation of this article is contingent upon an appropriation for its purposes by the Legislature in the annual Budget Act or another act.
SEC. 2. Chapter 15 (commencing with Section 49030) is added to Division 17 of the Food and Agricultural Code, to read:
### SEC. 2.
CHAPTER 15. Food Deserts Article 1. General Provisions49030. Unless the context otherwise requires, the definitions in this article govern the construction of this chapter.49031. Department means the Department of Food and Agriculture.49032. Food desert means a food desert as determined by the Economic Research Service within the United States Department of Agriculture.49033. Grocery store means a retail store in this state of over 15,000 square feet that is a retail seller of groceries, as described in Code 445110 of the North American Industry Classification System (NAICS) published by the United States Office of Management and Budget, 2022 edition. Article 2. Food Desert Elimination Grant Program49040. (a) The Food Desert Elimination Grant Program is hereby created under the administration of the Department of Food and Agriculture for the purpose of expanding access to healthy foods in food deserts in the state, and areas at risk of becoming food deserts, by providing grants to grocery store operators.(b) The Food Desert Elimination Fund is hereby created in the General Fund and may be expended by the department, upon appropriation, for the purposes of this article.49041. The department may award a grant for one or more of the following purposes to a grocery store operator seeking to locate a grocery store in a food desert:(a) A market and site feasibility study.(b) Salaries and benefits to grocery store employees.(c) Rents or downpayments to acquire a facility located in a food desert.(d) Capital improvements, planning, renovations, land acquisition, demolition, and durable and nondurable equipment purchases.(e) Other costs determined eligible by the department.49042. The department may award a grant for equipment upgrades to a grocery store located in a food desert for the purpose of expanding the grocery store or providing healthy foods for sale. The department shall use no more than 20 percent of the total program funding for this purpose.49043. No later than January 1, 2026, the department shall adopt regulations to implement this article.49044. The implementation of this article is contingent upon an appropriation for its purposes by the Legislature in the annual Budget Act or another act.
CHAPTER 15. Food Deserts Article 1. General Provisions49030. Unless the context otherwise requires, the definitions in this article govern the construction of this chapter.49031. Department means the Department of Food and Agriculture.49032. Food desert means a food desert as determined by the Economic Research Service within the United States Department of Agriculture.49033. Grocery store means a retail store in this state of over 15,000 square feet that is a retail seller of groceries, as described in Code 445110 of the North American Industry Classification System (NAICS) published by the United States Office of Management and Budget, 2022 edition. Article 2. Food Desert Elimination Grant Program49040. (a) The Food Desert Elimination Grant Program is hereby created under the administration of the Department of Food and Agriculture for the purpose of expanding access to healthy foods in food deserts in the state, and areas at risk of becoming food deserts, by providing grants to grocery store operators.(b) The Food Desert Elimination Fund is hereby created in the General Fund and may be expended by the department, upon appropriation, for the purposes of this article.49041. The department may award a grant for one or more of the following purposes to a grocery store operator seeking to locate a grocery store in a food desert:(a) A market and site feasibility study.(b) Salaries and benefits to grocery store employees.(c) Rents or downpayments to acquire a facility located in a food desert.(d) Capital improvements, planning, renovations, land acquisition, demolition, and durable and nondurable equipment purchases.(e) Other costs determined eligible by the department.49042. The department may award a grant for equipment upgrades to a grocery store located in a food desert for the purpose of expanding the grocery store or providing healthy foods for sale. The department shall use no more than 20 percent of the total program funding for this purpose.49043. No later than January 1, 2026, the department shall adopt regulations to implement this article.49044. The implementation of this article is contingent upon an appropriation for its purposes by the Legislature in the annual Budget Act or another act.
CHAPTER 15. Food Deserts
CHAPTER 15. Food Deserts
Article 1. General Provisions49030. Unless the context otherwise requires, the definitions in this article govern the construction of this chapter.49031. Department means the Department of Food and Agriculture.49032. Food desert means a food desert as determined by the Economic Research Service within the United States Department of Agriculture.49033. Grocery store means a retail store in this state of over 15,000 square feet that is a retail seller of groceries, as described in Code 445110 of the North American Industry Classification System (NAICS) published by the United States Office of Management and Budget, 2022 edition.
Article 1. General Provisions
Article 1. General Provisions
49030. Unless the context otherwise requires, the definitions in this article govern the construction of this chapter.
49030. Unless the context otherwise requires, the definitions in this article govern the construction of this chapter.
49031. Department means the Department of Food and Agriculture.
49031. Department means the Department of Food and Agriculture.
49032. Food desert means a food desert as determined by the Economic Research Service within the United States Department of Agriculture.
49032. Food desert means a food desert as determined by the Economic Research Service within the United States Department of Agriculture.
49033. Grocery store means a retail store in this state of over 15,000 square feet that is a retail seller of groceries, as described in Code 445110 of the North American Industry Classification System (NAICS) published by the United States Office of Management and Budget, 2022 edition.
49033. Grocery store means a retail store in this state of over 15,000 square feet that is a retail seller of groceries, as described in Code 445110 of the North American Industry Classification System (NAICS) published by the United States Office of Management and Budget, 2022 edition.
Article 2. Food Desert Elimination Grant Program49040. (a) The Food Desert Elimination Grant Program is hereby created under the administration of the Department of Food and Agriculture for the purpose of expanding access to healthy foods in food deserts in the state, and areas at risk of becoming food deserts, by providing grants to grocery store operators.(b) The Food Desert Elimination Fund is hereby created in the General Fund and may be expended by the department, upon appropriation, for the purposes of this article.49041. The department may award a grant for one or more of the following purposes to a grocery store operator seeking to locate a grocery store in a food desert:(a) A market and site feasibility study.(b) Salaries and benefits to grocery store employees.(c) Rents or downpayments to acquire a facility located in a food desert.(d) Capital improvements, planning, renovations, land acquisition, demolition, and durable and nondurable equipment purchases.(e) Other costs determined eligible by the department.49042. The department may award a grant for equipment upgrades to a grocery store located in a food desert for the purpose of expanding the grocery store or providing healthy foods for sale. The department shall use no more than 20 percent of the total program funding for this purpose.49043. No later than January 1, 2026, the department shall adopt regulations to implement this article.49044. The implementation of this article is contingent upon an appropriation for its purposes by the Legislature in the annual Budget Act or another act.
Article 2. Food Desert Elimination Grant Program
Article 2. Food Desert Elimination Grant Program
49040. (a) The Food Desert Elimination Grant Program is hereby created under the administration of the Department of Food and Agriculture for the purpose of expanding access to healthy foods in food deserts in the state, and areas at risk of becoming food deserts, by providing grants to grocery store operators.(b) The Food Desert Elimination Fund is hereby created in the General Fund and may be expended by the department, upon appropriation, for the purposes of this article.
49040. (a) The Food Desert Elimination Grant Program is hereby created under the administration of the Department of Food and Agriculture for the purpose of expanding access to healthy foods in food deserts in the state, and areas at risk of becoming food deserts, by providing grants to grocery store operators.
(b) The Food Desert Elimination Fund is hereby created in the General Fund and may be expended by the department, upon appropriation, for the purposes of this article.
49041. The department may award a grant for one or more of the following purposes to a grocery store operator seeking to locate a grocery store in a food desert:(a) A market and site feasibility study.(b) Salaries and benefits to grocery store employees.(c) Rents or downpayments to acquire a facility located in a food desert.(d) Capital improvements, planning, renovations, land acquisition, demolition, and durable and nondurable equipment purchases.(e) Other costs determined eligible by the department.
49041. The department may award a grant for one or more of the following purposes to a grocery store operator seeking to locate a grocery store in a food desert:
(a) A market and site feasibility study.
(b) Salaries and benefits to grocery store employees.
(c) Rents or downpayments to acquire a facility located in a food desert.
(d) Capital improvements, planning, renovations, land acquisition, demolition, and durable and nondurable equipment purchases.
(e) Other costs determined eligible by the department.
49042. The department may award a grant for equipment upgrades to a grocery store located in a food desert for the purpose of expanding the grocery store or providing healthy foods for sale. The department shall use no more than 20 percent of the total program funding for this purpose.
49042. The department may award a grant for equipment upgrades to a grocery store located in a food desert for the purpose of expanding the grocery store or providing healthy foods for sale. The department shall use no more than 20 percent of the total program funding for this purpose.
49043. No later than January 1, 2026, the department shall adopt regulations to implement this article.
49043. No later than January 1, 2026, the department shall adopt regulations to implement this article.
49044. The implementation of this article is contingent upon an appropriation for its purposes by the Legislature in the annual Budget Act or another act.
49044. The implementation of this article is contingent upon an appropriation for its purposes by the Legislature in the annual Budget Act or another act.
SEC. 3. Section 17053.74 is added to the Revenue and Taxation Code, to read:17053.74. (a) (1) For each taxable year beginning on or after January 1, 2025, and before January 1, 2030, there shall be allowed to a qualified taxpayer that hires a qualified full-time employee and pays or incurs qualified wages attributable to work performed by the qualified full-time employee in a grocery store located in a food desert, and that receives a tentative credit reservation for that qualified full-time employee, a credit against the net tax, as defined in Section 17039, in an amount calculated under this section. (2) The amount of the credit allowable under this section for a taxable year shall be equal to the product of the tentative credit amount for the taxable year and the applicable percentage for that taxable year. (3) The credit allowed by this section may be claimed only on a timely filed original return of the qualified taxpayer and only with respect to a qualified full-time employee for whom the qualified taxpayer has received a tentative credit reservation. (b) For purposes of this section, the following shall apply:(1) The tentative credit amount for a taxable year shall be 35 percent of the qualified wages paid by the qualified taxpayer during the taxable year to the qualified full-time employee. (2) The applicable percentage for a taxable year shall be equal to a fraction, the numerator of which is the net increase in the total number of full-time employees employed in this state during the taxable year, determined on an annual full-time equivalent basis, as compared with the total number of full-time employees employed in this state during the base year, determined on the same basis, and the denominator of which shall be the total number of qualified full-time employees employed in this state during the taxable year. The applicable percentage shall not exceed 100 percent. (3) Base year means the 2024 taxable year, except in the case of a qualified taxpayer who first hires a qualified full-time employee in a taxable year beginning on or after January 1, 2025, the base year means the taxable year immediately preceding the taxable year in which a qualified full-time employee was first hired by the qualified taxpayer. (4) Acquired includes any gift, inheritance, transfer incident to divorce, or any other transfer, whether or not for consideration.(5) Annual full-time equivalent means either of the following: (A) In the case of a full-time employee paid hourly qualified wages, annual full-time equivalent means the total number of hours worked for the qualified taxpayer by the employee, not to exceed 2,000 hours per employee, divided by 2,000. (B) In the case of a salaried full-time employee, annual full-time equivalent means the total number of weeks worked for the qualified taxpayer by the employee divided by 52. (6) Food desert means a food desert as determined by the Economic Research Service within the United States Department of Agriculture.(7) Grocery store means a retail store in this state of over 15,000 square feet that is a retail seller of groceries, as described in Code 445110 of the North American Industry Classification System (NAICS) published by the United States Office of Management and Budget, 2022 edition.(8) Minimum wage means the wage established pursuant to Chapter 1 (commencing with Section 1171) of Part 4 of Division 2 of the Labor Code. (9) Qualified full-time employee means an individual who meets all of the following requirements: (A) Receives starting wages that are at least ____ percent of the minimum wage.(B) Is hired by the qualified taxpayer on or after January 1, 2025.(C) Is hired by the qualified taxpayer after the date the Economic Research Service determines that the location is within a food desert.(D) Satisfies either of the following conditions: (i) Is paid qualified wages by the qualified taxpayer for services not less than an average of 35 hours per week. (ii) Is a salaried employee and was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer. (10) (A) Qualified taxpayer means a taxpayer that operates a grocery store located in a food desert.(B) In the case of any passthrough entity, the determination of whether a taxpayer is a qualified taxpayer under this section shall be made at the entity level and any credit under this section or Section 23627 shall be allowed to the passthru entity and passthrough to the partners and shareholders in accordance with applicable provisions of this part or Part 11 (commencing with Section 23001). For purposes of this subdivision, the term passthrough entity means any partnership or S corporation.(11) Qualified wages means those wages subject to withholding pursuant to Division 6 (commencing with Section 13000) of the Unemployment Insurance Code that meet all of the following requirements: (A) That portion of wages paid or incurred by the qualified taxpayer during the taxable year to each qualified full-time employee that exceeds 150 percent of minimum wage, but does not exceed 350 percent of minimum wage. (B) Wages paid or incurred during the 60-month period beginning with the first day the qualified full-time employee commences employment with the qualified taxpayer. In the case of any employee who is reemployed, including a regularly occurring seasonal increase, in the trade or business operations of the qualified taxpayer, this reemployment shall not be treated as constituting commencement of employment for purposes of this section. (12) Seasonal employment means employment by a qualified taxpayer that has regular and predictable substantial reductions in trade or business operations.(c) The net increase in full-time employees of a qualified taxpayer shall be determined as provided by this subdivision: (1) (A) The net increase in full-time employees shall be determined on an annual full-time equivalent basis by subtracting from the amount determined in subparagraph (C) the amount determined in subparagraph (B). (B) The total number of full-time employees employed in the base year by the taxpayer and by any trade or business acquired by the taxpayer during the current taxable year. (C) The total number of full-time employees employed in the current taxable year by the taxpayer and by any trade or business acquired during the current taxable year. (2) For taxpayers who first commence doing business in this state during the taxable year, the number of full-time employees for the base year shall be zero. (d) For purposes of this section:(1) All employees of the trades or businesses that are treated as related under Section 267, 318, or 707 of the Internal Revenue Code shall be treated as employed by a single taxpayer.(2) In determining whether the taxpayer has first commenced doing business in this state during the taxable year, the provisions of subdivision (f) of Section 17276, without application of paragraph (7) of that subdivision, shall apply.(e) (1) To be eligible for the credit allowed by this section, a qualified taxpayer shall, upon hiring a qualified full-time employee, request a tentative credit reservation from the Franchise Tax Board within 30 days of complying with the Employment Development Departments new hire reporting requirements as provided in Section 1088.5 of the Unemployment Insurance Code, in the form and manner prescribed by the Franchise Tax Board. (2) To obtain a tentative credit reservation with respect to a qualified full-time employee, the qualified taxpayer shall provide necessary information, as determined by the Franchise Tax Board, including the name, social security number, the start date of employment, and the rate of pay of the qualified full-time employee. (3) The qualified taxpayer shall provide the Franchise Tax Board an annual certification of employment with respect to each qualified full-time employee hired in a previous taxable year on or before, the 15th day of the third month of the taxable year. The certification shall be made under penalty of perjury and shall include necessary information, as determined by the Franchise Tax Board, including the name, social security number, start date of employment, and rate of pay for each qualified full-time employee employed by the qualified taxpayer. (4) A tentative credit reservation provided to a taxpayer with respect to an employee of that taxpayer shall not constitute a determination by the Franchise Tax Board with respect to any of the requirements of this section regarding a taxpayers eligibility for the credit authorized by this section. (f) The Franchise Tax Board shall do all of the following: (1) Approve a tentative credit reservation with respect to a qualified full-time employee hired during a calendar year. (2) Determine the aggregate tentative reservation amount for a calendar year. (3) Notwithstanding Section 19542, provide as a searchable database on its internet website, for each taxable year beginning on or after January 1, 2025, and before January 1, 2030, the employer names, amounts of tax credit claimed, and number of new jobs created for each taxable year pursuant to this section and Section 23627. (g) The Department of Agriculture shall, by January 1, 2026, provide the Franchise Tax Board with a list of the designated food deserts.(h) For purposes of this section:(1) All employees of the trades or businesses that are treated as related under Section 267, 318, or 707 of the Internal Revenue Code shall be treated as employed by a single taxpayer.(2) All employees of trades or businesses that are not incorporated, and that are under common control, shall be treated as employed by a single taxpayer.(3) The credit, if any, allowable by this section with respect to each trade or business shall be determined by reference to its proportionate share of the expense of the qualified wages giving rise to the credit, and shall be allocated to that trade or business in that manner.(4) Principles that apply in the case of controlled groups of corporations, as specified in subdivision (h) of Section 23627, shall apply with respect to determining employment.(5) If an employer acquires the major portion of a trade or business of another employer, hereinafter in this paragraph referred to as the predecessor, or the major portion of a separate unit of a trade or business of a predecessor, then, for purposes of applying this section, other than subdivision (i), for any taxable year ending after that acquisition, the employment relationship between a qualified full-time employee and an employer shall not be treated as terminated if the employee continues to be employed in that trade or business.(i) (1) If the employment of any qualified full-time employee, with respect to whom qualified wages are taken into account under subdivision (a), is terminated by the qualified taxpayer at any time during the first 36 months after commencing employment with the qualified taxpayer, whether or not consecutive, the tax imposed by this part for the taxable year in which that employment is terminated shall be increased by an amount equal to the credit allowed under subdivision (a) for that taxable year and all prior taxable years attributable to qualified wages paid or incurred with respect to that employee. (2) Paragraph (1) does not apply to any of the following: (A) A termination of employment of a qualified full-time employee who voluntarily leaves the employment of the qualified taxpayer. (B) A termination of employment of a qualified full-time employee who, before the close of the period referred to in paragraph (1), becomes disabled and unable to perform the services of that employment, unless that disability is removed before the close of that period and the qualified taxpayer fails to offer reemployment to that employee. (C) A termination of employment of a qualified full-time employee, if it is determined that the termination was due to the misconduct, as defined in Sections 1256-30 to 1256-43, inclusive, of Title 22 of the California Code of Regulations, of that employee. (D) A termination of employment of a qualified full-time employee due to a substantial reduction in the trade or business operations of the qualified taxpayer, including reductions due to seasonal employment. (E) A termination of employment of a qualified full-time employee, if that employee is replaced by other qualified full-time employees so as to create a net increase in both the number of employees and the hours of employment. (F) A termination of employment of a qualified full-time employee, when that employment is considered seasonal employment and the qualified employee is rehired on a seasonal basis. (3) For purposes of paragraph (1), the employment relationship between the qualified taxpayer and a qualified full-time employee shall not be treated as terminated by reason of a mere change in the form of conducting the trade or business of the qualified taxpayer, if the qualified full-time employee continues to be employed in that trade or business and the qualified taxpayer retains a substantial interest in that trade or business. (4) An increase in tax under paragraph (1) shall not be treated as tax imposed by this part for purposes of determining the amount of any credit allowable under this part. (j) In the case in which the credit allowed by this section exceeds the net tax, the excess may be carried over to reduce the net tax in the following year, and the succeeding four years if necessary, until the credit is exhausted. (k) In the case of an estate or trust, both of the following apply:(1) The qualified wages for a taxable year shall be apportioned between the estate or trust and the beneficiaries on the basis of the income of the estate or trust allocable to each.(2) A beneficiary to whom any qualified wages have been apportioned under paragraph (1) shall be treated, for purposes of this part, as the employer with respect to those wages.(l) The Franchise Tax Board may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section, including any guidelines regarding the allocation of the credit allowed under this section. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section.(m) (1) For the purpose of complying with Section 41 as it applies to the credit allowed under this section and Section 23627, the Legislature finds and declares the following:(A) The goal, purpose, and objective of the credit is to incentivize grocery store operators to create economic development in food deserts and increase food access throughout California.(B) The performance indicators for the Legislature to use in determining whether the credit achieves its goal shall be the number of taxpayers allowed a credit under this section or Section 23627 and the average dollar value of credits allowed.(2) (A) No later than December 1, 2025, and each December 1 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in compliance with Section 9795 of the Government Code, detailing the number of taxpayers allowed a credit under this section or Section 23627 and the average dollar value of credits allowed.(B) The disclosure requirements of this paragraph shall be treated as an exception to Section 19542.(n) (1) This section shall remain in effect only until December 1, 2035, and as of that date is repealed.(2) Notwithstanding paragraph (1) of subdivision (a), this section shall continue to be operative for taxable years beginning on or after January 1, 2030, but only with respect to qualified full-time employees who commenced employment with a qualified taxpayer in a food desert in a taxable year beginning before January 1, 2030. (3) This section shall remain operative for any qualified taxpayer with respect to any qualified full-time employee after the food desert is no longer designated as such for the remaining period, if any, of the 60-month period after the original date of hiring of an otherwise qualified full-time employee and any wages paid or incurred with respect to those qualified full-time employees after the food desert is no longer designated as such shall be treated as qualified wages under this section, provided the employee satisfies any other requirements of paragraphs (9) and (11) of subdivision (b), as if the food desert was still designated.
SEC. 3. Section 17053.74 is added to the Revenue and Taxation Code, to read:
### SEC. 3.
17053.74. (a) (1) For each taxable year beginning on or after January 1, 2025, and before January 1, 2030, there shall be allowed to a qualified taxpayer that hires a qualified full-time employee and pays or incurs qualified wages attributable to work performed by the qualified full-time employee in a grocery store located in a food desert, and that receives a tentative credit reservation for that qualified full-time employee, a credit against the net tax, as defined in Section 17039, in an amount calculated under this section. (2) The amount of the credit allowable under this section for a taxable year shall be equal to the product of the tentative credit amount for the taxable year and the applicable percentage for that taxable year. (3) The credit allowed by this section may be claimed only on a timely filed original return of the qualified taxpayer and only with respect to a qualified full-time employee for whom the qualified taxpayer has received a tentative credit reservation. (b) For purposes of this section, the following shall apply:(1) The tentative credit amount for a taxable year shall be 35 percent of the qualified wages paid by the qualified taxpayer during the taxable year to the qualified full-time employee. (2) The applicable percentage for a taxable year shall be equal to a fraction, the numerator of which is the net increase in the total number of full-time employees employed in this state during the taxable year, determined on an annual full-time equivalent basis, as compared with the total number of full-time employees employed in this state during the base year, determined on the same basis, and the denominator of which shall be the total number of qualified full-time employees employed in this state during the taxable year. The applicable percentage shall not exceed 100 percent. (3) Base year means the 2024 taxable year, except in the case of a qualified taxpayer who first hires a qualified full-time employee in a taxable year beginning on or after January 1, 2025, the base year means the taxable year immediately preceding the taxable year in which a qualified full-time employee was first hired by the qualified taxpayer. (4) Acquired includes any gift, inheritance, transfer incident to divorce, or any other transfer, whether or not for consideration.(5) Annual full-time equivalent means either of the following: (A) In the case of a full-time employee paid hourly qualified wages, annual full-time equivalent means the total number of hours worked for the qualified taxpayer by the employee, not to exceed 2,000 hours per employee, divided by 2,000. (B) In the case of a salaried full-time employee, annual full-time equivalent means the total number of weeks worked for the qualified taxpayer by the employee divided by 52. (6) Food desert means a food desert as determined by the Economic Research Service within the United States Department of Agriculture.(7) Grocery store means a retail store in this state of over 15,000 square feet that is a retail seller of groceries, as described in Code 445110 of the North American Industry Classification System (NAICS) published by the United States Office of Management and Budget, 2022 edition.(8) Minimum wage means the wage established pursuant to Chapter 1 (commencing with Section 1171) of Part 4 of Division 2 of the Labor Code. (9) Qualified full-time employee means an individual who meets all of the following requirements: (A) Receives starting wages that are at least ____ percent of the minimum wage.(B) Is hired by the qualified taxpayer on or after January 1, 2025.(C) Is hired by the qualified taxpayer after the date the Economic Research Service determines that the location is within a food desert.(D) Satisfies either of the following conditions: (i) Is paid qualified wages by the qualified taxpayer for services not less than an average of 35 hours per week. (ii) Is a salaried employee and was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer. (10) (A) Qualified taxpayer means a taxpayer that operates a grocery store located in a food desert.(B) In the case of any passthrough entity, the determination of whether a taxpayer is a qualified taxpayer under this section shall be made at the entity level and any credit under this section or Section 23627 shall be allowed to the passthru entity and passthrough to the partners and shareholders in accordance with applicable provisions of this part or Part 11 (commencing with Section 23001). For purposes of this subdivision, the term passthrough entity means any partnership or S corporation.(11) Qualified wages means those wages subject to withholding pursuant to Division 6 (commencing with Section 13000) of the Unemployment Insurance Code that meet all of the following requirements: (A) That portion of wages paid or incurred by the qualified taxpayer during the taxable year to each qualified full-time employee that exceeds 150 percent of minimum wage, but does not exceed 350 percent of minimum wage. (B) Wages paid or incurred during the 60-month period beginning with the first day the qualified full-time employee commences employment with the qualified taxpayer. In the case of any employee who is reemployed, including a regularly occurring seasonal increase, in the trade or business operations of the qualified taxpayer, this reemployment shall not be treated as constituting commencement of employment for purposes of this section. (12) Seasonal employment means employment by a qualified taxpayer that has regular and predictable substantial reductions in trade or business operations.(c) The net increase in full-time employees of a qualified taxpayer shall be determined as provided by this subdivision: (1) (A) The net increase in full-time employees shall be determined on an annual full-time equivalent basis by subtracting from the amount determined in subparagraph (C) the amount determined in subparagraph (B). (B) The total number of full-time employees employed in the base year by the taxpayer and by any trade or business acquired by the taxpayer during the current taxable year. (C) The total number of full-time employees employed in the current taxable year by the taxpayer and by any trade or business acquired during the current taxable year. (2) For taxpayers who first commence doing business in this state during the taxable year, the number of full-time employees for the base year shall be zero. (d) For purposes of this section:(1) All employees of the trades or businesses that are treated as related under Section 267, 318, or 707 of the Internal Revenue Code shall be treated as employed by a single taxpayer.(2) In determining whether the taxpayer has first commenced doing business in this state during the taxable year, the provisions of subdivision (f) of Section 17276, without application of paragraph (7) of that subdivision, shall apply.(e) (1) To be eligible for the credit allowed by this section, a qualified taxpayer shall, upon hiring a qualified full-time employee, request a tentative credit reservation from the Franchise Tax Board within 30 days of complying with the Employment Development Departments new hire reporting requirements as provided in Section 1088.5 of the Unemployment Insurance Code, in the form and manner prescribed by the Franchise Tax Board. (2) To obtain a tentative credit reservation with respect to a qualified full-time employee, the qualified taxpayer shall provide necessary information, as determined by the Franchise Tax Board, including the name, social security number, the start date of employment, and the rate of pay of the qualified full-time employee. (3) The qualified taxpayer shall provide the Franchise Tax Board an annual certification of employment with respect to each qualified full-time employee hired in a previous taxable year on or before, the 15th day of the third month of the taxable year. The certification shall be made under penalty of perjury and shall include necessary information, as determined by the Franchise Tax Board, including the name, social security number, start date of employment, and rate of pay for each qualified full-time employee employed by the qualified taxpayer. (4) A tentative credit reservation provided to a taxpayer with respect to an employee of that taxpayer shall not constitute a determination by the Franchise Tax Board with respect to any of the requirements of this section regarding a taxpayers eligibility for the credit authorized by this section. (f) The Franchise Tax Board shall do all of the following: (1) Approve a tentative credit reservation with respect to a qualified full-time employee hired during a calendar year. (2) Determine the aggregate tentative reservation amount for a calendar year. (3) Notwithstanding Section 19542, provide as a searchable database on its internet website, for each taxable year beginning on or after January 1, 2025, and before January 1, 2030, the employer names, amounts of tax credit claimed, and number of new jobs created for each taxable year pursuant to this section and Section 23627. (g) The Department of Agriculture shall, by January 1, 2026, provide the Franchise Tax Board with a list of the designated food deserts.(h) For purposes of this section:(1) All employees of the trades or businesses that are treated as related under Section 267, 318, or 707 of the Internal Revenue Code shall be treated as employed by a single taxpayer.(2) All employees of trades or businesses that are not incorporated, and that are under common control, shall be treated as employed by a single taxpayer.(3) The credit, if any, allowable by this section with respect to each trade or business shall be determined by reference to its proportionate share of the expense of the qualified wages giving rise to the credit, and shall be allocated to that trade or business in that manner.(4) Principles that apply in the case of controlled groups of corporations, as specified in subdivision (h) of Section 23627, shall apply with respect to determining employment.(5) If an employer acquires the major portion of a trade or business of another employer, hereinafter in this paragraph referred to as the predecessor, or the major portion of a separate unit of a trade or business of a predecessor, then, for purposes of applying this section, other than subdivision (i), for any taxable year ending after that acquisition, the employment relationship between a qualified full-time employee and an employer shall not be treated as terminated if the employee continues to be employed in that trade or business.(i) (1) If the employment of any qualified full-time employee, with respect to whom qualified wages are taken into account under subdivision (a), is terminated by the qualified taxpayer at any time during the first 36 months after commencing employment with the qualified taxpayer, whether or not consecutive, the tax imposed by this part for the taxable year in which that employment is terminated shall be increased by an amount equal to the credit allowed under subdivision (a) for that taxable year and all prior taxable years attributable to qualified wages paid or incurred with respect to that employee. (2) Paragraph (1) does not apply to any of the following: (A) A termination of employment of a qualified full-time employee who voluntarily leaves the employment of the qualified taxpayer. (B) A termination of employment of a qualified full-time employee who, before the close of the period referred to in paragraph (1), becomes disabled and unable to perform the services of that employment, unless that disability is removed before the close of that period and the qualified taxpayer fails to offer reemployment to that employee. (C) A termination of employment of a qualified full-time employee, if it is determined that the termination was due to the misconduct, as defined in Sections 1256-30 to 1256-43, inclusive, of Title 22 of the California Code of Regulations, of that employee. (D) A termination of employment of a qualified full-time employee due to a substantial reduction in the trade or business operations of the qualified taxpayer, including reductions due to seasonal employment. (E) A termination of employment of a qualified full-time employee, if that employee is replaced by other qualified full-time employees so as to create a net increase in both the number of employees and the hours of employment. (F) A termination of employment of a qualified full-time employee, when that employment is considered seasonal employment and the qualified employee is rehired on a seasonal basis. (3) For purposes of paragraph (1), the employment relationship between the qualified taxpayer and a qualified full-time employee shall not be treated as terminated by reason of a mere change in the form of conducting the trade or business of the qualified taxpayer, if the qualified full-time employee continues to be employed in that trade or business and the qualified taxpayer retains a substantial interest in that trade or business. (4) An increase in tax under paragraph (1) shall not be treated as tax imposed by this part for purposes of determining the amount of any credit allowable under this part. (j) In the case in which the credit allowed by this section exceeds the net tax, the excess may be carried over to reduce the net tax in the following year, and the succeeding four years if necessary, until the credit is exhausted. (k) In the case of an estate or trust, both of the following apply:(1) The qualified wages for a taxable year shall be apportioned between the estate or trust and the beneficiaries on the basis of the income of the estate or trust allocable to each.(2) A beneficiary to whom any qualified wages have been apportioned under paragraph (1) shall be treated, for purposes of this part, as the employer with respect to those wages.(l) The Franchise Tax Board may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section, including any guidelines regarding the allocation of the credit allowed under this section. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section.(m) (1) For the purpose of complying with Section 41 as it applies to the credit allowed under this section and Section 23627, the Legislature finds and declares the following:(A) The goal, purpose, and objective of the credit is to incentivize grocery store operators to create economic development in food deserts and increase food access throughout California.(B) The performance indicators for the Legislature to use in determining whether the credit achieves its goal shall be the number of taxpayers allowed a credit under this section or Section 23627 and the average dollar value of credits allowed.(2) (A) No later than December 1, 2025, and each December 1 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in compliance with Section 9795 of the Government Code, detailing the number of taxpayers allowed a credit under this section or Section 23627 and the average dollar value of credits allowed.(B) The disclosure requirements of this paragraph shall be treated as an exception to Section 19542.(n) (1) This section shall remain in effect only until December 1, 2035, and as of that date is repealed.(2) Notwithstanding paragraph (1) of subdivision (a), this section shall continue to be operative for taxable years beginning on or after January 1, 2030, but only with respect to qualified full-time employees who commenced employment with a qualified taxpayer in a food desert in a taxable year beginning before January 1, 2030. (3) This section shall remain operative for any qualified taxpayer with respect to any qualified full-time employee after the food desert is no longer designated as such for the remaining period, if any, of the 60-month period after the original date of hiring of an otherwise qualified full-time employee and any wages paid or incurred with respect to those qualified full-time employees after the food desert is no longer designated as such shall be treated as qualified wages under this section, provided the employee satisfies any other requirements of paragraphs (9) and (11) of subdivision (b), as if the food desert was still designated.
17053.74. (a) (1) For each taxable year beginning on or after January 1, 2025, and before January 1, 2030, there shall be allowed to a qualified taxpayer that hires a qualified full-time employee and pays or incurs qualified wages attributable to work performed by the qualified full-time employee in a grocery store located in a food desert, and that receives a tentative credit reservation for that qualified full-time employee, a credit against the net tax, as defined in Section 17039, in an amount calculated under this section. (2) The amount of the credit allowable under this section for a taxable year shall be equal to the product of the tentative credit amount for the taxable year and the applicable percentage for that taxable year. (3) The credit allowed by this section may be claimed only on a timely filed original return of the qualified taxpayer and only with respect to a qualified full-time employee for whom the qualified taxpayer has received a tentative credit reservation. (b) For purposes of this section, the following shall apply:(1) The tentative credit amount for a taxable year shall be 35 percent of the qualified wages paid by the qualified taxpayer during the taxable year to the qualified full-time employee. (2) The applicable percentage for a taxable year shall be equal to a fraction, the numerator of which is the net increase in the total number of full-time employees employed in this state during the taxable year, determined on an annual full-time equivalent basis, as compared with the total number of full-time employees employed in this state during the base year, determined on the same basis, and the denominator of which shall be the total number of qualified full-time employees employed in this state during the taxable year. The applicable percentage shall not exceed 100 percent. (3) Base year means the 2024 taxable year, except in the case of a qualified taxpayer who first hires a qualified full-time employee in a taxable year beginning on or after January 1, 2025, the base year means the taxable year immediately preceding the taxable year in which a qualified full-time employee was first hired by the qualified taxpayer. (4) Acquired includes any gift, inheritance, transfer incident to divorce, or any other transfer, whether or not for consideration.(5) Annual full-time equivalent means either of the following: (A) In the case of a full-time employee paid hourly qualified wages, annual full-time equivalent means the total number of hours worked for the qualified taxpayer by the employee, not to exceed 2,000 hours per employee, divided by 2,000. (B) In the case of a salaried full-time employee, annual full-time equivalent means the total number of weeks worked for the qualified taxpayer by the employee divided by 52. (6) Food desert means a food desert as determined by the Economic Research Service within the United States Department of Agriculture.(7) Grocery store means a retail store in this state of over 15,000 square feet that is a retail seller of groceries, as described in Code 445110 of the North American Industry Classification System (NAICS) published by the United States Office of Management and Budget, 2022 edition.(8) Minimum wage means the wage established pursuant to Chapter 1 (commencing with Section 1171) of Part 4 of Division 2 of the Labor Code. (9) Qualified full-time employee means an individual who meets all of the following requirements: (A) Receives starting wages that are at least ____ percent of the minimum wage.(B) Is hired by the qualified taxpayer on or after January 1, 2025.(C) Is hired by the qualified taxpayer after the date the Economic Research Service determines that the location is within a food desert.(D) Satisfies either of the following conditions: (i) Is paid qualified wages by the qualified taxpayer for services not less than an average of 35 hours per week. (ii) Is a salaried employee and was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer. (10) (A) Qualified taxpayer means a taxpayer that operates a grocery store located in a food desert.(B) In the case of any passthrough entity, the determination of whether a taxpayer is a qualified taxpayer under this section shall be made at the entity level and any credit under this section or Section 23627 shall be allowed to the passthru entity and passthrough to the partners and shareholders in accordance with applicable provisions of this part or Part 11 (commencing with Section 23001). For purposes of this subdivision, the term passthrough entity means any partnership or S corporation.(11) Qualified wages means those wages subject to withholding pursuant to Division 6 (commencing with Section 13000) of the Unemployment Insurance Code that meet all of the following requirements: (A) That portion of wages paid or incurred by the qualified taxpayer during the taxable year to each qualified full-time employee that exceeds 150 percent of minimum wage, but does not exceed 350 percent of minimum wage. (B) Wages paid or incurred during the 60-month period beginning with the first day the qualified full-time employee commences employment with the qualified taxpayer. In the case of any employee who is reemployed, including a regularly occurring seasonal increase, in the trade or business operations of the qualified taxpayer, this reemployment shall not be treated as constituting commencement of employment for purposes of this section. (12) Seasonal employment means employment by a qualified taxpayer that has regular and predictable substantial reductions in trade or business operations.(c) The net increase in full-time employees of a qualified taxpayer shall be determined as provided by this subdivision: (1) (A) The net increase in full-time employees shall be determined on an annual full-time equivalent basis by subtracting from the amount determined in subparagraph (C) the amount determined in subparagraph (B). (B) The total number of full-time employees employed in the base year by the taxpayer and by any trade or business acquired by the taxpayer during the current taxable year. (C) The total number of full-time employees employed in the current taxable year by the taxpayer and by any trade or business acquired during the current taxable year. (2) For taxpayers who first commence doing business in this state during the taxable year, the number of full-time employees for the base year shall be zero. (d) For purposes of this section:(1) All employees of the trades or businesses that are treated as related under Section 267, 318, or 707 of the Internal Revenue Code shall be treated as employed by a single taxpayer.(2) In determining whether the taxpayer has first commenced doing business in this state during the taxable year, the provisions of subdivision (f) of Section 17276, without application of paragraph (7) of that subdivision, shall apply.(e) (1) To be eligible for the credit allowed by this section, a qualified taxpayer shall, upon hiring a qualified full-time employee, request a tentative credit reservation from the Franchise Tax Board within 30 days of complying with the Employment Development Departments new hire reporting requirements as provided in Section 1088.5 of the Unemployment Insurance Code, in the form and manner prescribed by the Franchise Tax Board. (2) To obtain a tentative credit reservation with respect to a qualified full-time employee, the qualified taxpayer shall provide necessary information, as determined by the Franchise Tax Board, including the name, social security number, the start date of employment, and the rate of pay of the qualified full-time employee. (3) The qualified taxpayer shall provide the Franchise Tax Board an annual certification of employment with respect to each qualified full-time employee hired in a previous taxable year on or before, the 15th day of the third month of the taxable year. The certification shall be made under penalty of perjury and shall include necessary information, as determined by the Franchise Tax Board, including the name, social security number, start date of employment, and rate of pay for each qualified full-time employee employed by the qualified taxpayer. (4) A tentative credit reservation provided to a taxpayer with respect to an employee of that taxpayer shall not constitute a determination by the Franchise Tax Board with respect to any of the requirements of this section regarding a taxpayers eligibility for the credit authorized by this section. (f) The Franchise Tax Board shall do all of the following: (1) Approve a tentative credit reservation with respect to a qualified full-time employee hired during a calendar year. (2) Determine the aggregate tentative reservation amount for a calendar year. (3) Notwithstanding Section 19542, provide as a searchable database on its internet website, for each taxable year beginning on or after January 1, 2025, and before January 1, 2030, the employer names, amounts of tax credit claimed, and number of new jobs created for each taxable year pursuant to this section and Section 23627. (g) The Department of Agriculture shall, by January 1, 2026, provide the Franchise Tax Board with a list of the designated food deserts.(h) For purposes of this section:(1) All employees of the trades or businesses that are treated as related under Section 267, 318, or 707 of the Internal Revenue Code shall be treated as employed by a single taxpayer.(2) All employees of trades or businesses that are not incorporated, and that are under common control, shall be treated as employed by a single taxpayer.(3) The credit, if any, allowable by this section with respect to each trade or business shall be determined by reference to its proportionate share of the expense of the qualified wages giving rise to the credit, and shall be allocated to that trade or business in that manner.(4) Principles that apply in the case of controlled groups of corporations, as specified in subdivision (h) of Section 23627, shall apply with respect to determining employment.(5) If an employer acquires the major portion of a trade or business of another employer, hereinafter in this paragraph referred to as the predecessor, or the major portion of a separate unit of a trade or business of a predecessor, then, for purposes of applying this section, other than subdivision (i), for any taxable year ending after that acquisition, the employment relationship between a qualified full-time employee and an employer shall not be treated as terminated if the employee continues to be employed in that trade or business.(i) (1) If the employment of any qualified full-time employee, with respect to whom qualified wages are taken into account under subdivision (a), is terminated by the qualified taxpayer at any time during the first 36 months after commencing employment with the qualified taxpayer, whether or not consecutive, the tax imposed by this part for the taxable year in which that employment is terminated shall be increased by an amount equal to the credit allowed under subdivision (a) for that taxable year and all prior taxable years attributable to qualified wages paid or incurred with respect to that employee. (2) Paragraph (1) does not apply to any of the following: (A) A termination of employment of a qualified full-time employee who voluntarily leaves the employment of the qualified taxpayer. (B) A termination of employment of a qualified full-time employee who, before the close of the period referred to in paragraph (1), becomes disabled and unable to perform the services of that employment, unless that disability is removed before the close of that period and the qualified taxpayer fails to offer reemployment to that employee. (C) A termination of employment of a qualified full-time employee, if it is determined that the termination was due to the misconduct, as defined in Sections 1256-30 to 1256-43, inclusive, of Title 22 of the California Code of Regulations, of that employee. (D) A termination of employment of a qualified full-time employee due to a substantial reduction in the trade or business operations of the qualified taxpayer, including reductions due to seasonal employment. (E) A termination of employment of a qualified full-time employee, if that employee is replaced by other qualified full-time employees so as to create a net increase in both the number of employees and the hours of employment. (F) A termination of employment of a qualified full-time employee, when that employment is considered seasonal employment and the qualified employee is rehired on a seasonal basis. (3) For purposes of paragraph (1), the employment relationship between the qualified taxpayer and a qualified full-time employee shall not be treated as terminated by reason of a mere change in the form of conducting the trade or business of the qualified taxpayer, if the qualified full-time employee continues to be employed in that trade or business and the qualified taxpayer retains a substantial interest in that trade or business. (4) An increase in tax under paragraph (1) shall not be treated as tax imposed by this part for purposes of determining the amount of any credit allowable under this part. (j) In the case in which the credit allowed by this section exceeds the net tax, the excess may be carried over to reduce the net tax in the following year, and the succeeding four years if necessary, until the credit is exhausted. (k) In the case of an estate or trust, both of the following apply:(1) The qualified wages for a taxable year shall be apportioned between the estate or trust and the beneficiaries on the basis of the income of the estate or trust allocable to each.(2) A beneficiary to whom any qualified wages have been apportioned under paragraph (1) shall be treated, for purposes of this part, as the employer with respect to those wages.(l) The Franchise Tax Board may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section, including any guidelines regarding the allocation of the credit allowed under this section. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section.(m) (1) For the purpose of complying with Section 41 as it applies to the credit allowed under this section and Section 23627, the Legislature finds and declares the following:(A) The goal, purpose, and objective of the credit is to incentivize grocery store operators to create economic development in food deserts and increase food access throughout California.(B) The performance indicators for the Legislature to use in determining whether the credit achieves its goal shall be the number of taxpayers allowed a credit under this section or Section 23627 and the average dollar value of credits allowed.(2) (A) No later than December 1, 2025, and each December 1 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in compliance with Section 9795 of the Government Code, detailing the number of taxpayers allowed a credit under this section or Section 23627 and the average dollar value of credits allowed.(B) The disclosure requirements of this paragraph shall be treated as an exception to Section 19542.(n) (1) This section shall remain in effect only until December 1, 2035, and as of that date is repealed.(2) Notwithstanding paragraph (1) of subdivision (a), this section shall continue to be operative for taxable years beginning on or after January 1, 2030, but only with respect to qualified full-time employees who commenced employment with a qualified taxpayer in a food desert in a taxable year beginning before January 1, 2030. (3) This section shall remain operative for any qualified taxpayer with respect to any qualified full-time employee after the food desert is no longer designated as such for the remaining period, if any, of the 60-month period after the original date of hiring of an otherwise qualified full-time employee and any wages paid or incurred with respect to those qualified full-time employees after the food desert is no longer designated as such shall be treated as qualified wages under this section, provided the employee satisfies any other requirements of paragraphs (9) and (11) of subdivision (b), as if the food desert was still designated.
17053.74. (a) (1) For each taxable year beginning on or after January 1, 2025, and before January 1, 2030, there shall be allowed to a qualified taxpayer that hires a qualified full-time employee and pays or incurs qualified wages attributable to work performed by the qualified full-time employee in a grocery store located in a food desert, and that receives a tentative credit reservation for that qualified full-time employee, a credit against the net tax, as defined in Section 17039, in an amount calculated under this section. (2) The amount of the credit allowable under this section for a taxable year shall be equal to the product of the tentative credit amount for the taxable year and the applicable percentage for that taxable year. (3) The credit allowed by this section may be claimed only on a timely filed original return of the qualified taxpayer and only with respect to a qualified full-time employee for whom the qualified taxpayer has received a tentative credit reservation. (b) For purposes of this section, the following shall apply:(1) The tentative credit amount for a taxable year shall be 35 percent of the qualified wages paid by the qualified taxpayer during the taxable year to the qualified full-time employee. (2) The applicable percentage for a taxable year shall be equal to a fraction, the numerator of which is the net increase in the total number of full-time employees employed in this state during the taxable year, determined on an annual full-time equivalent basis, as compared with the total number of full-time employees employed in this state during the base year, determined on the same basis, and the denominator of which shall be the total number of qualified full-time employees employed in this state during the taxable year. The applicable percentage shall not exceed 100 percent. (3) Base year means the 2024 taxable year, except in the case of a qualified taxpayer who first hires a qualified full-time employee in a taxable year beginning on or after January 1, 2025, the base year means the taxable year immediately preceding the taxable year in which a qualified full-time employee was first hired by the qualified taxpayer. (4) Acquired includes any gift, inheritance, transfer incident to divorce, or any other transfer, whether or not for consideration.(5) Annual full-time equivalent means either of the following: (A) In the case of a full-time employee paid hourly qualified wages, annual full-time equivalent means the total number of hours worked for the qualified taxpayer by the employee, not to exceed 2,000 hours per employee, divided by 2,000. (B) In the case of a salaried full-time employee, annual full-time equivalent means the total number of weeks worked for the qualified taxpayer by the employee divided by 52. (6) Food desert means a food desert as determined by the Economic Research Service within the United States Department of Agriculture.(7) Grocery store means a retail store in this state of over 15,000 square feet that is a retail seller of groceries, as described in Code 445110 of the North American Industry Classification System (NAICS) published by the United States Office of Management and Budget, 2022 edition.(8) Minimum wage means the wage established pursuant to Chapter 1 (commencing with Section 1171) of Part 4 of Division 2 of the Labor Code. (9) Qualified full-time employee means an individual who meets all of the following requirements: (A) Receives starting wages that are at least ____ percent of the minimum wage.(B) Is hired by the qualified taxpayer on or after January 1, 2025.(C) Is hired by the qualified taxpayer after the date the Economic Research Service determines that the location is within a food desert.(D) Satisfies either of the following conditions: (i) Is paid qualified wages by the qualified taxpayer for services not less than an average of 35 hours per week. (ii) Is a salaried employee and was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer. (10) (A) Qualified taxpayer means a taxpayer that operates a grocery store located in a food desert.(B) In the case of any passthrough entity, the determination of whether a taxpayer is a qualified taxpayer under this section shall be made at the entity level and any credit under this section or Section 23627 shall be allowed to the passthru entity and passthrough to the partners and shareholders in accordance with applicable provisions of this part or Part 11 (commencing with Section 23001). For purposes of this subdivision, the term passthrough entity means any partnership or S corporation.(11) Qualified wages means those wages subject to withholding pursuant to Division 6 (commencing with Section 13000) of the Unemployment Insurance Code that meet all of the following requirements: (A) That portion of wages paid or incurred by the qualified taxpayer during the taxable year to each qualified full-time employee that exceeds 150 percent of minimum wage, but does not exceed 350 percent of minimum wage. (B) Wages paid or incurred during the 60-month period beginning with the first day the qualified full-time employee commences employment with the qualified taxpayer. In the case of any employee who is reemployed, including a regularly occurring seasonal increase, in the trade or business operations of the qualified taxpayer, this reemployment shall not be treated as constituting commencement of employment for purposes of this section. (12) Seasonal employment means employment by a qualified taxpayer that has regular and predictable substantial reductions in trade or business operations.(c) The net increase in full-time employees of a qualified taxpayer shall be determined as provided by this subdivision: (1) (A) The net increase in full-time employees shall be determined on an annual full-time equivalent basis by subtracting from the amount determined in subparagraph (C) the amount determined in subparagraph (B). (B) The total number of full-time employees employed in the base year by the taxpayer and by any trade or business acquired by the taxpayer during the current taxable year. (C) The total number of full-time employees employed in the current taxable year by the taxpayer and by any trade or business acquired during the current taxable year. (2) For taxpayers who first commence doing business in this state during the taxable year, the number of full-time employees for the base year shall be zero. (d) For purposes of this section:(1) All employees of the trades or businesses that are treated as related under Section 267, 318, or 707 of the Internal Revenue Code shall be treated as employed by a single taxpayer.(2) In determining whether the taxpayer has first commenced doing business in this state during the taxable year, the provisions of subdivision (f) of Section 17276, without application of paragraph (7) of that subdivision, shall apply.(e) (1) To be eligible for the credit allowed by this section, a qualified taxpayer shall, upon hiring a qualified full-time employee, request a tentative credit reservation from the Franchise Tax Board within 30 days of complying with the Employment Development Departments new hire reporting requirements as provided in Section 1088.5 of the Unemployment Insurance Code, in the form and manner prescribed by the Franchise Tax Board. (2) To obtain a tentative credit reservation with respect to a qualified full-time employee, the qualified taxpayer shall provide necessary information, as determined by the Franchise Tax Board, including the name, social security number, the start date of employment, and the rate of pay of the qualified full-time employee. (3) The qualified taxpayer shall provide the Franchise Tax Board an annual certification of employment with respect to each qualified full-time employee hired in a previous taxable year on or before, the 15th day of the third month of the taxable year. The certification shall be made under penalty of perjury and shall include necessary information, as determined by the Franchise Tax Board, including the name, social security number, start date of employment, and rate of pay for each qualified full-time employee employed by the qualified taxpayer. (4) A tentative credit reservation provided to a taxpayer with respect to an employee of that taxpayer shall not constitute a determination by the Franchise Tax Board with respect to any of the requirements of this section regarding a taxpayers eligibility for the credit authorized by this section. (f) The Franchise Tax Board shall do all of the following: (1) Approve a tentative credit reservation with respect to a qualified full-time employee hired during a calendar year. (2) Determine the aggregate tentative reservation amount for a calendar year. (3) Notwithstanding Section 19542, provide as a searchable database on its internet website, for each taxable year beginning on or after January 1, 2025, and before January 1, 2030, the employer names, amounts of tax credit claimed, and number of new jobs created for each taxable year pursuant to this section and Section 23627. (g) The Department of Agriculture shall, by January 1, 2026, provide the Franchise Tax Board with a list of the designated food deserts.(h) For purposes of this section:(1) All employees of the trades or businesses that are treated as related under Section 267, 318, or 707 of the Internal Revenue Code shall be treated as employed by a single taxpayer.(2) All employees of trades or businesses that are not incorporated, and that are under common control, shall be treated as employed by a single taxpayer.(3) The credit, if any, allowable by this section with respect to each trade or business shall be determined by reference to its proportionate share of the expense of the qualified wages giving rise to the credit, and shall be allocated to that trade or business in that manner.(4) Principles that apply in the case of controlled groups of corporations, as specified in subdivision (h) of Section 23627, shall apply with respect to determining employment.(5) If an employer acquires the major portion of a trade or business of another employer, hereinafter in this paragraph referred to as the predecessor, or the major portion of a separate unit of a trade or business of a predecessor, then, for purposes of applying this section, other than subdivision (i), for any taxable year ending after that acquisition, the employment relationship between a qualified full-time employee and an employer shall not be treated as terminated if the employee continues to be employed in that trade or business.(i) (1) If the employment of any qualified full-time employee, with respect to whom qualified wages are taken into account under subdivision (a), is terminated by the qualified taxpayer at any time during the first 36 months after commencing employment with the qualified taxpayer, whether or not consecutive, the tax imposed by this part for the taxable year in which that employment is terminated shall be increased by an amount equal to the credit allowed under subdivision (a) for that taxable year and all prior taxable years attributable to qualified wages paid or incurred with respect to that employee. (2) Paragraph (1) does not apply to any of the following: (A) A termination of employment of a qualified full-time employee who voluntarily leaves the employment of the qualified taxpayer. (B) A termination of employment of a qualified full-time employee who, before the close of the period referred to in paragraph (1), becomes disabled and unable to perform the services of that employment, unless that disability is removed before the close of that period and the qualified taxpayer fails to offer reemployment to that employee. (C) A termination of employment of a qualified full-time employee, if it is determined that the termination was due to the misconduct, as defined in Sections 1256-30 to 1256-43, inclusive, of Title 22 of the California Code of Regulations, of that employee. (D) A termination of employment of a qualified full-time employee due to a substantial reduction in the trade or business operations of the qualified taxpayer, including reductions due to seasonal employment. (E) A termination of employment of a qualified full-time employee, if that employee is replaced by other qualified full-time employees so as to create a net increase in both the number of employees and the hours of employment. (F) A termination of employment of a qualified full-time employee, when that employment is considered seasonal employment and the qualified employee is rehired on a seasonal basis. (3) For purposes of paragraph (1), the employment relationship between the qualified taxpayer and a qualified full-time employee shall not be treated as terminated by reason of a mere change in the form of conducting the trade or business of the qualified taxpayer, if the qualified full-time employee continues to be employed in that trade or business and the qualified taxpayer retains a substantial interest in that trade or business. (4) An increase in tax under paragraph (1) shall not be treated as tax imposed by this part for purposes of determining the amount of any credit allowable under this part. (j) In the case in which the credit allowed by this section exceeds the net tax, the excess may be carried over to reduce the net tax in the following year, and the succeeding four years if necessary, until the credit is exhausted. (k) In the case of an estate or trust, both of the following apply:(1) The qualified wages for a taxable year shall be apportioned between the estate or trust and the beneficiaries on the basis of the income of the estate or trust allocable to each.(2) A beneficiary to whom any qualified wages have been apportioned under paragraph (1) shall be treated, for purposes of this part, as the employer with respect to those wages.(l) The Franchise Tax Board may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section, including any guidelines regarding the allocation of the credit allowed under this section. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section.(m) (1) For the purpose of complying with Section 41 as it applies to the credit allowed under this section and Section 23627, the Legislature finds and declares the following:(A) The goal, purpose, and objective of the credit is to incentivize grocery store operators to create economic development in food deserts and increase food access throughout California.(B) The performance indicators for the Legislature to use in determining whether the credit achieves its goal shall be the number of taxpayers allowed a credit under this section or Section 23627 and the average dollar value of credits allowed.(2) (A) No later than December 1, 2025, and each December 1 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in compliance with Section 9795 of the Government Code, detailing the number of taxpayers allowed a credit under this section or Section 23627 and the average dollar value of credits allowed.(B) The disclosure requirements of this paragraph shall be treated as an exception to Section 19542.(n) (1) This section shall remain in effect only until December 1, 2035, and as of that date is repealed.(2) Notwithstanding paragraph (1) of subdivision (a), this section shall continue to be operative for taxable years beginning on or after January 1, 2030, but only with respect to qualified full-time employees who commenced employment with a qualified taxpayer in a food desert in a taxable year beginning before January 1, 2030. (3) This section shall remain operative for any qualified taxpayer with respect to any qualified full-time employee after the food desert is no longer designated as such for the remaining period, if any, of the 60-month period after the original date of hiring of an otherwise qualified full-time employee and any wages paid or incurred with respect to those qualified full-time employees after the food desert is no longer designated as such shall be treated as qualified wages under this section, provided the employee satisfies any other requirements of paragraphs (9) and (11) of subdivision (b), as if the food desert was still designated.
17053.74. (a) (1) For each taxable year beginning on or after January 1, 2025, and before January 1, 2030, there shall be allowed to a qualified taxpayer that hires a qualified full-time employee and pays or incurs qualified wages attributable to work performed by the qualified full-time employee in a grocery store located in a food desert, and that receives a tentative credit reservation for that qualified full-time employee, a credit against the net tax, as defined in Section 17039, in an amount calculated under this section.
(2) The amount of the credit allowable under this section for a taxable year shall be equal to the product of the tentative credit amount for the taxable year and the applicable percentage for that taxable year.
(3) The credit allowed by this section may be claimed only on a timely filed original return of the qualified taxpayer and only with respect to a qualified full-time employee for whom the qualified taxpayer has received a tentative credit reservation.
(b) For purposes of this section, the following shall apply:
(1) The tentative credit amount for a taxable year shall be 35 percent of the qualified wages paid by the qualified taxpayer during the taxable year to the qualified full-time employee.
(2) The applicable percentage for a taxable year shall be equal to a fraction, the numerator of which is the net increase in the total number of full-time employees employed in this state during the taxable year, determined on an annual full-time equivalent basis, as compared with the total number of full-time employees employed in this state during the base year, determined on the same basis, and the denominator of which shall be the total number of qualified full-time employees employed in this state during the taxable year. The applicable percentage shall not exceed 100 percent.
(3) Base year means the 2024 taxable year, except in the case of a qualified taxpayer who first hires a qualified full-time employee in a taxable year beginning on or after January 1, 2025, the base year means the taxable year immediately preceding the taxable year in which a qualified full-time employee was first hired by the qualified taxpayer.
(4) Acquired includes any gift, inheritance, transfer incident to divorce, or any other transfer, whether or not for consideration.
(5) Annual full-time equivalent means either of the following:
(A) In the case of a full-time employee paid hourly qualified wages, annual full-time equivalent means the total number of hours worked for the qualified taxpayer by the employee, not to exceed 2,000 hours per employee, divided by 2,000.
(B) In the case of a salaried full-time employee, annual full-time equivalent means the total number of weeks worked for the qualified taxpayer by the employee divided by 52.
(6) Food desert means a food desert as determined by the Economic Research Service within the United States Department of Agriculture.
(7) Grocery store means a retail store in this state of over 15,000 square feet that is a retail seller of groceries, as described in Code 445110 of the North American Industry Classification System (NAICS) published by the United States Office of Management and Budget, 2022 edition.
(8) Minimum wage means the wage established pursuant to Chapter 1 (commencing with Section 1171) of Part 4 of Division 2 of the Labor Code.
(9) Qualified full-time employee means an individual who meets all of the following requirements:
(A) Receives starting wages that are at least ____ percent of the minimum wage.
(B) Is hired by the qualified taxpayer on or after January 1, 2025.
(C) Is hired by the qualified taxpayer after the date the Economic Research Service determines that the location is within a food desert.
(D) Satisfies either of the following conditions:
(i) Is paid qualified wages by the qualified taxpayer for services not less than an average of 35 hours per week.
(ii) Is a salaried employee and was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer.
(10) (A) Qualified taxpayer means a taxpayer that operates a grocery store located in a food desert.
(B) In the case of any passthrough entity, the determination of whether a taxpayer is a qualified taxpayer under this section shall be made at the entity level and any credit under this section or Section 23627 shall be allowed to the passthru entity and passthrough to the partners and shareholders in accordance with applicable provisions of this part or Part 11 (commencing with Section 23001). For purposes of this subdivision, the term passthrough entity means any partnership or S corporation.
(11) Qualified wages means those wages subject to withholding pursuant to Division 6 (commencing with Section 13000) of the Unemployment Insurance Code that meet all of the following requirements:
(A) That portion of wages paid or incurred by the qualified taxpayer during the taxable year to each qualified full-time employee that exceeds 150 percent of minimum wage, but does not exceed 350 percent of minimum wage.
(B) Wages paid or incurred during the 60-month period beginning with the first day the qualified full-time employee commences employment with the qualified taxpayer. In the case of any employee who is reemployed, including a regularly occurring seasonal increase, in the trade or business operations of the qualified taxpayer, this reemployment shall not be treated as constituting commencement of employment for purposes of this section.
(12) Seasonal employment means employment by a qualified taxpayer that has regular and predictable substantial reductions in trade or business operations.
(c) The net increase in full-time employees of a qualified taxpayer shall be determined as provided by this subdivision:
(1) (A) The net increase in full-time employees shall be determined on an annual full-time equivalent basis by subtracting from the amount determined in subparagraph (C) the amount determined in subparagraph (B).
(B) The total number of full-time employees employed in the base year by the taxpayer and by any trade or business acquired by the taxpayer during the current taxable year.
(C) The total number of full-time employees employed in the current taxable year by the taxpayer and by any trade or business acquired during the current taxable year.
(2) For taxpayers who first commence doing business in this state during the taxable year, the number of full-time employees for the base year shall be zero.
(d) For purposes of this section:
(1) All employees of the trades or businesses that are treated as related under Section 267, 318, or 707 of the Internal Revenue Code shall be treated as employed by a single taxpayer.
(2) In determining whether the taxpayer has first commenced doing business in this state during the taxable year, the provisions of subdivision (f) of Section 17276, without application of paragraph (7) of that subdivision, shall apply.
(e) (1) To be eligible for the credit allowed by this section, a qualified taxpayer shall, upon hiring a qualified full-time employee, request a tentative credit reservation from the Franchise Tax Board within 30 days of complying with the Employment Development Departments new hire reporting requirements as provided in Section 1088.5 of the Unemployment Insurance Code, in the form and manner prescribed by the Franchise Tax Board.
(2) To obtain a tentative credit reservation with respect to a qualified full-time employee, the qualified taxpayer shall provide necessary information, as determined by the Franchise Tax Board, including the name, social security number, the start date of employment, and the rate of pay of the qualified full-time employee.
(3) The qualified taxpayer shall provide the Franchise Tax Board an annual certification of employment with respect to each qualified full-time employee hired in a previous taxable year on or before, the 15th day of the third month of the taxable year. The certification shall be made under penalty of perjury and shall include necessary information, as determined by the Franchise Tax Board, including the name, social security number, start date of employment, and rate of pay for each qualified full-time employee employed by the qualified taxpayer.
(4) A tentative credit reservation provided to a taxpayer with respect to an employee of that taxpayer shall not constitute a determination by the Franchise Tax Board with respect to any of the requirements of this section regarding a taxpayers eligibility for the credit authorized by this section.
(f) The Franchise Tax Board shall do all of the following:
(1) Approve a tentative credit reservation with respect to a qualified full-time employee hired during a calendar year.
(2) Determine the aggregate tentative reservation amount for a calendar year.
(3) Notwithstanding Section 19542, provide as a searchable database on its internet website, for each taxable year beginning on or after January 1, 2025, and before January 1, 2030, the employer names, amounts of tax credit claimed, and number of new jobs created for each taxable year pursuant to this section and Section 23627.
(g) The Department of Agriculture shall, by January 1, 2026, provide the Franchise Tax Board with a list of the designated food deserts.
(h) For purposes of this section:
(1) All employees of the trades or businesses that are treated as related under Section 267, 318, or 707 of the Internal Revenue Code shall be treated as employed by a single taxpayer.
(2) All employees of trades or businesses that are not incorporated, and that are under common control, shall be treated as employed by a single taxpayer.
(3) The credit, if any, allowable by this section with respect to each trade or business shall be determined by reference to its proportionate share of the expense of the qualified wages giving rise to the credit, and shall be allocated to that trade or business in that manner.
(4) Principles that apply in the case of controlled groups of corporations, as specified in subdivision (h) of Section 23627, shall apply with respect to determining employment.
(5) If an employer acquires the major portion of a trade or business of another employer, hereinafter in this paragraph referred to as the predecessor, or the major portion of a separate unit of a trade or business of a predecessor, then, for purposes of applying this section, other than subdivision (i), for any taxable year ending after that acquisition, the employment relationship between a qualified full-time employee and an employer shall not be treated as terminated if the employee continues to be employed in that trade or business.
(i) (1) If the employment of any qualified full-time employee, with respect to whom qualified wages are taken into account under subdivision (a), is terminated by the qualified taxpayer at any time during the first 36 months after commencing employment with the qualified taxpayer, whether or not consecutive, the tax imposed by this part for the taxable year in which that employment is terminated shall be increased by an amount equal to the credit allowed under subdivision (a) for that taxable year and all prior taxable years attributable to qualified wages paid or incurred with respect to that employee.
(2) Paragraph (1) does not apply to any of the following:
(A) A termination of employment of a qualified full-time employee who voluntarily leaves the employment of the qualified taxpayer.
(B) A termination of employment of a qualified full-time employee who, before the close of the period referred to in paragraph (1), becomes disabled and unable to perform the services of that employment, unless that disability is removed before the close of that period and the qualified taxpayer fails to offer reemployment to that employee.
(C) A termination of employment of a qualified full-time employee, if it is determined that the termination was due to the misconduct, as defined in Sections 1256-30 to 1256-43, inclusive, of Title 22 of the California Code of Regulations, of that employee.
(D) A termination of employment of a qualified full-time employee due to a substantial reduction in the trade or business operations of the qualified taxpayer, including reductions due to seasonal employment.
(E) A termination of employment of a qualified full-time employee, if that employee is replaced by other qualified full-time employees so as to create a net increase in both the number of employees and the hours of employment.
(F) A termination of employment of a qualified full-time employee, when that employment is considered seasonal employment and the qualified employee is rehired on a seasonal basis.
(3) For purposes of paragraph (1), the employment relationship between the qualified taxpayer and a qualified full-time employee shall not be treated as terminated by reason of a mere change in the form of conducting the trade or business of the qualified taxpayer, if the qualified full-time employee continues to be employed in that trade or business and the qualified taxpayer retains a substantial interest in that trade or business.
(4) An increase in tax under paragraph (1) shall not be treated as tax imposed by this part for purposes of determining the amount of any credit allowable under this part.
(j) In the case in which the credit allowed by this section exceeds the net tax, the excess may be carried over to reduce the net tax in the following year, and the succeeding four years if necessary, until the credit is exhausted.
(k) In the case of an estate or trust, both of the following apply:
(1) The qualified wages for a taxable year shall be apportioned between the estate or trust and the beneficiaries on the basis of the income of the estate or trust allocable to each.
(2) A beneficiary to whom any qualified wages have been apportioned under paragraph (1) shall be treated, for purposes of this part, as the employer with respect to those wages.
(l) The Franchise Tax Board may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section, including any guidelines regarding the allocation of the credit allowed under this section. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section.
(m) (1) For the purpose of complying with Section 41 as it applies to the credit allowed under this section and Section 23627, the Legislature finds and declares the following:
(A) The goal, purpose, and objective of the credit is to incentivize grocery store operators to create economic development in food deserts and increase food access throughout California.
(B) The performance indicators for the Legislature to use in determining whether the credit achieves its goal shall be the number of taxpayers allowed a credit under this section or Section 23627 and the average dollar value of credits allowed.
(2) (A) No later than December 1, 2025, and each December 1 thereafter, the Franchise Tax Board shall submit a report to the Legislature, in compliance with Section 9795 of the Government Code, detailing the number of taxpayers allowed a credit under this section or Section 23627 and the average dollar value of credits allowed.
(B) The disclosure requirements of this paragraph shall be treated as an exception to Section 19542.
(n) (1) This section shall remain in effect only until December 1, 2035, and as of that date is repealed.
(2) Notwithstanding paragraph (1) of subdivision (a), this section shall continue to be operative for taxable years beginning on or after January 1, 2030, but only with respect to qualified full-time employees who commenced employment with a qualified taxpayer in a food desert in a taxable year beginning before January 1, 2030.
(3) This section shall remain operative for any qualified taxpayer with respect to any qualified full-time employee after the food desert is no longer designated as such for the remaining period, if any, of the 60-month period after the original date of hiring of an otherwise qualified full-time employee and any wages paid or incurred with respect to those qualified full-time employees after the food desert is no longer designated as such shall be treated as qualified wages under this section, provided the employee satisfies any other requirements of paragraphs (9) and (11) of subdivision (b), as if the food desert was still designated.
SEC. 4. Section 23627 is added to the Revenue and Taxation Code, to read:23627. (a) (1) For each taxable year beginning on or after January 1, 2025, and before January 1, 2030, there shall be allowed to a qualified taxpayer that hires a qualified full-time employee and pays or incurs qualified wages attributable to work performed by the qualified full-time employee in a grocery store located in a food desert, and that receives a tentative credit reservation for that qualified full-time employee, a credit against the tax, as defined in Section 23036, in an amount calculated under this section.(2) The amount of the credit allowable under this section for a taxable year shall be equal to the product of the tentative credit amount for the taxable year and the applicable percentage for that taxable year. (3) The credit allowed by this section may be claimed only on a timely filed original return of the qualified taxpayer and only with respect to a qualified full-time employee for whom the qualified taxpayer has received a tentative credit reservation. (b) For purposes of this section, the following shall apply:(1) The tentative credit amount for a taxable year shall be 35 percent of the qualified wages paid by the qualified taxpayer during the taxable year to the qualified full-time employee. (2) The applicable percentage for a taxable year shall be equal to a fraction, the numerator of which is the net increase in the total number of full-time employees employed in this state during the taxable year, determined on an annual full-time equivalent basis, as compared with the total number of full-time employees employed in this state during the base year, determined on the same basis, and the denominator of which shall be the total number of qualified full-time employees employed in this state during the taxable year. The applicable percentage shall not exceed 100 percent. (3) Base year means the 2024 taxable year, except in the case of a qualified taxpayer who first hires a qualified full-time employee in a taxable year beginning on or after January 1, 2025, the base year means the taxable year immediately preceding the taxable year in which a qualified full-time employee was first hired by the qualified taxpayer. (4) Acquired includes any gift, inheritance, transfer incident to divorce, or any other transfer, whether or not for consideration.(5) Annual full-time equivalent means either of the following: (A) In the case of a full-time employee paid hourly qualified wages, annual full-time equivalent means the total number of hours worked for the qualified taxpayer by the employee, not to exceed 2,000 hours per employee, divided by 2,000. (B) In the case of a salaried full-time employee, annual full-time equivalent means the total number of weeks worked for the qualified taxpayer by the employee divided by 52. (6) Food desert means a food desert as determined by the Economic Research Service within the United States Department of Agriculture.(7) Grocery store means a retail store in this state of over 15,000 square feet that is a retail seller of groceries, as described in Code 445110 of the North American Industry Classification System (NAICS) published by the United States Office of Management and Budget, 2022 edition.(8) Minimum wage means the wage established pursuant to Chapter 1 (commencing with Section 1171) of Part 4 of Division 2 of the Labor Code. (9) Qualified full-time employee means an individual who meets all of the following requirements: (A) Receives starting wages that are at least ____ percent of the minimum wage.(B) Is hired by the qualified taxpayer on or after January 1, 2025.(C) Is hired by the qualified taxpayer after the date the Economic Research Service determines that the location is within a food desert.(D) Satisfies either of the following conditions: (i) Is paid qualified wages by the qualified taxpayer for services not less than an average of 35 hours per week. (ii) Is a salaried employee and was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer. (10) Qualified taxpayer means a taxpayer that operates a grocery store located in a food desert.(11) Qualified wages means those wages subject to withholding pursuant to Division 6 (commencing with Section 13000) of the Unemployment Insurance Code that meet all of the following requirements: (A) That portion of wages paid or incurred by the qualified taxpayer during the taxable year to each qualified full-time employee that exceeds 150 percent of minimum wage, but does not exceed 350 percent of minimum wage. (B) Wages paid or incurred during the 60-month period beginning with the first day the qualified full-time employee commences employment with the qualified taxpayer. In the case of any employee who is reemployed, including a regularly occurring seasonal increase, in the trade or business operations of the qualified taxpayer, this reemployment shall not be treated as constituting commencement of employment for purposes of this section. (12) Seasonal employment means employment by a qualified taxpayer that has regular and predictable substantial reductions in trade or business operations.(c) The net increase in full-time employees of a qualified taxpayer shall be determined as provided by this subdivision: (1) (A) The net increase in full-time employees shall be determined on an annual full-time equivalent basis by subtracting from the amount determined in subparagraph (C) the amount determined in subparagraph (B). (B) The total number of full-time employees employed in the base year by the taxpayer and by any trade or business acquired by the taxpayer during the current taxable year. (C) The total number of full-time employees employed in the current taxable year by the taxpayer and by any trade or business acquired during the current taxable year. (2) For taxpayers who first commence doing business in this state during the taxable year, the number of full-time employees for the base year shall be zero. (d) For purposes of this section:(1) All employees of the trades or businesses that are treated as related under Section 267, 318, or 707 of the Internal Revenue Code shall be treated as employed by a single taxpayer.(2) In determining whether the taxpayer has first commenced doing business in this state during the taxable year, the provisions of subdivision (f) of Section 17276, without application of paragraph (7) of that subdivision, shall apply.(e) (1) To be eligible for the credit allowed by this section, a qualified taxpayer shall, upon hiring a qualified full-time employee, request a tentative credit reservation from the Franchise Tax Board within 30 days of complying with the Employment Development Departments new hire reporting requirements as provided in Section 1088.5 of the Unemployment Insurance Code, in the form and manner prescribed by the Franchise Tax Board. (2) To obtain a tentative credit reservation with respect to a qualified full-time employee, the qualified taxpayer shall provide necessary information, as determined by the Franchise Tax Board, including the name, social security number, the start date of employment, and the rate of pay of the qualified full-time employee. (3) The qualified taxpayer shall provide the Franchise Tax Board an annual certification of employment with respect to each qualified full-time employee hired in a previous taxable year on or before, the 15th day of the third month of the taxable year. The certification shall be made under penalty of perjury and shall include necessary information, as determined by the Franchise Tax Board, including the name, social security number, start date of employment, and rate of pay for each qualified full-time employee employed by the qualified taxpayer. (4) A tentative credit reservation provided to a taxpayer with respect to an employee of that taxpayer shall not constitute a determination by the Franchise Tax Board with respect to any of the requirements of this section regarding a taxpayers eligibility for the credit authorized by this section. (f) The Franchise Tax Board shall do all of the following: (1) Approve a tentative credit reservation with respect to a qualified full-time employee hired during a calendar year. (2) Determine the aggregate tentative reservation amount for a calendar year. (3) Notwithstanding Section 19542, provide as a searchable database on its internet website, for each taxable year beginning on or after January 1, 2025, and before January 1, 2030, the employer names, amounts of tax credit claimed, and number of new jobs created for each taxable year pursuant to this section and Section 17053.74. (g) The Department of Agriculture shall, by January 1, 2026, provide the Franchise Tax Board with a list of the designated food deserts.(h) (1) For purposes of this section:(A) All employees of the trades or businesses that are treated as related under Section 267, 318, or 707 of the Internal Revenue Code shall be treated as employed by a single qualified taxpayer.(B) All employees of all corporations that are members of the same controlled group of corporations shall be treated as employed by a single qualified taxpayer.(C) The credit, if any, allowable by this section to each member shall be determined by reference to its proportionate share of the expense of the qualified wages giving rise to the credit, and shall be allocated in that manner.(D) If a qualified taxpayer acquires the major portion of a trade or business of another taxpayer, hereinafter in this paragraph referred to as the predecessor, or the major portion of a separate unit of a trade or business of a predecessor, then, for purposes of applying this section for any taxable year ending after that acquisition, the employment relationship between a qualified full-time employee and a qualified taxpayer shall not be treated as terminated if the employee continues to be employed in that trade or business.(2) For purposes of this subdivision, controlled group of corporations means a controlled group of corporations as defined in Section 1563(a) of the Internal Revenue Code, except that:(A) More than 50 percent shall be substituted for at least 80 percent each place it appears in Section 1563(a)(1) of the Internal Revenue Code.(B) The determination shall be made without regard to subsections (a)(4) and (e)(3)(C) of Section 1563 of the Internal Revenue Code.(3) Rules similar to the rules provided in Sections 46(e) and 46(h) of the Internal Revenue Code, as in effect on November 4, 1990, shall apply to both of the following:(A) An organization to which Section 593 of the Internal Revenue Code applies.(B) A regulated investment company or a real estate investment trust subject to taxation under this part.(i) (1) If the employment of any qualified full-time employee, with respect to whom qualified wages are taken into account under subdivision (a), is terminated by the qualified taxpayer at any time during the first 36 months after commencing employment with the qualified taxpayer, whether or not consecutive, the tax imposed by this part for the taxable year in which that employment is terminated shall be increased by an amount equal to the credit allowed under subdivision (a) for that taxable year and all prior taxable years attributable to qualified wages paid or incurred with respect to that employee. (2) Paragraph (1) does not apply to any of the following: (A) A termination of employment of a qualified full-time employee who voluntarily leaves the employment of the qualified taxpayer. (B) A termination of employment of a qualified full-time employee who, before the close of the period referred to in paragraph (1), becomes disabled and unable to perform the services of that employment, unless that disability is removed before the close of that period and the qualified taxpayer fails to offer reemployment to that employee. (C) A termination of employment of a qualified full-time employee, if it is determined that the termination was due to the misconduct, as defined in Sections 1256-30 to 1256-43, inclusive, of Title 22 of the California Code of Regulations, of that employee. (D) A termination of employment of a qualified full-time employee due to a substantial reduction in the trade or business operations of the qualified taxpayer, including reductions due to seasonal employment. (E) A termination of employment of a qualified full-time employee, if that employee is replaced by other qualified full-time employees so as to create a net increase in both the number of employees and the hours of employment. (F) A termination of employment of a qualified full-time employee, when that employment is considered seasonal employment and the qualified employee is rehired on a seasonal basis. (3) For purposes of paragraph (1), the employment relationship between the qualified taxpayer and a qualified full-time employee shall not be treated as terminated by reason of a mere change in the form of conducting the trade or business of the qualified taxpayer, if the qualified full-time employee continues to be employed in that trade or business and the qualified taxpayer retains a substantial interest in that trade or business. (4) An increase in tax under paragraph (1) shall not be treated as tax imposed by this part for purposes of determining the amount of any credit allowable under this part. (j) In the case in which the credit allowed by this section exceeds the net tax, the excess may be carried over to reduce the net tax in the following year, and the succeeding four years if necessary, until the credit is exhausted. (k) In the case of an estate or trust, both of the following apply:(1) The qualified wages for a taxable year shall be apportioned between the estate or trust and the beneficiaries on the basis of the income of the estate or trust allocable to each.(2) A beneficiary to whom any qualified wages have been apportioned under paragraph (1) shall be treated, for purposes of this part, as the employer with respect to those wages.(l) The Franchise Tax Board may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section, including any guidelines regarding the allocation of the credit allowed under this section. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section.(m) (1) This section shall remain in effect only until December 1, 2035, and as of that date is repealed.(2) Notwithstanding paragraph (1) of subdivision (a), this section shall continue to be operative for taxable years beginning on or after January 1, 2030, but only with respect to qualified full-time employees who commenced employment with a qualified taxpayer in a food desert in a taxable year beginning before January 1, 2030. (3) This section shall remain operative for any qualified taxpayer with respect to any qualified full-time employee after the food desert is no longer designated as such for the remaining period, if any, of the 60-month period after the original date of hiring of an otherwise qualified full-time employee and any wages paid or incurred with respect to those qualified full-time employees after the food desert is no longer designated as such shall be treated as qualified wages under this section, provided the employee satisfies any other requirements of paragraphs (9) and (11) of subdivision (b), as if the food desert was still designated.
SEC. 4. Section 23627 is added to the Revenue and Taxation Code, to read:
### SEC. 4.
23627. (a) (1) For each taxable year beginning on or after January 1, 2025, and before January 1, 2030, there shall be allowed to a qualified taxpayer that hires a qualified full-time employee and pays or incurs qualified wages attributable to work performed by the qualified full-time employee in a grocery store located in a food desert, and that receives a tentative credit reservation for that qualified full-time employee, a credit against the tax, as defined in Section 23036, in an amount calculated under this section.(2) The amount of the credit allowable under this section for a taxable year shall be equal to the product of the tentative credit amount for the taxable year and the applicable percentage for that taxable year. (3) The credit allowed by this section may be claimed only on a timely filed original return of the qualified taxpayer and only with respect to a qualified full-time employee for whom the qualified taxpayer has received a tentative credit reservation. (b) For purposes of this section, the following shall apply:(1) The tentative credit amount for a taxable year shall be 35 percent of the qualified wages paid by the qualified taxpayer during the taxable year to the qualified full-time employee. (2) The applicable percentage for a taxable year shall be equal to a fraction, the numerator of which is the net increase in the total number of full-time employees employed in this state during the taxable year, determined on an annual full-time equivalent basis, as compared with the total number of full-time employees employed in this state during the base year, determined on the same basis, and the denominator of which shall be the total number of qualified full-time employees employed in this state during the taxable year. The applicable percentage shall not exceed 100 percent. (3) Base year means the 2024 taxable year, except in the case of a qualified taxpayer who first hires a qualified full-time employee in a taxable year beginning on or after January 1, 2025, the base year means the taxable year immediately preceding the taxable year in which a qualified full-time employee was first hired by the qualified taxpayer. (4) Acquired includes any gift, inheritance, transfer incident to divorce, or any other transfer, whether or not for consideration.(5) Annual full-time equivalent means either of the following: (A) In the case of a full-time employee paid hourly qualified wages, annual full-time equivalent means the total number of hours worked for the qualified taxpayer by the employee, not to exceed 2,000 hours per employee, divided by 2,000. (B) In the case of a salaried full-time employee, annual full-time equivalent means the total number of weeks worked for the qualified taxpayer by the employee divided by 52. (6) Food desert means a food desert as determined by the Economic Research Service within the United States Department of Agriculture.(7) Grocery store means a retail store in this state of over 15,000 square feet that is a retail seller of groceries, as described in Code 445110 of the North American Industry Classification System (NAICS) published by the United States Office of Management and Budget, 2022 edition.(8) Minimum wage means the wage established pursuant to Chapter 1 (commencing with Section 1171) of Part 4 of Division 2 of the Labor Code. (9) Qualified full-time employee means an individual who meets all of the following requirements: (A) Receives starting wages that are at least ____ percent of the minimum wage.(B) Is hired by the qualified taxpayer on or after January 1, 2025.(C) Is hired by the qualified taxpayer after the date the Economic Research Service determines that the location is within a food desert.(D) Satisfies either of the following conditions: (i) Is paid qualified wages by the qualified taxpayer for services not less than an average of 35 hours per week. (ii) Is a salaried employee and was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer. (10) Qualified taxpayer means a taxpayer that operates a grocery store located in a food desert.(11) Qualified wages means those wages subject to withholding pursuant to Division 6 (commencing with Section 13000) of the Unemployment Insurance Code that meet all of the following requirements: (A) That portion of wages paid or incurred by the qualified taxpayer during the taxable year to each qualified full-time employee that exceeds 150 percent of minimum wage, but does not exceed 350 percent of minimum wage. (B) Wages paid or incurred during the 60-month period beginning with the first day the qualified full-time employee commences employment with the qualified taxpayer. In the case of any employee who is reemployed, including a regularly occurring seasonal increase, in the trade or business operations of the qualified taxpayer, this reemployment shall not be treated as constituting commencement of employment for purposes of this section. (12) Seasonal employment means employment by a qualified taxpayer that has regular and predictable substantial reductions in trade or business operations.(c) The net increase in full-time employees of a qualified taxpayer shall be determined as provided by this subdivision: (1) (A) The net increase in full-time employees shall be determined on an annual full-time equivalent basis by subtracting from the amount determined in subparagraph (C) the amount determined in subparagraph (B). (B) The total number of full-time employees employed in the base year by the taxpayer and by any trade or business acquired by the taxpayer during the current taxable year. (C) The total number of full-time employees employed in the current taxable year by the taxpayer and by any trade or business acquired during the current taxable year. (2) For taxpayers who first commence doing business in this state during the taxable year, the number of full-time employees for the base year shall be zero. (d) For purposes of this section:(1) All employees of the trades or businesses that are treated as related under Section 267, 318, or 707 of the Internal Revenue Code shall be treated as employed by a single taxpayer.(2) In determining whether the taxpayer has first commenced doing business in this state during the taxable year, the provisions of subdivision (f) of Section 17276, without application of paragraph (7) of that subdivision, shall apply.(e) (1) To be eligible for the credit allowed by this section, a qualified taxpayer shall, upon hiring a qualified full-time employee, request a tentative credit reservation from the Franchise Tax Board within 30 days of complying with the Employment Development Departments new hire reporting requirements as provided in Section 1088.5 of the Unemployment Insurance Code, in the form and manner prescribed by the Franchise Tax Board. (2) To obtain a tentative credit reservation with respect to a qualified full-time employee, the qualified taxpayer shall provide necessary information, as determined by the Franchise Tax Board, including the name, social security number, the start date of employment, and the rate of pay of the qualified full-time employee. (3) The qualified taxpayer shall provide the Franchise Tax Board an annual certification of employment with respect to each qualified full-time employee hired in a previous taxable year on or before, the 15th day of the third month of the taxable year. The certification shall be made under penalty of perjury and shall include necessary information, as determined by the Franchise Tax Board, including the name, social security number, start date of employment, and rate of pay for each qualified full-time employee employed by the qualified taxpayer. (4) A tentative credit reservation provided to a taxpayer with respect to an employee of that taxpayer shall not constitute a determination by the Franchise Tax Board with respect to any of the requirements of this section regarding a taxpayers eligibility for the credit authorized by this section. (f) The Franchise Tax Board shall do all of the following: (1) Approve a tentative credit reservation with respect to a qualified full-time employee hired during a calendar year. (2) Determine the aggregate tentative reservation amount for a calendar year. (3) Notwithstanding Section 19542, provide as a searchable database on its internet website, for each taxable year beginning on or after January 1, 2025, and before January 1, 2030, the employer names, amounts of tax credit claimed, and number of new jobs created for each taxable year pursuant to this section and Section 17053.74. (g) The Department of Agriculture shall, by January 1, 2026, provide the Franchise Tax Board with a list of the designated food deserts.(h) (1) For purposes of this section:(A) All employees of the trades or businesses that are treated as related under Section 267, 318, or 707 of the Internal Revenue Code shall be treated as employed by a single qualified taxpayer.(B) All employees of all corporations that are members of the same controlled group of corporations shall be treated as employed by a single qualified taxpayer.(C) The credit, if any, allowable by this section to each member shall be determined by reference to its proportionate share of the expense of the qualified wages giving rise to the credit, and shall be allocated in that manner.(D) If a qualified taxpayer acquires the major portion of a trade or business of another taxpayer, hereinafter in this paragraph referred to as the predecessor, or the major portion of a separate unit of a trade or business of a predecessor, then, for purposes of applying this section for any taxable year ending after that acquisition, the employment relationship between a qualified full-time employee and a qualified taxpayer shall not be treated as terminated if the employee continues to be employed in that trade or business.(2) For purposes of this subdivision, controlled group of corporations means a controlled group of corporations as defined in Section 1563(a) of the Internal Revenue Code, except that:(A) More than 50 percent shall be substituted for at least 80 percent each place it appears in Section 1563(a)(1) of the Internal Revenue Code.(B) The determination shall be made without regard to subsections (a)(4) and (e)(3)(C) of Section 1563 of the Internal Revenue Code.(3) Rules similar to the rules provided in Sections 46(e) and 46(h) of the Internal Revenue Code, as in effect on November 4, 1990, shall apply to both of the following:(A) An organization to which Section 593 of the Internal Revenue Code applies.(B) A regulated investment company or a real estate investment trust subject to taxation under this part.(i) (1) If the employment of any qualified full-time employee, with respect to whom qualified wages are taken into account under subdivision (a), is terminated by the qualified taxpayer at any time during the first 36 months after commencing employment with the qualified taxpayer, whether or not consecutive, the tax imposed by this part for the taxable year in which that employment is terminated shall be increased by an amount equal to the credit allowed under subdivision (a) for that taxable year and all prior taxable years attributable to qualified wages paid or incurred with respect to that employee. (2) Paragraph (1) does not apply to any of the following: (A) A termination of employment of a qualified full-time employee who voluntarily leaves the employment of the qualified taxpayer. (B) A termination of employment of a qualified full-time employee who, before the close of the period referred to in paragraph (1), becomes disabled and unable to perform the services of that employment, unless that disability is removed before the close of that period and the qualified taxpayer fails to offer reemployment to that employee. (C) A termination of employment of a qualified full-time employee, if it is determined that the termination was due to the misconduct, as defined in Sections 1256-30 to 1256-43, inclusive, of Title 22 of the California Code of Regulations, of that employee. (D) A termination of employment of a qualified full-time employee due to a substantial reduction in the trade or business operations of the qualified taxpayer, including reductions due to seasonal employment. (E) A termination of employment of a qualified full-time employee, if that employee is replaced by other qualified full-time employees so as to create a net increase in both the number of employees and the hours of employment. (F) A termination of employment of a qualified full-time employee, when that employment is considered seasonal employment and the qualified employee is rehired on a seasonal basis. (3) For purposes of paragraph (1), the employment relationship between the qualified taxpayer and a qualified full-time employee shall not be treated as terminated by reason of a mere change in the form of conducting the trade or business of the qualified taxpayer, if the qualified full-time employee continues to be employed in that trade or business and the qualified taxpayer retains a substantial interest in that trade or business. (4) An increase in tax under paragraph (1) shall not be treated as tax imposed by this part for purposes of determining the amount of any credit allowable under this part. (j) In the case in which the credit allowed by this section exceeds the net tax, the excess may be carried over to reduce the net tax in the following year, and the succeeding four years if necessary, until the credit is exhausted. (k) In the case of an estate or trust, both of the following apply:(1) The qualified wages for a taxable year shall be apportioned between the estate or trust and the beneficiaries on the basis of the income of the estate or trust allocable to each.(2) A beneficiary to whom any qualified wages have been apportioned under paragraph (1) shall be treated, for purposes of this part, as the employer with respect to those wages.(l) The Franchise Tax Board may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section, including any guidelines regarding the allocation of the credit allowed under this section. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section.(m) (1) This section shall remain in effect only until December 1, 2035, and as of that date is repealed.(2) Notwithstanding paragraph (1) of subdivision (a), this section shall continue to be operative for taxable years beginning on or after January 1, 2030, but only with respect to qualified full-time employees who commenced employment with a qualified taxpayer in a food desert in a taxable year beginning before January 1, 2030. (3) This section shall remain operative for any qualified taxpayer with respect to any qualified full-time employee after the food desert is no longer designated as such for the remaining period, if any, of the 60-month period after the original date of hiring of an otherwise qualified full-time employee and any wages paid or incurred with respect to those qualified full-time employees after the food desert is no longer designated as such shall be treated as qualified wages under this section, provided the employee satisfies any other requirements of paragraphs (9) and (11) of subdivision (b), as if the food desert was still designated.
23627. (a) (1) For each taxable year beginning on or after January 1, 2025, and before January 1, 2030, there shall be allowed to a qualified taxpayer that hires a qualified full-time employee and pays or incurs qualified wages attributable to work performed by the qualified full-time employee in a grocery store located in a food desert, and that receives a tentative credit reservation for that qualified full-time employee, a credit against the tax, as defined in Section 23036, in an amount calculated under this section.(2) The amount of the credit allowable under this section for a taxable year shall be equal to the product of the tentative credit amount for the taxable year and the applicable percentage for that taxable year. (3) The credit allowed by this section may be claimed only on a timely filed original return of the qualified taxpayer and only with respect to a qualified full-time employee for whom the qualified taxpayer has received a tentative credit reservation. (b) For purposes of this section, the following shall apply:(1) The tentative credit amount for a taxable year shall be 35 percent of the qualified wages paid by the qualified taxpayer during the taxable year to the qualified full-time employee. (2) The applicable percentage for a taxable year shall be equal to a fraction, the numerator of which is the net increase in the total number of full-time employees employed in this state during the taxable year, determined on an annual full-time equivalent basis, as compared with the total number of full-time employees employed in this state during the base year, determined on the same basis, and the denominator of which shall be the total number of qualified full-time employees employed in this state during the taxable year. The applicable percentage shall not exceed 100 percent. (3) Base year means the 2024 taxable year, except in the case of a qualified taxpayer who first hires a qualified full-time employee in a taxable year beginning on or after January 1, 2025, the base year means the taxable year immediately preceding the taxable year in which a qualified full-time employee was first hired by the qualified taxpayer. (4) Acquired includes any gift, inheritance, transfer incident to divorce, or any other transfer, whether or not for consideration.(5) Annual full-time equivalent means either of the following: (A) In the case of a full-time employee paid hourly qualified wages, annual full-time equivalent means the total number of hours worked for the qualified taxpayer by the employee, not to exceed 2,000 hours per employee, divided by 2,000. (B) In the case of a salaried full-time employee, annual full-time equivalent means the total number of weeks worked for the qualified taxpayer by the employee divided by 52. (6) Food desert means a food desert as determined by the Economic Research Service within the United States Department of Agriculture.(7) Grocery store means a retail store in this state of over 15,000 square feet that is a retail seller of groceries, as described in Code 445110 of the North American Industry Classification System (NAICS) published by the United States Office of Management and Budget, 2022 edition.(8) Minimum wage means the wage established pursuant to Chapter 1 (commencing with Section 1171) of Part 4 of Division 2 of the Labor Code. (9) Qualified full-time employee means an individual who meets all of the following requirements: (A) Receives starting wages that are at least ____ percent of the minimum wage.(B) Is hired by the qualified taxpayer on or after January 1, 2025.(C) Is hired by the qualified taxpayer after the date the Economic Research Service determines that the location is within a food desert.(D) Satisfies either of the following conditions: (i) Is paid qualified wages by the qualified taxpayer for services not less than an average of 35 hours per week. (ii) Is a salaried employee and was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer. (10) Qualified taxpayer means a taxpayer that operates a grocery store located in a food desert.(11) Qualified wages means those wages subject to withholding pursuant to Division 6 (commencing with Section 13000) of the Unemployment Insurance Code that meet all of the following requirements: (A) That portion of wages paid or incurred by the qualified taxpayer during the taxable year to each qualified full-time employee that exceeds 150 percent of minimum wage, but does not exceed 350 percent of minimum wage. (B) Wages paid or incurred during the 60-month period beginning with the first day the qualified full-time employee commences employment with the qualified taxpayer. In the case of any employee who is reemployed, including a regularly occurring seasonal increase, in the trade or business operations of the qualified taxpayer, this reemployment shall not be treated as constituting commencement of employment for purposes of this section. (12) Seasonal employment means employment by a qualified taxpayer that has regular and predictable substantial reductions in trade or business operations.(c) The net increase in full-time employees of a qualified taxpayer shall be determined as provided by this subdivision: (1) (A) The net increase in full-time employees shall be determined on an annual full-time equivalent basis by subtracting from the amount determined in subparagraph (C) the amount determined in subparagraph (B). (B) The total number of full-time employees employed in the base year by the taxpayer and by any trade or business acquired by the taxpayer during the current taxable year. (C) The total number of full-time employees employed in the current taxable year by the taxpayer and by any trade or business acquired during the current taxable year. (2) For taxpayers who first commence doing business in this state during the taxable year, the number of full-time employees for the base year shall be zero. (d) For purposes of this section:(1) All employees of the trades or businesses that are treated as related under Section 267, 318, or 707 of the Internal Revenue Code shall be treated as employed by a single taxpayer.(2) In determining whether the taxpayer has first commenced doing business in this state during the taxable year, the provisions of subdivision (f) of Section 17276, without application of paragraph (7) of that subdivision, shall apply.(e) (1) To be eligible for the credit allowed by this section, a qualified taxpayer shall, upon hiring a qualified full-time employee, request a tentative credit reservation from the Franchise Tax Board within 30 days of complying with the Employment Development Departments new hire reporting requirements as provided in Section 1088.5 of the Unemployment Insurance Code, in the form and manner prescribed by the Franchise Tax Board. (2) To obtain a tentative credit reservation with respect to a qualified full-time employee, the qualified taxpayer shall provide necessary information, as determined by the Franchise Tax Board, including the name, social security number, the start date of employment, and the rate of pay of the qualified full-time employee. (3) The qualified taxpayer shall provide the Franchise Tax Board an annual certification of employment with respect to each qualified full-time employee hired in a previous taxable year on or before, the 15th day of the third month of the taxable year. The certification shall be made under penalty of perjury and shall include necessary information, as determined by the Franchise Tax Board, including the name, social security number, start date of employment, and rate of pay for each qualified full-time employee employed by the qualified taxpayer. (4) A tentative credit reservation provided to a taxpayer with respect to an employee of that taxpayer shall not constitute a determination by the Franchise Tax Board with respect to any of the requirements of this section regarding a taxpayers eligibility for the credit authorized by this section. (f) The Franchise Tax Board shall do all of the following: (1) Approve a tentative credit reservation with respect to a qualified full-time employee hired during a calendar year. (2) Determine the aggregate tentative reservation amount for a calendar year. (3) Notwithstanding Section 19542, provide as a searchable database on its internet website, for each taxable year beginning on or after January 1, 2025, and before January 1, 2030, the employer names, amounts of tax credit claimed, and number of new jobs created for each taxable year pursuant to this section and Section 17053.74. (g) The Department of Agriculture shall, by January 1, 2026, provide the Franchise Tax Board with a list of the designated food deserts.(h) (1) For purposes of this section:(A) All employees of the trades or businesses that are treated as related under Section 267, 318, or 707 of the Internal Revenue Code shall be treated as employed by a single qualified taxpayer.(B) All employees of all corporations that are members of the same controlled group of corporations shall be treated as employed by a single qualified taxpayer.(C) The credit, if any, allowable by this section to each member shall be determined by reference to its proportionate share of the expense of the qualified wages giving rise to the credit, and shall be allocated in that manner.(D) If a qualified taxpayer acquires the major portion of a trade or business of another taxpayer, hereinafter in this paragraph referred to as the predecessor, or the major portion of a separate unit of a trade or business of a predecessor, then, for purposes of applying this section for any taxable year ending after that acquisition, the employment relationship between a qualified full-time employee and a qualified taxpayer shall not be treated as terminated if the employee continues to be employed in that trade or business.(2) For purposes of this subdivision, controlled group of corporations means a controlled group of corporations as defined in Section 1563(a) of the Internal Revenue Code, except that:(A) More than 50 percent shall be substituted for at least 80 percent each place it appears in Section 1563(a)(1) of the Internal Revenue Code.(B) The determination shall be made without regard to subsections (a)(4) and (e)(3)(C) of Section 1563 of the Internal Revenue Code.(3) Rules similar to the rules provided in Sections 46(e) and 46(h) of the Internal Revenue Code, as in effect on November 4, 1990, shall apply to both of the following:(A) An organization to which Section 593 of the Internal Revenue Code applies.(B) A regulated investment company or a real estate investment trust subject to taxation under this part.(i) (1) If the employment of any qualified full-time employee, with respect to whom qualified wages are taken into account under subdivision (a), is terminated by the qualified taxpayer at any time during the first 36 months after commencing employment with the qualified taxpayer, whether or not consecutive, the tax imposed by this part for the taxable year in which that employment is terminated shall be increased by an amount equal to the credit allowed under subdivision (a) for that taxable year and all prior taxable years attributable to qualified wages paid or incurred with respect to that employee. (2) Paragraph (1) does not apply to any of the following: (A) A termination of employment of a qualified full-time employee who voluntarily leaves the employment of the qualified taxpayer. (B) A termination of employment of a qualified full-time employee who, before the close of the period referred to in paragraph (1), becomes disabled and unable to perform the services of that employment, unless that disability is removed before the close of that period and the qualified taxpayer fails to offer reemployment to that employee. (C) A termination of employment of a qualified full-time employee, if it is determined that the termination was due to the misconduct, as defined in Sections 1256-30 to 1256-43, inclusive, of Title 22 of the California Code of Regulations, of that employee. (D) A termination of employment of a qualified full-time employee due to a substantial reduction in the trade or business operations of the qualified taxpayer, including reductions due to seasonal employment. (E) A termination of employment of a qualified full-time employee, if that employee is replaced by other qualified full-time employees so as to create a net increase in both the number of employees and the hours of employment. (F) A termination of employment of a qualified full-time employee, when that employment is considered seasonal employment and the qualified employee is rehired on a seasonal basis. (3) For purposes of paragraph (1), the employment relationship between the qualified taxpayer and a qualified full-time employee shall not be treated as terminated by reason of a mere change in the form of conducting the trade or business of the qualified taxpayer, if the qualified full-time employee continues to be employed in that trade or business and the qualified taxpayer retains a substantial interest in that trade or business. (4) An increase in tax under paragraph (1) shall not be treated as tax imposed by this part for purposes of determining the amount of any credit allowable under this part. (j) In the case in which the credit allowed by this section exceeds the net tax, the excess may be carried over to reduce the net tax in the following year, and the succeeding four years if necessary, until the credit is exhausted. (k) In the case of an estate or trust, both of the following apply:(1) The qualified wages for a taxable year shall be apportioned between the estate or trust and the beneficiaries on the basis of the income of the estate or trust allocable to each.(2) A beneficiary to whom any qualified wages have been apportioned under paragraph (1) shall be treated, for purposes of this part, as the employer with respect to those wages.(l) The Franchise Tax Board may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section, including any guidelines regarding the allocation of the credit allowed under this section. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section.(m) (1) This section shall remain in effect only until December 1, 2035, and as of that date is repealed.(2) Notwithstanding paragraph (1) of subdivision (a), this section shall continue to be operative for taxable years beginning on or after January 1, 2030, but only with respect to qualified full-time employees who commenced employment with a qualified taxpayer in a food desert in a taxable year beginning before January 1, 2030. (3) This section shall remain operative for any qualified taxpayer with respect to any qualified full-time employee after the food desert is no longer designated as such for the remaining period, if any, of the 60-month period after the original date of hiring of an otherwise qualified full-time employee and any wages paid or incurred with respect to those qualified full-time employees after the food desert is no longer designated as such shall be treated as qualified wages under this section, provided the employee satisfies any other requirements of paragraphs (9) and (11) of subdivision (b), as if the food desert was still designated.
23627. (a) (1) For each taxable year beginning on or after January 1, 2025, and before January 1, 2030, there shall be allowed to a qualified taxpayer that hires a qualified full-time employee and pays or incurs qualified wages attributable to work performed by the qualified full-time employee in a grocery store located in a food desert, and that receives a tentative credit reservation for that qualified full-time employee, a credit against the tax, as defined in Section 23036, in an amount calculated under this section.(2) The amount of the credit allowable under this section for a taxable year shall be equal to the product of the tentative credit amount for the taxable year and the applicable percentage for that taxable year. (3) The credit allowed by this section may be claimed only on a timely filed original return of the qualified taxpayer and only with respect to a qualified full-time employee for whom the qualified taxpayer has received a tentative credit reservation. (b) For purposes of this section, the following shall apply:(1) The tentative credit amount for a taxable year shall be 35 percent of the qualified wages paid by the qualified taxpayer during the taxable year to the qualified full-time employee. (2) The applicable percentage for a taxable year shall be equal to a fraction, the numerator of which is the net increase in the total number of full-time employees employed in this state during the taxable year, determined on an annual full-time equivalent basis, as compared with the total number of full-time employees employed in this state during the base year, determined on the same basis, and the denominator of which shall be the total number of qualified full-time employees employed in this state during the taxable year. The applicable percentage shall not exceed 100 percent. (3) Base year means the 2024 taxable year, except in the case of a qualified taxpayer who first hires a qualified full-time employee in a taxable year beginning on or after January 1, 2025, the base year means the taxable year immediately preceding the taxable year in which a qualified full-time employee was first hired by the qualified taxpayer. (4) Acquired includes any gift, inheritance, transfer incident to divorce, or any other transfer, whether or not for consideration.(5) Annual full-time equivalent means either of the following: (A) In the case of a full-time employee paid hourly qualified wages, annual full-time equivalent means the total number of hours worked for the qualified taxpayer by the employee, not to exceed 2,000 hours per employee, divided by 2,000. (B) In the case of a salaried full-time employee, annual full-time equivalent means the total number of weeks worked for the qualified taxpayer by the employee divided by 52. (6) Food desert means a food desert as determined by the Economic Research Service within the United States Department of Agriculture.(7) Grocery store means a retail store in this state of over 15,000 square feet that is a retail seller of groceries, as described in Code 445110 of the North American Industry Classification System (NAICS) published by the United States Office of Management and Budget, 2022 edition.(8) Minimum wage means the wage established pursuant to Chapter 1 (commencing with Section 1171) of Part 4 of Division 2 of the Labor Code. (9) Qualified full-time employee means an individual who meets all of the following requirements: (A) Receives starting wages that are at least ____ percent of the minimum wage.(B) Is hired by the qualified taxpayer on or after January 1, 2025.(C) Is hired by the qualified taxpayer after the date the Economic Research Service determines that the location is within a food desert.(D) Satisfies either of the following conditions: (i) Is paid qualified wages by the qualified taxpayer for services not less than an average of 35 hours per week. (ii) Is a salaried employee and was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer. (10) Qualified taxpayer means a taxpayer that operates a grocery store located in a food desert.(11) Qualified wages means those wages subject to withholding pursuant to Division 6 (commencing with Section 13000) of the Unemployment Insurance Code that meet all of the following requirements: (A) That portion of wages paid or incurred by the qualified taxpayer during the taxable year to each qualified full-time employee that exceeds 150 percent of minimum wage, but does not exceed 350 percent of minimum wage. (B) Wages paid or incurred during the 60-month period beginning with the first day the qualified full-time employee commences employment with the qualified taxpayer. In the case of any employee who is reemployed, including a regularly occurring seasonal increase, in the trade or business operations of the qualified taxpayer, this reemployment shall not be treated as constituting commencement of employment for purposes of this section. (12) Seasonal employment means employment by a qualified taxpayer that has regular and predictable substantial reductions in trade or business operations.(c) The net increase in full-time employees of a qualified taxpayer shall be determined as provided by this subdivision: (1) (A) The net increase in full-time employees shall be determined on an annual full-time equivalent basis by subtracting from the amount determined in subparagraph (C) the amount determined in subparagraph (B). (B) The total number of full-time employees employed in the base year by the taxpayer and by any trade or business acquired by the taxpayer during the current taxable year. (C) The total number of full-time employees employed in the current taxable year by the taxpayer and by any trade or business acquired during the current taxable year. (2) For taxpayers who first commence doing business in this state during the taxable year, the number of full-time employees for the base year shall be zero. (d) For purposes of this section:(1) All employees of the trades or businesses that are treated as related under Section 267, 318, or 707 of the Internal Revenue Code shall be treated as employed by a single taxpayer.(2) In determining whether the taxpayer has first commenced doing business in this state during the taxable year, the provisions of subdivision (f) of Section 17276, without application of paragraph (7) of that subdivision, shall apply.(e) (1) To be eligible for the credit allowed by this section, a qualified taxpayer shall, upon hiring a qualified full-time employee, request a tentative credit reservation from the Franchise Tax Board within 30 days of complying with the Employment Development Departments new hire reporting requirements as provided in Section 1088.5 of the Unemployment Insurance Code, in the form and manner prescribed by the Franchise Tax Board. (2) To obtain a tentative credit reservation with respect to a qualified full-time employee, the qualified taxpayer shall provide necessary information, as determined by the Franchise Tax Board, including the name, social security number, the start date of employment, and the rate of pay of the qualified full-time employee. (3) The qualified taxpayer shall provide the Franchise Tax Board an annual certification of employment with respect to each qualified full-time employee hired in a previous taxable year on or before, the 15th day of the third month of the taxable year. The certification shall be made under penalty of perjury and shall include necessary information, as determined by the Franchise Tax Board, including the name, social security number, start date of employment, and rate of pay for each qualified full-time employee employed by the qualified taxpayer. (4) A tentative credit reservation provided to a taxpayer with respect to an employee of that taxpayer shall not constitute a determination by the Franchise Tax Board with respect to any of the requirements of this section regarding a taxpayers eligibility for the credit authorized by this section. (f) The Franchise Tax Board shall do all of the following: (1) Approve a tentative credit reservation with respect to a qualified full-time employee hired during a calendar year. (2) Determine the aggregate tentative reservation amount for a calendar year. (3) Notwithstanding Section 19542, provide as a searchable database on its internet website, for each taxable year beginning on or after January 1, 2025, and before January 1, 2030, the employer names, amounts of tax credit claimed, and number of new jobs created for each taxable year pursuant to this section and Section 17053.74. (g) The Department of Agriculture shall, by January 1, 2026, provide the Franchise Tax Board with a list of the designated food deserts.(h) (1) For purposes of this section:(A) All employees of the trades or businesses that are treated as related under Section 267, 318, or 707 of the Internal Revenue Code shall be treated as employed by a single qualified taxpayer.(B) All employees of all corporations that are members of the same controlled group of corporations shall be treated as employed by a single qualified taxpayer.(C) The credit, if any, allowable by this section to each member shall be determined by reference to its proportionate share of the expense of the qualified wages giving rise to the credit, and shall be allocated in that manner.(D) If a qualified taxpayer acquires the major portion of a trade or business of another taxpayer, hereinafter in this paragraph referred to as the predecessor, or the major portion of a separate unit of a trade or business of a predecessor, then, for purposes of applying this section for any taxable year ending after that acquisition, the employment relationship between a qualified full-time employee and a qualified taxpayer shall not be treated as terminated if the employee continues to be employed in that trade or business.(2) For purposes of this subdivision, controlled group of corporations means a controlled group of corporations as defined in Section 1563(a) of the Internal Revenue Code, except that:(A) More than 50 percent shall be substituted for at least 80 percent each place it appears in Section 1563(a)(1) of the Internal Revenue Code.(B) The determination shall be made without regard to subsections (a)(4) and (e)(3)(C) of Section 1563 of the Internal Revenue Code.(3) Rules similar to the rules provided in Sections 46(e) and 46(h) of the Internal Revenue Code, as in effect on November 4, 1990, shall apply to both of the following:(A) An organization to which Section 593 of the Internal Revenue Code applies.(B) A regulated investment company or a real estate investment trust subject to taxation under this part.(i) (1) If the employment of any qualified full-time employee, with respect to whom qualified wages are taken into account under subdivision (a), is terminated by the qualified taxpayer at any time during the first 36 months after commencing employment with the qualified taxpayer, whether or not consecutive, the tax imposed by this part for the taxable year in which that employment is terminated shall be increased by an amount equal to the credit allowed under subdivision (a) for that taxable year and all prior taxable years attributable to qualified wages paid or incurred with respect to that employee. (2) Paragraph (1) does not apply to any of the following: (A) A termination of employment of a qualified full-time employee who voluntarily leaves the employment of the qualified taxpayer. (B) A termination of employment of a qualified full-time employee who, before the close of the period referred to in paragraph (1), becomes disabled and unable to perform the services of that employment, unless that disability is removed before the close of that period and the qualified taxpayer fails to offer reemployment to that employee. (C) A termination of employment of a qualified full-time employee, if it is determined that the termination was due to the misconduct, as defined in Sections 1256-30 to 1256-43, inclusive, of Title 22 of the California Code of Regulations, of that employee. (D) A termination of employment of a qualified full-time employee due to a substantial reduction in the trade or business operations of the qualified taxpayer, including reductions due to seasonal employment. (E) A termination of employment of a qualified full-time employee, if that employee is replaced by other qualified full-time employees so as to create a net increase in both the number of employees and the hours of employment. (F) A termination of employment of a qualified full-time employee, when that employment is considered seasonal employment and the qualified employee is rehired on a seasonal basis. (3) For purposes of paragraph (1), the employment relationship between the qualified taxpayer and a qualified full-time employee shall not be treated as terminated by reason of a mere change in the form of conducting the trade or business of the qualified taxpayer, if the qualified full-time employee continues to be employed in that trade or business and the qualified taxpayer retains a substantial interest in that trade or business. (4) An increase in tax under paragraph (1) shall not be treated as tax imposed by this part for purposes of determining the amount of any credit allowable under this part. (j) In the case in which the credit allowed by this section exceeds the net tax, the excess may be carried over to reduce the net tax in the following year, and the succeeding four years if necessary, until the credit is exhausted. (k) In the case of an estate or trust, both of the following apply:(1) The qualified wages for a taxable year shall be apportioned between the estate or trust and the beneficiaries on the basis of the income of the estate or trust allocable to each.(2) A beneficiary to whom any qualified wages have been apportioned under paragraph (1) shall be treated, for purposes of this part, as the employer with respect to those wages.(l) The Franchise Tax Board may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section, including any guidelines regarding the allocation of the credit allowed under this section. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section.(m) (1) This section shall remain in effect only until December 1, 2035, and as of that date is repealed.(2) Notwithstanding paragraph (1) of subdivision (a), this section shall continue to be operative for taxable years beginning on or after January 1, 2030, but only with respect to qualified full-time employees who commenced employment with a qualified taxpayer in a food desert in a taxable year beginning before January 1, 2030. (3) This section shall remain operative for any qualified taxpayer with respect to any qualified full-time employee after the food desert is no longer designated as such for the remaining period, if any, of the 60-month period after the original date of hiring of an otherwise qualified full-time employee and any wages paid or incurred with respect to those qualified full-time employees after the food desert is no longer designated as such shall be treated as qualified wages under this section, provided the employee satisfies any other requirements of paragraphs (9) and (11) of subdivision (b), as if the food desert was still designated.
23627. (a) (1) For each taxable year beginning on or after January 1, 2025, and before January 1, 2030, there shall be allowed to a qualified taxpayer that hires a qualified full-time employee and pays or incurs qualified wages attributable to work performed by the qualified full-time employee in a grocery store located in a food desert, and that receives a tentative credit reservation for that qualified full-time employee, a credit against the tax, as defined in Section 23036, in an amount calculated under this section.
(2) The amount of the credit allowable under this section for a taxable year shall be equal to the product of the tentative credit amount for the taxable year and the applicable percentage for that taxable year.
(3) The credit allowed by this section may be claimed only on a timely filed original return of the qualified taxpayer and only with respect to a qualified full-time employee for whom the qualified taxpayer has received a tentative credit reservation.
(b) For purposes of this section, the following shall apply:
(1) The tentative credit amount for a taxable year shall be 35 percent of the qualified wages paid by the qualified taxpayer during the taxable year to the qualified full-time employee.
(2) The applicable percentage for a taxable year shall be equal to a fraction, the numerator of which is the net increase in the total number of full-time employees employed in this state during the taxable year, determined on an annual full-time equivalent basis, as compared with the total number of full-time employees employed in this state during the base year, determined on the same basis, and the denominator of which shall be the total number of qualified full-time employees employed in this state during the taxable year. The applicable percentage shall not exceed 100 percent.
(3) Base year means the 2024 taxable year, except in the case of a qualified taxpayer who first hires a qualified full-time employee in a taxable year beginning on or after January 1, 2025, the base year means the taxable year immediately preceding the taxable year in which a qualified full-time employee was first hired by the qualified taxpayer.
(4) Acquired includes any gift, inheritance, transfer incident to divorce, or any other transfer, whether or not for consideration.
(5) Annual full-time equivalent means either of the following:
(A) In the case of a full-time employee paid hourly qualified wages, annual full-time equivalent means the total number of hours worked for the qualified taxpayer by the employee, not to exceed 2,000 hours per employee, divided by 2,000.
(B) In the case of a salaried full-time employee, annual full-time equivalent means the total number of weeks worked for the qualified taxpayer by the employee divided by 52.
(6) Food desert means a food desert as determined by the Economic Research Service within the United States Department of Agriculture.
(7) Grocery store means a retail store in this state of over 15,000 square feet that is a retail seller of groceries, as described in Code 445110 of the North American Industry Classification System (NAICS) published by the United States Office of Management and Budget, 2022 edition.
(8) Minimum wage means the wage established pursuant to Chapter 1 (commencing with Section 1171) of Part 4 of Division 2 of the Labor Code.
(9) Qualified full-time employee means an individual who meets all of the following requirements:
(A) Receives starting wages that are at least ____ percent of the minimum wage.
(B) Is hired by the qualified taxpayer on or after January 1, 2025.
(C) Is hired by the qualified taxpayer after the date the Economic Research Service determines that the location is within a food desert.
(D) Satisfies either of the following conditions:
(i) Is paid qualified wages by the qualified taxpayer for services not less than an average of 35 hours per week.
(ii) Is a salaried employee and was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified taxpayer.
(10) Qualified taxpayer means a taxpayer that operates a grocery store located in a food desert.
(11) Qualified wages means those wages subject to withholding pursuant to Division 6 (commencing with Section 13000) of the Unemployment Insurance Code that meet all of the following requirements:
(A) That portion of wages paid or incurred by the qualified taxpayer during the taxable year to each qualified full-time employee that exceeds 150 percent of minimum wage, but does not exceed 350 percent of minimum wage.
(B) Wages paid or incurred during the 60-month period beginning with the first day the qualified full-time employee commences employment with the qualified taxpayer. In the case of any employee who is reemployed, including a regularly occurring seasonal increase, in the trade or business operations of the qualified taxpayer, this reemployment shall not be treated as constituting commencement of employment for purposes of this section.
(12) Seasonal employment means employment by a qualified taxpayer that has regular and predictable substantial reductions in trade or business operations.
(c) The net increase in full-time employees of a qualified taxpayer shall be determined as provided by this subdivision:
(1) (A) The net increase in full-time employees shall be determined on an annual full-time equivalent basis by subtracting from the amount determined in subparagraph (C) the amount determined in subparagraph (B).
(B) The total number of full-time employees employed in the base year by the taxpayer and by any trade or business acquired by the taxpayer during the current taxable year.
(C) The total number of full-time employees employed in the current taxable year by the taxpayer and by any trade or business acquired during the current taxable year.
(2) For taxpayers who first commence doing business in this state during the taxable year, the number of full-time employees for the base year shall be zero.
(d) For purposes of this section:
(1) All employees of the trades or businesses that are treated as related under Section 267, 318, or 707 of the Internal Revenue Code shall be treated as employed by a single taxpayer.
(2) In determining whether the taxpayer has first commenced doing business in this state during the taxable year, the provisions of subdivision (f) of Section 17276, without application of paragraph (7) of that subdivision, shall apply.
(e) (1) To be eligible for the credit allowed by this section, a qualified taxpayer shall, upon hiring a qualified full-time employee, request a tentative credit reservation from the Franchise Tax Board within 30 days of complying with the Employment Development Departments new hire reporting requirements as provided in Section 1088.5 of the Unemployment Insurance Code, in the form and manner prescribed by the Franchise Tax Board.
(2) To obtain a tentative credit reservation with respect to a qualified full-time employee, the qualified taxpayer shall provide necessary information, as determined by the Franchise Tax Board, including the name, social security number, the start date of employment, and the rate of pay of the qualified full-time employee.
(3) The qualified taxpayer shall provide the Franchise Tax Board an annual certification of employment with respect to each qualified full-time employee hired in a previous taxable year on or before, the 15th day of the third month of the taxable year. The certification shall be made under penalty of perjury and shall include necessary information, as determined by the Franchise Tax Board, including the name, social security number, start date of employment, and rate of pay for each qualified full-time employee employed by the qualified taxpayer.
(4) A tentative credit reservation provided to a taxpayer with respect to an employee of that taxpayer shall not constitute a determination by the Franchise Tax Board with respect to any of the requirements of this section regarding a taxpayers eligibility for the credit authorized by this section.
(f) The Franchise Tax Board shall do all of the following:
(1) Approve a tentative credit reservation with respect to a qualified full-time employee hired during a calendar year.
(2) Determine the aggregate tentative reservation amount for a calendar year.
(3) Notwithstanding Section 19542, provide as a searchable database on its internet website, for each taxable year beginning on or after January 1, 2025, and before January 1, 2030, the employer names, amounts of tax credit claimed, and number of new jobs created for each taxable year pursuant to this section and Section 17053.74.
(g) The Department of Agriculture shall, by January 1, 2026, provide the Franchise Tax Board with a list of the designated food deserts.
(h) (1) For purposes of this section:
(A) All employees of the trades or businesses that are treated as related under Section 267, 318, or 707 of the Internal Revenue Code shall be treated as employed by a single qualified taxpayer.
(B) All employees of all corporations that are members of the same controlled group of corporations shall be treated as employed by a single qualified taxpayer.
(C) The credit, if any, allowable by this section to each member shall be determined by reference to its proportionate share of the expense of the qualified wages giving rise to the credit, and shall be allocated in that manner.
(D) If a qualified taxpayer acquires the major portion of a trade or business of another taxpayer, hereinafter in this paragraph referred to as the predecessor, or the major portion of a separate unit of a trade or business of a predecessor, then, for purposes of applying this section for any taxable year ending after that acquisition, the employment relationship between a qualified full-time employee and a qualified taxpayer shall not be treated as terminated if the employee continues to be employed in that trade or business.
(2) For purposes of this subdivision, controlled group of corporations means a controlled group of corporations as defined in Section 1563(a) of the Internal Revenue Code, except that:
(A) More than 50 percent shall be substituted for at least 80 percent each place it appears in Section 1563(a)(1) of the Internal Revenue Code.
(B) The determination shall be made without regard to subsections (a)(4) and (e)(3)(C) of Section 1563 of the Internal Revenue Code.
(3) Rules similar to the rules provided in Sections 46(e) and 46(h) of the Internal Revenue Code, as in effect on November 4, 1990, shall apply to both of the following:
(A) An organization to which Section 593 of the Internal Revenue Code applies.
(B) A regulated investment company or a real estate investment trust subject to taxation under this part.
(i) (1) If the employment of any qualified full-time employee, with respect to whom qualified wages are taken into account under subdivision (a), is terminated by the qualified taxpayer at any time during the first 36 months after commencing employment with the qualified taxpayer, whether or not consecutive, the tax imposed by this part for the taxable year in which that employment is terminated shall be increased by an amount equal to the credit allowed under subdivision (a) for that taxable year and all prior taxable years attributable to qualified wages paid or incurred with respect to that employee.
(2) Paragraph (1) does not apply to any of the following:
(A) A termination of employment of a qualified full-time employee who voluntarily leaves the employment of the qualified taxpayer.
(B) A termination of employment of a qualified full-time employee who, before the close of the period referred to in paragraph (1), becomes disabled and unable to perform the services of that employment, unless that disability is removed before the close of that period and the qualified taxpayer fails to offer reemployment to that employee.
(C) A termination of employment of a qualified full-time employee, if it is determined that the termination was due to the misconduct, as defined in Sections 1256-30 to 1256-43, inclusive, of Title 22 of the California Code of Regulations, of that employee.
(D) A termination of employment of a qualified full-time employee due to a substantial reduction in the trade or business operations of the qualified taxpayer, including reductions due to seasonal employment.
(E) A termination of employment of a qualified full-time employee, if that employee is replaced by other qualified full-time employees so as to create a net increase in both the number of employees and the hours of employment.
(F) A termination of employment of a qualified full-time employee, when that employment is considered seasonal employment and the qualified employee is rehired on a seasonal basis.
(3) For purposes of paragraph (1), the employment relationship between the qualified taxpayer and a qualified full-time employee shall not be treated as terminated by reason of a mere change in the form of conducting the trade or business of the qualified taxpayer, if the qualified full-time employee continues to be employed in that trade or business and the qualified taxpayer retains a substantial interest in that trade or business.
(4) An increase in tax under paragraph (1) shall not be treated as tax imposed by this part for purposes of determining the amount of any credit allowable under this part.
(j) In the case in which the credit allowed by this section exceeds the net tax, the excess may be carried over to reduce the net tax in the following year, and the succeeding four years if necessary, until the credit is exhausted.
(k) In the case of an estate or trust, both of the following apply:
(1) The qualified wages for a taxable year shall be apportioned between the estate or trust and the beneficiaries on the basis of the income of the estate or trust allocable to each.
(2) A beneficiary to whom any qualified wages have been apportioned under paragraph (1) shall be treated, for purposes of this part, as the employer with respect to those wages.
(l) The Franchise Tax Board may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section, including any guidelines regarding the allocation of the credit allowed under this section. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section.
(m) (1) This section shall remain in effect only until December 1, 2035, and as of that date is repealed.
(2) Notwithstanding paragraph (1) of subdivision (a), this section shall continue to be operative for taxable years beginning on or after January 1, 2030, but only with respect to qualified full-time employees who commenced employment with a qualified taxpayer in a food desert in a taxable year beginning before January 1, 2030.
(3) This section shall remain operative for any qualified taxpayer with respect to any qualified full-time employee after the food desert is no longer designated as such for the remaining period, if any, of the 60-month period after the original date of hiring of an otherwise qualified full-time employee and any wages paid or incurred with respect to those qualified full-time employees after the food desert is no longer designated as such shall be treated as qualified wages under this section, provided the employee satisfies any other requirements of paragraphs (9) and (11) of subdivision (b), as if the food desert was still designated.
SEC. 5. 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. 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. 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.
It is the intent of the Legislature to enact legislation to decrease food deserts in underserved communities.