HomeMy WebLinkAbout2010-01-26 - AGENDA REPORTS - AB 133 AND AB 1139 (2)CONSENT CALENDAR
DATE:
SUBJECT:
DEPARTMENT
Agenda Item:
CITY OF SANTA CLARITA
AGENDA REPORT
City Manager Approval
Item to be presented by
January 26, 2010
5
Farah Awan
STATE LEGISLATION: ASSEMBLY BILL 133 (SMYTH) AND
ASSEMBLY BILL 1139 (PEREZ)
City Manager's Office
RECOMMENDED ACTION
City Council accept the recommendation of the City Council Legislative Committee and direct
staff to submit letters of support and request to amend language for AB 133 and submit letters of
opposition for AB 1139 to members of the California Legislature, Governor, and the League of
California Cities.
BACKGROUND
During the January S, 2010, Santa Clarita Legislative Committee meeting, Councilmembers
Frank Ferry and Laurie Ender recommended that the City Council take the following positions:
AB 133- Support and request to be amended
AB 1139- Oppose
AB 133 (Smyth)- Bridge and Thoroughfare
AB 133, introduced by Assemblymember Cameron Smyth on January 20, 2009, would amend
Section 66484 of the Government Code amending the Subdivision Map Act related to bridge and
major thoroughfare districts in unincorporated areas of Los Angeles County. As written, AB 133
would amend the current definition of the term "construction" in the Subdivision Map Act.
Existing law defines the term "construction" to include design, acquisition of right -of ways,
administration of construction contracts, and actual construction.
If amended, the new expanded definition of "construction" will allow bridge and thoroughfare
districts within the unincorporated areas of Los Angeles County to use bridge and thoroughfare
fees to also defray from all direct and indirect environmental, engineering, accounting, legal and
other services needed to constrict bridges and thoroughfares. AB 133 does not negatively impact
APPROVED
the City of Santa Clarita, but as discussed by the City Council Legislative Committee, it is the
intent that City staff engage in discussions with Assemblymember Cameron Smyth's Office and
request that the language in AB 133 be amended to include the City of Santa Clarita's bridge and
thoroughfare districts. If the City of Santa Clarita bridge and thoroughfare districts are included
in AB 133, the City would benefit from the expanded definition of the term "construction" in the
Subdivision Map Act.
AB 1139 (Perez)- Enterprise Zone
AB 1139, introduced by Assemblymember John Perez on February 27, 2009, would effectively
rescind many of the benefits of California Enterprise Zone programs. As written, AB 1139 would
mandate, as a condition of participating in the Enterprise Zone program, that businesses provide
health care coverage and full-time employment. AB 1139 would also eliminate one of the
primary ways that employees qualify for a hiring credit under the program, which is residency in
a low-income, low -employment neighborhood, known as a Targeted Employee Area (TEA). In
addition, the bill establishes multiple reporting deadlines and regulations that severely limit the
program's effectiveness and would make participation in the program burdensome and costly for
businesses.
The Santa Clarita Enterprise Zone received its official designation from the State of California on
July 1, 2007. Since then, numerous businesses in the City of Santa Clarita have benefited from
this program. The success that has been achieved in the past two years is truly an indicator of the
importance of the Enterprise Zone program to the City. of Santa Clarita and its business
community. To remain effective, it is necessary that the established criteria for California
Enterprise Zone programs is not altered.
ALTERNATIVE ACTIONS
1. Do not accept the recommendation of the City Council Legislative Committee and do not
direct staff to submit letters of support and request to amend the language for AB 133,
2. Do not accept the recommendation of the City Council Legislative Committee and do not
direct staff to submit letters of opposition for AB 1139.
3.Other action as determined by the City Council.
FISCAL IMPACT
Adoption of the recommended action does not require any additional resources beyond those
already contained within the the adopted 2009/10 budget.
ATTACHMENTS
Assembly Bill 133
Assembly Bill 1139
z
AMENDED IN ASSEMBLY JANUARY 4, 2010
CALIFORNIA LEGISLATURE -2009-10 REGULAR SESSION
ASSEMBLY BILL No. 133
Introduced by Assembly Member Smyth
January 20, 2009
An act to amend Section 66484 of the Government Code, relating to
subdivisions.
LEGISLATIVE COUNSEL'S DIGEST
AB 133, as amended, Smyth. Subdivisions: major thoroughfares.
The Subdivision Map Act authorizes a local agency to require the
payment of a fee as a condition of approval of a final map or as a
condition of issuing a building permit for purposes of defraying the
actual or estimated cost of constructing bridges or major thoroughfares
if specified conditions are met. The fees collected are deposited in a
planned bridge or major thoroughfare fund. If the benefit area of a
bridge fund is one in which more than one bridge is required to be
constructed, a fund may be established that covers all of the bridge
projects in that benefit area. For the unincorporated area of San Diego
County only, "construction" is defined to include design, acquisition
of rights-of-way, actual construction, and reasonable administrative
expenses, as specified.
This bill would authorize a local agency to establish a fund for a
benefit area that covers all of the bridge and major thoroughfare projects
in that benefit area when that benefit area is one in which more than
one bridge or major thoroughfare is required to be constructed. The
definition of "construction" for the unincorporated area of San Diego
County would be expanded to ineitt also be applied to the
unincorporated area of Los Angeles County ,
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AB 133 —2—
administfative expenses, as . However with respect to Los
Angeles County only, in specified circumstances, "construction" would
be defined to include administration of construction contracts, rather
than administrative expenses.
Vote: majority. Appropriation: no. Fiscal committee: no.
State -mandated local program: no.
The people of the State of California do enact as follows:
1 SECTION 1. Section 66484 of the Government Code is
2 amended to read:
3 66484. (a) A local ordinance may require the payment of a
4 fee as a condition of approval of a final map or as a condition of
5 issuing a building permit for purposes of defraying the actual or
6 estimated cost of constructing bridges over waterways, railways,
7 freeways, and canyons, or constructing major thoroughfares. The
8 ordinance may require payment of fees pursuant to this section if
9 all of the following requirements are satisfied:
10 (1) The ordinance refers to the circulation element of the general
1 1 plan and, in the case of bridges, to the transportation or flood
12 control provisions thereof that identify railways, freeways, streams,
13 or canyons for which bridge crossings are required on the general
14 plan or local roads and in the case of major thoroughfares, to the
15 provisions of the circulation element that identify those major
16 thoroughfares whose primary purpose is to carry through traffic
17 and provide a network connecting to the state highway system, if
18 the circulation element, transportation or flood control provisions
19 have been adopted by the local agency 30 days prior to the filing
20 of a map or application for a building permit.
21 (2) The ordinance provides that there will be a public hearing
22 held by the governing body for each area benefited. Notice shall
23 be given pursuant to Section 65091 and shall include preliminary
24 information related to the boundaries of the area of benefit,
25 estimated cost, and the method of fee apportionment. The area of
26 benefit may include land or improvements in addition to the land
27 or improvements that are the subject of any map or building permit
28 application considered at the proceedings.
29 (3) The ordinance provides that at the public hearing, the
30 boundaries of the area of benefit, the costs, whether actual or
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estimated, and a fair method of allocation of costs to the area of
benefit and fee apportionment are established. The method of fee
apportionment, in the case of major thoroughfares, shall not provide
for higher fees on land that abuts the proposed improvement except
where the abutting property is provided direct usable access to the
major thoroughfare. A description of the boundaries of the area of
benefit, the costs, whether actual or estimated, and the method of
fee apportionment established at the hearing shall be incorporated
in a resolution of the governing body, a certified copy of which
shall be recorded by the governing body conducting the hearing
with the recorder of the county in which the area of benefit is
located. The apportioned fees shall be applicable to all property
within the area of benefit and shall be payable as a condition of
approval of a final map or as a condition of issuing a building
permit for the property or portions of the property. Where the area
of benefit includes lands not subject to the payment of fees pursuant
to this section, the governing agency shall make provision for
payment of the share of improvement costs apportioned to those
lands from other sources.
(4) The ordinance provides that payment of fees shall not be
required unless the major thoroughfares are in addition to, or a
reconstruction of, any existing major thoroughfares serving the
area at the time of the adoption of the boundaries of the area of
benefit.
(5) The ordinance provides that payment of fees shall not be
required unless the planned bridge facility is an original bridge
serving the area or an addition to any existing bridge facility.
serving the area at the time of the adoption of the boundaries of
the area of benefit. The fees shall not be expended to reimburse
the cost of existing bridge facility construction.
(6) The ordinance provides that if, within the time when protests
may be filed under the provisions of the ordinance, there is a
written protest, filed with the clerk of the legislative body, by the
owners of more than one-half of the area of the property to be
benefited by the improvement, and sufficient protests are not
withdrawn so as to reduce the area represented to less than one-half
of that to be benefited, then the proposed proceedings shall be
abandoned, and the legislative body shall not, for one year from
the filing of that written protest, commence or carry on any
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proceedings for the same improvement or acquisition under the
provisions of this section.
(b) Any protest may be withdrawn by the owner protesting, in
writing, at any time prior to the conclusion of a public hearing held
pursuant to the ordinance.
(c) If any majority protest is directed against only a portion of
the improvement, then all further proceedings under the provisions
of this section to construct that portion of the improvement so
protested against shall be barred for a period of one year, but the
legislative body may commence new proceedings not including
any part of the improvement or acquisition so protested against.
Nothing in this section prohibits a legislative body, within that
one-year period, from commencing and carrying on new
proceedings for the construction of a portion of the improvement
so protested against if it finds, by the affirmative vote of four-fifths
of its members, that the owners of more than one-half of the area
of the property to be benefited are in favor of going forward with
that portion of the improvement or acquisition.
(d) Nothing in this section precludes the processing and
recordation of maps in accordance with other provisions of this
division if the proceedings are abandoned.
(e) Fees paid pursuant to an ordinance adopted pursuant to this
section shall be deposited in a planned bridge facility or major
thoroughfare fund. A fund shall be established for each planned
bridge facility project or each planned major thoroughfare project.
If the benefit area is one in which more than.one bridge or major
thoroughfare is required to be constructed, a fund may be so
established covering all of the bridge and major thoroughfare
projects in the benefit area. Money in the fund shall be expended
solely for the construction or reimbursement for construction of
the improvement or improvements serving the area to be benefited
and from which the fees comprising the fund were collected, or to
reimburse the local agency for the cost of constructing the
improvement or improvements.
(f) An ordinance adopted pursuant to this section may provide
for the acceptance of considerations in lieu of the payment of fees.
(g) A local agency imposing fees pursuant to this section may
advance money from its general fund or road fund to pay the cost
of constructing the improvements and may reimburse the general
fund or road fund for any advances from planned bridge facility
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or major thoroughfares funds established to finance the construction
of those improvements.
(h) A local agency imposing fees pursuant to this section may
incur an interest-bearing indebtedness for the construction of bridge
facilities or major thoroughfares. However, the sole security for
repayment of that indebtedness shall be moneys in planned bridge
facility or major thoroughfares funds.
(i) (1) The term "construction" as used in this section includes
design, acquisition ofd rights -of --way, administration
of construction contracts, and actual construction.
6)
(2) (A) The term "construction," as used in this section, with
respect to the unincorporated areas of San Diego County and Los
Angeles County only, includes design, acquisition of rights-of-way,
and actual construction, including, but not limited to, all direct and
indirect environmental, engineering, accounting, legal,
administration of construction contracts, and other services
necessary therefor. The term "construction," with respect to the
unincorporated areas of San Diego County and Los Angeles County
only, also includes reasonable administrative expenses, not
exceeding three hundred thousand dollars ($300,000) in any
calendar year after January 1, 1986, as adjusted annually for any
increase or decrease in the Consumer Price Index of the Bureau
of Labor Statistics of the United States Department of Labor for
all Urban Consumers, San Diego, California (1967 = 100), and
Los Angeles -Long Beach -Anaheim, California (1967 = 100),
respectively, as published by the United States Department of
Commerce for the purpose of constructing bridges and major
thoroughfares. "Administrative expenses" means those office,
personnel, and other customary and normal expenses associated
with the direct management and administration of the agency, but
not including costs of construction.
(B) Notwithstanding subparagraph (A), the term "construction,"
as used in this section, with respect to Los Angeles County only,
shall have the same meaning as in paragraph (1), if the area of
benefit includes both a city or a portion thereof and adjacent
portions of unincorporated area, and if all of the bridge and major
thoroughfare project improvements lie within the boundaries of
the city.
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1 (j) Nothing in this section precludes a county or city from
2 providing funds for the construction of bridge facilities or major
3 thoroughfares to defray costs not allocated to the area of benefit.
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AMENDED IN ASSEMBLY APRIL 13, 2009
CALIFORNIA LEGISLATURE -2009-10 REGULAR SESSION
ASSEMBLY BILL No. 1139
Introduced by Assembly Member John A. Perez
Febniary 27, 2009
An act to amend Sections 17053.74 and 23634 of the Revenue and
Taxation Code, relating to taxation, to take effect immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
AB 1139, as amended, John A. Perez. Income taxes: credits:
enterprise zones.
The Personal Income Tax Law and the Corporation Tax Law authorize
various credits against the taxes imposed by those laws, including a
credit based on "qualified wages," which, except as spec f ed, is that
portion of wages paid or incurred by the taxpayer during the taxable
year to qualified employees that does not exceed 150% of the minimum
wage, for qualified taxpayers who hire qualified employees within
enterprise zones, subject to specific criteria. Existing law requires a
taxpayer to obtain, from specified agencies, a certification providing
that a qualified employee meets the requirements of the credit.
This bill would revise the definition of "qual f ed wages "for purposes
of the credit to provide that qualified wages include that portion of
wages paid or incurred by the taxpayer that do not exceed % of
the minimum wage and to further revise the definition to provide that
qualified wages include that portion of wages paid or incurred by the
taxpayer that do not exceed _% of the minimum wage for qualified
employees that the qualified employer employs for at least 35 hours
per week and for whom the taxpayer pays for at least 80% of spec f ed
forms of health care coverage. This bill would also revise the definition
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AB 1139 —2—
of "quaked employee" by removing, as an element of eligibility as a
qual fled employee, residency in a targeted employment or targeted tax
area. Additionally, this bill would require taxpayers to apply for; and
obtain, the certification of a qualified employee within 21 days of the
date of hire of the qualified employee. This bill would also require
taxpayers to annually report specified information regarding qualified
employees to certifying agencies which then must compile and report
that information to the Department of Housing and Community
Development, for an annual report presented by the department to the
Legislature.
The Pefsonal ineome Tax 17a", and the Gotporation Tax Law attth
vafious efedits agaitist the I.." .....-sed by those laws, ineluditt"
defined.
This bill "'ould fevise the definition 44'qualified employee" f6f t!
has been eenvieted 4 a felony ot: a misdemeanor offense punishable
ofgttilt, witi� speeified exeltisions. This bill wottld also make teehniettl,
This bill would take effect immediately as a tax levy.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State -mandated local program: no.
The people of the State of California do enact as follows:
1 SECTION 1. Section 17053.74 of the Revenue and Taxation
2 Code is amended to read.-
3
ead:3 17053.74. (a) There shall be allowed a credit against the "net
4 tax" (as defined in Section 17039) to a taxpayer who employs a
5 qualified employee in an enterprise zone during the taxable year.
6 The credit shall be equal to the sum of each of the following:
7 (1) Fifty percent of qualified wages in the first year of
8 employment.
9 (2) Forty percent of qualified wages in the second year of
10 employment.
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1 (3) Thirty percent of qualified wages in the third year of
2 employment.
3 (4) Twenty percent of qualified wages in the fourth year of
4 employment.
5 (5) -Ten percent of qualified wages in the fifth year of
6 employment.
7 (b) For purposes of this section:
8 (1) "Qualified wages" means:
9 (A) (i) Except as provided in clause (ii) or (iii), that portion of
10 wages paid or incurred by the taxpayer during the taxable year to
1 1 qualified employees that does not exceed -1-58 percent of the
12 minimum wage.
13 (ii) For up to 1,350 qualified employees who are employed by
14 the taxpayer in the Long Beach Enterprise Zone in aircraft
15 manufacturing activities described in Codes 3721 to 3728,
16 inclusive, and Code 3812 of the Standard Industrial Classification
17 (SIC) Manual published by the United States Office of
18 Management and Budget, 1987 edition, "qualified wages" means
19 that portion of hourly wages that does not exceed 202 percent of
20 the minimum wage.
21 (iii) "Qualified wages " means. that portion of wages paid or
22 incurred by the taxpayer during the taxable vear that does not
23 exceed percent of the minimum wage for a qualified employee
24 that the quaked employer employs for at least 35 hours per week
25 and for whom the taxpayer pays,for at least 80 percent of any of
26 the following:
27 (1) Health care coverage that meets the minimum requirements
28 set forth in Chapter 2.2 (commencing with Section 1340) of
29 Division 2 of the Health and Safety Code.
30 (11) A group health insurance policy, as defined in subdivision
31 (b) of Section 106 of the Insurance Code, that covers hospital,
32 surgical, and medical care expenses, provided the maximum
33 out -of pocket costs for insureds do not exceed the maximum
34 out-of-pocket costs for enrollees of health care service plans
35 providing benefits under a preferred provider organization policy.
36 For purposes of this section, a group health insurance policy shall
37 not include Medicare supplement, vision -only, dental -only,
38 Champus-supplement insurance, hospital indemnity, accident -only,
39 or specified disease insurance that pays benefits on a fixed benefit,
40 cash -payment -only basis.
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(111) Any Taft -Hartley health and welfare fund or any other
lawful collective bargaining agreement that provides for health
and welfare coverage for collective bargaining unit or other
employees thereby covered.
(IV) Any employer-sponsored group health plan meeting the
requirements of the federal Employee Income Security Act of 1974,
provided it meets the benefits required under subclause (1) or (11)
of this clause.
(V) A multiple employer wegare agreement established pursuant
to Section 742.20 of the Insurance Code, provided that its benefits
have not changed after January 1, 2004, or that it meets the
benefits required under subclause (I) or (II) of this clause.
(VI) Coverage provided under the Public Employees' Medical
and Hospital Care Act (Part 5 (commencing with Section 22850)
of Division 5 of Title 2 of the Government Code), provided it meets
the benefits required under subclause (1) or (II) of this clause or
is otherwise collectively bargained.
(VII) Health coverage provided by the University of California
to students of the University of California who are also employed
by the University of California.
(B) Wages received during the 60 -month period beginning with
the first day the employee commences employment with the
taxpayer. Reemployment in connection with any increase, including
a regularly occurring seasonal increase, in the trade or business
operations of the taxpayer does not constitute commencement of
employment for purposes of this section.
(C) Qualified wages do not include any wages paid or incurred
by the taxpayer on or after the zone expiration date. However,
wages paid or incurred with respect to qualified employees who
are employed by the taxpayer within the enterprise zone within
the 60 -month period prior to the zone expiration date shall continue
to qualify for the credit under this section after the zone expiration
date, in accordance with all provisions of this section applied as
if the enterprise zone designation were still in existence and
binding.
(2) "Minimum wage" means the wage established by the
Industrial Welfare Commission as provided for in Chapter 1
(commencing with Section 1171) of Part 4 of Division 2 of the
Labor Code.
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1 (3) "Zone expiration date" means the date the enterprise zone
2 designation expires, is no longer binding, or becomes inoperative.
3 (4) (A) "Qualified employee" means an individual who meets
4 all of the following requirements:
5 (i) At least 90 percent of whose services for the taxpayer during
6 the taxable year are directly related to the conduct of the taxpayer's
7 trade or business located in an enterprise zone.
8 (ii) Performs at least 50 percent of his or her services for the
9 taxpayer during the taxable year in an enterprise zone.
10 (iii) Is hired by the taxpayer after the date of original designation
1 1 of the area in which services were performed as an enterprise zone.
12 (iv) Is any of the following:
13 (1) Immediately preceding the qualified employee's
14 commencement of employment with the taxpayer, was a person
15 eligible for services under the federal Job Training Partnership
16 Act (29 U.S.C. Sec. 1501 et seq.), or its successor, who is receiving,
17 or is eligible to receive, subsidized employment, training, or
18 services funded by the federal Job Training Partnership Act, or its
19 successor.
20 (II) Immediately preceding the qualified employee's
21 commencement of employment with the taxpayer, was a person
22 eligible to be a voluntary or mandatory registrant under the Greater
23 Avenues for Independence Act of 1985 (GAIN) provided for
24 pursuant to Article 3.2 (commencing with Section 11320) of
25 Chapter 2 of' Part 3 of Division 9 of the Welfare and Institutions
26 Code, or its successor.
27 (Ill) Immediately preceding the qualified employee's
28 commencement of employment with the taxpayer, was an
29 economically disadvantaged individual 14 years of age or older.
30 (IV) Immediately preceding the qualified employee's
31 commencement of employment with the taxpayer, was a dislocated
32 worker who meets any of the following:
33 f*
34 (ia) Has been terminated or laid off or who has received a notice
35 of termination or layoff from employment, is eligible for or has
36 exhausted entitlement to unemployment insurance benefits, and
37 is unlikely to return to his or her previous industry or occupation.
38 (+)
39 (ib) Has been terminated or has received a notice of termination
40 of employment as a result of any permanent closure or any
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I substantial layoff at a plant, facility, or enterprise, including an
2 individual who has not received written notification but whose
3 employer has made a public announcement of the closure or layoff.
4 (ee)
5 (ic) Is long-term unemployed and has limited opportunities for
6 employment or reemployment in the same or a similar occupation
7 in the area in which the individual resides, including an individual
8 55 years of age or older who may have substantial barriers to
9 employment by reason of age.
10 H4)
1 1 (id) Was self-employed (including farmers and ranchers) and
12 is unemployed as a result of general economic conditions in the
13 community in which he or she resides or because of natural
14 disasters.
15 fee)
16 (ie) Was a civilian employee of the Department of Defense
17 employed at a military installation being closed or realigned under
18 the Defense Base Closure and Realignment Act of 1990.
19 (ff)
20 (ij) Was an active member of the armed forces or National Guard
21 as of September 30, 1990, and was either involuntarily separated
22 or separated pursuant to a special benefits program.
23 (-9
24 (ig) Is a seasonal or migrant worker who experiences chronic
25 seasonal unemployment and underemployment in the agriculture
26 industry, aggravated by continual advancements in technology and
27 mechanization.
28 fW
29 (ih) Has been terminated or laid off, or has received a notice of
30 termination or layoff, as a consequence of compliance with the
31 Clean Air Act.
32 (V) Immediately preceding the qualified employee's
33 commencement of employment with the taxpayer, was a disabled
34 individual who is eligible for or enrolled in, or has completed a
35 state rehabilitation plan or is a service -connected disabled veteran,
36 veteran of the Vietnam era, or veteran who is recently separated
37 from military service.
38 (VI) Immediately preceding the qualified employee's
39 commencement of employment with the taxpayer, was an
40 ex -offender. An individual shall be treated as convicted if he or
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AB 1139
she was placed on probation by a state court without a finding of
guilt.
(VII) Immediately preceding the qualified employee's
commencement of employment with the taxpayer, was a person
eligible for or a recipient of any of the following:
Ora)
(ia) Federal Supplemental Security Income benefits.
(bb) Aid to Families with Dependent Childfen.
(ib) Temporary Assistance for Needy Families.
(ic) Food stamps.
(44)
(id) State and local general assistance.
(VIII) Immediately preceding the qualified employee's
commencement of employment with the taxpayer, was a member
of a federally recognized Indian tribe, band, or other group of
Native American descent.
(1X) immediately preeeding the qualified employee's
of a targeted employment atta, as defined in Seetion 7072 of the
Government Gode.
(YO
(IX) An employee who qualified the taxpayer for the enterprise
zone hiring credit under former Section 17053.8 or the program
area hiring credit under former Section 17053.11.
(X) Immediately preceding the qualified employee's
commencement of employment with the taxpayer, was a member
of a targeted group, as defined in Section 51(d) of the Internal
Revenue Code, or its successor.
(B) Priority for employment shall be provided to an individual
who is enrolled in a qualified program under the federal-3ob
Training Paftnership Workforce Investment Act or the—ffeater
California Work
Opportunity and Responsibility to Kids Act or who is eligible as
a member of a targeted group under the Work Opportunity Tax
Credit (Section 51 of the Internal Revenue Code), or its successor.
(5) "Taxpayer" means a person or entity engaged in a trade or
business within an enterprise zone designated pursuant to Chapter
12.8 (commencing with Section 7070) of the Government Code.
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1 (6) "Seasonal employment' means employment by a taxpayer
2 that has regular and predictable substantial reductions in trade or
3 business operations.
4 (c) The taxpayer shall do both of the following:
5 (1) (A) Obtain, within 21 days from the commencement date of
6 employment, from the Employment Development Department, as
7 permitted by federal law, the local county or city job
8 Paftnetzship Workforce Investment Act administrative entity, the
9 local county GAIN CalWORKs office or social services agency,
10 or the local government administering the enterprise zone, a
1 1 certification which provides that a qualified employee meets the
12 eligibility requirements specified in clause (iv) of subparagraph
13 (A) of paragraph (4) of subdivision (b). The Employment
14 Development Department may provide preliminary screening and
15 referral to a certifying agency. The Employment Development
16 Department shall develop a form for this purpose. The Department
17 of Housing and Community Development shall develop regulations
18 governing the. issuance of certificates by local governments
19 pursuant to subdivision (a) of Section 7086 of the Government
20 Code.
21 (13) Applications for certification must be submitted to the
22 certifying agency within 21 days of the commencement date of
23 employment ,for the employee. The certifying agency shall not
24 provide a certification for any employee whose employment
25 commenced more than 21 days before the taxpayer requests a
26 certification.
27 (2) Retain a copy of the certification and provide it upon request
28 to the Franchise Tax Board.
29 (d) (1) For purposes of this section:
30 (A) All employees of trades or businesses, which are not
31 incorporated, that are under common control shall be treated as
32 employed by a single taxpayer.
33 (B) The credit, if any, allowable by this section with respect to
34 each trade or business shall be determined by reference to its
35 proportionate share of the expense of the qualified wages giving
36 rise to the credit, and shall be allocated in that manner.
37 (C) Principles that apply in the case of controlled groups of
38 corporations, as specified in subdivision (d) of Section 23622.7,
39 shall apply with respect to determining employment.
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1 (2) If an employer acquires the major portion of a trade or
2 business of another employer (hereinafter in this paragraph referred
3 to as the "predecessor") or the major portion of a separate unit of
4 a trade or business of a predecessor, then, for purposes of applying
5 this section (other than subdivision (e)) for any calendar year
6 ending after that acquisition, the employment relationship between
7 a qualified employee and an employer shall not be treated as
8 ,terminated if the employee continues to be employed in that trade
9 or business.
10 (e) (1) (A) If the employment, other than seasonal employment,
11 of any qualified employee, with respect to whom qualified wages
12 are taken into account under subdivision (a) is terminated by the
13 taxpayer at any time during the first 270 days of that employment
14 (whether or not consecutive) or before the close of the 270th
15 calendar day after the day in which that employee completes 90
16 days of employment with the taxpayer, the tax imposed by this
17 part for the taxable year in which that employment is terminated
18 shall be increased by an amount equal to the credit allowed under
19 subdivision (a) for that taxable year and all prior taxable years
20 attributable to qualified wages paid or incurred with respect to that
21 employee.
22 (B) If the seasonal employment of any qualified employee, with
23 respect to whom qualified wages are taken into account under
24 subdivision (a) is not continued by the taxpayer for a period of
25 270 days of employment during the 60 -month period beginning
26 with the day the qualified employee commences seasonal
27 employment with the taxpayer, the tax imposed by this part, for
28 the taxable year that includes the 60th month following the month
29 in which the qualified employee commences seasonal employment
30 with the taxpayer, shall be increased by an amount equal to the
31 credit allowed under subdivision (a) for that taxable year and all
32 prior taxable years attributable to qualified wages paid or incurred
33 with respect to that qualified employee.
34 (2) (A) Subparagraph (A) of paragraph (1) shall not apply to
35 any of the following:
36 (i) A termination of employment of a qualified employee who
37 voluntarily leaves the employment of the taxpayer.
38 (ii) A termination of employment of a qualified employee who,
39 before the close of the period referred to in paragraph (1), becomes
40 disabled and unable to perform the services of that employment,
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1 unless that disability is removed before the close of that period
2 and the taxpayer fails to offer reemployment to that employee.
3 (iii) A termination of employment of a qualified employee, if
4 it is determined that the termination was due to the misconduct (as
5 defined in Sections 1.256-30 to 1256-43, inclusive, of Title 22 of
6 the California Code of Regulations) of that employee.
7 (iv) A termination of employment of a qualified employee due
8 to a substantial reduction in the trade or business operations of the
9 taxpayer.
10 (v) A termination of employment of a qualified employee, if
11 that employee is replaced by other qualified employees so as to
12 create a net increase in both the number of employees and the
13 hours of employment.
14 (B) Subparagraph (B) of paragraph (1) shall not apply to any
15 of the following:
16 (i) A failure to continue the seasonal employment of a qualified
17 employee who voluntarily fails to return to the seasonal
18 employment of the taxpayer.
19 (ii) A failure to continue the seasonal employment ofa qualified
20 employee who, before the close of the period referred to in
21 subparagraph (B) of paragraph (1), becomes disabled and unable
22 to perform the services of that seasonal employment, unless that
23 disability is removed before the close of that period and the
24 taxpayer fails to offer seasonal employment to that qualified
25 employee.
26 (iii) A failure to continue the seasonal employment of a qualified
27 employee, if it is determined that the failure to continue the
28 seasonal employment was due to the misconduct (as defined in
29 Sections 1256-30 to 1256-43, inclusive, of Title 22 of the California
30 Code of Regulations) of that qualified employee.
31 (iv) A failure to continue seasonal employment of a qualified
32 employee due to a substantial reduction in the regular seasonal
33 trade or business operations of the taxpayer.
34 (v) A failure to continue the seasonal employment of a qualified
35 employee, if that qualified employee is replaced by other qualified
36 employees so as to create a net increase in both the number of
37 seasonal employees and the hours of seasonal employment.
38 (C) For purposes of paragraph (1), the employment relationship
39 between the taxpayer and a qualified employee shall not be treated
40 as terminated by reason of a mere change in the form of conducting
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the trade or business of the taxpayer, if the qualified employee
continues to be employed in that trade or business and the taxpayer
retains a substantial interest in that trade or business.
(3) Any 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.
(f) In the case of an estate or trust, both of the following apply:
(1) The qualified wages for any 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) Any 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.
(g) For purposes of this section, "enterprise zone" means an
area designated as an enterprise zone pursuant to Chapter 12.8
(commencing with Section 7070) of Division 7 of Title 1 of the
Government Code.
(h) The credit allowable under this section shall be reduced by
the credit allowed under Sections 17053.10, 17053.17 and 17053.46
claimed for the same employee. The credit shall also be reduced
by the federal credit allowed under Section 51 of the Internal
Revenue Code.
In addition, any deduction otherwise allowed under this part for
the wages or salaries paid or incurred by the taxpayer upon which
the credit is based shall be reduced by the amount of the credit,
prior to any reduction required by subdivision (i) or 0).
(i) In the case where the credit otherwise allowed under this
section exceeds the "net tax" for the taxable year, that portion of
the credit that exceeds the "net tax" may be carried over and added
to the credit, if any, in succeeding taxable years, until the credit is
exhausted. The credit shall be applied first to the earliest taxable
years possible.
(j) (1) The amount of the credit otherwise allowed under this
section and Section 17053.70, including any credit carryover from
prior years, that may reduce the "net tax" for the taxable year shall
not exceed the amount of tax which would be imposed on the
taxpayer's business income attributable to the enterprise zone
determined as if that attributable income represented all of the
income of the taxpayer subject to tax under this part.
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1 (2) Attributable income shall be that portion of the taxpayer's
2 California source business income that is apportioned to the
3 enterprise zone. For that purpose, the taxpayer's business income
4 attributable to sources in this state first shall be determined in
5 accordance with Chapter 17 (commencing with Section 25 10 1) of
6 Part 11. That business income shall be further apportioned to the
7 enterprise zone in accordance with Article 2 (commencing with
8 Section 25120) of Chapter 17 of Part 11, modified for purposes
9 of this section in accordance with paragraph (3).
10 (3) Business income shall be apportioned to the enterprise zone
1 1 by multiplying the total California business income of the taxpayer
12 by a fraction, the numerator of which is the property factor plus
13 the payroll factor, and the denominator of which is two. For
14 purposes of this paragraph:
15 (A) The property factor is a fraction, the numerator of which is
16 the average value of the taxpayer's real and tangible personal
17 property owned or rented and used in the enterprise zone during
18 the taxable year, and the denominator of which is the average value
19 of all the taxpayer's real and tangible- personal property owned or
20 rented and used in this state during the taxable year.
21 (B) The payroll factor is a fraction, the numerator of which is
22 the total amount paid by the taxpayer in the enterprise zone during
23 the taxable year for compensation, and the denominator of which
24 is the total compensation paid by the taxpayer in this state during
25 the taxable year.
26 (4) The portion of any credit remaining, if any, after application
27 of this subdivision, shall be carried over to succeeding taxable
28 years, as if it were an amount exceeding the "net tax" for the
29 taxable year, as provided in subdivision (i).
30 (k) The changes made to this section by the act adding this
31 subdivision shall apply to taxable years beginning on or after
32 January 1, 1997.
33 (1) (1) On or before March 1 of the calendar year following the
34 calendar year in which a taxpayer obtained the certification
35 required by subdivision (c), and every year thereafter the taxpayer
36 must report to the certifying entity the following information for
37 each quaked employee:
38 (A) Total wages or other compensation paid to the quaked
39 employee.
40 (B) The type of work performed by the qualified employee.
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13— AB 1139
(C) The length of employment of the qualified employee.
(D) Any benefits provided by the taxpayer to the qualified
employee.
(2) A certifying entity may refuse to issue a certification for a
subsequently hired qualified employee to a taxpayer if a taxpayer
has failed to report the it?formation required by paragraph (1) for
qualified employees who have already been certified.
(m) The amendments made to this section by the act adding
subdivision shall apply to taxable years beginning on or after
January 1, 2010, and to vouchers for hiring credits issued on or
after January 1, 2010.
SEC. 2. Section 23634 of the Revenue and Taxation Code is
amended to read. -
23634. (a) For each taxable year beginning on or after January
1, 1998, there shall be allowed a credit against the "tax" (as defined
by Section 23036) to a qualified taxpayer who employs a qualified
employee in a targeted tax area during the taxable year. The credit
shall be equal to the sum of each of the following:
(1) Fifty percent of qualified wages in the first year of
employment.
(2) Forty percent of qualified wages in the second year of
employment.
(3) Thirty percent of qualified wages in the third year of
employment.
(4) Twenty percent of qualified wages in the fourth year of
employment.
(5) Ten percent of qualified wages in the fifth year of
employment.
(b) For purposes of this section:
(1) "Qualified wages" means:
(A) That (i) Except as provided in clause (ii), that portion of
wages paid or incurred by the qualified taxpayer during the taxable
year to qualified employees that does not exceed4-5$ percent
of the minimum wage.
(ii) "Qualified wages" means that portion of wages paid or
incurred by the taxpayer during the taxable year that does not
exceed percent of the minimum wage for qualf ed employees
that the qualified employer employs for at least 35 hours per week
and for whom the taxpayer pays for at least 80 percent of a»y of
the following:
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1 (1) Health care coverage that meets the minimum requirements
2 set forth in Chapter 2.2 (commencing with Section 1340) of
3 Division 2 of the Health and Safety Code.
4 (11) A group health insurance policy, as defined in subdivision
5 (b) of Section 106 of the Insurance Code, that covers hospital,
6 surgical, and medical care expenses, provided the maximum
7 out-of-pocket costs for insureds do not exceed the maximum
8 out-of-pocket costs for enrollees of health care service plans
9 providing benefits under a preferred provider organization policy.
10 For purposes of this section, a group health insurance policy shall
11 not include Medicare supplement, vision -only, dental -only,
12 Champus-supplement insurance, hospital indemnity, accident -only,
13 or specified disease insurance that pays benefits on a fixed benefit,
14 cash -payment -only basis.
15 (111) Any Taft -Hartley health and welfare fund or any other
16 lawful collective bargaining agreement that provides for health
17 and wefare coverage for collective bargaining unit or other
18 employees thereby covered.
19 (IV) Any employer-sponsored group health plan meeting the
20 requirements of the federal Employee Income Security Act of 1974,
21 provided it meets the benefits required tinder subclause (1) or (11)
22 of this clause.
23 (V) A multiple employer welfare agreement established pursuant
24 to Section 742.20 of the Insurance Code, provided that its benefits
25 have not changed after January 1, 2004, or that it meets the
26 benefits required under subclause (1) or (11) of this clause.
27 (VI) Coverage provided under the Public Employees 'Medical
28 and Hospital Care Act (Part 5 (commencing with Section 22850)
29 of Division 5 of Title 2 of the Government Code), provided it meets
30 the benefits required under subclause (1) or (11) of this clause or
31 is otherwise collectively bargained.
32 (VII) Health coverage provided by the University of California
33 to students of the University of California who are also employed
34 by the University of California.
35 (B) Wages received during the 60 -month period beginning with
36 the first day the employee commences employment with the
37 qualified taxpayer. Reemployment in connection with any increase,
38 including a regularly occurring seasonal increase, in the trade or
39 business operations of the qualified taxpayer does not constitute
40 commencement of employment for purposes of this section.
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(C) Qualified wages do not include any wages paid or incurred
by the qualified taxpayer on or after the targeted tax area expiration
date. However, wages paid or incurred with respect to qualified
employees who are employed by the qualified taxpayer within the
targeted tax area within the 60 -month period prior to the targeted
tax area expiration date shall continue to qualify for the credit
under this section after the targeted tax area expiration date, in
accordance with all provisions of this section applied as if the
targeted tax area designation were still in existence and binding.
(2) "Minimum wage" means the wage established by the
Industrial Welfare Commission as provided for in Chapter 1
(commencing with Section 1171) of Part 4 of Division 2 of the
Labor Code.
(3) "Targeted tax area expiration date" means the date the
targeted tax area designation expires, is revoked, is no longer
binding, or becomes inoperative.
(4) (A) "Qualified employee" means an individual who meets
all of the following requirements:
(i) At least 90 percent of his or her services for the qualified
taxpayer during the taxable year are directly related to the conduct
of the qualified taxpayer's trade or business located in a targeted
tax area.
(ii) Performs at least 50 percent of his or her services for the
qualified taxpayer during the taxable year in a targeted tax area.
(iii) Is hired by the qualified taxpayer after the date of original
designation of the area in which services were performed as a
targeted tax area.
(iv) Is any of the following:
(1) Immediately preceding the qualified employee's
commencement of employment with the qualified taxpayer, was
a person eligible for services under the federal Job Training
Partnership Act (29 U.S.C. Sec. 1501 et seq.), or its successor,
who is receiving, or is eligible to receive, subsidized employment,
training, or services funded by the federal Job Training Partnership
Act, or its successor.
(1I) Immediately preceding the qualified employee's
commencement of employment with the qualified taxpayer, was
a person eligible to be a voluntary or mandatory registrant under
the Greater Avenues for Independence Act of 1985 (GAIN)
provided for pursuant to Article 3.2 (commencing with Section
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AB 1139 —16-
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1 11320) of Chapter 2 of Part 3 of Division 9 of the Welfare and
2 Institutions Code, or its successor.
3 (III) Immediately preceding the qualified employee's
4 commencement of employment with the qualified taxpayer, was
5 an economically disadvantaged individual 14 years of age or older.
6 (IV) Immediately preceding the qualified employee's
7 commencement of employment with the qualified taxpayer, was
8 a dislocated worker who meets any of the following:
9 (aa)
10 (io) Has been terminated or laid off or who has received a notice
1 1 of termination or layoff from employment, is eligible for or has
12 exhausted entitlement to unemployment insurance benefits, and
13 is unlikely to return to his or her previous industry or occupation.
14 (lam
15 (ib) Has been terminated or has received a notice of termination
16 of employment as a result of any permanent closure or any
17 substantial layoff at a plant, facility, or enterprise, including an
18 individual who has not received written notification but whose
19 employer has made a public announcement of the closure or layoff.
20 (ee)
21 (ic) Is long-term unemployed and has limited opportunities for
22 employment or reemployment in the same or a similar occupation
23 in the area in which the individual resides, including an individual
24 55 years of age or older who may have substantial barriers to
25 employment by reason of age.
26 (dt�
27 (id) Was self-employed (including farmers and ranchers) and
28 is unemployed as a result of general economic conditions in the
29 community in which he or she resides or because of natural
30 disasters.
31 fee)
32 (ie) Was a civilian employee of the Department of Defense
33 employed at a military installation being closed or realigned under
34 the Defense Base Closure and Realignment Act of 1990.
35 fff)
36 (0 Was an active member of the Armed Forces or National
37 Guard as of September 30, 1990, and was either involuntarily
38 separated or separated pursuant to a special benefits program.
39 (go
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(ig) Is a seasonal or migrant worker who experiences chronic
seasonal unemployment and underemployment in the agriculture
industry, aggravated by continual advancements in technology and
mechanization.
fth)
(ih) Has been terminated or laid off, or has received a notice of
termination or layoff, as a consequence of compliance with the
Clean Air Act.
(V) Immediately preceding the qualified employee's
commencement of employment with the qualified taxpayer, was
a disabled individual who is eligible for or enrolled in, or has
completed a state rehabilitation plan or is a service -connected
disabled veteran, veteran of the Vietnam era, or veteran who is
recently separated from military service.
(VI) Immediately preceding the qualified employee's
commencement of employment with the qualified taxpayer, was
an ex -offender. An individual shall be treated as convicted if he
or she was placed on probation by a state court without a finding
of guilt.
(VII) Immediately preceding the qualified employee's
commencement of employment with the qualified taxpayer, was
a person eligible for or a recipient of any of the following:
f�
(ia) Federal Supplemental Security Income benefits.
(bb) Aid to Families with Dependent Ghildt-en.
(ib) Temporary Assistance for Needy Families.
fee)
(ic) Food stamps.
f4d)
(id) State and local general assistance.
(VIII) Immediately preceding the qualified employee's
commencement of employment with the qualified taxpayer, was
a member of a federally recognized Indian tribe, band, or other
group of Native American descent.
(1X) immediately pfeeeding the qualified employee's
- iployti:tent with the qualified taxpayer,
f x- --
(IX) Immediately preceding the qualified employee's
commencement of employment with the taxpayer, was a member
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AB 1139 -18-
1 of a targeted group, as defined in Section 51(d) of the Internal
2 Revenue Code, or its successor.
3 (B) Priority for employment shall be provided to an individual
4 who is enrolled in a qualified program under the federal-3eb
5 Tfaining Paftnership Workforce Training Act or theGreate
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6 Avenues for independenee Aet of 1985 California Work
7 Opportunities and Responsibility to Kids Act or who is eligible as
8 a member of a targeted group under the Work Opportunity Tax
9 Credit (Section 51 of the Internal Revenue Code), or its successor.
10 (5) (A) "Qualified taxpayer" means a person or entity that meets
1 1 both of the following:
12 (i) Is engaged in a trade or business within a targeted tax area
13 designated pursuant to Chapter 12.93 (commencing with Section
14 7097) of Division 7 of Title 1 of the Government Code.
15 (ii) Is engaged in those lines of business described in Codes
16 2000 to 2099, inclusive; 2200 to 3999, inclusive; 4200 to 4299,
17 inclusive; 4500 to 4599, inclusive; and 4700 to 5199, inclusive,
18 of the Standard Industrial Classification (SIC) Manual published
19 by the United States Office of Management and Budget, 1987
20 edition.
21 (B) In the case of any passthrough entity, the determination of
22 whether a taxpayer is a qualified taxpayer under this section shall
23 be made at the entity level and any credit under this section or
24 Section 17053.34 shall be allowed to the passthrough entity and
25 passed through to the partners or shareholders in accordance with
26 applicable provisions of this part or Part 10 (commencing with
27 Section 17001). For purposes of this subparagraph, the term
28 "passthrough entity" means any partnership or S corporation.
29 (6) "Seasonal employment" means employment by a qualified
30 taxpayer that has regular and predictable substantial reductions in
31 trade or business operations.
32 (c) if the qualified taxpayer is allowed a credit for qualified
33 wages pursuant to this section, only one credit shall be allowed to
34 the taxpayer under this part with respect to those qualified wages.
35 (d) The qualified taxpayer shall do both of the following:
36 (1) (A) Obtain, within 21 days of the commencement date of
37 employment, from the Employment Development Department, as
38 permitted by federal law, the local county or city4ob Training
39 n.. hip Workforce Investment Act administrative entity, the
40 local county GAIN Ca1WORKs office or social services agency,
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or the local government administering the targeted tax area, a
certification that provides that a qualified employee meets the
eligibility requirements specified in clause (iv) of subparagraph
(A) of paragraph (4) of subdivision (b). The Employment
Development Department may provide preliminary screening and
referral to a certifying agency. The Department of Housing and
Community Development shall develop regulations for the issuance
of certificates pursuant to subdivision (g) of Section 7097 of the
Government Code, and shall develop forms for this purpose.
(13) Applications for certification must be submitted to the
certifying agency within 21 days of the commencement date of
employment for the employee. The certifying agency shall not
provide a certification for any employee whose employment
commenced more than 21 days before the taxpayer requests a
certification.
(2) Retain a copy of the certification and provide it upon request
to the Franchise Tax Board.
(e) (1) For purposes of this section:
(A) All employees of all corporations that are members of the
same controlled group of corporations shall be treated as employed
by a single taxpayer.
(B) 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.
(C) For purposes of this subdivision, "controlled group of
corporations" means "controlled group of corporations" as defined
in Section 1563(a) of the Internal Revenue Code, except that:
(i) "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.
(ii) The determination shall be made without regard to
subsections (a)(4) and (e)(3)(C) of Section 1563 of the Internal
Revenue Code.
(2) 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 (f)) for any calendar year ending
after that acquisition, the employment relationship between a
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AB 1139 —20
1 qualified employee and an employer shall not be treated as
2 terminated if the employee continues to be employed in that trade
3 or business.
4 (f) (1) (A) If the employment, other than seasonal employment,
5 of any qualified employee with respect to whom qualified wages
6 are taken into account under subdivision (a) is terminated by the
7 qualified taxpayer at any time during the first 270 days of that
8 employment (whether or not consecutive) or before the close of
9 the 270th calendar day after the day in which that employee
10 completes 90 days of employment with the qualified taxpayer, the
11 tax imposed by this part for the taxable year in which that
12 employment is terminated shall be increased by an amount equal
13 to the credit allowed under subdivision (a) for that taxable year
14 and all prior taxable years attributable to qualified wages paid or
15 incurred with respect to that employee.
16 (B) If the seasonal employment of any qualified employee, with
17 respect to whom qualified wages are taken into account under
18 subdivision (a) is not continued by the qualified taxpayer for a
19 period of 270 days of employment during the 60 -month period
20 beginning with the day the qualified employee commences seasonal
21 employment with the qualified taxpayer, the tax imposed by this
22 part, for the taxable year that includes the 60th month following
23 the month in which the qualified employee commences seasonal
24 employment with the qualified taxpayer, shall be increased by an
25 amount equal to the credit allowed under subdivision (a) for that
26 taxable year and all prior taxable years attributable to qualified
27 wages paid or incurred with respect to that qualified employee.
28 (2) (A) Subparagraph (A) of paragraph (1) shall not apply to
29 any of the following:
30 (i) A tennination of employment of a qualified employee who
31 voluntarily leaves the employment of the qualified taxpayer.
32 (ii) A termination of employment of a qualified employee who,
33 before the close of the period referred to in subparagraph (A) of
34 paragraph (1), becomes disabled and unable to perform the services
35 of that employment, unless that disability is removed before the
36 close of that period and the qualified taxpayer fails to offer
37 reemployment to that employee.
38 (iii) A termination of employment of a qualified employee, if
39 it is determined that the termination was due to the misconduct (as
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defined in Sections 1256-30 to 1256-43, inclusive, of Title 22 of
the California Code of Regulations) of that employee.
(iv) A termination of employment of a qualified employee due
to a substantial reduction in the trade or business operations of the
taxpayer.
(v) A termination of employment of a qualified employee, if
that employee is replaced by other qualified employees so as to
create a net increase in both the number of employees and the
hours of employment.
(B) Subparagraph (B) of paragraph (1) shall not apply to any
of the following:
(i) A failure to continue the seasonal employment of a qualified
employee who voluntarily fails to return to the seasonal
employment of the qualified taxpayer.
(ii) A failure to continue the seasonal employment of a qualified
employee who, before the close of the period referred to in
subparagraph (B) of paragraph (1), becomes disabled and unable
to perform the services of that seasonal employment, unless that
disability is removed before the close of that period and the
qualified taxpayer fails to offer seasonal employment to that
qualified employee.
(iii) A failure to continue the seasonal employment of a qualified
employee, if it is determined that the failure to continue the
seasonal employment 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 qualified employee.
(iv) A failure to continue seasonal employment of a qualified
employee due to a substantial reduction in the regular seasonal
trade or business operations of the qualified taxpayer.
(v) A failure to continue the seasonal employment of a qualified
employee, if that qualified employee is replaced by other qualified
employees so as to create a net increase in both the number of
seasonal employees and the hours of seasonal employment.
(C) For purposes of paragraph (]),the employment relationship
between the qualified taxpayer and a qualified employee shall not
be treated as terminated by either of the following:
(i) By a transaction to which Section 381(a) of the Internal
Revenue Code applies, if the qualified employee continues to be
employed by the acquiring corporation.
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(ii) By reason of a mere change in the form of conducting the
trade or business of the qualified taxpayer, if the qualified
employee continues to be employed in that trade or business and
the qualified taxpayer retains a substantial interest in that trade or
business.
(3) Any 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.
(g) Rules similar to the rules provided in Sections 46(e) and (h)
of the Internal Revenue Code shall apply to both of the following:
(1) An organization to which Section 593 of the Internal
Revenue Code applies.
(2) A regulated investment company or a real estate investment
trust subject to taxation under this part.
(h) For purposes of this section, "targeted tax area" means an
area designated pursuant to Chapter 12.93 (commencing with
Section 7097) of Division 7 of Title 1 of the Government Code.
(i) In the case where the credit otherwise allowed under this
section exceeds the "tax" for the taxable year, that portion of the
credit that exceeds the "tax" may be carried over and added to the
credit, if any, in succeeding taxable years, until the credit is
exhausted. The credit shall be applied first to the earliest taxable
years possible.
(j) (1) The amount of the credit otherwise allowed under this
section and Section 23633, including any credit carryover from
prior years, that may reduce the "tax" for the taxable year shall
not exceed the amount of tax that would be imposed on the
qualified taxpayer's business income attributable to the targeted
tax area determined as if that attributable income represented all
of the income of the qualified taxpayer subject to tax under this
part.
(2) Attributable income shall be that portion of the taxpayer's
California source business income that is apportioned to the
targeted tax area. For that purpose, the taxpayer's business income
attributable to sources in this state first shall be determined in
accordance with Chapter 17 (commencing with Section 25101).
That business income shall be further apportioned to the targeted
tax area in accordance with Article 2 (commencing with Section
25120) of Chapter 17, modified for purposes of this section in
accordance with paragraph (3).
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(3) Business income shall be apportioned to the targeted tax
area by multiplying the total California business income of the
taxpayer by a fraction, the numerator of which is the property
factor plus the payroll factor, and the denominator of which is two.
For purposes of this paragraph:
(A) The property factor is a fraction, the numerator of which is
the average value of the taxpayer's real and tangible personal
property owned or rented and used in the targeted tax area during
the taxable year, and the denominator of which is the average value
of all the taxpayer's real and tangible personal property owned or
rented and used in this state during the taxable year.
(B) The payroll factor is a fraction, the numerator of which is
the total amount paid by the taxpayer in the targeted tax area during
the taxable year for compensation, and the denominator of which
is the total compensation paid by the taxpayer in this state during
the taxable year.
(4) The portion of any credit remaining, if any, after application
of this subdivision, shall be carried over to succeeding taxable
years, as if it were an amount exceeding the "tax" for the taxable
year, as provided in subdivision (h).
(5) In the event that a credit carryover is allowable under
subdivision (h) for any taxable year after the targeted tax area
designation has expired or been revoked, the targeted tax area shall
be deemed to remain in existence for purposes of computing the
limitation specified in this subdivision.
(k) (1) On or before March I of the calendar year following
the calendar year in which a taxpayer obtained the certification
required by subdivision (c), and every year thereafter, the taxpayer
must report to the certifying entity the following information for
each qualified employee.-
(A)
mployee:(A) Total wages or other compensation paid to the qualified
employee.
(B) The type of work performed by the qualified employee.
(C) The length of employment of the qualified employee.
(D) Any benefits provided by the taxpayer to the qualified
employee.
(2) A certifying entity may refuse to issue a certification for a
subsequently hired qualified employee to a taxpayer if a taxpayer
has failed to report the information required by paragraph (1) for
qualified employees who have already been hired.
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1 (l) The amendments made to this section by the act adding
2 subdivision shall apply to taxable years beginning on or after
3 January 1, 2010, and to vouchers for hiring credits issued on or
4 after January 1, 2010.
5 SEC. 3. (a) On or before October 1 of each calendar year, an
6 agency required to provide a certification regarding a qualified
7 employee pursuant to subdivision (c) of Section 17053.74 and
8 subdivision (d) of Section 23634 of the Revenue and Taxation Code
9 shall provide the Department of Housing and Community
10 Development with a report, in a form and manner determined by
1 1 the department, that includes, but is not limited to, a compilation
12 of the information provided to the certifying agency by a taxpayer
13 pursuant to subdivision (1) of Section 17053.74 and subdivision
14 (k) of Section 23634 of the Revenue and Taxation Code.
15 (b) The Housing and Community Development Department
16 shall consider the completeness and timeliness of the reports as
17 part of its auditing requirements under Section 7076.1 of the
18 Government Code.
19 (c•) Annually, the Housing and Community Development
20 Department shall submit the information provided pursuant to
21 subdivision (a) as a compilation report.
22 SEC. 4. This act provides,for a tax levy within the meaning of
23 Article IV of the Constitution and shall go into immediate effect.
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26 All matter omitted in this version of the bill
27 appears in the bill as introduced in the
28 Assembly, February 27, 2009 (JR11)
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