BILL NUMBER: AB 1439	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Levine

                        FEBRUARY 23, 2007

   An act to add Sections 17053.15 and 23631 to the Revenue and
Taxation Code, relating to taxation, to take effect immediately, tax
levy.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1439, as introduced, Levine. Personal income tax and
corporation tax laws: credits: employee fitness.
   The Personal Income Tax Law and the Corporation Tax Law authorize
various credits against the taxes imposed by those laws.
   This bill would authorize a credit against those taxes for each
taxable year beginning on or after January 1, 2008, in an amount
equal to 10% of the amount paid or incurred by a qualified taxpayer,
as defined, during the taxable year for qualified fitness
expenditures, as defined, for the taxpayer's employees performing
services in this state.
   This bill would take effect immediately as a tax levy.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 17053.15 is added to the Revenue and Taxation
Code, to read:
   17053.15.  (a) For each taxable year beginning on or after January
1, 2008, there shall be allowed as a credit against the "net tax,"
as defined in Section 17039, an amount equal to 10 percent of the
amount paid or incurred by a qualified taxpayer during the taxable
year for qualified fitness expenditures.
   (b) For purposes of this section, both of the following
definitions apply:
   (1) (A) "Qualified fitness expenditures" means amounts paid on or
incurred by a qualified taxpayer for any of the following:
   (i) The costs of equipping, operating, and maintaining a facility
owned by the taxpayer, located on the taxpayer's premises in this
state, and used exclusively for the purpose of promoting the physical
fitness of the taxpayer's employees in this state, including, but
not limited to, a gymnasium, weight training room, aerobics workout
space, swimming pool, running track, or any indoor or outdoor court,
field, or other site used for competitive sports events or games.
   (ii) The cost of equipping of, or providing any financial support
to, an amateur athletic team that engages in vigorous athletic
activity and is under the sponsorship of the taxpayer, either alone
or jointly with one or more other employers, if the membership of the
team consists entirely of the employees of the taxpayer in this
state, or the taxpayer and another employer or employers with whom
the taxpayer has joined to provide employee fitness equipment and
financial support.
   (iii) The cost of subsidizing an employee's membership with a
health studio or a health club that is located in this state.
   (iv) Fifty percent of the cost of employing a qualified person or
an organization to provide, on the taxpayer's business premises in
this state, either of the following services:
   (I) Information and guidance on subjects relating to personal and
family health, including, but not limited to, nutrition, hygiene, and
methods of preventing, recognizing, and combating substance abuse.
   (II) Instruction in, and opportunity for, fitness enhancements
activity, including, but not limited to, dance or other aerobic
exercise, yoga, muscle stretching, and martial arts routines.
   (v) Costs incurred in connection with hiring an organization to
operate an employee fitness facility, provide employee fitness
equipment and financial support, or provide employee fitness
instruction, on the taxpayer's premises in this state.
   (B) For purposes of this paragraph, the following definitions
apply:
   (i) "Amateur athletic team" means a team of persons who engage in
competitive athletic events for which no monetary remuneration is
provided, all of whom are employed by the taxpayer or an employer
with whom the taxpayer has joined to provide the employee fitness
equipment and financial support.
   (ii) "Qualified person" means a person certified by a recognized
national organization to provide the instruction and information, as
described in clause (iv) of subparagraph (A).
   (iii) "Vigorous athletic activity" means exertion that makes a
person sweat and breathe hard, such as basketball, soccer, running,
swimming laps, fast bicycling, fast dancing, and similar aerobic
activities.
   (2) "Qualified taxpayer" means any employer that has employees in
this state.
   (c) The credit allowed by this section shall be in lieu of any
deduction to which the taxpayer otherwise may be entitled for
expenses on which a credit under this section is claimed.
   (d) The credit allowed by this section to a qualified taxpayer may
not exceed either of the following:
   (1) Fifty percent of the qualified taxpayer's "net tax" for that
taxable year.
   (2) An amount that is equal to fifty dollars ($50) multiplied by
the average number of taxpayer's full-time employees in this state as
of the last day of the third, sixth, ninth, and twelfth months in
that taxable year.
   (e) When two or more qualified taxpayers jointly establish and
operate an employee fitness facility, provide employee fitness
equipment and financial support, or provide employee fitness
instruction in accordance with this section, the participating
taxpayers may apportion the total amount of the tax credit allowed by
this section in any manner they consider appropriate, subject to any
applicable regulations promulgated by the Franchise Tax Board, not
to exceed the limitations imposed by subdivision (d).
   (f) (1) In the case where the credit allowed by this section
exceeds the "net tax," the excess may be carried over to reduce the
"net tax" in the following year, and in the six succeeding years if
necessary, until the credit is exhausted.
   (2) A qualified taxpayer that files an amended return may not
receive any amount of credit, or credit carryover, pursuant to this
section in excess of the amount claimed by the taxpayer on its
original return for the taxable year. This paragraph does not apply
to increases in the amount of credit claimed under this section on an
amended return due to the use of any credit amount previously
carried forward for the taxable year on the original return or any
eligible prior taxable year.
   (g) Verification of payments to not-for-profit or for-profit
corporation, or to a person who provides health or fitness
instruction to a taxpayer's employees, must be in writing and must be
retained by the taxpayer in support of the credit claimed on the tax
return.
   (h) Application for credit for payments made to construct or
rehabilitate a facility used for the purpose of promoting the
physical fitness of the taxpayer's employees in this state must be
submitted to the Franchise Tax Board within six months after the
local building inspector deems that the construction or
rehabilitation of the facility is substantially completed.
Application for credit for qualified fitness expenditures must be
submitted to the Franchise Tax Board with the tax return on which the
credit is claimed.
   (i) The Franchise Tax Board shall prescribe rules and regulations
necessary to administer this section, including the provisions of
subdivision (e).
  SEC. 2.  Section 23631 is added to the Revenue and Taxation Code,
to read:
   23631.  (a) For each taxable year beginning on or after January 1,
2008, there shall be allowed as a credit against the "tax," as
defined in Section 23036, an amount equal to 10 percent of the amount
paid or incurred by a qualified taxpayer during the taxable year for
qualified fitness expenditures.
   (b) For purposes of this section, both of the following
definitions apply:
   (1) (A) "Qualified fitness expenditures" means amounts paid on or
incurred by a qualified taxpayer for any of the following:
   (i) The costs of equipping, operating, and maintaining a facility
owned by the taxpayer, located on the taxpayer's premises in this
state, and used exclusively for the purpose of promoting the physical
fitness of the taxpayer's employees in this state, including, but
not limited to, a gymnasium, weight training room, aerobics workout
space, swimming pool, running track, or any indoor or outdoor court,
field, or other site used for competitive sports events or games.
   (ii) The cost of equipping of, or providing any financial support
to, an amateur athletic team that engages in vigorous athletic
activity and is under the sponsorship of the taxpayer, either alone
or jointly with one or more other employers, if the membership of the
team consists entirely of the employees of the taxpayer in this
state or the taxpayer and another employer or employers with whom the
taxpayer has joined to provide employee fitness equipment and
financial support.
   (iii) The cost of subsidizing an employee's membership with a
health studio or a health club that is located in this state.
   (iv) Fifty percent of the cost of employing a qualified person or
an organization to provide, on the taxpayer's business premises in
this state, either of the following services:
   (I) Information and guidance on subjects relating to personal and
family health, including, but not limited to, nutrition, hygiene, and
methods of preventing, recognizing, and combating substance abuse.
   (II) Instruction in, and opportunity for, fitness enhancements
activity, including, but not limited to, dance or other aerobic
exercise, yoga, muscle stretching, and martial arts routines.
   (v) Costs incurred in connection with hiring an organization to
operate an employee fitness facility, provide employee fitness
equipment and financial support, or provide employee fitness
instruction, on the taxpayer's premises in this state.
   (B) For purposes of this paragraph, the following definitions
apply:
   (i) "Amateur athletic team" means a team of persons who engage in
competitive athletic events for which no monetary remuneration is
provided, all of whom are employed by the taxpayer or an employer
with whom the taxpayer has joined to provide the employee fitness
equipment and financial support.
   (ii) "Qualified person" means a person certified by a recognized
national organization to provide the instruction and information, as
described in clause (iv) of subparagraph (A).
   (iii) "Vigorous athletic activity" means exertion that makes a
person sweat and breathe hard, such as basketball, soccer, running,
swimming laps, fast bicycling, fast dancing, and similar aerobic
activities.
   (2) "Qualified taxpayer" means any employer that has employees in
this state.
   (c) The credit allowed by this section shall be in lieu of any
deduction to which the taxpayer otherwise may be entitled for
expenses on which a credit under this section is claimed.
   (d) The credit allowed by this section to a qualified taxpayer may
not exceed either of the following:
   (1) Fifty percent of the qualified taxpayer's "tax" for that
taxable year.
   (2) An amount that is equal to fifty dollars ($50) multiplied by
the average number of taxpayer's full-time employees in this state as
of the last day of the third, sixth, ninth, and twelfth months in
that taxable year.
   (e) When two or more qualified taxpayers jointly establish and
operate an employee fitness facility, provide employee fitness
equipment and financial support, or provide employee fitness
instruction in accordance with this section, the participating
taxpayers may apportion the total amount of the tax credit allowed by
this section in any manner they consider appropriate, subject to any
applicable regulations promulgated by the Franchise Tax Board, not
to exceed the limitations imposed by subdivision (d).
   (f) (1) In the case where the credit allowed by this section
exceeds the "tax," the excess may be carried over to reduce the "tax"
in the following year, and in the six succeeding years if necessary,
until the credit is exhausted.
   (2) A qualified taxpayer that files an amended return may not
receive any amount of credit or credit carryover pursuant to this
section in excess of the amount claimed by the taxpayer on its
original return for the taxable year. This paragraph does not apply
to increases in the amount of credit claimed under this section on an
amended return due to the use of any credit amount previously
carried forward for the taxable year on the original return or any
eligible prior taxable year.
   (g) Verification of payments to not-for-profit or for-profit
corporation, or to a person who provides health or fitness
instruction to a taxpayer's employees, must be in writing and must be
retained by the taxpayer in support of the credit claimed on the tax
return.
   (h) Application for credit for payments made to construct or
rehabilitate a facility used for the purpose of promoting the
physical fitness of the taxpayer's employees in this state must be
submitted to the Franchise Tax Board within six months after the
local building inspector deems that the construction or
rehabilitation of the facility is substantially completed.
Application for credit for qualified fitness expenditures must be
submitted to the Franchise Tax Board with the tax return on which the
credit is claimed.
   (i) The Franchise Tax Board shall prescribe rules and regulations
necessary to administer this section, including the provisions of
subdivision (e).
  SEC. 3.  This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.