BILL NUMBER: AB 2388	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 29, 2012

INTRODUCED BY   Assembly Member Beall

                        FEBRUARY 24, 2012

    An act to amend Section 23609 of the Revenue and Taxation
Code, relating to taxation.   An act to amend Section
35159 of the Public Resources Code, relating to the Santa Clara
County Open-Space Authority. 


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2388, as amended, Beall.  Corporation Tax Law: credit:
research.   Santa Clara County Open-Space Authority:
authorization to contract.  
   The Santa Clara County Open-Space Authority Act establishes
procedures for the creation of the Santa Clara County Open-Space
Authority, and prescribes the functions and duties of the authority
with regard to the management of lands and facilities under the
jurisdiction of the authority. The act authorizes the authority to
contract with any person or public agency for any services, supplies,
equipment, or materials, or for the construction or completion of
any building, structure, or improvement. The act requires that a
contract for any services, supplies, equipment, or materials, with
the exception of certain legal appraisal services, that exceeds
$10,000 be contracted for and let to the lowest responsible bidder,
but authorizes the governing board of the authority, if 2 or more
bids are the same and the lowest, to accept the one it chooses. The
act permits contracts of $50,000 or less to be let by informal
bidding procedures, but requires contracts of more than $50,000 to be
let by formal bidding procedures.  
   This bill would instead require that a contract for any supplies,
equipment, or materials, that exceeds $25,000 be contracted for and
let to the lowest responsible bidder but would authorize the
governing board of the authority, if 2 more bids are the same and
lowest, to accept the one it chooses. The bill would further permit
contracts of $75,000 or less to be let by informal bidding
procedures, but would require that contracts of more than $75,000 be
let by formal bidding procedures. The bill would specify that those
requirements do not apply to contracts for services, including, but
not limited to, planning, consulting, legal, or appraisal services,
or to contracts for services authorized to be procured pursuant to
specified provisions with private architects, engineering, land
surveying, and construction project management firms.  
   (2) The bill would declare that, due to the unique circumstances
applicable only to the Santa Clara County Open-Space Authority that
the bill is intended to address, a general statute within the meaning
of specified provisions of the Constitution cannot be made
applicable and a special statute is necessary.  
   The Corporation Tax Law allows a credit against tax for amounts
paid or incurred in increasing research activities in accordance with
federal law, as modified.  
   This bill would make a technical, nonsubstantive change to these
provisions. 
   Vote: majority. Appropriation: no. Fiscal committee: no
  yes  . State-mandated local program: no.


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

   SECTION 1.    Section 35159 of the   Public
Resources Code   is amended to read: 
   35159.  (a) The authority may contract with any person or public
agency for any services, supplies, equipment, or materials, or for
the construction or completion of any building, structure, or
improvement. 
   (b) When a contract for any services, supplies, equipment, or
materials, except for legal or appraisal services, or except for
those services authorized to be procured under Chapter 10 (commencing
with Section 4525) of Division 5 of Title 1 of the Government Code
exceeds ten thousand dollars ($10,000), it shall be contracted for
and let to the lowest responsible bidder. If two or more bids are the
same and the lowest, the governing board may accept the one it
chooses. Contracts of fifty thousand dollars ($50,000) or less may be
let by informal bidding procedure, but contracts of more than fifty
thousand dollars ($50,000) shall be let by formal bidding procedures.
 
   (b) (1) Notwithstanding any other laws, a contract for any
supplies, equipment, or materials, that exceeds twenty-five thousand
dollars ($25,000) shall be contracted for and let to the lowest
responsible bidder. If two or more bids are the same and the lowest,
the governing board may accept the one it chooses. A contract of
seventy-five thousand dollars ($75,000) or less may be let by
informal bidding procedures, but a contract of more than seventy-five
thousand dollars ($75,000) shall be let by formal bidding
procedures.  
   (2) This section does not apply to contracts for services,
including, but not limited to, planning, consulting, legal or
appraisal services, or to contracts for services authorized to be
procured pursuant to Chapter 10 (commencing with Section 4525) of
Division 5 of Title 1 of the Government Code. 
   (c) The notice inviting bids shall set a date for the opening of
bids. The first publication or posting of the notice shall be at
least 10 days before the date of opening the bids.  Notice
  For purposes of contracts requiring formal bidding,
notice  shall be published at least twice, at least five days
apart, in a newspaper of general circulation in the authority, or if
there is none, it shall be posted in at least three public places in
the authority. The notice shall distinctly state the nature of the
contract.
   (d) The governing board may reject any bids. If the governing
board rejects all bids, it may either readvertise or adopt a
resolution, by four-fifths vote, declaring that the contract can be
performed more economically by the employees of the authority or
obtained at a lower price on the open market. Upon adoption of the
resolution, the governing board may undertake the project without
further complying with subdivisions (b) and (c).
   (e) If bids are not received, the governing board may undertake
the project without further complying with subdivisions (b) to (d),
inclusive.
   (f) In the case of an emergency, the governing board may adopt a
resolution by a two-thirds vote of all the members of the governing
board declaring that the public interest and necessity demand
immediate expenditure of public money to safeguard life, health, or
property. The governing board may expend any sum required in the
emergency without submitting the expenditure to bid.
   For the purpose of this subdivision, "emergency" means a sudden,
unexpected occurrence, involving a clear and imminent danger,
demanding immediate action to prevent or mitigate loss of, or damage
to, life, health, property, or essential public services. Emergency
includes a fire, flood, earthquake, or other soil or geologic
movements, as well as a riot, accident, or sabotage.
   SEC. 2.    The Legislature finds and declares that,
because of the unique circumstances applicable only to the Santa
Clara County Open-Space Authority, a statute of general applicability
cannot be enacted within the meanin   g of subdivision (b)
of Section 16 of Article IV of the California Constitution,
therefore, this special statute is necessary.  
  SECTION 1.    Section 23609 of the Revenue and
Taxation Code is amended to read:
   23609.  For each taxable year beginning on or after January 1,
1987, there shall be allowed as a credit against the "tax" (as
defined by Section 23036) an amount determined in accordance with
Section 41 of the Internal Revenue Code, except as follows:
   (a) For each taxable year beginning before January 1, 1997, both
of the following modifications shall apply:
   (1) The reference to "20 percent" in Section 41(a)(1) of the
Internal Revenue Code is modified to read "8 percent."
   (2) The reference to "20 percent" in Section 41(a)(2) of the
Internal Revenue Code is modified to read "12 percent."
   (b) (1) For each taxable year beginning on or after January 1,
1997, and before January 1, 1999, both of the following modifications
shall apply:
   (A) The reference to "20 percent" in Section 41(a)(1) of the
Internal Revenue Code is modified to read "11 percent."
   (B) The reference to "20 percent" in Section 41(a)(2) of the
Internal Revenue Code is modified to read "24 percent."
   (2) For each taxable year beginning on or after January 1, 1999,
and before January 1, 2000, both of the following shall apply:
   (A) The reference to "20 percent" in Section 41(a)(1) of the
Internal Revenue Code is modified to read "12 percent."
   (B) The reference to "20 percent" in Section 41(a)(2) of the
Internal Revenue Code is modified to read "24 percent."
   (3) For each taxable year beginning on or after January 1, 2000,
both of the following shall apply:
   (A) The reference to "20 percent" in Section 41(a)(1) of the
Internal Revenue Code is modified to read "15 percent."
   (B) The reference to "20 percent" in Section 41(a)(2) of the
Internal Revenue Code is modified to read "24 percent."
   (c) (1) With respect to any expense paid or incurred after the
operative date of Section 6378, Section 41(b)(1) of the Internal
Revenue Code is modified to exclude from the definition of "qualified
research expense" any amount paid or incurred for tangible personal
property that is eligible for the exemption from sales or use tax
provided by Section 6378.
   (2) "Qualified research" and "basic research" shall include only
research that is conducted in California.
   (d) The provisions of Section 41(e)(7)(A) of the Internal Revenue
Code, shall be modified so that "basic research," for purposes of
this section, includes any basic or applied research including
scientific inquiry or original investigation for the advancement of
scientific or engineering knowledge or the improved effectiveness of
commercial products, except that the term does not include any of the
following:
   (1) Basic research conducted outside California.
   (2) Basic research in the social sciences, arts, or humanities.
   (3) Basic research for the purpose of improving a commercial
product if the improvements relate to style, taste, cosmetic, or
seasonal design factors.
   (4) Any expenditure paid or incurred for the purpose of
ascertaining the existence, location, extent, or quality of any
deposit of ore or other mineral (including oil and gas).
   (e) (1) In the case of a taxpayer engaged in any biopharmaceutical
research activities that are described in codes 2833 to 2836,
inclusive, or any research activities that are described in codes
3826, 3829, or 3841 to 3845, inclusive, of the Standard Industrial
Classification (SIC) Manual published by the United States Office of
Management and Budget, 1987 edition, or any other biotechnology
research and development activities, the provisions of Section 41(e)
(6) of the Internal Revenue Code shall be modified to include both of
the following:
   (A) A qualified organization as described in Section 170(b)(1)(A)
(iii) of the Internal Revenue Code and owned by an institution of
higher education as described in Section 3304(f) of the Internal
Revenue Code.
   (B) A charitable research hospital owned by an organization that
is described in Section 501(c)(3) of the Internal Revenue Code, is
exempt from taxation under Section 501(a) of the Internal Revenue
Code, is not a private foundation, is designated a "specialized
laboratory cancer center," and has received Clinical Cancer Research
Center status from the National Cancer Institute.
   (2) For purposes of this subdivision:
   (A) "Biopharmaceutical research activities" means those activities
that use organisms or materials derived from organisms, and their
cellular, subcellular, or molecular components, in order to provide
pharmaceutical products for human or animal therapeutics and
diagnostics. Biopharmaceutical activities make use of living
organisms to make commercial products, as opposed to pharmaceutical
activities that make use of chemical compounds to produce commercial
products.
   (B) "Other biotechnology research and development activities"
means research and development activities consisting of the
application of recombinant DNA technology to produce commercial
products, as well as research and development activities regarding
pharmaceutical delivery systems designed to provide a measure of
control over the rate, duration, and site of pharmaceutical delivery.

   (f) 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 succeeding years if necessary, until the credit
has been exhausted.
   (g) For each taxable year beginning on or after January 1, 1998,
the reference to "Section 501(a)" in Section 41(b)(3)(C) of the
Internal Revenue Code, relating to contract research expenses, is
modified to read "this part or Part 10 (commencing with Section
17001)."
   (h) (1) For each taxable year beginning on or after January 1,
2000:
   (A) The reference to "3 percent" in Section 41(c)(4)(A)(i) of the
Internal Revenue Code is modified to read "one and forty-nine
hundredths of one percent."
   (B) The reference to "4 percent" in Section 41(c)(4)(A)(ii) of the
Internal Revenue Code is modified to read "one and ninety-eight
hundredths of one percent."
   (C) The reference to "5 percent" in Section 41(c)(4)(A)(iii) of
the Internal Revenue Code is modified to read "two and forty-eight
hundredths of one percent."
   (2) Section 41(c)(4)(B) shall not apply and in lieu thereof an
election under Section 41(c)(4)(A) of the Internal Revenue Code may
be made for any taxable year of the taxpayer beginning on or after
January 1, 1998. That election shall apply to the taxable year for
which made and all succeeding taxable years unless revoked with the
consent of the Franchise Tax Board.
   (3) Section 41(c)(7) of the Internal Revenue Code, relating to
gross receipts, is modified to take into account only those gross
receipts from the sale of property held primarily for sale to
customers in the ordinary course of the taxpayer's trade or business
that is delivered or shipped to a purchaser within this state,
regardless of f.o.b. point or any other condition of the sale.
   (4) Section 41(c)(5) of the Internal Revenue Code, relating to
election of the alternative simplified credit, shall not apply.
   (i) Section 41(h) of the Internal Revenue Code, relating to
termination, shall not apply.
   (j) Section 41(g) of the Internal Revenue Code, relating to
special rule for passthrough of credit, is modified by each of the
following:
   (1) The last sentence shall not apply.
   (2) If the amount determined under Section 41(a) of the Internal
Revenue Code for any taxable year exceeds the limitation of Section
41(g) of the Internal Revenue Code, that amount may be carried over
to other taxable years under the rules of subdivision (f), except
that the limitation of Section 41(g) of the Internal Revenue Code
shall be taken into account in each subsequent taxable year.
   (k) Section 41(a)(3) of the Internal Revenue Code shall not apply.

   (l) Section 41(b)(3)(D) of the Internal Revenue Code, relating to
amounts paid to eligible small businesses, universities, and federal
laboratories, shall not apply.
   (m) Section 41(f)(6) of the Internal Revenue Code, relating to
energy research consortium, shall not apply.