BILL NUMBER: SB 640	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 27, 2011

INTRODUCED BY   Senator Runner

                        FEBRUARY 18, 2011

   An act to add  and repeal  Sections 17053.50 and 23650
 to   of  the Revenue and Taxation Code,
relating to taxation, to take effect immediately, tax levy.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 640, as amended, Runner. Income and corporation taxes: tax
credit: employment.
   The Personal Income Tax Law and the Corporation Tax Law authorize
various credits against the taxes imposed by those laws.
   This bill would  , until a specified date  , under both
laws, provide a tax credit, in an amount as specified, to a taxpayer
for each qualified employee, as defined, who  has 
 actively  received unemployment insurance benefits for 6
months  immediately  prior to the time the taxpayer hires
the qualified employee.
   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.    This act shall be known, and may be
cited, as the California Employment Recovery Act of 2011. 
   SECTION 1.   SEC. 2.   Section 17053.50
is added to the Revenue and Taxation Code, to read:
   17053.50.  (a) For taxable years beginning on or after January 1,
2011, there shall be allowed as a credit against the "net tax," as
defined in Section 17039, a qualified amount for each qualified
employee employed by the taxpayer in a qualified job during the
taxable year.
   (b) For purposes of this section, the following definitions apply:

   (1)  (A)    "Qualified amount" shall be equal to
the sum of five hundred dollars ($500) per month for each qualified
employee employed by the taxpayer in a qualified job, multiplied by
the number of consecutive calendar months that the taxpayer employs
the qualified employee in a qualified job, but not to exceed 12
consecutive calendar months.  Where a qualified employee has
worked at least two weeks in a month for the taxpayer and earned a
gross salary of at least seven hundred fifty dollars ($750), the 12
consecutive calendar   month limitation may include two
two-week pay periods. The qualified amount for a two-week pay period
shall be two hundred fifty dollars ($250).  
   (B) The aggregate qualified amount allowed for any qualified
employee shall not exceed six thousand dollars ($6,000). 
   (2) "Qualified employee" means any person who  actively 
received unemployment insurance benefits for not less than six months
 immediately  prior to the time he or she was hired 
for the first time  by the taxpayer for a qualified job.
   (3) "Qualified job" means a nonseasonal, full-time employment
position within the State of California that would qualify the
employee for benefits under the Unemployment Insurance Code, not
including any benefits received under Section 1279.5 of the
Unemployment Insurance Code, and result in a  gross  salary
of not less than one thousand  dollars ($1,000) 
 five hundred dollars ($1,500)  in any month in which the
taxpayer seeks to apply the credit authorized by this section. 
   (c) The credit allowed by this section shall be in lieu of any
other credit that the taxpayer may otherwise claim pursuant to this
part with respect to a qualified employee.  
   (c) 
    (d)  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 the five succeeding
years if necessary, until the credit is exhausted. 
   (e) This section shall remain in effect only until January 1 of
the calendar year after the full calendar year in which California's
average unemployment rate falls below 10 percent, and as of that
January 1 is repealed. 
   SEC. 2.   SEC. 3.   Section 23650 is
added to the Revenue and Taxation Code, to read:
   23650.  (a) For taxable years beginning on or after January 1,
2011, there shall be allowed as a credit against the "tax," as
defined in Section 23036, a qualified amount for each qualified
employee employed by the taxpayer in a qualified job during the
taxable year.
   (b) For purposes of this section, the following definitions apply:

   (1)  (A)    "Qualified amount" shall be equal to
the sum of five hundred dollars ($500) per month for each qualified
employee employed by the taxpayer in a qualified job, multiplied by
the number of consecutive calendar months that the taxpayer employs
the qualified employee in a qualified job, but not to exceed 12
consecutive calendar months.  Where a qualified employee has
worked at least two weeks in a month for the taxpayer and earned a
gross salary of at least seven hundred fifty dollars ($750), the 12
consecutive calendar month limitation may include two two-week pay
periods. The qualified amount for a two-week pay period shall be two
hundred fifty dollars ($250).  
   (B) The aggregate qualified amount allowed for any qualified
employee shall not exceed six thousand dollars ($6,000).
   (2) "Qualified employee" means any person who  actively 
received unemployment insurance benefits for at least six months 
immediately  prior to the time he or she was hired  for the
first time  by the taxpayer for a qualified job.
   (3) "Qualified job" means a nonseasonal, full-time employment
position within the State of California that would qualify the
employee for benefits under the Unemployment Insurance Code, not
including any benefits received under Section 1279.5 of the
Unemployment Insurance Code, and result in a  gross  salary
of not less than one thousand  dollars ($1,000) 
 five hundred dollars ($1,500)  in any month in which the
taxpayer seeks to apply the credit authorized by this section. 
   (c) The credit allowed by this section shall be in lieu of any
other credit that the taxpayer may otherwise claim pursuant to this
part with respect to a qualified employee.  
   (c) 
    (d)  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 the five succeeding years if
necessary, until the credit is exhausted. 
   (e) This section shall remain in effect only until January 1 of
the calendar year after the full calendar year in which California's
average unemployment rate falls below 10 percent, and as of that
January 1 is repealed. 
   SEC. 3.   SEC. 4.   This act provides
for a tax levy within the meaning of Article IV of the Constitution
and shall go into immediate effect.