BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 106|
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THIRD READING
Bill No: AB 106
Author: Assembly Budget Committee
Amended: 9/5/13 in Senate
Vote: 21
SENATE BUDGET & FISCAL REVIEW COMMITTEE : 10-5, 9/9/13
AYES: Leno, Beall, Block, DeSaulnier, Hancock, Hill, Jackson,
Monning, Roth, Torres
NOES: Emmerson, Anderson, Berryhill, Nielsen, Wyland
NO VOTE RECORDED: Wright
ASSEMBLY FLOOR : Not relevant
SUBJECT : Revenue and Taxation, General Government, and Public
Safety
SOURCE : Author
DIGEST : This bill makes technical and clarifying changes to
tax incentive programs that are scheduled to change effective
December 31, 2013, by expanding the ability to claim certain
credits for sales taxes paid by businesses; clarifies the
designation of census tracts that would be eligible for the new
hiring tax credit, specifies the make-up of the California
Competes Tax Credit Committee (Committee); and makes technical
changes in laws related to public safety and allocations for law
enforcement activities.
ANALYSIS : This bill makes changes and clarifications to
existing law:
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AB 106
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1.Allows for an income tax credit, equivalent to the sales tax
paid on qualified capital equipment, to be claimed if the
equipment is purchased prior to the end of the calendar year
and placed in service prior to January 1, 2015, and provides
other clarifications to existing enterprise zone tax credits.
Under existing law, businesses located in enterprise zones,
and/or certain other targeted tax areas, are allowed to claim
the credit if the purchase is made and the equipment is placed
into service prior to the end of the calendar year ending
December 31, 2013.
2.Provides clarification to provisions related to the
designation of eligible census tracts for purposes of the
hiring credit. The hiring credit recently enacted by the
Legislature is available to businesses located in certain
census tracts of high unemployment and poverty rates.
3.Specifies that the Director of the Governor's Office of
Business and Economic Development serves as Chair of the
Committee, and that Senate and Assembly appointees may not be
members of the Legislature. The Committee is authorized to
award specified tax credits according to written agreements
between taxpayers and the state.
4.Expands the definition of "remote interest" so that board or
commission members that were members of a 501(c)(5) will still
be required to recuse from voting on issues that they may have
a remote interest in, but will not be in violation of state
conflict of interest code.
5.Updates the Enhancing Law Enforcement Activities Subaccount
allocation percentages to ensure that all funds ($489.9
million) are allocated as intended.
6.Removes the requirement that counties collect information on
the number of felons who would have been subject to certain
sentencing provisions if felony probation had not been
granted. SB 75 (Senate Budget and Fiscal Review Committee,
Chapter 31, Statutes of 2013) required counties to provide
this data in order to be eligible for certain grant monies.
However, counties are not otherwise required to collect this
information. If this requirement is not removed, numerous
counties would be ineligible for grants provided pursuant to
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AB 106
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SB 678 (Leno and Benoit, Chapter 608, Statutes of 2009) and SB
75.
7.Extends the sunset date for the Juvenile Interstate Compact
from July 1, 2014 to July 1, 2016. The Juvenile Interstate
Compact ensures the supervision of juvenile offenders placed
outside of California.
8.Includes an appropriation of $100,000 from the General Fund to
the Governor's Office of Economic Development to provide staff
support for the Committee.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: Yes
According to the Senate Budget and Fiscal Review Committee,
Regarding the provisions related to enterprise zone tax credits,
these revenue effects were incorporated in the estimates for AB
93 (Assembly Budget Committee, Chapter 69, Statutes of 2013) and
SB 90 (Galgiani, Chapter 70, Statutes of 2013), both adopted by
the Legislature in June of this year. Department of Finance
(DOF) therefore indicates that these provisions of the bill have
zero revenue impact relative to the 2013 Budget Act revenue
baseline. According to DOF, a preliminary analysis indicates
that if the bill is not enacted, additional revenues of
approximately $20.0 million would be received as a result of
increased income tax liabilities.
JA:ej 9/10/13 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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