Amended in Assembly September 11, 2013

Senate Bill No. 365

Introduced by Senator Wolk

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(Principal coauthors: Assembly Members Alejo and Logue)

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(Coauthors: Senators Evans, Monning, and Nielsen)

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(Coauthors: Assembly Members Chesbro, Levine, and Yamada)

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February 20, 2013

An act to begin insert amend Sections 15820.903 and 15820.913 of the Government Code, and to end insert add Section begin delete 41 to the Revenue and Taxation end delete begin insert 1978 to the Welfare and Institutions end insert Code, relating to begin delete taxation end delete begin insert jails end insert .

LEGISLATIVE COUNSEL’S DIGEST

SB 365, as amended, Wolk. begin delete Income and corporation taxes: credits: information and operative time period. end delete begin insert Jail construction: funding. end insert

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Existing law authorizes the Department of Corrections and Rehabilitation, participating counties, and the State Public Works Board to acquire, design, and construct local jail facilities approved by the Board of State and Community Corrections (BSCC). Existing law authorizes the State Public Works Board to issue revenue bonds, notes, or bond anticipation notes in the amounts of $445,771,000 and $774,229,000, in 2 phases, to finance the acquisition, design, and construction, and a reasonable construction reserve, of approved local jail facilities, as specified. The funds derived from those revenue bonds, notes, or bond anticipation notes are continuously appropriated for the purposes described above.

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This bill would decrease the authorization for revenue bonds, notes, or bond anticipation notes in the first phase from $445,771,000 to $365,771,000 and increase the authorization of the 2nd phase from $774,229,000 to $854,229,000.

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Existing law authorizes the Department of Corrections and Rehabilitation, a participating county, and the board to acquire, design, renovate, or construct a local youthful offender rehabilitative facility, approved by the BSCC, or a site or sites owned by, or subject to a lease or option to purchase held by, a participating county. Existing law authorizes the issuance of up to $300,000,000 in revenue bonds, notes, or bond anticipation notes to finance the acquisition, design, renovation, or construction, and a reasonable construction reserve, of approved local youthful offender rehabilitative facilities.

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This bill would, in the event that a county that has been conditionally awarded financing later determines that participating with other counties in a shared regional facility would provide an improved solution to the county’s needs and the needs of other counties, authorize the county to apply to the BSCC for redirection of the conditional award to another county that will be the lead county for the regional facility, in conjunction with the original county and, potentially, other counties. The bill would authorize the board to redirect the conditional award, prior to any approval and establishment of the project, if certain determinations are made by the BSCC.

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Existing law imposes various taxes and allows specified credits, deductions, exclusions, and exemptions in computing those taxes.

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This bill would require any bill, introduced on or after January 1, 2014, that would authorize a personal income or corporation tax credit to contain, among other provisions, (1) specified goals, purposes, and objectives that the tax credit will achieve, (2) detailed performance indicators to measure whether the tax credit is meeting those goals, purposes, and objectives, and (3) a requirement that the tax credit cease to be operative no later than 10 taxable years after its effective date, as specified.

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Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

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begin insert Section 15820.903 of the end insert begin insert Government Code end insert begin insert is
amended to read: end insert

15820.903.  

(a) The SPWB may issue up to begin delete four hundred
forty-five end delete begin insert three hundred sixty-five end insert million seven hundred
seventy-one thousand dollars begin delete ($445,771,000) end delete begin insert ($365,771,000) end insert in
revenue bonds, notes, or bond anticipation notes, pursuant to
Chapter 5 of Part 10b of Division 3 of Title 2 (commencing with
Section 15830) to finance the acquisition, design, or construction,
and a reasonable construction reserve, of approved local jail
facilities described in Section 15820.901, and any additional
amount authorized under Section 15849.6 to pay for the cost of
financing.

(b) Proceeds from the revenue bonds, notes, or bond anticipation
notes may be utilized to reimburse a participating county for the
costs of acquisition, preliminary plans, working drawings, and
construction for approved projects.

(c) Notwithstanding Section 13340, funds derived pursuant to
this section and Section 15820.902 are continuously appropriated
for purposes of this chapter.

(d) This section shall become inoperative on June 30, 2017, and
no project may be commenced after that date; however, projects
that have already commenced by that date may be completed and
financed with bonds issued pursuant to this chapter.

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begin insert SEC. 2. end insert   

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begin insert Section 15820.913 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

15820.913.  

(a) The SPWB may issue up to begin delete seven hundred
seventy-four end delete begin insert eight hundred fifty-four end insert million two hundred
twenty-nine thousand dollars begin delete ($774,229,000) end delete begin insert ($854,229,000) end insert in
revenue bonds, notes, or bond anticipation notes, pursuant to
Chapter 5 of Part 10b of Division 3 of Title 2 (commencing with
Section 15830) to finance the acquisition, design, or construction,
and a reasonable construction reserve, of approved local jail
facilities described in Section 15820.911, and any additional
amount authorized under Section 15849.6 to pay for the cost of
financing.

(b) Proceeds from the revenue bonds, notes, or bond anticipation
notes may be used to reimburse a participating county for the costs
of acquisition, preliminary plans, working drawings, and
construction for approved projects.

(c) Notwithstanding Section 13340, funds derived pursuant to
this section and Section 15820.912 are continuously appropriated
for purposes of this chapter.

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begin insert SEC. 3. end insert   

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begin insert Section 1978 is added to the end insert begin insert Welfare and Institutions
Code end insert begin insert , end insert immediately following Section 1977 begin insert , to read: end insert

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begin insert 1978. end insert   

In the event that a county that has been conditionally
awarded financing, pursuant to this article, later determines that
participating with other counties in a shared regional facility
would provide an improved solution to the county’s needs and the
needs of other counties, the original county may apply to the Board
of State and Community Corrections (BSCC) for redirection of
the conditional award to another county that will be the lead county
for the regional facility, in conjunction with the original county
and, potentially, other counties. If the BSCC determines, based on
findings submitted by the regional consortium of counties, that the
redirection will result in cost savings, regional efficiencies,
increased services, and improved outcomes, and that the design
of the joint facility will enhance program delivery, health and
mental health services, and the safety and security of minors, the
BSCC may authorize the redirection of the conditional award.
Redirection may only be considered prior to any approval or
establishment of the project by the board.

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SECTION 1.  

The Legislature finds and declares the following:

(a) Government at all levels enacts tax preferences to promote
equity among taxpayers and enhance economic growth in a way
that is inexpensive to administer and provides direct benefits to
taxpayers.

(b) National and state public finance experts recommend that
tax preferences be evaluated alongside direct spending programs,
as both are public initiatives meant to accomplish specified goals.

(c) Revenue losses attributable to federal tax preferences exceed
any other category of federal spending, including defense, Medicaid
and Medicare, Social Security, debt service, or discretionary
spending.

(d) California now forgoes more than $47 billion in revenue
from tax preferences, according to the Department of Finance.

(e) Many current tax preferences contain neither sunset
provisions, nor goals and objectives to measure the performance
of the tax preference.

(f) Many current tax preferences neither require taxpayers to
submit data demonstrating the tax preference’s effectiveness, nor
for state agencies to collect and send data to the Legislature to
evaluate the tax preference.

(g) The Legislature should apply the same level of review and
performance measure that it applies to spending programs to tax
preference programs, including tax credits.

SEC. 2.  

Section 41 is added to the Revenue and Taxation Code,
to read:

41.  

Notwithstanding any other law, any bill, introduced on or
after January 1, 2014, that would authorize a new credit against
the “net tax,” as defined in Section 17039, or against the “tax,” as
defined in Section 23036, or both, shall contain all of the following:

(a) Specific goals, purposes, and objectives that the tax credit
will achieve.

(b) Detailed performance indicators for the Legislature to use
when measuring whether the tax credit meets the goals, purposes,
and objectives stated in the bill.

(c) Data collection requirements to enable the Legislature to
determine whether the tax credit is meeting, failing to meet, or
exceeding those specific goals, purposes, and objectives. The
requirements shall include the specific data and baseline
measurements to be collected and remitted in each year the credit
is in effect, in order for the Legislature to measure the change in
performance indicators, and the specific taxpayers, state agencies,
or other entities required to collect and remit data.

(d) A requirement that the tax credit shall cease to be operative
no later than 10 taxable years after its effective date, and as of
January 1 of the year following the end of the operative period is
repealed.

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