Amended in Assembly August 7, 2014

Amended in Assembly September 3, 2013

Amended in Assembly June 20, 2013

Amended in Senate May 15, 2013

Amended in Senate April 4, 2013

Senate Bill No. 718

Introduced by begin delete Senator Yee end delete begin insert Senators Roth and Knight end insert

begin insert

(Principal Coauthors: Assembly Members Cooley, Fox, Medina, Muratsuchi, Quirk-Silva, and Salas)

end insert begin insert

(Coauthors: Senators Anderson, Berryhill, Block, Cannella, Fuller, Gaines, Hill, Huff, Morrell, Nielsen, Padilla, Vidak, Walters, and Wyland)

end insert begin insert

(Coauthors: Assembly Members Achadjian, Alejo, Atkins, Bloom, Bocanegra, Bradford, Ian Calderon, Chau, Dickinson, Gorell, Gray, Grove, Hall, Harkey, Roger Hernández, Holden, Linder, Maienschein, Nazarian, Nestande, Olsen, Pan, V. Manuel Pérez, Waldron, and Wilk)

end insert

February 22, 2013

An act to begin delete add Section 6401.8 to the Labor Code, relating to employment safety end delete begin insert amend Section 51298 of the Government Code, and to amend Section 23636 of the Revenue and Taxation Code, relating to economic development, and declaring the urgency thereof, to take effect immediately end insert .

LEGISLATIVE COUNSEL’S DIGEST

SB 718, as amended, begin delete Yee end delete   begin insert Roth end insert . begin delete Hospitals: workplace violence prevention plan. end delete begin insert Capital investment incentive programs: corporation tax credit: new advanced strategic aircraft program. end insert

begin insert

(1) Existing law, until July 1, 2015, authorizes a county, city and county, or city to establish a capital investment incentive program, pursuant to which the county, city and county, or city is authorized to pay a capital investment incentive amount, as defined, that does not exceed the amount of property tax derived from that portion of the assessed value of a qualified manufacturing facility that exceeds $25,000,000, to a proponent of a qualified manufacturing facility. Existing law defines a “proponent” as a party and requires a party to meet certain requirements, including that the party will be the fee owner of the qualified manufacturing facility upon the completion of that facility, as provided.

end insert begin insert

This bill would, until July 1, 2015, additionally authorize the party to be the lessee or the occupant under a government-owned contractor-operator enhanced use lease agreement of the qualified manufacturing facility upon the completion of that facility.

end insert begin insert

(2) Existing law, the Corporation Tax Law, for taxable years beginning on or after January 1, 2015, and before January 1, 2030, allows, with regard to the manufacture of a new advanced strategic aircraft for the United States Air Force, a credit against the taxes imposed under that law in an amount equal to 171⁄2% of qualified wages, as defined, paid or incurred with respect to qualified full-time employees, as multiplied by an annual full-time equivalent ratio, by the qualified taxpayer, defined as a taxpayer that is a major first-tier subcontractor with regard to the manufacture of that aircraft.

end insert begin insert

This bill would define a qualified taxpayer to also include a prime contractor awarded a prime contract to manufacture a new advanced strategic aircraft for the United States Air Force. The bill would limit this credit by providing that the aggregate number of total annual full-time equivalents, as defined, of all qualified taxpayers may not exceed 1,100.

end insert begin insert

This bill would declare that it is to take effect immediately as an urgency statute.

end insert begin delete

Existing law regulates the operation of health facilities, including hospitals.

end delete begin delete

Existing law, the California Occupational Safety and Health Act of 1973, imposes safety responsibilities on employers and employees, including the requirement that an employer establish, implement, and maintain an effective injury prevention program, and makes specified violation of these provisions a crime.

end delete begin delete

This bill would prohibit a hospital, as specified, from preventing an employee from, or taking punitive or retaliatory action against an employee for, seeking assistance and intervention from local emergency services or law enforcement for a violent incident. The bill would also require a hospital to provide evaluation and treatment, as specified, for an employee who is injured or is otherwise a victim of a violent incident.

end delete begin delete

The bill would require a hospital to document and keep for 5 years a written record of all violent incidents against a hospital employee, as defined, and to report to the division any violent incident, as specified. The bill would also authorize the division to assess a civil penalty against a hospital for failure to report a violent incident, as specified. The bill would further require the division to post on its Internet Web site a report regarding violent incidents at hospitals, as specified, and to adopt regulations implementing these provisions by January 1, 2015.

end delete begin delete

Because this bill would expand the scope of a crime, the bill would impose a state-mandated local program.

end delete begin delete

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

end delete begin delete

This bill would provide that no reimbursement is required by this act for a specified reason.

end delete

Vote:  begin delete majority end delete begin insert ²⁄₃ end insert . Appropriation: no. Fiscal committee: yes. State-mandated local program:  begin delete yes end delete begin insert no end insert .

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

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 51298 of the end insert begin insert Government Code end insert begin insert , as
amended by Section 1 of Chapter 116 of the Statutes of 2014, is
amended to read: end insert

51298.  

It is the intent of the Legislature in enacting this chapter
to provide local governments with opportunities to attract large
manufacturing facilities to invest in their communities and to
encourage industries, such as high technology, aerospace,
automotive, biotechnology, software, environmental sources, and
others, to locate and invest in those facilities in California.

(a) Commencing in the 1998-99 fiscal year, the governing body
of a county, city and county, or city, may, by means of an ordinance
or resolution approved by a majority of its entire membership,
elect to establish a capital investment incentive program. In any
county, city and county, or city in which the governing body has
so elected, the county, city and county, or city shall, upon the
approval by a majority of the entire membership of its governing
body of a written request therefor, pay a capital investment
incentive amount to the proponent of a qualified manufacturing
facility for up to 15 consecutive fiscal years. A request for the
payment of capital investment incentive amounts shall be filed by
a proponent in writing with the governing body of an electing
county, city and county, or city in the time and manner specified
in procedures adopted by that governing body. In the case in which
the governing body of an electing county, city and county, or city
approves a request for the payment of capital investment incentive
amounts, both of the following conditions shall apply:

(1) The consecutive fiscal years during which a capital
investment incentive amount is to be paid shall commence with
the first fiscal year commencing after the date upon which the
qualified manufacturing facility is certified for occupancy or, if
no certification is issued, the first fiscal year commencing after
the date upon which the qualified manufacturing facility
commences operation.

(2) In accordance with paragraph (4) of subdivision (d), the
annual payment to a proponent of each capital investment incentive
amount shall be contingent upon the proponent’s payment of a
community services fee.

(b) For purposes of this section:

(1) “Qualified manufacturing facility” means a proposed
manufacturing facility that meets all of the following criteria:

(A) The proponent’s initial investment in that facility, in real
and personal property, necessary for the full and normal operation
of that facility, made pursuant to the capital investment incentive
program, that comprises any portion of that facility or has its situs
at that facility, exceeds one hundred fifty million dollars
($150,000,000). Compliance with this subparagraph shall be
certified by the Governor’s Office of Business and Economic
Development upon the director’s approval of a proponent’s
application for certification of a qualified manufacturing facility.
An application for certification shall be submitted by a proponent
to the Governor’s Office of Business and Economic Development
in writing in the time and manner as specified by the director.

(B) The facility is to be located within the jurisdiction of the
electing county, city and county, or city to which the request is
made for payment of capital investment incentive amounts.

(C) The facility is operated by any of the following:

(i) A business described within Code 3359 or 3364 of the 2012
North American Industry Classification System (NAICS) Manual
published by the United States Office of Management and Budget.

(ii) A business engaged in the recovery of minerals from
geothermal resources, including the proportional amount of a
geothermal electric generating plant that is integral to the recovery
process by providing electricity for it.

(iii) A business engaged in the manufacturing of parts or
components related to the production of electricity using solar,
wind, biomass, hydropower, or geothermal resources on or after
July 1, 2010.

(D) The proponent is currently engaged in any of the following:

(i) Commercial production.

(ii) The perfection of the manufacturing process.

(iii) The perfection of a product intended to be manufactured.

(2) “Proponent” means a party or parties that meet all of the
following criteria:

(A) The party is named in the application to the county, city
and county, or city within which the qualified manufacturing
facility would be located for a permit to construct a qualified
manufacturing facility.

(B) The party will be the fee owner begin insert , lessee, or occupant under
a government-owned contractor operator enhanced use lease
agreement end insert of the qualified manufacturing facility upon the
completion of that facility. Notwithstanding the previous sentence,
the party may enter into a sale-leaseback transaction and
nevertheless be considered the proponent.

(C) If a proponent that is receiving capital investment incentive
amounts subsequently leases the subject qualified manufacturing
facility to another party, the lease may provide for the payment to
that lessee of any portion of a capital investment incentive amount.
Any lessee receiving any portion of a capital investment incentive
amount shall also be considered a proponent for the purposes of
subdivision (d).

(3) “Capital investment incentive amount” means, with respect
to a qualified manufacturing facility for a relevant fiscal year, an
amount up to or equal to the amount of ad valorem property tax
revenue begin delete derived by end delete begin insert allocated to end insert the participating local agency begin insert ,
which excludes the revenue transfers required by Sections 97.2
and 97.3 of the Revenue and Taxation Code, end insert from the taxation of
that portion of the total assessed value of that real and personal
property described in subparagraph (A) of paragraph (1) that is in
excess of twenty-five million dollars ($25,000,000).

(4) “Manufacturing” means the activity of converting or
conditioning property by changing the form, composition, quality,
or character of the property for ultimate sale at retail or use in the
manufacturing of a product to be ultimately sold at retail.
Manufacturing includes any improvements to tangible personal
property that result in a greater service life or greater functionality
than that of the original property.

(c) A city or special district may, upon the approval by a
majority of the entire membership of its governing body, pay to
the county, city and county, or city an amount equal to the amount
of ad valorem property tax revenue allocated to that city or special
district, but not the actual allocation, derived from the taxation of
that portion of the total assessed value of that real and personal
property described in subparagraph (A) of paragraph (1) of
subdivision (b) that is in excess of twenty-five million dollars
($25,000,000).

(d) A proponent whose request for the payment of capital
investment incentive amounts is approved by an electing county,
city and county, or city shall enter into a community services
agreement with that county, city and county, or city that includes,
but is not limited to, all of the following provisions:

(1) A provision requiring that a community services fee be
remitted by the proponent to the county, city and county, or city,
in each fiscal year, in an amount that is equal to 25 percent of the
capital investment incentive amount calculated for that proponent
for that fiscal year, except that in no fiscal year shall the amount
of the community services fee exceed two million dollars
($2,000,000).

(2) A provision specifying the dates in each relevant fiscal year
upon which payment of the community services fee is due and
delinquent, and the rate of interest to be charged to a proponent
for any delinquent portion of the community services fee amount.

(3) A provision specifying the procedures and rules for the
determination of underpayments or overpayments of a community
services fee, for the appeal of determinations of any underpayment,
and for the refunding or crediting of any overpayment.

(4) A provision specifying that a proponent is ineligible to
receive a capital investment incentive amount if that proponent is
currently delinquent in the payment of any portion of a community
services fee amount, if the qualified manufacturing facility is
constructed in a manner materially different from the facility as
described in building permit application materials, or if the facility
is no longer operated as a qualified manufacturing facility meeting
the requirements of paragraph (1) of subdivision (b). If a proponent
becomes ineligible to receive a capital investment incentive amount
as a result of an agreement provision included pursuant to this
subparagraph, the running of the number of consecutive fiscal
years specified in an agreement made pursuant to subdivision (a)
is not tolled during the period in which the proponent is ineligible.

(5) A provision that sets forth a job creation plan with respect
to the relevant qualified manufacturing facility. The plan shall
specify the number of jobs to be created by that facility, and the
types of jobs and compensation ranges to be created thereby. The
plan shall also specify that for the entire term of the community
services agreement, both of the following shall apply:

(A) All of the employees working at the qualified manufacturing
facility shall be covered by an employer-sponsored health benefits
plan, with the exception of any employee who was offered but
declined coverage due to other available group coverage.

(B) The average weekly wage, exclusive of overtime, paid to
all of the employees working at the qualified manufacturing
facility, who are not management or supervisory employees, shall
be not less than the state average weekly wage.

For the purpose of this subdivision, “state average weekly wage”
means the average weekly wage paid by employers to employees
covered by unemployment insurance, as reported to the
Employment Development Department for the four calendar
quarters ending June 30 of the preceding calendar year.

(6) (A)   In the case in which the proponent fails to operate the
qualified manufacturing facility as required by the community
services agreement, a provision that requires the recapture of any
portion of any capital investment incentive amounts previously
paid to the proponent equal to the lesser of the following:

(i) All of the capital investment incentive amounts paid to the
proponent, less all of the community services fees received from
the proponent, and less any capital investment incentive amounts
previously recaptured.

(ii) The last capital investment incentive amount paid to the
proponent, less the last community services fee received from the
proponent, multiplied by 40 percent of the number of years
remaining in the community services agreement, but not to exceed
10 years, and less any capital investment incentive amounts
previously recaptured.

(B) If the proponent fails to operate the qualified manufacturing
facility as required by the community services agreement, the
county, city and county, or city may, upon a finding that good
cause exists, waive any portion of the recapture of any capital
investment incentive amount due under this subdivision. For the
purpose of this subdivision, good cause includes, but is not limited
to, the following:

(i) The proponent has sold or leased the property to a person
who has entered into an agreement with the county, city and
county, or city to assume all of the responsibilities of the proponent
under the community services agreement.

(ii) The qualified manufacturing facility has been rendered
inoperable and beyond repair as a result of an act of God, civil
disorder, failure of power, riots, insurrections, war, acts of
terrorism, or any other causes, whether the kind herein enumerated
or otherwise, not within the control of the qualified manufacturing
facility claiming good cause, which restrict or interfere with a
qualified manufacturing facility’s ability to timely perform, and
which by the exercise of reasonable due diligence, such party is
or would have been unable to prevent or overcome.

(C) For purposes of this subdivision, failure to operate a
qualified manufacturing facility as required by the community
services agreement includes, but is not limited to, failure to
establish the number of jobs specified in the jobs creation plan
created pursuant to paragraph (5).

(e) (1)   Each county, city and county, or city that elects to
establish a capital investment incentive program shall notify the
Governor’s Office of Business and Economic Development of its
election to do so no later than June 30th of the fiscal year in which
the election was made.

(2) In addition to the information required to be reported
pursuant to paragraph (1), each county, city and county, or city
that has elected to establish a capital investment incentive program
shall notify the Governor’s Office of Business and Economic
Development each fiscal year no later than June 30th of the amount
of any capital investment incentive payments made and the
proponent of the qualified manufacturing facility to whom the
payments were made during that fiscal year.

(3) The Governor’s Office of Business and Economic
Development shall compile the information submitted by each
county, city and county, and city pursuant to paragraphs (1) and
(2) and submit a report to the Legislature containing this
information no later than October 1, every two years commencing
October 1, 2000.

(f) This section shall become inoperative on July 1, 2015.

(g) A capital investment incentive program established pursuant
to this section before the effective date of the act adding this
subdivision may remain in effect for the full term of that program.

(h) This section is repealed on January 1, 2016.

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 51298 of the end insert begin insert Government Code end insert begin insert , as added by
Section 2 of Chapter 116 of the Statutes of 2014, is amended to
read: end insert

51298.  

It is the intent of the Legislature in enacting this chapter
to provide local governments with opportunities to attract large
manufacturing facilities to invest in their communities and to
encourage industries, such as high technology, aerospace,
automotive, biotechnology, software, environmental sources, and
others, to locate and invest in those facilities in California.

(a) Commencing in the 1998-99 fiscal year, the governing body
of a county, city and county, or city, may, by means of an ordinance
or resolution approved by a majority of its entire membership,
elect to establish a capital investment incentive program. In any
county, city and county, or city in which the governing body has
so elected, the county, city and county, or city shall, upon the
approval by a majority of the entire membership of its governing
body of a written request therefor, pay a capital investment
incentive amount to the proponent of a qualified manufacturing
facility for up to 15 consecutive fiscal years. A request for the
payment of capital investment incentive amounts shall be filed by
a proponent in writing with the governing body of an electing
county, city and county, or city in the time and manner specified
in procedures adopted by that governing body. In the case in which
the governing body of an electing county, city and county, or city
approves a request for the payment of capital investment incentive
amounts, both of the following conditions shall apply:

(1) The consecutive fiscal years during which a capital
investment incentive amount is to be paid shall commence with
the first fiscal year commencing after the date upon which the
qualified manufacturing facility is certified for occupancy or, if
no certification is issued, the first fiscal year commencing after
the date upon which the qualified manufacturing facility
commences operation.

(2) In accordance with paragraph (4) of subdivision (d), the
annual payment to a proponent of each capital investment incentive
amount shall be contingent upon the proponent’s payment of a
community services fee.

(b) For purposes of this section:

(1) “Qualified manufacturing facility” means a proposed
manufacturing facility that meets all of the following criteria:

(A) The proponent’s initial investment in that facility, in real
and personal property, necessary for the full and normal operation
of that facility, made pursuant to the capital investment incentive
program, that comprises any portion of that facility or has its situs
at that facility, exceeds one hundred fifty million dollars
($150,000,000). Compliance with this subparagraph shall be
certified by the Governor’s Office of Business and Economic
Development upon the director’s approval of a proponent’s
application for certification of a qualified manufacturing facility.
An application for certification shall be submitted by a proponent
to the Governor’s Office of Business and Economic Development
in writing in the time and manner as specified by the director.

(B) The facility is to be located within the jurisdiction of the
electing county, city and county, or city to which the request is
made for payment of capital investment incentive amounts.

(C) The facility is operated by any of the following:

(i) A business described in Codes 3321 to 3399, inclusive, or
Codes 541711 or 541712 of the 2012 North American Industry
Classification System (NAICS) Manual published by the United
States Office of Management and Budget.

(ii) A business engaged in the recovery of minerals from
geothermal resources, including the proportional amount of a
geothermal electric generating plant that is integral to the recovery
process by providing electricity for it.

(iii) A business engaged in the manufacturing of parts or
components related to the production of electricity using solar,
wind, biomass, hydropower, or geothermal resources on or after
July 1, 2010.

(D) The proponent is currently engaged in any of the following:

(i) Commercial production.

(ii) The perfection of the manufacturing process.

(iii) The perfection of a product intended to be manufactured.

(2) “Proponent” means a party or parties that meet all of the
following criteria:

(A) The party is named in the application to the county, city
and county, or city within which the qualified manufacturing
facility would be located for a permit to construct a qualified
manufacturing facility.

(B) The party will be the fee owner of the qualified
manufacturing facility upon the completion of that facility.
Notwithstanding the previous sentence, the party may enter into
a sale-leaseback transaction and nevertheless be considered the
proponent.

(C) If a proponent that is receiving capital investment incentive
amounts subsequently leases the subject qualified manufacturing
facility to another party, the lease may provide for the payment to
that lessee of any portion of a capital investment incentive amount.
Any lessee receiving any portion of a capital investment incentive
amount shall also be considered a proponent for the purposes of
subdivision (d).

(3) “Capital investment incentive amount” means, with respect
to a qualified manufacturing facility for a relevant fiscal year, an
amount up to or equal to the amount of ad valorem property tax
revenue begin delete derived by end delete begin insert allocated to end insert the participating local agency begin insert ,
which excludes the revenue transfers required by Sections 97.2
and 97.3 of the Revenue and Taxation Code, end insert from the taxation of
that portion of the total assessed value of that real and personal
property described in subparagraph (A) of paragraph (1) that is in
excess of one hundred fifty million dollars ($150,000,000).

(4) “Manufacturing” means the activity of converting or
conditioning property by changing the form, composition, quality,
or character of the property for ultimate sale at retail or use in the
manufacturing of a product to be ultimately sold at retail.
Manufacturing includes any improvements to tangible personal
property that result in a greater service life or greater functionality
than that of the original property.

(c) A city or special district may, upon the approval by a
majority of the entire membership of its governing body, pay to
the county, city and county, or city an amount equal to the amount
of ad valorem property tax revenue allocated to that city or special
district, but not the actual allocation, derived from the taxation of
that portion of the total assessed value of that real and personal
property described in subparagraph (A) of paragraph (1) of
subdivision (b) that is in excess of one hundred fifty million dollars
($150,000,000).

(d) A proponent whose request for the payment of capital
investment incentive amounts is approved by an electing county,
city and county, or city shall enter into a community services
agreement with that county, city and county, or city that includes,
but is not limited to, all of the following provisions:

(1) A provision requiring that a community services fee be
remitted by the proponent to the county, city and county, or city,
in each fiscal year, in an amount that is equal to 25 percent of the
capital investment incentive amount calculated for that proponent
for that fiscal year, except that in no fiscal year shall the amount
of the community services fee exceed two million dollars
($2,000,000).

(2) A provision specifying the dates in each relevant fiscal year
upon which payment of the community services fee is due and
delinquent, and the rate of interest to be charged to a proponent
for any delinquent portion of the community services fee amount.

(3) A provision specifying the procedures and rules for the
determination of underpayments or overpayments of a community
services fee, for the appeal of determinations of any underpayment,
and for the refunding or crediting of any overpayment.

(4) A provision specifying that a proponent is ineligible to
receive a capital investment incentive amount if that proponent is
currently delinquent in the payment of any portion of a community
services fee amount, if the qualified manufacturing facility is
constructed in a manner materially different from the facility as
described in building permit application materials, or if the facility
is no longer operated as a qualified manufacturing facility meeting
the requirements of paragraph (1) of subdivision (b). If a proponent
becomes ineligible to receive a capital investment incentive amount
as a result of an agreement provision included pursuant to this
subparagraph, the running of the number of consecutive fiscal
years specified in an agreement made pursuant to subdivision (a)
is not tolled during the period in which the proponent is ineligible.

(5) A provision that sets forth a job creation plan with respect
to the relevant qualified manufacturing facility. The plan shall
specify the number of jobs to be created by that facility, and the
types of jobs and compensation ranges to be created thereby. The
plan shall also specify that for the entire term of the community
services agreement, both of the following shall apply:

(A) All of the employees working at the qualified manufacturing
facility shall be covered by an employer-sponsored health benefits
plan, with the exception of any employee who was offered but
declined coverage due to other available group coverage.

(B) The average weekly wage, exclusive of overtime, paid to
all of the employees working at the qualified manufacturing
facility, who are not management or supervisory employees, shall
be not less than the state average weekly wage. For the purpose
of this subdivision, “state average weekly wage” means the average
weekly wage paid by employers to employees covered by
unemployment insurance, as reported to the Employment
Development Department for the four calendar quarters ending
June 30 of the preceding calendar year.

(6) (A) In the case in which the proponent fails to operate the
qualified manufacturing facility as required by the community
services agreement, a provision that requires the recapture of any
portion of any capital investment incentive amounts previously
paid to the proponent equal to the lesser of the following:

(i) All of the capital investment incentive amounts paid to the
proponent, less all of the community services fees received from
the proponent, and less any capital investment incentive amounts
previously recaptured.

(ii) The last capital investment incentive amount paid to the
proponent, less the last community services fee received from the
proponent, multiplied by 40 percent of the number of years
remaining in the community services agreement, but not to exceed
10 years, and less any capital investment incentive amounts
previously recaptured.

(B) If the proponent fails to operate the qualified manufacturing
facility as required by the community services agreement, the
county, city and county, or city may, upon a finding that good
cause exists, waive any portion of the recapture of any capital
investment incentive amount due under this subdivision. For the
purpose of this subdivision, good cause includes, but is not limited
to, the following:

(i) The proponent has sold or leased the property to a person
who has entered into an agreement with the county, city and
county, or city to assume all of the responsibilities of the proponent
under the community services agreement.

(ii) The qualified manufacturing facility has been rendered
inoperable and beyond repair as a result of an act of God, civil
disorder, failure of power, riots, insurrections, war, acts of
terrorism, or any other causes, whether the kind herein enumerated
or otherwise, not within the control of the qualified manufacturing
facility claiming good cause, which restrict or interfere with a
qualified manufacturing facility’s ability to timely perform, and
which by the exercise of reasonable due diligence, such party is
or would have been unable to prevent or overcome.

(C) For purposes of this subdivision, failure to operate a
qualified manufacturing facility as required by the community
services agreement includes, but is not limited to, failure to
establish the number of jobs specified in the jobs creation plan
created pursuant to paragraph (5).

(e) (1) Each county, city and county, or city that elects to
establish a capital investment incentive program shall notify the
Governor’s Office of Business and Economic Development of its
election to do so no later than June 30th of the fiscal year in which
the election was made.

(2) In addition to the information required to be reported
pursuant to paragraph (1), each county, city and county, or city
that has elected to establish a capital investment incentive program
shall notify the Governor’s Office of Business and Economic
Development each fiscal year no later than June 30th of the amount
of any capital investment incentive payments made and the
proponent of the qualified manufacturing facility to whom the
payments were made during that fiscal year.

(3) The Governor’s Office of Business and Economic
Development shall compile the information submitted by each
county, city and county, and city pursuant to paragraphs (1) and
(2) and submit a report to the Legislature containing this
information no later than October 1, every two years commencing
October 1, 2016.

(f) This section shall become operative on July 1, 2015.

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 23636 of the end insert begin insert Revenue and Taxation Code end insert begin insert is
amended to read: end insert

23636.  

(a) For each taxable year beginning on or after January
1, 2015, and before January 1, 2030, a qualified taxpayer shall be
allowed a credit against the “tax,” as defined in Section 23036, in
an amount equal to 171⁄2 percent of qualified wages paid or incurred
by the qualified taxpayer during the taxable year to qualified
full-time begin delete employees multiplied by the annual full-time equivalent
ratio. end delete begin insert employees, subject to the limitations under subdivision (c). end insert

(b) For purposes of this section:

(1) “Annual full-time equivalent” means either of the following:

(A) In the case of a qualified full-time employee paid hourly
qualified wages, “annual full-time equivalent” means the total
number of hours worked for the qualified taxpayer by the qualified
full-time employee, not to exceed 2,000 hours per employee,
divided by 2,000.

(B) In the case of a salaried qualified full-time employee,
“annual full-time equivalent” means the total number of weeks
worked for the qualified taxpayer by the qualified employee
divided by 52.

begin delete

(2) “Annual full-time equivalent ratio” means a ratio, the
numerator of which is 1,100 and the denominator of which is the
number of a qualified taxpayer’s qualified full-time employees
computed on an annual full-time equivalent basis for the taxable
year. The annual full-time equivalent ratio may not be greater than
one.

end delete begin delete

(3)

end delete

begin insert (2) end insert  “Qualified full-time employee” means an individual that is
employed in this state by the qualified taxpayer and satisfies both
of the following:

(A) The individual’s services for the qualified taxpayer are
begin insert performed in this state and are end insert at least 80 percent directly related
to the qualified taxpayer’s begin insert prime contract or end insert subcontract to design,
test, manufacture property, or otherwise support production of
property for ultimate use in or as a component of a new advanced
strategic aircraft for the United States Air Force.

(B) The individual is paid compensation from the qualified
taxpayer that satisfies either of the following conditions:

(i) Is begin insert paid end insert qualified wages begin delete paid end delete by the qualified taxpayer for
services not less than an average of 35 hours per week.

(ii) Is begin insert paid end insert a salary begin delete paid end delete by the qualified taxpayer as
compensation during the taxable year for full-time employment,
within the meaning of Section 515 of the Labor Code.

begin delete

(4)

end delete

begin insert (3) end insert  “Qualified taxpayer” means any taxpayer that is begin insert either a
prime contractor awarded a prime contract or end insert a major first-tier
subcontractor awarded a subcontract to manufacture property for
ultimate use in or as a component of a new advanced strategic
aircraft for the United States Air Force. begin insert For purposes of this
paragraph, the term “prime contractor” means a contractor that
was awarded a prime contract for the manufacturing of a new
advanced strategic aircraft for the United States Air Force. end insert For
purposes of this paragraph, the term “major first-tier subcontractor”
means a subcontractor that was awarded a subcontract in an amount
of at least 35 percent of the amount of the initial prime contract
awarded for the manufacturing of a new advanced strategic aircraft
for the United States Air Force.

begin delete

(5)

end delete

begin insert (4) end insert  “Qualified wages” means wages paid or incurred by the
qualified taxpayer during the taxable year with respect to qualified
full-time employees that are direct labor costs, within the meaning
of Section 263A of the Internal Revenue Code, relating to
capitalization and inclusion in inventory costs of certain expenses,
allocable to property manufactured in this state by the qualified
taxpayer for ultimate use in or as a component of a new advanced
strategic aircraft for the United States Air Force.

begin delete

(6)

end delete

begin insert (5) end insert  “New advanced strategic aircraft for the United States Air
Force” means a new advanced strategic aircraft developed and
produced for the United States Air Force under the New Advanced
Strategic Aircraft Program.

begin delete

(7)

end delete

begin insert (6) end insert  “New Advanced Strategic Aircraft Program” means the
project begin delete designed end delete to design, test, manufacture, or otherwise support
production of a new advanced strategic aircraft for the United
States Air Force under a contract that is expected to be awarded
in the first or second calendar quarter of 2015. begin insert “New Advanced
Strategic Aircraft Program” does not include any contract awarded
prior to August 1, 2014, and does not include a program to
upgrade, modernize, sustain, or otherwise modify a current United
States Air Force bomber program, including, but not limited to,
the B-52, B-1, or B-2 programs. end insert

begin insert

(7) “Total annual full-time equivalents” means the number of
a qualified taxpayer’s qualified full-time employees computed on
an annual full-time equivalent basis for the taxable year.

end insert

(c) (1) The total aggregate amount of the credit that may be
allowed to all qualified taxpayers pursuant to this section shall be
as follows:

(A) In years one through five of the credit, the total aggregate
amount of the credit that may be allowed to all qualified taxpayers
pursuant to this section shall not exceed twenty- five million dollars
($25,000,000) per calendar year.

(B) In years 6 through 10 of the credit, the total aggregate
amount of the credit that may be allowed to all qualified taxpayers
pursuant to this section shall not exceed twenty-eight million
dollars ($28,000,000) per calendar year.

(C) In years 11 through 15 of the credit, the total aggregate
amount of the credit that may be allowed to all qualified taxpayers
pursuant to this section shall not exceed thirty-one million dollars
($31,000,000) per calendar year.

begin insert

(2) The aggregate number of total annual full-time equivalents
of all qualified taxpayers with respect to which a credit amount
may be allowed under this section for a calendar year shall not
exceed 1,100.

end insert begin delete

(2)

end delete

begin insert (3) end insert   begin insert (A) end insert begin insert   end insert The Franchise Tax Board shall allocate the credit to the
begin insert qualified end insert taxpayers on a first-come-first-served begin delete basis. end delete begin insert basis,
determined by the date the qualified taxpayer’s timely filed original
tax return is received by the Franchise Tax Board. If the returns
of two or more qualified taxpayers are received on the same day
and the amount of credit remaining to be allocated is insufficient
to be allocated fully to each, the credit remaining shall be allocated
to those qualified taxpayers on a pro-rata basis. end insert

begin insert

(B) For purposes of this paragraph, the date a return is received
shall be determined by the Franchise Tax Board. The determination
of the Franchise Tax Board as to the date a return is received and
whether a return has been timely filed for purposes of this
paragraph may not be reviewed in any administrative or judicial
proceeding.

end insert begin insert

(C) Any disallowance of a credit claimed due to the limitations
specified in this subdivision shall be treated as a mathematical
error appearing on the return. Any amount of tax resulting from
that disallowance may be assessed by the Franchise Tax Board in
the same manner as provided in Section 19051.

end insert begin delete

(3)

end delete

begin insert (4) end insert  The credit allowed under this section must be claimed on a
timely filed original return.

(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 seven succeeding years if necessary,
until the credit is exhausted.

(e) A credit shall not be allowed unless the credit was reflected
within the bid upon which the qualified taxpayer’s begin insert prime contract
or end insert subcontract to manufacture property for ultimate use in or as a
component of a New Advanced Strategic Aircraft Program is based
by reducing the amount of the bid by a good faith estimate of the
amount of the credit allowable under this section.

(f) All references to the credit and ultimate cost reductions
incorporated into any successful bid that was awarded a begin insert prime
contract or end insert subcontract and for which a qualified taxpayer is
making a claim shall be made available to the Franchise Tax Board
upon request.

(g) If the qualified taxpayer is allowed a credit pursuant to this
section for qualified wages paid or incurred, only one credit shall
be allowed to the taxpayer under this part with respect to any wage
consisting in whole or in part of those qualified wages.

(h) (1) The Franchise Tax Board may prescribe regulations
necessary or appropriate to carry out the purposes of this section.

(2) The Franchise Tax Board may also prescribe rules,
guidelines, or procedures necessary or appropriate to carry out the
purposes of this section. Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code
shall not apply to any rule, guideline, or procedure prescribed by
the Franchise Tax Board pursuant to this section.

(i) This section shall remain in effect only until December 1,
2030, and as of that date is repealed.

begin insert

begin insert SEC. 4. end insert   

end insert begin insert

This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:

end insert begin insert

In order to, as soon as possible, further promote economic
development in California related to the manufacture of property
to be used for a new advanced strategic aircraft for the United
States Air Force, and to authorize a local government to pay a
related capital investment amount to a specified lessee or occupant
of the qualified manufacturing facility upon the completion of that
facility, it is necessary that this act take effect immediately.

end insert

All matter omitted in this version of the bill appears in the bill as amended in the Assembly, September 3, 2013. (JR11)