BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 437 (Atkins) - Research and Development: Small Business Grant  
          Program.
          
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          |Version: July 13, 2015          |Policy Vote: GOV. & F. 6 - 0    |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date: August 27, 2015   |Consultant: Robert Ingenito     |
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          *********** ANALYSIS ADDENDUM - SUSPENSE FILE ***********
             The following information is revised to reflect amendments 
                     adopted by the committee on August 27, 2015


          Bill  
          Summary: AB 437 would permit qualified small businesses to  
          convert research and development credits into cash grants.


          Fiscal  
          Impact: 
                 The Franchise Tax Board (FTB) estimates that the  
               previous version of the bill would result in General Fund  
               revenue losses of $22 million in 2015-16, and $27 million  
               in 2016-17. By delaying the implementation date one year,  
               the revenue impacts would themselves be delayed by one  
               year, and would likely be of similar magnitude.

                 FTB estimates that the bill would result in one-time  
               General Fund administrative costs of $664,000, related to  
               the creation of the grant program. Ongoing costs would be  







          AB 437 (Atkins)                                        Page 1 of  
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               $344,000 annually, beginning in 2017-18.  


          Author  
          Amendments: Mitigate the risk of taxpayer fraud, delay the  
          implementation date until January 1, 2017, and make technical  
          changes.


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