Amended in Assembly April 26, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 2055


Introduced by Assembly Member Gipson

February 17, 2016


An act to amend Sections 17059.2 and 23689 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

LEGISLATIVE COUNSEL’S DIGEST

AB 2055, as amended, Gipson. Income taxation: credits: California competes.

Existing law allows a credit against the taxes imposed under the Corporation Tax Law and the Personal Income Tax Law for each taxable year beginning on or after January 1, 2014, and before January 1, 2025, in an amount as provided in a written agreement between the Governor’s Office of Business and Economic Development and the taxpayer, agreed upon by the California Competes Tax Credit Committee, and based on specified factors, including the number of jobs the taxpayer will create or retain in the state and the amount of investment in the state by the taxpayer. Existing law limits the aggregate amount of credits allocated to taxpayers to a specified sum per fiscal year throughbegin insert theend insert 2017-18begin insert fiscal yearend insert and reserves 25% of that amount for small businesses, as defined. Existing law authorizes the Director of Finance to increase the aggregate amount of the economic development credits that may be allocated to taxpayers each fiscal year by $25 million per fiscal year through the 2017-18 fiscal year.

This bill would, beginning in the 2018-19 fiscal year, reserve 25% of the aggregate amount of credits for taxpayers that make qualified sustainable freight investments, as defined, and would require the Franchise Tax Board to review the books and records of these taxpayers to ensure compliance with the taxpayer’s written agreement with GO-Biz. The bill would also make findings relating to California’s seaports andbegin delete harbors and zero-emissions and near-zero-emissionsend deletebegin insert trade corridors and zero-emission and near-zero-emissionend insert technology.

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:

P2    1

SECTION 1.  

The Legislature finds and declares all of the
2following:

3(a) begin deleteOur state’s waterfront has end deletebegin insertCalifornia has trade end insertinfrastructure
4needs that cannot be met by private investment alone, and therefore
5public financing mechanisms are required to build the new public
6works needed to support new commercial and industrial
7begin delete development in our seaports and harbors.end deletebegin insert development.end insert This need
8is compounded by the additional expenses which accompany
9investment in the next generation ofbegin delete zero-emissions and
10near-zero-emissionsend delete
begin insert zero-emission and near-zero-emissionend insert
11 equipment and supportingbegin delete infrastructure at marine terminals in
12California’s public ports.end delete
begin insert infrastructure.end insert

13(b) The seaports and harbors of California are valuable assets
14of the state that provide special maritime, navigational, recreational,
15cultural, and historical benefits to the people of the state and the
16management and development of these seaports and harbors are
17 matters of statewide significance. The investment in the state’s
18seaports and harbors by providing a financing mechanism, through
19the use of tax credits, is a matter of statewide importance that will
20further the purposes of the public trust.

21(c) This legislation is necessary to further incentivize the earliest
22possible investment in, and adoption of,begin delete zero-emissions and
23near-zero-emissionsend delete
begin insert zero-emission and near-zero-emissionend insert
24 technology at California’s publicbegin delete seaports.end deletebegin insert seaports and in its trade
25corridors.end insert
Companies should be encouraged to take on the
26additional costs of purchasing and maintainingbegin delete zero-emissionsend delete
27begin insert zero-emissionend insert equipment and supporting infrastructure in
28partnership with the state to achieve the state’s emissions reduction
29goals.

P3    1

SEC. 2.  

Section 17059.2 of the Revenue and Taxation Code
2 is amended to read:

3

17059.2.  

(a) (1) For each taxable year beginning on and after
4January 1, 2014, and before January 1, 2025, there shall be allowed
5as a credit against the “net tax,” as defined in Section 17039, an
6amount as determined by the committee pursuant to paragraph (2)
7and approved pursuant to Section 18410.2.

8(2) The credit under this section shall be allocated by GO-Biz
9with respect to the 2013-14 fiscal year through and including the
102017-18 fiscal year. The amount of credit allocated to a taxpayer
11with respect to a fiscal year pursuant to this section shall be as set
12forth in a written agreement between GO-Biz and the taxpayer and
13shall be based on the following factors:

14(A) The number of jobs the taxpayer will create or retain in this
15state.

16(B) The compensation paid or proposed to be paid by the
17taxpayer to its employees, including wages and fringe benefits.

18(C) The amount of investment in this state by the taxpayer.

19(D) The extent of unemployment or poverty in the area
20according to the United States Census in which the taxpayer’s
21project or business is proposed or located.

22(E) The incentives available to the taxpayer in this state,
23including incentives from the state, local government, and other
24entities.

25(F) The incentives available to the taxpayer in other states.

26(G) The duration of the proposed project and the duration the
27taxpayer commits to remain in this state.

28(H) The overall economic impact in this state of the taxpayer’s
29project or business.

30(I) The strategic importance of the taxpayer’s project or business
31to the state, region, or locality.

32(J) The opportunity for future growth and expansion in this state
33by the taxpayer’s business.

34(K) The extent to which the anticipated benefit to the state
35exceeds the projected benefit to the taxpayer from the tax credit.

36(3) The written agreement entered into pursuant to paragraph
37(2) shall include:

38(A) Terms and conditions that include the taxable year or years
39for which the credit allocated shall be allowed, a minimum
40compensation level, and a minimum job retention period.

P4    1(B) Provisions indicating whether the credit is to be allocated
2in full upon approval or in increments based on mutually agreed
3upon milestones when satisfactorily met by the taxpayer.

4(C) Provisions that allow the committee to recapture the credit,
5in whole or in part, if the taxpayer fails to fulfill the terms and
6conditions of the written agreement.

7(b) For purposes of this section:

8(1) “Committee” means the California Competes Tax Credit
9Committee established pursuant to Section 18410.2.

10(2) “GO-Biz” means the Governor’s Office of Business and
11Economic Development.

12(c) For purposes of this section, GO-Biz shall do the following:

13(1) Give priority to a taxpayer whose project or business is
14located or proposed to be located in an area of high unemployment
15or poverty.

16(2) Negotiate with a taxpayer the terms and conditions of
17proposed written agreements that provide the credit allowed
18pursuant to this section to a taxpayer.

19(3) Provide the negotiated written agreement to the committee
20for its approval pursuant to Section 18410.2.

21(4) Inform the Franchise Tax Board of the terms and conditions
22of the written agreement upon approval of the written agreement
23by the committee.

24(5) Inform the Franchise Tax Board of any recapture, in whole
25or in part, of a previously allocated credit upon approval of the
26recapture by the committee.

27(6) Post on its Internet Web site all of the following:

28(A) The name of each taxpayer allocated a credit pursuant to
29this section.

30(B) The estimated amount of the investment by each taxpayer.

31(C) The estimated number of jobs created or retained.

32(D) The amount of the credit allocated to the taxpayer.

33(E) The amount of the credit recaptured from the taxpayer, if
34applicable.

35(d) For purposes of this section, the Franchise Tax Board shall
36do all of the following:

37(1) (A) Except as provided in subparagraph (B), review the
38books and records of all taxpayers allocated a credit pursuant to
39this section to ensure compliance with the terms and conditions
40of the written agreement between the taxpayer and GO-Biz.

P5    1(B) In the case of a taxpayer that is a “small business,” as
2defined in Section 17053.73, review the books and records of the
3taxpayer allocated a credit pursuant to this section to ensure
4compliance with the terms and conditions of the written agreement
5between the taxpayer and GO-Biz when, in the sole discretion of
6the Franchise Tax Board, a review of those books and records is
7appropriate or necessary in the best interests of the state.

8(2) Notwithstanding Section 19542:

9(A) Notify GO-Biz of a possible breach of the written agreement
10by a taxpayer and provide detailed information regarding the basis
11for that determination.

12(B) Provide information to GO-Biz with respect to whether a
13taxpayer is a “small business,” as defined in Section 17053.73.

14(e) In the case where the credit allowed under this section
15exceeds the “net tax,” as defined in Section 17039, for a taxable
16year, the excess credit may be carried over to reduce the “net tax”
17in the following taxable year, and succeeding five taxable years,
18if necessary, until the credit has been exhausted.

19(f) Any recapture, in whole or in part, of a credit approved by
20the committee pursuant to Section 18410.2 shall be treated as a
21mathematical error appearing on the return. Any amount of tax
22resulting from that recapture shall be assessed by the Franchise
23Tax Board in the same manner as provided by Section 19051. The
24amount of tax resulting from the recapture shall be added to the
25tax otherwise due by the taxpayer for the taxable year in which
26the committee’s recapture determination occurred.

27(g) (1) The aggregate amount of credit that may be allocated
28in any fiscal year pursuant to this section and Section 23689 shall
29be an amount equal to the sum of subparagraphs (A), (B), and (C),
30less the amount specified in subparagraphs (D) and (E):

31(A) Thirty million dollars ($30,000,000) for the 2013-14 fiscal
32year, one hundred fifty million dollars ($150,000,000) for the
332014-15 fiscal year, and two hundred million dollars
34($200,000,000) for each fiscal year from 2015-16 to 2017-18,
35inclusive.

36(B) The unallocated credit amount, if any, from the preceding
37fiscal year.

38(C) The amount of any previously allocated credits that have
39been recaptured.

P6    1(D) The amount estimated by the Director of Finance, in
2consultation with the Franchise Tax Board and the State Board of
3Equalization, to be necessary to limit the aggregation of the
4estimated amount of exemptions claimed pursuant to Section
56377.1 and of the amounts estimated to be claimed pursuant to
6this section and Sections 17053.73, 23626, and 23689 to no more
7than seven hundred fifty million dollars ($750,000,000) for either
8the current fiscal year or the next fiscal year.

9(i) The Director of Finance shall notify the Chairperson of the
10Joint Legislative Budget Committee of the estimated annual
11 allocation authorized by this paragraph. Any allocation pursuant
12to these provisions shall be made no sooner than 30 days after
13written notification has been provided to the Chairperson of the
14Joint Legislative Budget Committee and the chairpersons of the
15committees of each house of the Legislature that consider
16appropriation, or not sooner than whatever lesser time the
17Chairperson of the Joint Legislative Budget Committee, or his or
18her designee, may determine.

19(ii) In no event shall the amount estimated in this subparagraph
20be less than zero dollars ($0).

21(E) (i) For the 2015-16 fiscal year and each fiscal year
22thereafter, the amount of credit estimated by the Director of Finance
23to be allowed to all qualified taxpayers for that fiscal year pursuant
24to subparagraph (A) or subparagraph (B) of paragraph (1) of
25subdivision (c) of Section 23636.

26(ii) If the amount available per fiscal year pursuant to this section
27and Section 23689 is less than the aggregate amount of credit
28estimated by the Director of Finance to be allowed to qualified
29taxpayers pursuant to subparagraph (A) or subparagraph (B) of
30paragraph (1) of subdivision (c) of Section 23636, the aggregate
31amount allowed pursuant to Section 23636 shall not be reduced
32and, in addition to the reduction required by clause (i), the
33aggregate amount of credit that may be allocated pursuant to this
34section and Section 23689 for the next fiscal year shall be reduced
35by the amount of that deficit.

36(iii) It is the intent of the Legislature that the reductions specified
37in this subparagraph of the aggregate amount of credit that may
38be allocated pursuant to this section and Section 23689 shall
39continue if the repeal dates of the credits allowed by this section
40and Section 23689 are removed or extended.

P7    1(2) (A) In addition to the other amounts determined pursuant
2to paragraph (1), the Director of Finance may increase the
3aggregate amount of credit that may be allocated pursuant to this
4section and Section 23689 by up to twenty-five million dollars
5($25,000,000) per fiscal year through the 2017-18 fiscal year. The
6amount of any increase made pursuant to this paragraph, when
7combined with any increase made pursuant to paragraph (2) of
8subdivision (g) of Section 23689, shall not exceed twenty-five
9million dollars ($25,000,000) per fiscal year through the 2017-18
10fiscal year.

11(B) It is the intent of the Legislature that the Director of Finance
12increase the aggregate amount under subparagraph (A) in order to
13mitigate the reduction of the amount available due to the credit
14allowed to all qualified taxpayers pursuant to subparagraph (A) or
15 (B) of paragraph (1) of subdivision (c) of Section 23636.

16(3) Each fiscal year, 25 percent of the aggregate amount of the
17credit that may be allocated pursuant to this section and Section
1823689 shall be reserved for “small business,” as defined in Section
1917053.73 or 23626.

20(4) Each fiscal year, no more than 20 percent of the aggregate
21amount of the credit that may be allocated pursuant to this section
22shall be allocated to any one taxpayer.

23(5) (A) Each fiscal year, beginning with the 2018-19 fiscal
24year, 25 percent of the aggregate amount of the credit that may be
25allocated pursuant to this section and Section 23689 shall be
26reserved for taxpayers that make qualified sustainable freight
27investments.

28(B) For purposes of thisbegin delete paragraph, “qualified sustainable freight
29investment” means the purchase or installation, or a proposed
30future purchase or installation, of zero-emissions and
31near-zero-emissions equipment and supporting infrastructure for
32use by or at a marine terminal in a California seaport.end delete
begin insert paragraph:end insert

begin insert

33
(i) “Qualified sustainable freight investment” means the
34purchase or installation of zero-emission and near-zero-emission
35equipment and support infrastructure in a trade corridor.

end insert
begin insert

36
(ii) “Trade corridor” means a trade corridor that would have
37been eligible for allocation from the Trade Corridors Improvement
38Fund pursuant to subparagraph (A) of paragraph (1) of subdivision
39(c) of Section 8879.23 of the Government Code.

end insert
begin insert

P8    1
(iii) “Zero-emission” and “near-zero-emission” shall have the
2same definition as in Section 39719.2 of the Health and Safety
3Code.

end insert

4(C) For purposes of this paragraph, the Franchise Tax Board
5shall review the books and records of the taxpayer allocated a
6credit amount pursuant to this paragraph to ensure compliance
7with the terms and agreements of the written agreement and notify
8GO-Biz of a possible breach of the written agreement by a taxpayer
9and provide detailed information regarding the basis for that
10determination.

begin insert

11
(D) GO-Biz shall use the criteria provided in paragraph (2) of
12subdivision (a) when allocating a credit pursuant to this paragraph
13and shall create equivalent criteria for jobs a taxpayer will create
14or retain under a collective bargaining agreement.

end insert

15(h) GO-Biz may prescribe rules and regulations as necessary to
16carry out the purposes of this section. Any rule or regulation
17prescribed pursuant to this section may be by adoption of an
18emergency regulation in accordance with Chapter 3.5 (commencing
19with Section 11340) of Part 1 of Division 3 of Title 2 of the
20Government Code.

21(i) A written agreement between GO-Biz and a taxpayer with
22respect to the credit authorized by this section shall comply with
23existing law on the date the agreement is executed.

24(j) (1) Upon the effective date of this section, the Department
25of Finance shall estimate the total dollar amount of credits that
26will be claimed under this section with respect to each fiscal year
27from the 2013-14 fiscal year to the 2024-25 fiscal year, inclusive.

28(2) The Franchise Tax Board shall annually provide to the Joint
29Legislative Budget Committee, by no later than March 1, a report
30of the total dollar amount of the credits claimed under this section
31with respect to the relevant fiscal year. The report shall compare
32the total dollar amount of credits claimed under this section with
33respect to that fiscal year with the department’s estimate with
34respect to that same fiscal year. If the total dollar amount of credits
35claimed for the fiscal year is less than the estimate for that fiscal
36year, the report shall identify options for increasing annual claims
37of the credit so as to meet estimated amounts.

38(k) This section is repealed on December 1, 2025.

39

SEC. 3.  

Section 23689 of the Revenue and Taxation Code is
40amended to read:

P9    1

23689.  

(a) (1) For each taxable year beginning on and after
2January 1, 2014, and before January 1, 2025, there shall be allowed
3as a credit against the “tax,” as defined in Section 23036, an amount
4as determined by the committee pursuant to paragraph (2) and
5approved pursuant to Section 18410.2.

6(2) The credit under this section shall be allocated by GO-Biz
7with respect to the 2013-14 fiscal year through and including the
82017-18 fiscal year. The amount of credit allocated to a taxpayer
9with respect to a fiscal year pursuant to this section shall be as set
10forth in a written agreement between GO-Biz and the taxpayer and
11shall be based on the following factors:

12(A) The number of jobs the taxpayer will create or retain in this
13state.

14(B) The compensation paid or proposed to be paid by the
15taxpayer to its employees, including wages and fringe benefits.

16(C) The amount of investment in this state by the taxpayer.

17(D) The extent of unemployment or poverty in the area
18according to the United States Census in which the taxpayer’s
19project or business is proposed or located.

20(E) The incentives available to the taxpayer in this state,
21including incentives from the state, local government, and other
22entities.

23(F) The incentives available to the taxpayer in other states.

24(G) The duration of the proposed project and the duration the
25taxpayer commits to remain in this state.

26(H) The overall economic impact in this state of the taxpayer’s
27project or business.

28(I) The strategic importance of the taxpayer’s project or business
29to the state, region, or locality.

30(J) The opportunity for future growth and expansion in this state
31by the taxpayer’s business.

32(K) The extent to which the anticipated benefit to the state
33exceeds the projected benefit to the taxpayer from the tax credit.

34(3) The written agreement entered into pursuant to paragraph
35(2) shall include:

36(A) Terms and conditions that include the taxable year or years
37for which the credit allocated shall be allowed, a minimum
38compensation level, and a minimum job retention period.

P10   1(B) Provisions indicating whether the credit is to be allocated
2in full upon approval or in increments based on mutually agreed
3upon milestones when satisfactorily met by the taxpayer.

4(C) Provisions that allow the committee to recapture the credit,
5in whole or in part, if the taxpayer fails to fulfill the terms and
6conditions of the written agreement.

7(b) For purposes of this section:

8(1) “Committee” means the California Competes Tax Credit
9Committee established pursuant to Section 18410.2.

10(2) “GO-Biz” means the Governor’s Office of Business and
11Economic Development.

12(c) For purposes of this section, GO-Biz shall do the following:

13(1) Give priority to a taxpayer whose project or business is
14located or proposed to be located in an area of high unemployment
15or poverty.

16(2) Negotiate with a taxpayer the terms and conditions of
17proposed written agreements that provide the credit allowed
18pursuant to this section to a taxpayer.

19(3) Provide the negotiated written agreement to the committee
20for its approval pursuant to Section 18410.2.

21(4) Inform the Franchise Tax Board of the terms and conditions
22of the written agreement upon approval of the written agreement
23by the committee.

24(5) Inform the Franchise Tax Board of any recapture, in whole
25or in part, of a previously allocated credit upon approval of the
26recapture by the committee.

27(6) Post on its Internet Web site all of the following:

28(A) The name of each taxpayer allocated a credit pursuant to
29this section.

30(B) The estimated amount of the investment by each taxpayer.

31(C) The estimated number of jobs created or retained.

32(D) The amount of the credit allocated to the taxpayer.

33(E) The amount of the credit recaptured from the taxpayer, if
34applicable.

35(d) For purposes of this section, the Franchise Tax Board shall
36do all of the following:

37(1) (A) Except as provided in subparagraph (B), review the
38books and records of all taxpayers allocated a credit pursuant to
39this section to ensure compliance with the terms and conditions
40of the written agreement between the taxpayer and GO-Biz.

P11   1(B) In the case of a taxpayer that is a “small business,” as
2defined in Section 23626, review the books and records of the
3taxpayer allocated a credit pursuant to this section to ensure
4compliance with the terms and conditions of the written agreement
5between the taxpayer and GO-Biz when, in the sole discretion of
6the Franchise Tax Board, a review of those books and records is
7appropriate or necessary in the best interests of the state.

8(2) Notwithstanding Section 19542:

9(A) Notify GO-Biz of a possible breach of the written agreement
10by a taxpayer and provide detailed information regarding the basis
11for that determination.

12(B) Provide information to GO-Biz with respect to whether a
13taxpayer is a “small business,” as defined in Section 23626.

14(e) In the case where the credit allowed under this section
15exceeds the “tax,” as defined in Section 23036, for a taxable year,
16the excess credit may be carried over to reduce the “tax” in the
17following taxable year, and succeeding five taxable years, if
18necessary, until the credit has been exhausted.

19(f) Any recapture, in whole or in part, of a credit approved by
20the committee pursuant to Section 18410.2 shall be treated as a
21mathematical error appearing on the return. Any amount of tax
22 resulting from that recapture shall be assessed by the Franchise
23Tax Board in the same manner as provided by Section 19051. The
24amount of tax resulting from the recapture shall be added to the
25tax otherwise due by the taxpayer for the taxable year in which
26the committee’s recapture determination occurred.

27(g) (1) The aggregate amount of credit that may be allocated
28in any fiscal year pursuant to this section and Section 17059.2 shall
29be an amount equal to the sum of subparagraphs (A), (B), and (C),
30less the amount specified in subparagraphs (D) and (E):

31(A) Thirty million dollars ($30,000,000) for the 2013-14 fiscal
32year, one hundred fifty million dollars ($150,000,000) for the
332014-15 fiscal year, and two hundred million dollars
34($200,000,000) for each fiscal year from 2015-16 to 2017-18,
35inclusive.

36(B) The unallocated credit amount, if any, from the preceding
37fiscal year.

38(C) The amount of any previously allocated credits that have
39been recaptured.

P12   1(D) The amount estimated by the Director of Finance, in
2consultation with the Franchise Tax Board and the State Board of
3Equalization, to be necessary to limit the aggregation of the
4estimated amount of exemptions claimed pursuant to Section
56377.1 and of the amounts estimated to be claimed pursuant to
6this section and Sections 17053.73, 17059.2, and 23626 to no more
7than seven hundred fifty million dollars ($750,000,000) for either
8the current fiscal year or the next fiscal year.

9(i) The Director of Finance shall notify the Chairperson of the
10Joint Legislative Budget Committee of the estimated annual
11allocation authorized by this paragraph. Any allocation pursuant
12to these provisions shall be made no sooner than 30 days after
13written notification has been provided to the Chairperson of the
14Joint Legislative Budget Committee and the chairpersons of the
15committees of each house of the Legislature that consider
16appropriation, or not sooner than whatever lesser time the
17Chairperson of the Joint Legislative Budget Committee, or his or
18her designee, may determine.

19(ii) In no event shall the amount estimated in this subparagraph
20be less than zero dollars ($0).

21(E) (i) For the 2015-16 fiscal year and each fiscal year
22thereafter, the amount of credit estimated by the Director of Finance
23to be allowed to all qualified taxpayers for that fiscal year pursuant
24to subparagraph (A) or subparagraph (B) of paragraph (1) of
25subdivision (c) of Section 23636.

26(ii) If the amount available per fiscal year pursuant to this section
27and Section 17059.2 is less than the aggregate amount of credit
28estimated by the Director of Finance to be allowed to qualified
29taxpayers pursuant to subparagraph (A) or subparagraph (B) of
30paragraph (1) of subdivision (c) of Section 23636, the aggregate
31amount allowed pursuant to Section 23636 shall not be reduced
32and, in addition to the reduction required by clause (i), the
33aggregate amount of credit that may be allocated pursuant to this
34section and Section 17059.2 for the next fiscal year shall be reduced
35by the amount of that deficit.

36(iii) It is the intent of the Legislature that the reductions specified
37in this subparagraph of the aggregate amount of credit that may
38be allocated pursuant to this section and Section 17059.2 shall
39continue if the repeal dates of the credits allowed by this section
40and Section 17059.2 are removed or extended.

P13   1(2) (A) In addition to the other amounts determined pursuant
2to paragraph (1), the Director of Finance may increase the
3aggregate amount of credit that may be allocated pursuant to this
4section and Section 17059.2 by up to twenty-five million dollars
5($25,000,000) per fiscal year through the 2017-18 fiscal year. The
6amount of any increase made pursuant to this paragraph, when
7combined with any increase made pursuant to paragraph (2) of
8subdivision (g) of Section 17059.2, shall not exceed twenty-five
9million dollars ($25,000,000) per fiscal year through the 2017-18
10fiscal year.

11(B) It is the intent of the Legislature that the Director of Finance
12increase the aggregate amount under subparagraph (A) in order to
13mitigate the reduction of the amount available due to the credit
14allowed to all qualified taxpayers pursuant to subparagraph (A) or
15(B) of paragraph (1) of subdivision (c) of Section 23636.

16(3) Each fiscal year, 25 percent of the aggregate amount of the
17credit that may be allocated pursuant to this section and Section
1817059.2 shall be reserved for “small business,” as defined in
19Section 17053.73 or 23626.

20(4) Each fiscal year, no more than 20 percent of the aggregate
21amount of the credit that may be allocated pursuant to this section
22shall be allocated to any one taxpayer.

23(5) (A) Each fiscal year, beginning with the 2018-19 fiscal
24year, 25 percent of the aggregate amount of the credit that may be
25allocated pursuant to this section and Section 23689 shall be
26reserved for taxpayers that make qualified sustainable freight
27investments.

28(B) For purposes of thisbegin delete paragraph, “qualified sustainable freight
29investment” means the purchase or installation, or a proposed
30future purchase or installation, of zero-emissions and
31near-zero-emissions equipment and supporting infrastructure for
32use by or at a marine terminal in a California seaport.end delete
begin insert paragraph:end insert

begin insert

33
(i) “Qualified sustainable freight investment” means the
34purchase or installation of zero-emission and near-zero-emission
35equipment and support infrastructure in a trade corridor.

end insert
begin insert

36
(ii) “Trade corridor” means a trade corridor that would have
37been eligible for allocation from the Trade Corridors Improvement
38Fund pursuant to subparagraph (A) of paragraph (1) of subdivision
39(c) of Section 8879.23 of the Government Code.

end insert
begin insert

P14   1
(iii) “Zero-emission” and “near-zero-emission” shall have the
2same definition as in Section 39719.2 of the Health and Safety
3Code.

end insert

4(C) For purposes of this paragraph, the Franchise Tax Board
5shall review the books and records of the taxpayer allocated a
6credit amount pursuant to this paragraph to ensure compliance
7with the terms and agreements of the written agreement and notify
8GO-Biz of a possible breach of the written agreement by a taxpayer
9and provide detailed information regarding the basis for that
10determination.

begin insert

11
(D) GO-Biz shall use the criteria provided in paragraph (2) of
12subdivision (a) when allocating a credit pursuant to this paragraph
13and shall create equivalent criteria for jobs a taxpayer will create
14or retain under a collective bargaining agreement.

end insert

15(h) GO-Biz may prescribe rules and regulations as necessary to
16carry out the purposes of this section. Any rule or regulation
17prescribed pursuant to this section may be by adoption of an
18emergency regulation in accordance with Chapter 3.5 (commencing
19with Section 11340) of Part 1 of Division 3 of Title 2 of the
20Government Code.

21(i) (1) A written agreement between GO-Biz and a taxpayer
22with respect to the credit authorized by this section shall not
23restrict, broaden, or otherwise alter the ability of the taxpayer to
24assign that credit or any portion thereof in accordance with Section
2523663.

26(2) A written agreement between GO-Biz and a taxpayer with
27respect to the credit authorized by this section must comply with
28existing law on the date the agreement is executed.

29(j) (1) Upon the effective date of this section, the Department
30of Finance shall estimate the total dollar amount of credits that
31will be claimed under this section with respect to each fiscal year
32from the 2013-14 fiscal year to the 2024-25 fiscal year, inclusive.

33(2) The Franchise Tax Board shall annually provide to the Joint
34Legislative Budget Committee, by no later than March 1, a report
35of the total dollar amount of the credits claimed under this section
36with respect to the relevant fiscal year. The report shall compare
37the total dollar amount of credits claimed under this section with
38respect to that fiscal year with the department’s estimate with
39respect to that same fiscal year. If the total dollar amount of credits
40claimed for the fiscal year is less than the estimate for that fiscal
P15   1year, the report shall identify options for increasing annual claims
2of the credit so as to meet estimated amounts.

3(k) This section is repealed on December 1, 2025.

4

SEC. 4.  

This act provides for a tax levy within the meaning of
5Article IV of thebegin insert Californiaend insert Constitution and shall go into
6immediate effect.



O

    98