BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 2900| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 2900 Author: Committee on Jobs, Economic Development, and the Economy Amended: 8/19/16 in Senate Vote: 21 SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 9-0, 6/20/16 AYES: Hill, Bates, Block, Gaines, Galgiani, Hernandez, Jackson, Mendoza, Wieckowski SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/11/16 AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen ASSEMBLY FLOOR: 79-0, 6/1/16 - See last page for vote SUBJECT: Small business technical assistance centers: income taxation: credits: California Competes Tax Credit Committee: GO-Biz SOURCE: Author DIGEST: This bill creates three additional disclosure requirements for the California Competes Tax Credit Program (CCTC Program) under the Governor's Office of Business and Economic Development (GO-Biz). Senate Floor Amendments of 8/19/16 delete provisions that require a state department that awards state funds to a federal small business technical assistance center to report annually on the outcomes of those contracts. AB 2900 Page 2 ANALYSIS: Existing law: 1)Establishes GO-Biz to serve as the lead state entity for economic strategy and marketing of California on issues relating to business development, private sector investment, and economic growth. (Government Code (GC) §§ 12096 - 12098.5) 2)Establishes the Office of Small Business Advocate (OSBA) within the GO-Biz to advocate the causes of small business and to provide small businesses with the information necessary to survive in the marketplace. (GC §§ 12098 - 12098.9) 3)Requires GO-Biz to post information on its website relating to the CCTC Program including: (Revenue and Taxation Code (RTC) § 17059.2 and § 23689) a) The name of each taxpayer allocated a credit pursuant to this section b) The estimated amount of the investment by each taxpayer; c) The estimated number of jobs created or retained; d) The amount of the credit allocated to the taxpayer; and e) The amount of the credit recaptured from the taxpayer, if applicable. 1)Requires that priority for the CCTC Program be given to applications from taxpayers with projects or businesses located in high unemployment or high poverty areas. (RTC § 17059.2(c)(1) and § 23689(c)(1)) 2)Requires that at least 25 percent of the CCTC Program's tax AB 2900 Page 3 credits be awarded to small businesses annually. (RTC § 17059.2(g)(2)(3) and § 23689(g)(2)(3)) This bill expands the reporting requirements of the CCTC Program to include, on its Web site, the following information: 1)The primary location of the facility(s) for which the taxpayer is applying for credits listed by city or, in the case of unincorporated areas, by county; 2)Information that identifies each tax credit award that was given a priority for being located in a high unemployment or poverty area, as specified; and 3)Information that identifies each tax credit award that is being counted toward the requirement that, each fiscal year, 25 percent of the aggregate amount of credits allocated are required to be reserved for small business, as defined. Background The Assembly Committee on Jobs, Economic Development, and the Economy (JEDE) is the Author and sponsor of this bill. According to the JEDE, the bill would "codify the reporting of key elements of the tax credit program, including the identification of business or project location, credits awarded to small businesses, and credit awards that received priority consideration. Each of these new reporting requirements represents a key element of the tax credit program and is essential to providing appropriate oversight and program transparency. These elements include information to identify: areas that are not currently being served; whether the requirements of the small business set aside are being met; and which areas of the state are benefiting from the priority application requirements for high unemployment and high poverty." AB 2900 Page 4 FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No A Senate Committee on Appropriations analysis dated August 11, 2016 indicated that the total fiscal impact of this bill is unknown, but could exceed $150,000 annually. However, the amendments taken on August 19, 2016 removed the provisions in the bill that were estimated to result in significant administrative costs. The analysis also indicated that the provisions that are now the remainder of the bill would be "minor and absorbable" to GO-Biz. SUPPORT: (Verified8/22/16) None received OPPOSITION: (Verified8/22/16) None received ASSEMBLY FLOOR: 79-0, 6/1/16 AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon NO VOTE RECORDED: Cooper Prepared by:Nicole Billington / B., P. & E.D. / (916) 651-4104 8/22/16 20:38:01 AB 2900 Page 5 **** END ****