BILL NUMBER: SB 594 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 16, 2009
INTRODUCED BY Senator Ashburn
( Coauthors: Assembly Members
Bill Berryhill, DeVore, Gilmore,
Jeffries, and Silva )
FEBRUARY 27, 2009
An act to add and repeal Sections 17052.9 and 23605 of the Revenue
and Taxation Code, relating to taxation, to take effect immediately,
tax levy.
LEGISLATIVE COUNSEL'S DIGEST
SB 594, as amended, Ashburn. Taxation: cafeteria plans: credits.
The Personal Income Tax Law and the Corporation Tax Law authorize
various credits against the taxes imposed by those laws.
This bill would authorize a credit against those taxes for each
taxable year beginning on or after January 1, 2009, and before
January 1, 2014, in an amount equal to 15% of the amount of
administrative costs paid or incurred by a qualified taxpayer during
the taxable year in connection with establishing or administering a
qualified cafeteria plan that provides for the payment of health
insurance premiums of the taxpayer's employees, as defined. This bill
would also require the Franchise Tax Board to report to the
chairpersons and vice chairpersons of specified legislative
committees regarding the utilization of that tax credit
Legislature , as provided.
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:
SECTION 1. Section 17052.9 is added to the Revenue and Taxation
Code, to read:
17052.9. (a) For each taxable year beginning on or after January
1, 2009, and before January 1, 2014, there shall be allowed as a
credit against the "net tax" (as defined by Section 17039) an amount
equal to 15 percent of the amount of administrative costs incurred by
a qualified taxpayer in connection with establishing or
administering a cafeteria plan that provides for the payment of
health insurance premiums of the taxpayer's employees.
(b) For purposes of this section, both of the following
definitions apply:
(1) "Cafeteria plan" means a qualified cafeteria plan as defined
in Section 125 of the Internal Revenue Code.
(2) "Employer" means any individual, person, corporation,
association, partnership, or limited liability company, or any agent
thereof, that is doing business in this state, is deriving income
from sources within this state, or is subject to the laws of this
state. "Employer" also includes the State of California, or any
political subdivision or agency thereof, including the Regents of the
University of California, any city organized under a freeholders'
charter, or any political body that is not a subdivision or agency of
the state, and any person, officer, employee, department, or agency
thereof, making payments of wages to employees for services performed
within this state.
(3) "Qualified taxpayer" means an employer.
(c) In the case where the credit allowed by this section exceeds
the "net tax," the excess may be carried over to reduce the "net tax"
for the succeeding seven years.
(d) No deduction shall be allowed, as otherwise provided in this
part, for that portion of any costs paid or incurred for the taxable
year for which a credit is allowed under this section.
(e) No credit may be claimed under this section with respect to
any amount for which any other credit has been claimed under this
part.
(f) On or before January 1, 2013, the Franchise Tax Board shall
provide a report on the utilization of the tax credit described in
this section to the chairpersons and vice chairpersons of
the Senate Committee on Health, the Senate Committee on Revenue and
Taxation, the Assembly Committee on Health, and the Assembly
Committee on Revenue and Taxation. The report shall include
this section to the Legislature. The report shall include
information regarding the effectiveness of this credit, including
the amount of the credit claimed, an estimate of the number of
Section 125 cafeteria plans established and the number of employees
affected, and information regarding the types of benefits offered by
these plans.
(g) This section shall remain in effect until December 1, 2014,
and as of that date is repealed.
SEC. 2. Section 23605 is added to the Revenue and Taxation Code,
to read:
23605. (a) For each taxable year beginning on or after January 1,
2009, and before January 1, 2014, there shall be allowed as a credit
against the "tax" (as defined by Section 23036) an amount equal to
15 percent of the amount of administrative costs incurred by a
qualified taxpayer in connection with establishing or administering a
cafeteria plan that provides for the payment of health insurance
premiums of the taxpayer's employees.
(b) For purposes of this section, both of the following
definitions apply:
(1) "Cafeteria plan" means a qualified cafeteria plan as defined
in Section 125 of the Internal Revenue Code.
(2) "Employer" means any person, corporation, association, or
limited liability company, or any agent thereof, that is doing
business in this state, is deriving income from sources within this
state, or is subject to the laws of this state. "Employer" also
includes the State of California, or any political subdivision or
agency thereof, including the Regents of the University of
California, any city organized under a freeholders' charter, or any
political body that is not a subdivision or agency of the state, and
any person, officer, employee, department, or agency thereof, making
payments of wages to employees for services performed within this
state.
(3) "Qualified taxpayer" means an employer.
(c) In the case where the credit allowed by this section exceeds
the "tax," the excess may be carried over to reduce the "tax" for the
succeeding seven years.
(d) No deduction shall be allowed, as otherwise provided in this
part, for that portion of any costs paid or incurred for the taxable
year for which a credit is allowed under this section.
(e) No credit may be claimed under this section with respect to
any amount for which any other credit has been claimed under this
part.
(f) On or before January 1, 2013, the Franchise Tax Board shall
provide a report on the utilization of the tax credit described in
this section to the chairpersons and vice chairpersons of
the Senate Committee on Health, the Senate Committee on Revenue and
Taxation, the Assembly Committee on Health, and the Assembly
Committee on Revenue and Taxation. The report shall include
this section to the Legislature. The report shall include
information regarding the effectiveness of this credit, including
the amount of the credit claimed, an estimate of the number of
Section 125 cafeteria plans established and the number of employees
affected, and information regarding the types of benefits offered by
these plans.
(g) This section shall remain in effect until December 1, 2014,
and as of that date is repealed.
SEC. 3. This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.