BILL NUMBER: SB 1391	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 6, 2010

INTRODUCED BY   Senator Yee

                        FEBRUARY 19, 2010

   An act to  amend Section 17002 of   to add
Sections 17060 and 23603 to  the Revenue and Taxation Code,
relating to taxation  to take effect immediately, tax levy 
.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 1391, as amended, Yee.  Personal income tax:
definitions.   Tax credits: reporting information and
recapture.  
   The Personal Income Tax Law and the Corporation Tax Law authorize
various credits against the taxes imposed by those laws.  
   This bill would require a taxpayer doing business in California
that claims a tax credit to submit to the Franchise Tax Board on the
original return specified information, including the number of
employees employed by the taxpayer in the state, the amount of tax
credits claimed by the taxpayer on the return, and the number of jobs
created by the tax credit.  
   The bill would also require, in cases in which a taxpayer subject
to the above provisions has a net decrease in the number of full-time
employees for a credit added by statute on or after January 1, 2011,
the credit to be disallowed and the entire amount of any credit
previously allowed to be recaptured and the taxpayer to be liable for
any credits on previous tax returns, as specified.  
   This bill would result in a change in state taxes for the purpose
of increasing state revenues within the meaning of Section 3 of
Article XIII  A of the California Constitution, and thus would
require for passage the approval of 2/3 of the membership of each
house of the Legislature.  
   This bill would take effect immediately as a tax levy. 

   The Personal Income Tax Law imposes taxes on taxable income and
provides, among other things, that specified definitions govern the
construction of that law.  
   This bill would make a technical, nonsubstantive change to those
provisions. 
   Vote:  majority   2/3  . Appropriation:
no. Fiscal committee:  no   yes  .
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 17060 is added to the 
 Revenue and Taxation Code   , to read:  
   17060.  (a) Notwithstanding any provision of this part, a taxpayer
doing business in the state that claims any credit against the "net
tax," as defined in Section 17039, shall annually submit to the
Franchise Tax Board on the timely filed original return the following
information:
   (1) The number of full-time employees, as defined, part-time
employees, and temporary employees employed by the taxpayer in the
state.
   (2) The amount of tax credits claimed by the taxpayer on the
return for each tax credit under this part.
   (3) The number of full-time jobs, part-time jobs, and temporary
jobs created by the tax credit.
   (4) A list of occupations, job classifications, and expected
average wages for the full-time jobs, part-time jobs, and temporary
jobs created by the tax credit.
   (5) A certification by the taxpayer that the information is true
and correct and contains no knowing misrepresentation.
   (6) The taxpayer's office mailing address and office telephone
number.
   (b) Notwithstanding any provision of this part, for any credit
against the "net tax," as defined in Section 17039, added to this
chapter on or after January 1, 2011, the credit shall be disallowed,
and the entire amount of any credit previously allowed under this
part shall be recaptured and the taxpayer shall be liable for any
credits on previous tax returns if the taxpayer has a net decrease in
the number of full-time employees according to the information
specified in (a).
   (1) The net decrease in qualified full-time employees shall be
determined on an annual full-time equivalent basis by subtracting
from the amount determined in subparagraph (A) the amount determined
in subparagraph (B).
   (A) The total number of qualified full-time employees employed in
the preceding taxable year by the taxpayer and by any trade or
business acquired by the taxpayer during the current taxable year.
   (B) The total number of full-time employees employed in the
current taxable year by the taxpayer and by any trade or business
acquired during the current taxable year.
   (2) "Annual full-time equivalent" means either of the following:
   (A) In the case of a full-time employee paid hourly qualified
wages, "annual full-time equivalent" means the total number of hours
worked for the taxpayer by the employee (not to exceed 2,000 hours
per employee) divided by 2,000.
   (B) In the case of a salaried full-time employee, "annual
full-time equivalent" means the total number of weeks worked for the
taxpayer by the employee divided by 52.
   (3) All employees of the trades or businesses that are treated as
related under either Section 267, 318, or 707 of the Internal Revenue
Code shall be treated as employed by a single taxpayer. 
   SEC. 2.    Section 23603 is added to the  
Revenue and Taxation Code   , to read:  
   23603.  (a) Notwithstanding any provision of this part, a taxpayer
doing business in the state that claims any credit against the "tax"
,as defined in Section 23036, shall submit to the Franchise Tax
Board on the timely filed original return the following information
annually when filing a return:
   (1) The number of full-time employees, as defined, part-time
employees, and temporary employees employed by the taxpayer in the
state.
   (2) The amount of tax credits claimed by the taxpayer on the
return for each tax credit under this part.
   (3) The number of full-time jobs, part-time jobs, and temporary
jobs created by the tax credit.
   (4) A list of occupations, job classifications, and expected
average wages for the full-time jobs, part-time jobs, and temporary
jobs created by the tax credit.
   (5) A certification by the taxpayer that the information is true
and correct and contains no knowing misrepresentation.
   (6) The taxpayer's office mailing address and office telephone
number.
   (b) Notwithstanding any provision of this part, for any credit
against the "net tax," as defined in Section 17039, added to this
chapter on or after January 1, 2011, the credit shall be disallowed,
and the entire amount of any credit previously allowed under this
part shall be recaptured and the taxpayer shall be liable for any
credits on previous tax returns if the taxpayer has a net decrease in
the number of full-time employees according to the information
specified in (a).
   (1) The net decrease in qualified full-time employees shall be
determined on an annual full-time equivalent basis by subtracting
from the amount determined in subparagraph (A) the amount determined
in subparagraph (B).
   (A) The total number of qualified full-time employees employed in
the preceding taxable year by the taxpayer and by any trade or
business acquired by the taxpayer during the current taxable year.
   (B) The total number of full-time employees employed in the
current taxable year by the taxpayer and by any trade or business
acquired during the current taxable year.
   (2) "Annual full-time equivalent" means either of the following:
   (A) In the case of a full-time employee paid hourly qualified
wages, "annual full-time equivalent" means the total number of hours
worked for the taxpayer by the employee (not to exceed 2,000 hours
per employee) divided by 2,000.
   (B) In the case of a salaried full-time employee, "annual
full-time equivalent" means the total number of weeks worked for the
taxpayer by the employee divided by 52.
   (3) All employees of the trades or businesses that are treated as
related under either Section 267, 318, or 707 of the Internal Revenue
Code shall be treated as employed by a single taxpayer. 
   SEC. 3.    This act provides for a tax levy within
the meaning of Article IV of the Constitution and shall go into
immediate effect.  
  SECTION 1.    Section 17002 of the Revenue and
Taxation Code is amended to read:
   17002.  Except where the context otherwise requires, the
definitions in this chapter govern the construction of this part.