BILL NUMBER: AB 103 AMENDED
BILL TEXT
AMENDED IN SENATE JULY 11, 2011
AMENDED IN SENATE JUNE 12, 2011
AMENDED IN SENATE MARCH 24, 2011
AMENDED IN SENATE MARCH 17, 2011
AMENDED IN SENATE MARCH 14, 2011
INTRODUCED BY Committee on Budget (Blumenfield (Chair), Alejo,
Allen, Brownley, Buchanan, Butler, Cedillo, Chesbro, Dickinson,
Feuer, Gordon, Huffman, Mitchell, Monning, and Swanson)
JANUARY 10, 2011
An act to amend Sections 17053.33, 17053.34, 17053.45,
17053.46, 17053.47, 17053.70, 17053.74, 23101, 23612.2, 23622.7,
23622.8, 23633, 23634, 23645, 23646, and 25128 of, to amend, repeal,
and add Section 25136 of, to add Section 6377 to, to repeal Section
25128.5 of, and to repeal and amend Sections 17053.80 and 23623 of,
the Revenue and Taxation Code, relating to taxation, to take effect
immediately, tax levy. An act to add Section 16330 to
the Government Code, relating to state finance, and making an
appropriation therefor, to take effect immediately, bill related to
the budget.
LEGISLATIVE COUNSEL'S DIGEST
AB 103, as amended, Committee on Budget. Taxation.
State funds: State Agency Investment Fund.
(1) Existing law provides for the investment of certain state
moneys by the Treasurer through the Pooled Money Investment Account,
according to specified criteria.
This bill would create the State Agency Investment Fund in the
State Treasury, for the receipt of deposits by state agencies of up
to $500,000,000 each, from moneys not required by law to be deposited
in the Pooled Money Investment Account, for a total of
$10,000,000,000 in the fund at any one time. It would authorize the
Director of Finance, in consultation with the Treasurer, to set
certain terms and conditions for the deposits, and require the
Treasurer to invest the moneys held in the fund through the Pooled
Money Investment Account, according to specified criteria. It would
continuously appropriate moneys in the fund to the Controller for the
payment of interest expenditures and the return of deposits to
depositors.
(2) The Administrative Procedure Act governs the procedure for the
adoption, amendment, or repeal of regulations by state agencies and
for the review of those regulatory actions by the Office of
Administrative Law, subject to specified criteria.
This bill would exempt activities conducted by the Director of
Finance, in consultation with the Treasurer, in implementing and
administering the investment program provided for in the bill from
the provisions of the act.
(3) This bill would declare that it is to take effect immediately
as a bill providing for appropriations related to the Budget Bill.
The Sales and Use Tax Law imposes a tax on retailers measured by
the gross receipts from the sale of tangible personal property sold
at retail in this state, or on the storage, use, or other consumption
in this state of tangible personal property purchased from a
retailer for storage, use, or other consumption in this state. That
law provides various exemptions from those taxes.
On and after July 1, 2012, this bill would exempt from specified
sales and use taxes, or a portion of those taxes, the sale of, and
the storage, use, or other consumption in this state, of tangible
personal property, as defined, purchased for use by a qualified
person, as defined, primarily in any stage of manufacturing,
processing, refining, fabricating, or recycling of property; in
research and development; to maintain, repair, measure, or test
specified property; and by a contractor for use in a construction
contract with a qualified person, as specified.
The Bradley-Burns Uniform Local Sales and Use Tax Law authorizes
counties and cities to impose local sales and use taxes in conformity
with the Sales and Use Tax Law, and the Transactions and Use Tax Law
authorizes districts, as specified, to impose transactions and use
taxes in conformity with the Sales and Use Tax Law. Exemptions from
state sales and use taxes are incorporated in these laws.
This bill would specify that this exemption does not apply to
local sales and use taxes or transactions and use taxes.
This bill would also specify that this exemption would be
operative only so long as state sales and use taxes are equal to or
greater than 7% or until July 1, 2016, whichever first occurs.
The Personal Income Tax Law and the Corporation Tax Law authorize
various credits against the taxes imposed by those laws, including a
credit for taxable years beginning on or after January 1, 2009, in
the amount of $3,000 for each full-time employee hired by a qualified
employer, until a cutoff date on which a maximum cumulative credit
of $400,000,000 has been reached for all taxable years. Those laws
define "qualified employer" as a taxpayer that employed 20 or fewer
employees as of the last day of the preceding taxable year.
This bill would, under both laws, continue that credit only for
taxable years beginning before January 1, 2011, and for taxable years
beginning on or after January 1, 2011, and before January 1, 2013,
would authorize a credit in the amount of $4,000 for each full-time
employee, as specified, and would revise the definition of "qualified
employer" to mean a taxpayer that employed 50 or fewer employees as
of the last day of the preceding taxable year. This bill would also
provide that the credit, under both laws, would be repealed upon the
cutoff date or December 31, 2013, whichever occurs earlier.
The Personal Income Tax Law and the Corporation Tax Law allow for
various tax credits and deductions in computing the taxes imposed by
those laws, relating to enterprise zones, targeted tax areas, local
agency military base recovery areas, and manufacturing enhancement
areas. Under existing law, specified tax credits for sales and use
taxes paid by certain taxpayers in these areas may be carried over to
succeeding taxable years, until the credit amount is exhausted.
Under both laws, credits are allowed to specified taxpayers for the
hiring and employment of specified employees within enterprise zones,
targeted tax areas, local agency military base recovery areas, and
manufacturing enhancement areas.
This bill would revise the credits allowed for the hiring and
employment of specified employees for taxable years beginning on or
after January 1, 2011, to provide, generally, for a credit of $5,000
for each net increase in specified full-time employees. This bill
would cease to allow carryovers for the credits for sales and use
taxes and for hiring and employment for taxable years beginning
before January 1, 2006, and limit the carryover period to five years
for those portions of credit that were first allowed in taxable years
beginning on or after January 1, 2006.
This bill would require specified taxpayers to submit information
to the Franchise Tax Board under penalty of perjury. By requiring
these taxpayer to submit information under penalty of perjury, this
bill would create a new crime and thereby impose a state-mandated
local program.
The Corporation Tax Law imposes taxes measured by income and, in
the case of a business with income derived from or attributable to
sources both within and without this state, apportions the income
between this state and other states and foreign countries in
accordance with a specified 4-factor formula based on the property,
payroll, and sales within and without this state, except that in the
case of an apportioning trade or business that derives more than 50%
of its gross business receipts from conducting one or more qualified
business activities, as defined, business income is apportioned in
accordance with a specified 3-factor formula. That law, for taxable
years beginning on or after January 1, 2011, allows a taxpayer to
have that income apportioned in accordance with a single sales factor
formula, except as provided, pursuant to an irrevocable annual
election, as specified. That law also provides that sales of tangible
and intangible personal property are in this state in accordance
with specified criteria.
This bill would, for taxable years beginning or after January 1,
2011, revise the rules which determine whether a taxpayer is doing
business within this state, revise the provisions which determine
whether specific sales occur in this state, and require a taxpayer,
except as provided, to apportion their income in accordance with a
single sales factor.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
This bill would constitute a change in state statute that would
result in a taxpayer paying a higher tax 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.
Vote: 2/3 majority . Appropriation:
no yes . Fiscal committee: yes.
State-mandated local program: yes no .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 16330 is added to the
Government Code , to read:
16330. (a) (1) The State Agency Investment Fund is hereby created
within the State Treasury, for the receipt of deposits from state
agencies with moneys not currently required by law to be deposited in
the Pooled Money Investment Account.
(2) For purposes of this section, a "state agency" includes any
state office, officer, department, division, bureau, board,
commission, organization, or agency, including, but not limited to,
the University of California, the California State University, the
California Community Colleges, and the Judicial Council.
(b) Each agency that deposits moneys in the fund shall deposit no
less than a total of five hundred million dollars ($500,000,000). The
total amount of moneys that may be deposited in the fund from all
eligible sources shall not exceed, at any point in time, a total of
ten billion dollars ($10,000,000,000), or a lesser amount as
determined by the Director of Finance, in consultation with the
Treasurer.
(c) The terms and conditions of deposits made into the fund shall
be set by the Director of Finance, in consultation with the
Treasurer. Those terms shall include, but not be limited to, the size
of deposit from a particular state agency, the length of time those
moneys shall be held in deposit in the fund, the availability of
funds for withdrawal by the state agency depositing the funds, and
the annual rate of interest paid on deposits, as described in
subdivision (e).
(d) Moneys held in the fund shall be invested by the Treasurer in
investments authorized by Sections 16430 and 16480 through the Pooled
Money Investment Account, and notwithstanding any other law, shall
be deemed borrowable by the General Fund for cashflow purposes
pursuant to Sections 16310 and 16381. Repayment of any of those
borrowings shall be considered a priority payment, equivalent to any
other loan repayment made from the General Fund to another state
fund.
(e) Notwithstanding any other law, the rate of interest to be paid
to the depositors shall be the base apportionment rate based on
their pro rata share of the earnings of the Pooled Money Investment
Account on a quarterly basis at the end of each quarter plus an
enhanced amount. The pro rata share shall be determined by a dollar
day participation. The base apportionment rate applied to the dollar
day participation in the fund shall be the quarter-to-date average
yield of the Pooled Money Investment Account for the current quarter.
The enhancement amount paid to depositors in the fund shall be
determined by the Director of Finance, in consultation with the
Treasurer, and shall be added to the base rate earned by the Pooled
Money Investment Account at the time the apportionment is made. The
total interest cost described in this subdivision shall not exceed
that provided for in paragraph (1) of subdivision (d) of Section
16731.
(f) Notwithstanding Section 13340, moneys in the fund are hereby
continuously appropriated to the Controller for payment of interest
expenditures to depositors calculated in accordance with subdivision
(e), and return of deposits to depositors according to terms and
conditions set by the Director of Finance, in consultation with the
Treasurer.
(g) The Department of Finance shall determine the budget items to
be used for the recording and reporting of interest expenditures
pursuant to this section.
(h) Deposits in the fund shall be tracked separately for each
participant in the state's accounting system, and shall be deemed to
be assets of each participant. These assets shall be reflected as
such on the participants' financial statements.
(i) Actions by the Director of Finance, in consultation with the
Treasurer, in implementing and administering the investment program
provided for in this section shall be exempt from the provisions of
the Administrative Procedure Act (Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3).
SEC. 2. This act is a bill providing for
appropriations related to the Budget Bill within the meaning of
subdivision (e) of Section 12 of Article IV of the California
Constitution, has been identified as related to the budget in the
Budget Bill, and shall take effect immediately. All matter
omitted in this version of the bill appears in the bill as amended in
the Senate, June 12, 2011. (JR11)