BILL NUMBER: AB 1818	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 29, 2012

INTRODUCED BY   Assembly  Member   Perea
  Members   Perea   and Beall 

                        FEBRUARY 21, 2012

   An act to  amend Section 17020.3 of   add
Sections 17053.99 and 23699 to  the Revenue and Taxation Code,
relating to taxation  , to take effect immediately, tax levy
 .



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1818, as amended, Perea.  Personal income tax.
  Income taxes: credit: patent licensing. 
   The Personal Income Tax Law  conforms, with modification,
to the federal definition of exchanged basis property  
and the Corporation Tax Law allow various credits against the taxes
imposed by those laws  .
   This bill  would make a technical, nonsubstantive change
to that provision   would, under the Personal Income Tax
Law and the Corporation Tax Law, for taxable years beginning on or
after January 1, 2012, allow a credit against those taxes in an
amount equal to ____% of the qualified royalties,   as
defined, paid by a qualified taxpayer, as defined  . 
   This bill would take effect immediately as a tax levy. 
   Vote: majority. 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 17053.99 is added to the 
 Revenue and Taxation Code   , to read:  
   17053.99.  (a) For each taxable year beginning on or after January
1, 2012, there shall be allowed to a qualified taxpayer as a credit
against the "net tax," as defined in Section 17039, an amount equal
to ____ percent of the qualified royalties paid by the qualified
taxpayer during the taxable year.
   (b) For purposes of this section:
   (1) "Qualified patent" means a patent owned by the University of
California for an invention where the research and development for
that invention was funded, in whole or in part, by amounts eligible
for the credit under Section 17052.12 or 23609.
   (2) "Qualified royalties" means any royalties paid by a qualified
taxpayer for the use of a qualified patent through a license
agreement with the University of California or another entity.
   (3) "Qualified taxpayer" means a taxpayer that paid qualified
royalties during the taxable year and commercializes, within the
state, the licensed patent for which qualified royalties were paid
during the taxable year.
   (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"
in the following year, and succeeding years if necessary, until the
credit is exhausted. 
   SEC. 2.    Section 23699 is added to the  
Revenue and Taxation Code   , to read:  
   23699.  (a) For each taxable year beginning on or after January 1,
2012, there shall be allowed to a qualified taxpayer as a credit
against the "tax," as defined in Section 23036, an amount equal to
____ percent of the qualified amount paid by the qualified taxpayer
during the taxable year.
   (b) For purposes of this section:
   (1) "Qualified patent" means a patent owned by the University of
California for an invention where the research and development for
that invention was funded, in whole or in part, by amounts eligible
for the credit under Section 17052.12 or 23609.
   (2) "Qualified royalties" means any royalties paid by a qualified
taxpayer for the use of a qualified patent through a license
agreement with the University of California or another entity.
   (3) "Qualified taxpayer" means a taxpayer that paid qualified
royalties during the taxable year and commercializes, within the
state, the licensed patent for which qualified royalties were paid
during the taxable year.
   (c) In the case where the credit allowed by this section exceeds
the "tax," the excess may be carried over to reduce the "tax" in the
following year, and succeeding years if necessary, until the credit
is exhausted. 
   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 17020.3 of the Revenue and
Taxation Code is amended to read:
   17020.3.  For purposes of this part, the term "exchanged basis
property" has the same meaning given to that term by Section 7701(a)
(44) of the Internal Revenue Code, except that reference to Subtitle
A shall instead be a reference to this part.