BILL NUMBER: SB 508	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JUNE 20, 2011

INTRODUCED BY   Senator Wolk

                        FEBRUARY 17, 2011

   An act to add Section 40 to the Revenue and Taxation Code,
relating to taxation.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 508, as amended, Wolk. Income and corporation taxes: credits:
information and operative  limitations.   time
period. 
   Existing law imposes various taxes and allows specified credits,
deductions, exclusions, and exemptions in computing those taxes.
   This bill would  , for taxable years beginning on or after
January 1, 2012,  require any bill  , introduced on or
after January 1, 2012,  that would authorize a personal income
or corporation tax credit to contain, among other provisions, (1)
specified goals, purposes, and objectives that the tax credit will
achieve, (2) detailed performance indicators to measure whether the
tax credit is meeting those goals, purposes, and objectives, and (3)
a requirement that the tax credit cease to be operative  7
  no later than 10  taxable years after its
effective date, as specified.
   Vote: majority. Appropriation: no. Fiscal committee:  yes
  no  . State-mandated local program: no.


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

  SECTION 1.  The Legislature finds and declares the following:
   (a) Government at all levels enacts tax preferences to promote
equity among taxpayers and enhance economic growth in a way that is
inexpensive to administer and provides direct benefits to taxpayers.
   (b) National and state public finance experts recommend that tax
preferences be evaluated alongside direct spending programs, as both
are public initiatives meant to accomplish specified goals.
   (c) Revenue losses attributable to federal tax preferences exceed
any other category of federal spending, including defense, Medicaid
and Medicare, Social Security, debt service, or discretionary
spending.
   (d) California now forgoes more than $41  
$47  billion in revenue from tax preferences, according to the
Department of Finance.
   (e) Many current tax preferences contain neither sunset
provisions, nor goals and objectives to measure the performance of
the tax preference.
   (f) Many current tax preferences neither require taxpayers to
submit data demonstrating the tax preference's effectiveness, nor for
state agencies to collect and send data to the Legislature to
evaluate the tax preference.
   (g) The Legislature should apply the same level of review and
performance measure that it applies to spending programs to tax
preference programs, including tax credits.
  SEC. 2.  Section 40 is added to the Revenue and Taxation Code, to
read:
   40.  Notwithstanding any other law, any bill, introduced on or
after January 1, 2012, that would authorize a new credit against the
"net tax," as defined in Section 17039, or against the "tax," as
defined in Section 23036, or both, shall contain all of the
following:
   (a) Specific goals, purposes, and objectives that the tax credit
will achieve.
   (b) Detailed performance indicators for the Legislature to use
when measuring whether the tax credit meets the goals, purposes, and
objectives stated in the bill.
   (c) Data collection requirements to enable the Legislature to
determine whether the tax credit is meeting, failing to meet, or
exceeding those specific goals, purposes, and objectives. The
requirements shall include the specific data and baseline
measurements to be collected and remitted in each year the credit is
 effective   in effect, in order  for the
Legislature to measure the change in performance indicators, and the
specific taxpayers, state agencies, or other entities required to
collect and remit data.
   (d) A requirement that the tax credit shall cease to be operative
 seven   no later than 10  taxable years
after its effective date, and as of January 1 of the year following
the end of the operative period is repealed.