California 2011-2012 Regular Session Status: In Committee

AB 231 — Economic development: economic development areas.

Last action — From committee: Filed with the Chief Clerk pursuant to Joint Rule 56.

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  1. ✓
    Introduced
  2. 2
    In Committee
  3. 3
    Passed Assembly
  4. 4
    Passed Senate
  5. 5
    To Executive
  6. 6
    Enacted

This bill died with 2011-2012 Regular Session. It reached “In Committee” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.

This bill is no longer active — its legislative session has ended, so there is no live prognosis. It would have to be reintroduced in the current session to move again.

Summary

(1) The Enterprise Zone Act provides for the designation and oversight by the Department of Housing and Community Development of various types of economic development areas throughout the state, including enterprise zones, targeted tax areas, local agency military base recovery areas (LAMBRAs) , and Manufacturing Enhancement Areas, collectively known as geographically targeted economic development areas, or G-TEDAs. Pursuant to these provisions, qualifying entities in those areas may receive certain tax and regulatory incentives. This bill would rename the act as the California Economic and Community Development Zone Act. This bill would delete the provisions governing Manufacturing Enhancement Areas and targeted tax areas, and make various revisions in the requirements for designating and administering enterprise zones and LAMBRAs, and G-TEDAs collectively. (2) The Personal Income Tax Law and the Corporation Tax Law authorize a taxpayer to claim certain tax incentives for activities conducted in an enterprise zone or a LAMBRA, including a credit for a specified percentage of wages paid during the taxable year to a qualified employee, as defined, who is employed by the taxpayer during the taxable year in an enterprise zone or a LAMBRA. This bill would, with respect to employees hired before January 1, 2011, increase specified requirements for an individual to be a qualified employee for purposes of the enterprise zone hiring credits, and make other specified changes relating to the requirements for a taxpayer to take advantage of the credits. This bill would, with respect to employees hired after January 1, 2011, revise the enterprise zone hiring credit, so that the credit would be available only for a qualified employee for each of the first 3 years of employment and modify the applicable percentage amounts. This bill would impose new requirements for a taxpayer claiming this credit, including a registration requirement made under penalty of perjury. By expanding the crime of perjury, this bill would impose a state-mandated local program. This bill would also limit the carryover period to 15 years. This bill would, for taxable years beginning on or after January 1, 2011, and before January 1, 2013, impose a specified 50% overall limitation on these credits, as provided. (3) The Personal Income Tax Law and the Corporation Tax Law allow a credit in an amount equal to the amount of sales or use tax paid in connection with qualified property that is purchased and placed in service during the taxable year by a taxpayer engaged in a trade or business in an enterprise zone, targeted tax area, or LAMBRA, and allow unused credits to be carried over indefinitely to subsequent taxable years. This bill would require the taxpayer to register, as specified, a business in an enterprise zone, targeted tax area, or a LAMBRA before the taxpayer can claim a credit, and would limit the carryover period to 15 years. This bill would also impose a specified 50% overall limitation on these credits as provided. (4) The Personal Income Tax Law and the Corporation Tax Law allow deductions in the amount of net interest received by a taxpayer in payment of a debt of a person or entity engaged in a trade or business in an enterprise zone. This bill would, for taxable years beginning on or after January 1, 2011, and before January 1, 2013, limit the amount of these deductions to 50% of the net interest received by a taxpayer in payment of debt, as specified. (5) The Personal Income Tax Law and the Corporation Tax Law allow specified credits for hiring employees in a targeted tax area and manufacturing enhancement area. This bill would limit the credits to qualified employees hired by a qualified taxpayer before January 1, 2011. (6) The Personal Income Tax Law and the Corporation Tax Law allow a deduction for a net operating loss of a person or entity engaged in business in an enterprise zone or a LAMBRA, and any unused net operating losses to be a net operating loss carryover to other years, as specified. This bill would allow a deduction for those net operating losses only for taxable years beginning before January 1, 2011, but would allow any unused net operating losses to continue to be carried to other years as provided. (7) 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. (8) This bill would include 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 23 of the membership of each house of the Legislature. (9) This bill would take effect immediately as a tax levy.

Bill Text

Action History

  1. From committee: Filed with the Chief Clerk pursuant to Joint Rule 56.

  2. Died pursuant to Art. IV, Sec. 10(c) of the Constitution.

  3. Re-referred to Com. on J., E.D. & E.

  4. From committee chair, with author's amendments: Amend, and re-refer to Com. on J., E.D. & E. Read second time and amended.

  5. Re-referred to Com. on J., E.D. & E.

  6. From committee chair, with author's amendments: Amend, and re-refer to Com. on J., E.D. & E. Read second time and amended.

  7. Re-referred to Com. on J., E.D. & E.

  8. From committee chair, with author's amendments: Amend, and re-refer to Com. on J., E.D. & E. Read second time and amended.

  9. Re-referred to Com. on J., E.D. & E.

  10. From committee chair, with author's amendments: Amend, and re-refer to Com. on J., E.D. & E. Read second time and amended.

  11. Referred to Coms. on J., E.D. & E. and REV. & TAX.

  12. From printer. May be heard in committee March 5.

  13. Read first time. To print.

Sponsors

  • Alejo · Cosponsor
  • Bradford · Cosponsor
  • Galgiani · Cosponsor
  • Hueso · Cosponsor
  • Perea · Cosponsor
  • Solorio · Cosponsor
  • Roger Hernández · Cosponsor
  • V. Manuel Pérez · Primary

Sponsorship breakdown

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1 sponsors · 7 co-sponsors · 114 not signed on

Sponsors (1)

Co-sponsors (7)

Not signed on (114)

114 members have not signed on to this bill.

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"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

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Subjects

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Frequently asked questions

What does AB 231 do?
(1) The Enterprise Zone Act provides for the designation and oversight by the Department of Housing and Community Development of various types of economic development areas throughout the state, including enterprise zones, targeted tax areas, local agency military base recovery areas (LAMBRAs) , and Manufacturing Enhancement Areas, collectively known as geographically targeted economic development areas, or G-TEDAs. Pursuant to these provisions, qualifying entities in those areas may receive certain tax and regulatory incentives. This bill would rename the act as the California Economic and Community Development Zone Act. This bill would delete the provisions governing Manufacturing Enhancement Areas and targeted tax areas, and make various revisions in the requirements for designating and administering enterprise zones and LAMBRAs, and G-TEDAs collectively. (2) The Personal Income Tax Law and the Corporation Tax Law authorize a taxpayer to claim certain tax incentives for activities conducted in an enterprise zone or a LAMBRA, including a credit for a specified percentage of wages paid during the taxable year to a qualified employee, as defined, who is employed by the taxpayer during the taxable year in an enterprise zone or a LAMBRA. This bill would, with respect to employees hired before January 1, 2011, increase specified requirements for an individual to be a qualified employee for purposes of the enterprise zone hiring credits, and make other specified changes relating to the requirements for a taxpayer to take advantage of the credits. This bill would, with respect to employees hired after January 1, 2011, revise the enterprise zone hiring credit, so that the credit would be available only for a qualified employee for each of the first 3 years of employment and modify the applicable percentage amounts. This bill would impose new requirements for a taxpayer claiming this credit, including a registration requirement made under penalty of perjury. By expanding the crime of perjury, this bill would impose a state-mandated local program. This bill would also limit the carryover period to 15 years. This bill would, for taxable years beginning on or after January 1, 2011, and before January 1, 2013, impose a specified 50% overall limitation on these credits, as provided. (3) The Personal Income Tax Law and the Corporation Tax Law allow a credit in an amount equal to the amount of sales or use tax paid in connection with qualified property that is purchased and placed in service during the taxable year by a taxpayer engaged in a trade or business in an enterprise zone, targeted tax area, or LAMBRA, and allow unused credits to be carried over indefinitely to subsequent taxable years. This bill would require the taxpayer to register, as specified, a business in an enterprise zone, targeted tax area, or a LAMBRA before the taxpayer can claim a credit, and would limit the carryover period to 15 years. This bill would also impose a specified 50% overall limitation on these credits as provided. (4) The Personal Income Tax Law and the Corporation Tax Law allow deductions in the amount of net interest received by a taxpayer in payment of a debt of a person or entity engaged in a trade or business in an enterprise zone. This bill would, for taxable years beginning on or after January 1, 2011, and before January 1, 2013, limit the amount of these deductions to 50% of the net interest received by a taxpayer in payment of debt, as specified. (5) The Personal Income Tax Law and the Corporation Tax Law allow specified credits for hiring employees in a targeted tax area and manufacturing enhancement area. This bill would limit the credits to qualified employees hired by a qualified taxpayer before January 1, 2011. (6) The Personal Income Tax Law and the Corporation Tax Law allow a deduction for a net operating loss of a person or entity engaged in business in an enterprise zone or a LAMBRA, and any unused net operating losses to be a net operating loss carryover to other years, as specified. This bill would allow a deduction for those net operating losses only for taxable years beginning before January 1, 2011, but would allow any unused net operating losses to continue to be carried to other years as provided. (7) 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. (8) This bill would include 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 23 of the membership of each house of the Legislature. (9) This bill would take effect immediately as a tax levy.
Who sponsors AB 231?
AB 231 is sponsored by Alejo, Bradford, Galgiani, Hueso, Perea, Solorio, Roger Hernández, and V. Manuel Pérez.
What is the current status of AB 231?
This bill died with 2011-2012 Regular Session. It reached “In Committee” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.
Where can I track AB 231?
Track AB 231 free on One Click Politics — get push/email alerts when it moves.

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