California 2017-2018 Regular Session Status: Enacted

SB 855 — Taxation.

Last action — Chaptered by Secretary of State. Chapter 52, Statutes of 2018.

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

This bill has been enacted into law. Introduced January 10, 2018. Enacted.

Prognosis

Likely to advance 70% · moderate confidence

Where this bill stands today.

Odds of enactment

High

How often bills like it became law.

  • Enacted

    Current position in the legislative process.

  • 1 sponsor

    1 primary, 0 co-sponsors signed on.

  • Cleared a recorded vote

    Passed 3 recorded votes so far.

Prognosis reads this bill's own signals — stage, sponsorship breadth, committee status, recorded votes and cross-state momentum. Odds come from a model trained on which bills have become law.

Summary

(1) The Personal Income Tax Law, beginning on or after January 1, 2015, in modified conformity with federal income tax laws, allows an earned income tax credit against personal income tax and a payment from the Tax Relief and Refund Account for an allowable credit in excess of tax liability to an eligible individual that is equal to that portion of the earned income tax credit allowed by federal law as determined by the earned income tax credit adjustment factor, as specified. The law provides that the amount of the credit is calculated as a percentage of the eligible individual's earned income and is phased out above a specified amount as income increases and provides alternative calculation factors under specified circumstances. An "eligible individual" is defined to include specified individuals, and provides that, if a person does not have a qualifying child, he or she must be between 25 and 65 years of age at the end of the taxable year. The law requires, for taxable years beginning on or after January 1, 2016, specified earned income amounts, phaseout amounts, and the amount of disqualified income that would disallow this credit to be recomputed annually in the same manner as the recomputation of income tax brackets, as prescribed. This bill, for each taxable year beginning on or after January 1, 2018, would revise the age requirement for the definition of an "eligible individual," with regard to persons who do not have a qualifying child, to require solely that the person must have attained 18 years of age. The bill, for each taxable year beginning on or after January 1, 2018, and before January 1, 2019, would deem the California Consumer Price Index as the greater of 3.1% or the percentage change in the California Consumer Price Index for the recomputation of specified amounts. This bill, for taxable years on and after January 1, 2018, would revise the alternative calculation factors to expand the credit amount. Existing law establishes the continuously appropriated Tax Relief and Refund Account and provides that payments required to be made to taxpayers or other persons from the Personal Income Tax Fund are to be paid from that account, including any amount to be paid as an earned income tax credit in excess of any tax liabilities. By expanding the definition of eligible individual and, thus, authorizing new payments from that account for additional amounts in excess of personal income tax liabilities, this bill would make an appropriation. (2) The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws, including, for taxable years beginning on or after January 1, 2014, and before January 1, 2021, a credit for hiring qualified full-time employees within a designated census tract or economic development area in an amount equal to 35% of the qualified wages paid to those employees multiplied by the applicable percentage for that taxable year. For the purposes of that credit, a qualified full-time employee is defined as an individual who meets certain requirements and satisfies at least one of several specified conditions, and the applicable percentage is calculated, in part, by comparing the total number of full-time employees employed in this state during the taxable year to the total number of full-time employees employed in this state during the base year, as defined, and qualified wages are limited to wages that exceed 150% of the minimum wage, or $10 per hour, as applicable, but do not exceed 350% of the minimum wage. This bill would extend the allowance of the credit until taxable years beginning before January 1, 2026. (3) The Personal Income Tax Law, in conformity with federal income tax law, generally defines "gross income" as income from whatever source derived, except as specifically excluded, and provides various exclusions from gross income. This bill, for taxable years beginning on or after January 1, 2018, would exclude from gross income the earned income of an eligible taxpayer that is derived from sources within Indian country in this state. The bill would define specified terms for the purposes of this exclusion. (4) The Personal Income Tax Law and the Corporation Tax Law allow a credit against the taxes imposed under those laws, for each taxable year beginning on and after January 1, 2014, and before January 1, 2025, in an amount as provided in a written agreement between the Governor's Office of Business and Economic Development (GO-Biz) and the taxpayer, agreed upon by the California Competes Tax Credit Committee, and based on specified factors, including the number of jobs the taxpayer will create or retain in the state and the amount of investment in the state by the taxpayer. Existing law provides for the allocation of credit amounts through the 2017–18 fiscal year, limits the aggregate amount of credit that may be allocated in a fiscal year, and subjects the amount to specified adjustments. This bill would extend the allowance of the credit until taxable years beginning before January 1, 2030. This bill would provide for the allocation of credit amounts of $180,000,000 for each fiscal year from 2018–19 to 2022–23, inclusive, subject to those specified adjustments. The bill would require GO-Biz, when determining whether to enter into a written agreement with a taxpayer for allocation periods beginning with the 2018–19 fiscal year, to consider the extent to which the credit will influence the taxpayer's ability, willingness, or both, to create jobs in this state that might not otherwise be created in the state by the taxpayer or any other taxpayer. This bill would require GO-Biz to additionally consider, when allocating the amount of the credit beginning with the 2018–19 fiscal year, the training opportunities offered by the taxpayer for its employees. The bill would require, on or before October 1, 2019, GO-Biz to provide to the Legislative Analyst's Office a report on the credits allocated pursuant to this section for the 2018–19 fiscal year containing specified information, including a detailed description of the methodology used to evaluate applications and allocate credits. The bill would require, on or before April 1, 2020, the Legislative Analyst's Office to provide to the Assembly Committee on Revenue and Taxation, the Senate Committee on Governance and Finance, the budget committees of both houses, and the public with a report evaluating the GO-Biz report. This bill would also require GO-Biz to provide a member of the California Competes Tax Credit Committee, or their designated representatives, upon request of that member, with any information necessary to fulfill their duties related to the tax credit. (5) Existing law authorizes a city, county, or city and county that has entered into a reciprocal agreement, as defined, with the Franchise Tax Board, to exchange tax information, as provided. Existing law requires, upon the request of the Franchise Tax Board, each city, county, or city and county that assesses a city, county, or city and county business tax or requires a city, county, or city and county business license to annually submit to the board specified information relating to the administration of the city, county, or city and county's business tax or business license program. Existing law limits the collection and use of this information and provides that any unauthorized use of this information is punishable as a misdemeanor. Existing law repeals these provisions on January 1, 2019. This bill would delete the January 1, 2019, repeal date, thereby extending the operation of these provisions indefinitely, and would make clarifying changes to related provisions. Because these provisions make the unauthorized use of specified information punishable as a misdemeanor, this bill would impose a state-mandated local program by extending a crime. (6) 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. (7) This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.

Bill Text

Action History

  1. Chaptered by Secretary of State. Chapter 52, Statutes of 2018.

  2. Approved by the Governor.

  3. Enrolled and presented to the Governor at 4 p.m.

  4. Assembly amendments concurred in. (Ayes 36. Noes 0. Page 4730.) Ordered to engrossing and enrolling.

  5. Unanimous consent granted to take up without reference to file.

  6. In Senate. Concurrence in Assembly amendments pending.

  7. Read third time. Passed. (Ayes 69. Noes 9. Page 5849.) Ordered to the Senate.

  8. Ordered to third reading.

  9. Withdrawn from committee.

  10. Assembly Rule 96 suspended. (Ayes 55. Noes 24. Page 5802.)

  11. From committee with author's amendments. Read second time and amended. Re-referred to Com. on BUDGET.

  12. From committee with author's amendments. Read second time and amended. Re-referred to Com. on BUDGET.

  13. Referred to Com. on BUDGET.

  14. In Assembly. Read first time. Held at Desk.

  15. Read third time. Passed. (Ayes 24. Noes 11. Page 4923.) Ordered to the Assembly.

  16. Read second time. Ordered to third reading.

  17. Ordered to second reading.

  18. Withdrawn from committee. (Ayes 25. Noes 11. Page 4865.)

  19. Referred to Com. on B. & F.R.

  20. From printer. May be acted upon on or after February 10.

  21. Introduced. Read first time. To Com. on RLS. for assignment. To print.

Sponsors

  • Committee on Budget and Fiscal Review · Primary

Sponsorship breakdown

Export CSV (upgrade) →

1 sponsors · 0 co-sponsors · 121 not signed on · 5 voted No

Sponsors (1)

  • Committee on Budget and Fiscal Review

Co-sponsors (0)

None.

Not signed on (121)

121 members have not signed on to this bill.

Show all 121 →

"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.

Whip count is in markup. Polling the chamber and every recorded vote this session. Only the first open is slow. It’s instant for you after this. Calling the roll · Tallying · Engrossing

Votes

W/O REF. TO FILE SB855 B. & F.R. (Mitchell) Concurrence

Passed 36 Yea · 0 Nay · 2 Other
Party YeaNayPresentNot Voting
Unaffiliated 31002
Democratic 5000
Total 36002
% of votes cast 95%0%0%5%
How each member voted (38)
Member Party Vote
Anderson — Yea
Beall — Yea
Bradford — Yea
Hill — Yea
Leyva — Yea
Monning — Yea
Nielsen — Yea
Skinner — Yea
Wieckowski — Yea
Glazer — Yea
Hertzberg — Yea
Lara — Yea
Morrell — Yea
Pan — Yea
Roth — Yea
Allen — Yea
De León — Yea
Cannella — Yea
Portantino — Yea
Atkins — Yea
Mitchell — Yea
Fuller — Yea
Galgiani — Yea
Hernandez — Yea
Hueso — Yea
Dodd — Yea
Bates — Yea
Moorlach — Not Voting
Vidak — Yea
Wilk — Yea
Beth Gaines — Yea
Bill Berryhill — Not Voting
Mark Stone — Yea
Jackson, Corey A. Democratic Yea
McGuire, Mike Democratic Yea
Nguyen, Stephanie Democratic Yea
Stern, Henry I. Democratic Yea
Wiener, Scott D. Democratic Yea

Official roll call →

SB 855 B. & F. R. Senate Third Reading

Passed 69 Yea · 9 Nay · 2 Other
Party YeaNayPresentNot Voting
Unaffiliated 49801
Democratic 16000
Republican 4101
Total 69902
% of votes cast 86%11%0%3%
How each member voted (80)
Member Party Vote
Acosta — Yea
Bigelow — Nay
Bloom — Yea
Brough — Nay
Jones-Sawyer — Yea
Levine — Yea
Low — Yea
Maienschein — Yea
Mathis — Yea
Rendon — Yea
Rodriguez — Yea
Santiago — Yea
Steinorth — Nay
Thurmond — Yea
Weber — Yea
Eggman — Yea
Chávez — Nay
Cunningham — Yea
Daly — Yea
Friedman — Yea
Gloria — Yea
Holden — Yea
Rivas — Yea
Rubio — Yea
Chiu — Yea
Chu — Yea
Cooper — Yea
Mayes — Yea
Mullin — Yea
O'Donnell — Yea
Voepel — Yea
Waldron — Yea
Salas — Yea
Fong — Yea
Burke — Yea
Gray — Yea
Frazier — Yea
Gonzalez Fletcher — Yea
Harper — Nay
Kamlager-Dove — Yea
Kiley — Yea
McCarty — Yea
Medina — Yea
Chau — Yea
Melendez — Nay
Nazarian — Yea
Baker — Yea
Cooley — Yea
Obernolte — Nay
Quirk — Yea
Ting — Yea
Wood — Yea
Cristina Garcia — Yea
Eduardo Garcia — Yea
Jim Patterson — Not Voting
Mark Stone — Yea
Travis Allen — Nay
Wendy Carrillo — Yea
Aguiar-Curry, Cecilia M. Democratic Yea
Arambula, Joaquin Democratic Yea
Berman, Marc Democratic Yea
Bonta, Mia Democratic Yea
Caballero, Anna M. Democratic Yea
Calderon, Lisa Democratic Yea
Cervantes, Sabrina Democratic Yea
Gabriel, Jesse Democratic Yea
Gipson, Mike A. Democratic Yea
Grayson, Timothy S. Democratic Yea
Irwin, Jacqui Democratic Yea
Kalra, Ash Democratic Yea
Limón, Monique Democratic Yea
Muratsuchi, Al Democratic Yea
Quirk-Silva, Sharon Democratic Yea
Reyes, Eloise Gómez Democratic Yea
Chen, Phillip Republican Yea
Choi, Steven S. Republican Yea
Dahle, Megan Republican Nay
Flora, Heath Republican Not Voting
Gallagher, James Republican Yea
Lackey, Tom Republican Yea

Official roll call →

3rd Reading SB855 B. & F.R.

Passed 24 Yea · 11 Nay · 4 Other
Party YeaNayPresentNot Voting
Unaffiliated 201004
Democratic 4100
Total 241104
% of votes cast 62%28%0%10%
How each member voted (39)
Member Party Vote
Anderson — Nay
Bates — Nay
Beall — Yea
Bradford — Yea
Hernandez — Yea
Hill — Yea
Lara — Yea
Morrell — Nay
Newman — Yea
Nielsen — Nay
Skinner — Yea
Galgiani — Yea
Glazer — Yea
Hertzberg — Yea
Monning — Yea
Allen — Yea
Cannella — Not Voting
Portantino — Yea
Atkins — Yea
Mitchell — Yea
De León — Not Voting
Fuller — Nay
Hueso — Not Voting
Dodd — Yea
Leyva — Yea
Moorlach — Nay
Pan — Yea
Roth — Yea
Vidak — Nay
Wieckowski — Yea
Wilk — Nay
Beth Gaines — Nay
Bill Berryhill — Not Voting
Mark Stone — Nay
Jackson, Corey A. Democratic Yea
McGuire, Mike Democratic Yea
Nguyen, Stephanie Democratic Nay
Stern, Henry I. Democratic Yea
Wiener, Scott D. Democratic Yea

Official roll call →

Subjects

taxation
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Frequently asked questions

What does SB 855 do?
(1) The Personal Income Tax Law, beginning on or after January 1, 2015, in modified conformity with federal income tax laws, allows an earned income tax credit against personal income tax and a payment from the Tax Relief and Refund Account for an allowable credit in excess of tax liability to an eligible individual that is equal to that portion of the earned income tax credit allowed by federal law as determined by the earned income tax credit adjustment factor, as specified. The law provides that the amount of the credit is calculated as a percentage of the eligible individual's earned income and is phased out above a specified amount as income increases and provides alternative calculation factors under specified circumstances. An "eligible individual" is defined to include specified individuals, and provides that, if a person does not have a qualifying child, he or she must be between 25 and 65 years of age at the end of the taxable year. The law requires, for taxable years beginning on or after January 1, 2016, specified earned income amounts, phaseout amounts, and the amount of disqualified income that would disallow this credit to be recomputed annually in the same manner as the recomputation of income tax brackets, as prescribed. This bill, for each taxable year beginning on or after January 1, 2018, would revise the age requirement for the definition of an "eligible individual," with regard to persons who do not have a qualifying child, to require solely that the person must have attained 18 years of age. The bill, for each taxable year beginning on or after January 1, 2018, and before January 1, 2019, would deem the California Consumer Price Index as the greater of 3.1% or the percentage change in the California Consumer Price Index for the recomputation of specified amounts. This bill, for taxable years on and after January 1, 2018, would revise the alternative calculation factors to expand the credit amount. Existing law establishes the continuously appropriated Tax Relief and Refund Account and provides that payments required to be made to taxpayers or other persons from the Personal Income Tax Fund are to be paid from that account, including any amount to be paid as an earned income tax credit in excess of any tax liabilities. By expanding the definition of eligible individual and, thus, authorizing new payments from that account for additional amounts in excess of personal income tax liabilities, this bill would make an appropriation. (2) The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws, including, for taxable years beginning on or after January 1, 2014, and before January 1, 2021, a credit for hiring qualified full-time employees within a designated census tract or economic development area in an amount equal to 35% of the qualified wages paid to those employees multiplied by the applicable percentage for that taxable year. For the purposes of that credit, a qualified full-time employee is defined as an individual who meets certain requirements and satisfies at least one of several specified conditions, and the applicable percentage is calculated, in part, by comparing the total number of full-time employees employed in this state during the taxable year to the total number of full-time employees employed in this state during the base year, as defined, and qualified wages are limited to wages that exceed 150% of the minimum wage, or $10 per hour, as applicable, but do not exceed 350% of the minimum wage. This bill would extend the allowance of the credit until taxable years beginning before January 1, 2026. (3) The Personal Income Tax Law, in conformity with federal income tax law, generally defines "gross income" as income from whatever source derived, except as specifically excluded, and provides various exclusions from gross income. This bill, for taxable years beginning on or after January 1, 2018, would exclude from gross income the earned income of an eligible taxpayer that is derived from sources within Indian country in this state. The bill would define specified terms for the purposes of this exclusion. (4) The Personal Income Tax Law and the Corporation Tax Law allow a credit against the taxes imposed under those laws, for each taxable year beginning on and after January 1, 2014, and before January 1, 2025, in an amount as provided in a written agreement between the Governor's Office of Business and Economic Development (GO-Biz) and the taxpayer, agreed upon by the California Competes Tax Credit Committee, and based on specified factors, including the number of jobs the taxpayer will create or retain in the state and the amount of investment in the state by the taxpayer. Existing law provides for the allocation of credit amounts through the 2017–18 fiscal year, limits the aggregate amount of credit that may be allocated in a fiscal year, and subjects the amount to specified adjustments. This bill would extend the allowance of the credit until taxable years beginning before January 1, 2030. This bill would provide for the allocation of credit amounts of $180,000,000 for each fiscal year from 2018–19 to 2022–23, inclusive, subject to those specified adjustments. The bill would require GO-Biz, when determining whether to enter into a written agreement with a taxpayer for allocation periods beginning with the 2018–19 fiscal year, to consider the extent to which the credit will influence the taxpayer's ability, willingness, or both, to create jobs in this state that might not otherwise be created in the state by the taxpayer or any other taxpayer. This bill would require GO-Biz to additionally consider, when allocating the amount of the credit beginning with the 2018–19 fiscal year, the training opportunities offered by the taxpayer for its employees. The bill would require, on or before October 1, 2019, GO-Biz to provide to the Legislative Analyst's Office a report on the credits allocated pursuant to this section for the 2018–19 fiscal year containing specified information, including a detailed description of the methodology used to evaluate applications and allocate credits. The bill would require, on or before April 1, 2020, the Legislative Analyst's Office to provide to the Assembly Committee on Revenue and Taxation, the Senate Committee on Governance and Finance, the budget committees of both houses, and the public with a report evaluating the GO-Biz report. This bill would also require GO-Biz to provide a member of the California Competes Tax Credit Committee, or their designated representatives, upon request of that member, with any information necessary to fulfill their duties related to the tax credit. (5) Existing law authorizes a city, county, or city and county that has entered into a reciprocal agreement, as defined, with the Franchise Tax Board, to exchange tax information, as provided. Existing law requires, upon the request of the Franchise Tax Board, each city, county, or city and county that assesses a city, county, or city and county business tax or requires a city, county, or city and county business license to annually submit to the board specified information relating to the administration of the city, county, or city and county's business tax or business license program. Existing law limits the collection and use of this information and provides that any unauthorized use of this information is punishable as a misdemeanor. Existing law repeals these provisions on January 1, 2019. This bill would delete the January 1, 2019, repeal date, thereby extending the operation of these provisions indefinitely, and would make clarifying changes to related provisions. Because these provisions make the unauthorized use of specified information punishable as a misdemeanor, this bill would impose a state-mandated local program by extending a crime. (6) 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. (7) This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.
Who sponsors SB 855?
SB 855 is sponsored by Committee on Budget and Fiscal Review.
What is the current status of SB 855?
This bill has been enacted into law. Introduced January 10, 2018. Enacted.
Where can I track SB 855?
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