Bill Text: CA AB2389 | 2013-2014 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Local government: capital investment incentive programs: corporation tax credits: qualified wages: new advanced strategic aircraft program.

Spectrum: Bipartisan Bill

Status: (Passed) 2014-07-10 - Chaptered by Secretary of State - Chapter 116, Statutes of 2014. [AB2389 Detail]

Download: California-2013-AB2389-Amended.html

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BILL NUMBER: AB 2389	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JUNE 25, 2014

INTRODUCED BY   Assembly Member  Campos   Fox

    (   Principal   coauthors:  
Assembly Members   Campos,   Muratsuchi,  
Quirk-Silva,   and Salas   ) 
    (   Principal  coauthors:  
Senators   Knight   and Lieu   ) 
    (   Coauthors:   Assembly Members 
 Achadjian,   Alejo,   Atkins,  
Bloom,   Bocanegra,   Bradford,   Ian
Calderon,   Chau,   Conway,   Cooley,
  Dababneh,   Dickinson,   Gorell, 
 Gray,   Hall,   Harkey,   Linder,
  Maienschein,   Medina,   Nazarian, 
 Olsen,  Pan,   Perea,   John A.
Pérez,   V. Manuel Pérez,   and Wilk   )

    (   Coauthors:   Senators  
Anderson,   Berryhill,   Cannella,  
Correa,   Fuller,  Gaines,   Huff, 
 Lara,   Nielsen,   Padilla,   Roth,
  Vidak,   and Walters  ) 

                        FEBRUARY 21, 2014

    An act to amend Section 2333.5 of the Streets and
Highways Code, relating to transportation, and declaring the urgency
thereof, to take effect immediately.   An act to amend
Section 51298.5 of, and to amend, repeal, and add Section 51298 of,
the Government Code, and to add Section 23636 to the Revenue and
Taxation Code, relating to economic development, and declaring the
urgency thereof, to take effect immediately. 


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2389, as amended,  Campos   Fox  .
 Safe routes to school.   Local government:
capital investment incentive programs: corporation tax credits:
qualified wages: new advanced strategic aircraft program.  
   Existing law authorizes a county, city and county, or city to
establish a capital investment incentive program, pursuant to which
the county, city and county, or city is authorized to pay a capital
investment incentive amount, as defined, that does not exceed the
amount of property tax derived from the assessed value of that
portion of a qualified manufacturing facility that exceeds
$150,000,000, to a proponent of a qualified manufacturing facility. A
"qualified manufacturing facility" is defined to include a facility
operated by a business described in specified provisions of the
Standard Industrial Classification Manual. Existing law requires the
Business, Transportation and Housing Agency, or its successor, to
certify qualified manufacturing facilities for purposes of these
provisions and to carry out various oversight duties. Existing law
repeals these provisions on January 1, 2017.  
   This bill would, until July 1, 2015, reduce the assessed value
threshold for calculating the capital investment incentive amount
from $150,000,000 to $25,000,000 and would define "qualified
manufacturing facility" to include, among others, facilities operated
by certain businesses described in specified provisions of the North
American Industry Classification System Manual. The bill would
transfer the duties of the Business, Transportation and Housing
Agency to the Governor's Office of Business and Economic Development
(GO-Biz). The bill would, on July 1, 2015, restore the existing
provisions relating to the capital investment threshold amount and
the definition of "qualified manufacturing facility," but would
maintain the transfer of duties to Go-Biz. The bill would instead
repeal these provisions on January 1, 2018. The bill would also
replace obsolete references in those restored provisions to the
Standard Industrial Classification Manual with corresponding
references to the North American Industry Classification System
Manual.  
   The Corporation Tax Law allows various credits against the taxes
imposed by that law.  
   This bill would, for taxable years beginning on or after January
1, 2015, and before January 1, 2030, allow, with regard to the
manufacture of a new advanced strategic aircraft for the United
States Air Force, a credit against the taxes imposed under that law
for 171/2% of qualified wages, as defined, paid or incurred by the
qualified taxpayer, as defined, to qualified full-time employees,
award the credit on a first-come-first-served basis, and provide that
the credit have a phased aggregate cap ranging from $25,000,000 to
$31,000,000 per calendar year, as specified.  
   This bill would declare that it is to take effect immediately as
an urgency statute.  
   Existing law requires the Department of Transportation, in
consultation with the Department of the California Highway Patrol, to
establish and administer a safe routes to school program for
construction of bicycle and pedestrian safety and traffic calming
projects. These provisions become inoperative on July 1, 2014, and
are repealed on January 1, 2015.  
   Existing law also creates the Active Transportation Program in the
Department of Transportation to fund various transportation projects
and programs relating to biking, walking, and other nonmotorized
activities, with funds allocated by the California Transportation
Commission, as specified. Existing law provides that safe routes to
school projects are to be included among the types of projects
eligible for funding under the Active Transportation Program.
 
   This bill would extend the date that the specific provisions
governing the safe routes to school program become inoperative, to
July 1, 2015, and the date that these provisions are repealed, to
January 1, 2016.  
   This bill would declare that it is to take effect immediately as
an urgency statute. 
   Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

   SECTION 1.    Section 51298 of the  
Government Code   is amended to read: 
   51298.  It is the intent of the Legislature in enacting this
chapter to provide local governments with opportunities to attract
large manufacturing facilities to invest in their communities and to
encourage industries, such as high technology, aerospace, automotive,
biotechnology, software, environmental sources, and others, to
locate and invest in those facilities in California.
   (a) Commencing in the 1998-99 fiscal year, the governing body of a
county, city and county, or city, may, by means of an ordinance or
resolution approved by a majority of its entire membership, elect to
establish a capital investment incentive program. In any county, city
and county, or city in which the governing body has so elected, the
county, city and county, or city shall, upon the approval by a
majority of the entire membership of its governing body of a written
request therefor, pay a capital investment incentive amount to the
proponent of a qualified manufacturing facility for up to 15
consecutive fiscal years. A request for the payment of capital
investment incentive amounts shall be filed by a proponent in writing
with the governing body of an electing county, city and county, or
city in the time and manner specified in procedures adopted by that
governing body. In the case in which the governing body of an
electing county, city and county, or city approves a request for the
payment of capital investment incentive amounts, both of the
following conditions shall apply:
   (1) The consecutive fiscal years during which a capital investment
incentive amount is to be paid shall commence with the first fiscal
year commencing after the date upon which the qualified manufacturing
facility is certified for occupancy or, if no certification is
issued, the first fiscal year commencing after the date upon which
the qualified manufacturing facility commences operation.
   (2) In accordance with paragraph (4) of subdivision (d), the
annual payment to a proponent of each capital investment incentive
amount shall be contingent upon the proponent's payment of a
community services fee.
   (b) For purposes of this section:
   (1) "Qualified manufacturing facility" means a proposed
manufacturing facility that meets all of the following criteria:
   (A) The proponent's initial investment in that facility, in real
and personal property, necessary for the full and normal operation of
that facility, made pursuant to the capital investment incentive
program, that comprises any portion of that facility or has its situs
at that facility, exceeds one hundred fifty million dollars
($150,000,000). Compliance with this subparagraph shall be certified
by the  Business, Transportation   Governor's
Office of Business  and  Housing Agency  
Economic Development  upon the  agency's  
director's  approval of a proponent's application for
certification of a qualified manufacturing facility. An application
for certification shall be submitted by a proponent to the 
agency   Governor's Office of Business and Economic
Development  in writing in the time and manner as specified by
the  agency.   director. 
   (B) The facility is to be located within the jurisdiction of the
electing county, city and county, or city to which the request is
made for payment of capital investment incentive amounts.
   (C) The facility is operated by any of the following:
   (i) A business described  in Codes 3500 to 3899,
inclusive,   within Code 3359 or 3364  of the
 Standard Industrial   2012 North American
Industry  Classification  (SIC)   System
(NAICS)  Manual published by the United States Office of
Management and  Budget, 1987 edition, except that "January 1,
1997," shall be substituted for "January 1, 1994," in each place in
which it appears.   Budget. 
   (ii) A business engaged in the recovery of minerals from
geothermal resources, including the proportional amount of a
geothermal electric generating plant that is integral to the recovery
process by providing electricity for it.
   (iii) A business engaged in the manufacturing of parts or
components related to the production of electricity using solar,
wind, biomass, hydropower, or geothermal resources on or after July
1, 2010.
   (D) The proponent is  either  currently engaged
in  commercial production or engaged in the perfection
  any  of the  manufacturing process, or
the perfection of a product intended to be manufactured. 
 following:  
   (i) Commercial production.  
    (ii) The perfection of the manufacturing process.  
    (iii) The perfection of a product intended to be manufactured.

   (2) "Proponent" means a party or parties that meet all of the
following criteria:
   (A) The party is named in the application to the county, city and
county, or city within which the qualified manufacturing facility
would be located for a permit to construct a qualified manufacturing
facility.
   (B) The party will be the fee owner of the qualified manufacturing
facility upon the completion of that facility. Notwithstanding the
previous sentence, the party may enter into a sale-leaseback
transaction and nevertheless be considered the proponent.
   (C) If a proponent that is receiving capital investment incentive
amounts subsequently leases the subject qualified manufacturing
facility to another party, the lease may provide for the payment to
that lessee of any portion of a capital investment incentive amount.
Any lessee receiving any portion of a capital investment incentive
amount shall also be considered a proponent for the purposes of
subdivision (d).
   (3) "Capital investment incentive amount" means, with respect to a
qualified manufacturing facility for a relevant fiscal year, an
amount up to or equal to the amount of ad valorem property tax
revenue derived by the participating local agency from the taxation
of that portion of the total assessed value of that real and personal
property described in subparagraph (A) of paragraph (1) that is in
excess of  one hundred fifty   twenty-five 
million dollars  ($150,000,000).  
($25,000,000). 
   (4) "Manufacturing" means the activity of converting or
conditioning property by changing the form, composition, quality, or
character of the property for ultimate sale at retail or use in the
manufacturing of a product to be ultimately sold at retail.
Manufacturing includes any improvements to tangible personal property
that result in a greater service life or greater functionality than
that of the original property.
   (c) A city or special district may, upon the approval by a
majority of the entire membership of its governing body, pay to the
county, city and county, or city an amount equal to the amount of ad
valorem property tax revenue allocated to that city or special
district, but not the actual allocation, derived from the taxation of
that portion of the total assessed value of that real and personal
property described in subparagraph (A) of paragraph (1) of
subdivision (b) that is in excess of  one hundred fifty
  twenty-five  million dollars 
($150,000,000).   ($25,000,000). 
   (d) A proponent whose request for the payment of capital
investment incentive amounts is approved by an electing county, city
and county, or city shall enter into a community services agreement
with that county, city and county, or city that includes, but is not
limited to, all of the following provisions:
   (1) A provision requiring that a community services fee be
remitted by the proponent to the county, city and county, or city, in
each fiscal  year subject to the agreement,  
year,  in an amount that is equal to 25 percent of the capital
investment incentive amount calculated for that proponent for that
fiscal year, except that in no fiscal year shall the amount of the
community services fee exceed two million dollars ($2,000,000).
   (2) A provision specifying the dates in each relevant fiscal year
upon which payment of the community services fee is due and
delinquent, and the rate of interest to be charged to a proponent for
any delinquent portion of the community services fee amount.
   (3) A provision specifying the procedures and rules for the
determination of underpayments or overpayments of a community
services fee, for the appeal of determinations of any underpayment,
and for the refunding or crediting of any overpayment.
   (4) A provision specifying that a proponent is ineligible to
receive a capital investment incentive amount if that proponent is
currently delinquent in the payment of any portion of a community
services fee amount, if the qualified manufacturing facility is
constructed in a manner materially different from the facility as
described in building permit application materials, or if the
facility is no longer operated as a qualified manufacturing facility
meeting the requirements of paragraph (1) of subdivision (b). If a
proponent becomes ineligible to receive a capital investment
incentive amount as a result of an agreement provision included
pursuant to this subparagraph, the running of the number of
consecutive fiscal years specified in an agreement made pursuant to
subdivision (a) is not tolled during the period in which the
proponent is ineligible.
   (5) A provision that sets forth a job creation plan with respect
to the relevant qualified manufacturing facility. The plan shall
specify the number of jobs to be created by that facility, and the
types of jobs and compensation ranges to be created thereby. The plan
shall also specify that for the entire term of the community
services agreement, both of the following shall apply:
   (A) All of the employees working at the qualified manufacturing
facility shall be covered by an employer-sponsored health benefits
 plan.   plan, with the exception of any
employee who was offered but declined coverage due to other available
group coverage. 
   (B) The average weekly wage, exclusive of overtime, paid to all of
the employees working at the qualified manufacturing facility, who
are not management or supervisory employees, shall be not less than
the state average weekly wage.
   For the purpose of this subdivision, "state average weekly wage"
means the average weekly wage paid by employers to employees covered
by unemployment insurance, as reported to the Employment Development
Department for the four calendar quarters ending June 30 of the
preceding calendar year.
   (6) (A) In the case in which the proponent fails to operate the
qualified manufacturing facility as required by the community
services agreement, a provision that requires the recapture of any
portion of any capital investment incentive amounts previously paid
to the proponent equal to the lesser of the following:
   (i) All of the capital investment incentive amounts paid to the
proponent, less all of the community services fees received from the
proponent, and less any capital investment incentive amounts
previously recaptured.
   (ii) The last capital investment incentive amount paid to the
proponent, less the last community services fee received from the
proponent, multiplied by 40 percent of the number of years remaining
in the community services agreement, but not to exceed 10 years, and
less any capital investment incentive amounts previously recaptured.
   (B) If the proponent fails to operate the qualified manufacturing
facility as required by the community services agreement, the county,
city and county, or city may, upon a finding that good cause exists,
waive any portion of the recapture of any capital investment
incentive amount due under this subdivision. For the purpose of this
subdivision, good cause includes, but is not limited to, the
following:
   (i) The proponent has sold or leased the property to a person who
has entered into an agreement with the county, city and county, or
city to assume all of the responsibilities of the proponent under the
community services agreement.
   (ii) The qualified manufacturing facility has been rendered
inoperable and beyond repair as a result of an act of  God.
  God, civil disorder, failure of power, riots,
insurrections, war, acts of terrorism, or any other causes, whether
the kind herein enumerated or otherwise, not within the control of
the qualified manufacturing facility claiming good cause, which
restrict or interfere with a qualified manufacturing facility's
ability to timely perform, and which by the exercise of reasonable
due diligence, such party is or would have been unable to prevent or
overcome.
   (C) For purposes of this subdivision, failure to operate a
qualified manufacturing facility as required by the community
services agreement includes, but is not limited to, failure to
establish the number of jobs specified in the jobs creation plan
created pursuant to paragraph (5).
   (e) (1) Each county, city and county, or city that elects to
establish a capital investment incentive program shall notify the
 Business, Transportation   Governor's Office of
Business  and  Housing Agency   Economic
Development  of its election to do so no later than June 30th of
the fiscal year in which the election was made.
   (2) In addition to the information required to be reported
pursuant to paragraph (1), each county, city and county, or city that
has elected to establish a capital investment incentive program
shall notify the  Business, Transportation  
Governor's Office of Business  and  Housing Agency
  Economic Development  each fiscal year no later
than June 30th of the amount of any capital investment incentive
payments made and the proponent of the qualified manufacturing
facility to whom the payments were made during that fiscal year.
   (3) The  Business, Transportation   Governor'
s Office of Business  and  Housing Agency 
Economic Development  shall compile the information submitted by
each county, city and county, and city pursuant to paragraphs (1)
and (2) and submit a report to the Legislature containing this
information no later than October 1, every two years commencing
October 1, 2000.
   (f) This section shall become  operative  
inoperative  on July 1,  2013.   2015.
 
   (g) A capital investment incentive program established pursuant to
this section before the effective date of the act adding this
subdivision may remain in effect for the full term of that program.
 
   (h) This section is repealed on January 1, 2016. 
   SEC. 2.    Section 51298 is added to the  
Government Code   , to read:  
   51298.  It is the intent of the Legislature in enacting this
chapter to provide local governments with opportunities to attract
large manufacturing facilities to invest in their communities and to
encourage industries, such as high technology, aerospace, automotive,
biotechnology, software, environmental sources, and others, to
locate and invest in those facilities in California.
   (a) Commencing in the 1998-99 fiscal year, the governing body of a
county, city and county, or city, may, by means of an ordinance or
resolution approved by a majority of its entire membership, elect to
establish a capital investment incentive program. In any county, city
and county, or city in which the governing body has so elected, the
county, city and county, or city shall, upon the approval by a
majority of the entire membership of its governing body of a written
request therefor, pay a capital investment incentive amount to the
proponent of a qualified manufacturing facility for up to 15
consecutive fiscal years. A request for the payment of capital
investment incentive amounts shall be filed by a proponent in writing
with the governing body of an electing county, city and county, or
city in the time and manner specified in procedures adopted by that
governing body. In the case in which the governing body of an
electing county, city and county, or city approves a request for the
payment of capital investment incentive amounts, both of the
following conditions shall apply:
   (1) The consecutive fiscal years during which a capital investment
incentive amount is to be paid shall commence with the first fiscal
year commencing after the date upon which the qualified manufacturing
facility is certified for occupancy or, if no certification is
issued, the first fiscal year commencing after the date upon which
the qualified manufacturing facility commences operation.
   (2) In accordance with paragraph (4) of subdivision (d), the
annual payment to a proponent of each capital investment incentive
amount shall be contingent upon the proponent's payment of a
community services fee.
   (b) For purposes of this section:
   (1) "Qualified manufacturing facility" means a proposed
manufacturing facility that meets all of the following criteria:
   (A) The proponent's initial investment in that facility, in real
and personal property, necessary for the full and normal operation of
that facility, made pursuant to the capital investment incentive
program, that comprises any portion of that facility or has its situs
at that facility, exceeds one hundred fifty million dollars
($150,000,000). Compliance with this subparagraph shall be certified
by the Governor's Office of Business and Economic Development upon
the director's approval of a proponent's application for
certification of a qualified manufacturing facility. An application
for certification shall be submitted by a proponent to the Governor's
Office of Business and Economic Development in writing in the time
and manner as specified by the director.
   (B) The facility is to be located within the jurisdiction of the
electing county, city and county, or city to which the request is
made for payment of capital investment incentive amounts.
   (C) The facility is operated by any of the following:
   (i) A business described in Codes 3321 to 3399, inclusive, or
Codes 541711 or 541712 of the 2012 North American Industry
Classification System (NAICS) Manual published by the United States
Office of Management and Budget.
   (ii) A business engaged in the recovery of minerals from
geothermal resources, including the proportional amount of a
geothermal electric generating plant that is integral to the recovery
process by providing electricity for it.
   (iii) A business engaged in the manufacturing of parts or
components related to the production of electricity using solar,
wind, biomass, hydropower, or geothermal resources on or after July
1, 2010.
   (D) The proponent is currently engaged in any of the following:
   (i) Commercial production.
   (ii) The perfection of the manufacturing process.
   (iii) The perfection of a product intended to be manufactured.
   (2) "Proponent" means a party or parties that meet all of the
following criteria:
   (A) The party is named in the application to the county, city and
county, or city within which the qualified manufacturing facility
would be located for a permit to construct a qualified manufacturing
facility.
   (B) The party will be the fee owner of the qualified manufacturing
facility upon the completion of that facility. Notwithstanding the
previous sentence, the party may enter into a sale-leaseback
transaction and nevertheless be considered the proponent.
   (C) If a proponent that is receiving capital investment incentive
amounts subsequently leases the subject qualified manufacturing
facility to another party, the lease may provide for the payment to
that lessee of any portion of a capital investment incentive amount.
Any lessee receiving any portion of a capital investment incentive
amount shall also be considered a proponent for the purposes of
subdivision (d).
   (3) "Capital investment incentive amount" means, with respect to a
qualified manufacturing facility for a relevant fiscal year, an
amount up to or equal to the amount of ad valorem property tax
revenue derived by the participating local agency from the taxation
of that portion of the total assessed value of that real and personal
property described in subparagraph (A) of paragraph (1) that is in
excess of one hundred fifty million dollars ($150,000,000).
   (4) "Manufacturing" means the activity of converting or
conditioning property by changing the form, composition, quality, or
character of the property for ultimate sale at retail or use in the
manufacturing of a product to be ultimately sold at retail.
Manufacturing includes any improvements to tangible personal property
that result in a greater service life or greater functionality than
that of the original property.
   (c) A city or special district may, upon the approval by a
majority of the entire membership of its governing body, pay to the
county, city and county, or city an amount equal to the amount of ad
valorem property tax revenue allocated to that city or special
district, but not the actual allocation, derived from the taxation of
that portion of the total assessed value of that real and personal
property described in subparagraph (A) of paragraph (1) of
subdivision (b) that is in excess of one hundred fifty million
dollars ($150,000,000).
   (d) A proponent whose request for the payment of capital
investment incentive amounts is approved by an electing county, city
and county, or city shall enter into a community services agreement
with that county, city and county, or city that includes, but is not
limited to, all of the following provisions:
   (1) A provision requiring that a community services fee be
remitted by the proponent to the county, city and county, or city, in
each fiscal year, in an amount that is equal to 25 percent of the
capital investment incentive amount calculated for that proponent for
that fiscal year, except that in no fiscal year shall the amount of
the community services fee exceed two million dollars ($2,000,000).
   (2) A provision specifying the dates in each relevant fiscal year
upon which payment of the community services fee is due and
delinquent, and the rate of interest to be charged to a proponent for
any delinquent portion of the community services fee amount.
   (3) A provision specifying the procedures and rules for the
determination of underpayments or overpayments of a community
services fee, for the appeal of determinations of any underpayment,
and for the refunding or crediting of any overpayment.
   (4) A provision specifying that a proponent is ineligible to
receive a capital investment incentive amount if that proponent is
currently delinquent in the payment of any portion of a community
services fee amount, if the qualified manufacturing facility is
constructed in a manner materially different from the facility as
described in building permit application materials, or if the
facility is no longer operated as a qualified manufacturing facility
meeting the requirements of paragraph (1) of subdivision (b). If a
proponent becomes ineligible to receive a capital investment
incentive amount as a result of an agreement provision included
pursuant to this subparagraph, the running of the number of
consecutive fiscal years specified in an agreement made pursuant to
subdivision (a) is not tolled during the period in which the
proponent is ineligible.
   (5) A provision that sets forth a job creation plan with respect
to the relevant qualified manufacturing facility. The plan shall
specify the number of jobs to be created by that facility, and the
types of jobs and compensation ranges to be created thereby. The plan
shall also specify that for the entire term of the community
services agreement, both of the following shall apply:
   (A) All of the employees working at the qualified manufacturing
facility shall be covered by an employer-sponsored health benefits
plan, with the exception of any employee who was offered but declined
coverage due to other available group coverage.
   (B) The average weekly wage, exclusive of overtime, paid to all of
the employees working at the qualified manufacturing facility, who
are not management or supervisory employees, shall be not less than
the state average weekly wage. For the purpose of this subdivision,
"state average weekly wage" means the average weekly wage paid by
employers to employees covered by unemployment insurance, as reported
to the Employment Development Department for the four calendar
quarters ending June 30 of the preceding calendar year.
   (6) (A) In the case in which the proponent fails to operate the
qualified manufacturing facility as required by the community
services agreement, a provision that requires the recapture of any
portion of any capital investment incentive amounts previously paid
to the proponent equal to the lesser of the following:
   (i) All of the capital investment incentive amounts paid to the
proponent, less all of the community services fees received from the
proponent, and less any capital investment incentive amounts
previously recaptured.
   (ii) The last capital investment incentive amount paid to the
proponent, less the last community services fee received from the
proponent,                                           multiplied by 40
percent of the number of years remaining in the community services
agreement, but not to exceed 10 years, and less any capital
investment incentive amounts previously recaptured.
   (B) If the proponent fails to operate the qualified manufacturing
facility as required by the community services agreement, the county,
city and county, or city may, upon a finding that good cause exists,
waive any portion of the recapture of any capital investment
incentive amount due under this subdivision. For the purpose of this
subdivision, good cause includes, but is not limited to, the
following:
   (i) The proponent has sold or leased the property to a person who
has entered into an agreement with the county, city and county, or
city to assume all of the responsibilities of the proponent under the
community services agreement.
   (ii) The qualified manufacturing facility has been rendered
inoperable and beyond repair as a result of an act of God, civil
disorder, failure of power, riots, insurrections, war, acts of
terrorism, or any other causes, whether the kind herein enumerated or
otherwise, not within the control of the qualified manufacturing
facility claiming good cause, which restrict or interfere with a
qualified manufacturing facility's ability to timely perform, and
which by the exercise of reasonable due diligence, such party is or
would have been unable to prevent or overcome.
   (C) For purposes of this subdivision, failure to operate a
qualified manufacturing facility as required by the community
services agreement includes, but is not limited to, failure to
establish the number of jobs specified in the jobs creation plan
created pursuant to paragraph (5).
   (e) (1) Each county, city and county, or city that elects to
establish a capital investment incentive program shall notify the
Governor's Office of Business and Economic Development of its
election to do so no later than June 30th of the fiscal year in which
the election was made.
   (2) In addition to the information required to be reported
pursuant to paragraph (1), each county, city and county, or city that
has elected to establish a capital investment incentive program
shall notify the Governor's Office of Business and Economic
Development each fiscal year no later than June 30th of the amount of
any capital investment incentive payments made and the proponent of
the qualified manufacturing facility to whom the payments were made
during that fiscal year.
   (3) The Governor's Office of Business and Economic Development
shall compile the information submitted by each county, city and
county, and city pursuant to paragraphs (1) and (2) and submit a
report to the Legislature containing this information no later than
October 1, every two years commencing October 1, 2016.
   (f) This section shall become operative on July 1, 2015. 
   SEC. 3.    Section 51298.5 of the  
Government Code   is amended to read: 
   51298.5.  (a) This chapter shall remain in effect only until
January 1,  2017, and as of that date is repealed, unless a
later enacted statute, that is enacted before January 1, 2017,
deletes or extends that date.   2018. 
   (b) A capital investment incentive program established pursuant to
this chapter before January 1,  2017,   2018,
 may remain in effect for the full term of that program,
regardless of the repeal of this chapter.
   SEC. 4.    Section 23636 is added to the  
Revenue and Taxation Code   , to read:  
   23636.  (a) For each taxable year beginning on or after January 1,
2015, and before January 1, 2030, a qualified taxpayer shall be
allowed a credit against the "tax," as defined in Section 23036, in
an amount equal to 171/2 percent of qualified wages paid or incurred
by the qualified taxpayer during the taxable year to qualified
full-time employees multiplied by the annual full-time equivalent
ratio.
   (b) For purposes of this section:
   (1) "Annual full-time equivalent" means either of the following:
   (A) In the case of a qualified full-time employee paid hourly
qualified wages, "annual full-time equivalent" means the total number
of hours worked for the qualified taxpayer by the qualified
full-time employee, not to exceed 2,000 hours per employee, divided
by 2,000.
   (B) In the case of a salaried qualified full-time employee,
"annual full-time equivalent" means the total number of weeks worked
for the qualified taxpayer by the qualified employee divided by 52.
   (2) "Annual full-time equivalent ratio" means a ratio, the
numerator of which is 1,100 and the denominator of which is the
number of a qualified taxpayer's qualified full-time employees
computed on an annual full-time equivalent basis for the taxable
year. The annual full-time equivalent ratio may not be greater than
one.
   (3) "Qualified full-time employee" means an individual that is
employed in this state by the qualified taxpayer and satisfies both
of the following:
   (A) The individual's services for the qualified taxpayer are at
least 80 percent directly related to the qualified taxpayer's
subcontract to design, test, manufacture property, or otherwise
support production of property for ultimate use in or as a component
of a new advanced strategic aircraft for the United States Air Force.

   (B) The individual is paid compensation from the qualified
taxpayer that satisfies either of the following conditions:
   (i) Is qualified wages paid by the qualified taxpayer for services
not less than an average of 35 hours per week.
   (ii) Is a salary paid by the qualified taxpayer as compensation
during the taxable year for full-time employment, within the meaning
of Section 515 of the Labor Code.
   (4) "Qualified taxpayer" means any taxpayer that is a major
first-tier subcontractor awarded a subcontract to manufacture
property for ultimate use in or as a component of a new advanced
strategic aircraft for the United States Air Force. For purposes of
this paragraph, the term "major first-tier subcontractor" means a
subcontractor that was awarded a subcontract in an amount of at least
35 percent of the amount of the initial prime contract awarded for
the manufacturing of a new advanced strategic aircraft for the United
States Air Force.
   (5) "Qualified wages" means wages paid or incurred by the
qualified taxpayer during the taxable year with respect to qualified
full-time employees that are direct labor costs, within the meaning
of Section 263A of the Internal Revenue Code, relating to
capitalization and inclusion in inventory costs of certain expenses,
allocable to property manufactured in this state by the qualified
taxpayer for ultimate use in or as a component of a new advanced
strategic aircraft for the United States Air Force.
   (6) "New advanced strategic aircraft for the United States Air
Force" means a new advanced strategic aircraft developed and produced
for the United States Air Force under the New Advanced Strategic
Aircraft Program.
   (7) "New Advanced Strategic Aircraft Program" means the project
designed to design, test, manufacture, or otherwise support
production of a new advanced strategic aircraft for the United States
Air Force under a contract that is expected to be awarded in the
first or second calendar quarter of 2015.
   (c) (1) The total aggregate amount of the credit that may be
allowed to all qualified taxpayers pursuant to this section shall be
as follows:
   (A) In years one through five of the credit, the total aggregate
amount of the credit that may be allowed to all qualified taxpayers
pursuant to this section shall not exceed twenty- five million
dollars ($25,000,000) per calendar year.
   (B) In years six through 10 of the credit, the total aggregate
amount of the credit that may be allowed to all qualified taxpayers
pursuant to this section shall not exceed twenty-eight million
dollars ($28,000,000) per calendar year.
   (C) In years 11 through 15 of the credit, the total aggregate
amount of the credit that may be allowed to all qualified taxpayers
pursuant to this section shall not exceed thirty-one million dollars
($31,000,000) per calendar year.
   (2) The Franchise Tax Board shall allocate the credit to the
taxpayers on a first-come-first-served basis.
   (3) The credit allowed under this section must be claimed on a
timely filed original return.
   (d) 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 the seven succeeding years if necessary, until
the credit is exhausted.
   (e) A credit shall not be allowed unless the credit was reflected
within the bid upon which the qualified taxpayer's subcontract to
manufacture property for ultimate use in or as a component of a New
Advanced Strategic Aircraft Program is based by reducing the amount
of the bid by a good faith estimate of the amount of the credit
allowable under this section.
   (f) All references to the credit and ultimate cost reductions
incorporated into any successful bid that was awarded a subcontract
and for which a qualified taxpayer is making a claim shall be made
available to the Franchise Tax Board upon request.
   (g) If the qualified taxpayer is allowed a credit pursuant to this
section for qualified wages paid or incurred, only one credit shall
be allowed to the taxpayer under this part with respect to any wage
consisting in whole or in part of those qualified wages.
   (h) (1) The Franchise Tax Board may prescribe regulations
necessary or appropriate to carry out the purposes of this section.
   (2) The Franchise Tax Board may also prescribe rules, guidelines,
or procedures necessary or appropriate to carry out the purposes of
this section. Chapter 3.5 (commencing with Section 11340) of Part 1
of Division 3 of Title 2 of the Government Code shall not apply to
any rule, guideline, or procedure prescribed by the Franchise Tax
Board pursuant to this section.
   (i) This section shall remain in effect only until December 1,
2030, and as of that date is repealed. 
   SEC. 5.    This act is an urgency statute necessary
for the immediate preservation of the public peace, health, or safety
within the meaning of Article IV of the Constitution and shall go
into immediate effect. The facts constituting the necessity are:
 
   In order to promote economic development in California related to
the manufacture of property to be used for new advanced strategic
aircraft for the United States Air Force and to authorize a local
government to pay a related capital investment amount pursuant to a
reduced threshold amount as soon as possible, it is necessary that
this act take effect immediately.  
  SECTION 1.    Section 2333.5 of the Streets and
Highways Code is amended to read:
   2333.5.  (a) The department, in consultation with the Department
of the California Highway Patrol, shall establish and administer a
"Safe Routes to School" construction program for construction of
bicycle and pedestrian safety and traffic calming projects.
   (b) The department shall award grants to local governmental
agencies under the program based on the results of a statewide
competition that requires submission of proposals for funding and
rates those proposals on all of the following factors:
   (1) Demonstrated needs of the applicant.
   (2) Potential of the proposal for reducing child injuries and
fatalities.
   (3) Potential of the proposal for encouraging increased walking
and bicycling among students.
   (4) Identification of safety hazards.
   (5) Identification of current and potential walking and bicycling
routes to school.
   (6) Use of a public participation process, including, but not
limited to, a public meeting that satisfies all of the following:
   (A) Involves the public, schools, parents, teachers, local
agencies, the business community, key professionals, and others.
   (B) Identifies community priorities and gathers community input to
guide the development of projects included in the proposal.
   (C) Ensures that community priorities are reflected in the
proposal.
   (D) Secures support for the proposal by relevant stakeholders.
   (7) Benefit to a low-income school, defined for purposes of this
section to mean a school where at least 75 percent of students are
eligible to receive free or reduced-price meals under the National
School Lunch Program.
   (c) Any annual budget allocation to fund grants described in
subdivision (b) shall be in addition to any federal funding received
by the state that is designated for "Safe Routes to School" projects
pursuant to Section 1404 of SAFETEA-LU or any similar program funded
through a subsequent transportation act.
   (d) Any federal funding received by the state that is designated
for "Safe Routes to School" projects shall be distributed by the
department under the competitive grant process, consistent with all
applicable federal requirements.
   (e) Prior to the award of any construction grant or the department'
s use of those funds for a "Safe Routes to School" construction
project encompassing a freeway, state highway, or county road, the
department shall consult with, and obtain approval from, the
Department of the California Highway Patrol, ensuring that the "Safe
Routes to School" proposal complements the California Highway Patrol'
s Pedestrian Corridor Safety Program and is consistent with its
statewide pedestrian safety statistical analysis.
   (f) The department is encouraged to coordinate with law
enforcement agencies' community policing efforts in establishing and
maintaining the "Safe Routes to School" construction program.
   (g) In the development of guidelines and procedures governing this
program, the department shall fully consider the needs of low-income
schools.
   (h) Up to 10 percent of program funds may be used to assist
eligible recipients in making infrastructure improvements, other than
schoolbus shelters, that create safe routes to schoolbus stops that
are located outside the vicinity of schools.
   (i) This section shall become inoperative on July 1, 2015, and, as
of January 1, 2016, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2016, deletes or
extends the dates on which it becomes inoperative and is repealed.
 
  SEC. 2.    This act is an urgency statute
necessary for the immediate preservation of the public peace, health,
or safety within the meaning of Article IV of the Constitution and
shall go into immediate effect. The facts constituting the necessity
are:
   In order to extend the operation of the "Safe Routes to School"
Program as quickly as possible, it is necessary that this act take
effect immediately.