Thursday, December 1, 2022

Bill to Restore Tax Credit Funding Goes to Governor

JobCreatorA California Chamber of Commerce-supported job creator bill to restore full funding to the California Competes Tax Credit program awaits action by the Governor after passing the Legislature in the closing hours of the session.

AB 1560 (Quirk-Silva; D-Fullerton) ensures California remains a competitive environment for employer investment.

Bipartisan Support

An urgency measure, AB 1560 passed the Senate and Assembly with overwhelming bipartisan support.

Last year, Governor Edmund G. Brown Jr. signed legislation that created a new tax credit program administered by the Governor’s Office of Business and Economic Development (GO-Biz). This program enables GO-Biz to negotiate agreements and provide economic incentives to employers in exchange for investment and employment expansion in California.

Employers must apply for this program and, before awarding any incentives, GO-Biz evaluates each application based on a number of factors, including the number of jobs created, the amount of wages and benefits provided to employees, the duration of the investment, and the overall size of the investment in the state.

In addition 25% of the funds awarded must be provided to small business.

Successful Program

The program proved to be very successful in its first year—the fund was oversubscribed by $470 million. The awards that were approved by GO-Biz are projected to create nearly 6,000 jobs and generate more than $2 billion in investments.

Unfortunately, recently enacted legislation reduces the amount of funding in future years, weakening a valuable economic tool that has contributed to a more competitive environment in the state.

AB 1560 authorizes the Department of Finance to restore funding to the program and, in doing so, sends a strong message to employers that California favors economic policies that make the state more investment-friendly.

The CalChamber will be asking the Governor to sign AB 1560.

Staff Contact: Jeremy Merz

Related Articles

CalChamber Presents Guide to 2023 Employment Laws

The California Chamber of Commerce has published a white paper and scheduled seminars to help employers prepare for new employment laws. The newly enacted laws include leaves of absence, discrimination, pay scale and pay data,...

Election 2022: First Look at Open Senate Seats as Ballot Counting Continues

An old idiom, “It’s all over but the shouting,” may have found an election corollary in California: “It’s all over but the counting.” The November 8 mid-term election is in the rearview mirror, but the...

Rest Breaks: Ways to Prove Employees Receive Duty-Free Time

Recently, an employee complained to management that they were not receiving rest breaks. Because the breaks are paid, the employees do not clock out for them; how can we prove that employees are being...