Business investment: tax credits.

Existing law imposes a gross premiums tax on insurers in lieu of other taxes, with certain exceptions. The Capital Access Company Law provides for licensing and regulation by the Commissioner of Corporations of capital access companies, which provide risk capital and management assistance to business entities. The Personal Income Tax Law and the Corporation Tax Law authorize various credits against the taxes imposed by those laws, including a credit in an amount equal to $3,000, prorated as provided, for each full-time employee hired during the taxable year by a qualified employer, as defined. Existing law caps the total amount of credit which may be allocated under those provisions to $400,000,000. This bill would enact the California Jobs Act of 2012, which would provide an investment tax credit against insurer premium tax liability to participating investors, as defined, and would provide for sale or transfer of the tax credits to other parties. The bill would provide for a maximum amount of tax credits under the act of $200,000,000, which could be claimed over specified tax years and carried forward until tax year 2037, and would also cap the total amount of the credit which may be allocated under existing law provisions authorizing a credit for the hire of full-time employees by qualified employers and the credit authorized under this act to $400,000,000. The bill would provide for the Department of Insurance, California Organized Insurance Network (DI/COIN) to, among other things, qualify applicants as qualified capital access companies, which would receive investment commitments from participating investors and make qualified investments in qualified businesses, subject to approval by DI/COIN. The bill would specify the process for qualified distributions to be made by the qualified capital access company to private investors and the state, with the state share to be deposited in the General Fund or in the Economic Development Fund, which would be created by the bill, as specified. The bill would provide for certain application and certification fees, and impose certain penalties, and provide for these revenues to be deposited in the Economic Development Fund. The bill would define various terms for purposes of the act. 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 XIIIA of the California Constitution, and thus would require for passage the approval of 23 of the membership of each house of the Legislature.