Income taxes: California Competes tax credit: private ownership share agreement.

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, 2030, in an amount provided in a written agreement between the Governor's Office of Business and Economic Development (GO-Biz) and the taxpayer, approved 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 requires GO-Biz, when determining whether to enter into a written agreement with a taxpayer, to consider specified factors, and also authorizes GO-Biz to consider, among other factors, the financial solvency of the taxpayer and its ability to finance its proposed expansion. Existing law provides for the allocation of credit amounts through the 2022–23 fiscal year and limits the aggregate amount of credit that may be allocated in a fiscal year to $180,000,000, and subjects the amount to specified reduction adjustments. This bill would authorize a taxpayer to offer the state a percentage of the taxpayer's business when applying for a California Competes Tax Credit, and would allow GO-Biz to consider the amount of equity being offered in determining the amount of credit allocated to the taxpayer. The bill would require the private equity share agreement to include specified provisions, including a provision that the state is not liable beyond the value of its ownership interest in the legal entity. The bill would also revise the factors that GO-Biz is required and authorized to consider when entering into a written agreement with a taxpayer, as provided, including the taxpayer's financial ability to retain its existing investments in the state. 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. This bill would take effect immediately as a tax levy.