AND WELCOME TO OUR
ASSEMBLY BUDGETS OF COMMITTEE
FOR HEARING THIS HEARING IS
TAKING PLACE IN ROOM 447. TODAY
WE ARE COVERING THE REMAINING
ITEMS FOR THE FRANCHISE TAX
BOARD. WE WILL BE ACCEPTING
PUBLIC COMMENT AT THE END OF
THIS HEARING, BOTH IN THE
HEARING ROOM AND ON THE PHONE.
THE PHONE NUMBER TO CONNECT IS
ON THE COMMITTEE WEBSITE AND
SHOULD BE DISPLAYED ON THE
SCREEN. IF YOU'RE WATCHING THIS
HEARING ONLINE, THE PHONE NUMBER
IS TOLL FREE. 87769289. AND THE
PUBLIC ACCESS CODE IS 1315447.
IF YOU ENCOUNTER ANY PROBLEMS,
PLEASE CONTACT THE ASSEMBLY
BUDGET COMMITTEE AT 9163192099
AND A STAFF MEMBER. WILL ASSIST
YOU. WE ENCOURAGE THE PUBLIC TO
PROVIDE WRITTEN TESTIMONY BEFORE
THE HEARING. PLEASE SEND YOUR
WRITTEN TESTIMONY TO BUDGETS OF
FOUR AT SM DOT CA.GOV WITH THAT
ROLL CALL, PLEASE. KOREA HERE
WE, PATTERSON. RAISE. THREE
WEEKS. WE WILL NOW BEGIN ON THE
BOAT ROLLING CALENDAR. WE HAVE
FOUR ITEMS FOR CONSIDERATION,
WHICH ARE LISTED ON THE AGENDA
FOR YOUR REFERENCE. CAN I GET A
MOTION AND A SECOND PLACE? ONCE
ONE MOMENT.
OKAY WE WILL LET ME DO THIS
AGAIN. WE WILL BEGIN OUR VOTE
ONLY CALENDAR WITH THE
RECOMMENDATION TO APPROVE THE
FOUR ITEMS FOR CONSIDERATION,
WHICH ARE LISTED ON THE AGENDA
FOR YOUR REFERENCE.
WE ARE APPROVING THE STAFF
RECOMMENDATIONS AS LISTED. FOR
THIS. THANK YOU. GREAT CAN I GET
THEM? CAN I GET A ROLL CALL,
PLEASE. CARILLO I WE, PATTERSON.
REYES WICKS. THANK YOU, AND
WE'RE GONNA GO. ON WE'RE GONNA
GO OUT OF ORDER FOR A MOMENT.
WE'RE GOING TO START BY GOING BY
ISSUE THREE. THAT'S CORRECT.
THERE. SHE DRINKS. DATA SHARING
TRAILER BILL LANGUAGE FOR THIS
PANEL, PLEASE. UH PLEASE COME
FORWARD.
PLEASE BEGIN WHEN YOU'RE READY.
GOOD AFTERNOON, DOC SIMMONS
DEPARTMENT OF FINANCE THIS
TRAILER BILL LANGUAGE. UH AS YOU
KNOW IS HE HAS BEEN WORKING WITH
C D. T C. D. S S AND D. H CS TO
DRAFT LANGUAGE THAT ALLOW THE UH
, SHARING AMONGST THE
ORGANIZATIONS TO SUPPORT THE
OUTREACH TO COUNTY EITC NON
FILERS THAT ARE PARTICIPANTS IN
THE PUBLIC SERVICE PROGRAM. UH
TO SUPPORT FTP OUTREACH, AS WELL
AS TO OTHER FILERS, NON FILERS
THAT APPEAR ELIGIBLE FOR KELLY
EITC. ASK IF YOU CAN SPEAK
CLOSER TO THE PLACE. WE CAN'T
HEAR YOU. VERY WELL. THE ECHO IS
BAD HERE, OKAY? SO THIS IS
OUTREACH. UH, SHARING OF
LANGUAGE BETWEEN, UH. F T B CDSS
, THE CALIFORNIA DEPARTMENT OF
SOCIAL SERVICES DHC S AND THIS
WILL ALLOW SHARING FOR THE EITC
OUTREACH. UM FOR INDIVIDUALS AS
WELL AS OTHER FILERS, NON FILERS
THAT APPEAR ELIGIBLE FOR CALLIE
EITC, BUT HAVE NOT TAKEN THE
STEPS TO CLAIM THE CREDIT. UM
THIS LANGUAGE WILL ALSO ENHANCED
NOTIFICATION REQUIREMENTS TO
STATEWIDE EMPLOYEES BY THEIR
EMPLOYER AND PUBLIC ASSISTANCE
PROGRAM. PARTICIPANTS BY
ADMINISTRATIVE ADMINISTRATION
ENTITIES TO INCLUDE INFORMATION
IS FREE ON FREE FILING, AS WELL
AS THE ANTI POVERTY TAX CREDIT
AND OUTREACH TWICE ANNUALLY.
CURRENTLY, IT'S ALL GONNA BE
DONE ONCE A YEAR. AND OTHER THAN
THAT WOULD BE GLAD TO ANSWER ANY
QUESTIONS YOU MAY HAVE. THANK
YOU, LEO, PLEASE. BRIAN MUELLER
, ELIO. NO CONCERNS ON THIS
ITEM. ANY COMMENTS OR QUESTIONS
FROM COMMITTEE. MADAM MAJORITY
LEADER. THIS IS SUCH AN EASY
ONE. WE'VE GOT TO DO THAT.
OUTREACH FOR KELLY EITC. MAKE
SURE THAT EVERYBODY WHO'S
ELIGIBLE APPLIES AND RECEIVE
THIS BENEFIT. IT'S ONE OF THE
GREATEST BENEFITS THAT
CALIFORNIA OFFERS. AND I, UM SO
THANK YOU. THANK YOU. THANK YOU
, MADAM CHAIR. THANK YOU. I
WOULD JUST ADD IN PREVIOUS
CONVERSATIONS RELATED TO THOSE
THAT CAN BENEFIT FROM KELLY I.
D. C. WE HAD A DISCUSSION ABOUT
THE F T B. RESPONSIBILITY OR
OPPORTUNITY. TO CREATE A PATHWAY
OR EASIER PATHWAY FOR MORE ITEM
TAXPAYERS THAT CAN TAKE
ADVANTAGE OF THE BENEFIT THERE
ABOUT TWO MILLION UNDOCUMENTED
UH, WORKERS IN THE STATE OF
CALIFORNIA AND ONLY ABOUT 70,000
TO 75,000 THAT ARE ACTUALLY ITEM
TAXPAYERS, SO THERE'S A BIG AS
WE THINK ABOUT THE SAFETY NET
AND THE WORK THAT IS BEING DONE
TO ENSURE THAT ALL CALIFORNIANS
HAVE ACCESS TO FIGURE OUT A WAY
IN WHICH MORE THE STATE CAN
CREATE MORE ITEM TAXPAYERS THAT
CAN ACTUALLY BENEFIT FROM THIS
PROGRAM AS WELL. THE TRAILER
BILL IS CONSISTENT WITH OUR PAST
ACTIONS TO ENSURE COOPERATIONS
BETWEEN THE STATE AGENCIES TO
INCREASE OUTREACH AND EDUCATION,
WHICH IS IMPORTANT TO ALL OF US
ON THE EARNED INCOME TAX CREDIT.
THE STAFF RECOMMENDATION IS TO
ADOPT PLACEHOLDER TRAILER BILL
LANGUAGE. CAN I GET A MOTION IN
A SECOND? REAL COP, PLEASE.
KOREA. AYE. LEIGH PATERSON RAISE
WICKS. THANK YOU VERY MUCH.
THANK YOU. WE ARE GOING TO GO
BACK TO ISSUE IN ORDER. WE'RE
GOING TO GO TO ISSUE ONE. UH,
INCOME. COMPLETE NON GRANTOR
TRUSTS. LET'S BEGIN.
FOR THIS ISSUE. WE WILL HEAR THE
GOVERNOR'S PROPOSED TRAILER BILL
LANGUAGE ON THE INCOMPLETE, NON
GRANTOR TRUST, UM, DEPARTMENT OF
FINANCE. YOU MAY PRESENT YOUR
PROPOSAL, PLEASE. HI I'M ROBIN
FINISHED SAID WITH THE
DEPARTMENT OF FINANCE. UH TRUST
IS A COMMONLY USED ESTATE
PLANNING. TOLD IT ALLOWS ONE
PERSON TO HOLD ASSETS ON BEHALF
OF ONE OR MANY BENEFICIARIES.
THERE ARE TWO MAIN TYPES OF
TRUST, GRANTOR AND NON GRANTOR
TRUST. GRANTOR TRUST IS
REVOCABLE ALLOWS THE GRAND TOUR
ADMINISTRATIVE CONTROL OVER THE
TRUST AND THE INCOME AND TAX
ATTRIBUTES OF THE TRUST FLOW
THROUGH THE GRANT THROUGH TO THE
GRAND TOUR. GRANTOR TRUSTS. ON
THE OTHER HAND. GRANT CONTROL OF
THE TRUST TO A TRUSTEE AND ARE
CONSIDERED IRREVOCABLE. THE
GRAND TOUR GIVES UP RIGHT TITLE
AND INTEREST IN THE PRINCIPLE TO
THE TRUST. THE NON GRANTOR TRUST
IS TREATED AS A SEPARATE TAXABLE
ENTITY AND IS RESPONSIBLE FOR
THE TAX CONSEQUENCES OF INCOME
DEDUCTIONS AND CREDITS.
GENERALLY A GRAND TOUR RESIDING
IN CALIFORNIA THAT MOVES ASSETS
TO A NON GRANTOR TRUST IN
ANOTHER STATE WHEN SHIELD THOSE
ASSETS FROM CALIFORNIA STATE
TAXES, BUT THE GIFT TO THE
GRANTOR TRUST WOULD MAKE THE
GRANTOR SUBJECT TO FEDERAL GIFT
TAXES OR REDUCTION IN THEIR
ESTATE EXEMPTION. MORE COMPLEX
VERSION OF THE NON GRANTOR TRUST
, THE INCOMPLETE GIFT, NON
GRANTOR TRUST OR INKS, WHICH HAS
BEEN CLOSER TO THE MIC PLACE, OF
COURSE. WHICH HAS BEEN USED IN
RECENT YEARS TO HELP HIGH NET
WORTH INDIVIDUALS, MOVE ASSETS
OUT OF STATE AND AVOID FEDERAL
GIFT TAXES WHILE SHIELDING THE
ASSETS FROM STATE TAXATION. I N
G S ARE OFTEN FORMED IN STATES
SUCH AS NEVADA OR DELAWARE THAT
DO NOT TAX INCOME OF TRUST.
TRUST STRADDLE A LINE WHERE THE
GRANTOR RETAINED ENOUGH CONTROL
OF THE TRUST FOR ITS GIFT TO BE
INCOMPLETE AND THEREFORE NOT
TRIGGER FEDERAL GIFT TAXES, BUT
STILL MAINTAINS THE NON GRANTOR
STATUS OF THE TRUST, WHICH MEANS
THE GRAND TOUR IS NOT TAXED. I R
S RULING, SINCE 2013 HAVE
GENERALLY AFFIRMED THIS STRATEGY
AND NEW YORK PASSED LEGISLATION
IN 2014 THAT CLOSED THE LOOPHOLE
FOR THEIR STATE. THIS PROPOSAL
FOLLOWS THIS SUCCESSFUL EXAMPLE
OF THE NEW YORK LEGISLATION AND
REQUIRES THE NET INCOME DERIVED
FROM AN INK TRUST TO BE INCLUDED
IN THE GRAND TOURS. GROSS
INCOME. THIS RULING CLOSE THIS
PARTICULAR LITTLE PAUL AND IS
EXPECTED TO INCREASE REVENUES BY
30 MILLION IN 23 24 17 MILLION
IN SUBSEQUENT YEARS YEARS AND
AFFECT 1300 TAXPAYERS IN THE
FIRST YEAR AND ROUGHLY 600 IN
SUBSEQUENT YEARS. THANK YOU AND
HAPPY TO ANSWER ANY QUESTIONS.
ELIO. YEAH GRANULAR. ELIO WE
DON'T HAVE ANY CONCERNS WITH
THIS PROPOSAL. IT DOES APPEAR TO
US TO BE PRIMARILY A TOOL USED
BY HIGH WEALTH INDIVIDUALS TO
AVOID PAYING TAXES AND AS THE
DEPARTMENT OF FINANCE MENTIONED,
UH, IT IS A FOLLOWING A MODEL
THAT HAS BEEN IN PLACE IN NEW
YORK SINCE 2014 AND AS AS FAR AS
WE'RE AWARE NO MAJOR ISSUES HAVE
BEEN RAISED WITH WITH NEW YORK'S
POLICY, SO WE DON'T HAVE ANY
CONCERNS ON THIS ONE. THANK YOU.
JUST A COUPLE OF QUESTIONS. HOW
LONG HAVE UM I N G TRUST SPIN
AROUND AND WHAT STATES ARE THEY
TYPICALLY USED IN? THERE THEY
HAVE BEEN AROUND FOR A WHILE,
BUT THEY HAVE RECENTLY BECOME
MORE POPULAR WITH TAX PREPARERS
AS THEY HAVE, UH, BECOME MORE
WELL KNOWN, UH, ESPECIALLY AFTER
THE I R S ISSUED A LETTER RULING
LETTER THAT IN 2013 THAT ALLOWED
FOR THE. THINGS TO BE TO AVOID
TAXATION. DO YOU KNOW WHAT ARE
THERE OTHER STATES, THOUGH, THAT
YOU THINK OR TO YOUR KNOWLEDGE
THAT YOU MAY KNOW, USE THIS
PROGRAM MORE THAN OTHERS. UH I'M
NOT SURE AT THIS TIME, BUT WE
KNOW THAT SPECIFIC STATES LIKE
NEVADA AND DELAWARE ARE HAVE
THESE TYPES OF PROGRAMS AND
ENCOURAGE THEIR USE. THANK YOU.
UM CAN YOU DISCUSS DISCUSS THE
STRUCTURE OF A CHARITABLE
REMAINDER TRUST COMPARED TO AN I
N G TRUST. A CHARITABLE
REMAINDER TRUST IS AN
IRREVOCABLE TRUST CONFORMING
WITH FEDERAL CODE 664. AND. IT'S
SET UP BY THE GRANTOR TO GIVE
INCOME TO CHARITIES AND ALSO
DRAW AN ANNUAL INCOME. THEY HAVE
A VERY SPECIFIC STRUCTURE TO
ALLOW FOR THIS, AND THE
REMAINDER INTEREST IS EXEMPT
FROM INCOME TAX. INTEREST ON THE
OTHER HAND, ARE DESIGNED TO
AVOID TAXATION, BUT HAVE NO SUCH
REQUIREMENT FOR CHARITABLE
DONATIONS. THE ASSETS GO
DIRECTLY TO BENEFICIARIES
INSTEAD. WE'RE WORKING ON A MORE
TECHNICAL COMPLETE COMPARISON
AND WE CAN FOLLOW UP WITH THE
COMMITTEE TOMORROW. THANK YOU
ANY ADDITIONAL COMMENTS OR
QUESTIONS? NO. WE ARE HOLDING
THIS ITEM OPEN FOR NOW. THANK
YOU VERY MUCH. WE'RE GOING TO
MOVE ON TO ISSUE NUMBER TWO. NEW
EMPLOYMENT CREDIT EXEMPTION FOR
SEMICONDUCTOR COMPANIES. PLEASE
BEGIN WHEN YOU'RE READY. THANK
YOU, MADAM CHAIR. KOBE WHITE
DEPARTMENT OF FINANCE, SO THE
ADMINISTRATION IS PROPOSING AN
EXPANSION OF THE STATE'S NEW
EMPLOYMENT CREDIT FOR TAX YEARS.
2023 THROUGH 2025 BY EXEMPTING
CERTAIN SEMICONDUCTORS,
SEMICONDUCTOR COMPANIES FROM THE
GEOGRAPHIC REQUIREMENTS OF THAT
OF THAT CREDIT, THE PURPOSE OF
THIS IS THE BETTER TO ALLOW
THESE. IT'S PART OF THE STATE'S
OVERALL STRATEGY TO COMPETE FOR
CHIPS, ACT DOLLARS. TO EXPAND
SEMICONDUCTOR DEVELOPMENT IN THE
STATE. THE. THE QUALIFYING
COMPANIES WOULD FALL UNDER NEXT
CODE 3344, WHICH IS ELECTRONIC
SEMICONDUCTOR COMPANIES,
ELECTRONIC COMPONENTS. AND THE
PROPOSAL ALLOWS FOR SELF
CERTIFICATION THAT THEY THAT THE
COMPANY'S PLAN TO APPLY FOR
FUNDING DUE TO THE UNCERTAIN
TIMING OF THE CHIPS ACT
APPLICATION PROCESS AND THE
POSSIBILITY FOR COMPANIES TO USE
THE NEW EMPLOYMENT CREDIT IN
THEIR APPLICATIONS FOR FEDERAL
DOLLARS. COMPANIES WHO APPLY FOR
THE FOR THE I'M SORRY COMPANIES
WHO APPLY FOR THAT, AND NEW
EMPLOYMENT CREDIT WOULD STILL BE
SUBJECT TO ALL OTHER THE ALL OF
THE OTHER REQUIREMENTS OF THE
NEW EMPLOYMENT CREDIT SO THIS
CAN BE VIEWED AS A BIT LIKE A
HARD TO HIRE CREDIT. SO TO
SPEAK. YOU HAVE TO MEET EMPLOYEE
AND QUALIFYING EMPLOYEE HAS TO
MEET CERTAIN UH, ELIGIBILITY
REQUIREMENTS, SUCH AS BEING AN
EX OFFENDER. COW WORKS RECIPIENT
. THE EITC RECIPIENTS IN THERE
ARE A FEW OTHERS. AND THE CREDIT
ITSELF IS GOOD FOR UP TO FIVE
YEARS. BUT THE LANGUAGE
INCLUDES, UH AUTHORIZATION FOR
THE FTP TO REQUEST DOCUMENTATION
EACH YEAR THAT THE THAT THE
COMPANY DID INDEED APPLY APPLY
FOR FEDERAL FUNDING UNDER THE
CHIPS ACT. SO ALONG WITH OTHER
PROPOSALS, INCLUDING THE
EXTENSION OF THE CAL COMPETES
GRANT PROGRAM. AH AS WELL AS
EXISTING PROGRAMS SUCH AS THE R
AND D TAX CREDIT AND THE SALES
AND USE TAX. UH EXEMPTION FOR
MANUFACTURING. THIS IS PART OF
OUR STRATEGY. THE STATE STRATEGY
TO ENCOURAGE CALIFORNIA BASED
COMPANIES TO LEVERAGE FEDERAL
DOLLARS UNDER THE UNDER THE
CHIPS ACT. THE FISCAL IMPACT OF
THIS PROPOSAL IS ESTIMATED AT
1.1 MILLION ANNUALLY IN 23 24
THROUGH 25 26. AND WITH THAT,
I'M HAPPY TO ANSWER ANY
QUESTIONS. ELIO. UM WE THINK
THAT THIS PROPOSAL IS WORTH
CONSIDERATION AS A RELATIVELY
LOW COST WAY FOR THE STATE TO
ATTEMPT TO DRAW DOWN ADDITIONAL
FEDERAL CHIPS ACT FUNDS. UM. AS
IS KIND OF NOTED IN YOUR AGENDA.
THERE ARE A NUMBER OF, UH, STATE
TAX CREDIT AND GRANT PROPOSALS,
MOSTLY IN THE CALIFORNIA PEACE
PROGRAM THAT ARE AIMED ALSO AT
DRAWING IN CHIPS, DOLLARS, AND
THIS IS IN RECOGNITION THAT THE
FEDERAL GUIDANCE HAS SUGGESTED
THAT THERE WILL THEY WILL BE
LOOKING FOR EVIDENCE THAT GRANT
OUT GRANT APPLICANTS ARE
RECEIVING AH STATE SUPPORT IN
THEIR PROJECTS. UH ONE THING
THAT, UM UH, MAKES THE NEW
EMPLOYMENT CREDIT DISTINCT
SOMEWHAT FROM THE CAL COMPETES
PIECES IS AS THE DEPARTMENT OF
FINANCE MENTIONED THE HARD TO
HIRE TARGETING COMPONENT OF IT,
WHICH, ADDITIONALLY COULD HELP
CALIFORNIA GRANT APPLICANTS.
SATISFY SOME OF THE ADDITIONAL
FEDERAL GUIDELINES THAT ARE
LOOKING FOR EFFORTS TO PROMOTE,
UH, KIND OF DIVERSE WORKFORCE
AND TARGETING, UM, DISADVANTAGED
COMMUNITIES. SO BY COMPLEMENTING
THE CALIFORNIA COMPETES PIECES
WITH THIS NEW EMPLOYMENT CREDIT
, UH, COULD HELP THE CALIFORNIA
GRANT APPLICANTS BE MORE LIKELY
TO RECEIVE THOSE FUNDS. THANK
YOU. WHAT IS THE PURPOSE OF
ELIMINATING THE DESIGNATED
CENSUS TRACK OR ECONOMIC
DEVELOPMENT AREAS? SO WHEN WE
LOOKED AT THIS, UH, DEVELOPMENT
OF THIS PROPOSAL WE LOOKED AT,
YOU KNOW, FIRST OF ALL, WE WERE
REALISTIC ABOUT THE SIZE OF THIS
INCENTIVE AND WHAT WHAT WE'RE
HOPING TO DO HERE, SO THIS IS A
RELATIVELY SMALL INCENTIVE AND
IN RELATION TO, FOR EXAMPLE,
SOME OF THE INCENTIVES THAT
OTHER STATES ARE OFFERING TO
HAVE COMPANIES BUILD NEW
FABRICATION FACILITIES IN IN
OTHER STATES. SO WE SEE. SEE
THIS MORE AS A AS HELPING TO
FACILITATE EXPANSION OF EXISTING
FACILITIES WITHIN THE STATE, AND
WHEN WE LOOKED AT WHERE THE
SEMICONDUCTOR FACILITIES WERE
LOCATED, MOST OF THEM WERE NOT
LOCATED WITHIN WITHIN THOSE
CENSUS TRACTS THAT WOULD QUALIFY
FOR THE NEW EMPLOYMENT CREDIT.
AND HOW DOES THE ELIMINATION FIT
WITH THE, UM WRITING THIS TO
HIRE OR THE NEED TO HIRE I'M
SORRY. HOW DOES THE ELIMINATION
FIT WITH THE HARD TO HIRE PIECE
? THE OTHER. THE OTHER
COMPONENTS OF THIS OF THIS TAX
CREDIT ARE STILL IN PLACE, AND
IN PARTICULAR, YOU KNOW THE
DESIGNATION THAT THE EMPLOYEE
MUST BE UNEMPLOYED FOR SIX
MONTHS PRIOR TO HIRE UNEMPLOYED.
UNEMPLOYED IS ONE OF THE
CRITERIA IF THEY'RE UNEMPLOYED
FOR SIX MONTHS PRIOR TO PRIOR TO
HIRE THAT'S THAT'S MEETS ONE OF
THE HARD, HARD TO HIGHER
THRESHOLDS. THERE'S ALSO OTHER
ALL THE OTHER. ALL THE OTHER
COMPONENTS OF THE TAX CREDIT ARE
IN PLACE. IT'S FOR IT'S FOR GOOD
PAYING JOBS. THE CREDIT IS
CALCULATED BASED ON 150 TO 350%
OF MINIMUM WAGE, SO THE
CALCULATION OF THE CREDIT, YOU
KNOW, IT'S REQUIRED TO HAVE HAVE
A HAVE A GOOD PAYING JOB. BUT
MAINLY THOSE HARD TO HIRE
CATEGORIES ARE STILL IN PLACE.
THAT TO FACILITATE THE HIRING OF
THOSE THOSE WORKERS INDIVIDUALS.
UM DOES THE DEPARTMENT OF
FINANCE ANTICIPATE MORE INTEREST
IN THE TAX CREDIT IF THOSE
RESTRICTIONS ARE ELIMINATED? WE
DO, AND OUR REVENUE ESTIMATE IS
PREDICATED ON SOME UPTAKE IN, UH
, IN THAT IN THAT AREA. YEAH.
ANY ADDITIONAL COMMENTS? YES,
MAJORITY LEADER. SO THE PURPOSES
I UNDERSTAND, AS IT SAYS, TO
PROVIDE TAX CREDITS FOR
BUSINESSES THAT OPERATE IN HIGH
POVERTY AREAS AND PROVIDE LONG
TERM EMPLOYMENT FOR SPECIFIED
POPULATIONS, AND I ASSUME THAT'S
WHY THE GEOGRAPHIC BOUNDARIES
WAS PART OF THIS BECAUSE YOU
LOOK AT THE AREAS THAT NEED THE
MOST HELP. THAT HAVE THE HIGHEST
POVERTY RATE. AND SO YOU'RE
TRYING TO ZERO IN ON THOSE AREAS
TO PROVIDE MORE EMPLOYMENT
OPPORTUNITIES AND THEN PROVIDE
LONG TERM EMPLOYMENT. IS THAT
RIGHT? YES WHAT YOU'RE
DESCRIBING IS THE ORIGINAL
STRUCTURE OF THE NEW EMPLOYMENT
CREDIT. YES. SO IF WE'RE SAYING
THEN THAT WE'RE GOING TO TAKE
OUT ELIMINATE THE GEOGRAPHIC
BOUNDARIES THAN THOSE VERY.
PEOPLE THAT WE WANT TO HELP GET
EMPLOYED. AND TO PROVIDE THIS
LONG TERM EMPLOYMENT Tð. ARE NOT
GOING TO BE THE EMPHASIS OF THE
THIS TAX CREDIT. YEAH THIS THIS
PARTICULAR EXCEPTIONS SO THIS
THIS WOULD ACCEPT THEM FROM THE
GEOGRAPHIC REQUIREMENT? IT
DOESN'T. IT DOESN'T MAKE AN
EXCEPTION FOR ALL THOSE OTHER
HARD TO HIRE. COMPONENTS, SO YOU
COULD ENVISION, UM YOU KNOW, YOU
COULD HAVE YOU YOU CAN JUST
BECAUSE OF BUSINESSES LOCATED
OUTSIDE THE CENSUS TRACK. THEN
YOU COULD ENVISION A POTENTIAL
EMPLOYEE BEING LOCATED WITHIN
ONE OF THOSE HIGH POVERTY AREAS
. BUT ALSO, YOU KNOW,
REALISTICALLY, ALSO, THERE'S A
LOT OF THERE ARE STILL HARD TO
HIGHER POPULATIONS WITHIN
OUTSIDE THOSE CENSUS TRACTS AS
WELL, BUT BUT WE DID. WE DID.
THIS IS ALSO TARGETED
SPECIFICALLY FOR THIS PARTICULAR
OPPORTUNITIES FOR THE NEXUS WITH
THE CHIPS ACT AND IT JUST
REALISTICALLY, THESE THESE
SEMICONDUCTOR COMPANIES ARE NOT
CURRENTLY LOCATED. MOST OF THEM
ARE NOT LOCATED WITHIN THOSE
CENSUS TRACTS. SO IT'S JUST A
RECOGNITION OF THAT, AND THE YOU
KNOW, CALIFORNIA HAS, UM ARE YOU
KNOW HAS MORE SEMICONDUCTOR
EMPLOYMENT THAN ANY OTHER STATE
? UM, BUT WE? WE DON'T
NECESSARILY ENVISIONED THAT
WE'RE GOING TO BE ABLE TO
ATTRACT THOSE LARGE. FABRICATION
FACILITIES TO THESE TO THESE TO
THE AREAS WITHIN THE WITHIN
THOSE DESIGNATED TRACKS BECAUSE
WE WOULDN'T NEED MUCH, MUCH
LARGER INCENTIVES TO COMPETE
WITH OTHER STATES IN ORDER TO DO
THAT. AND I RECOGNIZE WHAT THE
YELLOW L A. OH SANG IS TO DRAW
DOWN ON THE VISION, ADDITIONAL
FEDERAL CHIP SCRAP MONEY SO THE
MONEY IS SITTING THERE BECAUSE
THERE ARE YOU'RE NOT ABLE TO USE
IT FOR THE VERY PURPOSE THAT IT
WAS WRITTEN FOR. I GET WHAT
YOU'RE DOING. I JUST IT JUST
SEEMS TO ME THAT IF THAT WAS THE
PURPOSE OF IT IS TO GET THOSE
GEOGRAPHIC AREAS. THERE WAS A
REASON FOR THAT IS BECAUSE
THERE'S A GROUP OF PEOPLE THAT
NORMALLY ARE NOT GOING TO GET
THESE JOBS. SO IF WE USE THE
MONEY TO TRY TO FIGURE OUT HOW
TO EMPLOY THEM AND GIVE THEM
THOSE OPPORTUNITIES, THAT'S WHAT
THE TAX CREDIT WAS FOR. UM, BUT
RIGHT? YES AND THEN THE EXISTING
TAX CREDIT IS STILL IN PLACE FOR
ALL OTHER INDUSTRIES. YEAH BUT
YES, YOU MAY. THAT'S YOUR
CORRECT. THANK YOU. WOULD YOU BE
ABLE TO PROVIDE US WITH AN
EXAMPLE OF WHERE THESE
BUSINESSES MIGHT BE LIKE I THE
QUESTION FOLLOWING THE MAJORITY
LEADER IS IF THE BUSINESSES
OUTSIDE THE CENSUS TRACK RIGHT,
IDEALLY OR POTENTIALLY ARE THEY
IN THE BAY AREA? THEY IN L A AND
HOW CLOSE IN PROXIMITY ARE THE
HARD TO HIRE WORKERS IN TERMS OF
HOW HOW WILL THEY BE ABLE TO GET
TO THAT POTENTIAL JOB? YEAH I
CAN. I CAN FOLLOW UP WITH THE
COMMITTEE WITH A MORE WITH MORE
INFORMATION ON THAT A LOT. SOME
OF THEM ARE AS I RECALL IN THE
BAY AREA, BUT, UM, BUT, YEAH, I
CAN FOLLOW UP AND PROVIDE, UM
MORE. MORE DETAIL ON WHERE THE
SEMICONDUCTOR EMPLOYMENT WE'D
ACTUALLY I MEAN, THE DATA WE
HAVE IS, UM EMPLOYMENT. WE DON'T
UH, SO THE ECONOMIC DATA THAT WE
HAVE IS A CENSUS DATA AS IT'S ON
EMPLOYMENT, SO WE HAVE
EMPLOYMENT BY, FOR EXAMPLE, IN
VARIOUS COUNTIES AND THINGS LIKE
THAT. OKAY GIVE YOU AN IDEA OF
WHERE WHERE THESE BUSINESSES ARE
LOCATED. OKAY I'M JUST THINKING
COUNTIES ARE BIG RIGHT? LOS
ANGELES COUNTY IS HUGE. I'M JUST
CURIOUS IF THE LOCATION OF THE
BUSINESS IF IT'S OUTSIDE OF THE
CENSUS CENSUS TRACK. HOW
CHALLENGING DIFFICULT OR MAYBE
NOT, IS IT FOR THOSE HARD TO
HIRE TO GET THERE? UM AND
THINKING ABOUT JUST
TRANSPORTATION. I LOVE
RELOCATION OPPORTUNITY. JUST
CURIOUS AS TO WHERE THEY ARE AND
WHERE THE WORKERS ARE. YEAH I'LL
FOLLOW UP AND PROVIDE THE
COMMITTEE SOME MORE CONCRETE
DATA ON THAT, OKAY? YES. AS A
FOLLOW UP TO YOUR QUESTION,
MADAM CHAIR IF WE'RE TRYING TO
BRING PEOPLE IN. WHO ARE FROM
THESE GEOGRAPHIC AREAS. UM THEN
PERHAPS THE EMPLOYER KNOW THAT
KNOWING THEY'RE GOING TO GET
THESE TAX INCENTIVES WOULD THEN
BE MORE INCLINED TO PROVIDE
OTHER BENEFITS TO THAT EMPLOYEE
MAY MAYBE RELOCATION OR WHAT
HAVE YOU SO THAT THEY CAN THEN
MEET THE REQUIREMENTS OF THE
GEOGRAPHIC BOUNDARIES. UH, IT
JUST SEEMS. THAT WE'RE GIVING UP
ON THIS PART OF IT, RATHER THAN
TRYING TO BE CREATIVE AND
FIGURING OUT HOW WE BRING THOSE
EMPLOYEES IN AND PROVIDE THAT
EMPLOYMENT SO THAT THE PURPOSE
FOR WHICH THIS WAS WRITTEN
INITIALLY, ORIGINALLY, UM, COULD
STILL BE THAT WE COULD STILL
COMPLY WITH IT. YEAH. I MEAN, I
THINK THE LOCATION OF THE
BUSINESS. AT LEAST SOME OF THESE
BUSINESSES ARE QUITE LARGE. AND
THEY HAVE YOU KNOW THEY THEY
CAN'T JUST MOVE. MOVE THE
FACILITY. SO, UM SO I THINK I'M
TALKING ABOUT MOVING THE
EMPLOYEE. SO IF YOU GET AN
EMPLOYEE FROM THAT GEOGRAPHIC
AREA. UH FOR WHICH THE WAS
ORIGINALLY ORIGINALLY WRITTEN
FOR BUT IF THERE IS AN INCENTIVE
TO BRING THEM IN TO HELP WITH
THEIR RELOCATION, THEN THEY'VE
COMPLIED. THEY CAN GET THE
EMPLOYER GETS A TAX CREDIT. BUT
THE EMPLOYEE THEN GETS TO HAVE
THIS EMPLOYMENT IN LONG TERM
EMPLOYMENT VERY SPECIFICALLY.
YES SO IT SOUNDS LIKE WHAT
YOU'RE DESCRIBING IS A VARIATION
OF THIS CURRENT STRUCTURE FOR
THE BECAUSE RIGHT NOW IT'S WHERE
THE BUSINESS IS LOCATED, SO THE
BUSINESS HAS TO BE LOCATED
WITHIN WITHIN THE DESIGNATED
GEOGRAPHIC AREA IN ORDER TO GET
THE TAX CREDITS SO BRINGING IN
AN EMPLOYEE FROM HIGH POVERTY
AREA DOESN'T QUALIFY YOU FOR THE
TAX CREDIT UNDER CURRENT LAWS
OUT HERE. VERY GOOD. THANK YOU
FOR CLARIFYING THAT. THANK YOU.
THANK YOU, MADAM CHAIR. THANK
YOU VERY MUCH. WE'RE GOING TO
HOLD THIS ITEM OPEN FOR THE
MOMENT AND GO ON TO ISSUE NUMBER
FOUR. THE FILM AND TELEVISION
TAX CREDIT ADMINISTRATION. I
WANT TO WELCOME OUR GUESTS WHO
ARE HERE FOR A MUST SEE TV AND
ALSO MUST SEE BUDGET HEARING
THANK YOU FOR JOINING US IN THE
CAPITAL. PLEASE BEGIN WHEN
YOU'RE READY. FINAL ISSUE IS THE
RESOURCES FOR THE FILM TAX
CREDIT FOR THE FRANCHISE TAX
BOARD TO ACCOMPANY ANY PASSAGE
OF THE FOUR POINT OH TAX
PROGRAM. PLEASE BEGIN. GOOD
AFTERNOON, DOC SIMMONS
DEPARTMENT OF FINANCE UNDER THE
GOVERNOR'S 23 24 BUDGET PROPOSAL
, THE FILM AND TAX CREDIT
PROGRAM WOULD CONTINUE TO
EARMARK 330 MILLION FOR FILM AND
TV TAX INCENTIVES EACH YEAR
STARTING IN FISCAL YEAR 25 26
THROUGH FISCAL YEAR. 30 31. THE
ADMISSION ADMINISTRATION
PROPOSES FUNDING F T B TO ENSURE
TAX RETURNS ARE PROCESSED. AND
RETURNS ARE ISSUED TIMELY AS
WELL AS ENSURING IMPROPER
PAYMENTS OF THIS REFUNDABLE TAX
CREDIT ARE MINIMIZED. I'D BE
GLAD TO ANSWER ANY ADDITIONAL
QUESTIONS. ELLIOTT. NO CONCERNS.
SORRY. NO CONCERNS. THANK YOU.
UM THANK YOU FOR THE
PRESENTATION. WE WILL CONSIDER
THIS PROPOSAL IN CONJUNCTION
WITH THE LARGER CONVERSATION
RELATED TO THE FILM TAX CREDIT
PROGRAM. BUT UNDERSTAND THAT
EVEN WITHIN THOSE CONVERSATIONS
, WE, UM WE NEED TO PROVIDE THE
NECESSARY RESOURCES FOR THE
DEPARTMENT TO BE ABLE TO ENACT
THOSE PROGRAMS. ANY QUESTIONS? I
JUST WANT TO MAKE A COMMENT THAT
WHEN WE'RE TALKING ABOUT THIS
FILM AND TELEVISION TAX CREDIT,
IT'S SOMETHING THAT'S REALLY
IMPORTANT TO CALIFORNIA. UM AND
MAKING SURE THAT SHOULD THAT BE
INCLUDED IN OUR BUDGET. WE DO,
AS THE CHAIR HAS INDICATED. WE
DO NEED TO PROVIDE THE. THE
FUNDING FOR THE EMPLOYEES AND
EVERYTHING ELSE THAT IS NEEDED.
BUT UM, THE INITIAL THE BIG,
BIGGER PICTURE IS THE TAX CREDIT
ITSELF, AND I LOOK FORWARD TO
GETTING THAT RESOLVED FOR
CALIFORNIA'S SAKE. THANK YOU.
THANK YOU. THANK YOU VERY MUCH.
WE'RE GOING TO HOLD THIS ITEM
OPEN FOR THE MOMENT. AND THAT
BELIEVED CONCLUDES OUR ONE OF
OUR SHORTEST BUDGET HEARINGS
THAT WE HAVE HAD THUS FAR WE
WILL BE ACCEPTING PUBLIC COMMENT
AT THE HEARING ROOM AND ON THE
PHONE. THE PHONE NUMBER TO
CONNECT IS ON THE COMMITTEE
WEBSITE AND SHOULD ALSO BE ON
THE SCREEN. IF YOU ARE WATCHING
OVER THE INTERWEBS, THE NUMBER
IS STILL FREE 8776928957 PUBLIC
ACCESS CODE IS 131. 5447 I WANT
TO THANK ALL OF OUR PANELISTS
FOR ALL OF THE PRESENTATIONS
TODAY. ARE THERE ANY ADDITIONAL
PUBLIC COMMENTS IN THE ROOM?
SEEING NONE. WE'RE GOING TO GO
TO OUR COMMENTS OVER THE PHONE
OPERATOR, YOU MAY BEGIN. LADIES
AND GENTLEMEN, IF YOU WISH TO
MAKE A PUBLIC COMMENT, PLEASE
PRESS 10 YOU HEAR ATONING CAME
YOU CAN EVEN PLACE INTO THE
QUEUE. YOU MAY REMOVE YOURSELF
FROM SECURITY TIME BY PRESSING
10 AGAIN. AND THERE WAS
CURRENTLY NO ONE QUEUING UP,
MADAM CHAIR. THAT'S NEVER
HAPPENED EVER IN THIS COMMITTEE
, WHICH MEANS WHICH I BELIEVE
THAT MEANS WE'RE DONE. THERE ARE
NO ADDITIONAL. IT'S MR PATTERSON
ON HIS WAY. OKAY WE WILL. WE
WILL HOLD FOR AN ADDITIONAL FIVE
MINUTES BEFORE WE CONCLUDE.
THANK YOU, EVERYONE. AND WELCOME
TO A VERY EXCITING BUT VERY
SHORT, BUT IT'S A FOUR HEARING.
THANK YOU. THANK YOU FOR BEING
OUR AUDIENCE FOR TODAY LIVE LIVE
FROM THE CAPITAL. IT'S BUDGETS
OF FOUR. THANK YOU.
FOR THOSE WATCHING. WE WILL BE
BACK ON MONDAY FOR MAY REVISION
UPON A GERMAN OF SESSION.
WELCOME, MR PATTERSON. WE'RE
GONNA PROCEED WITH YOUR VOTES.
THE FIRST MOTION IS TO ADOPT THE
STAFF RECOMMENDATION ON THE VOTE
ONLY CALENDAR. PATERSON. AND THE
SECOND ONE IS ON ISSUE THREE IS
TO ADOPT PLACEHOLDER TRAILER
BILL LANGUAGE. PATERSON.
HI. THANK YOU THAT CONCLUDES OUR
BUDGETS OF FOUR HEARING. WE ARE
NOW A JOURNEY. YEAH YEAH, YEAH.