Senator Dutton has proposed SB 508, a new hiring tax credit available to all California employers modeled after the federal WOTC program.  Here’s the text of the bill:

SB 508, as introduced, Dutton. Taxes: credits: qualifiedemployees.  The Personal Income Tax Law and the Corporation Tax Law authorizevarious credits against the taxes imposed by those laws, including ahiring credit for qualified taxpayers who hire qualified employees,as defined, within enterprise zones, Manufacturing Enhancement Areas,targeted tax areas, and LAMBRAS, subject to specified criteria.  This bill would, for taxable years beginning on or after January1, 2009, authorize a hiring credit under those respective laws forqualified taxpayers who hire qualified employees, as defined.  This bill would take effect immediately as a tax levy.  Vote: majority. Appropriation: no. Fiscal committee: yes.State-mandated local program: no.THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:SECTION 1. Section 17053.76 is added to the Revenue and TaxationCode, to read:  17053.76. (a) For each taxable year beginning on or after January1, 2009, there shall be allowed a credit against the “net tax,” asdefined in Section 17039, an amount equal to the sum of the followingpercentages of wages paid or incurred by the taxpayer during thetaxable year to each qualified employee of the taxpayer:  (1) Twenty-five percent for each qualified employee employed bythe qualified taxpayer for at least 120 hours, but less than 400hours, during the taxable year.  (2) Forty percent for each qualified employee employed by thequalified taxpayer for at least 400 hours during the taxable year.  (b) The credit under subdivision (a) shall be allowed only withrespect to the first six thousand dollars ($6,000) of wages paid orincurred during the taxable year to each qualified employee.  (c) For purposes of this section, all of the following definitionsapply:  (1) “Qualified employee” means an individual who is any of thefollowing, as documented by the Employment Development Department:  (A) A recipient of CalWORKs benefits.  (B) A parolee.  (C) A veteran, as defined in Section 980 of the Military andVeterans Code.  (D) Eligible for receipt of unemployment insurance benefits orcurrently receiving unemployment insurance benefits.  (2) “Qualified taxpayer” means a taxpayer that is a person orentity engaged in a trade or business within California that has itsprincipal office located in California.  (d) For purposes of this section the qualified taxpayer shall doboth of the following:  (1) Obtain a certificate from the Employment DevelopmentDepartment certifying that a qualified employee is employed by thequalified taxpayer.  (2) Retain a copy of the certification and provide it upon requestto the Franchise Tax Board.  (e) (1) For purposes of this section:  (A) All employees of trades or businesses, which are notincorporated, that are under common control shall be treated asemployed by a single qualified taxpayer.  (B) The credit, if any, allowable by this section with respect toeach trade or business shall be determined by reference to itsproportionate share of the expense of the qualified wages giving riseto the credit, and shall be allocated in that manner.  (C) Principles that apply in the case of controlled groups ofcorporations, as specified in subdivision (e) of Section 23622.9,shall apply with respect to determining employment.  (2) If an employer acquires the major portion of a trade orbusiness of another employer (hereafter in this paragraph referred toas the “predecessor”) or the major portion of a separate unit of atrade or business of a predecessor, then, for purposes of applyingthis section, other than subdivision (f), for any calendar yearending after that acquisition, the employment relationship between aqualified employee and an employer shall not be treated as terminatedif the employee continues to be employed in that trade or business.  (f) Any deduction otherwise allowed under this part for the wagesor salaries paid or incurred by the qualified taxpayer upon which thecredit is based shall be reduced by the amount of the credit, priorto any reduction required by subdivision (g).  (g) In the case where the credit otherwise allowed under thissection exceeds the “net tax” for the taxable year, that portion ofthe credit that exceeds the “net tax” may be carried over and addedto the credit, if any, in succeeding taxable years, until the creditis exhausted. The credit shall be applied first to the earliesttaxable years possible.  SEC. 2. Section 23622.9 is added to the Revenue and Taxation Code,to read:  23622.9. (a) For each taxable year beginning on or after January1, 2009, there shall be allowed a credit against the “tax,” asdefined in Section 23036, an amount equal to the sum of the followingpercentages of wages paid or incurred by the taxpayer during thetaxable year to each qualified employee of the taxpayer.  (1) Twenty-five percent for each qualified employee employed bythe qualified taxpayer for at least 120 hours, but not less than 400hours, during the taxable year.  (2) Forty percent for each qualified employee employed by thequalified taxpayer for at least 400 hours during the taxable year.  (b) The credit under subdivision (a) shall be allowed only withrespect to the first six thousand dollars ($6,000) of wages paid orincurred during the taxable year to each qualified employee.  (c) For purposes of this section, all of the following definitionsapply:  (1) “Qualified employee” means an individual who is any of thefollowing, as documented by the Employment Development Department:  (A) A recipient of CalWORKs benefits.  (B) A parolee.  (C) A veteran, as defined in Section 980 of the Military andVeterans Code.  (D) Eligible for receipt of unemployment insurance benefits orcurrently receiving unemployment insurance benefits.  (2) “Qualified taxpayer” means a taxpayer that is a person orentity engaged in a trade or business within California that has itsprincipal office located in California.  (d) For purposes of this section the qualified taxpayer shall doboth of the following:  (1) Obtain a certificate from the Employment DevelopmentDepartment certifying that a qualified employee is employed by thequalified taxpayer.  (2) Retain a copy of the certification and provide it upon requestto the Franchise Tax Board.  (e) (1) For purposes of this section:  (A) All employees of trades or businesses, which are notincorporated, that are under common control shall be treated asemployed by a single qualified taxpayer.  (B) The credit, if any, allowable by this section with respect toeach trade or business shall be determined by reference to itsproportionate share of the expense of the qualified wages giving riseto the credit, and shall be allocated in that manner.  (C) Principles that apply in the case of controlled groups ofcorporations, as specified in subdivision (e) of Section 23622.9,shall apply with respect to determining employment.  (2) If an employer acquires the major portion of a trade orbusiness of another employer (hereafter in this paragraph referred toas the “predecessor”) or the major portion of a separate unit of atrade or business of a predecessor, then, for purposes of applyingthis section, other than subdivision (f), for any calendar yearending after that acquisition, the employment relationship between aqualified employee and an employer shall not be treated as terminatedif the employee continues to be employed in that trade or business.  (f) Any deduction otherwise allowed under this part for the wagesor salaries paid or incurred by the qualified taxpayer upon which thecredit is based shall be reduced by the amount of the credit, priorto any reduction required by subdivision (g).  (g) In the case where the credit otherwise allowed under thissection exceeds the “tax” for the taxable year, that portion of thecredit that exceeds the “tax” may be carried over and added to thecredit, if any, in succeeding taxable years, until the credit isexhausted. The credit shall be applied first to the earliest taxableyears possible.  SEC. 3. This act provides for a tax levy within the meaning ofArticle IV of the Constitution and shall go into immediate effect.