(a)The Legislature finds and declares all of the following:

(1)California is the international trade leader of the United States as the gateway to the dynamic economies of the Pacific Rim. International trade is one of the most important economic and job creation drivers of the state and a key to the state’s economic recovery. Together, the three California customs districts of Los Angeles, San Diego, and San Francisco led the nation by processing approximately $500 billion in two-way trade value in 2010. The combined California ports of Los Angeles, Long Beach, and Oakland are the busiest seaports in the nation, handling approximately 45 percent of all the waterborne containerized cargo coming into the United States.

(2)California, however, must do more to ensure that California ports remain competitive, as the Gulf, East Coast, and Mexican ports work to attract business away from California seaports and competition intensifies after the expansion of the Panama Canal in 2014. California ports are taking action to retain market share by expanding terminal capacity and investing in other trade-related infrastructure projects, but more needs to be done to protect California’s vitally important international trade sector, including creating incentives to maintain and grow new jobs related to business, manufacturing, and trade in the years ahead.

(3)Providing California tax credits to exporters and importers through California ports and airports and increasing cargo-moving capacity at California’s ports and airports will support President Obama’s national export initiative.

(b)It is the intent of the Legislature to boost exports and imports through California ports and airports by providing tax credits for California exporters and importers and by providing tax credits for increasing cargo-moving capacity.

For the purposes of this division, the following terms have the following meanings:

(a)“Annual full-time equivalent” means either of the following:

(1)In the case of a full-time employee who was paid hourly qualified wages, “annual full-time equivalent” means the total number of hours worked for the taxpayer by the employee (not to exceed 2,000 hours per employee) divided by 2,000.

(2)In the case of a salaried full-time employee, “annual full-time equivalent” means the total number of weeks worked for the taxpayer by the employee divided by 52.

(b)“Authority” means the California Transportation Financing Authority established in Section 64101.

(c)(1)“Capital costs” means all costs and expenses incurred by one or more exporter or importer in connection with the acquisition, construction, installation, and equipping of a cargo facility, including any environmental mitigation undertaken specifically to reduce the impacts of a cargo facility, during the period commencing with the date on which the acquisition, construction, installation, and equipping commences and ending on the date on which the cargo facility is placed in service.

(2)Capital costs shall include, but not be limited to, the following:

(A)The costs of acquiring, constructing, installing, equipping, and financing a cargo facility, including all obligations incurred for labor and to contractors, subcontractors, builders, and materialmen.

(B)The costs of acquiring land or rights in land and any cost incidental thereto, including recording fees.

(C)The costs of contract bonds and of insurance of any kind that may be required or necessary during the acquisition, construction, or installation of a cargo facility.

(D)The costs of architectural and engineering services, including test borings, surveys, estimates, plans, specifications, preliminary investigations, environmental mitigation, and supervision of construction, as well as for the performance of all the duties required by or consequent upon the acquisition, construction, and installation of a cargo facility.

(E)The costs associated with installation of fixtures and equipment, surveys, including archaeological and environmental surveys, site tests and inspections, subsurface site work, excavation, removal of structures, roadways, and other surface obstructions, filling, grading, paving, and provisions for drainage, stormwater retention, installation of utilities, including water, sewerage treatment, gas, electricity, communications, and similar facilities, and offsite construction of utility extensions to the boundaries of the property.

(F)The costs of completing any environmental mitigation.

(G)All other costs of a nature comparable to those described, including, but not limited to, all project costs required to be capitalized for federal income tax purposes pursuant to the provisions of Section 263(a) of Title 26 of the United States Code.

(H)Costs otherwise defined as capital costs incurred by the exporter or importer where the qualifying taxpayer is the lessee under a lease that contains a term of not less than five years and is characterized as a capital lease for federal income tax purposes.

(3)Capital costs shall not include property owned or leased by the exporter or importer or a related entity before the commencement of the acquisition, construction, installation, or equipping of the cargo facility, unless the property was physically located outside the state for a period of at least one year prior to the date on which the cargo facility was placed in service.

(4)Capital costs shall not include project costs that were expended prior to January 1, 2014.

(d)“Cargo facility” means a capital project at a port or airport in California designed to increase cargo-moving capacity at that port or airport and that is expended in a taxable year and has a useful life of five years or more.

(e)“Export cargo tonnage” means the weight of cargo exported through California ports by an exporter to destinations outside the United States.

(f)“Export cargo value” means the value of cargo exported through California airports by an exporter to destinations outside of the United States as certified by the applicant for a tax credit certificate.

(g)“Exporter” means a California taxpayer that is the shipper of record of agricultural products or manufactured goods on an ocean bill of lading or on an air waybill.

(h)“Import cargo tonnage” means the weight of cargo imported by an importer through California ports by that importer from outside the United States.

(i)“Import cargo value” means the value of cargo imported through California airports by an importer from outside the United States as certified by the applicant for a tax credit certificate.

(j)“Importer” means a California taxpayer that is the consignee of record of agricultural products or manufactured goods on an ocean bill of lading or on an air waybill.

(k)(1)“Qualified full-time employee” means either of the following:

(A)A qualified employee who was paid qualified wages by the qualified employer for services of not less than an average of 35 hours per week.

(B)A qualified employee who was a salaried employee and was paid compensation during the taxable year for full-time employment, within the meaning of Section 515 of the Labor Code, by the qualified employer.

(2)A “qualified employee” shall not include any of the following:

(A)An employee certified as a qualified employee in an enterprise zone designated in accordance with Chapter 12.8 (commencing with Section 7070) of Division 7 of Title 1.

(B)An employee certified as a qualified disadvantaged individual in a manufacturing enhancement area designated in accordance with Section 7073.8.

(C)An employee certified as a qualified employee in a targeted tax area designated in accordance with Section 7097.

(D)An employee certified as a qualified disadvantaged individual or a qualified displaced employee in a local agency military base recovery area (LAMBRA) designated in accordance with Chapter 12.97 (commencing with Section 7105) of Division 7 of Title 1.

(E)An employee whose wages are included in calculating any other credit allowed under Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001) of Division 2 of the Revenue and Taxation Code.

(l)“Qualified wages” means wages subject to Division 6 (commencing with Section 13000) of the Unemployment Insurance Code.

(m)“Tax credit certificate” means a certificate awarded by the authority to an exporter or importer evidencing the right of the exporter or importer to claim the tax credits provided for in this division in the amount specified in the certificate.

(a)Subject to the limitations in subdivision (f), for taxable years beginning on or after January 1, 2014, and before January 1, 2019, the authority may award a tax credit certificate to a person that is an exporter or importer pursuant to subdivisions (b), (c), and (d) in an aggregate amount that is not greater than two hundred fifty thousand dollars ($250,000) for a taxable year.

(b)A tax credit certificate, in an amount specified in subdivision (a) of Section 17053.60 of the Revenue and Taxation Code or subdivision (a) of Section 23660 of the Revenue and Taxation Code, may be awarded by the authority to any of the following:

(1)Exporters that demonstrate to the satisfaction of the authority that they have increased their export cargo tonnage through California ports in a taxable year beginning on or after January 1, 2014, and before January 1, 2019, by at least 5 percent over their export cargo tonnage through California ports for the preceding taxable year.

(2)Importers that demonstrate to the satisfaction of the authority that they have increased their import cargo tonnage through California ports in a taxable year beginning on or after January 1, 2014, and before January 1, 2019, by at least 5 percent over their import cargo tonnage through California ports for the preceding taxable year.

(3)Exporters that demonstrate to the satisfaction of the authority that they have increased their export cargo value through California airports in a taxable year beginning on or after January 1, 2014, and before January 1, 2019, by at least 5 percent over their export cargo value through California airports for the preceding taxable year.

(4)Importers that demonstrate to the satisfaction of the authority that they have increased their import cargo value through California airports in taxable year beginning on or after January 1, 2014, and before January 1, 2019, by at least 5 percent over their import cargo value through California airports for the preceding taxable year.

(5)Exporters or importers that demonstrate to the satisfaction of the authority that they have exported or imported export or import cargo tonnage through California ports in excess of 400,000 tons in a taxable year beginning on or after January 1, 2014, and before January 1, 2019, and that they did not export or import cargo through California ports in the preceding taxable year.

(6)Exporters and importers that demonstrate to the satisfaction of the authority that they have exported or imported cargo through California airports with export or import cargo value in excess of two hundred fifty thousand dollars ($250,000) in a taxable year beginning on or after January 1, 2014, and before January 1, 2019, and that they did not export or import cargo through California airports in the preceding taxable year.

(c)(1)A tax credit certificate, in an amount specified in subdivision (a) of Section 17053.65 of the Revenue and Taxation Code or subdivision (a) of Section 23665 of the Revenue and Taxation Code, may be awarded by the authority to an exporter or importer that demonstrates to the satisfaction of the authority that the exporter or importer had a net increase in qualified full-time employees hired in California during the taxable year.

(2)The net increase in qualified full-time employees of a qualified employer shall be determined as provided by this paragraph:

(A)The net increase in qualified full-time employees shall be determined on an annual full-time equivalent basis by subtracting from the amount determined in clause (ii) the amount determined in clause (i).

(i)The total number of qualified full-time employees employed in the preceding taxable year by the taxpayer and by any trade or business acquired by the taxpayer during the current taxable year.

(ii)The total number of full-time employees employed in the current taxable year by the taxpayer and by any trade or business acquired during the current taxable year.

(B)For taxpayers that first commence doing business in this state during the taxable year, the number of full-time employees for the immediately preceding prior taxable year shall be zero.

(d)A tax credit certificate, in an amount specified in subdivision (a) of Section 17053.66 of the Revenue and Taxation Code or subdivision (a) of Section 23666 of the Revenue and Taxation Code, may be awarded by the authority to an exporter or importer that demonstrates to the satisfaction of the authority that the exporter or importer has paid capital costs on a cargo facility in California during the taxable year.

(e)The authority shall, consistent with the requirements and criteria of this division and Sections 17053.60, 17053.65, 17053.66, 23660, 23665, and 23666 of the Revenue and Taxation Code, do all of the following:

(1)Establish a procedure for applicants to apply for the tax credit certificates, and a process to award those tax credit certificates on a first-come-first-served basis.

(2)Determine the information necessary to be provided by an applicant to the authority in order to award the tax credit certificates.

(3)Develop and provide application forms for use by applicants for tax credit certificates. The application form shall provide for inclusion of the applicant’s taxpayer identification number.

(f)The total amount of tax credit certificates authorized to be awarded pursuant to subdivisions (b), (c), and (d) in each of the five calendar years beginning with January 1, 2014, is one hundred million dollars ($100,000,000), for a total of five hundred million dollars ($500,000,000), and any portion of that authorization not awarded in any calendar year may be awarded in a future calendar year ending before January 1, 2019.

(g)(1)The authority shall establish and charge applicants fees that it determines are reasonably sufficient to cover all of its costs in carrying out its responsibilities under this division. The fees shall be deposited in the Job and Trade Competitiveness Fee Account, which is hereby established in the State Treasury. Moneys in the account shall be available, upon appropriation by the Legislature, to the authority for the purpose of implementing this division.

(2)Until the time that sufficient revenue is received by the authority, the authority may borrow any money as may be required for the purpose of meeting necessary expenses under this division, not to exceed the amount appropriated. A loan made to the authority shall be repayable solely from moneys appropriated to the authority from the Job and Trade Competitiveness Fee Account and shall not constitute a general obligation of the state for which the full faith and credit of the state are pledged.

(h)The authority shall determine the amount of each tax credit pursuant to this division and Sections 17053.60, 17053.65, 17053.66, 23660, 23665, and 23666 of the Revenue and Taxation Code, and the Franchise Tax Board shall not be responsible for determining the amount of that tax credit. The authority shall provide the Franchise Tax Board with an electronic copy of each tax credit certification awarded by it within 30 days after issuing the certificate. The tax credit certificate shall include the date of issuance, the amount of the tax credit, the name, the type of credit awarded, and taxpayer identification number of the exporter or importer to which the certificate was awarded.

(i)The authority shall establish audit procedures of taxpayers who have been awarded a tax credit certificate to verify that the tax credit certificate was awarded consistent with the requirements of this division and Sections 17053.60, 17053.65, 17053.66, 23660, 23665, and 23666 of the Revenue and Taxation Code. The authority shall conduct audits at random as the authority deems appropriate.

(j)In the event that the authority determines that any amount of a tax credit certificate was not awarded consistent with the requirements of this division or Sections 17053.60, 17053.65, 17053.66, 23660, 23665, and 23666 of the Revenue and Taxation Code, the authority shall cancel any unapplied amount erroneously awarded and any previously allowed credit erroneously awarded shall be recaptured. The authority shall notify the Franchise Tax Board of any amounts of a tax credit certificate that were erroneously awarded and were canceled.

(k)The authority may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this division. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 does not apply to any rule, guideline, or procedure prescribed by the authority pursuant to this subdivision.

(l)A tax credit certificate awarded pursuant to this section shall not be transferable.

(m)The authority shall notify the taxpayer within 45 days of either a denial of the tax credit certificate application or an award of a tax credit certificate.

(n)This division shall remain in effect only until January 1, 2021, and as of that date is repealed.