AB 1565 Summary

• Authorizes the Department of Housing and Community Development to designate Research and Development Tax Credit Areas within cities incorporated after July 1, 2000, or Innovation Hubs until January 1, 2016.

• Provides a 20% tax credit for qualified taxpayers conducting research and development on alternative energy sources and advanced transportation technologies in designated areas for taxable years 2011-2015, in lieu of the standard 15-24% federal research credit.

• Restricts tax credit benefits to income apportioned to the designated area using a formula based on property and payroll factors, with unused credits allowed to carry over to subsequent years.

• Requires the Legislative Analyst's Office to report to the Legislature between January 1-December 31, 2016, evaluating the program's effectiveness including job creation, business retention/relocation, revenue impact, and environmental benefits.

• Takes effect immediately and expires December 1, 2016.