AB 2037 Summary

• Reduces the cutoff threshold for the state hiring tax credit from $400 million to $100 million in cumulative claims, making the credit available only until that lower threshold is reached across all taxable years.

• Creates the California New Markets Tax Credit Program allowing a 39 percent tax credit for qualified equity investments in community development entities serving low-income communities, available for taxable years 2013-2019.

• Caps total New Markets Tax Credit at $50 million per calendar year (2012-2019), plus any unused credits from the prior year, allocated by the California Tax Credit Allocation Committee.

• Requires the committee to reserve at least 15 percent of credits for businesses in environmentally polluted low-income areas, 15 percent for rural areas, and 20 percent for inner-city areas.

• Authorizes the committee to establish application fees for the New Markets program and appropriates $150,000 from the Tax Credit Allocation Fee Account to implement the program.