Gino DiCaro

Strong Case Made for MIC in Senate Committee Hearing

By Gino DiCaro, VP, Communications

Capitol Update, May 2, 2003 Share this on FacebookTweet thisEmail this to a friend

On Wednesday, April 30th, the Senate Revenue and Taxation Committee met to discuss four Senate proposals to extend the MIC.

SB 454 (John Vasconcellos D-Santa Clara) extends the MIC for 5 years and would impose varying reporting requirements on those who claim the MIC; SB 47 (Dick Ackerman R-Irvine and Charles Poochigian R-Fresno) extends the MIC indefinitely; SB 137 (Bill Morrow R-Oceanside) extends the MIC indefinitely and increases the credit to 8%; and
SBX1 2 (Poochigian), a special session bill, extends the MIC indefinitely.

Authors focused on the proven success of the credit, the value of keeping the credit in place to help overcome the extremely negative perception of California's business climate, and the need for the MIC to be part of a larger economic recovery package similar to that of the early 1990s.

Representatives from the Franchise Tax Board and the Legislative Analyst's Office made brief presentations of data indicating who and what types of businesses claim the MIC and the pros and cons of tax incentives like the MIC.

Supporting witnesses included CMTA, Intel Corporation, Baxter Healthcare, Bayer, the California Grocer's Association, Carpenter Snodgrass & Associates, CalTax, AeA, the California Conference of Machinists, and the Teamsters. Traditional opponents of such economic development incentives, the opposition included the California Budget Project and the California Tax Reform Association.

The hearing was dominated by a very positive discussion about the value of the MIC and the negative message that would be sent were it to terminate. As expected, all the MIC bills were held in the committee in a ?suspense file? where many of the tax measures of the last few weeks are being held until after the Governor's May Revise of the budget.

Meanwhile, the Assembly Revenue and Taxation Committee will hear AB 1674 (John Dutra D-Fremont) this coming Monday, May 5, which also extends the MIC indefinitely.

Capitol updates archive 989898989