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ASSEMBLY BILL 2798 (MACHADO – 1998)
CHAPTER 323, STATUTES OF 1998
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As enacted, Assembly Bill 2798 amended Government Code sections 7073 and 7074, added Government Code sections 7076.1 and 7076.2, and affected various Revenue and Taxation Code sections relating to taxation. (See Exhibit A, #1e) Assembly Bill 2798 was introduced by the Assembly Committee on Budget on March 2, 1998. (See Exhibit A, #1a)
Assembly Bill 2798 was assigned to the Assembly Committee on Budget and the Senate Committee on Budget and Fiscal Review where policy issues raised by the bill were considered. (See Exhibit A, #2 and #3) Three amendments were made to Assembly Bill 2798. (See Exhibit A, #1b through #1d) Subsequent to legislative approval, Governor Pete Wilson signed the bill on August 20, 1998, and it was recorded by the Secretary of State on August 20, 1998 as Chapter 323 of the Statutes of 1998. (See Exhibit A, #1e and #2)
Assembly Bill 2798 contained an urgency clause which caused the bill to become effective immediately upon enactment. The urgency clause, found in section 37 of Chapter 323, states the reason for the urgency. (See Exhibit A, #1e, page 1383)
The Concurrence in Senate Amendments analysis of Assembly Bill 2798 provided the following summary of the bill:
Enacts 10 tax law changes, contingent on passage of Proposition 7 on the November 1998 ballot. If this bill is chaptered and Proposition 7 fails, the following 10 provisions would be enacted: extension of the sunset date on the Employer Child Care Program and the Employer Child Care Contribution credits; extend the manufacturing investment credit to computer software; provide 80% conformity to federal research and development tax credits; grant a permanent sales tax exemption for property purchased for use in space flights originating in California; increase the medical deduction for self-employed individuals to 40% beginning in the 1999 tax year; conform California law with certain provisions of federal estate tax law; provide a 5% General Fund sales tax exemption for property used in teleproduction or postproduction; reduce the minimum franchise tax on small corporations during their initial two years of business; provide a sales tax exemption for perennial plants; and make several changes to expand enterprise zones, and change the formulas used to calculate the value of tax incentives under all of the state’s geographically-based economic development programs.
If Proposition 7 passes, all of the provisions of this bill will be rendered inoperative as the bill’s effective date.
(See Exhibit A, #7)