CALIFORNIA LEGISLATURE – 2015-16 REGULAR SESSIONSenate Bill No. 1216

Introduced by Senator Hueso – February 18, 2016

SB 1216 Key Provisions:

SB 1216, if passed, will allow qualifying employers to deduct 20 percent of all qualified wages paid to qualified full-time employees for income tax purposes, not to exceed $15,000 per qualified taxpayer (meaning employer) per taxable year.

The provisions of Sec. 1.b.4.A and Sec. 1.b.6 require employers to employ workers (whose wages they intend to deduct) either on a full-time salaried basis or on an hourly basis for at least 35 hours per week, with the hourly wage in either case between 150% and 350% of the prevailing minimum wage. According to Sec. 1.b.8, employers must also provide a work readiness program that involves on-the-job training opportunities, academic advancement opportunities, a pathway to at least one industry certification, and a life-skills component. Secs. 1.d and 1.e outline employer accountability to the Franchise Tax Board.

According to codes from the North American Industry Classification System (NAICS) published by the United States Office of Management and Budget, 2012 edition, Sec. 1.a.5.C of SB 1216 excludes businesses who primarily engage in temporary health services, retail trade services, food services, gambling, or sexual businesses.

Sec. 1.g.1 indicates how proposed tax breaks can be revoked for employers for the amounts paid to each employee that is terminated after working there for less than 36 months since first hired. However, Sec. 1.g.2 outlines the exceptions, which include seasonal work, voluntary employee termination, misconduct, disability, significant reductions in market activity, and employee replacement in the case of competitive hour and wage increases at the business or organization.

SB 1216 applies only for fiscal years beginning between Jan. 1, 2016 and Jan. 1, 2021, and according to Secs. 1.m and 2.l, this bill will sunset on Dec. 1, 2021 without further action.

Homeboy Industries Work-Based Opinion:

SB 1216 provides an economic incentive for businesses to provide socially-conscious services as part of their business model. As I (a USC student intern) have interacted with many people already working in (or about to work in) large-scale for-profit contexts, I’ve heard many people respond to my stories about Homeboy Industries’ business model with phrases such as, “That’s great – but is it sustainable? Can this really work for equity-based companies, or for a nonprofit who doesn’t have a Greg Boyle-type icon fundraising eight figures every year for you?” So I appreciate that this bill provides corporations and their employees a chance to participate in the stories of people who are reshaping their lives. The bill also ensures that employers have extensive accountability to the Franchise Tax Board to prevent egregious lay-offs or under-provision for employees – internal controls are well written into the bill as is.

Some concerns: the termination provisions in Sec. 1.g.2 allow employers to terminate employees who acquire disabilities during employment (Homeboy hires a handful of physically disabled employees, and this provision is troubling considering disabilities add a whole layer of disadvantage for the unemployed). In particular, Sec. 1.g.2.D allows employers to “[terminate] employment of a qualified full-time employee due to a substantial reduction in the trade or business operations of the qualified taxpayer, including reductions due to seasonal employment.” Businesses could make these reductions arbitrarily using this clause, and it sounds like a compensating clause that opponents pushed before pledging support. Also, the $15,000 write-off limit for each employer will benefit small businesses and mid-sized regional employers, but is nowhere near material for multinational corporations. So I’d encourage increasing this limit to encourage larger employers to scale up their employment of former offenders. Finally, I am concerned by the exclusions of industries whose primary activities include selling food or retail items. Many food- and retail-based social enterprises do not have their re-entry services as developed as Homeboy’s, and could be excluded. I’d encourage removing those two exclusion categories, or creating a provision for the weighting of business and re-entry service costs.

CALIFORNIA LEGISLATURE – 2015-16 REGULAR SESSIONAssembly Bill No. 2466

Introduced by Assembly Member Weber – February 19, 2016Principal Co-author: Senator Mitchell

AB 2466 Key Provisions:

AB 2466 clarifies wording in the current definition of qualified California voters, which reads: “A person entitled to register to vote shall be a United States citizen, a resident of California, not imprisoned or on parole for the conviction of a felony, and at least 18 years of age at the time of the next election.” The bill provides identical clarifications for pre-registered 16- and 17-year-old future voters. There are three updates as follows.

Under AB 2466, for all applicable Election Code sections, “imprisoned” is updated to mean currently serving a state or federal prison sentence. This will exclude offenders serving local jail sentences from voter disqualification reports prepared by each county’s superior court clerk.

Under AB 2466, for all applicable Election Code sections, “parole” means a term of supervision by the Department of Corrections and Rehabilitation. This will clarify that offenders must be supervised by a specific state- or county-supervised parole program in order to be disqualified from voting. This will likely reduce the number of offenders who remain on parole records beyond their sentences (and as such, reduce how many offenders are disqualified from voting).

AB 2466, in Sec. 2, adds provision (c)3 to Election Code Sec. 2101, stating that “conviction” (in the definition of qualified voters) does not include a juvenile adjudication made pursuant to Section 203 of the Welfare and Institutions Code. This will enable a significant contingent of youth offenders to restore their voting rights.

Sec. 9 provides authority for local agencies and school districts to receive reimbursement for any added costs resulting from AB 2466’s provisions, in accordance with CA state law.

Homeboy Industries Work-Based Opinion:

AB 2466 provides wording that clarifies and only disqualifies prisoners from voting if they’re serving a state or federal prison sentence. Though the association between level of crime and what jail an offender goes to isn’t perfect, under AB 2466, many minor and non-violent offenses served in local jails will no longer result in legal voter disqualification. Common crimes with sentences served in local jails include minor drug possession, petty theft, and misdemeanors that were heavily upgraded due to gang enhancements and/or three strikes laws. Many of Homeboy Industries’ employees have committed such crimes in part due to the pressures of their circumstances, and this adjustment allows people who made such errors in judgment to have a second chance at participating in civic governance. In addition, many individuals commit such lower-end crimes as juveniles, at ages when most offenders have recently faced trauma and no offender has fully-developed mental capacity. Many Homeboy employees and advocates suggest a moral responsibility to give youth a second chance after non-major crimes, and voting is a crucial part of providing a second chance through rehabilitation and the restoration of legal rights.

With many (if not most) of Homeboy Industries’ clients on parole, I (a USC student intern) have heard stories about how much work individuals must go through to get their name off parole records in order to be able to vote again, even after their parole time has expired. AB 2466’s updated definition of parole will put the burden of proof on the government before excluding an individual from voting, rather than requiring already-burdened former inmates to prove their rehabilitation. Considering the historically hardline stance taken by California policymakers and state parole officers towards indeterminate sentence appeals and expungement, this expansion of voting rights will encourage Homeboy Industries employees and many other rehabilitating individuals to avoid re-offending and continue their positive behaviors.