Assembly Speaker Willie L. Brown Jr. said Wednesday that he will introduce a tax credit bill, probably next week, designed to make California more friendly to business and to persuade such companies as Taco Bell Corp. to remain in the state.
The bill would provide, among other inducements, a 6% investment tax credit for companies locating or expanding their headquarters in California.
Taco Bell, which is expected to decide any day whether it will stay in Orange County or move its headquarters and 1,000 jobs to Texas, supported the San Francisco Democrat’s effort. Spokeswoman Janis Smith said such legislation will help business, speed the state’s economic recovery and “influence our relocation decision.”
Brown’s effort came too late for Thrifty Drug Stores, which said Wednesday that its merger with the PayLess drugstore chain will result in its headquarters moving to Oregon.
Brown’s bill stems from the February, 1993, Economic Summit, a two-day hearing at which corporate executives, employees and business professors told legislators that California was unfriendly to business and needed to change laws before it lost major taxpayers.
Brown’s aides said the bill was legislation he intended to introduce at some point but was speeded up by the threatened departures of Taco Bell and Thrifty.
The bill would, among other things:
* Allow companies to accumulate tax credits during a five-year period starting this year and deduct 6% from their taxes for the next 15 years until the tax credits are used up. The credits would come from the costs of property for a headquarters site, construction costs, computer and other office equipment costs and new employees’ wages.
* Require that companies grow at least 1% and maintain that level for at least five years to obtain and use tax credits. It also sets thresholds by requiring a corporate headquarters to have at least 500 employees to start, a national headquarters to have 200 employees and a regional headquarters to have 100 employees.
* Waive residency requirements at University of California and California State University systems for employees who are transferred from out of state.
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“The idea is that we want to keep the jobs we have and create more growth by having the companies make a commitment to stay here and increase their employee base,” said Leslie Medina, Brown’s chief consultant on the proposed legislation.
“That’s the guarantee to California that it will be repaid,” she said. “The state then will use other taxes, like increased sales taxes and income taxes, to help offset the tax credits.”
While the bill applies to large operations only, it would help those in all three categories that are expanding their employee bases or building new headquarters.
The bill is likely to have bipartisan support.
“I think having the Speaker carry it guarantees a fair degree of success in the Assembly,” said Sen. Marian Bergeson (R-Newport Beach). “I can’t imagine there will be any opposition to strengthening the economic climate in California.”
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Times staff writer Eric Bailey contributed to this report.