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Bipartisan bill to offer tax credit to microbusinesses hiring formerly incarcerated moves to suspense file
Summary
AB 231 would create a tax credit for microbusinesses (fewer than five employees) that hire a formerly incarcerated person and retain them for six months; committee members praised the concept and placed the bill on the suspense file for fiscal review.
Assemblymember Todd (Vice Chair) presented AB 231, a bipartisan measure to create a small-business tax credit to encourage microbusinesses (employers with fewer than five employees) to hire formerly incarcerated people within one year of release. The bill was placed on the committee's suspense file.
The bill would provide a tax credit of up to $5,000 to microbusinesses that hire a formerly incarcerated person who then remains employed for at least six months. The sponsor and witnesses argued the credit would reduce recidivism by increasing employment opportunities: Vice Chair Ta noted research tying employment to lower reoffending rates.
Katie Dixon, who identified herself as formerly incarcerated and now employed and in advocacy, testified in support and described her own reentry experience and the role of a small-business employer who gave her a first job. Bianca Blomqvist of Small Business Majority said small employers are well positioned to hire justice-impacted workers and that a tax credit would give them an incentive to do so.
Committee members asked about fiscal cost and implementation. During the hearing, estimates discussed by members and witnesses varied and were characterized as preliminary; one exchange in the transcript referenced estimates in the low hundreds of thousands of dollars for initial years, but witnesses and staff cautioned that uptake is uncertain and the amount depends on employer participation. Committee members also discussed how the Fair Chance Act currently treats small employers.
Action and next steps: The committee designated AB 231 as a suspense-file candidate for fiscal review; no recorded committee roll-call on passage was taken at the hearing.
Ending: Members from different parties praised the policy objective, noted the bill includes a sunset and requested follow-up on fiscal estimates and evaluation metrics for recidivism and job retention.
