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AB 231 would offer tax credit to microbusinesses hiring formerly incarcerated people; committee places measure on suspense file
Summary
AB 231 proposes a up-to-$5,000 tax credit for microbusinesses (fewer than five employees) that hire a formerly incarcerated person within one year of release and retain that person for six months; the committee designated the bill a suspense candidate and heard testimony from formerly incarcerated jobseekers and small-business advocates.
Assembly Bill 231, presented by Assemblymember Tai, would grant a tax credit of up to $5,000 to employers with fewer than five employees that hire a formerly incarcerated person within the year following release, contingent on at least six months of employment. The bill's sponsor framed the credit as a tool to reduce recidivism, help small employers meet workforce needs and expand opportunities for people returning from incarceration.
A formerly incarcerated person, Katie Dixon, testified about her reentry experience and the role that a small-business employer played in her employment; Small Business Majority presented survey research indicating broad small-business support for incentives to hire justice-impacted workers and estimated the fiscal cost could be in the hundreds of thousands in an initial year (witnesses discussed a range including roughly $150,000–$350,000 as an order-of-magnitude estimate).
Committee members discussed the program's size, potential cost and how it interacts with existing "fair chance" employment law (which currently exempts microbusinesses). One member noted the bill includes a sunset provision and said that would allow the legislature to evaluate program outcomes before permanent extension. The committee placed AB 231 on the suspense file for fiscal analysis.
