Tax Benefits for Taco Bell Nearly Match Texas Bid : Incentives: If the proposed law passes, state officials hope the Irvine firm will decide the Dallas-Ft. Worth move is not worth it.

IRVINE —  Taco Bell Corp.’s tax benefits from a proposed state law aimed at keeping the Irvine company in California would likely be close to the $10 million in incentives being offered by Texas, a knowledgeable source said Tuesday.

If the bill is passed, state officials hope that the tax advantages offered by the two states would be so similar that a Taco Bell move to Texas would no longer be worth the expense.

Executives of the fast-food company are scheduled to reveal their estimated tax benefits from the state bill this afternoon in testimony before a state Senate committee. They also will estimate how much more in income taxes the state would receive from Taco Bell’s staying here and adding employees to its 1,000-member headquarters staff.

The Taco Bell executives will be among about a dozen corporate officers, lobbyists, business groups and state officials to testify before the Senate’s Revenue and Taxation Committee, said Leslie Medina, chief consultant to Assembly Speaker Willie Brown (D-San Francisco).

The committee is expected to accept an amendment to Brown’s legislation that is designed to make California more friendly to business in general and to persuade companies such as Taco Bell to remain in the state.

The bill, which is supported by the Wilson Administration, is part of California’s overall effort to halt the flight of its corporate tax base to other states and to entice companies to move here.

The bill would provide, among other inducements, a 6% investment tax credit for companies locating or expanding their headquarters in California. Companies could accumulate the credits over five years for construction, jobs created and other expenses, and take as long as 15 years to use the credits in their tax returns.

A source familiar with Taco Bell’s negotiations with state and local officials said Tuesday that, under the legislative proposal, the company’s tax credits could total as much as $8 million.

Medina said the state Franchise Tax Board has determined that the new bill would cost the state $45 million but would return a great deal more in other taxes.

A company building a $100-million headquarters, for instance, would cost the state $7.2 million in tax credits, she said. But it would provide 1,500 jobs and attract an additional $33 million in state revenue for a net gain of nearly $26 million.

Taco Bell has been looking for a new, larger headquarters site for nearly a year.

Two months ago, it narrowed its search to Orange County and the Dallas-Ft. Worth area. Chairman John E. Martin said the company was “this close” to moving to Texas when California officials “got religion” at the end of March and began to offer inducements to keep the company here.

Business leaders and state officials are trying to convince Taco Bell that, even if the tax incentives under the new California bill fall a bit short of the offer from Texas, the estimated $20-million cost of relocating to the Dallas area and the hassle of replacing staff members who did not move would make remaining in California worthwhile.

The company has missed three self-imposed deadlines to announce a new site.