AB 1269: Alternative energy.
- Session Year: 2015-2016
- House: Assembly
- Latest Version Date: 2015-10-11
The California Alternative Energy and Advanced Transportation Financing Authority Act establishes the California Alternative Energy and Advanced Transportation Financing Authority. The act authorizes, until January 1, 2021, the authority to provide financial assistance in the form of a sales and use tax exclusion for projects, including those that promote California-based manufacturing, California-based jobs, the reduction of greenhouse gases, or the reduction in air and water pollution or energy consumption. The act prohibits the sales and use tax exclusions from exceeding $100,000,000 for each calendar year. The act authorizes the authority, until July 1, 2016, to grant financial assistance in the form of a sales and use tax exclusion for projects that promote the use of advanced manufacturing.
This bill would extend the authorization to grant the above financial assistance to projects that promote the use of advanced manufacturing to January 1, 2021. By extending the eligibility of projects that promote the use of advanced manufacturing for the sales and use tax exclusion, which is limited at $100,000,000 annually, this bill would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIIIA of the California Constitution.
This bill would incorporate additional changes in Section 26003 of the Public Resources Code, as amended by Section 1 of Chapter 540 of the Statutes of 2013, proposed by AB 199, that would become operative only if this bill and AB 199 are both chaptered and become effective on or before January 1, 2016, and this bill is chaptered last.
This bill would incorporate additional changes in Section 26003 of the Public Resources Code, as amended by Section 2 of Chapter 540 of the Statutes of 2013, proposed by AB 199, that would become operative only if this bill and AB 199 are both chaptered and become effective on or before January 1, 2016, and this bill is chaptered last.
This bill would incorporate additional changes to Section 26011.8 of the Public Resources Code, as amended by Section 3 of Chapter 540 of the Statutes of 2013, proposed by AB 199, that would become operative only if this bill and AB 199 are both chaptered and become effective on or before January 1, 2016, and this bill is chaptered last.
The California Alternative Energy and Advanced Transportation Financing Authority Act establishes the California Alternative Energy and Advanced Transportation Financing Authority. The act authorizes, until January 1, 2021, the authority to provide financial assistance in the form of a sales and use tax exclusion for projects, including those that promote California-based manufacturing, California-based jobs, the reduction of greenhouse gases, or the reduction in air and water pollution or energy consumption. The act prohibits the sales and use tax exclusions from exceeding $100,000,000 for each calendar year. The act authorizes the authority, until July 1, 2016, to grant financial assistance in the form of a sales and use tax exclusion for projects that promote the use of advanced manufacturing.
This bill would extend the authorization to grant the above financial assistance to projects that promote the use of advanced manufacturing to January 1, 2021. By extending the eligibility of projects that promote the use of advanced manufacturing for the sales and use tax exclusion, which is limited at $100,000,000 annually, this bill would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIIIA of the California Constitution.
This bill would incorporate additional changes in Section 26003 of the Public Resources Code, as amended by Section 1 of Chapter 540 of the Statutes of 2013, proposed by AB 199, that would become operative only if this bill and AB 199 are both chaptered and become effective on or before January 1, 2016, and this bill is chaptered last.
This bill would incorporate additional changes in Section 26003 of the Public Resources Code, as amended by Section 2 of Chapter 540 of the Statutes of 2013, proposed by AB 199, that would become operative only if this bill and AB 199 are both chaptered and become effective on or before January 1, 2016, and this bill is chaptered last.
This bill would incorporate additional changes to Section 26011.8 of the Public Resources Code, as amended by Section 3 of Chapter 540 of the Statutes of 2013, proposed by AB 199, that would become operative only if this bill and AB 199 are both chaptered and become effective on or before January 1, 2016, and this bill is chaptered last.
The California Alternative Energy and Advanced Transportation Financing Authority Act establishes the California Alternative Energy and Advanced Transportation Financing Authority. The act authorizes, until January 1, 2021, the authority to provide financial assistance in the form of a sales and use tax exclusion for projects, including those that promote California-based manufacturing, California-based jobs, the reduction of greenhouse gases, or the reduction in air and water pollution or energy consumption. The act prohibits the sales and use tax exclusions from exceeding $100,000,000 for each calendar year. The act authorizes the authority, until July 1, 2016, to grant financial assistance in the form of a sales and use tax exclusion for projects that promote the use of advanced manufacturing.
This bill would extend the authorization to grant the above financial assistance to projects that promote the use of advanced manufacturing to January 1, 2021. By extending the eligibility of projects that promote the use of advanced manufacturing for the sales and use tax exclusion, which is limited at $100,000,000 annually, this bill would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIIIA of the California Constitution.
This bill would incorporate additional changes in Section 26003 of the Public Resources Code, as amended by Section 1 of Chapter 540 of the Statutes of 2013, proposed by AB 199, that would become operative only if this bill and AB 199 are both chaptered and become effective on or before January 1, 2016, and this bill is chaptered last.
This bill would incorporate additional changes in Section 26003 of the Public Resources Code, as amended by Section 2 of Chapter 540 of the Statutes of 2013, proposed by AB 199, that would become operative only if this bill and AB 199 are both chaptered and become effective on or before January 1, 2016, and this bill is chaptered last.
This bill would incorporate additional changes to Section 26011.8 of the Public Resources Code, as amended by Section 3 of Chapter 540 of the Statutes of 2013, proposed by AB 199, that would become operative only if this bill and AB 199 are both chaptered and become effective on or before January 1, 2016, and this bill is chaptered last.
The California Alternative Energy and Advanced Transportation Financing Authority Act establishes the California Alternative Energy and Advanced Transportation Financing Authority. The act authorizes, until January 1, 2021, the authority to provide financial assistance in the form of a sales and use tax exclusion for projects, including those that promote California-based manufacturing, California-based jobs, the reduction of greenhouse gases, or the reduction in air and water pollution or energy consumption. The act prohibits the sales and use tax exclusions from exceeding $100,000,000 for each calendar year. The act authorizes the authority, until July 1, 2016, to grant financial assistance in the form of a sales and use tax exclusion for projects that promote the use of advanced manufacturing.
This bill would extend the authorization to grant the above financial assistance to projects that promote the use of advanced manufacturing to January 1, 2021. By extending the eligibility of projects that promote the use of advanced manufacturing for the sales and use tax exclusion, which is limited at $100,000,000 annually, this bill would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIIIA of the California Constitution.
(a)As used in this division, unless the context otherwise requires:
(1)(A)Advanced manufacturing means manufacturing processes that improve existing or create entirely new materials, products, and processes through the use of science, engineering, or information technologies, high-precision tools and methods, a high-performance workforce, and innovative business or organizational models utilizing any of the following technology areas:
(i)Microelectronics and nanoelectronics, including semiconductors.
(ii)Advanced materials.
(iii)Integrated computational materials engineering.
(iv)Nanotechnology.
(v)Additive manufacturing.
(vi)Industrial biotechnology.
(B)Advanced manufacturing includes any of the following:
(i)Systems that result from substantive advancement, whether incremental or breakthrough, beyond the current industry standard, in the production of materials and products. These advancements include improvements in manufacturing processes and systems that are often referred to as smart or intelligent manufacturing systems, which integrate computational predictability and operational efficiency.
(ii)(I)Sustainable manufacturing systems and manufacturing technologies that minimize the use of resources while maintaining or improving cost and performance.
(II)Sustainable manufacturing systems and manufacturing technologies do not include those required to be undertaken pursuant to state or federal law or regulations, air district rules or regulations, memoranda of understanding with a governmental entity, or legally binding agreements or documents. The State Air Resources Board shall advise the authority to ensure that the requirements of this clause are met.
(2)(A)Advanced transportation technologies means emerging commercially competitive transportation-related technologies identified by the authority as capable of creating long-term, high value-added jobs for Californians while enhancing the states commitment to energy conservation, pollution and greenhouse gas emissions reduction, and transportation efficiency.
(B)Advanced transportation technologies does not include those projects required to be undertaken pursuant to state or federal law or regulations, air district rules or regulations, memoranda of understanding with a governmental entity, or legally binding agreements or documents. The State Air Resources Board shall advise the authority regarding projects that are excluded pursuant to this subparagraph.
(3)(A)Alternative sources means devices or technologies used for a renewable electrical generation facility, as defined in paragraph (1) of subdivision (a) of Section 25741, a combined heat and power system, as defined in Section 2840.2 of the Public Utilities Code, distributed generation and energy storage technologies eligible under the self-generation incentive program pursuant to Section 379.6 of the Public Utilities Code, as determined by the Public Utilities Commission, or a facility designed for the production of renewable fuels, the efficient use of which reduce the use of fossil or nuclear fuels, and energy efficiency devices or technologies that reduce the need for new electric generation and reduce emissions of toxic and criteria pollutants and greenhouse gases.
(B)Alternative sources does not include a hydroelectric facility that does not meet state laws pertaining to the control, appropriation, use, and distribution of water, including, but not limited to, the obtaining of applicable licenses and permits.
(4)Authority means the California Alternative Energy and Advanced Transportation Financing Authority established pursuant to Section 26004, and any board, commission, department, or officer succeeding to the functions of the authority, or to which the powers conferred upon the authority by this division shall be given.
(5)Cost as applied to a project or portion of the project financed under this division means all or part of the cost of construction and acquisition of all lands, structures, real or personal property or an interest in the real or personal property, rights, rights-of-way, franchises, easements, and interests acquired or used for a project; the cost of demolishing or removing any buildings or structures on land so acquired, including the cost of acquiring any lands to which those buildings or structures may be moved; the cost of all machinery, equipment, and furnishings, financing charges, interest prior to, during, and for a period after, completion of construction as determined by the authority; provisions for working capital; reserves for principal and interest and for extensions, enlargements, additions, replacements, renovations, and improvements; the cost of architectural, engineering, financial, accounting, auditing and legal services, plans, specifications, estimates, administrative expenses, and other expenses necessary or incidental to determining the feasibility of constructing any project or incidental to the construction, acquisition, or financing of a project.
(6)Financial assistance includes, but is not limited to, loans, loan loss reserves, interest rate reductions, proceeds of bonds issued by the authority, bond insurance, loan guarantees or other credit enhancements or liquidity facilities, contributions of money, or a combination thereof, as determined by, and approved by the resolution of, the board.
(7)(A)Participating party means a person, federal or state agency, department, board, authority, or commission, state or community college, or university, or a city or county, regional agency, public district, school district, or other political entity engaged in the business or operations in the state, whether organized for profit or not for profit, that applies for financial assistance from the authority for the purpose of implementing a project.
(B)(i)For purposes of Section 6010.8 of the Revenue and Taxation Code, participating party means an entity specified in subparagraph (A) that seeks financial assistance pursuant to Section 26011.8.
(ii)For purposes of Section 6010.8 of the Revenue and Taxation Code, an entity located outside of the state, including an entity located overseas, is considered to be a participating party and is eligible to apply for financial assistance pursuant to Section 26011.8 if the participating party commits to, and demonstrates that, the party will be opening a manufacturing facility in the state.
(iii)It is the intent of the Legislature by adding clause (ii) to clarify existing law and ensure that an out-of-state entity or overseas entity is eligible to apply for financial assistance pursuant to Section 26011.8.
(8)(A)Project means a land, building, improvement to the land or building, rehabilitation, work, property, or structure, real or personal, stationary or mobile, including, but not limited to, machinery and equipment utilized in the state, whether or not in existence or under construction, that utilizes, or is designed to utilize, an alternative source, or that is utilized for the design, technology transfer, manufacture, production, assembly, distribution, or service of advanced transportation technologies or alternative source components.
(B)Project, for purposes of Section 26011.8 and Section 6010.8 of the Revenue and Taxation Code, means tangible personal property that is utilized in the state for the design, manufacture, production, or assembly of advanced manufacturing, advanced transportation technologies, or alternative source products, components, or systems.
(9)Revenue means all rents, receipts, purchase payments, loan repayments, and all other income or receipts derived by the authority from a project, or the sale, lease, or other disposition of alternative source or advanced transportation technology facilities, or the making of loans to finance alternative source or advanced transportation technology facilities, and any income or revenue derived from the investment of money in any fund or account of the authority.
(b)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 1.5.Section 26003 of the Public Resources Code, as amended by Section 1 of Chapter 540 of the Statutes of 2013, is amended to read:26003.(a)As used in this division, unless the context otherwise requires:
(1)(A)Advanced manufacturing means manufacturing processes that improve existing or create entirely new materials, products, and processes through the use of science, engineering, or information technologies, high-precision tools and methods, a high-performance workforce, and innovative business or organizational models utilizing any of the following technology areas:
(i)Microelectronics and nanoelectronics, including semiconductors.
(ii)Advanced materials.
(iii)Integrated computational materials engineering.
(iv)Nanotechnology.
(v)Additive manufacturing.
(vi)Industrial biotechnology.
(B)Advanced manufacturing includes any of the following:
(i)Systems that result from substantive advancement, whether incremental or breakthrough, beyond the current industry standard, in the production of materials and products. These advancements include improvements in manufacturing processes and systems that are often referred to as smart or intelligent manufacturing systems, which integrate computational predictability and operational efficiency.
(ii)(I)Sustainable manufacturing systems and manufacturing technologies that minimize the use of resources while maintaining or improving cost and performance.
(II)Sustainable manufacturing systems and manufacturing technologies do not include those required to be undertaken pursuant to state or federal law or regulations, air district rules or regulations, memoranda of understanding with a governmental entity, or legally binding agreements or documents. The State Air Resources Board shall advise the authority to ensure that the requirements of this clause are met.
(2)(A)Advanced transportation technologies means emerging commercially competitive transportation-related technologies identified by the authority as capable of creating long-term, high value-added jobs for Californians while enhancing the states commitment to energy conservation, pollution and greenhouse gas emissions reduction, and transportation efficiency.
(B)Advanced transportation technologies does not include those projects required to be undertaken pursuant to state or federal law or regulations, air district rules or regulations, memoranda of understanding with a governmental entity, or legally binding agreements or documents. The State Air Resources Board shall advise the authority regarding projects that are excluded pursuant to this subparagraph.
(3)(A)Alternative sources means devices or technologies used for a renewable electrical generation facility, as defined in paragraph (1) of subdivision (a) of Section 25741, a combined heat and power system, as defined in Section 2840.2 of the Public Utilities Code, distributed generation and energy storage technologies eligible under the self-generation incentive program pursuant to Section 379.6 of the Public Utilities Code, as determined by the Public Utilities Commission, or a facility designed for the production of renewable fuels, the efficient use of which reduce the use of fossil or nuclear fuels, and energy efficiency devices or technologies that reduce the need for new electric generation and reduce emissions of toxic and criteria pollutants and greenhouse gases.
(B)Alternative sources does not include a hydroelectric facility that does not meet state laws pertaining to the control, appropriation, use, and distribution of water, including, but not limited to, the obtaining of applicable licenses and permits.
(4)Authority means the California Alternative Energy and Advanced Transportation Financing Authority established pursuant to Section 26004, and any board, commission, department, or officer succeeding to the functions of the authority, or to which the powers conferred upon the authority by this division shall be given.
(5)Cost as applied to a project or portion of the project financed under this division means all or part of the cost of construction and acquisition of all lands, structures, real or personal property or an interest in the real or personal property, rights, rights-of-way, franchises, easements, and interests acquired or used for a project; the cost of demolishing or removing any buildings or structures on land so acquired, including the cost of acquiring any lands to which those buildings or structures may be moved; the cost of all machinery, equipment, and furnishings, financing charges, interest prior to, during, and for a period after, completion of construction as determined by the authority; provisions for working capital; reserves for principal and interest and for extensions, enlargements, additions, replacements, renovations, and improvements; the cost of architectural, engineering, financial, accounting, auditing and legal services, plans, specifications, estimates, administrative expenses, and other expenses necessary or incidental to determining the feasibility of constructing any project or incidental to the construction, acquisition, or financing of a project.
(6)Financial assistance includes, but is not limited to, loans, loan loss reserves, interest rate reductions, proceeds of bonds issued by the authority, bond insurance, loan guarantees or other credit enhancements or liquidity facilities, contributions of money, or a combination thereof, as determined by, and approved by the resolution of, the board.
(7)(A)Participating party means a person, federal or state agency, department, board, authority, or commission, state or community college, or university, or a city or county, regional agency, public district, school district, or other political entity engaged in the business or operations in the state, whether organized for profit or not for profit, that applies for financial assistance from the authority for the purpose of implementing a project.
(B)(i)For purposes of Section 6010.8 of the Revenue and Taxation Code, participating party means an entity specified in subparagraph (A) that seeks financial assistance pursuant to Section 26011.8.
(ii)For purposes of Section 6010.8 of the Revenue and Taxation Code, an entity located outside of the state, including an entity located overseas, is considered to be a participating party and is eligible to apply for financial assistance pursuant to Section 26011.8 if the participating party commits to, and demonstrates that, the party will be opening a manufacturing facility in the state.
(iii)It is the intent of the Legislature by adding clause (ii) to clarify existing law and ensure that an out-of-state entity or overseas entity is eligible to apply for financial assistance pursuant to Section 26011.8.
(8)(A)Project means a land, building, improvement to the land or building, rehabilitation, work, property, or structure, real or personal, stationary or mobile, including, but not limited to, machinery and equipment utilized in the state, whether or not in existence or under construction, that utilizes, or is designed to utilize, an alternative source, or that is utilized for the design, technology transfer, manufacture, production, assembly, distribution, or service of advanced transportation technologies or alternative source components.
(B)Project, for purposes of Section 26011.8 and Section 6010.8 of the Revenue and Taxation Code, is defined in Section 26011.8.
(9)Revenue means all rents, receipts, purchase payments, loan repayments, and all other income or receipts derived by the authority from a project, or the sale, lease, or other disposition of alternative source or advanced transportation technology facilities, or the making of loans to finance alternative source or advanced transportation technology facilities, and any income or revenue derived from the investment of money in any fund or account of the authority.
(b)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 2.Section 26003 of the Public Resources Code, as amended by Section 2 of Chapter 540 of the Statutes of 2013, is amended to read:26003.(a)As used in this division, unless the context otherwise requires:
(1)(A)Advanced transportation technologies means emerging commercially competitive transportation-related technologies identified by the authority as capable of creating long-term, high value-added jobs for Californians while enhancing the states commitment to energy conservation, pollution and greenhouse gas emissions reduction, and transportation efficiency.
(B)Advanced transportation technologies does not include those projects required to be undertaken pursuant to state or federal law or regulations, air district rules or regulations, memoranda of understanding with a governmental entity, or legally binding agreements or documents. The State Air Resources Board shall advise the authority regarding projects that are excluded pursuant to this subparagraph.
(2)(A)Alternative sources means devices or technologies used for a renewable electrical generation facility, as defined in paragraph (1) of subdivision (a) of Section 25741, a combined heat and power system, as defined in Section 2840.2 of the Public Utilities Code, distributed generation and energy storage technologies eligible under the self-generation incentive program pursuant to Section 379.6 of the Public Utilities Code, as determined by the Public Utilities Commission, or a facility designed for the production of renewable fuels, the efficient use of which reduce the use of fossil or nuclear fuels, and energy efficiency devices or technologies that reduce the need for new electric generation and reduce emissions of toxic and criteria pollutants and greenhouse gases.
(B)Alternative sources does not include a hydroelectric facility that does not meet state laws pertaining to the control, appropriation, use, and distribution of water, including, but not limited to, the obtaining of applicable licenses and permits.
(3)Authority means the California Alternative Energy and Advanced Transportation Financing Authority established pursuant to Section 26004, and any board, commission, department, or officer succeeding to the functions of the authority, or to which the powers conferred upon the authority by this division shall be given.
(4)Cost as applied to a project or portion of the project financed under this division means all or part of the cost of construction and acquisition of all lands, structures, real or personal property or an interest in the real or personal property, rights, rights-of-way, franchises, easements, and interests acquired or used for a project; the cost of demolishing or removing any buildings or structures on land so acquired, including the cost of acquiring any lands to which those buildings or structures may be moved; the cost of all machinery, equipment, and furnishings, financing charges, interest prior to, during, and for a period after, completion of construction as determined by the authority; provisions for working capital; reserves for principal and interest and for extensions, enlargements, additions, replacements, renovations, and improvements; the cost of architectural, engineering, financial, accounting, auditing and legal services, plans, specifications, estimates, administrative expenses, and other expenses necessary or incidental to determining the feasibility of constructing any project or incidental to the construction, acquisition, or financing of a project.
(5)Financial assistance includes, but is not limited to, loans, loan loss reserves, interest rate reductions, proceeds of bonds issued by the authority, bond insurance, loan guarantees or other credit enhancements or liquidity facilities, contributions of money, or a combination thereof, as determined by, and approved by the resolution of, the board.
(6)(A)Participating party means a person, federal or state agency, department, board, authority, or commission, state or community college, or university, or a city or county, regional agency, public district, school district, or other political entity engaged in the business or operations in the state, whether organized for profit or not for profit, that applies for financial assistance from the authority for the purpose of implementing a project.
(B)(i)For purposes of Section 6010.8 of the Revenue and Taxation Code, participating party means an entity specified in subparagraph (A) that seeks financial assistance pursuant to Section 26011.8.
(ii)For purposes of Section 6010.8 of the Revenue and Taxation Code, an entity located outside of the state, including an entity located overseas, is considered to be a participating party and is eligible to apply for financial assistance pursuant to Section 26011.8 if the participating party commits to, and demonstrates that, the party will be opening a manufacturing facility in the state.
(iii)It is the intent of the Legislature by adding clause (ii) to clarify existing law and ensure that an out-of-state entity or overseas entity is eligible to apply for financial assistance pursuant to Section 26011.8.
(7)(A)Project means a land, building, improvement to the land or building, rehabilitation, work, property, or structure, real or personal, stationary or mobile, including, but not limited to, machinery and equipment utilized in the state, whether or not in existence or under construction, that utilizes, or is designed to utilize, an alternative source, or that is utilized for the design, technology transfer, manufacture, production, assembly, distribution, or service of advanced transportation technologies or alternative source components.
(B)Project, for purposes of Section 26011.8 and Section 6010.8 of the Revenue and Taxation Code, means tangible personal property that is utilized in the state for the design, manufacture, production, or assembly of advanced transportation technologies or alternative source products, components, or systems.
(8)Revenue means all rents, receipts, purchase payments, loan repayments, and all other income or receipts derived by the authority from a project, or the sale, lease, or other disposition of alternative source or advanced transportation technology facilities, or the making of loans to finance alternative source or advanced transportation technology facilities, and any income or revenue derived from the investment of money in any fund or account of the authority.
(b)This section shall become operative on January 1, 2021.
SEC. 2.5.Section 26003 of the Public Resources Code, as amended by Section 2 of Chapter 540 of the Statutes of 2013, is amended to read:26003.(a)As used in this division, unless the context otherwise requires:
(1)(A) Advanced transportation technologies means emerging commercially competitive transportation-related technologies identified by the authority as capable of creating long-term, high value-added jobs for Californians while enhancing the states commitment to energy conservation, pollution and greenhouse gas emissions reduction, and transportation efficiency.
(B)Advanced transportation technologies does not include those projects required to be undertaken pursuant to state or federal law or regulations, air district rules or regulations, memoranda of understanding with a governmental entity, or legally binding agreements or documents. The State Air Resources Board shall advise the authority regarding projects that are excluded pursuant to this subparagraph.
(2)(A)Alternative sources means devices or technologies used for a renewable electrical generation facility, as defined in paragraph (1) of subdivision (a) of Section 25741, a combined heat and power system, as defined in Section 2840.2 of the Public Utilities Code, distributed generation and energy storage technologies eligible under the self-generation incentive program pursuant to Section 379.6 of the Public Utilities Code, as determined by the Public Utilities Commission, or a facility designed for the production of renewable fuels, the efficient use of which reduce the use of fossil or nuclear fuels, and energy efficiency devices or technologies that reduce the need for new electric generation and reduce emissions of toxic and criteria pollutants and greenhouse gases.
(B)Alternative sources does not include a hydroelectric facility that does not meet state laws pertaining to the control, appropriation, use, and distribution of water, including, but not limited to, the obtaining of applicable licenses and permits.
(3)Authority means the California Alternative Energy and Advanced Transportation Financing Authority established pursuant to Section 26004, and any board, commission, department, or officer succeeding to the functions of the authority, or to which the powers conferred upon the authority by this division shall be given.
(4)Cost as applied to a project or portion of the project financed under this division means all or part of the cost of construction and acquisition of all lands, structures, real or personal property or an interest in the real or personal property, rights, rights-of-way, franchises, easements, and interests acquired or used for a project; the cost of demolishing or removing any buildings or structures on land so acquired, including the cost of acquiring any lands to which those buildings or structures may be moved; the cost of all machinery, equipment, and furnishings, financing charges, interest prior to, during, and for a period after, completion of construction as determined by the authority; provisions for working capital; reserves for principal and interest and for extensions, enlargements, additions, replacements, renovations, and improvements; the cost of architectural, engineering, financial, accounting, auditing and legal services, plans, specifications, estimates, administrative expenses, and other expenses necessary or incidental to determining the feasibility of constructing any project or incidental to the construction, acquisition, or financing of a project.
(5)Financial assistance includes, but is not limited to, loans, loan loss reserves, interest rate reductions, proceeds of bonds issued by the authority, bond insurance, loan guarantees or other credit enhancements or liquidity facilities, contributions of money, or a combination thereof, as determined by, and approved by the resolution of, the board.
(6)(A)Participating party means a person, federal or state agency, department, board, authority, or commission, state or community college, or university, or a city or county, regional agency, public district, school district, or other political entity engaged in the business or operations in the state, whether organized for profit or not for profit, that applies for financial assistance from the authority for the purpose of implementing a project.
(B)(i)For purposes of Section 6010.8 of the Revenue and Taxation Code, participating party means an entity specified in subparagraph (A) that seeks financial assistance pursuant to Section 26011.8.
(ii)For purposes of Section 6010.8 of the Revenue and Taxation Code, an entity located outside of the state, including an entity located overseas, is considered to be a participating party and is eligible to apply for financial assistance pursuant to Section 26011.8 if the participating party commits to, and demonstrates that, the party will be opening a manufacturing facility in the state.
(iii)It is the intent of the Legislature by adding clause (ii) to clarify existing law and ensure that an out-of-state entity or overseas entity is eligible to apply for financial assistance pursuant to Section 26011.8.
(7)(A)Project means a land, building, improvement to the land or building, rehabilitation, work, property, or structure, real or personal, stationary or mobile, including, but not limited to, machinery and equipment utilized in the state, whether or not in existence or under construction, that utilizes, or is designed to utilize, an alternative source, or that is utilized for the design, technology transfer, manufacture, production, assembly, distribution, or service of advanced transportation technologies or alternative source components.
(B)Project, for purposes of Section 26011.8 and Section 6010.8 of the Revenue and Taxation Code, is defined in Section 26011.8.
(8)Revenue means all rents, receipts, purchase payments, loan repayments, and all other income or receipts derived by the authority from a project, or the sale, lease, or other disposition of alternative source or advanced transportation technology facilities, or the making of loans to finance alternative source or advanced transportation technology facilities, and any income or revenue derived from the investment of money in any fund or account of the authority.
(b)This section shall become operative on January 1, 2021.
SEC. 3.Section 26011.8 of the Public Resources Code, as amended by Section 3 of Chapter 540 of the Statutes of 2013, is amended to read:26011.8.(a)The purpose of this section is to promote the creation of California-based manufacturing, California-based jobs, advanced manufacturing, the reduction of greenhouse gases, or reductions in air and water pollution or energy consumption. In furtherance of this purpose, the authority may approve a project for financial assistance in the form of the sales and use tax exclusion established in Section 6010.8 of the Revenue and Taxation Code.
(b)For purposes of this section, project means a project as defined in subparagraph (B) of paragraph (8) of subdivision (a) of Section 26003.
(c)The authority shall publish notice of the availability of project applications and deadlines for submission of project applications to the authority.
(d)The authority shall evaluate project applications based upon all of the following criteria:
(1)The extent to which the project develops manufacturing facilities, or purchases equipment for manufacturing facilities, located in California.
(2)The extent to which the anticipated benefit to the state from the project equals or exceeds the projected benefit to the participating party from the sales and use tax exclusion.
(3)The extent to which the project will create new, permanent jobs in California.
(4)To the extent feasible, the extent to which the project, or the product produced by the project, results in a reduction of greenhouse gases, a reduction in air or water pollution, an increase in energy efficiency, or a reduction in energy consumption, beyond what is required by federal or state law or regulation.
(5)The extent of unemployment in the area in which the project is proposed to be located.
(6)Any other factors the authority deems appropriate in accordance with this section.
(e)At a duly noticed public hearing, the authority shall approve, by resolution, project applications for financial assistance.
(f)Notwithstanding subdivision (j), and without regard to the actual date of any transaction between a participating party and the authority, any project approved by the authority by resolution for the sales and use tax exclusion pursuant to Section 6010.8 of the Revenue and Taxation Code before March 24, 2010, shall not be subject to this section.
(g)The Legislative Analysts Office shall report to the Joint Legislative Budget Committee on the effectiveness of this program, on or before January 1, 2019, by evaluating factors, including, but not limited to, the following:
(1)The number of jobs created by the program in California.
(2)The number of businesses that have remained in California or relocated to California as a result of this program.
(3)The amount of state and local revenue and economic activity generated by the program.
(4)The types of advanced manufacturing, as defined in paragraph (1) of subdivision (a) of Section 26003, utilized.
(5)The amount of reduction in greenhouse gases, air pollution, water pollution, or energy consumption.
(h)The exclusions granted pursuant to Section 6010.8 of the Revenue and Taxation Code for projects approved by the authority pursuant to this section shall not exceed one hundred million dollars ($100,000,000) for each calendar year.
(i)(1)The authority shall study the efficacy and cost benefit of the sales and use tax exemption as it relates to advanced manufacturing projects. The study shall include the number of jobs created, the costs of each job, and the annual salary of each job. The study shall also consider a dynamic analysis of the economic output to the state that would occur without the sales and use tax exemption. Before January 1, 2017, the authority shall submit to the Legislature, consistent with Section 9795 of the Government Code, the result of the study.
(2)Before January 1, 2015, the authority shall, consistent with Section 9795 of the Government Code, submit to the Legislature an interim report on the efficacy of the program conducted pursuant to this section. The study shall include recommendations on program changes that would increase the programs efficacy in creating permanent and temporary jobs, and whether eligibility for the program should be extended or narrowed to other manufacturing types. The authority may work with the Legislative Analysts Office in preparing the report and its recommendations.
(j)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that becomes operative on or before January 1, 2021, deletes or extends that date. The sale or purchase of tangible personal property of a project approved before January 1, 2021, shall continue to be excluded from sales and use taxes pursuant to Section 6010.8 of the Revenue and Taxation Code for the period of time set forth in the authoritys resolution approving the project pursuant to this section.
SEC. 3.5.Section 26011.8 of the Public Resources Code, as amended by Section 3 of Chapter 540 of the Statutes of 2013, is amended to read:26011.8.(a)The purpose of this section is to promote the creation of California-based manufacturing, California-based jobs, advanced manufacturing, the reduction of greenhouse gases, or reductions in air and water pollution or energy consumption. In furtherance of this purpose, the authority may approve a project for financial assistance in the form of the sales and use tax exclusion established in Section 6010.8 of the Revenue and Taxation Code.
(b)For purposes of this section, the following terms have the following meanings:
(1)Project means tangible personal property if at least 50 percent of its use is either to process recycled feedstock that is intended to be reused in the production of another product or using recycled feedstock in the production of another product or soil amendment, or tangible personal property that is used in the state for the design, manufacture, production, or assembly of advanced manufacturing, advanced transportation technologies, or alternative source products, components, or systems, as defined in Section 26003. Project does not include tangible personal property that processes or uses recycled feedstock in a manner that would constitute disposal as defined in subdivision (b) of Section 40192.
(2)Recycled feedstock means materials that would otherwise be destined for disposal, having completed their intended end use and product lifecycle.
(3)Soil amendments may include compost, as defined in Section 14525 of the Food and Agricultural Code, fertilizing material, as defined in Section 14533 of the Food and Agricultural Code, gypsum or phosphatic sulfate gypsum, as those terms are defined in Section 14537 of the Food and Agricultural Code, or a substance distributed for the purpose of promoting plant growth or improving the quality of crops by conditioning soils through physical means.
(c)The authority shall publish notice of the availability of project applications and deadlines for submission of project applications to the authority.
(d)The authority shall evaluate project applications based upon all of the following criteria:
(1)The extent to which the project develops manufacturing facilities, or purchases equipment for manufacturing facilities, located in California.
(2)The extent to which the anticipated benefit to the state from the project equals or exceeds the projected benefit to the participating party from the sales and use tax exclusion.
(3)The extent to which the project will create new, permanent jobs in California.
(4)To the extent feasible, the extent to which the project, or the product produced by the project, results in a reduction of greenhouse gases, a reduction in air or water pollution, an increase in energy efficiency, or a reduction in energy consumption, beyond what is required by federal or state law or regulation.
(5)The extent of unemployment in the area in which the project is proposed to be located.
(6)Any other factors the authority deems appropriate in accordance with this section.
(e)At a duly noticed public hearing, the authority shall approve, by resolution, project applications for financial assistance.
(f)Notwithstanding subdivision (j), and without regard to the actual date of any transaction between a participating party and the authority, any project approved by the authority by resolution for the sales and use tax exclusion pursuant to Section 6010.8 of the Revenue and Taxation Code before March 24, 2010, shall not be subject to this section.
(g)The Legislative Analysts Office shall report to the Joint Legislative Budget Committee on the effectiveness of this program, on or before January 1, 2019, by evaluating factors, including, but not limited to, the following:
(1)The number of jobs created by the program in California.
(2)The number of businesses that have remained in California or relocated to California as a result of this program.
(3)The amount of state and local revenue and economic activity generated by the program.
(4)The types of advanced manufacturing, as defined in paragraph (1) of subdivision (a) of Section 26003, utilized.
(5)The amount of reduction in greenhouse gases, air pollution, water pollution, or energy consumption.
(h)The exclusions granted pursuant to Section 6010.8 of the Revenue and Taxation Code for projects approved by the authority pursuant to this section shall not exceed one hundred million dollars ($100,000,000) for each calendar year.
(i)(1)The authority shall study the efficacy and cost benefit of the sales and use tax exemption as it relates to advanced manufacturing projects. The study shall include the number of jobs created, the costs of each job, and the annual salary of each job. The study shall also consider a dynamic analysis of the economic output to the state that would occur without the sales and use tax exemption. Before January 1, 2017, the authority shall submit to the Legislature, consistent with Section 9795 of the Government Code, the result of the study.
(2)Before January 1, 2015, the authority shall, consistent with Section 9795 of the Government Code, submit to the Legislature an interim report on the efficacy of the program conducted pursuant to this section. The study shall include recommendations on program changes that would increase the programs efficacy in creating permanent and temporary jobs, and whether eligibility for the program should be extended or narrowed to other manufacturing types. The authority may work with the Legislative Analysts Office in preparing the report and its recommendations.
(j)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that becomes operative on or before January 1, 2021, deletes or extends that date. The sale or purchase of tangible personal property of a project approved before January 1, 2021, shall continue to be excluded from sales and use taxes pursuant to Section 6010.8 of the Revenue and Taxation Code for the period of time set forth in the authoritys resolution approving the project pursuant to this section.
SEC. 4.Section 26011.8 of the Public Resources Code, as amended by Section 4 of Chapter 540 of the Statutes of 2013, is repealed.SEC. 5.Section 6010.8 of the Revenue and Taxation Code, as amended by Section 35 of Chapter 677 of the Statutes of 2012, is amended to read:6010.8.(a)Sale and purchase do not include any lease or transfer of title of tangible personal property constituting any project to any participating party. As used in this section, project has the meaning specified in subparagraph (B) of paragraph (8) of subdivision (a) of Section 26003 of the Public Resources Code and participating party has the meaning specified in subparagraph (B) of paragraph (7) of subdivision (a) of Section 26003 of the Public Resources Code.
(b)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 6.Section 6010.8 of the Revenue and Taxation Code, as added by Section 36 of Chapter 677 of the Statutes of 2012, is amended to read:6010.8.(a)Sale and purchase do not include any lease or transfer of title of tangible personal property constituting any project to any participating party. As used in this section, project has the meaning specified in subparagraph (B) of paragraph (7) of subdivision (a) of Section 26003 of the Public Resources Code and participating party has the meaning specified in subparagraph (B) of paragraph (6) of subdivision (a) of Section 26003 of the Public Resources Code.
(b)This section shall become operative on January 1, 2021.
SEC. 7.Section 1.5 of this bill incorporates amendments to Section 26003 of the Public Resources Code, as amended by Section 1 of Chapter 540 of the Statutes of 2013, proposed by this bill and Assembly Bill 199. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2016, (2) each bill amends Section 26003 of the Public Resources Code, as amended by Section 1 of Chapter 540 of the Statutes of 2013, and (3) this bill is enacted after Assembly Bill 199, in which case Section 26003 of the Public Resources Code, as amended by Section 1 of Chapter 540 of the Statutes of 2013, as amended by Assembly Bill 199, shall remain operative only until the operative date of this bill, at which time Section 1.5 of this bill shall become operative, and Section 1 of this bill shall not become operative.
SEC. 8.Section 2.5 of this bill incorporates amendments to Section 26003 of the Public Resources Code, as amended by Section 2 of Chapter 540 of the Statutes of 2013, proposed by this bill and Assembly Bill 199. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2016, (2) each bill amends Section 26003 of the Public Resources Code, as amended by Section 2 of Chapter 540 of the Statutes of 2013, and (3) this bill is enacted after Assembly Bill 199, in which case Section 26003 of the Public Resources Code, as amended by Section 2 of Chapter 540 of the Statutes of 2013, as amended by Assembly Bill 199, shall remain operative only until the operative date of this bill, at which time Section 2.5 of this bill shall become operative, and Section 2 of this bill shall not become operative.
SEC. 9.Section 3.5 of this bill incorporates amendments to Section 26011.8 of the Public Resources Code, as amended by Section 3 of Chapter 540 of the Statutes of 2013, proposed by this bill and Assembly Bill 199. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2016, (2) each bill amends Section 26011.8 of the Public Resources Code, as amended by Section 3 of Chapter 540 of the Statutes of 2013, and (3) this bill is enacted after Assembly Bill 199, in which case Section 26011.8 of the Public Resources Code, as amended by Section 3 of Chapter 540 of the Statutes of 2013, as amended by Assembly Bill 199, shall remain operative only until the operative date of this bill, at which time Section 3.5 of this bill shall become operative, and Section 3 of this bill shall not become operative.
(a)As used in this division, unless the context otherwise requires:
(1)(A)Advanced manufacturing means manufacturing processes that improve existing or create entirely new materials, products, and processes through the use of science, engineering, or information technologies, high-precision tools and methods, a high-performance workforce, and innovative business or organizational models utilizing any of the following technology areas:
(i)Microelectronics and nanoelectronics, including semiconductors.
(ii)Advanced materials.
(iii)Integrated computational materials engineering.
(iv)Nanotechnology.
(v)Additive manufacturing.
(vi)Industrial biotechnology.
(B)Advanced manufacturing includes any of the following:
(i)Systems that result from substantive advancement, whether incremental or breakthrough, beyond the current industry standard, in the production of materials and products. These advancements include improvements in manufacturing processes and systems that are often referred to as smart or intelligent manufacturing systems, which integrate computational predictability and operational efficiency.
(ii)(I)Sustainable manufacturing systems and manufacturing technologies that minimize the use of resources while maintaining or improving cost and performance.
(II)Sustainable manufacturing systems and manufacturing technologies do not include those required to be undertaken pursuant to state or federal law or regulations, air district rules or regulations, memoranda of understanding with a governmental entity, or legally binding agreements or documents. The State Air Resources Board shall advise the authority to ensure that the requirements of this clause are met.
(2)(A)Advanced transportation technologies means emerging commercially competitive transportation-related technologies identified by the authority as capable of creating long-term, high value-added jobs for Californians while enhancing the states commitment to energy conservation, pollution and greenhouse gas emissions reduction, and transportation efficiency.
(B)Advanced transportation technologies does not include those projects required to be undertaken pursuant to state or federal law or regulations, air district rules or regulations, memoranda of understanding with a governmental entity, or legally binding agreements or documents. The State Air Resources Board shall advise the authority regarding projects that are excluded pursuant to this subparagraph.
(3)(A)Alternative sources means devices or technologies used for a renewable electrical generation facility, as defined in paragraph (1) of subdivision (a) of Section 25741, a combined heat and power system, as defined in Section 2840.2 of the Public Utilities Code, distributed generation and energy storage technologies eligible under the self-generation incentive program pursuant to Section 379.6 of the Public Utilities Code, as determined by the Public Utilities Commission, or a facility designed for the production of renewable fuels, the efficient use of which reduce the use of fossil or nuclear fuels, and energy efficiency devices or technologies that reduce the need for new electric generation and reduce emissions of toxic and criteria pollutants and greenhouse gases.
(B)Alternative sources does not include a hydroelectric facility that does not meet state laws pertaining to the control, appropriation, use, and distribution of water, including, but not limited to, the obtaining of applicable licenses and permits.
(4)Authority means the California Alternative Energy and Advanced Transportation Financing Authority established pursuant to Section 26004, and any board, commission, department, or officer succeeding to the functions of the authority, or to which the powers conferred upon the authority by this division shall be given.
(5)Cost as applied to a project or portion of the project financed under this division means all or part of the cost of construction and acquisition of all lands, structures, real or personal property or an interest in the real or personal property, rights, rights-of-way, franchises, easements, and interests acquired or used for a project; the cost of demolishing or removing any buildings or structures on land so acquired, including the cost of acquiring any lands to which those buildings or structures may be moved; the cost of all machinery, equipment, and furnishings, financing charges, interest prior to, during, and for a period after, completion of construction as determined by the authority; provisions for working capital; reserves for principal and interest and for extensions, enlargements, additions, replacements, renovations, and improvements; the cost of architectural, engineering, financial, accounting, auditing and legal services, plans, specifications, estimates, administrative expenses, and other expenses necessary or incidental to determining the feasibility of constructing any project or incidental to the construction, acquisition, or financing of a project.
(6)Financial assistance includes, but is not limited to, loans, loan loss reserves, interest rate reductions, proceeds of bonds issued by the authority, bond insurance, loan guarantees or other credit enhancements or liquidity facilities, contributions of money, or a combination thereof, as determined by, and approved by the resolution of, the board.
(7)(A)Participating party means a person, federal or state agency, department, board, authority, or commission, state or community college, or university, or a city or county, regional agency, public district, school district, or other political entity engaged in the business or operations in the state, whether organized for profit or not for profit, that applies for financial assistance from the authority for the purpose of implementing a project.
(B)(i)For purposes of Section 6010.8 of the Revenue and Taxation Code, participating party means an entity specified in subparagraph (A) that seeks financial assistance pursuant to Section 26011.8.
(ii)For purposes of Section 6010.8 of the Revenue and Taxation Code, an entity located outside of the state, including an entity located overseas, is considered to be a participating party and is eligible to apply for financial assistance pursuant to Section 26011.8 if the participating party commits to, and demonstrates that, the party will be opening a manufacturing facility in the state.
(iii)It is the intent of the Legislature by adding clause (ii) to clarify existing law and ensure that an out-of-state entity or overseas entity is eligible to apply for financial assistance pursuant to Section 26011.8.
(8)(A)Project means a land, building, improvement to the land or building, rehabilitation, work, property, or structure, real or personal, stationary or mobile, including, but not limited to, machinery and equipment utilized in the state, whether or not in existence or under construction, that utilizes, or is designed to utilize, an alternative source, or that is utilized for the design, technology transfer, manufacture, production, assembly, distribution, or service of advanced transportation technologies or alternative source components.
(B)Project, for purposes of Section 26011.8 and Section 6010.8 of the Revenue and Taxation Code, means tangible personal property that is utilized in the state for the design, manufacture, production, or assembly of advanced manufacturing, advanced transportation technologies, or alternative source products, components, or systems.
(9)Revenue means all rents, receipts, purchase payments, loan repayments, and all other income or receipts derived by the authority from a project, or the sale, lease, or other disposition of alternative source or advanced transportation technology facilities, or the making of loans to finance alternative source or advanced transportation technology facilities, and any income or revenue derived from the investment of money in any fund or account of the authority.
(b)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 1.5.Section 26003 of the Public Resources Code, as amended by Section 1 of Chapter 540 of the Statutes of 2013, is amended to read:26003.(a)As used in this division, unless the context otherwise requires:
(1)(A)Advanced manufacturing means manufacturing processes that improve existing or create entirely new materials, products, and processes through the use of science, engineering, or information technologies, high-precision tools and methods, a high-performance workforce, and innovative business or organizational models utilizing any of the following technology areas:
(i)Microelectronics and nanoelectronics, including semiconductors.
(ii)Advanced materials.
(iii)Integrated computational materials engineering.
(iv)Nanotechnology.
(v)Additive manufacturing.
(vi)Industrial biotechnology.
(B)Advanced manufacturing includes any of the following:
(i)Systems that result from substantive advancement, whether incremental or breakthrough, beyond the current industry standard, in the production of materials and products. These advancements include improvements in manufacturing processes and systems that are often referred to as smart or intelligent manufacturing systems, which integrate computational predictability and operational efficiency.
(ii)(I)Sustainable manufacturing systems and manufacturing technologies that minimize the use of resources while maintaining or improving cost and performance.
(II)Sustainable manufacturing systems and manufacturing technologies do not include those required to be undertaken pursuant to state or federal law or regulations, air district rules or regulations, memoranda of understanding with a governmental entity, or legally binding agreements or documents. The State Air Resources Board shall advise the authority to ensure that the requirements of this clause are met.
(2)(A)Advanced transportation technologies means emerging commercially competitive transportation-related technologies identified by the authority as capable of creating long-term, high value-added jobs for Californians while enhancing the states commitment to energy conservation, pollution and greenhouse gas emissions reduction, and transportation efficiency.
(B)Advanced transportation technologies does not include those projects required to be undertaken pursuant to state or federal law or regulations, air district rules or regulations, memoranda of understanding with a governmental entity, or legally binding agreements or documents. The State Air Resources Board shall advise the authority regarding projects that are excluded pursuant to this subparagraph.
(3)(A)Alternative sources means devices or technologies used for a renewable electrical generation facility, as defined in paragraph (1) of subdivision (a) of Section 25741, a combined heat and power system, as defined in Section 2840.2 of the Public Utilities Code, distributed generation and energy storage technologies eligible under the self-generation incentive program pursuant to Section 379.6 of the Public Utilities Code, as determined by the Public Utilities Commission, or a facility designed for the production of renewable fuels, the efficient use of which reduce the use of fossil or nuclear fuels, and energy efficiency devices or technologies that reduce the need for new electric generation and reduce emissions of toxic and criteria pollutants and greenhouse gases.
(B)Alternative sources does not include a hydroelectric facility that does not meet state laws pertaining to the control, appropriation, use, and distribution of water, including, but not limited to, the obtaining of applicable licenses and permits.
(4)Authority means the California Alternative Energy and Advanced Transportation Financing Authority established pursuant to Section 26004, and any board, commission, department, or officer succeeding to the functions of the authority, or to which the powers conferred upon the authority by this division shall be given.
(5)Cost as applied to a project or portion of the project financed under this division means all or part of the cost of construction and acquisition of all lands, structures, real or personal property or an interest in the real or personal property, rights, rights-of-way, franchises, easements, and interests acquired or used for a project; the cost of demolishing or removing any buildings or structures on land so acquired, including the cost of acquiring any lands to which those buildings or structures may be moved; the cost of all machinery, equipment, and furnishings, financing charges, interest prior to, during, and for a period after, completion of construction as determined by the authority; provisions for working capital; reserves for principal and interest and for extensions, enlargements, additions, replacements, renovations, and improvements; the cost of architectural, engineering, financial, accounting, auditing and legal services, plans, specifications, estimates, administrative expenses, and other expenses necessary or incidental to determining the feasibility of constructing any project or incidental to the construction, acquisition, or financing of a project.
(6)Financial assistance includes, but is not limited to, loans, loan loss reserves, interest rate reductions, proceeds of bonds issued by the authority, bond insurance, loan guarantees or other credit enhancements or liquidity facilities, contributions of money, or a combination thereof, as determined by, and approved by the resolution of, the board.
(7)(A)Participating party means a person, federal or state agency, department, board, authority, or commission, state or community college, or university, or a city or county, regional agency, public district, school district, or other political entity engaged in the business or operations in the state, whether organized for profit or not for profit, that applies for financial assistance from the authority for the purpose of implementing a project.
(B)(i)For purposes of Section 6010.8 of the Revenue and Taxation Code, participating party means an entity specified in subparagraph (A) that seeks financial assistance pursuant to Section 26011.8.
(ii)For purposes of Section 6010.8 of the Revenue and Taxation Code, an entity located outside of the state, including an entity located overseas, is considered to be a participating party and is eligible to apply for financial assistance pursuant to Section 26011.8 if the participating party commits to, and demonstrates that, the party will be opening a manufacturing facility in the state.
(iii)It is the intent of the Legislature by adding clause (ii) to clarify existing law and ensure that an out-of-state entity or overseas entity is eligible to apply for financial assistance pursuant to Section 26011.8.
(8)(A)Project means a land, building, improvement to the land or building, rehabilitation, work, property, or structure, real or personal, stationary or mobile, including, but not limited to, machinery and equipment utilized in the state, whether or not in existence or under construction, that utilizes, or is designed to utilize, an alternative source, or that is utilized for the design, technology transfer, manufacture, production, assembly, distribution, or service of advanced transportation technologies or alternative source components.
(B)Project, for purposes of Section 26011.8 and Section 6010.8 of the Revenue and Taxation Code, is defined in Section 26011.8.
(9)Revenue means all rents, receipts, purchase payments, loan repayments, and all other income or receipts derived by the authority from a project, or the sale, lease, or other disposition of alternative source or advanced transportation technology facilities, or the making of loans to finance alternative source or advanced transportation technology facilities, and any income or revenue derived from the investment of money in any fund or account of the authority.
(b)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 2.Section 26003 of the Public Resources Code, as amended by Section 2 of Chapter 540 of the Statutes of 2013, is amended to read:26003.(a)As used in this division, unless the context otherwise requires:
(1)(A)Advanced transportation technologies means emerging commercially competitive transportation-related technologies identified by the authority as capable of creating long-term, high value-added jobs for Californians while enhancing the states commitment to energy conservation, pollution and greenhouse gas emissions reduction, and transportation efficiency.
(B)Advanced transportation technologies does not include those projects required to be undertaken pursuant to state or federal law or regulations, air district rules or regulations, memoranda of understanding with a governmental entity, or legally binding agreements or documents. The State Air Resources Board shall advise the authority regarding projects that are excluded pursuant to this subparagraph.
(2)(A)Alternative sources means devices or technologies used for a renewable electrical generation facility, as defined in paragraph (1) of subdivision (a) of Section 25741, a combined heat and power system, as defined in Section 2840.2 of the Public Utilities Code, distributed generation and energy storage technologies eligible under the self-generation incentive program pursuant to Section 379.6 of the Public Utilities Code, as determined by the Public Utilities Commission, or a facility designed for the production of renewable fuels, the efficient use of which reduce the use of fossil or nuclear fuels, and energy efficiency devices or technologies that reduce the need for new electric generation and reduce emissions of toxic and criteria pollutants and greenhouse gases.
(B)Alternative sources does not include a hydroelectric facility that does not meet state laws pertaining to the control, appropriation, use, and distribution of water, including, but not limited to, the obtaining of applicable licenses and permits.
(3)Authority means the California Alternative Energy and Advanced Transportation Financing Authority established pursuant to Section 26004, and any board, commission, department, or officer succeeding to the functions of the authority, or to which the powers conferred upon the authority by this division shall be given.
(4)Cost as applied to a project or portion of the project financed under this division means all or part of the cost of construction and acquisition of all lands, structures, real or personal property or an interest in the real or personal property, rights, rights-of-way, franchises, easements, and interests acquired or used for a project; the cost of demolishing or removing any buildings or structures on land so acquired, including the cost of acquiring any lands to which those buildings or structures may be moved; the cost of all machinery, equipment, and furnishings, financing charges, interest prior to, during, and for a period after, completion of construction as determined by the authority; provisions for working capital; reserves for principal and interest and for extensions, enlargements, additions, replacements, renovations, and improvements; the cost of architectural, engineering, financial, accounting, auditing and legal services, plans, specifications, estimates, administrative expenses, and other expenses necessary or incidental to determining the feasibility of constructing any project or incidental to the construction, acquisition, or financing of a project.
(5)Financial assistance includes, but is not limited to, loans, loan loss reserves, interest rate reductions, proceeds of bonds issued by the authority, bond insurance, loan guarantees or other credit enhancements or liquidity facilities, contributions of money, or a combination thereof, as determined by, and approved by the resolution of, the board.
(6)(A)Participating party means a person, federal or state agency, department, board, authority, or commission, state or community college, or university, or a city or county, regional agency, public district, school district, or other political entity engaged in the business or operations in the state, whether organized for profit or not for profit, that applies for financial assistance from the authority for the purpose of implementing a project.
(B)(i)For purposes of Section 6010.8 of the Revenue and Taxation Code, participating party means an entity specified in subparagraph (A) that seeks financial assistance pursuant to Section 26011.8.
(ii)For purposes of Section 6010.8 of the Revenue and Taxation Code, an entity located outside of the state, including an entity located overseas, is considered to be a participating party and is eligible to apply for financial assistance pursuant to Section 26011.8 if the participating party commits to, and demonstrates that, the party will be opening a manufacturing facility in the state.
(iii)It is the intent of the Legislature by adding clause (ii) to clarify existing law and ensure that an out-of-state entity or overseas entity is eligible to apply for financial assistance pursuant to Section 26011.8.
(7)(A)Project means a land, building, improvement to the land or building, rehabilitation, work, property, or structure, real or personal, stationary or mobile, including, but not limited to, machinery and equipment utilized in the state, whether or not in existence or under construction, that utilizes, or is designed to utilize, an alternative source, or that is utilized for the design, technology transfer, manufacture, production, assembly, distribution, or service of advanced transportation technologies or alternative source components.
(B)Project, for purposes of Section 26011.8 and Section 6010.8 of the Revenue and Taxation Code, means tangible personal property that is utilized in the state for the design, manufacture, production, or assembly of advanced transportation technologies or alternative source products, components, or systems.
(8)Revenue means all rents, receipts, purchase payments, loan repayments, and all other income or receipts derived by the authority from a project, or the sale, lease, or other disposition of alternative source or advanced transportation technology facilities, or the making of loans to finance alternative source or advanced transportation technology facilities, and any income or revenue derived from the investment of money in any fund or account of the authority.
(b)This section shall become operative on January 1, 2021.
SEC. 2.5.Section 26003 of the Public Resources Code, as amended by Section 2 of Chapter 540 of the Statutes of 2013, is amended to read:26003.(a)As used in this division, unless the context otherwise requires:
(1)(A) Advanced transportation technologies means emerging commercially competitive transportation-related technologies identified by the authority as capable of creating long-term, high value-added jobs for Californians while enhancing the states commitment to energy conservation, pollution and greenhouse gas emissions reduction, and transportation efficiency.
(B)Advanced transportation technologies does not include those projects required to be undertaken pursuant to state or federal law or regulations, air district rules or regulations, memoranda of understanding with a governmental entity, or legally binding agreements or documents. The State Air Resources Board shall advise the authority regarding projects that are excluded pursuant to this subparagraph.
(2)(A)Alternative sources means devices or technologies used for a renewable electrical generation facility, as defined in paragraph (1) of subdivision (a) of Section 25741, a combined heat and power system, as defined in Section 2840.2 of the Public Utilities Code, distributed generation and energy storage technologies eligible under the self-generation incentive program pursuant to Section 379.6 of the Public Utilities Code, as determined by the Public Utilities Commission, or a facility designed for the production of renewable fuels, the efficient use of which reduce the use of fossil or nuclear fuels, and energy efficiency devices or technologies that reduce the need for new electric generation and reduce emissions of toxic and criteria pollutants and greenhouse gases.
(B)Alternative sources does not include a hydroelectric facility that does not meet state laws pertaining to the control, appropriation, use, and distribution of water, including, but not limited to, the obtaining of applicable licenses and permits.
(3)Authority means the California Alternative Energy and Advanced Transportation Financing Authority established pursuant to Section 26004, and any board, commission, department, or officer succeeding to the functions of the authority, or to which the powers conferred upon the authority by this division shall be given.
(4)Cost as applied to a project or portion of the project financed under this division means all or part of the cost of construction and acquisition of all lands, structures, real or personal property or an interest in the real or personal property, rights, rights-of-way, franchises, easements, and interests acquired or used for a project; the cost of demolishing or removing any buildings or structures on land so acquired, including the cost of acquiring any lands to which those buildings or structures may be moved; the cost of all machinery, equipment, and furnishings, financing charges, interest prior to, during, and for a period after, completion of construction as determined by the authority; provisions for working capital; reserves for principal and interest and for extensions, enlargements, additions, replacements, renovations, and improvements; the cost of architectural, engineering, financial, accounting, auditing and legal services, plans, specifications, estimates, administrative expenses, and other expenses necessary or incidental to determining the feasibility of constructing any project or incidental to the construction, acquisition, or financing of a project.
(5)Financial assistance includes, but is not limited to, loans, loan loss reserves, interest rate reductions, proceeds of bonds issued by the authority, bond insurance, loan guarantees or other credit enhancements or liquidity facilities, contributions of money, or a combination thereof, as determined by, and approved by the resolution of, the board.
(6)(A)Participating party means a person, federal or state agency, department, board, authority, or commission, state or community college, or university, or a city or county, regional agency, public district, school district, or other political entity engaged in the business or operations in the state, whether organized for profit or not for profit, that applies for financial assistance from the authority for the purpose of implementing a project.
(B)(i)For purposes of Section 6010.8 of the Revenue and Taxation Code, participating party means an entity specified in subparagraph (A) that seeks financial assistance pursuant to Section 26011.8.
(ii)For purposes of Section 6010.8 of the Revenue and Taxation Code, an entity located outside of the state, including an entity located overseas, is considered to be a participating party and is eligible to apply for financial assistance pursuant to Section 26011.8 if the participating party commits to, and demonstrates that, the party will be opening a manufacturing facility in the state.
(iii)It is the intent of the Legislature by adding clause (ii) to clarify existing law and ensure that an out-of-state entity or overseas entity is eligible to apply for financial assistance pursuant to Section 26011.8.
(7)(A)Project means a land, building, improvement to the land or building, rehabilitation, work, property, or structure, real or personal, stationary or mobile, including, but not limited to, machinery and equipment utilized in the state, whether or not in existence or under construction, that utilizes, or is designed to utilize, an alternative source, or that is utilized for the design, technology transfer, manufacture, production, assembly, distribution, or service of advanced transportation technologies or alternative source components.
(B)Project, for purposes of Section 26011.8 and Section 6010.8 of the Revenue and Taxation Code, is defined in Section 26011.8.
(8)Revenue means all rents, receipts, purchase payments, loan repayments, and all other income or receipts derived by the authority from a project, or the sale, lease, or other disposition of alternative source or advanced transportation technology facilities, or the making of loans to finance alternative source or advanced transportation technology facilities, and any income or revenue derived from the investment of money in any fund or account of the authority.
(b)This section shall become operative on January 1, 2021.
SEC. 3.Section 26011.8 of the Public Resources Code, as amended by Section 3 of Chapter 540 of the Statutes of 2013, is amended to read:26011.8.(a)The purpose of this section is to promote the creation of California-based manufacturing, California-based jobs, advanced manufacturing, the reduction of greenhouse gases, or reductions in air and water pollution or energy consumption. In furtherance of this purpose, the authority may approve a project for financial assistance in the form of the sales and use tax exclusion established in Section 6010.8 of the Revenue and Taxation Code.
(b)For purposes of this section, project means a project as defined in subparagraph (B) of paragraph (8) of subdivision (a) of Section 26003.
(c)The authority shall publish notice of the availability of project applications and deadlines for submission of project applications to the authority.
(d)The authority shall evaluate project applications based upon all of the following criteria:
(1)The extent to which the project develops manufacturing facilities, or purchases equipment for manufacturing facilities, located in California.
(2)The extent to which the anticipated benefit to the state from the project equals or exceeds the projected benefit to the participating party from the sales and use tax exclusion.
(3)The extent to which the project will create new, permanent jobs in California.
(4)To the extent feasible, the extent to which the project, or the product produced by the project, results in a reduction of greenhouse gases, a reduction in air or water pollution, an increase in energy efficiency, or a reduction in energy consumption, beyond what is required by federal or state law or regulation.
(5)The extent of unemployment in the area in which the project is proposed to be located.
(6)Any other factors the authority deems appropriate in accordance with this section.
(e)At a duly noticed public hearing, the authority shall approve, by resolution, project applications for financial assistance.
(f)Notwithstanding subdivision (j), and without regard to the actual date of any transaction between a participating party and the authority, any project approved by the authority by resolution for the sales and use tax exclusion pursuant to Section 6010.8 of the Revenue and Taxation Code before March 24, 2010, shall not be subject to this section.
(g)The Legislative Analysts Office shall report to the Joint Legislative Budget Committee on the effectiveness of this program, on or before January 1, 2019, by evaluating factors, including, but not limited to, the following:
(1)The number of jobs created by the program in California.
(2)The number of businesses that have remained in California or relocated to California as a result of this program.
(3)The amount of state and local revenue and economic activity generated by the program.
(4)The types of advanced manufacturing, as defined in paragraph (1) of subdivision (a) of Section 26003, utilized.
(5)The amount of reduction in greenhouse gases, air pollution, water pollution, or energy consumption.
(h)The exclusions granted pursuant to Section 6010.8 of the Revenue and Taxation Code for projects approved by the authority pursuant to this section shall not exceed one hundred million dollars ($100,000,000) for each calendar year.
(i)(1)The authority shall study the efficacy and cost benefit of the sales and use tax exemption as it relates to advanced manufacturing projects. The study shall include the number of jobs created, the costs of each job, and the annual salary of each job. The study shall also consider a dynamic analysis of the economic output to the state that would occur without the sales and use tax exemption. Before January 1, 2017, the authority shall submit to the Legislature, consistent with Section 9795 of the Government Code, the result of the study.
(2)Before January 1, 2015, the authority shall, consistent with Section 9795 of the Government Code, submit to the Legislature an interim report on the efficacy of the program conducted pursuant to this section. The study shall include recommendations on program changes that would increase the programs efficacy in creating permanent and temporary jobs, and whether eligibility for the program should be extended or narrowed to other manufacturing types. The authority may work with the Legislative Analysts Office in preparing the report and its recommendations.
(j)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that becomes operative on or before January 1, 2021, deletes or extends that date. The sale or purchase of tangible personal property of a project approved before January 1, 2021, shall continue to be excluded from sales and use taxes pursuant to Section 6010.8 of the Revenue and Taxation Code for the period of time set forth in the authoritys resolution approving the project pursuant to this section.
SEC. 3.5.Section 26011.8 of the Public Resources Code, as amended by Section 3 of Chapter 540 of the Statutes of 2013, is amended to read:26011.8.(a)The purpose of this section is to promote the creation of California-based manufacturing, California-based jobs, advanced manufacturing, the reduction of greenhouse gases, or reductions in air and water pollution or energy consumption. In furtherance of this purpose, the authority may approve a project for financial assistance in the form of the sales and use tax exclusion established in Section 6010.8 of the Revenue and Taxation Code.
(b)For purposes of this section, the following terms have the following meanings:
(1)Project means tangible personal property if at least 50 percent of its use is either to process recycled feedstock that is intended to be reused in the production of another product or using recycled feedstock in the production of another product or soil amendment, or tangible personal property that is used in the state for the design, manufacture, production, or assembly of advanced manufacturing, advanced transportation technologies, or alternative source products, components, or systems, as defined in Section 26003. Project does not include tangible personal property that processes or uses recycled feedstock in a manner that would constitute disposal as defined in subdivision (b) of Section 40192.
(2)Recycled feedstock means materials that would otherwise be destined for disposal, having completed their intended end use and product lifecycle.
(3)Soil amendments may include compost, as defined in Section 14525 of the Food and Agricultural Code, fertilizing material, as defined in Section 14533 of the Food and Agricultural Code, gypsum or phosphatic sulfate gypsum, as those terms are defined in Section 14537 of the Food and Agricultural Code, or a substance distributed for the purpose of promoting plant growth or improving the quality of crops by conditioning soils through physical means.
(c)The authority shall publish notice of the availability of project applications and deadlines for submission of project applications to the authority.
(d)The authority shall evaluate project applications based upon all of the following criteria:
(1)The extent to which the project develops manufacturing facilities, or purchases equipment for manufacturing facilities, located in California.
(2)The extent to which the anticipated benefit to the state from the project equals or exceeds the projected benefit to the participating party from the sales and use tax exclusion.
(3)The extent to which the project will create new, permanent jobs in California.
(4)To the extent feasible, the extent to which the project, or the product produced by the project, results in a reduction of greenhouse gases, a reduction in air or water pollution, an increase in energy efficiency, or a reduction in energy consumption, beyond what is required by federal or state law or regulation.
(5)The extent of unemployment in the area in which the project is proposed to be located.
(6)Any other factors the authority deems appropriate in accordance with this section.
(e)At a duly noticed public hearing, the authority shall approve, by resolution, project applications for financial assistance.
(f)Notwithstanding subdivision (j), and without regard to the actual date of any transaction between a participating party and the authority, any project approved by the authority by resolution for the sales and use tax exclusion pursuant to Section 6010.8 of the Revenue and Taxation Code before March 24, 2010, shall not be subject to this section.
(g)The Legislative Analysts Office shall report to the Joint Legislative Budget Committee on the effectiveness of this program, on or before January 1, 2019, by evaluating factors, including, but not limited to, the following:
(1)The number of jobs created by the program in California.
(2)The number of businesses that have remained in California or relocated to California as a result of this program.
(3)The amount of state and local revenue and economic activity generated by the program.
(4)The types of advanced manufacturing, as defined in paragraph (1) of subdivision (a) of Section 26003, utilized.
(5)The amount of reduction in greenhouse gases, air pollution, water pollution, or energy consumption.
(h)The exclusions granted pursuant to Section 6010.8 of the Revenue and Taxation Code for projects approved by the authority pursuant to this section shall not exceed one hundred million dollars ($100,000,000) for each calendar year.
(i)(1)The authority shall study the efficacy and cost benefit of the sales and use tax exemption as it relates to advanced manufacturing projects. The study shall include the number of jobs created, the costs of each job, and the annual salary of each job. The study shall also consider a dynamic analysis of the economic output to the state that would occur without the sales and use tax exemption. Before January 1, 2017, the authority shall submit to the Legislature, consistent with Section 9795 of the Government Code, the result of the study.
(2)Before January 1, 2015, the authority shall, consistent with Section 9795 of the Government Code, submit to the Legislature an interim report on the efficacy of the program conducted pursuant to this section. The study shall include recommendations on program changes that would increase the programs efficacy in creating permanent and temporary jobs, and whether eligibility for the program should be extended or narrowed to other manufacturing types. The authority may work with the Legislative Analysts Office in preparing the report and its recommendations.
(j)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that becomes operative on or before January 1, 2021, deletes or extends that date. The sale or purchase of tangible personal property of a project approved before January 1, 2021, shall continue to be excluded from sales and use taxes pursuant to Section 6010.8 of the Revenue and Taxation Code for the period of time set forth in the authoritys resolution approving the project pursuant to this section.
SEC. 4.Section 26011.8 of the Public Resources Code, as amended by Section 4 of Chapter 540 of the Statutes of 2013, is repealed.SEC. 5.Section 6010.8 of the Revenue and Taxation Code, as amended by Section 35 of Chapter 677 of the Statutes of 2012, is amended to read:6010.8.(a)Sale and purchase do not include any lease or transfer of title of tangible personal property constituting any project to any participating party. As used in this section, project has the meaning specified in subparagraph (B) of paragraph (8) of subdivision (a) of Section 26003 of the Public Resources Code and participating party has the meaning specified in subparagraph (B) of paragraph (7) of subdivision (a) of Section 26003 of the Public Resources Code.
(b)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 6.Section 6010.8 of the Revenue and Taxation Code, as added by Section 36 of Chapter 677 of the Statutes of 2012, is amended to read:6010.8.(a)Sale and purchase do not include any lease or transfer of title of tangible personal property constituting any project to any participating party. As used in this section, project has the meaning specified in subparagraph (B) of paragraph (7) of subdivision (a) of Section 26003 of the Public Resources Code and participating party has the meaning specified in subparagraph (B) of paragraph (6) of subdivision (a) of Section 26003 of the Public Resources Code.
(b)This section shall become operative on January 1, 2021.
SEC. 7.Section 1.5 of this bill incorporates amendments to Section 26003 of the Public Resources Code, as amended by Section 1 of Chapter 540 of the Statutes of 2013, proposed by this bill and Assembly Bill 199. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2016, (2) each bill amends Section 26003 of the Public Resources Code, as amended by Section 1 of Chapter 540 of the Statutes of 2013, and (3) this bill is enacted after Assembly Bill 199, in which case Section 26003 of the Public Resources Code, as amended by Section 1 of Chapter 540 of the Statutes of 2013, as amended by Assembly Bill 199, shall remain operative only until the operative date of this bill, at which time Section 1.5 of this bill shall become operative, and Section 1 of this bill shall not become operative.
SEC. 8.Section 2.5 of this bill incorporates amendments to Section 26003 of the Public Resources Code, as amended by Section 2 of Chapter 540 of the Statutes of 2013, proposed by this bill and Assembly Bill 199. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2016, (2) each bill amends Section 26003 of the Public Resources Code, as amended by Section 2 of Chapter 540 of the Statutes of 2013, and (3) this bill is enacted after Assembly Bill 199, in which case Section 26003 of the Public Resources Code, as amended by Section 2 of Chapter 540 of the Statutes of 2013, as amended by Assembly Bill 199, shall remain operative only until the operative date of this bill, at which time Section 2.5 of this bill shall become operative, and Section 2 of this bill shall not become operative.
SEC. 9.Section 3.5 of this bill incorporates amendments to Section 26011.8 of the Public Resources Code, as amended by Section 3 of Chapter 540 of the Statutes of 2013, proposed by this bill and Assembly Bill 199. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2016, (2) each bill amends Section 26011.8 of the Public Resources Code, as amended by Section 3 of Chapter 540 of the Statutes of 2013, and (3) this bill is enacted after Assembly Bill 199, in which case Section 26011.8 of the Public Resources Code, as amended by Section 3 of Chapter 540 of the Statutes of 2013, as amended by Assembly Bill 199, shall remain operative only until the operative date of this bill, at which time Section 3.5 of this bill shall become operative, and Section 3 of this bill shall not become operative.
(a)As used in this division, unless the context otherwise requires:
(1)(A)Advanced manufacturing means manufacturing processes that improve existing or create entirely new materials, products, and processes through the use of science, engineering, or information technologies, high-precision tools and methods, a high-performance workforce, and innovative business or organizational models utilizing any of the following technology areas:
(i)Microelectronics and nanoelectronics, including semiconductors.
(ii)Advanced materials.
(iii)Integrated computational materials engineering.
(iv)Nanotechnology.
(v)Additive manufacturing.
(vi)Industrial biotechnology.
(B)Advanced manufacturing includes any of the following:
(i)Systems that result from substantive advancement, whether incremental or breakthrough, beyond the current industry standard, in the production of materials and products. These advancements include improvements in manufacturing processes and systems that are often referred to as smart or intelligent manufacturing systems, which integrate computational predictability and operational efficiency.
(ii)(I)Sustainable manufacturing systems and manufacturing technologies that minimize the use of resources while maintaining or improving cost and performance.
(II)Sustainable manufacturing systems and manufacturing technologies do not include those required to be undertaken pursuant to state or federal law or regulations, air district rules or regulations, memoranda of understanding with a governmental entity, or legally binding agreements or documents. The State Air Resources Board shall advise the authority to ensure that the requirements of this clause are met.
(2)(A)Advanced transportation technologies means emerging commercially competitive transportation-related technologies identified by the authority as capable of creating long-term, high value-added jobs for Californians while enhancing the states commitment to energy conservation, pollution and greenhouse gas emissions reduction, and transportation efficiency.
(B)Advanced transportation technologies does not include those projects required to be undertaken pursuant to state or federal law or regulations, air district rules or regulations, memoranda of understanding with a governmental entity, or legally binding agreements or documents. The State Air Resources Board shall advise the authority regarding projects that are excluded pursuant to this subparagraph.
(3)(A)Alternative sources means devices or technologies used for a renewable electrical generation facility, as defined in paragraph (1) of subdivision (a) of Section 25741, a combined heat and power system, as defined in Section 2840.2 of the Public Utilities Code, distributed generation and energy storage technologies eligible under the self-generation incentive program pursuant to Section 379.6 of the Public Utilities Code, as determined by the Public Utilities Commission, or a facility designed for the production of renewable fuels, the efficient use of which reduce the use of fossil or nuclear fuels, and energy efficiency devices or technologies that reduce the need for new electric generation and reduce emissions of toxic and criteria pollutants and greenhouse gases.
(B)Alternative sources does not include a hydroelectric facility that does not meet state laws pertaining to the control, appropriation, use, and distribution of water, including, but not limited to, the obtaining of applicable licenses and permits.
(4)Authority means the California Alternative Energy and Advanced Transportation Financing Authority established pursuant to Section 26004, and any board, commission, department, or officer succeeding to the functions of the authority, or to which the powers conferred upon the authority by this division shall be given.
(5)Cost as applied to a project or portion of the project financed under this division means all or part of the cost of construction and acquisition of all lands, structures, real or personal property or an interest in the real or personal property, rights, rights-of-way, franchises, easements, and interests acquired or used for a project; the cost of demolishing or removing any buildings or structures on land so acquired, including the cost of acquiring any lands to which those buildings or structures may be moved; the cost of all machinery, equipment, and furnishings, financing charges, interest prior to, during, and for a period after, completion of construction as determined by the authority; provisions for working capital; reserves for principal and interest and for extensions, enlargements, additions, replacements, renovations, and improvements; the cost of architectural, engineering, financial, accounting, auditing and legal services, plans, specifications, estimates, administrative expenses, and other expenses necessary or incident incidental to determining the feasibility of constructing any project or incident incidental to the construction, acquisition, or financing of a project.
(6)Financial assistance includes, but is not limited to, loans, loan loss reserves, interest rate reductions, proceeds of bonds issued by the authority, bond insurance, loan guarantees or other credit enhancements or liquidity facilities, contributions of money, or a combination thereof, as determined by, and approved by the resolution of, the board.
(7)(A)Participating party means a person, federal or state agency, department, board, authority, or commission, state or community college, or university, or a city or county, regional agency, public district, school district, or other political entity engaged in the business or operations in the state, whether organized for profit or not for profit, that applies for financial assistance from the authority for the purpose of implementing a project.
(B)(i)For purposes of Section 6010.8 of the Revenue and Taxation Code, participating party means an entity specified in subparagraph (A) that seeks financial assistance pursuant to Section 26011.8.
(ii)For purposes of Section 6010.8 of the Revenue and Taxation Code, an entity located outside of the state, including an entity located overseas, is considered to be a participating party and is eligible to apply for financial assistance pursuant to Section 26011.8 if the participating party commits to, and demonstrates that, the party will be opening a manufacturing facility in the state.
(iii)It is the intent of the Legislature by adding clause (ii) to clarify existing law and ensure that an out-of-state entity or overseas entity is eligible to apply for financial assistance pursuant to Section 26011.8.
(8)(A)Project means a land, building, improvement to the land or building, rehabilitation, work, property, or structure, real or personal, stationary or mobile, including, but not limited to, machinery and equipment utilized in the state, whether or not in existence or under construction, that utilizes, or is designed to utilize, an alternative source, or that is utilized for the design, technology transfer, manufacture, production, assembly, distribution, or service of advanced transportation technologies or alternative source components.
(B)Project, for purposes of Section 26011.8 and Section 6010.8 of the Revenue and Taxation Code, means tangible personal property that is utilized in the state for the design, manufacture, production, or assembly of advanced manufacturing, advanced transportation technologies, or alternative source products, components, or systems.
(9)Revenue means all rents, receipts, purchase payments, loan repayments, and all other income or receipts derived by the authority from a project, or the sale, lease, or other disposition of alternative source or advanced transportation technology facilities, or the making of loans to finance alternative source or advanced transportation technology facilities, and any income or revenue derived from the investment of money in any fund or account of the authority.
(b)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 1.5.Section 26003 of the Public Resources Code, as amended by Section 1 of Chapter 540 of the Statutes of 2013, is amended to read:26003.(a)As used in this division, unless the context otherwise requires:
(1)(A)Advanced manufacturing means manufacturing processes that improve existing or create entirely new materials, products, and processes through the use of science, engineering, or information technologies, high-precision tools and methods, a high-performance workforce, and innovative business or organizational models utilizing any of the following technology areas:
(i)Microelectronics and nanoelectronics, including semiconductors.
(ii)Advanced materials.
(iii)Integrated computational materials engineering.
(iv)Nanotechnology.
(v)Additive manufacturing.
(vi)Industrial biotechnology.
(B)Advanced manufacturing includes any of the following:
(i)Systems that result from substantive advancement, whether incremental or breakthrough, beyond the current industry standard, in the production of materials and products. These advancements include improvements in manufacturing processes and systems that are often referred to as smart or intelligent manufacturing systems, which integrate computational predictability and operational efficiency.
(ii)(I)Sustainable manufacturing systems and manufacturing technologies that minimize the use of resources while maintaining or improving cost and performance.
(II)Sustainable manufacturing systems and manufacturing technologies do not include those required to be undertaken pursuant to state or federal law or regulations, air district rules or regulations, memoranda of understanding with a governmental entity, or legally binding agreements or documents. The State Air Resources Board shall advise the authority to ensure that the requirements of this clause are met.
(2)(A)Advanced transportation technologies means emerging commercially competitive transportation-related technologies identified by the authority as capable of creating long-term, high value-added jobs for Californians while enhancing the states commitment to energy conservation, pollution and greenhouse gas emissions reduction, and transportation efficiency.
(B)Advanced transportation technologies does not include those projects required to be undertaken pursuant to state or federal law or regulations, air district rules or regulations, memoranda of understanding with a governmental entity, or legally binding agreements or documents. The State Air Resources Board shall advise the authority regarding projects that are excluded pursuant to this subparagraph.
(3)(A)Alternative sources means devices or technologies used for a renewable electrical generation facility, as defined in paragraph (1) of subdivision (a) of Section 25741, a combined heat and power system, as defined in Section 2840.2 of the Public Utilities Code, distributed generation and energy storage technologies eligible under the self-generation incentive program pursuant to Section 379.6 of the Public Utilities Code, as determined by the Public Utilities Commission, or a facility designed for the production of renewable fuels, the efficient use of which reduce the use of fossil or nuclear fuels, and energy efficiency devices or technologies that reduce the need for new electric generation and reduce emissions of toxic and criteria pollutants and greenhouse gases.
(B)Alternative sources does not include a hydroelectric facility that does not meet state laws pertaining to the control, appropriation, use, and distribution of water, including, but not limited to, the obtaining of applicable licenses and permits.
(4)Authority means the California Alternative Energy and Advanced Transportation Financing Authority established pursuant to Section 26004, and any board, commission, department, or officer succeeding to the functions of the authority, or to which the powers conferred upon the authority by this division shall be given.
(5)Cost as applied to a project or portion of the project financed under this division means all or part of the cost of construction and acquisition of all lands, structures, real or personal property or an interest in the real or personal property, rights, rights-of-way, franchises, easements, and interests acquired or used for a project; the cost of demolishing or removing any buildings or structures on land so acquired, including the cost of acquiring any lands to which those buildings or structures may be moved; the cost of all machinery, equipment, and furnishings, financing charges, interest prior to, during, and for a period after, completion of construction as determined by the authority; provisions for working capital; reserves for principal and interest and for extensions, enlargements, additions, replacements, renovations, and improvements; the cost of architectural, engineering, financial, accounting, auditing and legal services, plans, specifications, estimates, administrative expenses, and other expenses necessary or incident incidental to determining the feasibility of constructing any project or incident incidental to the construction, acquisition, or financing of a project.
(6)Financial assistance includes, but is not limited to, loans, loan loss reserves, interest rate reductions, proceeds of bonds issued by the authority, bond insurance, loan guarantees or other credit enhancements or liquidity facilities, contributions of money, or a combination thereof, as determined by, and approved by the resolution of, the board.
(7)(A)Participating party means a person, federal or state agency, department, board, authority, or commission, state or community college, or university, or a city or county, regional agency, public district, school district, or other political entity engaged in the business or operations in the state, whether organized for profit or not for profit, that applies for financial assistance from the authority for the purpose of implementing a project.
(B)(i)For purposes of Section 6010.8 of the Revenue and Taxation Code, participating party means an entity specified in subparagraph (A) that seeks financial assistance pursuant to Section 26011.8.
(ii)For purposes of Section 6010.8 of the Revenue and Taxation Code, an entity located outside of the state, including an entity located overseas, is considered to be a participating party and is eligible to apply for financial assistance pursuant to Section 26011.8 if the participating party commits to, and demonstrates that, the party will be opening a manufacturing facility in the state.
(iii)It is the intent of the Legislature by adding clause (ii) to clarify existing law and ensure that an out-of-state entity or overseas entity is eligible to apply for financial assistance pursuant to Section 26011.8.
(8)(A)Project means a land, building, improvement to the land or building, rehabilitation, work, property, or structure, real or personal, stationary or mobile, including, but not limited to, machinery and equipment utilized in the state, whether or not in existence or under construction, that utilizes, or is designed to utilize, an alternative source, or that is utilized for the design, technology transfer, manufacture, production, assembly, distribution, or service of advanced transportation technologies or alternative source components.
(B)Project, for purposes of Section 26011.8 and Section 6010.8 of the Revenue and Taxation Code, means tangible personal property that is utilized in the state for the design, manufacture, production, or assembly of advanced manufacturing, advanced transportation technologies, or alternative source products, components, or systems. is defined in Section 26011.8.
(9)Revenue means all rents, receipts, purchase payments, loan repayments, and all other income or receipts derived by the authority from a project, or the sale, lease, or other disposition of alternative source or advanced transportation technology facilities, or the making of loans to finance alternative source or advanced transportation technology facilities, and any income or revenue derived from the investment of money in any fund or account of the authority.
(b)This section shall become inoperative on July 1, 2016, and, as of January 1, 2017, remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that becomes operative on or is enacted before January 1, 2017, 2021, deletes or extends the dates on which it becomes inoperative and is repealed. that date.
SEC. 2.Section 26003 of the Public Resources Code, as amended by Section 2 of Chapter 540 of the Statutes of 2013, is amended to read:26003.(a)As used in this division, unless the context otherwise requires:
(1)(A)Advanced transportation technologies means emerging commercially competitive transportation-related technologies identified by the authority as capable of creating long-term, high value-added jobs for Californians while enhancing the states commitment to energy conservation, pollution and greenhouse gas emissions reduction, and transportation efficiency.
(B)Advanced transportation technologies does not include those projects required to be undertaken pursuant to state or federal law or regulations, air district rules or regulations, memoranda of understanding with a governmental entity, or legally binding agreements or documents. The State Air Resources Board shall advise the authority regarding projects that are excluded pursuant to this subparagraph.
(2)(A)Alternative sources means devices or technologies used for a renewable electrical generation facility, as defined in paragraph (1) of subdivision (a) of Section 25741, a combined heat and power system, as defined in Section 2840.2 of the Public Utilities Code, distributed generation and energy storage technologies eligible under the self-generation incentive program pursuant to Section 379.6 of the Public Utilities Code, as determined by the Public Utilities Commission, or a facility designed for the production of renewable fuels, the efficient use of which reduce the use of fossil or nuclear fuels, and energy efficiency devices or technologies that reduce the need for new electric generation and reduce emissions of toxic and criteria pollutants and greenhouse gases.
(B)Alternative sources does not include a hydroelectric facility that does not meet state laws pertaining to the control, appropriation, use, and distribution of water, including, but not limited to, the obtaining of applicable licenses and permits.
(3)Authority means the California Alternative Energy and Advanced Transportation Financing Authority established pursuant to Section 26004, and any board, commission, department, or officer succeeding to the functions of the authority, or to which the powers conferred upon the authority by this division shall be given.
(4)Cost as applied to a project or portion of the project financed under this division means all or part of the cost of construction and acquisition of all lands, structures, real or personal property or an interest in the real or personal property, rights, rights-of-way, franchises, easements, and interests acquired or used for a project; the cost of demolishing or removing any buildings or structures on land so acquired, including the cost of acquiring any lands to which those buildings or structures may be moved; the cost of all machinery, equipment, and furnishings, financing charges, interest prior to, during, and for a period after, completion of construction as determined by the authority; provisions for working capital; reserves for principal and interest and for extensions, enlargements, additions, replacements, renovations, and improvements; the cost of architectural, engineering, financial, accounting, auditing and legal services, plans, specifications, estimates, administrative expenses, and other expenses necessary or incident incidental to determining the feasibility of constructing any project or incident incidental to the construction, acquisition, or financing of a project.
(5)Financial assistance includes, but is not limited to, loans, loan loss reserves, interest rate reductions, proceeds of bonds issued by the authority, bond insurance, loan guarantees or other credit enhancements or liquidity facilities, contributions of money, or a combination thereof, as determined by, and approved by the resolution of, the board.
(6)(A)Participating party means a person, federal or state agency, department, board, authority, or commission, state or community college, or university, or a city or county, regional agency, public district, school district, or other political entity engaged in the business or operations in the state, whether organized for profit or not for profit, that applies for financial assistance from the authority for the purpose of implementing a project.
(B)(i)For purposes of Section 6010.8 of the Revenue and Taxation Code, participating party means an entity specified in subparagraph (A) that seeks financial assistance pursuant to Section 26011.8.
(ii)For purposes of Section 6010.8 of the Revenue and Taxation Code, an entity located outside of the state, including an entity located overseas, is considered to be a participating party and is eligible to apply for financial assistance pursuant to Section 26011.8 if the participating party commits to, and demonstrates that, the party will be opening a manufacturing facility in the state.
(iii)It is the intent of the Legislature by adding clause (ii) to clarify existing law and ensure that an out-of-state entity or overseas entity is eligible to apply for financial assistance pursuant to Section 26011.8.
(7)(A)Project means a land, building, improvement to the land or building, rehabilitation, work, property, or structure, real or personal, stationary or mobile, including, but not limited to, machinery and equipment utilized in the state, whether or not in existence or under construction, that utilizes, or is designed to utilize, an alternative source, or that is utilized for the design, technology transfer, manufacture, production, assembly, distribution, or service of advanced transportation technologies or alternative source components.
(B)Project, for purposes of Section 26011.8 and Section 6010.8 of the Revenue and Taxation Code, means tangible personal property that is utilized in the state for the design, manufacture, production, or assembly of advanced transportation technologies or alternative source products, components, or systems.
(8)Revenue means all rents, receipts, purchase payments, loan repayments, and all other income or receipts derived by the authority from a project, or the sale, lease, or other disposition of alternative source or advanced transportation technology facilities, or the making of loans to finance alternative source or advanced transportation technology facilities, and any income or revenue derived from the investment of money in any fund or account of the authority.
(b)This section shall become operative on January 1, 2021.
SEC. 2.5.Section 26003 of the Public Resources Code, as amended by Section 2 of Chapter 540 of the Statutes of 2013, is amended to read:26003.(a)As used in this division, unless the context otherwise requires:
(1)(A) Advanced transportation technologies means emerging commercially competitive transportation-related technologies identified by the authority as capable of creating long-term, high value-added jobs for Californians while enhancing the states commitment to energy conservation, pollution and greenhouse gas emissions reduction, and transportation efficiency.
(B)Advanced transportation technologies does not include those projects required to be undertaken pursuant to state or federal law or regulations, air district rules or regulations, memoranda of understanding with a governmental entity, or legally binding agreements or documents. The State Air Resources Board shall advise the authority regarding projects that are excluded pursuant to this subparagraph.
(2)(A)Alternative sources means devices or technologies used for a renewable electrical generation facility, as defined in paragraph (1) of subdivision (a) of Section 25741, a combined heat and power system, as defined in Section 2840.2 of the Public Utilities Code, distributed generation and energy storage technologies eligible under the self-generation incentive program pursuant to Section 379.6 of the Public Utilities Code, as determined by the Public Utilities Commission, or a facility designed for the production of renewable fuels, the efficient use of which reduce the use of fossil or nuclear fuels, and energy efficiency devices or technologies that reduce the need for new electric generation and reduce emissions of toxic and criteria pollutants and greenhouse gases.
(B)Alternative sources does not include a hydroelectric facility that does not meet state laws pertaining to the control, appropriation, use, and distribution of water, including, but not limited to, the obtaining of applicable licenses and permits.
(3)Authority means the California Alternative Energy and Advanced Transportation Financing Authority established pursuant to Section 26004, and any board, commission, department, or officer succeeding to the functions of the authority, or to which the powers conferred upon the authority by this division shall be given.
(4)Cost as applied to a project or portion of the project financed under this division means all or part of the cost of construction and acquisition of all lands, structures, real or personal property or an interest in the real or personal property, rights, rights-of-way, franchises, easements, and interests acquired or used for a project; the cost of demolishing or removing any buildings or structures on land so acquired, including the cost of acquiring any lands to which those buildings or structures may be moved; the cost of all machinery, equipment, and furnishings, financing charges, interest prior to, during, and for a period after, completion of construction as determined by the authority; provisions for working capital; reserves for principal and interest and for extensions, enlargements, additions, replacements, renovations, and improvements; the cost of architectural, engineering, financial, accounting, auditing and legal services, plans, specifications, estimates, administrative expenses, and other expenses necessary or incident incidental to determining the feasibility of constructing any project or incident incidental to the construction, acquisition, or financing of a project.
(5)Financial assistance includes, but is not limited to, loans, loan loss reserves, interest rate reductions, proceeds of bonds issued by the authority, bond insurance, loan guarantees or other credit enhancements or liquidity facilities, contributions of money, or a combination thereof, as determined by, and approved by the resolution of, the board.
(6)(A)Participating party means a person, federal or state agency, department, board, authority, or commission, state or community college, or university, or a city or county, regional agency, public district, school district, or other political entity engaged in the business or operations in the state, whether organized for profit or not for profit, that applies for financial assistance from the authority for the purpose of implementing a project.
(B)(i)For purposes of Section 6010.8 of the Revenue and Taxation Code, participating party means an entity specified in subparagraph (A) that seeks financial assistance pursuant to Section 26011.8.
(ii)For purposes of Section 6010.8 of the Revenue and Taxation Code, an entity located outside of the state, including an entity located overseas, is considered to be a participating party and is eligible to apply for financial assistance pursuant to Section 26011.8 if the participating party commits to, and demonstrates that, the party will be opening a manufacturing facility in the state.
(iii)It is the intent of the Legislature by adding clause (ii) to clarify existing law and ensure that an out-of-state entity or overseas entity is eligible to apply for financial assistance pursuant to Section 26011.8.
(7)(A)Project means a land, building, improvement to the land or building, rehabilitation, work, property, or structure, real or personal, stationary or mobile, including, but not limited to, machinery and equipment utilized in the state, whether or not in existence or under construction, that utilizes, or is designed to utilize, an alternative source, or that is utilized for the design, technology transfer, manufacture, production, assembly, distribution, or service of advanced transportation technologies or alternative source components.
(B)Project, for purposes of Section 26011.8 and Section 6010.8 of the Revenue and Taxation Code, means tangible personal property that is utilized in the state for the design, manufacture, production, or assembly of advanced transportation technologies or alternative source products, components, or systems. is defined in Section 26011.8.
(8)Revenue means all rents, receipts, purchase payments, loan repayments, and all other income or receipts derived by the authority from a project, or the sale, lease, or other disposition of alternative source or advanced transportation technology facilities, or the making of loans to finance alternative source or advanced transportation technology facilities, and any income or revenue derived from the investment of money in any fund or account of the authority.
(b)This section shall become operative on July January 1, 2016. 2021.
SEC. 3.Section 26011.8 of the Public Resources Code, as amended by Section 3 of Chapter 540 of the Statutes of 2013, is amended to read:26011.8.(a)The purpose of this section is to promote the creation of California-based manufacturing, California-based jobs, advanced manufacturing, the reduction of greenhouse gases, or reductions in air and water pollution or energy consumption. In furtherance of this purpose, the authority may approve a project for financial assistance in the form of the sales and use tax exclusion established in Section 6010.8 of the Revenue and Taxation Code.
(b)For purposes of this section, project means a project as defined in subparagraph (B) of paragraph (8) of subdivision (a) of Section 26003.
(c)The authority shall publish notice of the availability of project applications and deadlines for submission of project applications to the authority.
(d)The authority shall evaluate project applications based upon all of the following criteria:
(1)The extent to which the project develops manufacturing facilities, or purchases equipment for manufacturing facilities, located in California.
(2)The extent to which the anticipated benefit to the state from the project equals or exceeds the projected benefit to the participating party from the sales and use tax exclusion.
(3)The extent to which the project will create new, permanent jobs in California.
(4)To the extent feasible, the extent to which the project, or the product produced by the project, results in a reduction of greenhouse gases, a reduction in air or water pollution, an increase in energy efficiency, or a reduction in energy consumption, beyond what is required by federal or state law or regulation.
(5)The extent of unemployment in the area in which the project is proposed to be located.
(6)Any other factors the authority deems appropriate in accordance with this section.
(e)At a duly noticed public hearing, the authority shall approve, by resolution, project applications for financial assistance.
(f)Notwithstanding subdivision (j), and without regard to the actual date of any transaction between a participating party and the authority, any project approved by the authority by resolution for the sales and use tax exclusion pursuant to Section 6010.8 of the Revenue and Taxation Code before March 24, 2010, shall not be subject to this section.
(g)The Legislative Analysts Office shall report to the Joint Legislative Budget Committee on the effectiveness of this program, on or before January 1, 2019, by evaluating factors, including, but not limited to, the following:
(1)The number of jobs created by the program in California.
(2)The number of businesses that have remained in California or relocated to California as a result of this program.
(3)The amount of state and local revenue and economic activity generated by the program.
(4)The types of advanced manufacturing, as defined in paragraph (1) of subdivision (a) of Section 26003, utilized.
(5)The amount of reduction in greenhouse gases, air pollution, water pollution, or energy consumption.
(h)The exclusions granted pursuant to Section 6010.8 of the Revenue and Taxation Code for projects approved by the authority pursuant to this section shall not exceed one hundred million dollars ($100,000,000) for each calendar year.
(i)(1)The authority shall study the efficacy and cost benefit of the sales and use tax exemption as it relates to advanced manufacturing projects. The study shall include the number of jobs created, the costs of each job, and the annual salary of each job. The study shall also consider a dynamic analysis of the economic output to the state that would occur without the sales and use tax exemption. Before January 1, 2017, the authority shall submit to the Legislature, consistent with Section 9795 of the Government Code, the result of the study.
(2)Before January 1, 2015, the authority shall, consistent with Section 9795 of the Government Code, submit to the Legislature an interim report on the efficacy of the program conducted pursuant to this section. The study shall include recommendations on program changes that would increase the programs efficacy in creating permanent and temporary jobs, and whether eligibility for the program should be extended or narrowed to other manufacturing types. The authority may work with the Legislative Analysts Office in preparing the report and its recommendations.
(j)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that becomes operative on or before January 1, 2021, deletes or extends that date. The sale or purchase of tangible personal property of a project approved before January 1, 2021, shall continue to be excluded from sales and use taxes pursuant to Section 6010.8 of the Revenue and Taxation Code for the period of time set forth in the authoritys resolution approving the project pursuant to this section.
SEC. 3.5.Section 26011.8 of the Public Resources Code, as amended by Section 3 of Chapter 540 of the Statutes of 2013, is amended to read:26011.8.(a)The purpose of this section is to promote the creation of California-based manufacturing, California-based jobs, advanced manufacturing, the reduction of greenhouse gases, or reductions in air and water pollution or energy consumption. In furtherance of this purpose, the authority may approve a project for financial assistance in the form of the sales and use tax exclusion established in Section 6010.8 of the Revenue and Taxation Code.
(b)For purposes of this section, the following terms have the following meanings:
(b)For purposes of this section, project means a project
(1)Project means tangible personal property if at least 50 percent of its use is either to process recycled feedstock that is intended to be reused in the production of another product or using recycled feedstock in the production of another product or soil amendment, or tangible personal property that is used in the state for the design, manufacture, production, or assembly of advanced manufacturing, advanced transportation technologies, or alternative source products, components, or systems, as defined in subparagraph (B) of paragraph (8) of subdivision (a) of Section 26003. Project does not include tangible personal property that processes or uses recycled feedstock in a manner that would constitute disposal as defined in subdivision (b) of Section 40192.
(2)Recycled feedstock means materials that would otherwise be destined for disposal, having completed their intended end use and product lifecycle.
(3)Soil amendments may include compost, as defined in Section 14525 of the Food and Agricultural Code, fertilizing material, as defined in Section 14533 of the Food and Agricultural Code, gypsum or phosphatic sulfate gypsum, as those terms are defined in Section 14537 of the Food and Agricultural Code, or a substance distributed for the purpose of promoting plant growth or improving the quality of crops by conditioning soils through physical means.
(c)The authority shall publish notice of the availability of project applications and deadlines for submission of project applications to the authority.
(d)The authority shall evaluate project applications based upon all of the following criteria:
(1)The extent to which the project develops manufacturing facilities, or purchases equipment for manufacturing facilities, located in California.
(2)The extent to which the anticipated benefit to the state from the project equals or exceeds the projected benefit to the participating party from the sales and use tax exclusion.
(3)The extent to which the project will create new, permanent jobs in California.
(4)To the extent feasible, the extent to which the project, or the product produced by the project, results in a reduction of greenhouse gases, a reduction in air or water pollution, an increase in energy efficiency, or a reduction in energy consumption, beyond what is required by federal or state law or regulation.
(5)The extent of unemployment in the area in which the project is proposed to be located.
(6)Any other factors the authority deems appropriate in accordance with this section.
(e)At a duly noticed public hearing, the authority shall approve, by resolution, project applications for financial assistance.
(f)Notwithstanding subdivision (j), and without regard to the actual date of any transaction between a participating party and the authority, any project approved by the authority by resolution for the sales and use tax exclusion pursuant to Section 6010.8 of the Revenue and Taxation Code before March 24, 2010, shall not be subject to this section.
(g)The Legislative Analysts Office shall report to the Joint Legislative Budget Committee on the effectiveness of this program, on or before January 1, 2019, by evaluating factors, including, but not limited to, the following:
(1)The number of jobs created by the program in California.
(2)The number of businesses that have remained in California or relocated to California as a result of this program.
(3)The amount of state and local revenue and economic activity generated by the program.
(4)The types of advanced manufacturing, as defined in paragraph (1) of subdivision (a) of Section 26003, utilized.
(5)The amount of reduction in greenhouse gases, air pollution, water pollution, or energy consumption.
(h)The exclusions granted pursuant to Section 6010.8 of the Revenue and Taxation Code for projects approved by the authority pursuant to this section shall not exceed one hundred million dollars ($100,000,000) for each calendar year.
(i)(1)The authority shall study the efficacy and cost benefit of the sales and use tax exemption as it relates to advanced manufacturing projects. The study shall include the number of jobs created, the costs of each job, and the annual salary of each job. The study shall also consider a dynamic analysis of the economic output to the state that would occur without the sales and use tax exemption. Before January 1, 2017, the authority shall submit to the Legislature, consistent with Section 9795 of the Government Code, the result of the study.
(2)Before January 1, 2015, the authority shall, consistent with Section 9795 of the Government Code, submit to the Legislature an interim report on the efficacy of the program conducted pursuant to this section. The study shall include recommendations on program changes that would increase the programs efficacy in creating permanent and temporary jobs, and whether eligibility for the program should be extended or narrowed to other manufacturing types. The authority may work with the Legislative Analysts Office in preparing the report and its recommendations.
(j)(1)Except as provided in paragraph (2), this section shall become inoperative on July 1, 2016, and, as of January 1, 2017, This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that becomes operative on or before January 1, 2017, 2021, deletes or extends the dates on which it becomes inoperative and is repealed. that date. The sale or purchase of tangible personal property of a project approved before June 30, 2016, January 1, 2021, shall continue to be excluded from sales and use taxes pursuant to Section 6010.8 of the Revenue and Taxation Code for the period of time set forth in the authoritys resolution approving the project pursuant to this section.
(2)Notwithstanding paragraph (1), the authoritys obligation to submit to the Legislature a report pursuant to paragraph (2) of subdivision (i) shall remain operative until the submission of the report.
SEC. 4.Section 26011.8 of the Public Resources Code, as amended by Section 4 of Chapter 540 of the Statutes of 2013, is repealed.SEC. 5.Section 6010.8 of the Revenue and Taxation Code, as amended by Section 35 of Chapter 677 of the Statutes of 2012, is amended to read:6010.8.(a)Sale and purchase do not include any lease or transfer of title of tangible personal property constituting any project to any participating party. As used in this section, project has the meaning specified in subparagraph (B) of paragraph (8) of subdivision (a) of Section 26003 of the Public Resources Code and participating party has the meaning specified in subparagraph (B) of paragraph (7) of subdivision (a) of Section 26003 of the Public Resources Code.
(b)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 6.Section 6010.8 of the Revenue and Taxation Code, as added by Section 36 of Chapter 677 of the Statutes of 2012, is amended to read:6010.8.(a)Sale and purchase do not include any lease or transfer of title of tangible personal property constituting any project to any participating party. As used in this section, project has the meaning specified in subparagraph (B) of paragraph (7) of subdivision (a) of Section 26003 of the Public Resources Code and participating party has the meaning specified in subparagraph (B) of paragraph (6) of subdivision (a) of Section 26003 of the Public Resources Code.
(b)This section shall become operative on January 1, 2021.
SEC. 7.Section 1.5 of this bill incorporates amendments to Section 26003 of the Public Resources Code, as amended by Section 1 of Chapter 540 of the Statutes of 2013, proposed by this bill and Assembly Bill 199. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2016, (2) each bill amends Section 26003 of the Public Resources Code, as amended by Section 1 of Chapter 540 of the Statutes of 2013, and (3) this bill is enacted after Assembly Bill 199, in which case Section 26003 of the Public Resources Code, as amended by Section 1 of Chapter 540 of the Statutes of 2013, as amended by Assembly Bill 199, shall remain operative only until the operative date of this bill, at which time Section 1.5 of this bill shall become operative, and Section 1 of this bill shall not become operative.
SEC. 8.Section 2.5 of this bill incorporates amendments to Section 26003 of the Public Resources Code, as amended by Section 2 of Chapter 540 of the Statutes of 2013, proposed by this bill and Assembly Bill 199. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2016, (2) each bill amends Section 26003 of the Public Resources Code, as amended by Section 2 of Chapter 540 of the Statutes of 2013, and (3) this bill is enacted after Assembly Bill 199, in which case Section 26003 of the Public Resources Code, as amended by Section 2 of Chapter 540 of the Statutes of 2013, as amended by Assembly Bill 199, shall remain operative only until the operative date of this bill, at which time Section 2.5 of this bill shall become operative, and Section 2 of this bill shall not become operative.
SEC. 9.Section 3.5 of this bill incorporates amendments to Section 26011.8 of the Public Resources Code, as amended by Section 3 of Chapter 540 of the Statutes of 2013, proposed by this bill and Assembly Bill 199. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2016, (2) each bill amends Section 26011.8 of the Public Resources Code, as amended by Section 3 of Chapter 540 of the Statutes of 2013, and (3) this bill is enacted after Assembly Bill 199, in which case Section 26011.8 of the Public Resources Code, as amended by Section 3 of Chapter 540 of the Statutes of 2013, as amended by Assembly Bill 199, shall remain operative only until the operative date of this bill, at which time Section 3.5 of this bill shall become operative, and Section 3 of this bill shall not become operative.
(a)As used in this division, unless the context otherwise requires:
(1)(A)Advanced manufacturing means manufacturing processes that improve existing or create entirely new materials, products, and processes through the use of science, engineering, or information technologies, high-precision tools and methods, a high-performance workforce, and innovative business or organizational models utilizing any of the following technology areas:
(i)Microelectronics and nanoelectronics, including semiconductors.
(ii)Advanced materials.
(iii)Integrated computational materials engineering.
(iv)Nanotechnology.
(v)Additive manufacturing.
(vi)Industrial biotechnology.
(B)Advanced manufacturing includes any of the following:
(i)Systems that result from substantive advancement, whether incremental or breakthrough, beyond the current industry standard, in the production of materials and products. These advancements include improvements in manufacturing processes and systems that are often referred to as smart or intelligent manufacturing systems, which integrate computational predictability and operational efficiency.
(ii)(I)Sustainable manufacturing systems and manufacturing technologies that minimize the use of resources while maintaining or improving cost and performance.
(II)Sustainable manufacturing systems and manufacturing technologies do not include those required to be undertaken pursuant to state or federal law or regulations, air district rules or regulations, memoranda of understanding with a governmental entity, or legally binding agreements or documents. The State Air Resources Board shall advise the authority to ensure that the requirements of this clause are met.
(2)(A)Advanced transportation technologies means emerging commercially competitive transportation-related technologies identified by the authority as capable of creating long-term, high value-added jobs for Californians while enhancing the states commitment to energy conservation, pollution and greenhouse gas emissions reduction, and transportation efficiency.
(B)Advanced transportation technologies does not include those projects required to be undertaken pursuant to state or federal law or regulations, air district rules or regulations, memoranda of understanding with a governmental entity, or legally binding agreements or documents. The State Air Resources Board shall advise the authority regarding projects that are excluded pursuant to this subparagraph.
(3)(A)Alternative sources means devices or technologies used for a renewable electrical generation facility, as defined in paragraph (1) of subdivision (a) of Section 25741, a combined heat and power system, as defined in Section 2840.2 of the Public Utilities Code, distributed generation and energy storage technologies eligible under the self-generation incentive program pursuant to Section 379.6 of the Public Utilities Code, as determined by the Public Utilities Commission, or a facility designed for the production of renewable fuels, the efficient use of which reduce the use of fossil or nuclear fuels, and energy efficiency devices or technologies that reduce the need for new electric generation and reduce emissions of toxic and criteria pollutants and greenhouse gases.
(B)Alternative sources does not include a hydroelectric facility that does not meet state laws pertaining to the control, appropriation, use, and distribution of water, including, but not limited to, the obtaining of applicable licenses and permits.
(4)Authority means the California Alternative Energy and Advanced Transportation Financing Authority established pursuant to Section 26004, and any board, commission, department, or officer succeeding to the functions of the authority, or to which the powers conferred upon the authority by this division shall be given.
(5)Cost as applied to a project or portion of the project financed under this division means all or part of the cost of construction and acquisition of all lands, structures, real or personal property or an interest in the real or personal property, rights, rights-of-way, franchises, easements, and interests acquired or used for a project; the cost of demolishing or removing any buildings or structures on land so acquired, including the cost of acquiring any lands to which those buildings or structures may be moved; the cost of all machinery, equipment, and furnishings, financing charges, interest prior to, during, and for a period after, completion of construction as determined by the authority; provisions for working capital; reserves for principal and interest and for extensions, enlargements, additions, replacements, renovations, and improvements; the cost of architectural, engineering, financial, accounting, auditing and legal services, plans, specifications, estimates, administrative expenses, and other expenses necessary or incident to determining the feasibility of constructing any project or incident to the construction, acquisition, or financing of a project.
(6)Financial assistance includes, but is not limited to, loans, loan loss reserves, interest rate reductions, proceeds of bonds issued by the authority, bond insurance, loan guarantees or other credit enhancements or liquidity facilities, contributions of money, or a combination thereof, as determined by, and approved by the resolution of, the board.
(7)(A)Participating party means a person, federal or state agency, department, board, authority, or commission, state or community college, or university, or a city or county, regional agency, public district, school district, or other political entity engaged in the business or operations in the state, whether organized for profit or not for profit, that applies for financial assistance from the authority for the purpose of implementing a project.
(B)(i)For purposes of Section 6010.8 of the Revenue and Taxation Code, participating party means an entity specified in subparagraph (A) that seeks financial assistance pursuant to Section 26011.8.
(ii)For purposes of Section 6010.8 of the Revenue and Taxation Code, an entity located outside of the state, including an entity located overseas, is considered to be a participating party and is eligible to apply for financial assistance pursuant to Section 26011.8 if the participating party commits to, and demonstrates that, the party will be opening a manufacturing facility in the state.
(iii)It is the intent of the Legislature by adding clause (ii) to clarify existing law and ensure that an out-of-state entity or overseas entity is eligible to apply for financial assistance pursuant to Section 26011.8.
(8)(A)Project means a land, building, improvement to the land or building, rehabilitation, work, property, or structure, real or personal, stationary or mobile, including, but not limited to, machinery and equipment utilized in the state, whether or not in existence or under construction, that utilizes, or is designed to utilize, an alternative source, or that is utilized for the design, technology transfer, manufacture, production, assembly, distribution, or service of advanced transportation technologies or alternative source components.
(B)Project, for purposes of Section 26011.8 and Section 6010.8 of the Revenue and Taxation Code, means tangible personal property that is utilized in the state for the design, manufacture, production, or assembly of advanced manufacturing, advanced transportation technologies, or alternative source products, components, or systems.
(9)Revenue means all rents, receipts, purchase payments, loan repayments, and all other income or receipts derived by the authority from a project, or the sale, lease, or other disposition of alternative source or advanced transportation technology facilities, or the making of loans to finance alternative source or advanced transportation technology facilities, and any income or revenue derived from the investment of money in any fund or account of the authority.
(b)This section shall become inoperative on July 1, 2016, and, as of January 1, 2017, is repealed, unless a later enacted statute, that becomes operative on or before January 1, 2017, deletes or extends the dates on which it becomes inoperative and is repealed.
(b)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 2.Section 26003 of the Public Resources Code, as amended by Section 2 of Chapter 540 of the Statutes of 2013, is amended to read:26003.(a)As used in this division, unless the context otherwise requires:
(1)(A)Advanced transportation technologies means emerging commercially competitive transportation-related technologies identified by the authority as capable of creating long-term, high value-added jobs for Californians while enhancing the states commitment to energy conservation, pollution and greenhouse gas emissions reduction, and transportation efficiency.
(B)Advanced transportation technologies does not include those projects required to be undertaken pursuant to state or federal law or regulations, air district rules or regulations, memoranda of understanding with a governmental entity, or legally binding agreements or documents. The State Air Resources Board shall advise the authority regarding projects that are excluded pursuant to this subparagraph.
(2)(A)Alternative sources means devices or technologies used for a renewable electrical generation facility, as defined in paragraph (1) of subdivision (a) of Section 25741, a combined heat and power system, as defined in Section 2840.2 of the Public Utilities Code, distributed generation and energy storage technologies eligible under the self-generation incentive program pursuant to Section 379.6 of the Public Utilities Code, as determined by the Public Utilities Commission, or a facility designed for the production of renewable fuels, the efficient use of which reduce the use of fossil or nuclear fuels, and energy efficiency devices or technologies that reduce the need for new electric generation and reduce emissions of toxic and criteria pollutants and greenhouse gases.
(B)Alternative sources does not include a hydroelectric facility that does not meet state laws pertaining to the control, appropriation, use, and distribution of water, including, but not limited to, the obtaining of applicable licenses and permits.
(3)Authority means the California Alternative Energy and Advanced Transportation Financing Authority established pursuant to Section 26004, and any board, commission, department, or officer succeeding to the functions of the authority, or to which the powers conferred upon the authority by this division shall be given.
(4)Cost as applied to a project or portion of the project financed under this division means all or part of the cost of construction and acquisition of all lands, structures, real or personal property or an interest in the real or personal property, rights, rights-of-way, franchises, easements, and interests acquired or used for a project; the cost of demolishing or removing any buildings or structures on land so acquired, including the cost of acquiring any lands to which those buildings or structures may be moved; the cost of all machinery, equipment, and furnishings, financing charges, interest prior to, during, and for a period after, completion of construction as determined by the authority; provisions for working capital; reserves for principal and interest and for extensions, enlargements, additions, replacements, renovations, and improvements; the cost of architectural, engineering, financial, accounting, auditing and legal services, plans, specifications, estimates, administrative expenses, and other expenses necessary or incident to determining the feasibility of constructing any project or incident to the construction, acquisition, or financing of a project.
(5)Financial assistance includes, but is not limited to, loans, loan loss reserves, interest rate reductions, proceeds of bonds issued by the authority, bond insurance, loan guarantees or other credit enhancements or liquidity facilities, contributions of money, or a combination thereof, as determined by, and approved by the resolution of, the board.
(6)(A)Participating party means a person, federal or state agency, department, board, authority, or commission, state or community college, or university, or a city or county, regional agency, public district, school district, or other political entity engaged in the business or operations in the state, whether organized for profit or not for profit, that applies for financial assistance from the authority for the purpose of implementing a project.
(B)(i)For purposes of Section 6010.8 of the Revenue and Taxation Code, participating party means an entity specified in subparagraph (A) that seeks financial assistance pursuant to Section 26011.8.
(ii)For purposes of Section 6010.8 of the Revenue and Taxation Code, an entity located outside of the state, including an entity located overseas, is considered to be a participating party and is eligible to apply for financial assistance pursuant to Section 26011.8 if the participating party commits to, and demonstrates that, the party will be opening a manufacturing facility in the state.
(iii)It is the intent of the Legislature by adding clause (ii) to clarify existing law and ensure that an out-of-state entity or overseas entity is eligible to apply for financial assistance pursuant to Section 26011.8.
(7)(A)Project means a land, building, improvement to the land or building, rehabilitation, work, property, or structure, real or personal, stationary or mobile, including, but not limited to, machinery and equipment utilized in the state, whether or not in existence or under construction, that utilizes, or is designed to utilize, an alternative source, or that is utilized for the design, technology transfer, manufacture, production, assembly, distribution, or service of advanced transportation technologies or alternative source components.
(B)Project, for purposes of Section 26011.8 and Section 6010.8 of the Revenue and Taxation Code, means tangible personal property that is utilized in the state for the design, manufacture, production, or assembly of advanced transportation technologies or alternative source products, components, or systems.
(8)Revenue means all rents, receipts, purchase payments, loan repayments, and all other income or receipts derived by the authority from a project, or the sale, lease, or other disposition of alternative source or advanced transportation technology facilities, or the making of loans to finance alternative source or advanced transportation technology facilities, and any income or revenue derived from the investment of money in any fund or account of the authority.
(b)This section shall become operative on July 1, 2016. January 1, 2021.
SEC. 3.Section 26011.8 of the Public Resources Code, as amended by Section 3 of Chapter 540 of the Statutes of 2013, is amended to read:26011.8.(a)The purpose of this section is to promote the creation of California-based manufacturing, California-based jobs, advanced manufacturing, the reduction of greenhouse gases, or reductions in air and water pollution or energy consumption. In furtherance of this purpose, the authority may approve a project for financial assistance in the form of the sales and use tax exclusion established in Section 6010.8 of the Revenue and Taxation Code.
(b)For purposes of this section, project means a project as defined in subparagraph (B) of paragraph (8) of subdivision (a) of Section 26003.
(c)The authority shall publish notice of the availability of project applications and deadlines for submission of project applications to the authority.
(d)The authority shall evaluate project applications based upon all of the following criteria:
(1)The extent to which the project develops manufacturing facilities, or purchases equipment for manufacturing facilities, located in California.
(2)The extent to which the anticipated benefit to the state from the project equals or exceeds the projected benefit to the participating party from the sales and use tax exclusion.
(3)The extent to which the project will create new, permanent jobs in California.
(4)To the extent feasible, the extent to which the project, or the product produced by the project, results in a reduction of greenhouse gases, a reduction in air or water pollution, an increase in energy efficiency, or a reduction in energy consumption, beyond what is required by federal or state law or regulation.
(5)The extent of unemployment in the area in which the project is proposed to be located.
(6)Any other factors the authority deems appropriate in accordance with this section.
(e)At a duly noticed public hearing, the authority shall approve, by resolution, project applications for financial assistance.
(f)Notwithstanding subdivision (j), and without regard to the actual date of any transaction between a participating party and the authority, any project approved by the authority by resolution for the sales and use tax exclusion pursuant to Section 6010.8 of the Revenue and Taxation Code before March 24, 2010, shall not be subject to this section.
(g)The Legislative Analysts Office shall report to the Joint Legislative Budget Committee on the effectiveness of this program, on or before January 1, 2019, by evaluating factors, including, but not limited to, the following:
(1)The number of jobs created by the program in California.
(2)The number of businesses that have remained in California or relocated to California as a result of this program.
(3)The amount of state and local revenue and economic activity generated by the program.
(4)The types of advanced manufacturing, as defined in paragraph (1) of subdivision (a) of Section 26003, utilized.
(5)The amount of reduction in greenhouse gases, air pollution, water pollution, or energy consumption.
(h)The exclusions granted pursuant to Section 6010.8 of the Revenue and Taxation Code for projects approved by the authority pursuant to this section shall not exceed one hundred million dollars ($100,000,000) for each calendar year.
(i)(1)The authority shall study the efficacy and cost benefit of the sales and use tax exemption as it relates to advanced manufacturing projects. The study shall include the number of jobs created, the costs of each job, and the annual salary of each job. The study shall also consider a dynamic analysis of the economic output to the state that would occur without the sales and use tax exemption. Before January 1, 2017, the authority shall submit to the Legislature, consistent with Section 9795 of the Government Code, the result of the study.
(2)Before January 1, 2015, the authority shall, consistent with Section 9795 of the Government Code, submit to the Legislature an interim report on the efficacy of the program conducted pursuant to this section. The study shall include recommendations on program changes that would increase the programs efficacy in creating permanent and temporary jobs, and whether eligibility for the program should be extended or narrowed to other manufacturing types. The authority may work with the Legislative Analysts Office in preparing the report and its recommendations.
(j)(1)Except as provided in paragraph (2), this This section shall become inoperative on July 1, 2016, and, as of remain in effect only until January 1, 2017, 2021, and as of that date is repealed, unless a later enacted statute, that becomes operative on or before January 1, 2017, 2021, deletes or extends the dates on which it becomes inoperative and is repealed. that date. The sale or purchase of tangible personal property of a project approved before June 30, 2016, January 1, 2021, shall continue to be excluded from sales and use taxes pursuant to Section 6010.8 of the Revenue and Taxation Code for the period of time set forth in the authoritys resolution approving the project pursuant to this section.
(2)Notwithstanding paragraph (1), the authoritys obligation to submit to the Legislature a report pursuant to paragraph (2) of subdivision (i) shall remain operative until the submission of the report.
SEC. 4.Section 26011.8 of the Public Resources Code, as amended by Section 4 of Chapter 540 of the Statutes of 2013, is repealed.26011.8.(a)The purpose of this section is to promote the creation of California-based manufacturing, California-based jobs, the reduction of greenhouse gases, or reductions in air and water pollution or energy consumption. In furtherance of this purpose, the authority may approve a project for financial assistance in the form of the sales and use tax exclusion established in Section 6010.8 of the Revenue and Taxation Code.
(b)For purposes of this section, project means a project as defined in subparagraph (B) of paragraph (7) of subdivision (a) of Section 26003.
(c)The authority shall publish notice of the availability of project applications and deadlines for submission of project applications to the authority.
(d)The authority shall evaluate project applications based upon a net benefits test that includes all of the following criteria:
(1)The extent to which the project develops manufacturing facilities, or purchases equipment for manufacturing facilities, located in California.
(2)The extent to which the anticipated benefit to the state from the project equals or exceeds the projected benefit to the participating party from the sales and use tax exclusion.
(3)The extent to which the project will create new, permanent jobs in California.
(4)To the extent feasible, the extent to which the project, or the product produced by the project, results in a reduction of greenhouse gases, a reduction in air or water pollution, an increase in energy efficiency, or a reduction in energy consumption, beyond what is required by federal or state law or regulation.
(5)The extent of unemployment in the area in which the project is proposed to be located.
(6)Any other factors the authority deems appropriate in accordance with this section.
(e)At a duly noticed public hearing, the authority shall approve, by resolution, project applications for financial assistance.
(f)Notwithstanding subdivision (j), and without regard to the actual date of any transaction between a participating party and the authority, any project as defined in paragraph (7) of subdivision (a) of Section 26003 approved by the authority by resolution for the sales and use tax exclusion pursuant to Section 6010.8 of the Revenue and Taxation Code before March 24, 2010, shall not be subject to this section.
(g)The Legislative Analysts Office shall report to the Joint Legislative Budget Committee on the effectiveness of this program, on or before January 1, 2019, by evaluating factors, including, but not limited to, the following:
(1)The number of jobs created by the program in California.
(2)The number of businesses that have remained in California or relocated to California as a result of this program.
(3)The amount of state and local revenue and economic activity generated by the program.
(4)The amount of reduction in greenhouse gases, air pollution, water pollution, or energy consumption.
(h)The exclusions granted pursuant to Section 6010.8 of the Revenue and Taxation Code for projects approved by the authority pursuant to this section shall not exceed one hundred million dollars ($100,000,000) for each calendar year.
(i)The authority shall make every effort to expedite the operation of this section, and shall adopt regulations for purposes of implementing the section as emergency regulations in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. For purposes of that Chapter 3.5, including Section 11349.6 of the Government Code, the adoption of the regulations shall be considered by the Office of Administrative Law to be necessary for the immediate preservation of the public peace, health and safety, and general welfare.
(j)This section shall become operative on July 1, 2016, and shall remain in effect only until January 1, 2021, and as of that date is repealed. The sale or purchase of tangible personal property of a project approved before January 1, 2021, shall continue to be excluded from sales and use taxes pursuant to Section 6010.8 of the Revenue and Taxation Code for the period of time set forth in the authoritys resolution approving the project pursuant to this section.
SEC. 5.Section 6010.8 of the Revenue and Taxation Code, as amended by Section 35 of Chapter 677 of the Statutes of 2012, is amended to read:6010.8.(a)Sale and purchase do not include any lease or transfer of title of tangible personal property constituting any project to any participating party. As used in this section, project has the meaning specified in subparagraph (B) of paragraph (8) of subdivision (a) of Section 26003 of the Public Resources Code and participating party has the meaning specified in subparagraph (B) of paragraph (7) of subdivision (a) of Section 26003 of the Public Resources Code.
(b)This section shall become inoperative on July 1, 2016, and, as of January 1, 2017, is repealed, unless a later enacted statute, that becomes operative on or before January 1, 2017, deletes or extends the dates on which it becomes inoperative and is repealed.
(b)This section shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 6.Section 6010.8 of the Revenue and Taxation Code, as added by Section 36 of Chapter 677 of the Statutes of 2012, is amended to read:6010.8.(a)Sale and purchase do not include any lease or transfer of title of tangible personal property constituting any project to any participating party. As used in this section, project has the meaning specified in subparagraph (B) of paragraph (7) of subdivision (a) of Section 26003 of the Public Resources Code and participating party has the meaning specified in subparagraph (B) of paragraph (6) of subdivision (a) of Section 26003 of the Public Resources Code.
(b)This section shall become operative on July 1, 2016 January 1, 2021.
|
Date
|
Status
|
|---|---|
| Sep 10, 2015 | Read third time. Passed. Ordered to the Assembly. |
| Jun 29, 2015 | Withdrawn from committee. |
| Jul 15, 2015 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 5. Noes 0.) (July 15). Re-referred to Com. on APPR. |
| Aug 17, 2015 | In committee: Referred to APPR. suspense file. |
| Aug 27, 2015 | From committee: Do pass. (Ayes 6. Noes 0.) (August 27). |
| Aug 31, 2015 | Read second time. Ordered to third reading. |
| Sep 4, 2015 | Read third time and amended. Ordered to second reading. |
| Sep 8, 2015 | Read second time. Ordered to third reading. |
| Sep 10, 2015 | In Assembly. Concurrence in Senate amendments pending. |
| Jun 29, 2015 | Re-referred to Com. on GOV. & F. |
| Sep 10, 2015 | Read third time. Passed. Ordered to the Assembly. (Ayes 40. Noes 0. Page 2711.). |
| Sep 11, 2015 | Senate amendments concurred in. To Engrossing and Enrolling. |
| Sep 11, 2015 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 78. Noes 0. Page 3168.). |
| Sep 11, 2015 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 78. Noes 0.). |
| Sep 25, 2015 | Enrolled and presented to the Governor at 2 p.m. |
| Oct 11, 2015 | Approved by the Governor. |
| Oct 11, 2015 | Chaptered by Secretary of State - Chapter 788, Statutes of 2015. |
| Feb 27, 2015 | Introduced. To print. |
| Jun 29, 2015 | In committee: Hearing postponed by committee. |
| Jun 24, 2015 | In committee: Hearing postponed by committee. |
| Jun 11, 2015 | Referred to Coms. on E., U., & C. and GOV. & F. |
| Jun 1, 2015 | Read third time. Passed. Ordered to the Senate. (Ayes 80. Noes 0. Page 1726.) |
| Jun 1, 2015 | Read third time. Passed. Ordered to the Senate. |
| Jun 1, 2015 | In Senate. Read first time. To Com. on RLS. for assignment. |
| May 28, 2015 | Read second time. Ordered to third reading. |
| May 28, 2015 | From committee: Do pass. (Ayes 17. Noes 0.) (May 28). |
| May 6, 2015 | In committee: Set, first hearing. Referred to APPR. suspense file. |
| Apr 28, 2015 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 9. Noes 0.) (April 27). Re-referred to Com. on APPR. |
| Apr 27, 2015 | In committee: Set, first hearing. Referred to REV. & TAX. suspense file. |
| Apr 20, 2015 | In committee: Hearing postponed by committee. |
| Mar 23, 2015 | Referred to Com. on REV. & TAX. |
| Mar 2, 2015 | Read first time. |
| Mar 1, 2015 | From printer. May be heard in committee March 31. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Sep 11, 2015 | AB 1269 DABABNEH Concurrence in Senate Amendments | Assembly Floor |
Passed |
|
| Sep 10, 2015 | Assembly 3rd Reading AB1269 Dababneh By Beall | Senate Floor |
Passed |
|
| Aug 27, 2015 | Do pass | Senate Standing Committee on Appropriations |
Passed |
|
| Aug 17, 2015 | Placed on suspense file | Senate Standing Committee on Appropriations |
Passed |
|
| Jul 15, 2015 | Do pass, but first be re-referred to the Committee on [Appropriations] | Senate Standing Committee on Governance and Finance |
Passed |
|
| Jun 1, 2015 | AB 1269 DABABNEH Assembly Third Reading | Assembly Floor |
Passed |
|
| May 28, 2015 | Do pass. | Assembly Standing Committee on Appropriations |
Passed |
|
| Apr 27, 2015 | Do pass and be re-referred to the Committee on [Appropriations] | Assembly Standing Committee on Revenue and Taxation |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| California Manufacturers And Technology Association | ** Support | Sep 10, 2015 |
| Capstone | ** Support | Sep 10, 2015 |
| Large Scale Solar Association | ** Support | Sep 10, 2015 |
| State Treasurer John Chiang | ** Support | Sep 10, 2015 |
| Treasurer, State of California | ** Support | Jun 1, 2015 |
AB 1269
Page 3
CONCURRENCE IN SENATE AMENDMENTS
AB 1269
(Dababneh)
As Amended September 4, 2015
2/3 vote
ASSEMBLY: |
80-0 |
(June 1, 2015) |
SENATE: |
40-0 |
(September 10, 2015) |
Original Committee Reference: REV. & TAX.
SUMMARY: Extends the authority of the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) to grant financial assistance in the form of a sales and use tax (SUT) exclusion for projects that promote the use of advanced manufacturing until January 1, 2021.
The Senate amendments add chaptering out amendments for AB 199 (Eggman) of the current legislative session.
FISCAL EFFECT: According to the Senate Appropriations Committee:
Increased likelihood that up to $100 million from the General Fund will be lost through sales and use tax exemptions.
Unknown costs to the General Fund for CAEATFA’s administrative costs that are not recovered through application and administrative fees.
AS PASSED BY THE ASSEMBLY, this bill extended the authority of the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) to grant financial assistance in the form of a SUT exclusion for projects that promote the use of advanced manufacturing until January 1, 2021.
COMMENTS:
Author's Statement: The author states that "[t]he [sales and use tax exclusion] program for advanced manufacturing under CAEATFA is critical for attracting and retaining cutting edge high tech jobs and companies in California. To date the program has created an estimated 1,356 jobs and generated a net benefit to the state of $168,022,862. Extending the sunset date of this successful program will allow business to plan investments and help further grow the state’s high tech manufacturing industry."
CAEATFA Background: The California Alternative Energy Source Financing Authority was established in 1980 with an authorization of $200 million in revenue bonds to finance projects utilizing alternative or renewable energy sources, such as wind, solar, cogeneration and geothermal. In 1994, the authority was renamed "CAEATFA" and its charge was expanded to include the financing of "advanced transportation" technologies. During the energy crisis of 2001, CAEATFA's authority was expanded again to provide financial assistance to public power entities, independent generators, and others for new and renewable energy sources, and to develop clean distributed generation. The CAEATFA board consists of five members: the Treasurer, Controller, Director of Finance, Chairperson of the Energy Commission, and President of the Public Utilities Commission.
CAEATFA may provide financial assistance to approved projects via the issuance of bonds, loans, loan guarantees and credit enhancements. CAEATFA may authorize up to $1 billion in revenue or prepayment bonds to fund projects. Over the last few years, CAEATFA has provided financial assistance through various programs, including qualified energy conservation bonds for projects that promote the use of alternative energy and energy efficiency in state, local and tribal government facilities, as well as clean renewable energy bonds for renewable energy projects. In addition, with the passage of SB 71 (Padilla), Chapter 10, Statutes of 2010, CAEATFA is allowed to grant a SUT exemption to provide financial assistance for the purchase of equipment that is used for the design, manufacture, production, or assembly of "advanced transportation technologies" or "alternative source" products, components, or systems (SB 71 Program). Alternative source products include cogeneration technology, energy conservation, solar, biomass, wind, geothermal, specified hydro-electric, or any other energy efficient technologies that reduce the use of fossil and nuclear fuels. Alternative sources also include advanced electric distributive generation technology and energy storage technology. The SB 71 Program will sunset on January 1, 2021.
In 2012, SB 1128 (Padilla), Chapter 677, Statutes of 2012, expanded the SUT exclusion program to include advanced manufacturing projects. Under the SUT exclusion program, CAEATFA evaluates all applicants to determine whether the benefits received by the state will outweigh forgone SUT revenue. Specifically, the net benefits test established within the SUT exclusion program is primarily designed to evaluate the fiscal and environmental benefits of the project will produce for the state. According to CAEATFA's annual report, CAEATFA board began receiving applications for advanced manufacturing projects in October of 2013, and approved two advanced manufacturing projects as its December 2013 meeting.
Partial Sales and Use Tax Exemption: The passage of AB 93 (Budget Committee), Chapter 69, Statutes of 2013, and SB 90 (Galgiani), Chapter 70, Statutes of 2013, created California's first effort to grant a partial SUT exemption for taxpayers performing manufacturing or research and development in the state. The rationale for providing a SUT exemption on business inputs, even if partial, is to reduce the imposition of a tax on a tax, otherwise known as "pyramiding". The SUT is paid when a business is considered to be the final consumer of tangible item. The tax paid on tangible personal items is then incorporated into the cost of a consumer product, leading to double taxation. As noted by Joseph Henchman, "Ideally, a sales tax should be levied on all goods and services sold at retail, and to prevent distortions and hidden taxes, it should be levied only once on each good or service sold at retail." (Joseph Henchman, States Should Avoid Sales Taxes on Nonprofit Hospital Purchases, Tax Foundation, April 2008.) Ideally, taxes should only be levied once because pyramiding may cause consumers to favor goods and services that are provided by a single company instead of those that require multiple production steps. (Id.)
Differences: There are a few differences between CAEATFA’s SUT exclusion and the state's partial SUT exemption. The partial exemption rate is currently 4.1875%. The partial exemption provides that sales of the qualifying property sold to a qualified person be taxed at a rate of 3.3125% (7.50% current statewide tax rate – 4.1875% partial exemption) plus any applicable district taxes. Under CAEATFA, an approved project does not pay any SUT tax, including local and district taxes. Additionally, the state’s SUT exemption is much broader and more easily available. So long as a business meets all requirements, a qualifying manufacturer can receive a partial SUT exemption. CAEATFA, however, is a much lengthier process, requiring an application and approval process before the exclusion can apply. Furthermore, the programs appear to accomplish different goals. Both programs reduce the economic distortions related to taxing business inputs, but CAEATFA appears to also be concerned with encouraging projects that provide a greater return on investment for the state. As noted above, the anticipated project benefits, measured by the fiscal and environmental benefit to the state, must exceed the cost of forgone SUT. No such analysis is needed for the partial SUT exemption.
No Chance of Double Dipping: Assuming a manufacturer qualifies under both the state's partial SUT exemption and CAEATFA's SUT exclusion, the taxpayer can, at most, take the full exclusion from SUT, and only after successfully completing the application process. However, a qualifying manufacturer may take a partial SUT exemption on qualifying purchases if those purchases meet all requirements under the partial SUT exemption are not part of an approved project under CAEATFA.
Analysis Prepared by: Carlos Anguiano / REV. & TAX. / (916) 319-2098 FN: 0002357
AB 1269
Page 6
|
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 |
THIRD READING
Bill No: AB 1269
Amended: 9/4/15 in Senate
SENATE GOVERNANCE & FIN. COMMITTEE: 5-0, 7/15/15
AYES: Hertzberg, Beall, Hernandez, Moorlach, Pavley
NO VOTE RECORDED: Nguyen, Lara
SENATE APPROPRIATIONS COMMITTEE: 6-0, 8/27/15
AYES: Lara, Beall, Hill, Leyva, Mendoza, Nielsen
NO VOTE RECORDED: Bates
ASSEMBLY FLOOR: 80-0, 6/1/15 - See last page for vote
SOURCE: State Treasurer John Chiang
DIGEST: This bill extends the sunset on the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) advanced manufacturing program until January 1, 2021.
Senate
Floor Amendments of 9/4/15 enact provisions to resolve conflicts
with
AB 199 (Eggman).
Existing law:
Establishes in the Office of State Treasurer, the CAEATFA, which provides financing through conduit or revenue bonds, loan guarantees, loan loss reserves, and a state and local sales and use tax exemption for facilities that use alternative energy sources and technologies or engage in advanced manufacturing.
Creates CAEATFA’s board, composed of the State Treasurer, State Controller, Director of Finance, Chairperson of the Energy Commission, and President of the Public Utilities Commission.
Directs CAEATFA to administer a state and local sales and use tax exemption for manufacturers of renewable technology, subject to an application and evaluation process, and board approval, which sunsets on July 1, 2021 (SB 71, Padilla, Chapter 10, Statutes of 2010), and to administer a similar state and local sales and use tax for advanced manufacturing, which sunsets on July 1, 2016 (SB 1128, Padilla, Chapter 677, Statutes of 2012).
Allows CAEATFA to allocate exemptions to successful applicants under for programs up to $100 million annually; however, CAEATFA must evaluate all applicants to determine whether the net environmental and economic benefits received by the state will outweigh forgone sales and use tax revenue, and can only allocate exemptions to projects that demonstrate such a benefit.
Requires CAEATFA to study the efficacy and cost benefit of the program, including the number of jobs created, the costs of each job, as well as its annual salary, and consider a dynamic analysis of the economic output of the state without the exemption by January 1, 2017.
Requires CAEATFA to submit interim reports to the Legislature with specified contents by January 1, 2015.
This bill extends the sunset on the CAEATFA advanced manufacturing program until January 1, 2021, and enacts provisions resolving conflicts should both this bill and AB 199 (Eggman) be enacted.
Background
When the Legislature created CAEATFA in 1980, it provided that both the state and local shares of the sales and use tax didn’t apply to its purchases of tangible personal property. However, CAEATFA didn’t do much until 2008, when Governor Arnold Schwarzenegger and State Treasurer Bill Lockyer announced that CAEATFA would use this authority to grant sales and use tax exemption for normally taxable manufacturing equipment purchased by Tesla Motors under a sale-leaseback agreement. Soon after, the Legislature enacted SBs 71 and 1128. The Governor’s Budget proposes a total of $27.5 million for CAEATFA in 2014–15, funded primarily through transfers from the California Energy Commission.
In 2013, the Legislature enacted AB 93 (Committee on Budget, Chapter 69, Statutes of 2013), which reformed California’s economic development policies by eliminating enterprise zones and other geographically-targeted economic development areas, instead allowing three new tax benefits:
Tax credits for wages paid by taxpayers to qualified employees within former enterprise zones, and other areas that suffer from high levels of poverty and unemployment. The credit lasts from the 2014 taxable year until the 2019 taxable year.
The California Competes Tax Credit, where the California Competes Tax Credit Committee, also created by the bill, can award various tax credits up to an annually capped amount to taxpayers who apply. The Committee is comprised of the Treasurer, the Director of Finance, the Director of the Governor’s Office of Business and Economic Development (GO-BIZ), one appointee of the Speaker of the Assembly, and one appointee from the Senate Committee on Rules.
A state-only (4.1875%) sales and use tax exemption on purchases of manufacturing equipment made by taxpayers within specific North American Industrial Classification System codes, capped at $200 million annually per taxpayer, effective July 1, 2014, and ending July 1, 2022. The exemption largely superseded the SB 71 and SB 1128 programs, as they applied to almost all the same taxpayers. Instead of applying to CAEATFA, taxpayers simply print a resale certificate from the Board of Equalization’s website, and present it to the retailer to purchase the property sales-tax free.
Comments
Today’s CAEATFA advanced manufacturing applicants qualify for the general sales and use tax exemption, but apply to also obtain both the state and local exemption. To date, CAEATFA has approved 18 applications in the past year since AB 93 was effective, and considered applications from Las Gallinas Valley Sanitation District (Marin County), Hi Shear Corporation (Los Angeles County), Fisker Automotive (Riverside and Orange Counties), and Orbital ATK Defense Electronic Systems (Los Angeles County) at its July and August meetings.
SBs 71 and 1128 were the first state tax incentives for manufacturing in California since the Manufacturer’s Investment Credit expired in 2000. In these bills, the Legislature set forth an application process that required CAEATFA to only approve applications that demonstrated net environmental and economic effects in public meetings after a thorough due diligence review. However, the Legislature wanted to further expand manufacturing in the state by extending the sales and use tax exemption to include all manufacturing, and put its own money at risk by only exempting the state share of the sales tax. AB 93 trumps SB 1128 except to the extent successful CAEATFA applicants can obtain an exemption from the local share too. As such, extending AB 1269 will only come at the cost of local sales tax revenues.
In its report to the Legislature regarding both the SB 71 and 1128 programs, CAEATFA states that it’s approved 76 projects worth a total of $273 million of foregone revenue; however, only 63 applicants eventually purchased $43.3 million of equipment because many projects are built out over a course of years, and the revenue effect doesn’t occur until the applicant purchases the property. CAEATFA adds that most of the unspent allocation comes from a few, larger, more recent applicants, with only two comprising one-third of the unspent amount. Smaller projects of less than $1 million constitute the majority of granted applications and foregone revenue. CAEATFA projects net environmental benefits of $82 million, economic benefits of $299 million, with a fiscal cost of $244 million, for a total net benefit of $137 million realized over the expected useful life of the equipment, which is about five to 29 years. However, at the time of the report, only six projects had been approved as part of the advanced manufacturing program that AB 1269 seeks to extend. As part of the report, CAEATFA recommends extending the advanced manufacturing program to provide businesses with stability and a sufficient planning horizon, and removing the $100 million cap on the combined program as a signal to green businesses and investors that the exemption would be available for large projects choosing to locate in California.
The recently enacted Budget Act extended the repayment date on the $2.4 million loan from the Renewable Resources Trust Fund made to start the program in 2010-11to the 2018-19 fiscal year. In its Budget Change Proposal, CAEATFA stated that it had “erratic application volume and program activity” due to the economic recession, localized industry trends such as the disruption of the solar manufacturing market, and the enactment of the general sales and use tax exclusion, so revenue for the agency wasn’t sufficient to repay the loan. CAETFA collects .0005 of the total amount of anticipated qualified machinery in the application, not to exceed $10,000 per applicant, and .004 of the machinery purchases, not to exceed $350,000. CAETFA states that renewed outreach efforts will result in more applications, and therefore application fees, so it should be able to repay the loan by 2018-19. Without AB 1269, it’s unlikely CAEATFA will be able to repay the loan.
Related Legislation
AB 199 (Eggman) expands the CAEATFA sales and use tax exemption program to include projects that process or utilize recycled feedstock. The bill is currently in the Senate Rules Committee.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
According to the Senate Appropriations Committee, this bill will result in an increased likelihood that up to $100 million from the General Fund will be lost through sales and use tax exemptions.
State Treasurer John Chiang (source)
California Manufacturers and Technology Association
Capstone
Large Scale Solar Association
None received
ARGUMENTS IN SUPPORT: According to the author, “The sales and use tax exclusion program for advanced manufacturing under CAEATFA is critical for attracting and retaining cutting edge high tech companies and jobs in California. While AB 93 (2014) is providing a partial sales and use tax exemption at just over 4% for qualifying businesses, the CAETFA exclusion for all state and local taxes continues to provide added value for the state and companies by encouraging targeted high tech manufacturing projects with a high return on investment. To date the program has approved projects that will generate 3,535 jobs and create over $146 million in fiscal benefit for a cost of just over $77,000,000. Extending the sunset date of this successful program will allow business to plan investments and help further grow the state’s high tech manufacturing industry.”
ASSEMBLY FLOOR: 80-0, 6/1/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins
Prepared by: Colin Grinnell / GOV. & F. / (916) 651-4119
9/8/15 15:00:05
**** END ****
AB 1269
Page 5
|
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 |
THIRD READING
Bill No: AB 1269
Introduced: 2/27/15
SENATE GOVERNANCE & FIN. COMMITTEE: 5-0, 7/15/15
AYES: Hertzberg, Beall, Hernandez, Moorlach, Pavley
NO VOTE RECORDED: Nguyen, Lara
SENATE APPROPRIATIONS COMMITTEE: 6-0, 8/27/15
AYES: Lara, Beall, Hill, Leyva, Mendoza, Nielsen
NO VOTE RECORDED: Bates
ASSEMBLY FLOOR: 80-0, 6/1/15 - See last page for vote
SOURCE: State Treasurer John Chiang
DIGEST: This bill extends the sunset on the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) advanced manufacturing program until January 1, 2021.
Existing law:
Establishes in the Office of State Treasurer, the CAEATFA, which provides financing through conduit or revenue bonds, loan guarantees, loan loss reserves, and a state and local sales and use tax exemption for facilities that use alternative energy sources and technologies or engage in advanced manufacturing.
Creates CAEATFA’s board, composed of the State Treasurer, State Controller, Director of Finance, Chairperson of the Energy Commission, and President of the Public Utilities Commission.
Directs CAEATFA to administer a state and local sales and use tax exemption for manufacturers of renewable technology, subject to an application and evaluation process, and board approval, which sunsets on July 1, 2021 (SB 71, Padilla, Chapter 10, Statutes of 2010), and to administer a similar state and local sales and use tax for advanced manufacturing, which sunsets on July 1, 2016 (SB 1128, Padilla, Chapter 677, Statutes of 2012).
Allows CAEATFA to allocate exemptions to successful applicants under for programs up to $100 million annually; however, CAEATFA must evaluate all applicants to determine whether the net environmental and economic benefits received by the state will outweigh forgone sales and use tax revenue, and can only allocate exemptions to projects that demonstrate such a benefit.
Requires CAEATFA to study the efficacy and cost benefit of the program, including the number of jobs created, the costs of each job, as well as its annual salary, and consider a dynamic analysis of the economic output of the state without the exemption by January 1, 2017.
Requires CAEATFA to submit interim reports to the Legislature with specified contents by January 1, 2015.
This bill extends the sunset on the CAEATFA advanced manufacturing program until January 1, 2021.
Background
When the Legislature created CAEATFA in 1980, it provided that both the state and local shares of the sales and use tax didn’t apply to its purchases of tangible personal property. However, CAEATFA didn’t do much until 2008, when Governor Arnold Schwarzenegger and State Treasurer Bill Lockyer announced that CAEATFA would use this authority to grant sales and use tax exemption for normally taxable manufacturing equipment purchased by Tesla Motors under a sale-leaseback agreement. Soon after, the Legislature enacted SBs 71 and 1128. The Governor’s Budget proposes a total of $27.5 million for CAEATFA in 2014–15, funded primarily through transfers from the California Energy Commission.
In 2013, the Legislature enacted AB 93 (Committee on Budget, Chapter 69, Statutes of 2013), which reformed California’s economic development policies by eliminating enterprise zones and other geographically-targeted economic development areas, instead allowing three new tax benefits:
Tax credits for wages paid by taxpayers to qualified employees within former enterprise zones, and other areas that suffer from high levels of poverty and unemployment. The credit lasts from the 2014 taxable year until the 2019 taxable year.
The California Competes Tax Credit, where the California Competes Tax Credit Committee, also created by the bill, can award various tax credits up to an annually capped amount to taxpayers who apply. The Committee is comprised of the Treasurer, the Director of Finance, the Director of the Governor’s Office of Business and Economic Development (GO-BIZ), one appointee of the Speaker of the Assembly, and one appointee from the Senate Committee on Rules.
A state-only (4.1875%) sales and use tax exemption on purchases of manufacturing equipment made by taxpayers within specific North American Industrial Classification System codes, capped at $200 million annually per taxpayer, effective July 1, 2014, and ending July 1, 2022. The exemption largely superseded the SB 71 and SB 1128 programs, as they applied to almost all the same taxpayers. Instead of applying to CAEATFA, taxpayers simply print a resale certificate from the Board of Equalization’s website, and present it to the retailer to purchase the property sales-tax free.
Comments
Today’s CAEATFA advanced manufacturing applicants qualify for the general sales and use tax exemption, but apply to also obtain both the state and local exemption. To date, CAEATFA has approved 18 applications in the past year since AB 93 was effective, and considered applications from Las Gallinas Valley Sanitation District (Marin County), Hi Shear Corporation (Los Angeles County), Fisker Automotive (Riverside and Orange Counties), and Orbital ATK Defense Electronic Systems (Los Angeles County) at its July and August meetings.
SBs 71 and 1128 were the first state tax incentives for manufacturing in California since the Manufacturer’s Investment Credit expired in 2000. In these bills, the Legislature set forth an application process that required CAEATFA to only approve applications that demonstrated net environmental and economic effects in public meetings after a thorough due diligence review. However, the Legislature wanted to further expand manufacturing in the state by extending the sales and use tax exemption to include all manufacturing, and put its own money at risk by only exempting the state share of the sales tax. AB 93 trumps SB 1128 except to the extent successful CAEATFA applicants can obtain an exemption from the local share too. As such, extending AB 1269 will only come at the cost of local sales tax revenues.
In its report to the Legislature regarding both the SB 71 and 1128 programs, CAEATFA states that it’s approved 76 projects worth a total of $273 million of foregone revenue; however, only 63 applicants eventually purchased $43.3 million of equipment because many projects are built out over a course of years, and the revenue effect doesn’t occur until the applicant purchases the property. CAEATFA adds that most of the unspent allocation comes from a few, larger, more recent applicants, with only two comprising one-third of the unspent amount. Smaller projects of less than $1 million constitute the majority of granted applications and foregone revenue. CAEATFA projects net environmental benefits of $82 million, economic benefits of $299 million, with a fiscal cost of $244 million, for a total net benefit of $137 million realized over the expected useful life of the equipment, which is about five to 29 years. However, at the time of the report, only six projects had been approved as part of the advanced manufacturing program that AB 1269 seeks to extend. As part of the report, CAEATFA recommends extending the advanced manufacturing program to provide businesses with stability and a sufficient planning horizon, and removing the $100 million cap on the combined program as a signal to green businesses and investors that the exemption would be available for large projects choosing to locate in California.
The recently enacted Budget Act extended the repayment date on the $2.4 million loan from the Renewable Resources Trust Fund made to start the program in 2010-11to the 2018-19 fiscal year. In its Budget Change Proposal, CAEATFA stated that it had “erratic application volume and program activity” due to the economic recession, localized industry trends such as the disruption of the solar manufacturing market, and the enactment of the general sales and use tax exclusion, so revenue for the agency wasn’t sufficient to repay the loan. CAETFA collects .0005 of the total amount of anticipated qualified machinery in the application, not to exceed $10,000 per applicant, and .004 of the machinery purchases, not to exceed $350,000. CAETFA states that renewed outreach efforts will result in more applications, and therefore application fees, so it should be able to repay the loan by 2018-19. Without AB 1269, it’s unlikely CAEATFA will be able to repay the loan.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
According to the Senate Appropriations Committee, this bill will result in an increased likelihood that up to $100 million from the General Fund will be lost through sales and use tax exemptions.
State Treasurer John Chiang (source)
California Manufacturers and Technology Association
Capstone
Large Scale Solar Association
OPPOSITION: (Verified 8/28/15)
None received
ARGUMENTS IN SUPPORT: According to the author, “The sales and use tax exclusion program for advanced manufacturing under CAEATFA is critical for attracting and retaining cutting edge high tech companies and jobs in California. While AB 93 (2014) is providing a partial sales and use tax exemption at just over 4% for qualifying businesses, the CAETFA exclusion for all state and local taxes continues to provide added value for the state and companies by encouraging targeted high tech manufacturing projects with a high return on investment. To date the program has approved projects that will generate 3,535 jobs and create over $146 million in fiscal benefit for a cost of just over $77,000,000. Extending the sunset date of this successful program will allow business to plan investments and help further grow the state’s high tech manufacturing industry.”
ASSEMBLY FLOOR: 80-0, 6/1/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins
Prepared by: Colin Grinnell / GOV. & F. / (916) 651-4119
8/31/15 11:43:28
**** END ****
AB 1269 (Dababneh) Page 3 of 3
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 1269 (Dababneh) - Alternative energy.
|
|
Version: February 27, 2015 |
Policy Vote: GOV. & F. 5 - 0 |
Urgency: No |
Mandate: No |
Hearing Date: August 17, 2015 |
Consultant: Marie Liu |
This bill meets the criteria for referral to the Suspense File.
Bill Summary:
AB 1269 would extend the eligibility of advanced manufacturing projects to receive state and local sales and use tax exemptions by the California Alternative Energy and Advanced Transportation Financing Authority until January 1, 2021.
Fiscal Impact:
Increased likelihood that up to $100 million from the General Fund will be lost through sales and use tax exemptions.
Unknown costs to the General Fund for CAEATFA’s administrative costs that are not recovered through application and administrative fees.
Background:
The California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) was established in 1980 as a means to encourage the use of equipment using alternative or renewable energy sources. CAEATFA’s authority has since been expanded several times including to include the financing of advanced transportation technologies. Financial assistance can occur through the issuance of revenue bonds, loan guarantees, loan loss reserves, and insurance.
As a result of the passage of SB 71 (Padilla) Chapter 10, Statutes of 2010, CAEATFA was authorized to provide projects financial assistance in the form of a sales and use tax exemption on property (such as manufacturing equipment) used for the design, manufacture, production, or assembly of advanced transportation technologies or alternative energy products, components, or systems. The program was expanded in 2012 by SB 1128 (Padilla) Chapter 677, Statutes of 2012 to include advanced manufacturing projects. This program is referred to as the Sales and Use Tax Exclusion (STE) Program.
For all project types under the STE Program, existing law requires CAEATFA to evaluate project applications for eligibility based upon certain criteria that encourages manufacturing facilities and jobs located in California and the reduction of greenhouse gases beyond the reduction required by federal or state law or regulation. Projects must meet the “net benefits test” by showing that the new project will create jobs in the state. No more than $100 million in tax exemptions may be approved by CAEATFA in any calendar year.
CAEATFA’s authority to offer these tax exemptions for advanced manufacturing sunsets on July 1, 2016 while the entire STE Program sunsets on January 1, 2021.
Proposed Law:
This bill would extend the sunset on the CAEATFA advanced manufacturing program until January 1, 2021, thereby aligning the sunset date for all project types under the STE Program.
Staff Comments:
This bill will increase the odds that the maximum tax exemptions are issued: Since CAEATFA has been considering advanced manufacturing applications in December 2013 in the STE Program, it has approved $104 million in tax exemptions, with another $6.7 million in exemptions pending approval at the August and September 2015 CAEATFA board meetings. Advanced manufacturing projects have represented 64% of the approved projects in the STE program since December 2013. Since advanced manufacturing projects have represented a majority of project types under the STE Program, extending the eligibility for advanced manufacturing projects greatly increases the likelihood that the $100 million in tax exemptions will be reached each year.
Granting more tax exemptions may assist in the recovery of administrative costs: CAEATFA incurs administrative costs to administer the STE program. These costs are supposed to be covered by an application and administrative fee. However, historically the fee revenues have not been sufficient to cover the administrative costs. According to the Treasurer’s office, fee revenues have fallen short because the fee schedule was based on $100 million in award per year and that the majority of the applicants would move forward with their projects. However, the program has only reached its $100 million limit once and fewer awarded projects have moved forward than anticipated. CAEATFA staff is currently working with the Treasurer’s office to improve outreach and participation program. Since advanced manufacturing has been a major project type under the program, extending its eligibility might make it more likely that the CAEATFA recovers sufficient project applications to offset its administrative costs.
Staff notes that CAEATFA may have difficulties in increasing participation in the STE program, even if this bill does become law. Related to the 2013-14 approved budget, AB 93 (Committee on Budget) Chapter 69, Statutes of 2013 created a state-only sales and use tax exemption on purchases of manufacturing equipment for specific industries through 2022. Projects eligible for the STE program are generally also eligible for the AB 93 tax exemption, which is easier to obtain as there is no required net-benefits test. While the STE program offers the benefit of offering both a state and local tax exemption, the ease of obtaining an AB 93 tax exemption will likely make it difficult for CAEATFA to increase participation despite its increased outreach efforts, and thereby less likely to recover its administrative costs. Staff notes that there may be better ways for CAEATFA to recover its administrative costs than to rely on greater participation in the program.
Granting more tax exemptions may (ironically?) assist in the repayment of loans made to the program for startup costs: When the STE program was first enacted, CAEATFA received a $2.4 million loan to cover initial program development costs. CAEATFA’s ability to repay back this loan is dependent on participation in the program (i.e. there must be applicants on which a fee can be assessed) and the amount of the fee. To the extent that this bill increases participation in the program, this increased participation can help ensure the repayment of the loan. To date, no loan repayments have been made.
As part of this year’s budget, the Treasurer’s office received a three-year extension on the loan payments. Three annual payments of $804,000 are now due on June 30, 2017, 2018, and 2019. The BCP requesting the extension did not discuss the need to extent the advanced manufacturing portion of the program.
Tax exemptions are not necessarily offset by increased revenues to the state: As discussed above, the STE program only has authority to grant tax exemptions to projects that are estimated to have benefits to the state that equal or exceed the exemption. The advanced manufacturing projects approved to date are estimated to lead to over $196 million in fiscal benefits over the lifespan of the programs. Should this estimation be correct, the short term General Fund costs will more than be offset by increased revenues. However, as noted by the Treasurer’s office, the nascent nature of many of the new technologies means that not all approved projects move forward or last as long as hoped. In these cases, it is possible that the fiscal benefits of the program are not fully realized and therefore may not fully offset lost tax revenues. A hearing held by the Committees on Governance and Finance and Energy, Utilities, and Communication on October 11, 2011 found that the program had not yet resulted in net economic benefits. Though there have been program changes, including changes to the net-benefits text since that hearing.
This bill creates a Proposition 26 tax: Because the participation of advanced manufacturing projects in the STE program can prevent the participation of other project types under the STE program should the program become oversubscribed, Legislative Counsel has determined that the measure can increase a tax on a taxpayer for the purposes of Section three of Article XIIIA of the California Constitution. As such, this measure requires a 2/3 vote.
-- END --
AB 1269 (Dababneh) 2/27/15 Page 4 of 4
SENATE COMMITTEE ON GOVERNANCE AND FINANCE
Senator Robert M. Hertzberg, Chair
2015 - 2016 Regular
Bill No: |
AB 1269 |
Hearing Date: |
7/15/15 |
Author: |
Dababneh |
Tax Levy: |
No |
Version: |
2/27/15 |
Fiscal: |
Yes |
Consultant: |
Grinnell |
||
Alternative energy
Extends the sunset on the CAEATFA advanced manufacturing program until January 1, 2021.
Background and Existing Law
Housed in the office of the State Treasurer, the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) provides financing through conduit or revenue bonds, loan guarantees, loan loss reserves and a sales and use tax exemption for facilities that use alternative energy sources and technologies or engage in advanced manufacturing. CAEATFA’s board, composed of the Treasurer, Controller, Director of Finance, Chairperson of the Energy Commission, and President of the Public Utilities Commission, decides which projects to assist. The Governor’s budget proposes a total of $27.5 million for CAEATFA in 2014–15, funded primarily through transfers from the California Energy Commission. In addition to its sales and use tax program, CAEATFA administers other programs, including:
A $10 million loan loss reserve program that directs the state to reimburse the original mortgage lender for the costs associated with the Property Assessed Clean Energy program assessments during a foreclosure (SB 96, Committee on Budget and Fiscal Review, 2013).
A $25 million loan loss reserve program to backstop loans made by participating financial institutions for energy efficiency improvements and distributed generation technology (ABx1 14, Skinner, 2011).
When the Legislature created CAEATFA in 1980, it provided that both the state and local shares of the sales and use tax didn’t apply to its purchases of tangible personal property. However, CAEATFA didn’t do much until 2008, when Governor Arnold Schwarzenegger and State Treasurer Bill Lockyer announced that CAEATFA would use this authority to grant sales and use tax exemption for normally taxable manufacturing equipment purchased by Tesla Motors under a sale-leaseback agreement. Subsequently, the Legislature directed CAEATFA to administer sales and use tax exemptions for manufacturers of renewable technology, subject to an application and evaluation process (SB 71, Padilla, 2010), which was soon after expanded to advanced manufacturing (SB 1128, Padilla, 2012).
CAEATFA can allocate exemptions up to $100 million annually to successful applicants; however, CAEATFA evaluates all applicants to determine whether the benefits received by the state will outweigh forgone SUT revenue, and can only allocate exemptions to projects that produce net fiscal and environmental benefits for the state. SB 1128 required CAEATFA to study the efficacy and cost benefit of the program, including the number of jobs created, the costs of each job, as well as its annual salary, and consider a dynamic analysis of the economic output of the state without the exemption by January 1, 2017. The measure also required CAEATFA to submit interim reports to the Legislature with specified contents by January 1, 2015.
In 2013, the Legislature enacted AB 93 (Committee on Budget) and SB 90 (Committee on Budget and Fiscal Review), measures which reformed California’s economic development policies by eliminating enterprise zones and other geographically-targeted economic development areas, instead allowing three new tax benefits:
Tax credits for wages paid by taxpayers to qualified employees within former enterprise zones, and other areas that suffer from high levels of poverty and unemployment. The credit lasts from the 2014 taxable year until the 2019 taxable year.
The California Competes Tax Credit, where the California Competes Tax Credit Committee, also created by the bill, can award various tax credits up to an annually capped amount to taxpayers who apply. The Committee is comprised of the Treasurer, the Director of Finance, the Director of the Governor’s Office of Business and Economic Development (GO-BIZ), one appointee of the Speaker of the Assembly, and one appointee from the Senate Committee on Rules.
A state-only (4.1875%) sales and use tax exemption on purchases of manufacturing equipment made by taxpayers within specific North American Industrial Classification System codes, capped at $200 million annually per taxpayer, effective July 1, 2014, and ending July 1, 2022. The exemption largely superseded the SB 71 and SB 1186 programs, as they applied to almost all the same taxpayers. Instead of applying to CAEATFA, taxpayers simply print a resale certificate from BOE’s website, and present it to the retailer to purchase the property sales-tax free.
Today’s CAEATFA advanced manufacturing applicants qualify for the general sales and use tax exemption, but apply to also obtain both the state and local exemption. To date, CAEATFA has approved 18 applications in the past year since AB 93 was effective, and will consider applications from Las Gallinas Valley Sanitation District (Marin County), Hi Shear Corporation (Los Angeles County), Fisker Automotive (Riverside and Orange Counties), and Orbital ATK Defense Electronic Systems (Los Angeles County) at its July and August meetings.
While CAEATFA’s blanket sales and use tax exemption authority doesn’t have a sunset, the Legislature placed a July 1, 2021 sunset on the renewable energy production program, but a July 1, 2016 sunset on the advanced manufacturing. State Treasurer John Chiang wants to extend the sunset on the advanced manufacturing program.
Proposed Law
Assembly Bill 1269 extends the sunset on the CAEATFA advanced manufacturing program until January 1, 2021.
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill. According to the author, “The sales and use tax exclusion program for advanced manufacturing under CAEATFA is critical for attracting and retaining cutting edge high tech companies and jobs in California. While AB 93 (2014) is providing a partial sales and use tax exemption at just over 4% for qualifying businesses, the CAETFA exclusion for all state and local taxes continues to provide added value for the state and companies by encouraging targeted high tech manufacturing projects with a high return on investment. To date the program has approved projects that will generate 3,535 jobs and create over $146 million in fiscal benefit for a cost of just over $77,000,000. Extending the sunset date of this successful program will allow business to plan investments and help further grow the state’s high tech manufacturing industry.”
2. The general and the specific. SBs 71 and 1128 were the first state tax incentives for manufacturing in California since the Manufacturer’s Investment Credit expired in 2000. In these bills, the Legislature set forth an application process that required CAEATFA to only approve applications that demonstrated net environmental and economic effects in public meetings after a thorough due diligence review. However, the Legislature wanted to further expand manufacturing in the state by extending the sales and use tax exemption to include all manufacturing, and put its own money at risk by only exempting the state share of the sales tax. AB 93 trumps SB 1128 except to the extent successful CAEATFA applicants can obtain an exemption from the local share too. As such, extending AB 1269 will only come at the cost of local sales tax revenues. The Committee may wish to consider whether extending the SB 1128 program will result in additional manufacturing in the state above and beyond the general exemption, and if so, asking local agencies to pay for it is fair.
3. Review. In its report to the Legislature regarding both the SB 71 and 1128 programs, CAEATFA states that its approved 76 projects worth a total of $273 million of foregone revenue; however, only 63 applicants eventually purchased $43.3 million of equipment because many projects are built out over a course of years, and the revenue effect doesn’t occur until the applicant purchases the property. CAEATFA adds that most of the unspent allocation comes from a few, larger, more recent applicants, with only two comprising one-third of the unspent amount. Smaller projects of less than $1 million constitute the majority of granted applications and foregone revenue. CAEATFA projects net environmental benefits of $82 million, economic benefits of $299 million, with a fiscal cost of $244 million, for a total net benefit of $137 million realized over the expected useful life of the equipment, which is about 5 to 29 years. However, at the time of the report, only 6 projects had been approved as part of the advanced manufacturing program that AB 1269 seeks to extend. As part of the report, CAEATFA recommends extending the advanced manufacturing program to provide businesses with stability and a sufficient planning horizon, and removing the $100 million cap on the combined program as a signal to green businesses and investors that the exemption would be available for large projects choosing to locate in California.
4. Hard times. The recently enacted Budget Act extended the repayment date on the $2.4 million loan from the Renewable Resources Trust Fund made to start the program in 2010-11to the 2018-19 fiscal year. In its Budget Change Proposal, CAEATFA stated that it had “erratic application volume and program activity” due to the economic recession, localized industry trends such as the disruption of the solar manufacturing market, and the enactment of the general sales and use tax exclusion, so revenue for the agency wasn’t sufficient to repay the loan. CAETFA collects .0005 of the total amount of anticipated qualified machinery in the application, not to exceed $10,000 per applicant, and .004 of the machinery purchases, not to exceed $350,000. CAETFA states that renewed outreach efforts will result in more applications, and therefore application fees, so it should be able to repay the loan by 2018-19. Without AB 1269, it’s unlikely CAEATFA will be able to repay the loan.
5. 2/3. CAEATFA can allocate sales and use tax exemptions up to $100 million. Because extending the advanced manufacturing program may crowd out an applicant seeking an exemption for renewable energy manufacturing under that cap, Legislative Counsel has determined that the measure increases a tax on any taxpayer for the purposes of Section Three of Article XIIIA of the California Constitution. As such, the measure is keyed a 2/3 vote.
Assembly Actions
Assembly
Floor 80-0
Assembly Appropriations 17-0
Assembly
Revenue and Taxation 9-0
Support and Opposition
(7/9/15)
Support: California Manufacturers and Technology Association, Capstone, Large Scale Solar Association.
Opposition: None received.
-- END --
AB 1269
Page 3
ASSEMBLY THIRD READING
AB 1269
(Dababneh)
As Introduced February 27, 2015
2/3 vote
Committee |
Votes |
Ayes |
Noes |
Revenue & Taxation |
9-0 |
Ting, Brough, Dababneh, Gipson, Roger Hernández, Mullin, Patterson, Quirk, Wagner |
|
Appropriations |
17-0 |
Gomez, Bigelow, Bonta, Calderon, Chang, Daly, Eggman, Gallagher, Eduardo Garcia, Gordon, Holden, Jones, Quirk, Rendon, Wagner, Weber, Wood |
|
SUMMARY: Extends the authority of the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) to grant financial assistance in the form of a sales and use tax (SUT) exclusion for projects that promote the use of advanced manufacturing until January 1, 2021.
FISCAL EFFECT: According to the Assembly Appropriations Committee, expected decreases in General Fund revenue of approximately $15-20 million per fiscal year.
Existing law limits the aggregate allowable sales and use tax exclusions for all projects approved by CAEAFTA to $100 million per calendar year. According to data provided by the Treasurer's office, from November 2010 to March 1, 2015, approximately $290 million in sales and use tax exclusions were approved by CAEATFA, and approximately $82 million in exclusions have been claimed, or approximately $19 million in claimed exclusions on an annualized rate.
COMMENTS:
Author's Statement: The author states that "[t]he [sales and use tax exclusion] program for advanced manufacturing under CAEATFA is critical for attracting and retaining cutting edge high tech jobs and companies in California. To date the program has created an estimated 1,356 jobs and generated a net benefit to the state of $168,022,862. Extending the sunset date of this successful program will allow business to plan investments and help further grow the state’s high tech manufacturing industry."
Arguments in Support: The Large-Scale Solar Association states that "[t]he Advanced Manufacturing Sales and Use Tax exemption program administered by [CAEATFA] promotes the creation of California-based manufacturing and California-based jobs. The program has approved financial assistance for solar photovoltaic manufacturing, biogas capture and production, electric vehicle and battery manufacturing, landfill gas capture and production, biomass process and fuel production and for conventional manufacturing in the state."
Arguments in Opposition: None submitted.
CAEATFA Background: The California Alternative Energy Source Financing Authority was established in 1980 with an authorization of $200 million in revenue bonds to finance projects utilizing alternative or renewable energy sources, such as wind, solar, cogeneration and geothermal. In 1994, the authority was renamed "CAEATFA" and its charge was expanded to include the financing of "advanced transportation" technologies. During the energy crisis of 2001, CAEATFA's authority was expanded again to provide financial assistance to public power entities, independent generators, and others for new and renewable energy sources, and to develop clean distributed generation. The CAEATFA board consists of five members: the Treasurer, Controller, Director of Finance, Chairperson of the Energy Commission, and President of the Public Utilities Commission.
CAEATFA may provide financial assistance to approved projects via the issuance of bonds, loans, loan guarantees and credit enhancements. CAEATFA may authorize up to $1 billion in revenue or prepayment bonds to fund projects. Over the last few years, CAEATFA has provided financial assistance through various programs, including qualified energy conservation bonds for projects that promote the use of alternative energy and energy efficiency in state, local and tribal government facilities, as well as clean renewable energy bonds for renewable energy projects. In addition, with the passage of SB 71 (Padilla), Chapter 10, Statutes of 2010, CAEATFA is allowed to grant a SUT exemption to provide financial assistance for the purchase of equipment that is used for the design, manufacture, production, or assembly of "advanced transportation technologies" or "alternative source" products, components, or systems (SB 71 Program). Alternative source products include cogeneration technology, energy conservation, solar, biomass, wind, geothermal, specified hydro-electric, or any other energy efficient technologies that reduce the use of fossil and nuclear fuels. Alternative sources also include advanced electric distributive generation technology and energy storage technology. The SB 71 Program will sunset on January 1, 2021.
In 2012, SB 1128 (Padilla), Chapter 677, Statutes of 2012, expanded the SUT exclusion program to include advanced manufacturing projects. Under the SUT exclusion program, CAEATFA evaluates all applicants to determine whether the benefits received by the state will outweigh forgone SUT revenue. Specifically, the net benefits test established within the SUT exclusion program is primarily designed to evaluate the fiscal and environmental benefits of the project will produce for the state. According to CAEATFA's annual report, CAEATFA board began receiving applications for advanced manufacturing projects in October of 2013, and approved two advanced manufacturing projects as its December 2013 meeting.
Partial Sales and Use Tax Exemption: The passage of AB 93 (Budget Committee), Chapter 69, Statutes of 2013, and SB 90 (Galgiani), Chapter 70, Statutes of 2013, created California’s first effort to grant a partial SUT exemption for taxpayers performing manufacturing or research and development in the state. The rationale for providing a SUT exemption on business inputs, even if partial, is to reduce the imposition of a tax on a tax, otherwise known as "pyramiding". The SUT is paid when a business is considered to be the final consumer of tangible item. The tax paid on tangible personal items is then incorporated into the cost of a consumer product, leading to double taxation. As noted by Joseph Henchman, "Ideally, a sales tax should be levied on all goods and services sold at retail, and to prevent distortions and hidden taxes, it should be levied only once on each good or service sold at retail." (Joseph Henchman, States Should Avoid Sales Taxes on Nonprofit Hospital Purchases, Tax Foundation, April 2008.) Ideally, taxes should only be levied once because pyramiding may cause consumers to favor goods and services that are provided by a single company instead of those that require multiple production steps. (Id.)
Differences: There are a few differences between CAEATFA’s SUT exclusion and the state’s partial SUT exemption. The partial exemption rate is currently 4.1875%. The partial exemption provides that sales of the qualifying property sold to a qualified person be taxed at a rate of 3.3125% (7.50% current statewide tax rate – 4.1875% partial exemption) plus any applicable district taxes. Under CAEATFA, an approved project does not pay any SUT tax, including local and district taxes. Additionally, the state’s SUT exemption is much broader and more easily available. So long as a business meets all requirements, a qualifying manufacturer can receive a partial SUT exemption. CAEATFA, however, is a much lengthier process, requiring an application and approval process before the exclusion can apply. Furthermore, the programs appear to accomplish different goals. Both programs reduce the economic distortions related to taxing business inputs, but CAEATFA appears to also be concerned with encouraging projects that provide a greater return on investment for the state. As noted above, the anticipated project benefits, measured by the fiscal and environmental benefit to the state, must exceed the cost of forgone SUT. No such analysis is needed for the partial SUT exemption.
No Chance of Double Dipping: Assuming a manufacturer qualifies under both the state's partial SUT exemption and CAEATFA's SUT exclusion, the taxpayer can, at most, take the full exclusion from SUT, and only after successfully completing the application process. However, a qualifying manufacturer may take a partial SUT exemption on qualifying purchases if those purchases meet all requirements under the partial SUT exemption are not part of an approved project under CAEATFA.
Analysis Prepared by: Carlos Anguiano / REV. & TAX. / (916) 319-2098 FN: 0000651
AB 1269
Page 2
Date of Hearing: May 6, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB 1269
(Dababneh) – As Introduced February 27, 2015
Policy Committee: |
Revenue and Taxation |
Vote: |
9 - 0 |
Urgency: No State Mandated Local Program: No Reimbursable: No
SUMMARY:
This bill extends the authority of the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) to grant sales and use tax exclusions for projects that promote the use of advanced manufacturing until January 1, 2021.
FISCAL EFFECT:
Expected decreases in GF revenue of approximately $15-20 million per fiscal year.
Existing law limits the aggregate allowable sales and use tax exclusions for all projects approved by CAEAFTA to $100 million per calendar year. According to data provided by the Treasurer's office, from November 2010 to March 1, 2015, approximately $290 million in sales and use tax exclusions were approved by CAEATFA, and approximately $82 million in exclusions have been claimed, or approximately $19 million in claimed exclusions on an annualized rate.
COMMENTS:
1) Purpose. According to the author, the sales and use tax exclusion program for advanced manufacturing under CAEATFA is critical for attracting and retaining high tech companies and jobs in California. The author contends the program has created approximately 1,350 jobs and generated net benefits to the state of approximately $168 million since its inception. Supporters state the program has provided financial assistance for solar photovoltaic manufacturing, biogas and landfill gas capture and production, electric vehicle and battery manufacturing, biomass process, and fuel production in California.
2) CAEAFTA. The California Alternative Energy Source Financing Authority was established in 1980 to finance projects involving alternative or renewable energy sources, including wind, solar, cogeneration, and geothermal. In 1994, the authority's mandate was expanded to include financing advanced transportation technologies, and it was renamed CAEAFTA. In 2001, CAEAFTA's mandate was again expanded to include financing public power entities, independent generators, and others for new and renewable energy sources, and to develop clean distributed generation.
CAEAFTA provides financing through revenue and prepayment bonds, loans, guarantees, and other credit enhancements. Since 2010, CAEAFTA has also been allowed to grant sales and use tax exclusions to assist in the purchase of equipment used for an approved project, and since 2012, the exclusion has been allowed for advanced manufacturing projects. Total sales and use tax exclusions are limited to $100 million in any calendar year.
3) Sales and Use Tax Relief. Sales and use tax exemptions and exclusions provide tax relief on the purchase of business inputs. The policy justification for relief is that the inputs will be used for, or incorporated into, a final consumer item, which is itself taxable, resulting in the imposition of sales and use tax at multiple points along the item's manufacturing process.
The state provides certain partial sales and use tax exemptions for manufacturing or research and development, resulting in a reduction in the state portion of sales tax owed on certain inputs. The exemption is widely available and relatively easy to claim, though it does not relieve the taxpayer of all state sales and use taxes or any local sales and use taxes.
In contrast, the CAEATFA exclusion relieves a taxpayer of all state and local sales and use taxes, but requires a more robust application and approval process from CAEATFA in order to claim. As a result, CAEATFA is able to direct the tax relief to projects that provide the greatest return on investment for the state. Manufacturers that qualify for both the partial sales and use tax exemption and the CAEAFTA exclusion are prohibited from claiming both with respect to the same inputs.
Analysis Prepared by: Joel Tashjian / APPR. / (916) 319-2081
AB 1269
Page 4
Date of Hearing: April 20, 2015
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Philip Ting, Chair
AB 1269
(Dababneh) – As Introduced February 27, 2015
SUBJECT: Alternative energy
SUMMARY: Extends the authority of the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) to grant financial assistance in the form of a sales and use tax (SUT) exclusion for projects that promote the use of advanced manufacturing until January 1, 2021.
EXISTING LAW:
Creates CAEATFA for the purpose of promoting the development and utilization of alternative energy sources and the development and commercialization of advanced transportation technologies.
Authorizes CAEATFA to provide financial assistance to certain facilities that use alternative energy sources and technologies, develop advanced manufacturing, or are needed to develop and commercialize advanced transportation technologies that conserve energy, reduce air pollution, and promote economic development and jobs.
Allows CAEATFA to provide eligible projects financial assistance in the form of a SUT exemption on property used for the "design, manufacture, production, or assembly" of either advanced manufacturing, advanced transportation technologies, or alternative energy source products, components or system, as defined.
Requires a project to demonstrate that the benefits to the state from the project equals or exceeds the projected benefit to the participating party from the SUT exclusion.
Requires CAEATFA to provide 20-day notice to the Legislature once the value of SUT exemptions approved by CAEATFA exceeds $100 million. The notification must be provided prior to grating additional approvals.
Sunsets the CAEATFA's expanded authority to promote the use of advanced manufacturing on July 1, 2016.
Imposes a sales tax on a retailer's gross receipts from the retail sale of tangible personal property (TPP) in this state, unless the sale is specifically exempt from taxation by statute. It is presumed that gross receipts from a particular sale of TPP are subject to tax, unless the seller can establish either that the sale was not a retail transaction or that the sale is subject to an exemption.
FISCAL EFFECT: According to the BOE, "[e]xisting law limits the allowable sales and use tax exclusion for all projects approved by CAEAFTA, including this bill’s described projects, to $100 million each calendar year. Between November 2010 and February 2015, CAEATFA has approved tax exclusions of over $283 million, but only $75 million has actually been claimed.
COMMENTS:
Author's Statement: The author states that "[t]he [sales and use tax exclusion] program for advanced manufacturing under CAEATFA is critical for attracting and retaining cutting edge high tech jobs and companies in California. To date the program has created an estimated 1,356 jobs and generated a net benefit to the state of $168,022,862. Extending the sunset date of this successful program will allow business to plan investments and help further grow the state’s high tech manufacturing industry."
Arguments in Support: The Large-Scale Solar Association states that "[t]he Advanced Manufacturing Sales and Use Tax exemption program administered by [CAEATFA] promotes the creation of California-based manufacturing and California-based jobs. The program has approved financial assistance for solar photovoltaic manufacturing, biogas capture and production, electric vehicle and battery manufacturing, landfill gas capture and production, biomass process and fuel production and for conventional manufacturing in the state."
CAEATFA Background: The California Alternative Energy Source Financing Authority was established in 1980 with an authorization of $200 million in revenue bonds to finance projects utilizing alternative or renewable energy sources, such as wind, solar, cogeneration and geothermal. In 1994, the authority was renamed "CAEATFA" and its charge was expanded to include the financing of "advanced transportation" technologies. During the energy crisis of 2001, CAEATFA's authority was expanded again to provide financial assistance to public power entities, independent generators, and others for new and renewable energy sources, and to develop clean distributed generation. The CAEATFA board consists of five members: the Treasurer, Controller, Director of Finance, Chairperson of the Energy Commission, and President of the Public Utilities Commission.
CAEATFA may provide financial assistance to approved projects via the issuance of bonds, loans, loan guarantees and credit enhancements. CAEATFA may authorize up to $1 billion in revenue or prepayment bonds to fund projects. Over the last few years, CAEATFA has provided financial assistance through various programs, including qualified energy conservation bonds for projects that promote the use of alternative energy and energy efficiency in state, local and tribal government facilities, as well as clean renewable energy bonds for renewable energy projects. In addition, with the passage of SB 71 (Padilla), Chapter 10, Statutes of 2010, CAEATFA is allowed to grant a SUT exemption to provide financial assistance for the purchase of equipment that is used for the design, manufacture, production, or assembly of "advanced transportation technologies" or "alternative source" products, components, or systems (SB 71 Program). Alternative source products include cogeneration technology, energy conservation, solar, biomass, wind, geothermal, specified hydro-electric, or any other energy efficient technologies that reduce the use of fossil and nuclear fuels. Alternative sources also include advanced electric distributive generation technology and energy storage technology. The SB 71 Program will sunset on January 1, 2021.
In 2012, SB 1128 (Padilla), Chapter 677, Statutes of 2012, expanded the SUT exclusion program to include advanced manufacturing projects. Under the SUT exclusion program, CAEATFA evaluates all applicants to determine whether the benefits received by the state will outweigh forgone SUT revenue. Specifically, the net benefits test established within the SUT exclusion program is primarily designed to evaluate the fiscal and environmental benefits of the project will produce for the state. According to CAEATFA's annual report, CAEATFA board began receiving applications for advanced manufacturing projects in October of 2013, and approved two advanced manufacturing projects as its December 2013 meeting.
Partial Sales and Use Tax Exemption: The passage of AB 93 (Committee on Budget), Chapter 69, Statutes of 2013, and SB 90 (Galgiani), Chapter 70, Statutes of 2013, created California’s first effort to grant a partial SUT exemption for taxpayers performing manufacturing or research and development in the state. The rationale for providing a SUT exemption on business inputs, even if partial, is to reduce the imposition of a tax on a tax, otherwise known as "pyramiding". The SUT is paid when a business is considered to be the final consumer of tangible item. The tax paid on tangible personal items is then incorporated into the cost of a consumer product, leading to double taxation. As noted by Joseph Henchman, “Ideally, a sales tax should be levied on all goods and services sold at retail, and to prevent distortions and hidden taxes, it should be levied only once on each good or service sold at retail.” (Joseph Henchman, States Should Avoid Sales Taxes on Nonprofit Hospital Purchases, Tax Foundation, April 2008.) Ideally, taxes should only be levied once because pyramiding may cause consumers to favor goods and services that are provided by a single company instead of those that require multiple production steps. (Id.)
Differences: There are a few differences between CAEATFA’s SUT exclusion and the state’s partial SUT exemption. The partial exemption rate is currently 4.1875%. The partial exemption provides that sales of the qualifying property sold to a qualified person be taxed at a rate of 3.3125% (7.50% current statewide tax rate – 4.1875% partial exemption) plus any applicable district taxes. Under CAEATFA, an approved project does not pay any SUT tax, including local and district taxes. Additionally, the state’s SUT exemption is much broader and more easily available. So long as a business meets all requirements, a qualifying manufacturer can receive a partial SUT exemption. CAEATFA, however, is a much lengthier process, requiring an application and approval process before the exclusion can apply. Furthermore, the programs appear to accomplish different goals. Both programs reduce the economic distortions related to taxing business inputs, but CAEATFA appears to also be concerned with encouraging projects that provide a greater return on investment for the state. As noted above, the anticipated project benefits, measured by the fiscal and environmental benefit to the state, must exceed the cost of forgone SUT. No such analysis is needed for the partial SUT exemption.
No Chance of Double Dipping: Assuming a manufacturer qualifies under both the state's partial SUT exemption and CAEATFA's SUT exclusion, the taxpayer can, at most, take the full exclusion from SUT, and only after successfully completing the application process. However, a qualifying manufacturer may take a partial SUT exemption on qualifying purchases if those purchases meet all requirements under the partial SUT exemption are not part of an approved project under CAEATFA.
Prior Legislation:
SB 1128 (Padilla), Chapter 677, Statutes of 2012, expands CAEATFA's SUT exclusion program to include advanced manufacturing projects.
SB 71 (Padilla), Chapter 10, Statutes of 2010, allows CAEATFA to grant a SUT exemption to provide financial assistance for the purchase of equipment that is used for the design, manufacture, production, or assembly of "advanced transportation technologies" or "alternative source" products, components, or systems.
REGISTERED SUPPORT / OPPOSITION:
Support
Treasurer, State of California (Sponsor)
California Manufacturers & Technology Association
Large-Scale Solar Association
Opposition
None on file
Analysis Prepared by: Carlos Anguiano / REV. & TAX. / (916) 319-2098
Discussed in Hearing
35SEC
Assembly Floor
3MIN
Senate Floor
56SEC
Senate Standing Committee on Appropriations
1MIN
Assembly Floor
Bill Author
Bill Co-Author(s):