Existing law, until January 1, 2024, authorizes the governing body of a county, city and county, or city to establish a capital investment incentive program, pursuant to which the county, city and county, or city is authorized to pay, upon request, a capital investment incentive amount that is an amount up to or equal to the amount of ad valorem property tax revenues allocated to that entity, as specified, derived from that portion of the assessed value of a qualified manufacturing facility, as defined, that exceeds $150,000,000 to a proponent of a qualified manufacturing facility for up to 15 years.

This bill would, commencing with the 202021 fiscal year, until January 1, 2024, additionally authorize the governing body of a county, city and county, or city to pay a proponent of a qualified targeted manufacturing facility facility, as defined, a capital investment incentive amount, for up to 10 consecutive years, that does not exceed the amount of ad valorem property tax revenues allocated to that entity, as specified, derived from that portion of the assessed value that exceeds $5,000,000 of a qualified targeted manufacturing facility located within the jurisdiction of that county, city and county, or city commencing with the first fiscal year after the date upon which the qualified targeted manufacturing facility is certified for occupancy or commences operation, as specified. The bill would require that annual payment of the capital investment incentive amount to be contingent on the proponents compliance with a community services agreement, which this bill would require the county, city and county, or city to enter into with the proponent, and the payment of a specified community services fee required to be paid by the proponent to the county, city and county, or city. The bill would prohibit ad valorem property tax revenue amounts with respect to a facility from being taken into account in calculating more than one capital investment incentive.

The bill would require a county, city and county, and city that has approved the payment of a capital investment incentive amount for either a qualified manufacturing facility or qualified targeted manufacturing facility to provide the Governors Office of Business and Economic Development with specified information. The bill would require the Governors Office of Business and Economic Development to compile the information submitted by each county, city and county, and city and submit a report to the Legislature containing this information, as specified.

 THIRD READING  

Bill No: AB 1248

Author: Eduardo Garcia (D)

Amended: 8/30/19 in Senate

Vote: 21

SENATE GOVERNANCE & FIN. COMMITTEE: 5-0, 6/19/19

AYES: McGuire, Beall, Hurtado, Nielsen, Wiener

NO VOTE RECORDED: Moorlach, Hertzberg

SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/30/19

AYES: Portantino, Bates, Bradford, Durazo, Hill, Jones, Wieckowski

ASSEMBLY FLOOR: 77-0, 5/22/19 (Consent) - See last page for vote

SUBJECT: Capital Investment Incentive Program: local governments: property tax abatement

SOURCE: Author

DIGEST:

This bill allows cities and counties to offer Capital Investment Incentive Program incentives to small and mid-size manufacturers and specified production facilities.

ANALYSIS:

Existing law:

1. Creates the Capital Investment Incentive Program (CIIP), which allows counties and cities to pay a capital investment incentive amount for 15 years to a proponent of a qualified manufacturing facility (QMF) making an initial investment that exceeds $150 million.
2. Requires manufacturing facility proponents to file a request to the city or county, which must be approved by majority vote of the city or county governing body to receive CIIP payments.
3. Provides that, if the city or county approves the request, the proponent receives a payment equal to the amount of property taxes paid and received by that city or county that exceeds $150 million of the facility’s value - other agencies’ shares of tax revenues from that property are not affected.
4. Requires a proponent receiving CIIP payments to pay a community service fee equal to 25% of the capital incentive amount, up to $2 million a year. The proponent must also sign a community services agreement that spells out the fee, payment conditions, a job creation plan that requires employer-sponsored health care and payment of an average wage not less than the state average, and provisions to recapture the incentive payments if the proponent fails to run the facility as agreed.
5. Allows a city or special district to pay the county or city an amount equal to the amount of property tax revenue that the local government receives from the facility’s property taxes paid on the facility’s value over $150 million.
6. Requires that the city or county submit annual reports on the incentives it approves to the Governor’s Office of Business and Economic Development (GO-Biz), which GO-Biz compiles into a report it submits to the Legislature.
7. Limits CIIP to manufacturing facilities engaged in commercial production, the perfection of the manufacturing process, or the perfection of a product intended to be manufactured, that also meets the following criteria:
   1. Have an initial investment in real and personal property over $150 million, certified GO-Biz;
   2. Be located within the county or city offering the capital incentive program; and,
   3. Be operated by a business within specified North American Industrial Classification System (NAICS) codes, which includes firms engaged in various types of manufacturing, research and development, recovery of minerals from geothermal resources, and components related to electricity production.

This bill:

1. Expands the CIIP to allow cities and counties to offer a capital investment incentive amount for 10 years, beginning in 2020-21, to the proponent of a proposed “qualified targeted manufacturing facility” that makes an initial investment of over $5 million in that facility.
2. Defines “qualified targeting manufacturing facility” as a proposed manufacturing or production facility that meets the following criteria:
   1. The proponent’s initial investment in that facility in real and personal property, as specified, exceeds $5 million, as certified by GO-Biz following the submittal of a written certification application by the proponent.
   2. The facility is located within the jurisdiction to which the request for payment of capital investment incentive amounts is made.
   3. The facility is operated by a business entity with manufacturing as its principal business activity code, as reported on its tax return, or is operated by a business entity that meets the NAICS code for motion picture and video production.
   4. The proponent is currently engaged in commercial production, the perfection of the manufacturing process, or the perfection of a product intended to be manufactured.
3. Defines “capital investment incentive amount,” as it pertains to a qualified targeted manufacturing facility, as an amount up to or equal to the amount of property tax allocated to the participating local entity from the taxation of that portion of the total assessed value of that property that is in excess of $5 million.
4. Prohibits a school district or community college district from paying its share of property tax to a city or county that approves payment of a capital investment incentive amount.
5. Requires a city or county that has approved payment of a capital investment incentive amount for either a qualified manufacturing facility (existing program) or a qualified targeted manufacturing facility (expanded program) to report the following additional information to GO-Biz:
   1. Programs or projects established or funded in part by the community services agreement.
   2. Economic activity generated in the area where the facility is located, including changes in median income, the number of businesses, and the volume or value of exported goods.

Background

The Legislature originally approved the program to help Placer County officials attract an Intel plant, but they never used the law (SB 566, Thompson, 1997). Legislators expanded the definition of a qualified manufacturing facility to include CalEnergy Company’s plan to extract minerals from geothermal brine, which did not launch (SB 133, Kelley, Chapter 24, Statutes of 1999). In 2009, the Legislature further expanded the program to include other manufacturers that produce of electricity using solar, wind, biomass, hydropower, or geothermal resources; shifted the responsibility to certify the investment to the Business, Transportation and Housing Agency; and sunset the program on January 1, 2017 (AB 904, V.M Perez, Chapter 486, Statutes of 2009). In 2012, the Legislature expanded the program (SB 1006, Committee on Budget and Fiscal Review) to entice Samsung Semiconductor to expand its manufacturing facility in San Jose; however, the facility was constructed without the incentive agreement being executed, with the company instead applying for and receiving California Competes tax credits. SB 1006 repealed all of its changes on June 30, 2013.

In 2014, the Legislature again reauthorized the program, expanded the NAICS codes to include additional manufacturers, and lowered the threshold to trigger incentive payments from $150 million in value to $25 million. The bill was part of a package of incentives to attract production of the United States Air Force’s new long-range bomber to California (AB 2389 (Fox, Chapter 116, Statutes of 2014) and SB 718 (Roth, Chapter 189, Statutes of 2014). The specific programmatic changes sunset on January 1, 2016, thereby defaulting to the threshold investment amounts and minimum value thresholds to those originally set by the Legislature in 1997. Both bills set the program to sunset entirely on January 1, 2018. However, in 2017, the Legislature extended the program from January 1, 2018, to January 1, 2019, at the request of Imperial County and ES Minerals, a firm seeking to extract lithium from a location near the Salton Sea (AB 755, E. Garcia, Chapter 709, Statutes of 2017). Last year, the Legislature extended the program once again from January 1, 2019, to January 1, 2024 (AB 1900, Brough, Chapter 382, Statutes of 2018).

Comments

1. Purpose of the bill. According to the author, “California’s manufacturing investments have not kept pace with the rest of the country, capturing a mere 4.5% of capital funding nationwide. Existing incentives, like the CIIP, have not been able to overcome this trend because they are focused on competing for very large manufacturing investment. In the decades since the CIIP was enacted, the engine for job creation and economic expansion in the manufacturing industry has shifted to small and medium investments. Between 2015 and 2017, manufacturers investing between $5 and $55 million in new or existing facilities outpaced the total number of jobs created by projects the CIIP was intended to attract. [This bill] will provide local governments a tool to incentivize the redevelopment and rehabilitation of abandoned or distressed facilities in their communities by attracting investment from small and mid-size manufacturers.”
2. Right way? AB 1248 expands CIIP to smaller manufacturers, which allows cities and counties to refund property taxes received solely by that jurisdiction to specified firms, under the assumption that the net economic benefits to that city or county exceed the amounts refunded. While the state foregoes almost $60 billion annually in tax expenditures, some for economic development purposes, is it good public policy for local agencies as well?
3. How does this work? If a city council or county board of supervisors approves the proponent’s request, he or she pays their property tax as they would normally under current law. The local agency approving the request then sends a payment equal to the amount of the share of the property tax they received on the value of the facility that exceeds $5 million for QMF, less the community service fee. Under AB 1248, a firm that constructs a facility valued at $10 million, pays $100,000 in tax at a 1% rate. If the local agency approving the request receives a 15% share of the allocated property tax for that property in that specific tax rate area, the payment is $6,000 ($10 million - $5 million = $4 million x 1% rate x the 15% share), less the $1,500 (25%) service fee, for a net payment of $4,500 annually for up to 10 years. The Legislature may wish to consider whether AB 1248 will sufficiently impact manufacturers’ decisions regarding where to locate their facilities.
4. This just in. Up to this point, no local agency has provided a facility with a CIIP incentive. Proponents of expanding the program argue that the initial investment threshold for QMFs is set too high to be effective, but also argue that growth in the manufacturing industry is concentrated between $5 and $55 million in initial investments. AB 1248 also adds motion picture and video production facilities to the list of facilities that can qualify for the QMF incentive. The Legislature may wish to consider holding off on the expansion of the program to manufacturing facilities with smaller initial investments, as well as motion picture and video production facilities that are not manufacturing facilities and may be temporary facilities, until a local agency takes advantage of the existing program and submits information to GO-Biz to evaluate.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee:

• Ongoing costs to GO-Biz of at least $150,000 annually through 2023 in staff time to coordinate with cities, counties, and project proponents, provide technical assistance, review and approve applications for certification, compile specified information submitted by cities and counties, and report to the Legislature. Depending on the demand for the expanded program, GO-Biz administrative costs could be higher. (General Fund)
• No state costs related to the expansion of city and county property tax abatements, since local agencies that voluntarily participate in the CIIP are only entitled to offer their share of the property tax revenues, and the bill explicitly excludes participation by a school district or community college district. (Local funds)

SUPPORT: (Verified 8/30/19)

California Association for Local Economic Development

California Manufacturers and Technology Association

OPPOSITION: (Verified 8/30/19)

None received

ASSEMBLY FLOOR: 77-0, 5/22/19

AYES: Aguiar-Curry, Arambula, Bauer-Kahan, Berman, Bigelow, Bloom, Boerner Horvath, Bonta, Brough, Burke, Calderon, Carrillo, Cervantes, Chau, Chen, Chiu, Choi, Chu, Cooper, Cunningham, Dahle, Daly, Diep, Eggman, Flora, Fong, Frazier, Friedman, Gabriel, Gallagher, Cristina Garcia, Gipson, Gloria, Gonzalez, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Petrie-Norris, Quirk, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Salas, Santiago, Smith, Mark Stone, Ting, Voepel, Waldron, Weber, Wicks, Wood, Rendon

NO VOTE RECORDED: Cooley, Eduardo Garcia, Mullin

Prepared by: Jonathan Peterson / GOV. & F. / (916) 651-4119

9/3/19 11:08:02

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2019 - 2020 Regular Session

AB 1248 (Eduardo Garcia) - Capital Investment Incentive Program: local governments: property tax abatement

Bill Summary:

AB 1248 would expand the Capital Investment Incentive Program (CIIP) by authorizing cities and counties to offer property tax abatements for up to 10 years to smaller manufacturers who make an investment of over $5 million in a proposed manufacturing facility, as specified.

*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********

The following information is revised to reflect amendments

adopted by the committee on August 30, 2019

Fiscal Impact:

• Ongoing costs to the Governor’s Office of Business and Economic Development (Go-Biz) of at least $150,000 annually through 2023 in staff time to coordinate with cities, counties, and project proponents, provide technical assistance, review and approve applications for certification, compile specified information submitted by cities and counties, and report to the Legislature. Depending on the demand for the expanded program, Go-Biz administrative costs could be higher. (General Fund)
  
• No state costs related to the expansion of city and county property tax abatements, since local agencies that voluntarily participate in the CIIP are only entitled to offer their share of the property tax revenues, and the bill explicitly excludes participation by a school district or community college district. (Local funds)

Committee Amendments:

• Specify that a proposed production facility is included in the definition of a “qualified targeted manufacturing facility.”
• Specify that a motion picture and video production business is included in the types of facilities that qualify for participation in the program, if other criteria are met.

-- END --

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2019 - 2020 Regular Session

AB 1248 (Eduardo Garcia) - Capital Investment Incentive Program: local governments: property tax abatement

Bill Summary:

AB 1248 would expand the Capital Investment Incentive Program (CIIP) by authorizing cities and counties to offer property tax abatements for up to 10 years to smaller manufacturers who make an investment of over $5 million in a proposed manufacturing facility, as specified.

Fiscal Impact:

• Ongoing costs to the Governor’s Office of Business and Economic Development (Go-Biz) of at least $150,000 annually through 2023 in staff time to coordinate with cities, counties, and project proponents, provide technical assistance, review and approve applications for certification, compile specified information submitted by cities and counties, and report to the Legislature. Depending on the demand for the expanded program, Go-Biz administrative costs could be higher. (General Fund)
  
• No state costs related to the expansion of city and county property tax abatements, since local agencies that voluntarily participate in the CIIP are only entitled to offer their share of the property tax revenues, and the bill explicitly excludes participation by a school district or community college district. (Local funds)

Background:

Existing law authorizes cities and counties to establish a CIIP, through an ordinance or resolution approved by a majority of its governing body, that provides for the payment of a “capital investment incentive amount” for 15 years to a proponent of a qualified manufacturing facility making an initial investment that exceeds $150 million. The proponent must apply to the city or county by filing a request, which must be approved by majority vote of the city or county’s governing body for payments to commence. If approved, a proponent receives a payment equal to the amount of property taxes received by that city or county that exceeds $150 million of the facility’s value - other agencies’ shares of tax revenues from that property are not affected unless they opt-in, as specified below. In return for this property tax rebate, the proponent must then pay a community service fee to the city or county equal to 25% of the capital incentive amount, up to $2 million a year. The proponent must also sign a community services agreement that spells out the fee, payment conditions, a job creation plan that requires employer-sponsored health care and payment of an average wage not less than the state average, and provisions to recapture the incentive payments if the proponent fails to run the facility as agreed. Additionally, a city or special district may pay the county or city an amount equal to the amount of property tax revenue that the local government receives from the facility’s property taxes paid on the facility’s value over $150 million.

To qualify for this tax rebate program, a qualified manufacturing facility must be engaged in commercial production, the perfection of the manufacturing process, or the perfection of a product intended to be manufactured. The proponent of the facility must also be located in the city or county offering the CIIP, have an initial investment of over $150 million in real and personal property, as certified by Go-Biz, and be operated by a business within specified industries (as identified by their North American Industrial Classification codes).

The CIIP was initially established in statute in 1997 to help Placer County officials attract an Intel facility, but the authority was never exercised. The program has been expanded and revised multiple times over the years, but no capital investment incentive payments have been made to date. According to the most recent Go-Biz report on the program in 2017, however, several cities and the County of Los Angeles have approved resolutions and entered into agreements with certain project proponents. Currently, the City of Long Beach and the County of Los Angeles have entered into 15-year agreements with Weber Metals, Inc. under the CIIP, but the facility is currently under construction and no payments have yet been made. Recently, the City of Riverside and City of El Centro have both adopted CIIP resolutions, and the City of Huntington Beach is considering adopting one, according to GO-Biz. However, no specific project has yet been identified for these jurisdictions. The CIIP statutes become inoperative on January 1, 2024

Proposed Law:

AB 1248 would expand the CIIP to allow cities and counties to offer a capital investment incentive amount for 10 years, beginning in 2020-21, to the proponent of a proposed “qualified targeted manufacturing facility” that makes an initial investment of over $5 million in that facility. Specifically, this bill would:

• Define “qualified targeted manufacturing facility” as a proposed manufacturing facility that meets the following criteria:
  • The proponent’s initial investment in that facility in real and personal property, as specified, exceeds $5 million, as certified by Go-Biz following the submittal of a written certification application by the proponent.
  • The facility is located within the jurisdiction to which the request for payment of capital investment incentive amounts is made.
  • The facility is operated by a business entity with manufacturing as its principal business activity code, as reported on its tax return.
  • The proponent is currently engaged in commercial production, the perfection of the manufacturing process, or the perfection of a product intended to be manufactured.
• Define “capital investment incentive amount,” as it pertains to a qualified targeted manufacturing facility, as an amount up to or equal to the amount of property tax allocated to the participating local entity from the taxation of that portion of the total assessed value of that property that is in excess of $5 million.
• Explicitly prohibit a school district or community college district from paying its share of property tax to a city or county that approves payment of a capital investment incentive amount.
• Require a city or county that has approved payment of a capital investment incentive amount for either a qualified manufacturing facility (existing program) or a qualified targeted manufacturing facility (expanded program) to report the following additional information to Go-Biz:
  • Programs or projects established or funded in part by the community services agreement.
  • Economic activity generated in the area where the facility is located, including changes in median income, the number of businesses, and the volume or value of exported goods.

Staff Comments:

The current restrictions on the CIIP to very large investments of over $150 million by manufacturers in specified industries has limited participation in the program to date. This bill would significantly expand access to small and medium-sized manufacturers investing over $5 million in new or existing facilities operated by a business entity with manufacturing as its principal business activity code, as self-reported on its personal income tax or corporate tax return. These changes to the qualifying criteria are likely to drive a significant increase in businesses and local government utilization of the program. Go-Biz indicates that it would incur costs of at least $150,000 annually, beginning in 2020-21, for additional staff to provide technical assistance to project proponents, coordinate with cities and counties, and review and certify that project investments approved by local jurisdictions meet the criteria of a qualified targeted manufacturing facility. The bill would also require cities and counties to submit additional information to Go-Biz related to the CIIP, which must be included in biennial reports to the Legislature. Staff notes that the program is scheduled to sunset on January 1, 2024, so the bill provides 3-1/2 years for cities and counties to enter into agreements with manufacturers to provide property tax abatements for small and medium manufacturers.

-- END --

SENATE COMMITTEE ON GOVERNANCE AND FINANCE

Senator Mike McGuire, Chair

2019 - 2020 Regular

Capital Investment Incentive Program: local governments: property tax abatement

Allows cities and counties to offer Capital Investment Incentive Program incentives to small and mid-size manufacturers.

Background

Property tax. Article XIII of the California Constitution provides that all property is taxable at the same percentage of fair market value unless explicitly exempted by the Constitution or federal law. The Constitution limits the maximum amount of any ad valorem tax on real property at 1% of full cash value, and directs assessors to only reappraise property when newly constructed, or ownership changes (Proposition 13, 1978). Proposition 13 additionally limits any inflationary growth of the full cash value base to 2% per year.

Capital Investment Incentive Program. Under the Capital Investment Incentive Program (CIIP), counties and cities can pay a capital investment incentive amount for 15 years to a proponent of a qualified manufacturing facility (QMF) making an initial investment that exceeds $150 million. The proponent must apply to the city or county by filing a request, which must be approved by majority vote of the city or county’s governing body for payments to commence. If approved, a proponent receives a payment equal to the amount of property taxes paid and received by that city or county that exceeds $150 million of the facility’s value - other agencies’ shares of tax revenues from that property are not affected. In return for this property tax rebate, the proponent must then pay a community service fee equal to 25% of the capital incentive amount, up to $2 million a year. The proponent must also sign a community services agreement that spells out the fee, payment conditions, a job creation plan that requires employer-sponsored health care and payment of an average wage not less than the state average, and provisions to recapture the incentive payments if the proponent fails to run the facility as agreed. Additionally, a city or special district may pay the county or city an amount equal to the amount of property tax revenue that the local government receives from the facility’s property taxes paid on the facility’s value over $150 million. The city or county must submit annual reports on the incentives it approves to the Governor’s Office of Business and Economic Development (GO-Biz), which GO-Biz compiles into a report it submits to the Legislature.

To qualify for this tax rebate program, a QMF must be engaged in commercial production, the perfection of the manufacturing process, or the perfection of a product intended to be manufactured. The proponent of the facility must also:

• Have an initial investment in real and personal property over $150 million, certified GO-Biz,
• Be located within the county or city offering the capital incentive program, and
• Be operated by a business within specified North American Industrial Classification System (NAICS) codes, that includes firms engaged in various types of manufacturing, research and development, recovery of minerals from geothermal resources, and components related to electricity production.

The Legislature originally approved the program to help Placer County officials attract an Intel plant, but they never used the law (SB 566, Thompson, 1997). Legislators expanded the definition of a qualified manufacturing facility to include CalEnergy Company’s plan to extract minerals from geothermal brine, which did not launch (SB 133, Kelley, 1999.) In 2009, the Legislature further expanded the program to include other manufacturers that produce of electricity using solar, wind, biomass, hydropower, or geothermal resources; shifted the responsibility to certify the investment to the Business, Transportation and Housing Agency; and sunset the program on January 1, 2017 (AB 904, V.M Perez).

In 2012, the Legislature expanded the program to (SB 1006, Committee on Budget and Fiscal Review):

• Include research and development facilities,
• Raise the threshold investment amount from $150 to $250 million,
• Lower from $150 million to $25 million the assessed valuation threshold that trigger capital investment incentive payments equivalent to property taxes paid,
• Revise eligibility criteria, and
• Shift the duty to certify investments to GO-Biz.

SB 1006 sought to entice Samsung Semiconductor to expand its manufacturing facility in San Jose; however, the facility was constructed without the incentive agreement being executed, with the company instead applying for and receiving California Competes tax credits. SB 1006 repealed all of its changes on June 30, 2013.

In 2014, the Legislature again reauthorized the program, expanded the NAICS codes to include additional manufacturers, and lowered the threshold to trigger incentive payments from $150 million in value to $25 million. The bill was part of a package of incentives to attract production of the United States Air Force’s new long-range bomber to California (AB 2389, Fox, and SB 718, Roth, 2014). The specific programmatic changes sunset on January 1, 2016, thereby defaulting to the threshold investment amounts and minimum value thresholds to those originally set by the Legislature in 1997. Both bills set the program to sunset entirely on January 1, 2018. However, in 2017, the Legislature extended the program from January 1, 2018, to January 1, 2019, at the request of Imperial County and ES Minerals, a firm seeking to extract lithium from a location near the Salton Sea (AB 755, E. Garcia). Last year the Legislature extended the program once again from January 1, 2019, to January 1, 2024 (AB 1900, Brough, 2018).

GO-Biz report. In November, 2017, GO-Biz submitted a report covering plan activity under the program through June 30, 2017. The report indicated that the following cities had approved a resolution establishing a CIIP:

• The City of Palmdale entered into a 15-year agreement with the Lockheed Martin Corporation, which agreed to invest $385 million in new facilities if it secured the Department of Defense (DOD) contract to manufacture the new strategic aircraft program. The agreement would have paid Lockheed Martin $740,000 annually, with a Community Service Fee of an unspecified amount.
• The County of Los Angeles entered into a 15-year agreement with the Lockheed Martin Corporation if it secured the same contract. The agreement would have paid Lockheed Martin $3.08 million annually, with a community services fee of $1.02 million.

However, DOD awarded the contract to another bidder, so no payments were made. The County of Los Angeles and the City of Long Beach entered into an agreement with Weber Metals, Inc., where the county entered into a 15-year agreement to make a payment of $1.04 million and the city makes one of $709,000, in exchange for annual community service fees of $348,607 and $265,000, respectively. GO-Biz indicated that the facility is currently under construction, so no payments have yet been made. If GO-Biz certifies the investment, it would become the first time the program has been used in its 20-year life. Recently, the City of Riverside and City of El Centro have both adopted CIIP resolutions, and the City of Huntington Beach is considering adopting one, according to GO-Biz. However, no specific project has yet been identified for these jurisdictions. GO-Biz plans to submit its next report later this year.

The author wants to allow cities and counties to offer CIIP incentives to small and mid-size manufacturers.

Proposed Law

Assembly Bill 1248 allows, beginning in the 2020-21 fiscal year, the governing body of a city or county to pay a capital investment incentive amount to the proponent of a qualified targeted manufacturing facility (QTMF), which is defined as a facility that reports manufacturing as its principal business activity on its tax return, and makes an initial investment in the facility of at least $5 million. If the QTMF is located in a jurisdiction that has decided to offer the incentive, the QTMF proponent would receive an amount up to, or equal to, the amount of ad valorem property tax revenue allocated to that particular city or county from the taxation of the facility’s total assessed value in excess of $5 million. The bill prevents a facility from receiving more than one QMF or QTMF incentive payment.

AB 1248 requires a city or county that approves payment of an incentive for a QTMF to include the incentives when it submits the approved amount to GO-Biz for inclusion in the CIIP report GO-Biz submits to the Legislature. The bill also requires a city or county to provide the following specifically for QTMFs:

• Programs and projects funded by the community services agreement.
• Economic activity generated in the area where the QTMF is located.

State Revenue Impact

No estimate.

Comments

1. Purpose of the bill. According to the author, “California’s manufacturing investments have not kept pace with the rest of the country, capturing a mere 4.5% of capital funding nationwide. Existing incentives, like the CIIP, have not been able to overcome this trend because they are focused on competing for very large manufacturing investment. In the decades since the CIIP was enacted, the engine for job creation and economic expansion in the manufacturing industry has shifted to small and medium investments. Between 2015 and 2017, manufacturers investing between $5 and $55 million in new or existing facilities outpaced the total number of jobs created by projects the CIIP was intended to attract. [This bill] will provide local governments a tool to incentivize the redevelopment and rehabilitation of abandoned or distressed facilities in their communities by attracting investment from small and mid-size manufacturers.”

2. Right way? AB 1248 expands CIIP to smaller manufacturers, which allows cities and counties to refund property taxes received solely by that jurisdiction to specified firms, under the assumption that the net economic benefits to that city or county exceed the amounts refunded. While the state foregoes almost $60 billion annually in tax expenditures, some for economic development purposes, is it good public policy for local agencies as well? The Committee may wish to consider the general effectiveness of property tax rebates toward creating economic development.

3. How does this work? If a city council or county board of supervisors approves the proponent’s request, he or she pays their property tax as they would normally under current law. The local agency approving the request then sends a payment equal to the amount of the share of the property tax they received on the value of the facility that exceeds $150 million in the case of a QMF or $5 million for QTMF, less the community service fee. Under the existing program for QMFs, a firm that constructs a facility valued at $200 million pays $2 million in tax at a 1% rate. If the local agency approving the request receives a 15% share of the allocated property tax for that property in that specific tax rate area, the payment is $75,000 ($200 million - $150 million = $50 million x 1% rate x the 15% share), less the $18,750 (25%) community service fee, for a net payment of $56,250 annually for up to 15 years. However, since QTMF incentives require a smaller initial investment, the potential benefit to a firm is even less. Under AB 1248, a firm that constructs a facility valued at $10 million, pays $100,000 in tax at a 1% rate. If the local agency approving the request receives a 15% share of the allocated property tax for that property in that specific tax rate area, the payment is $6,000 ($10 million - $5 million = $4 million x 1% rate x the 15% share), less the $1,500 (25%) service fee, for a net payment of $4,500 annually for up to 10 years. The Committee may wish to consider whether AB 1248 will sufficiently impact manufacturers’ decisions regarding where to locate their facilities.

4. This just in. Up to this point, no local agency has provided a facility with a CIIP incentive. Los Angeles County continues to work on implementing the program, and the next GO-Biz report will provide an update on their progress. Proponents of expanding the program argue that the initial investment threshold for QMFs is set too high to be effective, but also argue that growth in the manufacturing industry is concentrated between $5 and $55 million in initial investments. The Committee may wish to consider holding off on the expansion of the program until a local agency takes advantage of the existing program and submits information to GO-Biz to evaluate.

5. Reporting requirements. AB 1248 requires cities and counties offering QMTF incentives to not only comply with existing CIIP reporting requirements, but also provide additional reporting information for QMTF recipients. Specifically, the bill requires cities and counties to provide information on the programs or projects established or funded by the community services agreement and the economic activity they generate. However, the larger QMF incentives are not subject to this requirement. The Committee may wish to consider amending the bill to make the reporting requirements consistent for both QMF and QTMF recipients.

6. Subsidies and schools. In addition to counties and cities, special districts can also make incentive payments to manufacturers under the program. However, the underlying law is unclear regarding whether the definition of special districts also includes school districts. If the measure allows school districts to do so, why should school districts shift funds from education purposes to pay for economic development incentives? While current law prohibits special districts from paying the actual property tax allocation to the recipient, likely nullifying any state Proposition 98 backfill for a school district from the state General Fund, the Committee may wish to consider amending the measure to preclude school districts from making incentive payments.

7. Sunset. CIIP, including both subsidies for QMF and QTMF sunsets in 2024. As such, local governments would have four years to offer these incentives before requiring further legislative action.

8. Related legislation. Senate Bill 531 (Glazer, 2019), which this Committee approved on a 5-2 vote, prohibits a local agency from entering into any agreement that results in a rebate of Bradley-Burns local tax revenues to a retailer in exchange for that retailer locating within that agency’s jurisdiction.

Assembly Actions

Assembly Local Government Committee: 8-0

Assembly Appropriations Committee: 16-0

Assembly Floor: 77-0

Support and Opposition

(6/14/19)

Support: California Manufacturers and Technology Association.

Opposition: Unknown.

-- END --

Date of Hearing: May 16, 2019

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 1248

Author:(Eduardo Garcia) – As Amended Ver:April 29, 2019

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill, until January 1, 2024, under the Capital Investment Incentive Program (CIIP), allows cities and counties to offer property tax abatements to small and mid-size manufacturers. Specifically, this bill:

1. Allows beginning in the 2020-21 fiscal year, the governing body of a city or county to pay, for up to 10 consecutive years, a capital investment incentive amount (incentive) to the proponent of a qualified targeted manufacturing facility (QTMF), located within the jurisdiction of the city or county, equal to the taxes owed on the manufacturing property in excess of the first $5 million assessment, upon making certain findings.
2. Requires a city or county that approves payment of an incentive for a QTMF to provide the Governor’s Office of Business and Economic Development (GO-Biz) with specified information to include in an existing report to the Legislature.

FISCAL EFFECT:

1. No state costs. The incentive payments under the CIIP are made after local agencies make all other required property tax allocations, including any payments affecting the school share.
2. Local costs are not reimbursable because the program is permissive.

COMMENTS:

1. Purpose. According to the author:

California’s manufacturing investments have not kept pace with the rest of the country, capturing a mere 4.5% of capital funding nationwide. Existing incentives, like the CIIP, have not been able to overcome this trend because they are focused on competing for very large manufacturing investment. In the decades since the CIIP was enacted, the engine for job creation and economic expansion in the manufacturing industry has shifted to small and medium investments. Between 2015 and 2017, manufacturers investing between $5 and $55 million in new or existing facilities outpaced the total number of jobs created by projects the CIIP was intended to attract. [This bill] will provide local governments a tool to incentivize the redevelopment and rehabilitation of abandoned or distressed facilities in their communities by attracting investment from small and mid-size manufacturers.

1. Background. CIIP authorizes a local government to offer partial property tax abatement for a qualified manufacturing facility (QMF) for assessed property taxes in excess of $150 million. CIIP seeks to provide local governments with opportunities to attract large manufacturing facilities to invest in their communities and to encourage industries, such as high technology, energy, environmental and others to locate and invest in California.

The program allows a local government to rebate a “capital investment incentive amount” to a manufacturer proponent equal to the taxes owed on the manufacturing property in excess of the first $150 million assessment for up to 15 years. The incentive may be offered only if the proponent enters into an agreement requiring the proponent to meet certain criteria, such as job creation numbers, wages paid at least equal to the state average weekly wage and local fees. If a proponent fails to meet these requirements, the local government is entitled to repayment of any amounts paid.

1. Prior Legislation. AB 1900 (Brough), Chapter 382, Statutes of 2018, extended the sunset of the CIIP until January 1, 2024.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing: April 24, 2019

ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT

Cecilia Aguiar-Curry, Chair

ABPCA Bill Id:AB 1248 (

Author:Eduardo Garcia) – As Amended Ver:March 28, 2019

SUBJECT: Targeted Revitalization Incentive Program: local governments: property tax abatement.

SUMMARY: Creates the Targeted Revitalization Incentive Program to allow cities and counties to offer property tax abatements to small and mid-size manufacturers. Specifically, this bill:

1. Allows, commencing in the 2020-21 fiscal year, the governing body of a city or county to, by majority vote of that governing body, establish a Targeted Revitalization Incentive Program (TRIP) and approve, for up to 10 consecutive years, the payment of a targeted revitalization incentive amount (incentive) to the proponent of a qualified manufacturing facility (QMF) upon making the following findings:
   1. The QMF is located within the jurisdiction of the city or county;
   2. The proponent of the QMF enters into a community services agreement (agreement) with the city or county; and,
   3. The city or county has considered the comments, if any, from stakeholders on the economic impact of the QMF on the residents and businesses of the community where the QMF will be located.
2. Requires the consecutive fiscal years during which an incentive is to be paid to commence with the first fiscal year after the date upon which the QMF is certified for occupancy or the first fiscal year commencing after the date the QMF commences operation.
3. Requires the annual payment of the incentive to be contingent on the proponent’s compliance with an agreement and the payment of a community services fee (fee), as specified.
4. Requires a city or county that establishes a TRIP to provide the Governor’s Office of Business and Economic Development (GO-Biz) with all of the following:
   1. Notice of the city or county’s election to establish the program no later than June 30 of the fiscal year in which the election was made;
   2. The amount of any incentive payments made and the proponent of the QMF to whom the payments were made during that fiscal year;
   3. Programs or projects established or funded in part by the agreement; and,
   4. Economic activity generated, directly or indirectly, in the area in which the QMF is located, including, but not limited to, changes in median income, the number of businesses, and the volume or value of exported goods.
5. Requires GO-Biz to compile the information submitted by each city and county and submit a report to the Legislature containing this information on or before October 1, 2025, and no later than October 1 every two years thereafter, as specified.
6. Requires, upon a finding that good cause exists, the city or county to waive any portion of a recaptured incentive amount due under this bill.
7. Provides that no abatement shall be allowed pursuant to the Capital Investment Incentive Program (CIIP) for ad valorem property tax amounts taken into account in calculating the payment authorized by this bill.
8. Provides the following definitions:
   1. “Community services agreement” means an agreement by the proponent that includes, but is not limited to, all of the following provisions:
      1. A job creation plan that specifies the number and types of jobs to be created by the QMF, the compensation ranges for each job type, and the coverage to be provided by an employer-sponsored health benefits plan;
      2. A requirement that a fee be remitted by the proponent to the city or county, in each fiscal year, in an amount up to or equal to 25% of the incentive amount calculated for that proponent for that fiscal year;
      3. The dates in each relevant fiscal year upon which payment of the fee is due and delinquent, and the rate of interest to be charged to a proponent for any delinquent portion of the fee amount;
      4. The procedures and rules for the determination of underpayments or overpayments of a fee, for the appeal of determinations of any underpayment, and for the refunding or crediting of any overpayment;
      5. The procedures and rules for the determination of the proponent’s ineligibility to receive an incentive amount if the proponent is delinquent in the payment of any portion of the fee, if the city or county finds the QMF is materially different from the facility as described in building permit application materials, or if the facility is no longer operated as a QMF;
      6. The procedures and rules for the determination of the proponent’s failure to operate the QMF as required by the agreement and for the recapture of any portion of any incentive amount previously paid to the proponent, less all of the fees received from the proponent and less any incentive amounts previously recaptured;
      7. The procedures and rules for the determination of whether good cause exists for the proponent’s failure to operate the QMF as required by the agreement. Good cause includes, but is not limited to:
         1. The sale or lease of the property to a person who has entered into an agreement with the city or county to assume all of the responsibilities of the proponent under the agreement; and,
         2. The QMF has been rendered inoperable or beyond repair as a result of an act of God, civil disorder, failure of power, riots, insurrections, war, acts of terrorism, or any other causes, whether the kind herein enumerated or otherwise, not within the control of the QMF claiming good cause, which restrict or interfere with a QMF’s ability to perform in a timely manner, and which by the exercise of reasonable due diligence, such party is or would have been unable to prevent or overcome;
   2. “Manufacturing facility” means a facility operated by a business entity with manufacturing as its principal business activity code, as reported on the entity’s tax return filed under specified existing law governing franchise and income taxes;
   3. “Proponent” means any party that is either the fee owner of the QMF, the lessee of real property constructing the QMF, or the applicant named on a permit to construct a QMF located in the city or county;
   4. “Qualified manufacturing facility” means a proposed manufacturing facility where the proponent’s investment, in real or personal property, exceeds $5 million dollars;
   5. “Targeted revitalization incentive amount” means an amount up to or equal to the amount of ad valorem property tax revenue, not to exceed a total of $50 million, allocated to a city or county that has established a TRIP pursuant to this bill, excluding specified revenue transfers required under existing law, from the taxation of that portion of the total assessed value of that real and personal property described in d), above.
9. Repeals the provisions of this bill on January 1, 2035, but provides that a TRIP established pursuant to this bill before January 1, 2035, may remain in effect for the full term of that program.

EXISTING LAW:

1. Specifies that all property is subject to property tax, unless explicitly exempted by the California Constitution or federal law.
2. Authorizes counties or cities to establish a CIIP, with the following components:
   1. Requires a county or city that creates a CIIP to pay a “capital investment incentive amount” to the proponent of a QMF for up to 15 consecutive years, as specified;
   2. Defines the criteria that a QMF must meet, including (among other specifications) that the proponent’s initial investment in the facility exceeds $150 million, the facility is located within the jurisdiction of the county or city that will pay the incentive amount, the facility will be operated by specified types of businesses, and the proponent will be engaged in specified activities;
   3. Limits the incentive amount paid to the proponent for a relevant fiscal year to an amount up to or equal to the amount of ad valorem property tax revenue allocated to the participating county or city from the total assessed value of the facility's real or personal property in excess of $150 million;
   4. Requires a proponent whose request for payment of the incentive amount is approved to enter into a community services agreement with the county or city and requires the agreement to contain specified provisions, including a specified “community services fee,” a job creation plan, and protections for the local government if the proponent fails to meet its obligations under the agreement;
   5. Provides that the incentive amount paid to the proponent, as specified above, is contingent upon the proponent’s payment of the fee, as specified;
   6. Calculates the proponent’s fee as an amount equal to 25% of the proponent’s incentive amount for each fiscal year, and caps the fee to a maximum of $2 million in any fiscal year;
   7. Requires each county or city that elects to create a CIIP to notify GO-Biz each fiscal year, as specified; and,
   8. Requires GO-Biz to compile the information submitted by counties and cities and submit
      a report to the Legislature no later than October 1 every two years, as specified.
3. Repeals the authority of counties and cities to create a CIIP on January 1, 2024, but specifies that a CIIP established before this date may remain in effect for the full term of that program.

FISCAL EFFECT: This bill is keyed fiscal.

COMMENTS:

1. Background. SB 566 (Thompson), Chapter 616, Statutes of 1997, enacted the CIIP, and SB 133 (Kelley), Chapter 24, Statutes of 1999, expanded the program to provide local governments with an opportunity to attract large manufacturing facilities to invest in their communities and to encourage industries, such as high technology, energy, environmental, and others to locate and invest in California. CIIP authorizes a local government to offer partial property tax abatement for QMFs for assessed property taxes in excess of $150 million. The program allows a local government to rebate a ‘capital investment incentive amount’ to a manufacturer proponent that is equal to the taxes owed on the manufacturing property in excess of the first $150 million assessment for up to 15 years.

The incentive may only be offered if the proponent enters into an agreement that requires the proponent to meet certain criteria, such as job creation numbers, wages paid at least to the state average weekly wage, and local fees. If a proponent fails to meet these requirements, the local government is entitled to repayment of any amounts paid.

In 1999, Imperial County and CalEnergy Operating Corporation attempted to utilize the program for zinc extraction from the Salton Sea, but a collapse in the zinc market caused the project, and thus the program, to cease. The abated property taxes were returned to the County, as provided under the Community Service Agreement between CalEnergy and the County. Imperial County and EnergySource Minerals, LLC (ES Minerals) were attempting to utilize the program last year. In its November 2017 report on the CIIP, GO-Biz reported that the cities of Palmdale and Long Beach and the County of Los Angeles established programs for their jurisdictions but none had issued any payments and only one proponent, Weber Metals Inc., appeared to be proceeding with its project.

Last year, AB 1900 (Brough), Chapter 382, Statutes of 2018, extended the sunset of the CIIP until January 1, 2024. When AB 1900 was heard by this committee, it modified the CIIP in several ways. It extended the program for 10 years, expanded it to include large-scale retail-trade related facilities, and temporarily reduced the required initial investment amount from $150 million to $25 million. It also temporarily increased the property taxes cities and counties could rebate to the facility over $25 million of assessed value by lowering the threshold from $150 million. This Committee amended AB 1900 to remove all of its provisions, except for the sunset extension.

1. Author’s Statement. According to the author, “California’s manufacturing investments have not kept pace with the rest of the country, capturing a mere 4.5% of capital funding nationwide. Existing incentives, like the CIIP, have not been able to overcome this trend because they are focused on competing for very large manufacturing investment. In the decades since the CIIP was enacted, the engine for job creation and economic expansion in the manufacturing industry has shifted to small and medium investments. Between 2015 and 2017, manufacturers investing between $5 and $55 million in new or existing facilities outpaced the total number of jobs created by projects the CIIP was intended to attract. AB 1248 will provide local governments a tool to incentivize the redevelopment and rehabilitation of abandoned or distressed facilities in their communities by attracting investment from small and mid-size manufacturers.”

This bill is sponsored by the California Manufacturers and Technology Association.

1. Bill Summary. This bill establishes the TRIP to allow cities and counties to offer property tax abatements to small and mid-size manufacturers. It is largely modeled after the CIIP, but allows tax abatements for much smaller manufacturers investing as little as $5 million. There are also some additional differences between the programs that are outlined below.
2. Policy Considerations. The Committee may wish to consider the following:
   1. Original Intent of CIIP. When the Legislature originally approved the CIIP, the intent of the program was made clear: “It is the intent of the Legislature in enacting this chapter to provide local governments with opportunities to attract large manufacturing facilities to invest in their communities and to encourage industries, such as high technology, aerospace, automotive, biotechnology, software, environmental sources, and others, to locate and invest in those facilities in California.”

This bill represents a significant departure from this original intent by focusing on much smaller manufacturing operations with much lower initial investments in a facility – only $5 million as compared to the CIIP investment threshold of $150 million. While the proponent presents arguments for supporting small and mid-size manufacturers with the property tax abatement mechanism crated by the CIIP that would be available to smaller manufacturers under the TRIP, the Committee may wish to consider whether this approach is appropriate, effective, or even attractive to local governments and whether existing incentives available to local agencies (including state programs such as California Competes) offer sufficient tools for local agencies to support these smaller manufacturers.

• 1. Investment Threshold. The initial $150 million threshold in the CIIP was set at a time when a comparable Oregon statute had a $100 million threshold, with proponents noting that a higher threshold would be appropriate for California. This was based in part on the theory that only a substantial investment would generate the kind of economic activity necessary to “pay” for the property tax rebates granted. While the proponent has offered information regarding the broader economic benefits that small and mid-size manufacturing can create in a given community, the Committee may wish to consider whether the initial investment threshold should be reduced so dramatically. A local government subsidy’s primary purpose is to encourage specific business operations and other activities in a particular location. This bill’s financial incentives will only increase economic activity to the extent one assumes the activity would not otherwise occur in that particular local government’s location or another location within this state. The Committee may wish to consider the appropriate threshold level for tax abatements.
  2. Revitalization. The stated intent of this bill is to encourage small and mid-size manufacturers to locate in areas that support local jurisdictions’ efforts to “revitalize their communities.” However, there is no requirement in this bill for facilities to be located in any specific area of a city or a county, much less an area targeted for revitalization. The Committee may wish to ask the proponent how this bill would achieve this stated goal.
  3. CIIP as a Model. The proponent asserts that the components of the TRIP authorized under this bill are modeled after the CIIP. However, there are several requirements under the CIIP that are not included in this bill for the TRIP. These include:

The Committee may wish to consider whether the requirements and parameters of the TRIP are sufficient.

• 1. Legislative Review of New Powers. This bill includes a sunset date of January 1, 2035, and does not require a report from GO-Biz until October 1, 2025. Given the new and substantially different authority this bill would provide, the Committee may wish to consider whether the Legislature should be receiving information about TRIP for the first time nearly six years from its inception, and whether the program itself should be allowed to run for 15 years before there is a mechanism for the Legislature to review it.

1. Committee Amendments. In order to address some of the issues raised above, the Committee may wish to include the TRIP in the statutes governing the CIIP.
2. Arguments in Support. The California Manufacturers and Technology Association, sponsor of this bill, states, “California’s existing economic development incentive to attract manufacturing investment does not align with the state of modern manufacturing. The CIIP is designed to allow local governments to court ‘mega’ businesses building large manufacturing facilities. Such investment is rare. AB 1248 would create a parallel program, modeled on the CIIP, but that aligns with the state of modern manufacturing. This would allow local government to develop more comprehensive plans to revitalize their communities.

“Manufacturing provides the foundation for developing economically strong and socially mobile communities in California. Throughout the state, manufacturing investment is revitalizing neglected neighborhoods, providing middle-income wages where few jobs once existed, and providing an onramp for employment by allowing workers to transition from unstable jobs in other sectors to a full-time career based in their communities.

“In their ‘Advanced Manufacturing Playbook,’ the San Francisco Office of Civic Innovation and the Office of Economic and Workforce Development extol the benefits of fostering manufacturing in California’s cities: ‘Urban manufacturing has a unique ability to bring together diverse neighborhoods, socio-economic groups and disciplines by locating jobs and companies in the neighborhoods that need them most. Manufacturing is an engine for equity, generating and sustaining jobs for a larger variety of skill levels and backgrounds than most industries.’ However, many local economic development strategies focus on promoting retail, office, and residential growth. These local governments lack a tool that they can use to make small and mid-size production part of their mixed-use redevelopment portfolio. AB 1248 would empower them to do so.

“Manufacturing’s ability to revitalize and uplift communities is anchored in the investment in small and mid-sized production, not large facilities. This transformative power is being driven by technological and economic changes in the manufacturing industry itself: costs of production are lower, space needs are smaller, and goods can be produced and brought to market faster. Growth in the manufacturing industry is anchored in the expansion of facilities reclaiming underused spaces embedded in commercial districts and city centers rather than large, standalone production sites.

“In 2016 and 2017, a third of California’s manufacturing investments were between $5 and $55 million. In contrast, only 4% of the state’s manufacturing investments were over $55 million during the same period. In those two years, investment over $55 million created approximately 2,000 jobs. Investment between $5 and $55 million created approximately four times as many jobs, totaling 40% of the jobs created from all manufacturing investment. The CIIP – with a threshold level of investment starting at $150 million – is designed to compete for an ever-shrinking fraction of manufacturing investment, accounting for its sporadic use and limiting its potential effectiveness. In contrast, AB 1248’s targeted incentive meets the manufacturing industry where it is.

“AB 1248 incorporates meaningful mechanisms to ensure public scrutiny and good governance. Before a local government may authorize any incentive program, AB 1248 requires that they consider comments ‘from stakeholders on the economic impact of the qualified manufacturing facility on the residents and businesses of the community where the qualified manufacturing facility will be located.’ This public comment requirement distinguishes the TRIP from both the CIIP and other incentive and subsidy programs offered by local governments, and pushes the program to be used where there is a clear benefit for the community, the local agency, and the manufacturer making the investment. Additionally, AB 1248 also requires local governments to submit data on the incentive programs they create to the Governor’s Office of Business and Economic Development and, in turn, requires that office to issue a report on the program’s effectiveness every two years, beginning in 2025.”

1. Arguments in Opposition. None on file.

REGISTERED SUPPORT / OPPOSITION:

Support

California Manufacturers and Technology Association [SPONSOR]

Opposition

None on file

Analysis Prepared by: Angela Mapp / L. GOV. / (916) 319-3958