BILL NUMBER: AB 1422 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 19, 2013
AMENDED IN SENATE JUNE 4, 2013
AMENDED IN ASSEMBLY APRIL 15, 2013
INTRODUCED BY Committee on Jobs, Economic Development, and the
Economy (Medina (Chair), Daly, Fong, Fox, and V. Manuel Pérez)
MARCH 21, 2013
An act to amend Sections 26003 and 26011.8 of the Public Resources
Code, and to repeal Section 1 of Chapter 677 of the Statutes of
2012, relating to energy.
LEGISLATIVE COUNSEL'S DIGEST
AB 1422, as amended, Committee on Jobs, Economic Development, and
the Economy. California Alternative Energy and Advanced
Transportation Financing Authority: participating party.
(1) Existing law, the California Alternative Energy and Advanced
Transportation Financing Authority Act, establishes the California
Alternative Energy and Advanced Transportation Financing Authority
and requires the authority to establish programs to provide financial
assistance to participating parties for projects related to
sustainable and renewable energy sources, energy efficiency, and
advanced transportation projects. The act provides financial
assistance, in the form of a sales and use tax exclusion, to
participating parties for these types of projects. The act
prohibits the sales and use tax exclusions granted from exceeding
$100,000,000 for each calendar year.
This bill would clarify that for purposes of the sales and use tax
exclusion, 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 if the
participating party commits to, and demonstrates that the
participating party will be opening a manufacturing facility in the
state. The bill would require that any portion of the
$100,000,000 not granted through the sales and use tax exclusions be
available to be granted in the subsequent calendar year, provided
that the total amount available in any year does not exceed
$200,000,000. This bill would also make technical,
nonsubstantive changes to these provisions.
(2) Existing law requires the authority to evaluate project
applications based on certain criteria, including, but not limited
to, the extent the project will create new, permanent jobs in
California and the extent the project results in a reduction in
greenhouse gases, a reduction in air or water pollution, an increase
in energy efficiency, or a reduction in energy consumption. Existing
law requires the authority to work with the University of California
or the California State University to perform a peer review of this
criteria, as specified.
This bill would repeal the requirement to perform a peer review.
(3) Existing law requires the Governor's Office of Business and
Economic Development to review and identify efficient and
cost-effective methods for the state to create jobs in advanced
manufacturing, as specified, and to report its findings to the
Legislature on or before January 1, 2017.
This bill would repeal this reporting requirement.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 26003 of the Public Resources Code, as amended
by Section 5 of Chapter 677 of the Statutes of 2012, 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) Micro- 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 state's
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 the 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, 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 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.
SEC. 2. Section 26003 of the Public Resources Code, as added by
Section 6 of Chapter 677 of the Statutes of 2012, 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 state's
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, 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 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.
SEC. 3. Section 26011.8 of the Public Resources Code, as amended
by Section 12 of Chapter 677 of the Statutes of 2012, 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 any 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 prior to March 24, 2010, shall not be
subject to this section.
(g) The Legislative Analyst's 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. Any portion of the one
hundred million dollars ($100,000,000) in exclusions not granted in
the assigned calendar year shall be available to be granted in the
subsequent calendar year provided that the total amount available in
any year does not exceed two hundred million dollars ($200,000,000).
(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 program's 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 Analyst's 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, 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. The sale or purchase of tangible
personal property of a project approved prior to June 30, 2016,
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 authority's resolution approving the project
pursuant to this section.
(2) Notwithstanding paragraph (1), the authority's 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 added by
Section 13 of Chapter 677 of the Statutes of 2012, is amended to
read:
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 any 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 prior to March 24, 2010, shall not be subject to
this section.
(g) The Legislative Analyst's 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. Any portion of the one
hundred million dollars ($100,000,000) in exclusions not granted in
the assigned calendar year shall be available to be granted in the
subsequent calendar year provided that the total amount
available in any year does not exceed two hundred million dollars
($200,000,000).
(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 prior to 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
authority's resolution approving the project pursuant to this
section.
SEC. 5. Section 1 of Chapter 677 of the Statutes of 2012 is
repealed.