BILL ANALYSIS Ó
AB 1422
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Date of Hearing: May 8, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 1422 (Committee on JEDE) - As Amended: April 15, 2013
Policy Committee: Committee on
Revenue and Taxation Vote: 8-0
Committee on JEDE 9-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill revises the definition of participating party for
purposes of the sales and use tax (SUT) exemption to include
out-of-state and overseas entities. Specifically, this bill:
1)Specifies that an entity located outside the state, including
an entity located overseas, that commits to and demonstrates
that it will be opening a manufacturing facility in the state,
may qualify for the SUT exemption as a participating party.
2)Repeals the requirement for the Governor's Office of Business
and Economic Development to report to the Legislature by
January 1, 2017, regarding the most efficient and
cost-effective methods for the state to create jobs in
advanced manufacturing.
FISCAL EFFECT
Negligible fiscal impact. The proposed change to the definition
of participating party will not result in an additional General
Fund revenue loss. Existing law imposes an annual cap of $100
million on the amount of SUT exclusions that may be granted to
eligible projects.
COMMENTS
1)Purpose. According to the staff of the Assembly Committee on
Jobs, Economic Development, and the Economy, AB 1422 is
intended to provide necessary clarification for efficient
administration of the California Alternative Energy and
AB 1422
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Advanced Transportation Financing Authority (CAEATFA) the
purpose of which is to attract new manufacturing facilities to
be built in California.
2)Background . The California Alternative Energy Source
Financing Authority was established in 1980 with an
authorization of $200 million in revenue bonds to finance
projects utilizing alternative or renewable energy sources,
such as wind, solar, co-generation and geothermal. Over time
its role expanded and the name changed to CAEATFA.
With the passage of SB 71 (Padilla), Chapter 10, Statutes of
2010, CAEATFA is authorized, until January 1, 2021, to grant a
SUT exemption for the purchase of equipment that is used for
the design, manufacture, production or assembly of advanced
transportation technologies. Last year, the Legislature also
temporarily authorized CAEATFA, until July 1, 2016, to grant
financial assistance to eligible projects that promote the
utilization of advanced manufacturing.
3)Previous Legislation :
a) SB 1128 (Padilla), Chapter 677, Statutes of 2012,
authorizes CAEATFA to expand the sales and use tax
exclusion program to include advanced manufacturing
projects and caps the program benefit at $100 million per
year for all projects.
b) SB 71 (Padilla), Chapter 10, Statutes of 2010,
authorizes CAEATFA to administer a state and local sales
tax exclusion program for tangible personal property that
is used advanced transportation technologies or alternative
source products, components or systems.
4)There is no registered opposition to this bill .
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081