BILL ANALYSIS Ó
AB 1422
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CONCURRENCE IN SENATE AMENDMENTS
AB 1422 (Jobs, Economic Development, and the Economy Committee)
As Amended August 26, 2013
Majority vote
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|ASSEMBLY: |70-0 |(May 16, 2013) |SENATE: |38-0 |(September 9, |
| | | | | |2013) |
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Original Committee Reference: J., E.D. & E.
SUMMARY : Makes a variety of technical and programmatic changes
to the sales and use tax program (SUTE) administered by the
California Alternative Energy and Advanced Transportation
Financing Authority (Finance Authority).
The Senate amendments remove a requirement for a peer reviewed
study on any changes in the Finance Authority's net benefit's
test. This was a condition of the Governor's signature of SB
1128 (Padilla), Chapter 677, Statutes of 2012.
EXISTING LAW :
1)Establishes the Finance Authority for the purpose of providing
and promoting the establishment of facilities utilizing
alternative sources of energy and facilities needed for the
development and commercialization of advanced transportation
technologies.
2)Authorizes the Finance Authority to administer a SUTE program
for any 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. The SUTE
program is capped at a total of $100 million in tax exclusion
benefits for all projects per calendar year.
3)Requires the Governor's Office of Business and Economic
Development (GO-Biz) to review and identify cost-effective
methods for the state to create jobs in advanced manufacturing
and report its findings to the Legislature on or before
January 1, 2017.
FISCAL EFFECT : According to the Senate Appropriations
AB 1422
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Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS : The Finance Authority was established in 1980 for the
purpose of providing capital for facilities utilizing
alternative methods and sources of energy and facilities needed
for the development and commercialization of advanced
transportation technologies. The Finance Authority oversees a
range of financial products including conduit bond and revenue
bond financings, loan guarantees, loan loss reserve accounts
among other financial products that support the development and
commercialization of technologies that conserve energy, reduce
air pollution, and promote economic development and jobs.
Examples of some of the Finance Authority's more unique
financial products include $381 million in Qualified Energy
Conservation Bonds authorized under the federal American
Recovery and Reinvestment Act and the SB 77 (Pavley), Chapter
15, Statutes of 2010, Property Assessed Clean Energy (PACE) Bond
Program. Governor Arnold Schwarzenegger used the Finance
Authority to assist a joint venture between Tesla Motors and
Toyota Motors to purchase the Nummi assembly plant in Fremont,
California, where the two companies focus on manufacturing
hybrid and electric vehicles, including the TESLA brand.
Most recently, the role of the Finance Authority was expanded to
include administration of the SUTE program which provides for a
state sales and use tax exclusion for property used in the
"design, manufacture, production, or assembly" of either
advanced transportation technologies or alternative energy
source products, components or systems (SB 71 (Padilla), Chapter
10, Statutes of 2010). In 2012, the program was expanded to
include advanced manufacturing (SB 1128).
Since the inception of the SUTE program, the Finance Authority
has approved a total of 50 applications, of which 40 are active.
These 40 applications have been approved for $1.16 billion in
anticipated qualified purchases, with an estimated result of
$98.5 million in sales and use tax exclusions. These projects
have produced an estimated $72.5 million in environmental
benefits and $125.7 million in fiscal benefits across 14
counties, resulting in approximately $99.7 million in net
benefits.
AB 1422
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Analysis Prepared by : Toni Symonds and Zach Hutsell / J.,
E.D. & E. / (916) 319-2090
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