California Legislature—2015–16 Regular Session

Assembly BillNo. 1683


Introduced by Assembly Member Eggman

January 20, 2016


An act to amend Section 26011.8 of the Public Resources Code, relating to alternative energy.

LEGISLATIVE COUNSEL’S DIGEST

AB 1683, as introduced, Eggman. Alternative energy financing.

The California Alternative Energy and Advanced Transportation Financing Authority Act establishes the California Alternative Energy and Advanced Transportation Financing Authority. The act authorizes, until January 1, 2021, the authority to provide financial assistance in the form of a sales and use tax exclusion for projects, including those that promote California-based manufacturing, California-based jobs, advanced manufacturing, the reduction of greenhouse gases, or the reduction in air and water pollution or energy consumption. The act prohibits the sales and use tax exclusions from exceeding $100,000,000 for each calendar year.

This bill would instead prohibit the sales and use tax exclusions from exceeding $200,000,000 for each calendar year. By increasing the limit on the sales and use tax exclusion, this bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of 23 of the membership of each house of the Legislature. The bill would specify that if less than $200,000,000 is granted in a calendar year, the unallocated amount may roll over to the following calendar year.

Vote: 23. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Section 26011.8 of the Public Resources Code
2 is amended to read:

3

26011.8.  

(a) The purpose of this section is to promote the
4creation of California-based manufacturing, California-based jobs,
5advanced manufacturing, the reduction of greenhouse gases, or
6reductions in air and water pollution or energy consumption. In
7furtherance of this purpose, the authority may approve a project
8for financial assistance in the form of the sales and use tax
9exclusion established in Section 6010.8 of the Revenue and
10Taxation Code.

11(b) For purposes of this section, the following terms have the
12following meanings:

13(1) “Project” means tangible personal property if at least 50
14percent of its use is either to process recycled feedstock that is
15intended to be reused in the production of another product or using
16recycled feedstock in the production of another product or soil
17amendment, or tangible personal property that is used in the state
18for the design, manufacture, production, or assembly of advanced
19manufacturing, advanced transportation technologies, or alternative
20source products, components, or systems, as defined in Section
2126003. “Project” does not include tangible personal property that
22processes or uses recycled feedstock in a manner that would
23constitute disposal as defined in subdivision (b) of Section 40192.

24(2) “Recycled feedstock” means materials that would otherwise
25be destined for disposal, having completed their intended end use
26and product lifecycle.

27(3) “Soil amendments” may include “compost,” as defined in
28Section 14525 of the Food and Agricultural Code, “fertilizing
29material,” as defined in Section 14533 of the Food and Agricultural
30Code, “gypsum” or “phosphatic sulfate gypsum,” as those terms
31are defined in Section 14537 of the Food and Agricultural Code,
32or a substance distributed for the purpose of promoting plant
33growth or improving the quality of crops by conditioning soils
34through physical means.

P3    1(c) The authority shall publish notice of the availability of
2project applications and deadlines for submission of project
3applications to the authority.

4(d) The authority shall evaluate project applications based upon
5all of the following criteria:

6(1) The extent to which the project develops manufacturing
7facilities, or purchases equipment for manufacturing facilities,
8located in California.

9(2) The extent to which the anticipated benefit to the state from
10the project equals or exceeds the projected benefit to the
11participating party from the sales and use tax exclusion.

12(3) The extent to which the project will create new, permanent
13jobs in California.

14(4) To the extent feasible, the extent to which the project, or the
15product produced by the project, results in a reduction of
16greenhouse gases, a reduction in air or water pollution, an increase
17in energy efficiency, or a reduction in energy consumption, beyond
18what is required by federal or state law or regulation.

19(5) The extent of unemployment in the area in which the project
20is proposed to be located.

21(6) Any other factors the authority deems appropriate in
22accordance with this section.

23(e) At a duly noticed public hearing, the authority shall approve,
24by resolution, project applications for financial assistance.

25(f) Notwithstanding subdivision (j), and without regard to the
26actual date of any transaction between a participating party and
27the authority, any project approved by the authority by resolution
28for the sales and use tax exclusion pursuant to Section 6010.8 of
29the Revenue and Taxation Code before March 24, 2010, shall not
30be subject to this section.

31(g) The Legislative Analyst’s Office shall report to the Joint
32Legislative Budget Committee on the effectiveness of this program,
33on or before January 1, 2019, by evaluating factors, including, but
34not limited to, the following:

35(1) The number of jobs created by the program in California.

36(2) The number of businesses that have remained in California
37or relocated to California as a result of this program.

38(3) The amount of state and local revenue and economic activity
39generated by the program.

P4    1(4) The types of advanced manufacturing, as defined in
2paragraph (1) of subdivision (a) of Section 26003, utilized.

3(5) The amount of reduction in greenhouse gases, air pollution,
4water pollution, or energy consumption.

5(h) begin insert(1)end insertbegin insertend insert The exclusions granted pursuant to Section 6010.8 of
6the Revenue and Taxation Code for projects approved by the
7authority pursuant to this section shall not exceedbegin delete oneend deletebegin insert twoend insert hundred
8million dollarsbegin delete ($100,000,000)end deletebegin insert ($200,000,000)end insert for each calendar
9year.

begin insert

10(2) If less than two hundred million dollars ($200,000,000) is
11excluded pursuant to Section 6010.8 of the Revenue and Taxation
12Code in a calendar year, the unallocated portion of that two
13hundred million dollars ($200,000,000) may be granted the
14following calendar year, in excess of the following year’s two
15hundred million dollar ($200,000,000) maximum. The unallocated
16amount for a particular calendar year shall not roll over more
17than one calendar year.

end insert

18(i) (1) The authority shall study the efficacy and cost benefit
19of the sales and use tax exemption as it relates to advanced
20manufacturing projects. The study shall include the number of jobs
21created, the costs of each job, and the annual salary of each job.
22The study shall also consider a dynamic analysis of the economic
23output to the state that would occur without the sales and use tax
24exemption. Before January 1, 2017, the authority shall submit to
25the Legislature, consistent with Section 9795 of the Government
26Code, the result of the study.

27(2) Before January 1, 2015, the authority shall, consistent with
28Section 9795 of the Government Code, submit to the Legislature
29an interim report on the efficacy of the program conducted pursuant
30to this section. The study shall include recommendations on
31program changes that would increase the program’s efficacy in
32creating permanent and temporary jobs, and whether eligibility
33for the program should be extended or narrowed to other
34manufacturing types. The authority may work with the Legislative
35Analyst’s Office in preparing the report and its recommendations.

36(j) This section shall remain in effect only until January 1, 2021,
37and as of that date is repealed, unless a later enacted statute, that
38becomes operative on or before January 1, 2021, deletes or extends
39that date. The sale or purchase of tangible personal property of a
40project approved before January 1, 2021, shall continue to be
P5    1excluded from sales and use taxes pursuant to Section 6010.8 of
2the Revenue and Taxation Code for the period of time set forth in
3the authority’s resolution approving the project pursuant to this
4 section.



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