Amended in Assembly March 8, 2016

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 alternativebegin delete energy.end deletebegin insert energy, to take effect immediately, tax levy.end insert


AB 1683, as amended, 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.begin delete 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 XIIIend deletebegin deleteend deletebegin deleteA of the California Constitution, and thus would require for passage the approval of end deletebegin delete23end deletebegin delete of the membership of each house of the Legislature.end delete 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.

begin insert

This bill would take effect immediately as a tax levy.

end insert

Vote: begin delete23 end deletebegin insertmajorityend insert. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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

P2    1


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



(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
P3    1growth or improving the quality of crops by conditioning soils
2through physical means.

3(c) The authority shall publish notice of the availability of
4project applications and deadlines for submission of project
5applications to the authority.

6(d) The authority shall evaluate project applications based upon
7all of the following criteria:

8(1) The extent to which the project develops manufacturing
9facilities, or purchases equipment for manufacturing facilities,
10located in California.

11(2) The extent to which the anticipated benefit to the state from
12the project equals or exceeds the projected benefit to the
13participating party from the sales and use tax exclusion.

14(3) The extent to which the project will create new, permanent
15jobs in California.

16(4) To the extent feasible, the extent to which the project, or the
17product produced by the project, results in a reduction of
18greenhouse gases, a reduction in air or water pollution, an increase
19in energy efficiency, or a reduction in energy consumption, beyond
20what is required by federal or state law or regulation.

21(5) The extent of unemployment in the area in which the project
22is proposed to be located.

23(6) Any other factors the authority deems appropriate in
24accordance with this section.

25(e) At a duly noticed public hearing, the authority shall approve,
26by resolution, project applications for financial assistance.

27(f) Notwithstanding subdivision (j), and without regard to the
28actual date of any transaction between a participating party and
29the authority, any project approved by the authority by resolution
30for the sales and use tax exclusion pursuant to Section 6010.8 of
31the Revenue and Taxation Code before March 24, 2010, shall not
32be subject to this section.

33(g) The Legislative Analyst’s Office shall report to the Joint
34Legislative Budget Committee on the effectiveness of this program,
35on or before January 1, 2019, by evaluating factors, including, but
36not limited to, the following:

37(1) The number of jobs created by the program in California.

38(2) The number of businesses that have remained in California
39or relocated to California as a result of this program.

P4    1(3) The amount of state and local revenue and economic activity
2generated by the program.

3(4) The types of advanced manufacturing, as defined in
4paragraph (1) of subdivision (a) of Section 26003, utilized.

5(5) The amount of reduction in greenhouse gases, air pollution,
6water pollution, or energy consumption.

7(h) (1) The exclusions granted pursuant to Section 6010.8 of
8the Revenue and Taxation Code for projects approved by the
9authority pursuant to this section shall not exceed two hundred
10million dollars ($200,000,000) for each calendar year.

11(2) If less than two hundred million dollars ($200,000,000) is
12excluded pursuant to Section 6010.8 of the Revenue and Taxation
13Code in a calendar year, the unallocated portion of that two hundred
14million dollars ($200,000,000) may be granted the following
15calendar year, in excess of the following year’sbegin delete two hundred
16million dollarend delete
begin insert two-hundred-million-dollarend insert ($200,000,000)
17maximum. The unallocated amount for a particular calendar year
18shall not roll over more than one calendar year.

19(i) (1) The authority shall study the efficacy and cost benefit
20of the sales and use tax exemption as it relates to advanced
21manufacturing projects. The study shall include the number of jobs
22created, the costs of each job, and the annual salary of each job.
23The study shall also consider a dynamic analysis of the economic
24output to the state that would occur without the sales and use tax
25exemption. Before January 1, 2017, the authority shall submit to
26the Legislature, consistent with Section 9795 of the Government
27Code, the result of the study.

28(2) Before January 1, 2015, the authority shall, consistent with
29Section 9795 of the Government Code, submit to the Legislature
30an interim report on the efficacy of the program conducted pursuant
31to this section. The study shall include recommendations on
32program changes that would increase the program’s efficacy in
33creating permanent and temporary jobs, and whether eligibility
34for the program should be extended or narrowed to other
35manufacturing types. The authority may work with the Legislative
36Analyst’s Office in preparing the report and its recommendations.

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

6begin insert

begin insertSEC. 2.end insert  

end insert
begin insert

This act provides for a tax levy within the meaning of
7Article IV of the Constitution and shall go into immediate effect.

end insert