BILL ANALYSIS Ó
AB 1683
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Date of Hearing: May 25, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
1683 (Eggman) - As Amended May 16, 2016
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|Policy |Revenue and Taxation |Vote:|9 - 0 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill:
1)States that it is the intent of the Legislature that the
California Alternative Energy and Advanced Transportation
Financing Authority (CAEATFA) approve project applications on
a competitive basis.
2)Adds two ex officio members to the seven-member CAEATFA: one
state legislator appointed by the Assembly Speaker and another
state legislator appointed by the Senate Committee on Rules.
AB 1683
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3)Allows any amount of the CAEATFA sales and use tax (SUT)
exclusion that is unallocated to be rolled over into the next
calendar year, but for that one year only.
FISCAL EFFECT:
1)Unknown fiscal costs to CAEATFA to approve applications on a
competitive basis.
2)Unknown use of the SUT exclusion as a result of rolling
forward unallocated exclusion amounts for an additional year.
COMMENTS:
1)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, and cogeneration and geothermal. In
1994, the authority was renamed the California Alternative
Energy and Advanced Transportation Financing Authority
(CAEATFA).
CAEATFA is also allowed to provide a SUT exclusion for certain
specified projects, and this program has been expanded in
recent years. The first SUT exclusion was granted to Tesla in
2009. SB 71 (Padilla), Chapter 10, Statutes of 2010, expanded
the SUT exclusion to apply to purchases of equipment used for
"advanced transportation technologies" and "alternative
source" products, components, or systems. In 2012, SB 1128
AB 1683
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(Padilla), Chapter 677, Statutes of 2012 added "advanced
manufacturing" to the list of eligible projects and placed a
$100 million cap on the amount of the SUT exclusion that may
be awarded in a calendar year. In 2015, AB 199 (Eggman),
Chapter 768, Statutes of 2015, further modified the SUT
exclusion program to include manufacturing projects that
either process or utilize "recycled feedstock." The expanded
program is due to sunset on January 1, 2021.
2)Program oversubscription. Last year, CAEATFA had a high number
of applications requesting an allocation of the SUT exclusion,
and the existing cap of $100 million was quickly reached.
With the expansion of the CAEATFA program to include projects
that process or utilize recycled feedstock, the number of SUT
exclusion applications is expected to increase even more.
While historically small projects requesting less than $2.1
million in SUT exclusions comprised almost 75% of approved
applications, in recent years CAEAFTA has approved a number of
applications for large projects with more than $20 million in
SUT exclusions, such as for example, the ones submitted by
Tesla, Atieva, Lockheed, Space X, and Solyndra.
Existing law does not impose a cap on the amount that a company
may request in SUT exclusions, nor does existing law
prioritize certain types of projects. Thus, applications
involving large projects may utilize a considerable portion of
the allowable $100 million cap, leaving no funds for smaller
projects. Furthermore, the CAEAFTA does not have the authority
to utilize the unclaimed awards. Finally, CAEAFTA may not
award any amounts that remain unallocated in a particular
calendar year in the following years. In other words, the
un-awarded SUT exclusion amounts disappear.
AB 1683
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3)Related legislation. AB 2334 (Mullin), also on today's agenda,
increases the amount of SUT exclusions available from $100
million to $575 million for 2016 and from $100 million to $350
million for 2017 through 2021.
Analysis Prepared by:Luke Reidenbach / APPR. / (916)
319-2081