BILL ANALYSIS Ó
AB 2055
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Date of Hearing: May 18, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
2055 (Gipson) - As Amended April 26, 2016
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|Policy |Revenue and Taxation |Vote:|9 - 0 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
This bill requires that 25% of the California Competes Tax
Credit (CCTC) allocation be reserved for taxpayers that make
qualified sustainable freight investments beginning in FY
2018-19.
FISCAL EFFECT:
1)No additional revenue loss from the CCTC. This bill reserves a
share of program dollars that will go to freight
infrastructure and does not increase the total amount of
dollars allocated.
AB 2055
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2)One-time administrative costs to the Governor's Office of
Business and Economic Development (Go-Biz) in excess of
$200,000 to develop new regulations, make application changes,
modify the existing review processes and checklist, and to
conduct outreach to affected taxpayers.
COMMENTS:
1)Purpose. According to the author, AB 2055 works within the
current framework of the CCTC to help achieve Governor Brown's
plan for long-term, environmental sustainability. The
Administration has identified the replacement of 100,000
pieces of conventional freight equipment or vehicles with
zero-emission technology as a primary goal of the state.
2)Background on the CCTC. In 2014, Governor Brown signed AB 93
(Committee on Budget), Chapter 69, Statutes of 2014, which
among other things created the CCTC program. Existing law
requires that each fiscal year at least 25% of the aggregate
credit amount be reserved for small businesses, i.e., a
business with $2 million or less in gross receipts, minus
returns and allowances.
While the CCTC program is scheduled to sunset on January 1,
2025, the Administration is only authorized to award this
credit to qualified taxpayers until FY 2018-19, up to an
annually capped amount. The amount equals $30 million for the
FY 2013-14, $150 million for the FY 2014-15, and $200 million
for the FY 2015-16, FY 2016-17, and FY 2017-18, plus certain
statutorily prescribed adjustments.
3)Argument for including freight projects in the CCTC program.
California is home to three of the world's largest ports. The
real property at these ports is publicly owned. However, the
ports are operated as enterprises with private revenue
AB 2055
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streams. The primary form of infrastructure funding comes from
revenue bonds secured against future operations or lease
revenues.
The author states that California's maritime industry has made
significant improvements of port infrastructure, upgrading all
ships, trucks, cranes, trains, tugs and cargo handling
equipment to ensure that they are amongst the cleanest in the
word. As a result, the air quality has improved markedly
around California's ports. However, their environmental
efforts have not been replicated by the competitors in other
ports across North America.
Many argue that California's ports and their partners are
losing cargo because of higher costs, which negatively affects
the industry's profits needed to reinvest in newer air quality
improvement projects. California can further reduce
environmental impacts and address the ports' competitiveness
by helping seaports transition from its more conventional
equipment to the next generation of zero-emissions and
near-zero emissions infrastructure and equipment, and
consequently, improve ports' emissions profile.
Analysis Prepared by:Luke Reidenbach / APPR. / (916)
319-2081