California Legislature—2015–16 Regular Session

Assembly BillNo. 2334


Introduced by Assembly Members Mullin and Ting

February 18, 2016


An act to amend Section 26011.8 of the Public Resources Code and to amend Section 6010.8 of the Revenue and Taxation Code, relating to alternative energy, to take effect immediately, tax levy.

LEGISLATIVE COUNSEL’S DIGEST

AB 2334, as introduced, Mullin. 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 any lease or transfer of title of tangible personal property constituting a project to any participating party, and defines a project and participating party for those purposes. The act limits the sales and use tax exclusion to $100,000,000 for each calendar year.

This bill would extend the sales and use tax exclusion to any contractor for use in the performance of a construction contract for the participating party that will use that property as an integral part of the approved project. This bill would provide for an additional sales and use tax exclusion amount of $475,000,000 for the 2016 calendar year and $250,000,000 for each calendar year thereafter, plus any amounts not granted or amounts granted but unused from the previous calendar year beginning in the 2017 calendar year.

This bill would take effect immediately as a tax levy.

Vote: majority. 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 insertbegin insert(A)end insertThe exclusions granted pursuant tobegin insert paragraph (1)
6of subdivision (a) ofend insert
Section 6010.8 of the Revenue and Taxation
7Code for projects approved by the authority pursuant to this section
8shall not exceed one hundred million dollars ($100,000,000) for
9each calendarbegin delete year.end deletebegin insert year before the 2017 calendar year.end insert

begin insert

10(B) For the 2017 calendar year and each calendar year
11thereafter, the exclusions granted pursuant to paragraph (1) of
12subdivision (a) of Section 6010.8 of the Revenue and Taxation
13Code for projects approved by the authority pursuant to this section
14shall not exceed one hundred million dollars ($100,000,000) plus
15any amounts not granted or amounts granted but unused from the
16previous calendar year.

end insert
begin insert

17(2) In addition to the amount described in paragraph (1), the
18amount of exclusions that may be granted pursuant to paragraphs
19(1) and (2) of subdivision (a) of Section 6010.8 of the Revenue and
20Taxation Code for projects approved by the authority pursuant to
21this section per calendar year shall be as follows:

end insert
begin insert

22(A) For the 2016 calendar year, four hundred seventy five
23million dollars ($475,000,000).

end insert
begin insert

24(B) For the 2017 calendar year and each calendar year
25thereafter, two hundred fifty million dollars ($250,000,000) plus
26any amounts not granted or amounts granted but unused from the
27previous calendar year.

end insert

28(i) (1) The authority shall study the efficacy and cost benefit
29of the sales and use tax exemption as it relates to advanced
30manufacturing projects. The study shall include the number of jobs
31 created, the costs of each job, and the annual salary of each job.
32The study shall also consider a dynamic analysis of the economic
33output to the state that would occur without the sales and use tax
34exemption. Before January 1, 2017, the authority shall submit to
35the Legislature, consistent with Section 9795 of the Government
36Code, the result of the study.

37(2) Before January 1, 2015, the authority shall, consistent with
38Section 9795 of the Government Code, submit to the Legislature
39an interim report on the efficacy of the program conducted pursuant
40to this section. The study shall include recommendations on
P5    1program changes that would increase the program’s efficacy in
2creating permanent and temporary jobs, and whether eligibility
3for the program should be extended or narrowed to other
4manufacturing types. The authority may work with the Legislative
5Analyst’s Office in preparing the report and its recommendations.

6(j) This section shall remain in effect only until January 1, 2021,
7and as of that date is repealed, unless a later enacted statute, that
8becomes operative on or before January 1, 2021, deletes or extends
9that date. The sale or purchase of tangible personal property of a
10project approved before January 1, 2021, shall continue to be
11excluded from sales and use taxes pursuant to Section 6010.8 of
12the Revenue and Taxation Code for the period of time set forth in
13the authority’s resolution approving the project pursuant to this
14section.

15

SEC. 2.  

Section 6010.8 of the Revenue and Taxation Code, as
16amended by Section 5 of Chapter 788 of the Statutes of 2015, is
17amended to read:

18

6010.8.  

(a) begin insert(1)end insertbegin insertend insert“Sale” and “purchase” do not include any lease
19or transfer of title of tangible personal property constituting any
20project to any participating party.begin delete Asend delete

begin insert

21(2) On and after the operative date of the act adding this
22paragraph, “sale” and “purchase” do not include any lease or
23transfer of title of tangible personal property constituting any
24project to any contractor for use in the performance of a
25construction contract for the participating party that will use that
26property as an integral part of the approved project.

end insert

27begin insert(b)end insertbegin insertend insertbegin insertAsend insert used in this section, “project” has the meaning specified
28in subparagraph (B) of paragraph (8) of subdivision (a) of Section
2926003 of the Public Resources Code and “participating party” has
30the meaning specified in subparagraph (B) of paragraph (7) of
31subdivision (a) of Section 26003 of the Public Resources Code.

begin delete

32(b)

end delete

33begin insert(c)end insert This section shall remain in effect only until January 1, 2021,
34and as of that date is repealed, unless a later enacted statute, that
35is enacted before January 1, 2021, deletes or extends that date.

36

SEC. 3.  

This act provides for a tax levy within the meaning of
37Article IV of the Constitution and shall go into immediate effect.



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