BILL NUMBER: AB 2334 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 27, 2016
AMENDED IN ASSEMBLY MAY 16, 2016
INTRODUCED BY Assembly Members Mullin and Ting
(Principal coauthor: Assembly Member Eggman)
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 amended, Mullin. Sales and use taxes: exclusion:
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 expand those
persons eligib le for the sales and use
tax exclusion exclusion, which is limited in
amount, to additionally include 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 also
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 allow the exclusion
amount granted by the authority in any year to include any
amounts not granted or amounts granted but unused from the previous
calendar year beginning in the 2017 calendar year.
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 2/3 of the membership of
each house of the Legislature.
This bill would take effect immediately as a tax levy.
Vote: majority 2/3 . Appropriation:
no. Fiscal committee: yes. State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 26011.8 of the Public Resources Code is amended
to read:
26011.8. (a) The purpose of this section is to promote the
creation of California-based manufacturing, California-based jobs,
advanced manufacturing, the reduction of greenhouse gases, or
reductions in air and water pollution or energy consumption. In
furtherance of this purpose, the authority may approve a project for
financial assistance in the form of the sales and use tax exclusion
established in Section 6010.8 of the Revenue and Taxation Code.
(b) For the purposes of this section, the following terms have the
following meanings:
(1) "Project" means tangible personal property if at least 50
percent of its use is either to process recycled feedstock that is
intended to be reused in the production of another product or using
recycled feedstock in the production of another product or soil
amendment, or tangible personal property that is used in the state
for the design, manufacture, production, or assembly of advanced
manufacturing, advanced transportation technologies, or alternative
source products, components, or systems, as defined in Section 26003.
"Project" does not include tangible personal property that processes
or uses recycled feedstock in a manner that would constitute
disposal as defined in subdivision (b) of Section 40192.
(2) "Recycled feedstock" means materials that would otherwise be
destined for disposal, having completed their intended end use and
product lifecycle.
(3) "Soil amendments" may include "compost," as defined in Section
14525 of the Food and Agricultural Code, "fertilizing material," as
defined in Section 14533 of the Food and Agricultural Code, "gypsum"
or "phosphatic sulfate gypsum," as those terms are defined in Section
14537 of the Food and Agricultural Code, or a substance distributed
for the purpose of promoting plant growth or improving the quality of
crops by conditioning soils through physical means.
(c) The authority shall publish notice of the availability of
project applications and deadlines for submission of project
applications to the authority.
(d) The authority shall evaluate project applications based upon
all of the following criteria:
(1) The extent to which the project develops manufacturing
facilities, or purchases equipment for manufacturing facilities,
located in California.
(2) The extent to which the anticipated benefit to the state from
the project equals or exceeds the projected benefit to the
participating party from the sales and use tax exclusion.
(3) The extent to which the project will create new, permanent
jobs in California.
(4) To the extent feasible, the extent to which the project, or
the product produced by the project, results in a reduction of
greenhouse gases, a reduction in air or water pollution, an increase
in energy efficiency, or a reduction in energy consumption, beyond
what is required by federal or state law or regulation.
(5) The extent of unemployment in the area in which the project is
proposed to be located.
(6) Any other factors the authority deems appropriate in
accordance with this section.
(e) At a duly noticed public hearing, the authority shall approve,
by resolution, project applications for financial assistance.
(f) Notwithstanding subdivision (j), and without regard to the
actual date of any transaction between a participating party and the
authority, any project approved by the authority by resolution for
the sales and use tax exclusion pursuant to Section 6010.8 of the
Revenue and Taxation Code before March 24, 2010, shall not be subject
to this section.
(g) The Legislative Analyst's Office shall report to the Joint
Legislative Budget Committee on the effectiveness of this program, on
or before January 1, 2019, by evaluating factors, including, but not
limited to, the following:
(1) The number of jobs created by the program in California.
(2) The number of businesses that have remained in California or
relocated to California as a result of this program.
(3) The amount of state and local revenue and economic activity
generated by the program.
(4) The types of advanced manufacturing, as defined in paragraph
(1) of subdivision (a) of Section 26003, utilized.
(5) The amount of reduction in greenhouse gases, air pollution,
water pollution, or energy consumption.
(h) (1) (A)The The exclusions
granted pursuant to paragraph (1) paragraphs
(1) and (2) of subdivision (a) of Section 6010.8 of the Revenue
and Taxation Code for projects approved by the authority pursuant to
this section shall not exceed one hundred million dollars
($100,000,000) for each calendar year before the 2017 calendar year.
(B)
(2) For the 2017 calendar year and each calendar year
thereafter, the exclusions granted pursuant to paragraph (1)
paragraphs (1) and (2) of subdivision (a) of
Section 6010.8 of the Revenue and Taxation Code for projects approved
by the authority pursuant to this section shall not exceed one
hundred million dollars ($100,000,000) plus any amounts not granted
or amounts granted but unused from the previous calendar year.
(2) In addition to the amount described in paragraph (1), the
amount of exclusions that may be granted pursuant to paragraphs (1)
and (2) of subdivision (a) of Section 6010.8 of the Revenue and
Taxation Code for projects approved by the authority pursuant to this
section per calendar year shall be as follows:
(A) For the 2016 calendar year, four hundred seventy-five million
dollars ($475,000,000).
(B) For the 2017 calendar year and each calendar year thereafter,
two hundred fifty million dollars ($250,000,000) plus any amounts not
granted or amounts granted but unused from the previous calendar
year.
(i) (1) The authority shall study the efficacy and cost benefit of
the sales and use tax exemption as it relates to advanced
manufacturing projects. The study shall include the number of jobs
created, the costs of each job, and the annual salary of each job.
The study shall also consider a dynamic analysis of the economic
output to the state that would occur without the sales and use tax
exemption. Before January 1, 2017, the authority shall submit to the
Legislature, consistent with Section 9795 of the Government Code, the
result of the study.
(2) Before January 1, 2015, the authority shall, consistent with
Section 9795 of the Government Code, submit to the Legislature an
interim report on the efficacy of the program conducted pursuant to
this section. The study shall include recommendations on program
changes that would increase the program's efficacy in creating
permanent and temporary jobs, and whether eligibility for the program
should be extended or narrowed to other manufacturing types. The
authority may work with the Legislative Analyst's Office in preparing
the report and its recommendations.
(j) This section shall remain in effect only until January 1,
2021, and as of that date is repealed, unless a later enacted
statute, that becomes operative on or before January 1, 2021, deletes
or extends that date. The sale or purchase of tangible personal
property of a project approved before January 1, 2021, shall continue
to be excluded from sales and use taxes pursuant to Section 6010.8
of the Revenue and Taxation Code for the period of time set forth in
the authority's resolution approving the project pursuant to this
section.
SEC. 2. Section 6010.8 of the Revenue and Taxation Code, as
amended by Section 5 of Chapter 788 of the Statutes of 2015, is
amended to read:
6010.8. (a) (1) "Sale" and "purchase" do not include any lease or
transfer of title of tangible personal property constituting any
project to any participating party.
(2) On and after the operative date of the act adding this
paragraph, "sale" and "purchase" do not include any lease or transfer
of title of tangible personal property constituting any project 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.
(b) As used in this section, "project" has the meaning specified
in subparagraph (B) of paragraph (8) of subdivision (a) of Section
26003 of the Public Resources Code and "participating party" has the
meaning specified in subparagraph (B) of paragraph (7) of subdivision
(a) of Section 26003 of the Public Resources Code.
(c) This section shall remain in effect only until January 1,
2021, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2021, deletes or extends
that date.
SEC. 3. This act provides for a tax levy within the meaning of
Article IV of the California Constitution and shall go into immediate
effect.