BILL ANALYSIS
AB 904
Page 1
Date of Hearing: May 20, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 904 (V. Manual Perez) - As Amended: May 4, 2009
Policy Committee: Local
GovernmentVote:7-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill expands the list of businesses eligible to receive
incentive payments from local governments under the California
Investment Incentive Program (CIIP). Specifically, this bill:
1)Expands the list of eligible businesses to include a
manufacturer of parts or components related to the production
of electricity using solar, wind, biomass, hydropower, or
geothermal resources.
2)Removes obsolete references in the existing CIIP program to
the Technology, Trade, and Commerce Agency (which no longer
exists) and replaces them with references to the Business,
Transportation and Housing Agency.
FISCAL EFFECT
1)Minor, probably absorbable, costs to the Business
Transportation, and Housing Agency, which is responsible under
the CIIP program for approval of a proponent's application for
certification of a qualified manufacturing facility.
2)No direct impact on state revenues, as the bill merely
authorizes cities and counties to provide incentive payments
for specified businesses from their share of property tax
revenues.
COMMENTS
1)Background . The CIIP authorizes cities and counties to pay a
qualified manufacturing facility a "capital investment
AB 904
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incentive amount" - essentially a property tax rebate on the
amount of the assessed value of the facility in excess of $150
million - for up to 15 years, if the governing body of the
city or county elects to establish a CIIP in their
jurisdiction. To qualify for this incentive, the manufacturer
must: establish a job creation plan; pay the city or county an
annual "community services fee" equal to 25% of the rebated
property taxes, or $2 million, whichever is less; and sign an
agreement to repay the property tax rebate if certain
conditions are not met. Currently, CIIPs are authorized for a
business engaged in the recovery of minerals from geothermal
resources and various types of manufacturing. To date, the
CIIP program has been used on a very limited basis.
2)Rationale . This bill, sponsored by Imperial County, is
intended to expand CIIP to enable the county to attract
renewable energy manufacturing businesses into its region. The
author indicates that Imperial County faces high unemployment
and is well positioned to attract renewable energy firms,
given its prime geothermal sites, solar resources, and wind
capacity.
3)Prior legislation . Several bills have been introduced that
would have expanded the list of businesses eligible for the
CIIP program. AB 2129 (Kelley, 2002) and AB 1996 (Garcia,
2006) would have expanded the program to electricity
powerplants using renewable resources. Both bills were held in
Senate Local Government Committee.
Analysis Prepared by : Brad Williams / APPR. / (916) 319-2081