BILL ANALYSIS
AB 904
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 904 (V. Manuel Perez)
As Amended July 9, 2009
Majority vote
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|ASSEMBLY: |79-0 |(May 28, 2009) |SENATE: |38-0 |(August 27, |
| | | | | |2009) |
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Original Committee Reference: L. GOV.
SUMMARY : Specifies that a business engaged in the manufacturing
of parts or components related to the production of electricity
using solar, wind, biomass, hydropower, or geothermal resources
on or after July 1, 2010, is eligible under the California
Investment Incentive Program (CIIP).
The Senate amendments :
1)Eliminate the ability of a school district to pay a portion of
its ad valorem property tax revenues toward the CIIP.
2)Repeal the provisions authorizing the CIIP on January 1, 2017,
unless a later enacted statute deletes or extends the sunset
date.
3)Allow a program established before January 1, 2017, to remain
in effect for the full term of that program, regardless of the
January 1, 2017 repeal date.
EXISTING LAW :
1)Authorizes the governing body of a county, city and county, or
a city to establish a capital investment incentive program
whereby the local agency would pay a capital investment
incentive amount to the proponent of a qualified manufacturing
facility for up to 15 consecutive fiscal years upon the
approval of a written request from the proponent.
2)Provides that the annual amount of the capital investment
incentive would be the local agency's share of the property
tax on the facility's assessed value in excess of $150
million.
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3)Provides that the proponent must enter into a community
services agreement with the local agency, which shall include
the payment by the proponent to the local agency of a
community services fee equal to 25% of the capital investment
incentive amount, up to
$2 million.
4)Allows multiple agencies to establish the program (i.e., the
county and a city could establish the program for the same
facility).
AS PASSED BY THE ASSEMBLY , this bill specified that a business
engaged in the manufacturing of parts or components related to
the production of electricity using solar, wind, biomass,
hydropower, or geothermal resources on or after July 1, 2010, is
eligible under the CIIP.
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS : This bill, sponsored by Imperial County, will expand
the list of eligible businesses for the CIIP to include those
that are engaged in the manufacturing of parts or components
related to the production of electricity using solar, wind,
biomass, hydropower, or geothermal resources on or after July 1,
2010.
The CIIP authorizes cities and counties to pay a qualified
manufacturing facility a "capital investment 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: 1) establish a job creation
plan; 2) 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, 3) sign an agreement to repay the
property tax rebate if certain conditions are not met.
The CIIP was created in 1997 [SB 566 (Thompson), Chapter 616] to
allow local agencies to provide a reduction in property taxes as
a means to attract very large, high-tech manufacturing plants.
The Legislature originally passed the CIIP to help Placer County
officials attract an Intel plant, but they never used the law.
In 1999, the CIIP was expanded to allow mineral-recovery
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geothermal businesses to the list of eligible businesses [SB 133
(Kelley), Chapter 24], with the intent of including CalEnergy
Company's plan to extract minerals from geothermal brine. While
Imperial County paid some property tax rebates to that project,
CalEnergy was unable to bring the mineral extraction plant into
operation and repaid the rebates. With the exception of this
one unsuccessful attempt, the tax rebate program has never been
used.
There have been several other attempts to expand the list of
businesses eligible for the CIIP.
AB 2129 (Kelley), of 2002, would have allowed an electricity
power plant that uses solar, wind, geothermal, solid-fuel
biomass, or digester gas to be eligible for the CIIP. Assembly
Member Garcia carried a similar measure in 2006 (AB 1966), which
would have allowed a business engaged in the operation of a
power plant used for the production of electricity from one or
more of the following energy resources: solar thermal, wind,
photovoltaic, geothermal, solid-fuel biomass, fuel cells using
renewable fuel, small hydroelectric generation of 30 megawatts
or less, municipal solid waste conversion, digester gas,
landfill gas, ocean wave, ocean thermal, and tidal current to be
eligible for the CIIP. Both bills failed passage in the Senate
Local Government Committee.
Amendments taken in the Senate would repeal the provisions
authorizing the CIIP on January 1, 2017. A program established
prior to January 1, 2017 would be allowed to remain in effect
past January 1, 2017 for the full term of the program,
regardless of the repeal date.
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958
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