BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
338 (Alquist)
Hearing Date: 5/11/2009 Amended: 4/15/2009
Consultant: Bob Franzoia Policy Vote: Energy 10-0
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BILL SUMMARY: SB 338 would, for the California Alternative
Energy and Advanced Transportation Financing Authority
(authority), broaden the definition of "project" to apply to the
property and activities that are utilized for the design,
technology transfer, manufacture, production, assembly,
distribution or service of renewable energy technologies,
renewable energy projects, and renewable energy manufacturing
service of renewable energy technologies, renewable energy
projects, and renewable energy manufacturing.
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Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
Expanded definition of Up to $14,040 Up to
$14,040 General
authority project
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
California imposes a sales tax on a retailer's gross receipts
from the retail sale of tangible personal property in the state,
unless the sale is specifically exempt from taxation by statute.
This tax is imposed on the retailer who may collect
reimbursements from the customer if the contract of sale so
provides. It is presumed that gross receipts from a particular
sale of tangible personal property are subject to tax, unless
the seller can establish either that the sale was not a retail
transaction or that the sale is subject to an exemption.
Revenue and Taxation Code 6010.8 provides that "sale" and
"purchase" do not include any transfer of title of tangible
property constituting any project to the authority by a
participating party, nor any lease or transfer to any
participating party, as specified.
Where the conditions of Revenue and Taxation Code 6010.8 are
met, neither the acquisition of the equipment by the authority
nor the transfer of the equipment to the participating party
will be subject to sales and use taxes.
The Board of Equalization estimates that in 2008, California
capital expenditures of machinery and equipment related to clean
renewable energy production amounted to approximately $225
million. There is no information to determine what portion of
that amount would be acquired in transactions qualifying for the
exclusion under Revenue and Taxation Code 6010.8. If all
persons making capital expenditures of machinery and equipment
in California for renewable energy production structured their
transactions to meet the conditions of the exclusion, then the
annual state and local revenue loss could be as high as $14.04
million to the state and $20.24 million total ($225 million x
9%) annually until the authority's bonding capacity is
exhausted.
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SB 338 (Alquist)
The revenue loss would be as follows:
State General Fund (6.0%)
$13.54 million
Fiscal Recovery Fund (0.25%)
.50
Local
(2.0%) 4.50
District
(0.75%) 1.70
$20.24 million
The authority has $53 million of bonds outstanding, no bonds
unsold, and approximately $813.9 million in remaining bonding
capacity.