BILL NUMBER: AB 1530 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 2, 2012
AMENDED IN ASSEMBLY APRIL 18, 2012
AMENDED IN ASSEMBLY MARCH 29, 2012
INTRODUCED BY Assembly Members Huffman, Olsen, and V. Manuel Pérez
(Coauthors: Assembly Members Chesbro, Fletcher, Nestande, Solorio,
and Wieckowski)
(Coauthor: Senator Vargas)
JANUARY 23, 2012
An act to add and repeal Chapter 8.5 (commencing with Section
51298.6) of Part 1 of Division 1 of Title 5 of the Government Code
, and to add Section 242 to the Revenue and Taxation Code
, relating to economic development.
LEGISLATIVE COUNSEL'S DIGEST
AB 1530, as amended, Huffman. Economic development: Clean
Manufacturing and Job Creation Incentive Act of 2012.
(1) The Enterprise Zone Act provides for the designation and
oversight by the Department of Housing and Community Development of
various types of economic development areas throughout the state,
including enterprise zones, targeted tax areas, local agency military
base recovery areas (LAMBRAs), and manufacturing enhancement areas,
collectively known as geographically targeted economic development
areas, or G-TEDAs. Pursuant to these provisions, qualifying entities
in those areas may receive certain tax and regulatory incentives.
This bill would , until January 1, 2020, establish the
Clean Manufacturing and Job Creation Incentive Act of 2012, and would
authorize the legislative body of a city, county, or city and county
to establish a clean manufacturing zone, as defined, within the
city, county, or city and county's boundaries for the purpose of
providing incentives to manufacturing businesses to locate within
that city, county, or city and county.
(2) Existing property tax law provides for the levy of an annual
ad valorem tax on personal property, with certain exceptions, based
upon the full value of that property.
This bill, commencing with the 2013-14 fiscal year, would, until
January 1, 2020, authorize local agencies, as defined, to provide an
annual rebate to a taxpayer in an amount that shall not exceed the
amount of property tax revenue paid by the taxpayer for that year for
qualified manufacturing property that is located within a clean
manufacturing zone.
(2) The California Constitution authorizes the Legislature to
classify personal property for differential taxation or for exemption
by means of a statute approved by a 2/3 vote of the membership of
each house.
This bill would, pursuant to this constitutional authorization,
commencing with the 2013-14 fiscal year and for each fiscal year
thereafter, upon approval of the legislative body of the city or
county that created the clean manufacturing zone, exempt from
property taxation qualified personal property, as defined, used in a
clean manufacturing zone.
By imposing new duties upon local tax officials with respect to
the personal property tax exemption described above, this bill would
impose a state-mandated local program.
(3) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.
(4) Section 2229 of the Revenue and Taxation Code requires the
Legislature to reimburse local agencies annually for certain property
tax revenues lost as a result of any exemption or classification of
property for purposes of ad valorem property taxation.
This bill would provide that, notwithstanding Section 2229 of the
Revenue and Taxation Code, no appropriation is made and the state
shall not reimburse local agencies for property tax revenues lost by
them pursuant to the bill.
Vote: 2/3 majority . Appropriation:
no. Fiscal committee: yes. State-mandated local program: yes
no .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) California's economy is among the 10 largest in the world,
with a gross domestic product of almost $2 trillion.
(b) Although the state unemployment rate remains over 11 percent,
California still ranks first among all 50 states in new branches of
high-tech manufacturing and first in the number of manufacturing
industry jobs.
(c) Economic development and job creation are essential elements
of California's fiscal recovery.
(d) California must compete with other states to attract
high-skill, high-wage manufacturing businesses and jobs, and to
retain manufacturing jobs and facilities as companies grow and
expand, which in turn can stimulate and support new businesses and
jobs in a range of sectors.
(e) California's environmental protections and public health and
safety standards are essential to ensure quality of life and economic
growth in this state.
(f) One of the major obstacles identified by businesses to opening
new facilities in California is delays in acquiring the licenses and
permits necessary to operate, including local and state business
licenses and other regulatory approvals.
(g) The purpose of this act is to stimulate growth in the
manufacturing industry without compromising California's high
environmental, public health, and safety standards by creating clean
manufacturing zones with preapproved permits and licenses to
accommodate new and expanding manufacturing businesses.
SEC. 2. Chapter 8.5 (commencing with Section 51298.6) is added to
Part 1 of Division 1 of Title 5 of the Government Code, to read:
CHAPTER 8.5. CLEAN MANUFACTURING AND JOB CREATION INCENTIVE
ACT OF 2012
51298.6. This act shall be known, and may be cited, as the Clean
Manufacturing and Job Creation Incentive Act of 2012.
51298.7. (a) For purposes of this chapter, the following terms
have the following meanings:
(1) "Clean manufacturing zone" means an area within a city,
county, or city and county that is designated by the legislative body
of the city, county, or city and county as a clean manufacturing
zone and is suitable for industrial use.
(2) "Manufacturing" means the activity of converting or
conditioning property by changing the form, composition, quality, or
character of the property for sale at retail or use in manufacturing
of a product to be sold at retail. Manufacturing includes any
improvements to tangible personal property that result in a greater
service life or greater functionality than that of the original
property.
(b) A city, county, or city and county may establish
designate a clean manufacturing zone within its
boundaries by ordinance or resolution of the legislative body of the
city, county, or city and county for the purpose of providing
incentives to manufacturing businesses to locate within that city,
county, or city and county.
(c) The resolution or ordinance adopted pursuant to subdivision
(b) shall include, but is not limited to
without limitation , all of the following provisions
:
(1) The designated official point of contact for the zone.
(2) A commitment by a the city,
county, or city and county to maintain a designated ombudsman for
permit assistance for a any
manufacturer in a the zone. This
ombudsman may, but is not required to, be the official point of
contact.
(3) The term of the zone designation , which
shall not exceed seven years.
(4) The process by which the legislative body will set and oversee
measurable objectives for the city, county, or city and county
manufacturing-related activities in the zone.
(5) The geographic boundaries of a the
zone described in sufficient detail for the county
tax assessor to identify which properties are within the zone.
(6) Baseline data on the economic and business development
conditions in the zone . This data may include the number
of manufacturing facilities, number of available lots for new or
expanded facilities, status of infrastructure, facility vacancy
rates, and employment levels.
(7) Key local and regional partnerships that the city,
county, or city and county proposes to engage for the purpose of
providing incentives to manufacturing businesses to locate within
that city, county, or city and county.
(8) A list of local and regional regulatory, tax, and programmatic
incentives available to manufacturers that locate within the zone.
Local incentives may include, but are not limited to, all of the
following:
(A) The suspension or relaxation of locally originated or modified
building codes, zoning laws, general development plans, or rent
controls.
(B) The elimination or reduction of fees for applications,
permits, and local government services.
(C) The establishment of a streamlined permit process.
(D) The elimination or reduction of the city's county's,
or city and county's share of business property
taxes, construction taxes , or business
license taxes that belong to the city, county, or city and
county .
(E) The provision or expansion of infrastructure.
(F) The targeting of federal block grant moneys, including small
cities.
(G) The targeting of economic development grants and loan moneys,
including grant and loan moneys provided by the federal Housing and
Urban Development Act of 1968 (12 (codified
in part 12 in U.S.C. Sec. 1701x), the United States Department
of Commerce, the United States Environmental Protection Agency, and
the federal Economic Development Administration.
(H) The targeting of workforce training and vocational education
grant moneys.
(I) The targeting of federal or state transportation grant moneys.
(J) The special provisions provided for under the state's other
geographically targeted economic development areas, including, but
not limited to, the Enterprise Zone Act (Chapter 12.8 (commencing
with Section 7070) of Division 7 of Title 1), infrastructure
financing districts (Chapter 2.8 (commencing with Section 53395) of
Part 1 of Division 2 of Title 5), the Local Agency Military Base
Recovery Area Act (Chapter 12.97 (commencing with Section 7105) of
Division 7 of Title 1), and targeted preference areas.
(K) Foreign Trade Zones , pursuant to 48 U.S. Stats. at
L. Ch. 590 established pursuant to Section 81a of Titl
e 19 of the United States Code , and targeted
investment areas under the federal EB-5 Program, pursuant to Section
203(b)(5) of the Immigration and Nationality Act (8 U.S.C.
Sec. 1153(b)(5)) 1153(b)(5) of Title 8 of the United
States Code .
(L) The use of tax allocation bonds, special assessment bonds,
bonds under the Mello-Roos Community Facilities Act of 1982 (Chapter
2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title
5), industrial development bonds, revenue bonds, private activity
bonds, and all special provisions provided for under federal tax law
for empowerment zone bonds.
(d) In addition to the required elements of the zone designation
ordinance or resolution, the legislative body of a city, county, or
city and county, may approve, by a majority vote of the legislative
body, the exemption of personal property within a manufacturing
facility located within the zone pursuant to Section 242 of the
Revenue and Taxation Code.
(e)
(d) (1) A copy of the resolution or ordinance shall be
transmitted to the Governor's Office of Business and Economic
Development within 60 days of being approved.
(2) The Governor's Office of Business and Economic Development
shall, within 30 days of receipt of ordinance or resolution, do all
of the following:
(A) Transmit an acknowledgment to the legislative body of the
city, county, or city and county that the document has been received.
(B) Host the resolution or ordinance on the office's Internet Web
site, including the list of local incentives.
(3) The Governor's Office of Business and Economic Development may
use the list of incentives and other relevant information provided
in the ordinance or resolution when assisting site selectors,
developers, and manufacturers who are looking to locate or relocate
within California.
(4) Permit assistance requests related to manufacturing facilities
located in a clean manufacturing zone shall be serviced as a
priority by the Governor's Office of Business and Economic
Development. The Governor's Office of Business and Economic
Development shall designate a liaison for permit assistance from a
zone. The liaison shall work in partnership with the ombudsman of the
zone to facilitate state and regional permits and licenses. This
includes provisional permits that may be granted to a jurisdiction in
advance of a manufacturer occupying a facility.
(f)
(e) The ombudsman for permit assistance, pursuant to
subdivision (c), shall, among other duties assigned, provide
assistance to the jurisdiction and manufacturers within the zone in
obtaining permits and licenses necessary to permit and prepermit
manufacturing sites within the zone. Permits and licenses include,
but are not limited to, permits and licenses issued by a local,
state, regional, or federal government.
(g)
(f) State agencies shall, based on their existing
resources and authorities, prioritize permit and license applications
that are submitted by a manufacturer or a local government agency
for a facility located within a zone, including, but not limited to,
calling for a permitting team pursuant to Section 65959.2. To qualify
for this priority, the application shall be received following the
date that the ordinance or resolution establishing the zone was
acknowledged as being received by the Governor's Office of Business
and Economic Development.
(h)
(g) Every city, county, or city and county that has
designated a zone shall report annually to the Controller on the
amount of property taxes exempted pursuant to subdivision
(c), the property and sales taxes generated within the
zones, and the number of new jobs created as a result of the
assistance and incentives provided in the clean manufacturing zone.
(i)
(h) Every manufacturer locating in a facility which was
preapproved by the city, county, or city and county shall agree to
advertise job openings with the One-Stop Career Center. The
manufacturer is not limited as to other places or methods for
advertising open positions.
(j)
(i) Notwithstanding any other law, a jurisdiction may
apply for any local, regional, or state permit or license for the
purpose of prepermitting a manufacturing facility within a zone. The
permitting agency may issue a provisional permit for this purpose,
which shall be finalized once the manufacturer is available to take
occupancy of the facility in the zone. The permit may be transferred
to a manufacturer and the city, county, or city and county may charge
the manufacturer the cost of the permitting, including
administrative costs.
(k)This chapter shall remain in effect only until January 1, 2020,
and as of that date is repealed, unless a later enacted statute,
that is enacted before January 1, 2020, deletes or extends that date.
51298.8. (a) For the 2013-14 fiscal year and each fiscal year
thereafter, the governing body of a local agency may, by a majority
vote of that governing body, provide an annual rebate to a taxpayer
in an amount that shall not exceed the proportional amount allocated
to the local agency from the amount of property tax revenue paid by
the taxpayer for that year for a qualified manufacturing property
that is located within a clean manufacturing zone.
(b) For purposes of this section the following terms have the
following meanings:
(1) "Local agency" means a city, county, or city and county.
(2) "Qualified manufacturing property" means tangible personal
property that meets all of the following requirements:
(A) The property is directly involved in the manufacturing process
in this state, and not in a preliminary or subsequent activity, or
one incidental to manufacturing.
(B) Use of the property will lead to the creation of at least 10
new full-time manufacturing jobs or positions at salary levels of at
least ten dollars ($10) per hour, twenty thousand dollars ($20,000)
per year, and those jobs or positions will continue in existence for
a continuous five-year period.
(C) A majority of the governing body of the local agency makes a
finding, in its sole discretion, that the property is used in
conjunction with the establishment or expansion of a manufacturing
project or facility within the local agency's jurisdiction, and that
the property meets the requirements of subparagraphs (A) and (B). In
this connection, a majority of the governing body is hereby
authorized, but not required, to make the finding specified herein,
and thereby authorize the rebate provided pursuant to this section.
(c) If at any time within five years after granting a rebate
pursuant to this section, the governing body finds that the recipient
taxpayer has not complied with the conditions of paragraph (2) of
subdivision (b), the governing body may recapture from that taxpayer
all or any portion of the amount rebated.
(d) This section shall apply only to property that is placed in
service on or after January 1, 2013.
(e) A local agency may enter into an agreement with a taxpayer to
implement this section and the agreement shall be valid
notwithstanding the subsequent repeal of this section.
51298.9. This chapter shall remain in effect only until January
1, 2020, and as of that date is repealed.
SEC. 3. Section 242 is added to the Revenue and
Taxation Code, to read:
242. (a) For the 2013-14 fiscal year and for each fiscal year
thereafter, qualified personal property used in a clean manufacturing
zone is exempt from taxation.
(b) The exemption provided by this section shall apply in a clean
manufacturing zone only if the legislative body of the city, county,
or city and county that establishes the zone approves this exemption
pursuant to subdivision (d) of Section 51298.7 of the Government
Code.
(c) For purposes of this section, both of the following shall
apply:
(1) "Qualified personal property" means property that is purchased
on or after January 1, 2013, for use in a clean manufacturing zone.
Qualified personal property includes, but is not limited to,
equipment or devices used or required to operate, control, regulate,
or maintain machinery and equipment, including, without limitation,
computers, data processing equipment, and computer software, together
with all repair and replacement parts with a useful life of one or
more years, whether purchased separately or in conjunction with the
machinery or equipment.
(2) "Clean manufacturing zone" means a zone that is established
pursuant to the authorization in the Clean Manufacturing and Job
Creation Incentive Act of 2012 (Chapter 8.5 (commencing with Section
51298.6) of Part 1 of Division 1 of Title 5 of the Government Code).
SEC. 4. If the Commission on State Mandates
determines that this act contains costs mandated by the state,
reimbursement to local agencies and school districts for those costs
shall be made pursuant to Part 7 (commencing with Section 17500) of
Division 4 of Title 2 of the Government Code.
SEC. 5. Notwithstanding Section 2229 of the
Revenue and Taxation Code, no appropriation is made by this act and
the state shall not reimburse any local agency for any property tax
revenues lost by it pursuant to this act.