Sa le s & Use T a x E xc lusio n Pro g ra m Disc ussio n o f - PowerPoint PPT Presentation

Sa le s & Use T a x E xc lusio n Pro g ra m Disc ussio n o f Pro po se d Re g ula tio n Ame ndme nts Oc to b e r 22, 2019

We lc o me  F o r tho se he re in pe rso n, ple a se sig n in a t the b a c k  Co pie s o f the pre se nta tio n a nd pro po se d re g ula tio ns a re a va ila b le a t the b a c k a nd o n o ur we b site a t:  https:/ / www.tre a sure r.c a .g o v/ c a e a tfa / ste / re g ula tio ns/ ind e x.a sp  T his he a ring is b e ing re c o rde d  Pub lic Co mme nt:  I n pe rso n (will b e ta ke n first): ple a se c o me to the fro nt to spe a k in the mic ro pho ne  Via we b ina r: Ple a se ra ise yo u ha nd o r type yo ur q ue stio n in the c o mme nt b o x 2

Ag e nda  Sta ff’ s Sta ke ho lde r Pro c e ss & Appro a c h  Ove rvie w o f Pro po se d Ame ndme nts  Ne xt Ste ps  Pub lic Co mme nt 3

Re g ula tio n De ve lo pme nt Pro c e ss I ndividua l b rie fing s to Sta ke ho lde r o utre a c h, pro vide b a c kg ro und pro viding list o f Sta ff de ve lo ps a list o f a nd so lic it input o n po te ntia l c ha ng e s a nd po te ntia l c ha ng e s g o a ls a nd po lic y inviting pa rtic ipa tio n a t prio ritie s Bo a rd me e ting Se pte mb e r 9 th Bo a rd Dra ft pro po se d Re le a se te xt fo r me e ting to disc uss the re g ula tio n te xt in lig ht c o mme nt a nd ho ld pro po se d c ha ng e s a nd o f Bo a rd me e ting pub lic wo rksho p o n so lic it pub lic input disc ussio n pro po se d te xt Pre se nt fina l dra ft I f a do pte d b y the Ope n up a pplic a tio ns re g ula tio ns to Bo a rd a t Bo a rd, file with OAL a s fo r 2020 in De c e mb e r No ve mb e r Bo a rd e me rg e nc y re g ula tio ns fo r c o nside ra tio n in me e ting fo r to b e e ffe c tive in F e b rua ry c o nside ra tio n De c e mb e r 4

Sta ff’ s Appro a c h to Pro po se d Re g ula tio ns Re spo nd to Bo a rd me mb e r prio ritie s a nd inc o rpo ra te pub lic fe e db a c k Ma ke inc re me nta l c ha ng e s a t this time Antic ipa te a dditio na l c ha ng e s ne xt ye a r, a llo wing mo re to so lic it input a nd c o nside r issue s 5

Pr opose d Ame ndme nts to the ST E Pr ogr am Re gulations 6

Applic a tio n Co nside ra tio n Pro c e ss (Se c tio n 10032(a )(1),(7)) Co ntinue re vie wing o n a ro lling b a sis until c o mpe titive . • Whe n CAE AT F A re c e ive s Applic a tio ns re q ue sting ST E in e xc e ss o f the • sta tuto ry c a p, Applic a tio ns sub mitte d fo r tha t pa rtic ula r Bo a rd me e ting will b e c o nside re d in the o rde r in whic h the y a re ra nke d b a se d o n c o mpe titive c rite ria . Curre nt Co mpe titive Crite ria Pro po se d Co mpe titive Crite ria • Ne w Applic a nt (5 po ints) • Co st o f ST E pe r jo b c re a te d (up to 75 po ints) • L o c a te d in c o unty o f hig h une mplo yme nt (up to 5 • L o c a te d in c o unty o f hig h po ints) une mplo yme nt (up to 50 po ints) • Co rpo ra te HQ in Ca lifo rnia (1 po int) • T o ta l Po llutio n Be ne fits sc o re g re a te r tha n 0 • Sma ll Busine ss (1 po int) (AS/ AT / Re c yc ling )(100 po ints) • Re b uilding due to • Co rpo ra te HQ in Ca lifo rnia e me rg e nc y disa ste r (5 po ints) (15 po ints) • Re b uilding o r re lo c a ting due to na tura l disa ste r (50 po ints) 7

Pro po se d Co mpe titive Crite rio n Co st o f ST E pe r Jo b Cre a te d (Se c tio n 10032(a )(7)(B)) Po ints fo r Jo b Cre a tio n • 1 Job ≤ $50,000 in STE = 75 points • $50,000 in STE < 1 Job ≤ $100,000 in STE = 60 points • $100,000 in STE < 1 Job ≤ $150,000 in STE = 55 points • $150,000 in STE < 1 Job ≤ $200,000 in STE = 45 points • $200,000 in STE < 1 Job ≤ $300,000 in STE = 40 points • $300,000 in STE < 1 Job ≤ $400,000 in STE = 35 points • $400,000 in STE < 1 Job ≤ $750,000 in STE = 30 points • $750,000 in STE < 1 Job ≤ $1,500,000 in STE = 20 points • 1 Jo b > $1,500,000 in ST E , o r 0 jo b s c re a te d = 0 po ints E xa mple s –  Applic a tio n re q ue sts $7,000,000 in ST E . Pro je c t is a ntic ipa te d to c re a te 10 jo b s a s a re sult o f the ST E . 1 jo b = $700,000 in ST E , the re fo re 30 po ints a wa rde d.  Applic a tio n re q ue sts $500,000 in ST E . Pro je c t is no t a ntic ipa te d to c re a te a ny jo b s a s a re sult o f the ST E . T he re fo re no po ints a wa rde d.  Applic a tio n re q ue sts $1,200,000 in ST E . Pro je c t is a ntic ipa te d to c re a te 1 jo b a s a re sult o f the ST E . 1 jo b = $1,200,000 in ST E , the re fo re 20 po ints a wa rde d. 8

Pro po se d Co mpe titive Crite ria Une mplo yme nt (Se c tio n 10032(a )(7)(B)) Po ints a re b a se d o n ho w muc h g re a te r the lo c a l une mplo yme nt ra te is in c o mpa riso n to the a nnua l a ve ra g e sta te wide une mplo yme nt ra te , pursua nt to the fo llo wing fo rmula : Po ints = ((lo c a l ra te / sta te ra te ) * 100) – 100 E xa mple :  Annua l a ve ra g e sta te wide une mplo yme nt ra te : 5.23%  L o c a l une mplo yme nt ra te : 7.5% ((7.5%/ 5.23%) * 100) – 100 = 43 po ints 9

Annua l Pe r-Applic a nt Ca p (Se c tio n 10032(a )(4)) Cur r e nt Re gulations  $20 millio n in ST E c a p  I f a ny ST E re ma ins a t the e nd o f the ye a r, Applic a nts c a n sub mit a re vise d Applic a tio n fo r re vie w a nd c o nside ra tio n  Bo a rd must vo te to ma ke the ST E a va ila b le , in a dditio na l to vo ting o n e a c h Applic a nt’ s re q ue st  ST E is split e ve nly a mo ng e lig ib le Applic a nts 10

Annua l Pe r-Applic a nt Ca p (Se c tio n 10032(a )(4)) Pr opose d Change s  L o we r c a p to $10 millio n in ST E  I f a ny ST E re ma ins, ST E is split pro po rtio na lly a mo ng e lig ib le Applic a nts b a se d o n po ints e a rne d fro m e va lua tio n c rite ria  E D will a nno unc e if a ny ST E is a va ila b le , ra the r tha n re q uiring a Bo a rd vo te  E va lua tio n c rite ria (sa me a s pro po se d c o mpe titive c rite ria )  Co st o f ST E pe r jo b c re a te d (up to 75 po ints)  Hig h une mplo yme nt c o unty (up to 50 po ints)  Pro je c t ma ke s a pro duc t tha t g e ne ra te s e nviro nme nta l b e ne fits (AS/ AT / RF ) (100 po ints)  Co rpo ra te HQ in Ca lifo rnia (15 po ints)  Re b uilding o r re lo c a ting due to na tura l disa ste r (50 po ints) 11

Re c e iving Additio na l ST E a t the E nd o f the Ye a r (Se c tio n 10032(a )(4)) E xample – Additional Awar d Sc or e T ota l CA Ne w Re build or T ota l Une mployme nt Pollution HQ Jobs r e loc a ting Sc or e Sc or e T ota l ST E Be ne fit Sc or e a fte r na tur a l Re que st Sc or e > 0 disa ste r ? Up to Up to Up to 50 pts 100 pts 15pts 75 pts 50 pts 290 pts Applic a nt 1 $40 MM 100 15 0 40 0 155 Applic a nt 2 $12 MM 0 15 35 0 50 100 Applic a nt 3 $20 MM 100 0 50 55 0 205 12

Re c e iving Additio na l ST E a t the E nd o f the Ye a r (Se c tio n 10032(a )(4)) E xample (Continue d) - Alloc ation of Additional ST E ST E Re ma ining a t e nd o f ye a r: $10,000,000 T ota l Initia l Sha r e Se c onda r y T ota l ST E Sha r e of T ota l Additional Sc or e Additional of Additional Re que st Points ST E Awa r de d Awa r d Points Awa r d App. 1 $40 MM 155 34% $3,369,565 43% $74,879 $3,444,444 App. 2 $12 MM 100 22% $2,000,000 0 $0 $2,000,000 App. 3 $20 MM 205 45% $4,456,522 57% $99,034 $4,555,556 F ina l Awa rds T ota l ST E Ca ppe d T ota l Additional Re ma ining Ask T ota l Awa r d Re que st Awa r d ST E Awa r de d for F utur e Apps App. 1 $40 MM $10MM $3,444,444 $13,444,444 $26,555,556 App. 2 $12 MM $10MM $2,000,000 $12,000,000 $0 App. 3 $20 MM $10MM $4,555,556 $14,555,556 $5,444,444 13

Additio na l Cha ng e s  No lo ng e r re q uiring a ha rdc o py o f the Applic a tio n pa c ke t – o nly a n e le c tro nic ve rsio n. (§10032(a )(2), §10032(b ), §10036(a )(3))  Ask fo r Co rpo ra te He a dq ua rte rs a ddre ss. (§10032(c )(4)(A)(vii))  Must indic a te whe the r the re will b e a ne t re duc tio n in jo b s a t the F a c ility re sulting fro m the purc ha se a nd use o f the Qua lifie d Pro pe rty (Re q uire d unde r AB 176). (§10032(c )(4)(B)(i)k) 14

Additio na l Cha ng e s  Ope n up po ints c urre ntly o nly a wa rde d to AM pro je c ts fo r R&D, wo rkfo rc e pa rtne rships, a nd b e ing pa rt o f a n industry c luste r to a ll e lig ib ility pa thwa ys. (§10032(c )(4)(F ) & §10033(c )(E ))  E lig ib ility a nd re vie w o f L e g a l Sta tus Que stio nna ire – (1) no c a se unde r OSHA’ s Se ve re Vio la to r E nfo rc e me nt Pro g ra m, a nd (2) no willful OSHA vio la tio ns. (§10033(b )(3))  Upda te L e g a l Sta tus Que stio nna ire ve rsio n (§10032(c )(2))  E xte nd time fra me to purc ha se 15% o f Qua lifie d Pro pe rty fro m 1 ye a r to 18 mo nths a nd a llo w the Bo a rd to e xte nd upo n a finding o f e xtra o rdina ry c irc umsta nc e s. (§10034(b )(1))  E xtra o rdina ry c irc umsta nc e s ma y inc lude unfo re se e n pe rmitting issue s, b ut do e s no t inc lude a la c k o f funding 15