California Alternative Energy & Advanced Transportation Authority (CAEATFA):
Sales & Use Tax Exemptions for Clean Tech Manufacturing
California leads the world in environmental technology as the home to 10,209 clean-tech companies and home base to the innovative minds and year-round sunshine that power the
clean technology industry. SB 71 will allow California to maintain this competitive edge by expanding the range of projects which may be approved for a sales tax exemption to include
all clean-tech manufacturers.
Previously, CAEATFA could provide a sales tax exemption for the purchase of new manufacturing equipment for zero-emission vehicles (ZEV); under SB 71 they will now be able to provide an exemption for all clean-tech manufacturers.
The CAEATFA Board has directed authority staff to explore proposals for providing sales and use tax exemptions for the purchase of ZEV and clean-tech manufacturing equipment. The goal of this program is to create a strong new clean-tech industry within California that reduces green house gas emissions and creates new long-term high value-added jobs.
Businesses must apply for the tax exemption and once approved would be able to make tax-exempt clean-tech manufacturing equipment. CAEATFA will send project approval in the form of a letter authorizing the Executive Director to enter into a contract with the participating business. The participating business will issue an exemption certificate (provided by CAEATFA) to the vendor at the time of purchase. This certificate will state that the business party is exempt from paying taxes on the equipment at time of purchase. Once the participating party purchases the project equipment from its vendors, the Conveyance/Reconveyance contract takes over. Under the contract, the participating business will convey title to CAEATFA along with a list of equipment purchased, and CAEATFA will convey it back to the participating business. The business party is not allowed to use the equipment until it receives the reconveyed title from CAEATFA.
The Board of Equalization (BOE) oversees statesales and use tax issues and would be consulted in the process.
Pollution Control Financing:
The CPCFA provides tax-exempt bond financing for pollution control projects. Their Tax-Exempt Bond Financing Program gives California businesses help with acquisition or construction of qualified pollution control, waste disposal or waste recovery facilities, and the acquisition and installation of new equipment. They also offer a Sustainable Communities Grant and Loan Program that assists communities implementing "smart growth strategies," and the CalReUSE Program that offers low-interest, forgivable loans to assist public and private partners in redeveloping contaminated brownfields. The California Capital Access Program (CalCAP) helps small business borrowers obtain loans. www.treasurer.ca.gov/cpcfa/
Alternative and Renewable Fuel and Vehicle Technology Program (AB 118)
Assembly Bill 118 (Núñez, Chapter 750, Statutes of 2007) created the California Energy
Commission's Alternative and Renewable Fuel and Vehicle Technology Program. The statute,
subsequently amended by Assembly Bill 109 (Núñez, Chapter 313, Statutes of 2008), authorizes the Energy Commission to develop and deploy alternative and renewable fuels and advanced
transportation technologies to help attain the state's climate change policies. The Energy Commission has an annual program budget of approximately $100 million to support projects that:
• Develop and improve alternative and renewable low-carbon fuels.
• Optimize alternative and renewable fuels for existing and developing engine technologies.
• Produce alternative and renewable lowcarbon fuels in California.
• Decrease, on a full fuel cycle basis, the overall impact and carbon footprint of alternative and renewable fuels and increase sustainability.
• Expand fuel infrastructure, fueling stations, and equipment.
• Improve light-, medium-, and heavy-duty vehicle technologies.
• Retrofit medium- and heavy-duty on-road and non-road vehicle fleets.
• Expand infrastructure connected with existing fleets, public transit, and transportation corridors.
• Establish workforce training programs, conduct public education and promotion,and create technology centers.
The statute allows the Energy Commission to use grants, loans, loan guarantees, revolving loans,and other appropriate measures. Eligible recipients include: public agencies, private
businesses, public-private partnerships, vehicle and technology consortia, workforce training
partnerships and collaboratives, fleet owners, consumers, recreational boaters, and academic institutions. The Energy Commission must prepare and adopt an Investment Plan and convene an Advisory Committee to assist in preparing the Investment Plan.
For more information, please contact:
Alternative and Renewable Fuel &
Vehicle Technology Program
Fuels & Transportation Division
California Energy Commission
Incentive and tax information is provided to Area Development by each state's economic development or commerce agency for information purposes only and is subject to revision at any time by the state government. Please contact the state agency directly for full requirements and offerings.