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§ 10033. Eligibility Requirements and Application Evaluation.

4 CA ADC § 10033Barclays Official California Code of RegulationsEffective: April 7, 2022

Barclays California Code of Regulations
Title 4. Business Regulations
Division 13. California Alternative Energy and Advanced Transportation Financing Authority
Article 2. Manufacturing Sales and Use Tax Exclusion Program
Effective: April 7, 2022
4 CCR § 10033
§ 10033. Eligibility Requirements and Application Evaluation.
Currentness
(a) Staff summary and recommendation. Following receipt of a complete Application, Authority staff will review each Application and prepare a summary and recommendation to the Authority. The summary and recommendation will include a calculation of the benefits of the Facility and an assessment of whether the proposed Facility meets the eligibility requirements.
(b) Eligibility. To be eligible for the sales and use tax exclusion:
(1) The Facility must include the purchase of tangible personal property otherwise subject to sales and use tax used substantially (a) for the design, manufacture, production or assembly of Advanced Transportation Technologies or Alternative Source products, components, or systems, (b) for the design, manufacture, production or assembly of a component of the Green Component of an Advanced Transportation Technology or Alternative Source product, component or system, (c) as part of an Advanced Manufacturing process, or (d) where at least 50.0 percent of the use of the Qualified Property is to process Recycled feedstock.
(A) For this purpose, “used substantially” shall mean that the Qualified Property must be used for the design, manufacture, production or assembly of Advanced Transportation Technologies or Alternative Source products, components, or systems; as part of an Advanced Manufacturing process; or to process Recycled feedstock more than 50.0 percent of the time.
(2) The Facility must produce benefits to the State of California, as determined by the Authority subject to the criteria and evaluation process identified herein.
(3) The Applicant must not have disclosed as part of its Legal Status Questionnaire a finding of guilty of a willful violation by the Occupational Safety and Health Administration or a case under the Occupational Safety and Health Administration's Severe Violator Enforcement Program.
(c) Evaluation. Applications shall be scored according to the benefits provided to the state by the marginal increase in Qualified Property purchases resulting from the sales and use tax exclusion. Applicants must demonstrate that the benefits of the marginal increase in Qualified Property purchases exceed the cost to the state of the sales and use tax exclusion. Benefits can be a combination of fiscal, environmental and other benefits, as specified. Each Application will be evaluated based on these elements as specified below.
(1) Fiscal Benefits
(A) The estimated percent increase in capital investment (PICI) resulting from sales and use tax exclusion. The increase in capital investment will be calculated based on the factor share of capital (ω), the price elasticity of demand for output (η), the elasticity of substitution between capital and labor (σ), and the change in user cost from the sales tax exclusion (equal to the current statewide average sales tax rate or STR) according to the following formula:
PICI = (σ - σ * ω + ω * η)*STR
(i) The factor share of capital (ω) is calculated for each Applicant depending on the capital stock's contribution to the firm's value-added output. To calculate the factor share of capital, Applicant-provided information about estimated annual sales value (Sales), production-related purchases from suppliers (Supplies), labor costs (Labor), the value of the capital stock (VCS), and determinations made by the Executive Director based on the relevant research literature and consultation with outside experts of the cost of employee benefits (EB) and the cost of capital ($CAP) are used in the following formula:
ω = Equipment Capital as Percent of Total Capital * Capital Share of Output
a. Equipment Capital as Percent of Total Capital is the ratio of the Estimated Annual Payment for Capital Stock (CAP) to Total Capital. CAP is the lesser of: 1) the estimated amount the applicant would have to pay for the capital stock (VCS) with interest ($CAP) over the weighted average life span (WALS) of the Qualified Property, or 2) Total Capital, which is calculated pursuant to the following formula:
Total Capital = Sales - Supplies - (Labor + EB)
Notwithstanding the above, if the resulting value is less than the value of CAP, then Total Capital shall be equal to CAP.
b. Capital Share of Output is the ratio of capital to output calculated pursuant to the following formula:
Capital Share of Output = 1 - (Labor + EB) / (Sales - Supplies)
Notwithstanding the above, if the resulting value is less than zero, then the capital share of output shall be calculated pursuant to the following formula:
Capital Share of Output = Total Capital / (Total Capital + Labor)
(ii) The price elasticity of demand for output (η) and the elasticity of substitution between capital and labor (a) are determined by the Executive Director based on the relevant research literature and consultation with outside experts.
(iii) The change in user cost is the same as the sales tax rate (STR) as determined by the Executive Director based on information collected by the California Department of Tax and Fee Administration.
(iv) Where the Applicant can demonstrate that the Facility would have been located outside of California absent the sales and use tax exclusion, the Executive Director will adjust the PICI to reflect this fact.
(B) The estimated marginal increase in Qualified Property (MIQP) purchases resulting from sales and use tax exclusion. The increase in purchases will be calculated using Applicant-provided information on the total value of the Qualified Property (VQP) and the estimated percent increase in capital investment (PICI). The MIQP will be calculated pursuant to the following formula:
MIQP = (VQP /(1+PICI)*PICI)
(C) The estimated marginal increase in sales (MIS) resulting from sales and use tax exclusion. The increase in sales will be calculated by multiplying MIQP times the ratio of the estimated annual units of production times the average per unit sales price to the value of the capital stock (VCS) used to produce the product, pursuant to the following formula:
MIS = MIQP * (Estimated Annual Sales Value / VCS)
(i) The present value of the MIS (PVMIS) will be calculated based on the weighted average life span (WALS) of the Qualified Property as provided by the Applicant and a discount rate determined by the Executive Director based on the relevant research literature, consultation with outside experts, or information provided by other state agencies and approved by the Authority.
(D) The estimated annual marginal increase in units (MIU) resulting from sales and use tax exclusion. The increase will be calculated using the marginal increase in sales (MIS) and Applicant-provided data on the sales price per unit ($Unit), pursuant to the following formula:
MIU = (MIS / $Unit)
(E) The estimated annual increase in employee wages (AIEW) will be calculated based on Applicant-provided information about the per unit labor costs and the per unit price, pursuant to the following formula:
AIEW = (MIU) * average per unit labor cost
(F) The estimated marginal increase in state economic output (MISO) resulting from the sales and use tax exclusion. The MISO will be calculated using the MIS, the AIEW resulting from the marginal increase in sales, the marginal increase in in-state supplier purchases (MISP) and a multiplier effect (Multiplier) to be determined by the Executive Director based on the relevant research literature, consultation with outside experts, or information provided by other state agencies, pursuant to the following formulas:
MISP = MIU * percent of production costs from California suppliers *
Per unit production-related purchases from suppliers
MISO = (MISP * Multiplier + AIEW * Multiplier - AIEW)
(i) The present value of the MISO (PVMISO) will be calculated based on the WALS of the Qualified Property as provided by the Applicant and a discount rate determined by the Executive Director.
(G) The estimated extent of increased tax revenues, or total fiscal benefits (TFB), that will accrue to the state and local governments over the WALS resulting from the PVMIS and PVMISO. TFB is the sum of the increased direct fiscal benefits (DFB) and the indirect fiscal benefits (IFB).
TFB = DFB + IFB
(i) The DFB are the sum of the increases in sales taxes (IST), personal income taxes (IPIT), corporate or other income taxes paid by the company on its profits (ICIT) and property taxes (IPT) that result from the company's MIS.
DFB = IST + IPIT + ICIT + IPT
a. The IST is calculated using MIS, Applicant-provided data on the percent of sales in California (POSCA), and the current statewide average sales tax rate (STR) as determined by the Executive Director based on information collected by the California Department of Tax and Fee Administration, and the percent value added (VA), pursuant to the following formula:
IST = POSCA * PVMIS * VA * STR
If the Applicant produces a product that does not generate sales tax revenue, the IST will be reduced based on the fraction of production that does not generate sales tax revenue. If the Applicant produces Biofuel and utilizes a fraction of that Biofuel for purposes of operating the Facility and produces an end-of-supply-chain product that does not generate sales tax revenue, the IST will be reduced based on the fraction of the Applicant's Biofuel production that will offset external fuel purchases.
b. The IPIT is calculated using the present value of the AIEW and the average state income tax rate (SIR) as determined by the Executive Director by using the most recent two-year average of personal income tax rates published by the California Franchise Tax Board, pursuant to the following formula:
IPIT = Present Value (AIEW) * SIR
i. The present value is based on the WALS of the capital equipment purchased as provided by the Applicant and the discount rate determined by the Executive Director.
c. The ICIT paid by the company on its profits is the present value of the estimated annual tax liability that is attributable to the Qualified Property.
i. The ICIT is calculated using an estimate of annual tax liability (ATL) as determined by the Executive Director based on information collected by the California Franchise Tax Board, Applicant-provided data on estimated annual tax liability, or other sources as determined by the Executive Director; the value of the capital stock (VCS) used to produce the product; and the MIQP pursuant to the following formula:
ICIT = Present Value (ATL * MIQP/VCS)
ii. The present value is based on the WALS of the capital equipment purchased as provided by the Applicant and the discount rate determined by the Executive Director.
d. The increase in property taxes (IPT) is the present value of the annual property taxes paid on the MIQP.
i. The annual property tax amount is calculated using MIQP and the current property tax rate (PTR) as determined by the Executive Director based on information collected by the California Department of Tax and Fee Administration, pursuant to the following formula:
IPT = Present Value (MIQP * PTR)
ii. The present value is based on the WALS of the capital equipment purchased as provided by the Applicant and the discount rate determined by the Executive Director.
(ii) The indirect fiscal benefits (IFB) result from increased state and local revenues resulting from increased economic activity caused by additional purchases from in-state suppliers and increased employee wages resulting from the MIQP.
a. The increase in revenues is calculated using PVMISO and the ratio of state and local government revenues to gross state output (GRSO) as determined by the Executive Director using the sum of the latest two-year average of actual state general fund revenues from the California Department of Finance, the latest two-year average of actual aggregate city and county revenues excluding intergovernmental transfers and service charges from the cities annual report and the counties annual report from the California State Controller's Office, divided by the latest two-year average of gross state product from U.S. Department of Commerce's Bureau of Economic Analysis, pursuant to the following formula:
IFB = PVMISO * GRSO
(2) The value of the sales and use tax exclusion. For each Application, the total cost of the sales and use tax exclusion will be calculated by multiplying the value of the Qualified Property (VQP) as reported by the Applicant times the STR.
(3) Environmental Benefits.
(A) The allocated share (AS) is the estimated percent of the pollution benefit from the Green Component of the Advanced Transportation Technology or Alternative Source product, component, or system that can be attributed to the Applicant's use of the Qualified Property. The AS is calculated using Applicant-provided data on the percent of time (POT) that the Qualified Property will be used to make the Advanced Transportation Technology or Alternative Source product, component or system and the fractional component contribution (FCC) of the Applicant's product to the Green Component of the end-of-supply-chain product. FCC will be calculated by multiplying the percent value added (VA) per unit times the sales price per unit ($Unit) and then dividing by the total value of the end-of-supply-chain product for Facilities producing end products or systems or by the total value of the Green Component of the end-of-supply-chain product for Facilities producing subcomponents (End $) as provided by the Applicant. The AS will be calculated pursuant to the following formulas:
FCC = (VA * $Unit) / End $
and
AS = POT * FCC
Notwithstanding the above, the FCC and the AS both have a maximum value of 1.
(B) For Facilities producing the Green Component of Alternative Source or Advanced Transportation Technology products, excluding Biofuels, the estimated impact of pollution from a gallon of gasoline equivalent (GGE) or a MWh of electricity or equivalent. GGE refers to the number of gallons of a fuel that has the equivalent amount of energy to one gallon of gasoline.
(i) The dollar value of pollution costs associated with a GGE ($GGE) is calculated based on the percent of sales in California (POSCA) as provided by the Applicant and the pollution cost per unit of volatile organic compounds (VOCs), nitrous oxide (NOx), and carbon dioxide or carbon dioxide equivalent (CO2) as determined by the Executive Director based on the relevant research literature, expert analysis, or information provided by other state agencies, pursuant to the following formula:
$GGE = Pollution cost of CO2 per GGE +
(POSCA * (pollution cost of VOC per GGE + pollution cost
of NOx per GGE))
(ii) The dollar value pollution costs associated with a MWh of electricity generation ($MWh) is calculated based on the POSCA as provided by the Applicant and the pollution cost per unit of CO2, nitrous oxide, and sulfur dioxide released from a MWh of electricity production in California (CA) and the rest of the United States (US) as determined by the Executive Director based on the relevant research literature, expert analysis, or information provided by other state agencies, pursuant to the following formula:
$MWh = (POSCA * (pollution cost of CA CO2 per MWh + pollution
cost of CA NOx per MWh + pollution cost of CA SO2 per MWh))
+ ((1-POSCA) * pollution cost of US CO2 per MWh)
(iii) The dollar value per pound of any other offsetting energy pollutants ($OP) shall be determined by the Executive Director based on the relevant research literature, expert analysis, or information provided by other state agencies.
a. Any non-greenhouse gas emissions benefits will be weighted according the POSCA.
(C) The total pollution benefit (TPB) will be calculated based on the marginal increase in product sales due to the sales and use tax exclusion in the following areas:
(i) Net change in use of electricity generated from alternative sources (increased use of alternative sources). The total pollution benefit (TPB) resulting from the net change in electricity generated from alternative sources is based on the lifetime pollution benefit (LPB) of each unit and the increase in unit sales that can be attributed to the sales and use tax exclusion.
a. The LPB is calculated using information on the annual net electricity generation per unit (MWhG), the annual emissions per MWh of offsetting pollutants (OP) as provided by the Applicant, and estimates of the pollution cost in dollars of avoided MWh ($MWh) and the pollution cost in dollars of any offsetting energy pollutants ($OP) as determined by the Executive Director, pursuant to the following formula:
LPB = Present Value ($MWh * MWhG) - (OP * $OP))
i. The present value is based on the estimated useful lifespan of the product (ULOP) as provided by the Applicant and the discount rate determined by the Executive Director.
b. The TPB is then calculated pursuant to the following formula:
TPB = Present Value (LPB * AS * MIU)
i. The present value is based on the WALS of the capital equipment as provided by the Applicant and the discount rate determined by the Executive Director.
(ii) Net change in fossil fuel consumption resulting from increased use of Alternative Source fuels. The TPB resulting from the net change in consumption of fossil fuels is based on the lifetime pollution benefit (LPB) of each unit and the increase in unit sales that can be attributed to the sales and use tax exclusion.
a. The LPB is calculated based on the dollar value of pollution avoided per unit calculated as the number of GGEs per unit (GGEA) times the dollar value of pollution avoided per GGE ($GGE) less the dollar value of offsetting pollution cost for any fuel or electricity required to produce a unit (OFF) of Alternative Source fuel ($GGE or $MWh or dollar value of pollution cost per unit for other pollutants), as determined by the Executive Director, pursuant to the following formula:
LPB = (GGEA * $GGE) - (OFF/ * $GGE) - (OFF * $MWh) - dollar
value of other pollution costs/per unit
b. For Biofuels, the LPB is determined based on the net annual pollution benefit per unit (NAPB) as calculated by the Executive Director based on information from the California Air Resources Board or other state agencies, expert analysis, relevant research literature, and applicant provided information with respect to the net change in greenhouse gas emissions resulting from production and use of the alternative source product and the dollar value of pollution costs avoided by use of Biofuels as calculated based on the pollution cost per unit of carbon dioxide or carbon dioxide equivalent ($CO2) as determined by the Executive Director based on the relevant research literature, expert analysis, or information provided by other state agencies multiplied by the NAPB pursuant to the following formula:
LPB = NAPB * $CO2
c. The TPB is then calculated pursuant to the following formula:
TPB = Present Value (LPB * AS * MIU)
i. The present value is based on the WALS of the capital equipment as provided by the Applicant and the discount rate determined by the Executive Director.
(iii) Net change in use of energy generated or produced from current sources (energy efficiency). The TPB resulting from the net change in the use of energy generated or produced from current sources is based on the lifetime pollution benefit (LPB) of each unit and the increase in unit sales that can be attributed to the sales and use tax exclusion.
a. The LPB is calculated using the annual net improvement in system consumption per unit (NI) as provided by the Applicant and estimates of the dollar value of pollution avoided per MWh ($MWh), per GGE ($GGE), or per MMBTU ($MMBTU), respectively, as determined by the Executive Director, pursuant to the following formula:
LPB = Present Value (NI * $MWh)
or
LPB = Present Value (NI * $GGE)
or
LPB = Present Value (NI * $MMBTU)
i. The present value is based on the ULOP as provided by the Applicant and the discount rate determined by the Executive Director.
ii. The net improvement in system consumption is calculated as the difference between baseline system consumption and improved system consumption where the baseline system consumption is equal to the maximum energy consumption amount that would allow the product to qualify for the applicable Recognized Energy Efficiency Standard. If more than one Recognized Energy Efficiency Standard applies to a product, the more stringent standard will be used for purposes of setting the baseline system consumption. The improved system consumption is the energy consumption of the Applicant's product under circumstances and conditions substantially similar to those used for purposes of setting the baseline system consumption value.
b. The TPB is then calculated pursuant to the following formula:
TPB = Present Value (LPB * AS * MIU)
i. The present value is based on the WALS of the capital equipment as provided by the Applicant and the discount rate determined by the Executive Director.
(iv) Net change in consumption of fossil fuels due to increased use of Advanced Transportation Technologies. The TPB resulting from the net change in consumption of fossil fuels is based on the lifetime pollution benefit (LPB) of each unit and the increase in unit sales that can be attributed to the sales and use tax exclusion.
a. The LPB is calculated by using the annual net improvement in system consumption per unit (NI) and the annual consumption of offsetting energy (OFF) as provided by the Applicant and estimates of the dollar value of pollution avoided per GGE ($GGE) and the dollar value of pollution emitted as a result of the offsetting energy consumption ($MWh) as determined by the Executive Director, pursuant to the following formula:
LPB = Present Value (($GGE * NI) - (OFF * $MWh))
i. The present value is based on the ULOP as provided by the Applicant and the discount rate determined by the Executive Director.
b. The TPB is then calculated pursuant to the following formula
TPB = Present Value (LPB * AS * MIU)
i. The present value is based on the WALS of the capital equipment as provided by the Applicant and the discount rate determined by the Executive Director.
(v) Other environmental benefits. Any other environmental benefits asserted by the Applicant shall be evaluated by the Executive Director based on verification of Applicant-provided information regarding the methodology for calculating such benefits and shall be added to the appropriate Total Pollution Benefit (TPB) amount determined pursuant to these regulations.
(D) For Advanced Manufacturing Applications, the environmental benefits score is calculated based on the per unit reduction in energy use, waste generation, water use, or emissions of air pollutants, or other environmental benefits as follows:
(i) Applicants may receive points for the following:
a. Applicants with an environmental sustainability plan that describes the Applicant's plans to reduce energy use or water use and reduce solid waste, hazardous waste, or air pollutant emissions at the Facility will receive 5 points.
b. Applicants with Facilities that reduce energy use by at least five percent relative to the baseline identified in the Application will receive five points plus one point for each additional percentage point of reductions over five percent up to a maximum of 30 points.
c. Applicants with Facilities that reduce water use by at least five percent relative to the baseline identified in the Application will receive five points plus one point for each additional percentage point of reductions over five percent up to a maximum of 30 points.
d. Applicants with Facilities that reduce solid waste by at least five percent relative to the baseline identified in the Application will receive five points plus one point for each additional percentage point of reductions over five percent up to a maximum of 30 points.
e. Applicants with Facilities that reduce hazardous waste by at least five percent relative to the baseline identified in the Application will receive five points plus one point for each additional percentage point of reductions over five percent up to a maximum of 30 points.
f. Applicants with Facilities that reduce air pollutant emissions by at least five percent relative to the baseline identified in the Application will receive five points plus one point for each additional percentage point of reductions over five percent up to a maximum of 30 points.
g. Applicants with Facilities that reduce emissions of other pollutants by at least five percent relative to the baseline identified in the Application will receive five points plus one point for each additional percentage point of reductions over five percent up to a maximum of 30 points.
(E) For Recycled Resource Extraction Projects, the environmental benefits score will be calculated based on the estimated greenhouse gas reduction due to increased use of recycled materials as follows.
(i) The estimated change in amount recycled (CAR) will be calculated as follows.
a. Annual production costs (APC) will be calculated as the sum of annual labor costs, production-related purchase costs, and the CAP.
b. The present value of production costs (PVPC) will be calculated based on APC, the WALS of the Qualified Property as provided by the Applicant, and a discount rate determined by the Executive Director based on the relevant research literature, consultation with outside experts, or information provided by other state agencies.
PVPC = Present Value(APC)
i. The present value is based on the WALS of the capital equipment as provided by the Applicant and the discount rate determined by the Executive Director.
c. The percentage change in production costs (PCPC) due to the sales and use tax exclusion will be calculated from the value of the sales and use tax exclusion (exclusion amount, or EA) and the present value of production costs (PVPC) using the following formula:
PCPC = EA / PVPC
d. The percent increase in recycling (PIR) is the estimated increase in the amount of material recycled due to the sales and use tax exclusion. The PIR is calculated from the PCPC, the price elasticity of supply (SE) for the recycled material, and the price elasticity of demand (DE) for the recycled material using the following formula:
PIR = PCPC * (SE * DE)/(SE + DE)
i. The SE and DE will be determined by the Executive Director based on the relevant research literature or consultation with outside experts.
e. The CAR is calculated based on the PIR and the projected average annual amount of recycled material sold or shipped (ARM), as provided by the Applicant as follows:
CAR = PIR * (1 - PIR) * ARM
(ii) The greenhouse gas benefit (GGB) for each unit of material recycled will be determined by the Executive Director based on the relevant research literature, consultation with outside experts, information from other state agencies, or the Federal Environmental Protection Agency Waste Reduction Model (WARM). Where the California Air Resources Board (CARB) has made modifications or developed an alternative to the WARM model, the CARB measurements will be used.
(iii) The dollar value of pollution costs associated with emission of a unit of CO2 ($CO2) will be determined by the Executive Director based on the relevant research literature, expert analysis, or information provided by other state agencies
(iv) The TPB will be determined based on the present value of the GGB and $CO2 as follows:
TPB = Present Value(GGB * $CO2)
a. The present value is based on the WALS of the capital equipment as provided by the Applicant and the discount rate determined by the Executive Director.
(4) Calculation of points. Points for fiscal benefits will be calculated by dividing total fiscal benefits (TFB) by the value of the sales and use tax exclusion and multiplying the result by 1,000. Points for environmental benefits for Advanced Transportation, Alternative Source, and Recycled Resource Extraction Applications will be calculated by dividing total pollution benefits (TPB) by the value of the sales and use tax exclusion and multiplying the result by 1,000. Points for environmental benefits for Advanced Manufacturing Applicants will be equal to the sum of the environmental benefits points awarded based on the categories listed in Section 10033(c)(3)(D).
(5) Additional points. Additional points shall be awarded as follows:
(A) Unemployment score. An Applicant may earn up to 50 points for creating jobs in high unemployment areas.
(i) The unemployment rate for the area means the rate within the county in which the Facility is located as reported by the California Employment Development Department. The most current annual average unemployment rate information available at the time of the Application submission shall be used.
(ii) Points are based on how much greater the local unemployment rate is in comparison to the annual average statewide unemployment rate, pursuant to the following formula:
Points = ((Local Rate / State Rate) * 100) - 100
a. Non-integer points (e.g., 20.4) will be rounded to the nearest whole integer for scoring purposes.
(B) New jobs score. An Applicant may earn up to 75 points for creating new jobs.
(i) The Executive Director will calculate the amount of the sales and use tax exclusion per job created by the Applicant as a result of the MIQP. The number of jobs created by the Applicant as a result of the MIQP will be calculated by multiplying the total number of full time equivalent jobs associated with the production of the Applicant's product times the ratio of the MIQP to the VCS. Points for the New Jobs Score will be awarded as follows:
a. Less than or equal to $50,000 in sales and use tax exclusion per job - 75 points.
b. Less than or equal to $100,000 in sales and use tax exclusion per job but greater than $50,000 per job - 60 points.
c. Less than or equal to $150,000 in sales and use tax exclusion per job but greater than $100,000 per job - 55 points.
d. Less than or equal to $200,000 in sales and use tax exclusion per job but greater than $150,000 per job - 45 points.
e. Less than or equal to $300,000 in sales and use tax exclusion per job but greater than $200,000 per job - 40 points.
f. Less than or equal to $400,000 in sales and use tax exclusion per job but greater than $300,000 per job - 35 points.
g. Less than or equal to $750,000 in sales and use tax exclusion per job but greater than $400,000 per job - 30 points.
h. Less than or equal to $1,500,000 in sales and use tax exclusion per job but greater than $750,000 per job - 20 points.
i. Greater than $1,500,000 in sales and use tax exclusion per job - 0 points.
(ii) The Executive Director will calculate the decrease in Facility jobs, if any, due to the sales and use tax exclusion. The number of jobs reduced by the Applicant as a result of the sales and use tax exclusion will be calculated by subtracting the total Facility jobs as reported by the Applicant assuming the Qualified Property is not used from the total Facility jobs assuming the Qualified Property is used. If the result is a negative value, the New Jobs Score will be set to zero regardless of the results of the calculation in Section 10033(c)(5)(B)(i). If this value is negative, Lost Jobs Points will be calculated by (a) subtracting the total Facility jobs as reported by the Applicant assuming the Qualified Property is not used from the total Facility jobs assuming the Qualified Property is used, (b) dividing the result by the number of Facility jobs assuming the Qualified Property is used, and (c) multiplying the result by 100.
(C) Construction or installation jobs score. An Applicant may earn up to 75 points for creating construction or installation related jobs.
(i) The Executive Director will calculate the amount of the sales and use tax exclusion per annual full time equivalent construction or installation job created by the Applicant as a result of the MIQP. The number of annual full time equivalent construction or installation jobs created by the Applicant as a result of the MIQP will be calculated by multiplying the total number of annual full time equivalent construction or installation jobs associated with construction of the Applicant's Facility or the installation of the Applicant's equipment times the ratio of the MIQP to the VCS. Points will be awarded as follows:
a. Less than or equal to $50,000 in sales and use tax exclusion per job - 75 points.
b. Less than or equal to $100,000 in sales and use tax exclusion per job but greater than $50,000 per job - 60 points.
c. Less than or equal to $150,000 in sales and use tax exclusion per job but greater than $100,000 per job - 55 points.
d. Less than or equal to $200,000 in sales and use tax exclusion per job but greater than $150,000 per job - 45 points.
e. Less than or equal to $300,000 in sales and use tax exclusion per job but greater than $200,000 per job - 40 points.
f. Less than or equal to $400,000 in sales and use tax exclusion per job but greater than $300,000 per job - 35 points.
g. Less than or equal to $750,000 in sales and use tax exclusion per job but greater than $400,000 per job - 30 points.
h. Less than or equal to $1,500,000 in sales and use tax exclusion per job but greater than $750,000 per job - 20 points.
i. Greater than $1,500,000 in sales and use tax exclusion per job - 0 points.
(D) Emerging Strategic Industry score. An Applicant may earn up to 40 points if the Applicant's industry is in an Emerging Strategic Industry as defined in Section 10031(m). The Executive Director will determine if an Applicant's industry is an Emerging Strategic Industry and award points to those Applicants that qualify.
(E) Other Facility Characteristics.
(i) An Application may be awarded points for the following other facility characteristics:
a. Applicants with facilities in California that perform research and development functions related to the product or production process at the Facility that is the subject of this application will receive 25 points.
b. Applicants with partnerships with educational institutions either for the purpose of training the workers at the Facility or for purposes of assisting in the training of potential future workers, including workers from disadvantaged communities including women, racial minorities, formerly incarcerated, and veterans, will receive 25 points.
c. Applicants in Industry Clusters, as defined, will receive 25 points.
d. Applicants that provide benefits and fringe benefits to employees will receive 5 points for each type of benefit or fringe benefit provided, up to 25 points.
(F) Out-of-state environmental benefits score. An Application may be awarded points for non-greenhouse gas environmental benefits attributable to Advanced Transportation Technologies or Alternative Source products, components, or systems sold outside of California, pursuant to the following:
(i) The Executive Director will calculate the value of the non-greenhouse gas environmental benefits resulting from the marginal increase in out-of-state product sales due to the sales and use tax exclusion, pursuant to the following equations:
a. The dollar value of an out-of-state non-greenhouse gas benefit from a GGE ($OSG) pursuant to the following formula:
$OSG = (1- POSCA)* (pollution cost of VOC per GGE + pollution cost of NOx per GGE)
b. The dollar value of an out-of-state non-greenhouse gas benefit from a MWh ($OSM) is calculated pursuant to the following formula:
$OSM = (1 - POSCA) * (pollution cost of US NOx per MWh +pollution cost of US SO2 per MWh)
c. The dollar value per unit of any other offsetting pollutants ($OP) be weighted by the POSCA and incorporated by the Executive Director into the calculation of the out-of-state environmental benefits score.
d. The total value of out-of-state non-greenhouse gas pollution benefits (TOB) due to electricity generated from alternative sources (increased use of alternative sources excluding Biofuels) is calculated pursuant to the following formula:
LPB = Present Value ((NI * $OSM) - (OP * $OP))
and
TOB = Present Value (LPB * AS * MIU)
e. The total value of out-of-state non- greenhouse gas pollution benefits (TOB) to electricity generated from non-alternative sources or fossil fuels burned (conservation) is calculated pursuant to the following formula:
LPB = Present Value (NI * $OSM)
or
LPB = Present Value (NI * $OSG)
and
TOB = Present Value (LPB * AS * MIU)
f. The total value of out-of-state non-greenhouse gas benefits (TOB) due to increased use of advanced transportation technologies is calculated pursuant to the following formula:
LPB = Present Value ((NI * $OSG) - (OFF * $OSM))
and
TOB = Present Value (LPB * AS * MIU)
(ii) The Authority will then calculate the ratio of the total value of out-of-state non-greenhouse gas benefits (TOB) to the value of the sales and use tax exclusion and the result will be multiplied times 1000 and divided in half to determine the Applicant's point total, pursuant to the following formula:
Points = ((TOB / Sales and Use Tax Exclusion) * 1000)/2
a. Non-integer point totals will be rounded to the nearest whole integer for scoring. A maximum of 40 points may be awarded for out-of-state pollution benefits.
(6) Total Score. The total number of additional points not to exceed 200 determined pursuant to Section 10033(c)(5) shall be added to the number of points determined pursuant to Section 10033(c)(4). The result of this sum is the Applicant's total score. Complete Applications receiving both a total score greater than or equal to the threshold value of 1,000 and a TPB score greater than 20 may be recommended for a sales and use tax exclusion. Notwithstanding the foregoing, where a project receives a score less than these thresholds, the Executive Director may recommend it to the board for approval upon a statement articulating specific reasons why the approval is in the public interest and advances the purposes of the Program.
(7) Upon a recommendation from the Executive Director that it is in the public interest and advances the purposes of the Program, the Authority may adjust any of the threshold values set forth in Section 10033(c)(6).

Credits

Note: Authority cited: Section 26009, Public Resources Code; and Section 26011.8, Public Resources Code. Reference: Section 26011.8, Public Resources Code; and Section 6010.8, Revenue and Taxation Code.
History
1. New section filed 10-4-2010 as an emergency; operative 10-4-2010 (Register 2010, No. 41). A Certificate of Compliance must be transmitted to OAL by 4-4-2011 or emergency language will be repealed by operation of law on the following day.
2. New section refiled 4-1-2011 as an emergency; operative 4-1-2011 (Register 2011, No. 13). A Certificate of Compliance must be transmitted to OAL by 6-30-2011 or emergency language will be repealed by operation of law on the following day.
3. New section refiled 6-24-2011 as an emergency; operative 6-24-2011 (Register 2011, No. 25). A Certificate of Compliance must be transmitted to OAL by 9-22-2011 or emergency language will be repealed by operation of law on the following day.
4. Certificate of Compliance as to 6-24-2011 order, including amendment of section and Note, transmitted to OAL 6-29-2011 and filed 8-10-2011; operative 9-28-2011 (Register 2011, No. 32).
5. Amendment of subsections (c)(1)(A)(i)a.-b. and (c)(2)(A) deemed necessary for the immediate preservation of the public peace, health and safety, and general welfare by the Legislature pursuant to section 26011.8 of the Public Resources Code; filed 3-8-2012 as an emergency; operative 3-8-2012 (Register 2012, No. 10). A Certificate of Compliance must be transmitted to OAL by 9-4-2012 or emergency language will be repealed by operation of law on the following day.
6. Amendment of subsections (c)(1)(A)(i)a.-b. and (c)(2)(A) deemed necessary for the immediate preservation of the public peace, health and safety, and general welfare by the Legislature pursuant to section 26011.8 of the Public Resources Code; refiled 9-4-2012 as an emergency; operative 9-4-2012 (Register 2012, No. 36). A Certificate of Compliance must be transmitted to OAL by 12-3-2012 or emergency language will be repealed by operation of law on the following day.
7. Amendment of subsections (c)(1)(A)(i)a.-b. and (c)(2)(A) deemed necessary for the immediate preservation of the public peace, health and safety, and general welfare by the Legislature pursuant to section 26011.8 of the Public Resources Code; refiled 12-3-2012 as an emergency; operative 12-3-2012 (Register 2012, No. 49). A Certificate of Compliance must be transmitted to OAL by 3-4-2013 or emergency language will be repealed by operation of law on the following day.
8. Certificate of Compliance as to 12-3-2012 order transmitted to OAL 2-28-2013 and filed 4-2-2013 (Register 2013, No. 14).
9. Editorial correction of subsection (c)(5)(F)(1)c. (Register 2013, No. 41).
10. Amendment filed 10-7-2013 as a deemed emergency pursuant to Public Resources Code section 26009; operative 10-7-2013 (Register 2013, No. 41). A Certificate of Compliance must be transmitted to OAL by 4-7-2014 or emergency language will be repealed by operation of law on the following day.
11. Amendment refiled 4-3-2014 as a deemed emergency pursuant to Public Resources Code section 26009; operative 4-3-2014 (Register 2014, No. 14). A Certificate of Compliance must be transmitted to OAL by 7-2-2014 or emergency language will be repealed by operation of law on the following day.
12. Amendment of section, including further amendment of subsections (c)(5)(F) and (c)(5)(G)(ii)a., refiled 6-30-2014 as a deemed emergency pursuant to Public Resources Code section 26009; operative 6-30-2014 (Register 2014, No. 27). A Certificate of Compliance must be transmitted to OAL by 9-29-2014 or emergency language will be repealed by operation of law on the following day.
13. Certificate of Compliance as to 6-30-2014 order, including amendment of subsection (c)(5)(D), transmitted to OAL 9-29-2014 and filed 11-10-2014; amendments effective 11-10-2014 pursuant to Government Code section 11343.4(b)(3) (Register 2014, No. 46).
14. Amendment filed 8-9-2016 as a deemed emergency pursuant to Public Resources Code section 26009; operative 8-9-2016 (Register 2016, No. 33). A Certificate of Compliance must be transmitted to OAL by 2-6-2017 or emergency language will be repealed by operation of law on the following day.
15. Amendment refiled 2-7-2017 as a deemed emergency pursuant to Public Resources Code section 26009; operative 2-7-2017 (Register 2017, No. 6). A Certificate of Compliance must be transmitted to OAL by 5-8-2017 or emergency language will be repealed by operation of law on the following day.
16. Amendment refiled 5-4-2017 as a deemed emergency pursuant to Public Resources Code section 26009; operative 5-9-2017 (Register 2017, No. 18). A Certificate of Compliance must be transmitted to OAL by 8-7-2017 or emergency language will be repealed by operation of law on the following day.
17. Reinstatement of section as it existed prior to 8-9-2016 emergency amendment by operation of Government Code section 11346.1(f) (Register 2017, No. 36).
18. Amendment filed 10-31-2017; operative 10-31-2017 pursuant to Government Code section 11343.4(b)(3) (Register 2017, No. 44).
19. Amendment of subsections (b)(1) and (b)(2), new subsection (b)(3), amendment of subsections (c)(4), (c)(5)(A)(ii) , (c)(5)(E) and (c)(5)(E)(i)b. and relettering of former subsection (c)(5)(G) to new section (c)(5)(F) filed 12-16-2019 as a deemed emergency pursuant to Public Resources Code section 26009; operative 12-16-2019 (Register 2019, No. 51). A Certificate of Compliance must be transmitted to OAL by 6-15-2020 or emergency language will be repealed by operation of law on the following day.
20. Emergency filed 12-16-2019 extended 60 days (Executive Order N-40-20). A Certificate of Compliance must be transmitted to OAL by 8-14-2020 or emergency language will be repealed by operation of law on the following day.
21. Emergency filed 12-16-2019 extended an additional 60 days (Executive Order N-66-20). A Certificate of Compliance must be transmitted to OAL by 10-14-2020 or emergency language will be repealed by operation of law on the following day.
22. Reinstatement of section as it existed prior to 12-16-2019 emergency amendment by operation of Government Code section 11346.1(f) (Register 2020, No. 43).
23. Amendment of subsections (b)(1) and (b)(2), new subsection (b)(3), amendment of subsections (c)(1)(A)(iii), (c)(1)(G)(i)a., (c)(1)(G)(i)d.i., (c)(4), (c)(5)(A)(ii) and (c)(5)(B)(i), new subsection (c)(5)(B)(ii) and amendment of subsections (c)(5)(D), (c)(5)(E) and (c)(5)(E)(i)b., new subsection (c)(5)(E)(i)d. and relettering of former subsection (c)(5)(G) to new subsection (c)(5)(F) filed 11-4-2020 as a deemed emergency pursuant to Public Resources Code section 26009; operative 11-4-2020. Emergency expiration extended 60 days (Executive Order N-40-20) plus an additional 60 days (Executive Order N-66-20) (Register 2020, No. 45). A Certificate of Compliance must be transmitted to OAL by 8-31-2021 or emergency language will be repealed by operation of law on the following day.
24. Amendment of subsections (b)(1) and (b)(2), new subsection (b)(3), amendment of subsections (c)(1)(A)(iii), (c)(1)(G)(i)a., (c)(1)(G)(i)d.i., (c)(5)(A)(ii) and (c)(5)(B)(i), new subsection (c)(5)(B)(ii) and amendment of subsections (c)(5)(E) and (c)(5)(E)(i)b., new subsection (c)(5)(E)(i)d. and relettering of former subsection (c)(5)(G) to new subsection (c)(5)(F) refiled 8-30-2021 as a deemed emergency pursuant to Public Resources Code section 26009; operative 9-1-2021 (Register 2021, No. 36). A Certificate of Compliance must be transmitted to OAL by 11-30-2021 or emergency language will be repealed by operation of law on the following day.
25. Amendment of subsections (b)(1) and (b)(2), new subsection (b)(3), amendment of subsections (c)(1)(A)(iii), (c)(1)(G)(i)a., (c)(1)(G)(i)d.i., (c)(5)(A)(ii) and (c)(5)(B)(i), new subsection (c)(5)(B)(ii) and amendment of subsections (c)(5)(E) and (c)(5)(E)(i)b., new subsection (c)(5)(E)(i)d. and relettering of former subsection (c)(5)(G) to new subsection (c)(5)(F) refiled 11-29-2021 as a deemed emergency pursuant to Public Resources Code section 26009; operative 12-1-2021 (Register 2021, No. 49). A Certificate of Compliance must be transmitted to OAL by 3-1-2022 or emergency language will be repealed by operation of law on the following day.
26. Amendment of subsections (c)(1)(G)(i)a., (c)(3)(D)(i)a. and (c)(5)(B)(ii) and Note filed 12-9-2021 as a deemed emergency pursuant to Public Resources Code section 26009; operative 12-9-2021 (Register 2021, No. 50). A Certificate of Compliance must be transmitted to OAL by 6-7-2022 or emergency language will be repealed by operation of law on the following day.
27. Certificate of Compliance as to 11-29-2021 order transmitted to OAL and filed 4-7-2022 (Register 2022, No. 14).
This database is current through 4/19/24 Register 2024, No. 16.
Cal. Admin. Code tit. 4, § 10033, 4 CA ADC § 10033
End of Document