California Senate Bill SB1128 Amended / Bill

 BILL NUMBER: SB 1128AMENDED BILL TEXT AMENDED IN SENATE MAY 29, 2012 AMENDED IN SENATE MAY 1, 2012 AMENDED IN SENATE APRIL 16, 2012 AMENDED IN SENATE APRIL 9, 2012 INTRODUCED BY Senator Padilla (Coauthor: Senator Rubio) FEBRUARY 21, 2012 An act to amend, repeal, and add Sections 26003, 26011, and 26011.8 of the Public Resources Code, relating to energy. LEGISLATIVE COUNSEL'S DIGEST SB 1128, as amended, Padilla. Energy: alternative energy financing. Existing law authorizes the California Alternative Energy and Advanced Transportation Financing Authority, until January 1, 2021, to provide financial assistance in the form of a sales and use tax exclusion for a project to promote California-based manufacturing, California-based jobs, the reduction of greenhouse gases, or the reduction in air and water pollution or energy consumption.  Existing law requires the authority, upon granting sales and use tax exemption for projects that exceeds $100,000,000 for a given year, to provide the Legislature with a 20-day notice prior to granting additional sales and use tax exclusion.  This bill would additionally authorize the authority, until July 1, 2016, to grant the above financial assistance to projects that promote the utilization of advanced manufacturing, as defined. The bill would require the authority, until July 1, 2016, to study the efficacy and cost benefit of the sales and use tax exemption for advanced manufacturing projects. The bill would require the authority, before January 1, 2017, to submit to the Legislature a report on the study.  The bill would require the authority, before January 1, 2015, to submit to the Legislature an interim report on the efficacy of granting the sales and use tax exemption for a projects, and recommendations on changes that would increase the efficacy in creating jobs and whether the exemption should be expanded or narrowed.  The bill would require the authority, until July 1, 2016, to work with the Legislative Analyst's Office to determine the most efficient and cost effective way for the state to create jobs in advanced manufacturing. The bill would require the authority, until January 1, 2021, to work with the University of California or the California State University to perform a peer review of the net benefits test used to evaluate applicants applying for the sales and use tax exemption  , as specified. The bill would instead prohibit the authority from granting, on an annual basis, a sales and use tax exclusion for a project exceeding $100,000,000  . Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 26003 of the Public Resources Code is amended to read: 26003. (a) As used in this division, unless the context otherwise requires: (1) (A) "Advanced manufacturing" means manufacturing that improves existing, or creates entirely new, materials, products, and processes through the use of science, engineering, or information technologies, high-precision tools and methods, a high-performance workforce, and innovative business or organizational models in any of the following technology areas: (i) Micro- and nanoelectronics, including semiconductors. (ii) Advanced materials. (iii) Integrated computational materials engineering. (iv) Nanotechnology. (v) Additive manufacturing. (vi) Industrial biotechnology. (B) "Advanced manufacturing" includes all of the following: (i) A production system capable of furnishing a mix of products in small or large volumes, with both the efficiency of mass production and the flexibility of custom manufacturing, to respond rapidly to customer demand and desired quality. (ii) Systems that result from substantive advancement, whether incremental or breakthrough, over the current state of the art, in the production of materials and products. These advancements include improvements in manufacturing processes and systems that are often referred to as "smart" or "intelligent" manufacturing systems, which integrate computational predictability and operational efficiency. (iii) Systems that produce goods that minimize the use of resources while maintaining or improving cost and performance. (iv) (I) Systems and technologies that are sustainable. (II) Sustainable systems and technologies do not include those required to be undertaken pursuant to state or federal law or regulations, air district rules or regulations, memoranda of understanding with a governmental entity, or legally binding agreements or documents. The State Air Resources Board shall advise the authority to ensure that the  requirement   requirements  of this subclause are met. (2) "Advanced transportation technologies" means emerging commercially competitive transportation-related technologies identified by the authority as capable of creating long-term,  high value-added   high-value added  jobs for Californians while enhancing the state's commitment to energy conservation, pollution reduction, and transportation efficiency. Those technologies may include, but are not limited to, any of the following: (A) Intelligent vehicle highway systems. (B) Advanced telecommunications for transportation. (C) Command, control, and communications for public transit vehicles and systems. (D) Electric vehicles and ultralow-emission vehicles. (E) High-speed rail and magnetic levitation passenger systems. (F) Fuel cells. (3) (A) "Alternative sources" means the application of cogeneration technology, as defined in Section 25134; the conservation of energy; or the use of solar, biomass, wind, geothermal, hydroelectricity under 30 megawatts, or any other source of energy, the efficient use of which will reduce the use of fossil and nuclear fuels. (B) "Alternative sources" does not include a hydroelectric facility that does not meet state laws pertaining to the control, appropriation, use, and distribution of water, including, but not limited to, the obtaining of applicable licenses and permits. (4) "Authority" means the California Alternative Energy and Advanced Transportation Financing Authority established pursuant to Section 26004, and any board, commission, department, or officer succeeding to the functions of the authority, or to which the powers conferred upon the authority by this division shall be given. (5) "Cost" as applied to a project or portion of the project financed under this division means all or part of the cost of construction and acquisition of all lands, structures, real or personal property or an interest in the real or personal property, rights, rights-of-way, franchises, easements, and interests acquired or used for a project; the cost of demolishing or removing any buildings or structures on land so acquired, including the cost of acquiring any lands to which those buildings or structures may be moved; the cost of all machinery, equipment, and furnishings, financing charges, interest prior to, during, and for a period after, completion of construction as determined by the authority; the cost of the purchase or sale of energy derived from an alternative source pursuant to paragraph (7) of subdivision (a) of Section 26011; provisions for working capital; reserves for principal and interest and for extensions, enlargements, additions, replacements, renovations, and improvements; the cost of architectural, engineering, financial, accounting, auditing and legal services, plans, specifications, estimates, administrative expenses, and other expenses necessary or incident to determining the feasibility of constructing any project or incident to the construction, acquisition, or financing of a project. (6) "Financial assistance" includes, but is not limited to, either, or any combination, of the following: (A) Loans, loan loss reserves, interest rate reductions, proceeds of bonds issued by the authority, insurance, guarantees or other credit enhancements or liquidity facilities, contributions of money, property, labor, or other items of value, or any combination thereof, as determined by, and approved by the resolution of, the board. (B) Any other type of assistance the authority determines is appropriate. (7) "Participating party" means either of the following: (A) A person, or an entity or group of entities engaged in business or operations in the state, whether organized for profit or not for profit, that does either of the following: (i) Applies for financial assistance from the authority for the purpose of implementing a project in a manner prescribed by the authority. (ii) Participates in the purchase or sale of energy derived from an alternative source pursuant to paragraph (7) of subdivision (a) of Section 26011. (B) A public agency or nonprofit corporation that does either of the following: (i) Applies for financial assistance from the authority for the purpose of implementing a project in a manner prescribed by the authority. (ii) Participates in the purchase or sale of energy derived from an alternative source pursuant to paragraph (7) of subdivision (a) of Section 26011. (8) (A) "Project" means a land, building, improvement to the land or building, rehabilitation, work, property, or structure, real or personal, stationary or mobile, including, but not limited to, machinery and equipment, whether or not in existence or under construction, that utilizes, or is designed to utilize, an alternative source, or that is utilized for the design, technology transfer, manufacture, production, assembly, distribution, or service of advanced transportation technologies, alternative source components, or an arrangement for the purchase, including prepayment, or sale of energy derived from an alternative source pursuant to paragraph (7) of subdivision (a) of Section 26011. (B) "Project," for the purposes of Section 26011.8, means any tangible personal property that is utilized for the design, manufacture, production, or assembly of advanced manufacturing, advanced transportation technologies, or alternative source products, components, or systems. (9) "Public agency" means a federal or state agency, department, board, authority, state or community college, university, or commission, or a county, city and county, city, regional agency, public district, school district, or other political entity. (10) (A) "Renewable energy" means a device or technology that conserves or produces heat, processes heat, space heating, water heating, steam, space cooling, refrigeration, mechanical energy, electricity, or energy in any form convertible to these uses, that does not expend or use conventional energy fuels, and that uses any of the following electrical generation technologies: (i) Biomass. (ii) Solar thermal. (iii) Photovoltaic. (iv) Wind. (v) Geothermal. (B) For purposes of this subdivision, "conventional energy fuel" means any fuel derived from petroleum deposits, including, but not limited to, oil, heating oil, gasoline, fuel oil, or natural gas, including liquefied natural gas, or nuclear fissionable materials. (C) Notwithstanding subparagraph (A), for the purposes of this section, "renewable energy" also means ultralow-emission equipment for energy generation based on thermal energy systems such as natural gas turbines; landfill gas turbines, engines, and microturbines; digester gas turbines, engines, and microturbines; and fuel cells. (11) "Revenue" means all rents, receipts, purchase payments, loan repayments, and all other income or receipts derived by the authority from a project, or the sale, lease, or other disposition of alternative source or advanced transportation technology facilities, or the making of loans to finance alternative source or advanced transportation technology facilities, and any income or revenue derived from the investment of money in any fund or account of the authority. (b) This section shall become inoperative on July 1, 2016, and, as of January 1, 2017, is repealed, unless a later enacted statute, that becomes operative on or before January 1, 2017, deletes or extends the dates on which it becomes inoperative and is repealed. SEC. 2. Section 26003 is added to the Public Resources Code, to read: 26003. (a) As used in this division, unless the context otherwise requires: (1) "Advanced transportation technologies" means emerging commercially competitive transportation-related technologies identified by the authority as capable of creating long-term,  high value-added   high-value added  jobs for Californians while enhancing the state's commitment to energy conservation, pollution reduction, and transportation efficiency. Those technologies may include, but are not limited to, any of the following: (A) Intelligent vehicle highway systems. (B) Advanced telecommunications for transportation. (C) Command, control, and communications for public transit vehicles and systems. (D) Electric vehicles and ultralow-emission vehicles. (E) High-speed rail and magnetic levitation passenger systems. (F) Fuel cells. (2) (A) "Alternative sources" means the application of cogeneration technology, as defined in Section 25134; the conservation of energy; or the use of solar, biomass, wind, geothermal, hydroelectricity under 30 megawatts, or any other source of energy, the efficient use of which will reduce the use of fossil and nuclear fuels. (B) "Alternative sources" does not include a hydroelectric facility that does not meet state laws pertaining to the control, appropriation, use, and distribution of water, including, but not limited to, the obtaining of applicable licenses and permits. (3) "Authority" means the California Alternative Energy and Advanced Transportation Financing Authority established pursuant to Section 26004, and any board, commission, department, or officer succeeding to the functions of the authority, or to which the powers conferred upon the authority by this division shall be given. (4) "Cost" as applied to a project or portion of the project financed under this division means all or part of the cost of construction and acquisition of all lands, structures, real or personal property or an interest in the real or personal property, rights, rights-of-way, franchises, easements, and interests acquired or used for a project; the cost of demolishing or removing any buildings or structures on land so acquired, including the cost of acquiring any lands to which those buildings or structures may be moved; the cost of all machinery, equipment, and furnishings, financing charges, interest prior to, during, and for a period after, completion of construction as determined by the authority; the cost of the purchase or sale of energy derived from an alternative source pursuant to paragraph (7)  of  subdivision (a) of Section 26011; provisions for working capital; reserves for principal and interest and for extensions, enlargements, additions, replacements, renovations, and improvements; the cost of architectural, engineering, financial, accounting, auditing and legal services, plans, specifications, estimates, administrative expenses, and other expenses necessary or incident to determining the feasibility of constructing any project or incident to the construction, acquisition, or financing of a project. (5) "Financial assistance" includes, but is not limited to, either, or any combination, of the following: (A) Loans, loan loss reserves, interest rate reductions, proceeds of bonds issued by the authority, insurance, guarantees or other credit enhancements or liquidity facilities, contributions of money, property, labor, or other items of value, or any combination thereof, as determined by, and approved by the resolution of, the board. (B) Any other type of assistance the authority determines is appropriate. (6) "Participating party" means either of the following: (A) A person, or an entity or group of entities engaged in business or operations in the state, whether organized for profit or not for profit, that does either of the following: (i) Applies for financial assistance from the authority for the purpose of implementing a project in a manner prescribed by the authority. (ii) Participates in the purchase or sale of energy derived from an alternative source pursuant to paragraph (7) of subdivision (a) of Section 26011. (B) A public agency or nonprofit corporation that does either of the following: (i) Applies for financial assistance from the authority for the purpose of implementing a project in a manner prescribed by the authority. (ii) Participates in the purchase or sale of energy derived from an alternative source pursuant to paragraph (7) of subdivision (a) of Section 26011. (7) (A) "Project" means a land, building, improvement to the land or building, rehabilitation, work, property, or structure, real or personal, stationary or mobile, including, but not limited to, machinery and equipment, whether or not in existence or under construction, that utilizes, or is designed to utilize, an alternative source, or that is utilized for the design, technology transfer, manufacture, production, assembly, distribution, or service of advanced transportation technologies, alternative source components, or an arrangement for the purchase, including prepayment, or sale of energy derived from an alternative source pursuant to paragraph (7) of subdivision (a) of Section 26011. (B) "Project," for the purposes of Section 26011.8, means any tangible personal property that is utilized for the design, manufacture, production, or assembly of advanced transportation technologies or alternative source products, components, or systems. (8) "Public agency" means a federal or state agency, department, board, authority, state or community college, university, or commission, or a county, city and county, city, regional agency, public district, school district, or other political entity. (9) (A) "Renewable energy" means a device or technology that conserves or produces heat, processes heat, space heating, water heating, steam, space cooling, refrigeration, mechanical energy, electricity, or energy in any form convertible to these uses, that does not expend or use conventional energy fuels, and that uses any of the following electrical generation technologies: (i) Biomass. (ii) Solar thermal. (iii) Photovoltaic. (iv) Wind. (v) Geothermal. (B) For purposes of this subdivision, "conventional energy fuel" means any fuel derived from petroleum deposits, including, but not limited to, oil, heating oil, gasoline, fuel oil, or natural gas, including liquefied natural gas, or nuclear fissionable materials. (C) Notwithstanding subparagraph (A), for the purposes of this section, "renewable energy" also means ultralow-emission equipment for energy generation based on thermal energy systems such as natural gas turbines; landfill gas turbines, engines, and microturbines; digester gas turbines, engines, and microturbines; and fuel cells. (10) "Revenue" means all rents, receipts, purchase payments, loan repayments, and all other income or receipts derived by the authority from a project, or the sale, lease, or other disposition of alternative source or advanced transportation technology facilities, or the making of loans to finance alternative source or advanced transportation technology facilities, and any income or revenue derived from the investment of money in any fund or account of the authority. (b) This section shall become operative on July 1, 2016. SEC. 3. Section 26011 of the Public Resources Code is amended to read: 26011. (a) The authority is authorized and empowered: (1) To adopt an official seal. (2) To sue and be sued in its own name. (3) To issue bonds, notes, bond anticipation notes, and other obligations of the authority, including, at the option of the authority, obligations bearing interest that is taxable for purposes of federal income taxation, for any of its purposes and to fund or refund the same, all as provided in this division. (4) To determine the location and character of a project to be financed under the provisions of this division, to lend financial assistance to a participating party, to enter into loan agreements with a participating party for the financing of a project including creating a lien or security interest in the property, to construct, reconstruct, renovate, replace, lease, as lessor or lessee, and regulate the same, and to enter into contracts for the sale of a project, including installment sales or sales under conditional sales contracts. (5) To fix fees and charges for projects, and interest rates with respect to loans for projects, and to revise from time to time the fees and charges and interest rates, and to collect rates, rents, fees, and charges for the use of, and for a facility or service furnished, or to be furnished, by a project or part of the project and to contract with a person, partnership, association, corporation, or public agency with respect to the project, and to fix the terms and conditions upon which a project may be sold or disposed of, whether upon installment sales contracts or otherwise. (6) To employ and fix the compensation of bond counsel, financial consultants, and advisers as may be necessary in its judgment in connection with the issuance and sale of any bonds, notes, bond anticipation notes, or other obligations of the authority; to contract for engineering, architectural, accounting, or other services of appropriate state agencies as may be necessary in the judgment of the authority for the successful development of a project; and to pay the reasonable costs of consulting engineers, architects, accountants, and construction experts employed by a participating party if, in the judgment of the authority, the services are necessary to the successful development of a project, and the services are not obtainable from a state agency. (7) To purchase alternative source energy or projects from a person or entity for sale to a participating party, or to make a loan to a participating party to purchase alternative source energy or projects, or to purchase from a person or entity that has contracted to sell alternative source energy to a participating party the right to receive purchase payments and related rights under that contract or any related contracts. Notwithstanding any other applicable law, the authority and a public agency, for purposes of a program or financing, shall have the power to enter into contractual arrangements and related agreements or instruments, including, without limitation, a prepayment purchase contract, lease, loan, construction, security, operation and maintenance, or other agreement or instrument, with the authority or with a participating party, upon the terms and subject to the conditions that may be necessary or convenient to accomplish the purposes of this subdivision. The authority shall only enter into a prepayment contract with a participating party for energy derived from an alternative source to the extent the prepayment is for energy intended to primarily offset part or all of the authority's or a participating party's own electrical requirements. (8) To purchase, with proceeds of its bonds or its revenue, bonds issued by a public agency described in clause (ii) of subparagraph (B) of paragraph (7) of subdivision (a) of Section 26003 at a public or negotiated sale. Bonds purchased pursuant to this subdivision may be held by the authority or sold to public or private purchasers at public or negotiated sales, in whole or in part, separately or together with other bonds issued by the authority. (9) To do all things generally necessary or convenient to carry out the purposes of this division. (b) This section shall become inoperative on July 1, 2016, and, as of January 1, 2017, is repealed, unless a later enacted statute, that becomes operative on or before January 1, 2017, deletes or extends the dates on which it becomes inoperative and is repealed. SEC. 4. Section 26011 is added to the Public Resources Code, to read: 26011. (a) The authority is authorized and empowered: (1) To adopt an official seal. (2) To sue and be sued in its own name. (3) To issue bonds, notes, bond anticipation notes, and other obligations of the authority, including, at the option of the authority, obligations bearing interest that is taxable for purposes of federal income taxation, for any of its purposes and to fund or refund the same, all as provided in this division. (4) To determine the location and character of a project to be financed under the provisions of this division, to lend financial assistance to a participating party, to enter into loan agreements with a participating party for the financing of a project including creating a lien or security interest in the property, to construct, reconstruct, renovate, replace, lease, as lessor or lessee, and regulate the same, and to enter into contracts for the sale of a project, including installment sales or sales under conditional sales contracts. (5) To fix fees and charges for projects, and interest rates with respect to loans for projects, and to revise from time to time the fees and charges and interest rates, and to collect rates, rents, fees, and charges for the use of, and for a facility or service furnished, or to be furnished, by a project or part of the project and to contract with a person, partnership, association, corporation, or public agency with respect to the project, and to fix the terms and conditions upon which a project may be sold or disposed of, whether upon installment sales contracts or otherwise. (6) To employ and fix the compensation of bond counsel, financial consultants, and advisers as may be necessary in its judgment in connection with the issuance and sale of any bonds, notes, bond anticipation notes, or other obligations of the authority; to contract for engineering, architectural, accounting, or other services of appropriate state agencies as may be necessary in the judgment of the authority for the successful development of a project; and to pay the reasonable costs of consulting engineers, architects, accountants, and construction experts employed by a participating party if, in the judgment of the authority, the services are necessary to the successful development of a project, and the services are not obtainable from a state agency. (7) To purchase alternative source energy or projects from a person or entity for sale to a participating party, or to make a loan to a participating party to purchase alternative source energy or projects, or to purchase from a person or entity that has contracted to sell alternative source energy to a participating party the right to receive purchase payments and related rights under that contract or any related contracts. Notwithstanding any other applicable law, the authority and a public agency, for purposes of a program or financing, shall have the power to enter into contractual arrangements and related agreements or instruments, including, without limitation, a prepayment purchase contract, lease, loan, construction, security, operation and maintenance, or other agreement or instrument, with the authority or with a participating party, upon the terms and subject to the conditions that may be necessary or convenient to accomplish the purposes of this subdivision. The authority shall only enter into a prepayment contract with a participating party for energy derived from an alternative source to the extent the prepayment is for energy intended to primarily offset part or all of the authority's or a participating party's own electrical requirements. (8) To purchase, with proceeds of its bonds or its revenue, bonds issued by a public agency described in clause (ii) of subparagraph (B) of paragraph (6) of subdivision (a) of Section 26003 at a public or negotiated sale. Bonds purchased pursuant to this subdivision may be held by the authority or sold to public or private purchasers at public or negotiated sales, in whole or in part, separately or together with other bonds issued by the authority. (9) To do all things generally necessary or convenient to carry out the purposes of this division. (b) This section shall become operative on July 1, 2016. SEC. 5. Section 26011.8 of the Public Resources Code is amended to read: 26011.8. (a) The purpose of this section is to promote the creation of California-based manufacturing, California-based jobs, advanced manufacturing, the reduction of greenhouse gases, or reductions in air and water pollution or energy consumption. In furtherance of this purpose, the authority may approve a project for financial assistance in the form of the sales and use tax exclusion established in Section 6010.8 of the Revenue and Taxation Code. (b) For purposes of this section, the following terms have the following meanings: (1) "Alternative source," in addition to as provided pursuant to subdivision (c) of Section 26003, includes advanced electric distributive generation technology as defined in Section 379.8 of the Public Utilities Code or energy storage technologies and their component materials. (2) "Project" means a project as defined in subparagraph (B) of paragraph (8) of subdivision (a) of Section 26003. (c) The authority shall publish notice of the availability of project applications and deadlines for submission of project applications to the authority. (d) The authority shall evaluate project applications based upon all of the following criteria: (1) The extent to which the project develops manufacturing facilities, or purchases equipment for manufacturing facilities, located in California. (2) The extent to which the anticipated benefit to the state from the project equals or exceeds the projected benefit to the participating party from the sales and use tax exclusion. (3) The extent to which the project will create new, permanent jobs in California. (4) To the extent feasible, the extent to which the project, or the product produced by the project, results in a reduction of greenhouse gases, a reduction in air or water pollution, an increase in energy efficiency, or a reduction in energy consumption, beyond what is required by any federal or state law or regulation. (5) The extent of unemployment in the area in which the project is proposed to be located. (6) Any other factors the authority deems appropriate in accordance with this section. (e) At a duly noticed public hearing, the authority shall approve, by resolution, project applications for financial assistance. (f) Notwithstanding subdivision (j), and without regard to the actual date of any transaction between a participating party and the authority, any project approved by the authority by resolution for the sales and use tax exclusion pursuant to Section 6010.8 of the Revenue and Taxation Code prior to March 24, 2010, shall not be subject to this section. (g) The Legislative Analyst's Office shall report to the Joint Legislative Budget Committee on the effectiveness of this program, on or before January 1, 2019, by evaluating factors, including, but not limited to, the following: (1) The number of jobs created by the program in California. (2) The number of businesses that have remained in California or relocated to California as a result of this program. (3) The amount of state and local revenue and economic activity generated by the program. (4) The types of advanced manufacturing, as defined in paragraph (1) of subdivision (a) of Section 26003, utilized. (5) The amount of reduction in greenhouse gases, air pollution, water pollution, or energy consumption. (h)  Once the   The  exclusions granted pursuant to Section 6010.8 of the Revenue and Taxation Code for projects approved by the authority pursuant to this section  shall not  exceed one hundred million dollars ($100,000,000)  annually, the authority shall provide a 20-day notice to the Legislature prior to making additional approvals pursuant to this section   for each calendar year  . (i) The authority shall make every effort to expedite the operation of this section, and shall adopt regulations for purposes of implementing the section as emergency regulations in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. For purposes of that Chapter 3.5, including Section 11349.6 of the Government Code, the adoption of the regulations shall be considered by the Office of Administrative Law to be necessary for the immediate preservation of the public peace, health and safety, and general welfare. (j) (1) The authority shall study the efficacy and cost benefit of the sales and use tax exemption as it relates to advanced manufacturing projects. The study shall include the number of jobs created, the costs of each job,  and  the annual salary of each job. The study shall also consider a dynamic analysis of the economic output to the state that would occur without the sales and use tax exemption. The authority shall work with the Legislative Analyst's Office to determine the most efficient and  cost effective   cost-effective  way for the state to create jobs in advanced manufacturing.  Before January 1, 2017, the authority shall submit to the Legislature, consistent with Section 9795 of the Government Code, the result of the study.  (2)  The   Before January 1, 2014 and within six months of any significant change to the net benefits test, the  authority shall work with the University of California or the California State University to perform a peer review of the net benefits test currently used to evaluate applicants applying pursuant to this section.  (3) Before January 1, 2017, the authority shall, in compliance with Section 9795 of the Government Code, submit to the Legislature a report on the study performed pursuant to paragraph (1).   (3) Before January 1 , 2015, the authority shall, consistent with Section 9795 of the Government Code, submit to the Legislature an interim report on the efficacy of the program conducted pursuant to this section. The study shall include recommendations on program changes that would increase the program's efficacy in creating permanent and temporary jobs, and whether eligibility for the program should be extended or narrowed to other manufacturing types. The authority may work with the Legislative Analyst's Office in preparing the report and its recommendations.  (k) (1) Except as provided in paragraph (2), this section shall become inoperative on July 1, 2016, and, as of January 1, 2017, is repealed, unless a later enacted statute, that becomes operative on or before January 1, 2017, deletes or extends the dates on which it becomes inoperative and is repealed. The sale or purchase of tangible personal property of a project approved prior to June 30, 2016, shall continue to be excluded from sales and use taxes pursuant to Section 6010.8 of the Revenue and Taxation Code for the period of time set forth in the authority's resolution approving the project pursuant to this section. (2) Notwithstanding paragraph (1), the authority's obligation to submit to the Legislature a report pursuant to paragraph (3) of subdivision (j) shall remain operative until the submission of the report. SEC. 6. Section 26011.8 is added to the Public Resources Code, to read: 26011.8. (a) The purpose of this section is to promote the creation of California-based manufacturing, California-based jobs, the reduction of greenhouse gases, or reductions in air and water pollution or energy consumption. In furtherance of this purpose, the authority may approve a project for financial assistance in the form of the sales and use tax exclusion established in Section 6010.8 of the Revenue and Taxation Code. (b) (1) For purposes of this section, "project" means a project as defined in subparagraph (B) of paragraph (7) of subdivision (a) of Section 26003. (2) For purposes of this section, "alternative sources" also includes advanced electric distributive generation technology as defined in Section 379.8 of the Public Utilities Code or energy storage technologies and their component materials. (c) The authority shall publish notice of the availability of project applications and deadlines for submission of project applications to the authority. (d) The authority shall evaluate project applications based upon all of the following criteria: (1) The extent to which the project develops manufacturing facilities, or purchases equipment for manufacturing facilities, located in California. (2) The extent to which the anticipated benefit to the state from the project equals or exceeds the projected benefit to the participating party from the sales and use tax exclusion. (3) The extent to which the project will create new, permanent jobs in California. (4) To the extent feasible, the extent to which the project, or the product produced by the project, results in a reduction of greenhouse gases, a reduction in air or water pollution, an increase in energy efficiency, or a reduction in energy consumption, beyond what is required by any federal or state law or regulation. (5) The extent of unemployment in the area in which the project is proposed to be located. (6) Any other factors the authority deems appropriate in accordance with this section. (e) At a duly noticed public hearing, the authority shall approve, by resolution, project applications for financial assistance. (f) Notwithstanding subdivision (j), and without regard to the actual date of any transaction between a participating party and the authority, any project as defined in paragraph (7) of subdivision (a) of Section 26003 approved by the authority by resolution for the sales and use tax exclusion pursuant to Section 6010.8 of the Revenue and Taxation Code prior to March 24, 2010, shall not be subject to this section. (g) The Legislative Analyst's Office shall report to the Joint Legislative Budget Committee on the effectiveness of this program, on or before January 1, 2019, by evaluating factors, including, but not limited to, the following: (1) The number of jobs created by the program in California. (2) The number of businesses that have remained in California or relocated to California as a result of this program. (3) The amount of state and local revenue and economic activity generated by the program. (4) The amount of reduction in greenhouse gases, air pollution, water pollution, or energy consumption. (h)  Once the   The    exclusions granted pursuant to Section 6010.8 of the Revenue and Taxation Code for projects approved by the authority pursuant to this section  shall not  exceed one hundred million dollars ($100,000,000)  annually, the authority shall provide a 20-day notice to the Legislature prior to making additional approvals pursuant to this section  for each calendar year  . (i) The authority shall make every effort to expedite the operation of this section, and shall adopt regulations for purposes of implementing the section as emergency regulations in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. For purposes of that Chapter 3.5, including Section 11349.6 of the Government Code, the adoption of the regulations shall be considered by the Office of Administrative Law to be necessary for the immediate preservation of the public peace, health and safety, and general welfare. (j)  The   If any significant changes are made to the net benefits test, the  authority shall work with the University of California or the California State University to perform a peer review of the net benefits test currently used to evaluate applicants applying pursuant to this section. (k) This section shall become operative on July 1, 2016, and shall remain in effect only until January 1, 2021, and as of that date is repealed. The sale or purchase of tangible personal property of a project approved prior to January 1, 2021, shall continue to be excluded from sales and use taxes pursuant to Section 6010.8 of the Revenue and Taxation Code for the period of time set forth in the authority's resolution approving the project pursuant to this section.