§ 51298.1. — 51298.1. (Added by Stats. 2024, Ch. 581, Sec. 2.)

(a)
The governing body of a county, city and county, or city, may, by means of an ordinance or resolution approved by a majority of its entire membership, elect to establish a capital investment incentive program. In any county, city and county, or city in which the governing body has so elected, the county, city and county, or city shall, upon the approval by a majority of the entire membership of its governing body of a written request therefor, pay a capital investment incentive amount to the proponent of a qualified manufacturing facility for up to 15 consecutive fiscal years. A request for the payment of capital investment incentive amounts shall be filed by a proponent in writing with the governing body of an electing
county, city and county, or city in the time and manner specified in procedures
adopted by that governing body. In the case in which the governing body of an electing county, city and county, or city approves a request for the payment of capital investment incentive amounts, both of the following conditions shall apply:
(1)
The consecutive fiscal years during which a capital investment incentive amount is to be paid shall commence with the first fiscal year commencing after the date upon which the qualified manufacturing facility is certified for occupancy or, if no certification is issued, the first fiscal year commencing after the date upon which the qualified manufacturing facility commences operation.
(2)
In accordance with paragraph (4) of subdivision (d) of Section 51298, the annual payment to a proponent of each capital investment
incentive amount shall be contingent upon the proponent’s payment of a community services fee.
(b)
(1)
A city or special district may, upon the approval by a majority of the entire membership of its governing body, pay to the county, city and county, or city an amount equal to the amount of ad valorem property tax revenue allocated to that city or special district, but not the actual allocation, derived from the taxation of that portion of the total assessed value of that real and personal property described in subparagraph (A) of paragraph (4) of subdivision (e) that is in excess of twenty-five million dollars ($25,000,000).
(2)
For purposes of this subdivision, “special district” shall not include a school district or a community college district.
(c)
A proponent whose request for the payment of capital investment incentive amounts is approved by an electing county, city and county, or city shall enter into a community services agreement with that county, city and county, or city that includes, but is not limited to, all of the following provisions:
(1)
All of the provisions set forth in subdivision (d) of Section 51298.
(2)
A provision that sets forth a job creation plan with respect to the relevant qualified manufacturing facility.
(A)
The plan shall specify the number of jobs to be created by that facility, and the types of jobs and compensation ranges to be created thereby, and may include commitments for all of the following:
(i)
The total dollar amount of the proponent’s compensation to workers.
(ii)
The hourly wage rate for each job classification.
(iii)
The value and type of fringe benefits for each job classification.
(B)
The plan shall include commitments by the proponent to provide both of
the following:
(i)
A hiring preference for local residents, community area residents, or disadvantaged workers.
(ii)
A targeted hiring program, including all of the following:
(I)
Meaningful outreach and recruitment activities to individuals facing barriers to employment or displaced workers.
(II)
Hiring practices developed to provide fair access to and support the hiring of individuals facing barriers to employment.
(III)
Directly support skill and career development for individuals facing barriers to employment. This may include collaboration with community groups and public entities.
(d)
(1)
Each county, city and county, or city that elects to establish a capital investment
incentive program shall notify the Governor’s Office of Business and Economic Development of its election to do so no later than June 30 of the fiscal year in which the election was made.
(2)
In addition to the information required to be reported pursuant to paragraph (1), each county, city and county, or city that has elected to establish a capital investment incentive program shall notify the Governor’s Office of Business and Economic Development each fiscal year no later than June 30 of the amount of any capital investment incentive payments made and the proponent of the qualified manufacturing facility to whom the payments were made during that fiscal year.
(3)
The Governor’s Office of Business and Economic Development shall compile the information submitted by each county,
city and county, and city pursuant to paragraphs (1) and (2) and submit a report to the Legislature containing this information no later than October 1, every two years commencing October 1, 2026.
(e)
For purposes of this section, the following definitions apply:
(1)
“Capital investment incentive amount” means, with respect to a qualified manufacturing facility for a relevant fiscal year, an amount up to or equal to the amount of ad valorem property tax revenue allocated to the participating local agency, which excludes the revenue transfers required by Sections 97.2 and 97.3 of the Revenue and Taxation Code, from the taxation of that portion of the total assessed value of that real and personal property described in subparagraph (A) of paragraph (4) that is in excess of twenty-five million dollars
($25,000,000).
(2)
“Manufacturing” means the activity of converting or conditioning property by changing the form, composition, quality, or character of the property for ultimate sale at retail or use in the manufacturing of a product to be ultimately sold at retail. Manufacturing includes any improvements to tangible personal property that result in a greater service life or greater functionality than that of the original property.
(3)
“Proponent” means a party or parties that meet all of the following criteria:
(A)
The party is named in the application to the county, city and county, or city within which the qualified manufacturing facility would be located for a permit to construct a qualified manufacturing facility.
(B)
The party will be the fee owner of the qualified manufacturing
facility upon the completion of that facility. Notwithstanding the previous sentence, the party may enter into a sale-leaseback transaction and nevertheless be considered the proponent.
(C)
If a proponent that is receiving capital investment incentive amounts subsequently leases the subject qualified manufacturing facility to another party, the lease may provide for the payment to that lessee of any portion of a capital investment incentive amount. Any lessee receiving any portion of a capital investment incentive amount shall also be considered a proponent for the purposes of subdivision (c).
(4)
“Qualified manufacturing facility” means a proposed manufacturing facility that meets all of the following criteria:
(A)
The proponent’s initial investment in that facility, in real and personal property, necessary for the full and normal operation of that facility, made pursuant to the capital investment incentive program, that comprises any portion of that facility or has its situs at that facility, exceeds twenty-five million dollars ($25,000,000). Compliance with this subparagraph shall be certified by the Governor’s Office of Business and Economic Development upon the director’s approval of a proponent’s application for certification of a qualified manufacturing facility. An application for certification shall be submitted by a proponent to the Governor’s Office of Business and Economic Development in writing in the time
and manner as specified by the director.
(B)
The facility is to be located within the jurisdiction of the electing county, city and county, or city to which the request is made for payment of capital investment incentive amounts.
(C)
The facility is operated by any of the following:
(i)
A business described in Codes 3321 to 3399, inclusive, or Codes 541711 or 541712 of the 2012 North American Industry Classification System (NAICS) Manual published by the United States Office of Management and Budget.
(ii)
A business engaged in the recovery of minerals from geothermal resources, including the proportional amount of a geothermal electric generating plant that is
integral to the recovery process by providing electricity for it.
(iii)
A business engaged in the manufacturing of parts or components related to the production of electricity using solar, wind, biomass, hydropower, or geothermal resources on or after July 1, 2010.
(iv)
A business engaged in the manufacturing of fuels, electrical parts, or components used in the field of clean transportation or the production of alternative fuel vehicles or electric vehicles.
(D)
The proponent is currently engaged in any of the following:
(i)
Commercial production.
(ii)
The perfection of the manufacturing process.
(iii)
The perfection of a product intended to be manufactured.

Legislative History

Added by Stats. 2024, Ch. 581, Sec. 2. (AB 2922) Effective September 25, 2024. Inoperative January 1, 2035, pursuant to Section 51298.5.