California Legislature Approves Advanced Manufacturing Incentives: Senate Bill … –

by admin on August 30, 2012

 California Legislature Approves Advanced Manufacturing Incentives: Senate Bill 1128 Authored by Senator Alex Padilla

Today, the California Senate gave final approval to Senate Bill 1128 authored by Senator Alex Padilla (D-Pacoima). The measure would encourage investment, job creation and economic growth in California by allowing sales and use tax exemptions on the purchase of manufacturing equipment in the advanced manufacturing sector. The bill now goes to Governor Brown for his consideration.

“California is one of three states that tax the purchase of manufacturing equipment. Taxing manufacturing equipment is counterproductive and undermines our efforts to attract and retain manufacturing firms and create jobs. SB 1128 changes that,” said Senator Alex Padilla.

Specifically, SB 1128 would build upon a sales tax exemption program administered by the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) by including advanced manufacturing companies in industries such as aerospace, biotechnology, computers, appliances, medical device manufacturing, machinery, furniture, fabricated metals and transportation goods.

Advanced manufacturing are processes that improve upon and create entirely new materials and products through the use of science, engineering, information technologies, high-precision tools and methods, along with a high-performance workforce and innovative business and organizational models. The following technologies utilized in advanced manufacturing include micro and nanoelectronics, semiconductors, advanced materials, integrated computational materials engineering, additive manufacturing, and industrial biotechnology.

“I authored this bill because California is uniquely positioned to benefit from high tech jobs coming back to the United States. We are a leader in innovation. In 2010 nearly half of all research and development venture capital invested in the U.S. was invested in California. Being a leader in R&D is great, but only half of the equation. We need to make California attractive to the manufacturing sector as well,” added Senator Alex Padilla.

Last year Congress approved and President Obama signed the Reshoring Initiative, which focuses on bringing jobs back to America. The President also launched the Advanced Manufacturing Partnership to promote investment in emerging technologies in order to create high quality manufacturing jobs. Recent studies have shown that the cost of manufacturing in the United States is becoming more competitive as wages and transportation costs increase overseas. By expanding the CAEATFA program to advanced manufacturing, California has an opportunity to attract new investment and compete more effectively for manufacturing jobs.

In 2010, Senator Padilla authored SB 71 which allowed CAEATFA to approve sales and use tax exemptions on tangible personal property utilized for the design, manufacture, production, or assembly of advanced transportation technologies or alternative energy products, components or systems. For every million dollars the program allocates, it generates $10 million dollars in private investment in the state. So far the program has helped leverage close to a billion dollars in private investment and a projected 7,352 jobs.

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 Thursday, August 30, 2012 2:00 pm.


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