Application Workshop Fiscal Year 20172018 GOVERNORS OFFICE OF BUSINESS AND ECONOMIC DEVELOPMENT STATE OF CALIFORNIA s OFFICE OF GOVERNOR EDMUND G BROWN JR GOBiz Services ID: 642742
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California Competes Tax Credit Application WorkshopFiscal Year 2017-2018
GOVERNOR’S OFFICE OF BUSINESS AND ECONOMIC
DEVELOPMENTSTATE OF CALIFORNIA s OFFICE OF GOVERNOR EDMUND G. BROWN JR. Slide2
GO-Biz Services
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California Business Investment Services (CalBIS)Small Business AssistanceCalifornia Business PortalInnovation and EntrepreneurshipPermitting AssistanceInternational Affairs and Trade DevelopmentSlide3
Small Business Assistance
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Provides assistance through informational workshops, interagency projects, and direct advocacyMaintains a comprehensive list of small business resources for state procurement, loan programs, and business planninghttp://business.ca.gov/programs/smallbusiness.aspx Slide4
Permitting Assistance
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Provides permit identification and regulatory compliance assistanceOffers pre-application meetings between businesses and the appropriate regulatory agenciesMaintains online permit assistance website: www.calgold.ca.gov Slide5
California Business Portal
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Business NavigatorNot sure where to start? Use the California Business Navigator to find custom information for your businessBusiness Service DeskGet answers to commonly asked questions relating to taxes, permits, incentive programs, regulations, and workforce informationQuick Start GuidesQuick Start Guides contain essential information for starting, growing, and expanding specific types of businesseshttp://businessportal.ca.gov Slide6
The California Competes Tax CreditCalifornia Competes Tax Credit:Credit against the income tax due the Franchise Tax BoardNon-refundable6 tax year carryoverAccountability
: Tied to achieving contractual (hiring/investment) milestonesRecapture provisions
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California Competes Tax Credit (Continued)Credit awards are based on 11 factors:Number of jobs created or retainedCompensation paid to employees
Amount of investmentDuration of proposed project and commitment
to remain in this stateExtent of unemployment or poverty in business areaExtent the benefit to the state exceeds the amount of the tax creditIncentives available in other statesOpportunity for future growth and expansionOther incentives available in CaliforniaOverall economic impact Strategic importance to the state, region, or locality7Slide8
California Competes Tax Credit AvailabilityTentative Amount of Credits Available $230 million in fiscal year 2017/18
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Application PeriodsThe Director of GO-Biz sets the application periods each fiscal year:Fiscal Year 2017-2018July 24, 2017 – August 21, 2017$75 million availableJanuary 2, 2018 – January 22, 2018$100 million available
March 5, 2018 – March 26, 2018$55.4 million available
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Application ProcessOnline application submission: https://www.calcompetes.ca.govNotices and technical assistance: http://www.business.ca.gov/Programs/CaliforniaCompetesTaxCredit Unsuccessful applicants may resubmit applications in the next application period in the same fiscal year after
updating the Employees and Investment sections and Current Tax Year
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Credit Application and Award Process
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Post Committee ApprovalInformation PostingRequired ReportingAgreement ComplianceAgreementsMust be approved by the California Competes Tax Credit CommitteePhase IIComprehensive evaluation based on eight additional factors and the Phase I ratio calculationPhase IQuantitative analysisCost-benefit ratioSlide12
Phase I EvaluationCost-Benefit Ratio:
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Amount of Credit RequestedAggregate Employee CompensationAggregate InvestmentSlide13
Exemptions to the Phase I Calculation
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GO-Biz may move an application to Phase II, regardless of ratio the applicant certifies that:absent award of the credit, the applicant’s project may/will occur in another state, or the applicant may/will terminate or relocate all or a portion of its employees to another state, orat least 75% of the applicant’s net increase of full time employees work at least 75% of the time in an area of high unemployment or high povertySlide14
High Poverty and Unemployment Areas
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High Poverty AreaA city and/or county within California with a poverty rate of at least 150% of the California statewide poverty rate per the most recently updated data available from the U.S. Census Bureau’s American Community Survey thirty days prior to the first day of the applicable application period.High Unemployment Area A city and/or county within California with an unemployment rate of at least 150% of the California statewide unemployment rate per the most recently updated data available from the California Employment Development Department thirty days prior to the first day of the applicable application period. A list of qualifying high unemployment and high poverty areas will be posted on the California Competes website approximately 30 days prior to the close of an upcoming application period.Slide15
Phase II EvaluationPhase I information Extent of unemployment/povertyEconomic impactNumber of retained employeesOpportunity for growth/expansionOther incentives availableWages/benefitsStrategic importanceOther information requested
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Note: Evaluated factors are in no particular orderSlide16
AgreementsTerms and conditions of the agreements include:Minimum employee compensation and retention periodCredit distribution periodRecapture provisions if applicant fails to meet
commitmentsTax credit agreements must be approved by California Competes Tax Credit Committee
Committee Members: State Treasurer, Director of the Department of Finance, two legislative appointees, and the Director of GO-Biz (Chair)16Slide17
Agreements
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GO-Biz is required to post information on its website for all awardeesFor a list of all awardees, visit the awardee list.
Post Committee Approval
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Oversight/AccountabilityFranchise Tax Board (FTB)Access to application and all documentation Must review books/records for agreement compliance for non-small businessesMay review books/records for agreement compliance if the recipient is a small businessMaterial Breach
FTB informs GO-BizCommittee approves or denies recapture
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California Competes Tax CreditApply: www.calcompetes.ca.govEmail:
calcompetes@gov.ca.govPhone: (916) 322-4051
20Governor’s Office of Business & Economic Development1325 J Street, Suite 1800Sacramento, CA 95814http://www.business.ca.gov/Programs/CaliforniaCompetesTaxCredit Questions?