AMBayArea partners with California Manufacturers & Technology Association (CMTA), which works with state government to develop balanced laws, effective regulations and sound public policies to stimulate economic growth and create new jobs while safeguarding the state’s environmental resources. AMBayArea provides advocacy information from CMTA and similar organizations for education purposes and encourages members to do their own research on topics provided.
CMTA President Testifies in Jobs Committee
Posted April 5, 2021 from CMTA.net
Lance Hastings testified recently in the Assembly Jobs, Economic Development and Economy Committee regarding CMTA’s Manufacturing “Maker Bill” AB 904 by Assemblymember Tim Grayson. It’s an increase in the cap on a manufacturing equipment purchase tax credit.
Here are some specifics on the bill itself:
The bill would amend Sections of the Revenue and Taxation Code. As a tax levy, the bill would take effect immediately upon chaptering. Section One of the bill would amend Revenue and Taxation Code Section 17039.3 (in the personal income tax law) to include the credit allowed by Section 17053.50 relating to credit for manufacturers’ machinery and equipment to the $5 million cap on the use of business tax credits between January 1, 2020 and December 31, 2022. Section Two of the bill would add Revenue and Taxation Code Section 17053.50 (in the personal income tax law) to provide a tax credit for eleven years for qualified taxpayers for a percentage of the amount paid for qualified personal tangible personal property up to $1 million. The credit would be allowed from tax years beginning January 1, 2021 through 2031. The bill would define the terms “fabricating,” “manufacturing,” “primarily,” “processing,” “qualified business,” “qualified personal tangible property,” “qualified taxpayer,” “refining,” and “useful life.” A “qualified business” would be defined as a business described in Sector Codes 31 to 33, inclusive, of the North American Industry Classification System (NAICS) published by the United States Office of Management and Budget (OMB), 2017 edition. “Qualified personal tangible property” would be defined as including items such as machinery and equipment, including component parts, and equipment or devices used or required to operate, control, regulate, or maintain the machinery. It would also include special purpose buildings and foundations.
Contact Lawrence Gayden at email@example.com if you have any questions regarding AB 904.
Hastings also testified on the need to secure more funding for California’s highly successful Employment Training Panel program to train manufacturers and our future workforce, and CMTA is part of a coalition to increase this funding.
You can watch the testimony here.
Report: PAGA lawsuits mean less for worker, more for attorneys
Posted April 5, 2021 from CMTA.net
The California Business and Industry Association released a revealing report recently on the impacts of California’s broad and challenging Private Attorneys General Act (PAGA), which authorizes employees to file lawsuits to recover civil penalties on behalf of themselves, other employees, and the State of California for Labor Code violations. The Act creates a path for a type of class action lawsuit in place of a proper complaint hearing decided by the Labor and Workforce Development Agency (LWDA).
According to the report the current average payment a worker receives from a PAGA case decided by the Labor and Workforce Development Agency (LWDA) is 95 percent greater than for a PAGA case filed with a court — $4,100 from an LWDA-decided case, versus $2,100 from a court case.
Even though workers are receiving higher awards from LWDA-decided cases, employers are paying 60 percent less per award. On average employers pay $504,000 per LWDA-decided case and $1,232,000 per PAGA court case.
LWDA-decided cases do not award attorneys’ fees, which contributes significantly to the huge difference in award amounts between LWDA-decided cases and PAGA court cases. Attorneys who file PAGA cases with a court are compensated with fees that represent 33% or more of the workers’ total recovery, coming to more than $405,000 per case on average.
CMTA remains committed to finding and advocating for PAGA reforms to ensure that aggrieved workers receive proper restitution and that employers get a fair hearing under the LWDA system.
You can read the report here.
Manufacturing “Maker” Bill AB 904
Posted March 9, 2021 from CMTA.net
CMTA’s flagship legislation has arrived. Our ultimate Manufacturing “Maker” bill, AB 904 by Assemblymember Tim Grayson, seeks a more competitive environment by requiring a manufacturing exemption from California’s existing $5 million equipment and R&D tax credit cap.
For decades the driving engine of California’s economy has been manufacturing. Fueled by the state’s research, technological and intellectual resources, California has grown to employ more manufacturers than any other state. But that growth is stagnant and we are losing manufacturing investments for mass scale production to other states. With a 1.8 percent decline in manufacturing jobs since the recession in California compared to the rest of the nation’s 8.0 percent increase, we have work to do. Which is why we are focusing on this bill and others to provide an incentive for new and existing manufacturers to scale up facilities here in the Golden State. The production sector is a primary pathway to the middle class for many working families. This point will be emphasized as CMTA works to get the bill passed.
“California manufacturers consistently innovate, and research and develop products here, but we must find a way to provide those companies operational cost relief so they can compete and invest more in longterm production here in the State,” said bill author Assemblymember Tim Grayson. “With CMTA’s great partnership and lots of early support on this legislation I think we have a real chance at helping manufacturers create high quality opportunities for California‘s working families.”
Details on what the AB 904 adjusts in the tax code:
Section 1 and Section 3 – Exemption from Tax Credit Cap
Revenue & Tax Code Sections 17039.3 (PIT – amended) and 23036.3 (CIT – added)
adds the term “qualified business credit” to exempt the manufacturing machinery and equipment tax exemption from the $5 million cap.
Section 2 and Section 4 – Manufacturing Tax Credit Revenue & Taxation Code Sections 17053.50 (PIT – added) and 23650 (CIT – added)
– Tax credit on “qualified personal tangible property,” as defined, to a “qualified taxpayer” for up to $1M
– Definitions to describe the processes
– Definition of “qualified business” is limited to Manufacturing NAICS codes
-“Qualified personal tangible property” defined as:
- Machinery and equipment
- Equipment/devices to control, maintain, operate the machinery
- Used in pollution control
- Special purpose buildings/foundations used as integral part of manufacturing
Does not include:
- Consumables with useful life less than one year
- Furniture, inventory
- Equipment used in extraction process
- Equipment used to store finish product
- Primarily used in administration, general mgmt. and marketing
– “Qualified taxpayer” defined as MFG on or after 1/1/20
– Defines “useful life” as one or more years
– Tax credit percentage
- 6% for MFG with 99 or fewer employees
- 5% for MFG with 100+ employees
– Carryover until credit exhausted and not beyond 1/1/35 for smaller MFG or 1/1/34 for larger MFG.
Section 5 – Legislative declarations re goal, purpose and objectives of the bill
– To incentivize, attract/retain and support recovering small/medium-sized companies.
– Measurements – FTB prepare written report re utilization to be shared with relevant legislative fiscal committees.
National Apprenticeship Act of 2021
Posted February 4, 2021 from Manufacturing Institute
Tomorrow, the House will vote on H.R. 447 – National Apprenticeship Act of 2021. The bill codifies many of the existing rules on registered apprenticeships while also making improvements to the registration system, creates a National Advisory Committee on Apprenticeships and authorizes over $3 billion over five years for the creation and expansion of registered apprenticeship programs. In addition to streamlining some of the reporting requirements that have long been burdensome for manufacturers that want to support a registered apprenticeship program, we worked with the committee to add language that ensures that program costs, including new machinery and equipment, were included as allowable costs for all grant dollars. We appreciate Congresswoman Slotkin’s (D-MI-8) amendment that addressed that concern. Due to these improvements in the overall registered system, The Manufacturing Institute is supportive of the bill. You can read our letter of support here. For more information on the bill, here is a section-by-section on the bill and a fact sheet.
Manufacturing Institute Workforce & Education Policy Committee
The MI Workforce and Education Policy Committee will hold its next meeting on Friday, February 12, 2021 from 10:00 a.m. to 11:00 a.m. EST via Zoom. RSVP Online
New COVID OSHA Regulations
Posted November 20, 2020 from CMTA.net
After a lengthy hearing yesterday, the Cal OSHA Standards Board unanimously voted (6-0) to adopt the emergency regulation on COVID-19 workplace prevention standards. Thank you to all who answered our ongoing survey and responded with comments.
CMTA’s Nicole Rice testified on the following topics concerning the impact to manufacturers:
- Timing of regulation did not afford adequate stakeholder engagement, which would have identified and possibly corrected inconsistencies and implementation challenges for manufacturers.
- Emergency rule was unnecessary given the myriad of existing laws, including SB 1159 (COVID-19 workers comp presumption), AB 685 (COVID-19 exposure notice requirement) and the Cal OSHA sectorial and general industry COVID-19 guidance that the Division has been enforcing for months.
- Many of the engineering and administrative control mandates are infeasible in a manufacturing/industrial setting with controlled environments.
- Manufacturers need flexibility in implementation to balance workplace safety with operational integrity.
- The overly broad testing mandate is excessive and will be extremely costly to manufacturers. Additionally, the outbreak definitions do not align with existing statutory requirements and will result in confusion and compliance challenges. For example, which rule are we to follow – state, local, federal, Cal OSHA??
The regulation now heads to the Office of Administrative Law (OAL) for approval. They have 10 calendar days to act. While OAL could find that the rule exceeds Cal OSHA’s authority and reject it (sending it back to the Division for additional editing), that outcome is highly unlikely as their involvement is usually pro forma. If approved, regulation would go into effect on November 29, 2020 and remain in effect for 180 days with the possibility of two 90-day extensions.
At the Board’s request, we anticipate that staff will convene an advisory committee on the regulation as early as next month (December) to address many of the concerns raised by CMTA and other industry representatives during the meeting.
CMTA will continue to engage in and monitor this process and update you with more information on future actions to mitigate the impacts on California manufacturers.
For more updates, visit cmta.net.
Prop 15 Split Roll Property Tax Measure
California Proposition 15
Posted September 2020
The Tax on Commercial and Industrial Properties for Education and Local Government Funding Initiative (Prop 15), is on the ballot in California as an initiated constitutional amendment on November 3, 2020.
Since manufacturing facilities make up a substantial portion of the square footage of industrial properties in the Bay Area, AMBayArea wants to ensure manufacturers are aware of this proposition.
- General information and views on Prop 15 can be found on ballotpedia.org.
- California Manufacturers & Technology Association (CMTA) released a press release on September 11, 2020: Manufacturers Oppose Prop 15 Split Roll Property Tax Measure
The Association of Manufacturers Bay Area (AMBayArea) is providing this information for educational purposes and encourages members to do their own research on the topics provided.