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Calif. Senator Padilla Introduces Bill to Spur Manufacturing Jobs Creation in State

SACRAMENTO, Calif. /California Newswire/ — Senator Alex Padilla (D-Pacoima) announced today the introduction of Senate Bill 1128, which would encourage investment, job creation and economic growth in California by exempting advanced manufacturing companies from paying sales and use taxes on manufacturing equipment.

“Manufacturing jobs are starting to return to the United States, but California must still compete with other states for these jobs. Being one of only three states that taxes the purchase of manufacturing equipment hurts our state,” said Senator Alex Padilla.

SB 1128 would build upon a sales tax exemption program administered by the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) to include advanced manufacturing companies in industries such as computers, appliances, machinery, furniture, fabricated metals and transportation goods. It would require companies that receive a tax exemption to have an equal or net tax benefit to the state. It would also require that these companies show quantifiable and verifiable job creation.

“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, evidenced by more than 47.8 percent of the nation’s venture capital invested in research and development in the state in 2010. California must ensure that new products developed here are manufactured here and that when a company wants to expand, we are first in line,” said Senator Padilla.

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 spurred close to a billion dollars in private investment and is projected to create 7,352 jobs.

“With the state’s unemployment rate still above 11 percent, we need to do all we can to stimulate investments that create good paying jobs,” added Padilla.

Last year Congress approved and the President signed the Reshoring Initiative, which is focused on bringing jobs back to America and launched the Advanced Manufacturing Program to promote investment in emerging technologies in order to create high quality manufacturing jobs. Recent studies have shown that the cost advantage of manufacturing overseas is rapidly decreasing due to rising wages, a weaker dollar, and rising transportation costs. By expanding the program to advanced manufacturing, California has an opportunity to attract new investment and compete for these jobs.

Senator Alex Padilla represents more than 900,000 residents of the 20th State Senate District which includes most of the San Fernando Valley in Los Angeles.

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