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Panel considers $60 million proposal to revive California Competes grant program
Summary
GO‑Biz and California Competes officials described a proposed $60 million grant round to reach businesses that cannot monetize the non‑refundable California Competes tax credit, while the Legislative Analyst's Office urged clearer eligibility criteria and oversight.
Scott Dossick, deputy director for the California Competes grant program at GO‑Biz, told the Assembly Budget Subcommittee 5 the governor's budget includes $60,000,000 to resume the California Competes grant program to reach businesses that cannot use the non‑refundable tax credit.
Dossick explained the difference between the tax credit and the grant: the California Competes tax credit is non‑refundable and some firms cannot monetize it if they have little state tax liability. He said the grant mirrors the credit's contractual structure — awardees sign five‑year agreements with milestones for job creation, wages and capital investment and that awardees earn credits or grants only as they meet milestones. He described recapture provisions and the Franchise Tax Board's oversight role.
Why it matters: GO‑Biz and proponents said the grant would allow the state to incentivize investments from firms that otherwise could not benefit from the tax credit, expanding the pool of projects that can be recruited or retained. The program is intended to target jobs that would not otherwise be created in California and to avoid giving an unfair advantage to local firms.
Questions and oversight: Rowan Isaac of the Legislative Analyst's Office said the tax credit has relatively good evidence of effectiveness but raised oversight concerns for a grant fund. Isaac recommended creating observable, explicit eligibility criteria so the legislature and auditors can verify that grant recipients truly could not use the tax credit and suggested re‑evaluating the statutory 30% cap on awards given the smaller proposed appropriation ($60,000,000) compared with prior rounds.
Public comment and alternatives: A private‑sector speaker encouraged consideration of refundability or transferability options for the tax credit as an alternative to repeated one‑time grant rounds.
Quotes and attribution: “Every company that is awarded a credit or grant signs a five‑year contract that clearly lays out how much credit they get over the five‑year period if they achieve their milestones,” Scott Dossick told the committee. LAO analyst Rowan Isaac recommended additional statutory eligibility criteria to aid oversight.
Ending: Committee members asked for more transparency on eligibility and oversight. The $60,000,000 item was presented as a governor's budget proposal; no final appropriation or committee vote was recorded in the hearing record.
