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GoBiz seeks $60 million to relaunch Cal Competes grant program; LAO urges tighter eligibility oversight
Summary
GoBiz asked the subcommittee to reauthorize $60 million for the California Competes grant program, which provides awards to companies that cannot take a nonrefundable tax credit; LAO supported the concept but urged clearer, observable eligibility criteria and oversight.
Scott Dossick, deputy director of the California Competes program at the Governor's Office of Business and Economic Development (GoBiz), asked the subcommittee to approve a $60 million allocation to revive the California Competes grant program. Dossick said the grant addresses a known limitation of the nonrefundable tax credit: some companies lack tax liability to monetize credits, so a grant makes California competitive for projects that otherwise would relocate out of state.
Dossick cited the program's role as matching support for federal CHIPS Act awards and said the grant uses the same evaluation criteria as the tax credit, including material‑factor analysis and milestone‑based performance requirements. He described the grant as an effective recruitment tool used by companies in the semiconductor supply chain and other high‑tech industries.
The Legislative Analyst's Office told the committee it broadly concurs that the grant can address a valid tax‑credit limitation and that GoBiz's evaluation approach has strong elements, such as milestone requirements and recapture authority. However, LAO noted the grant has not yet been evaluated separately from the tax credit and recommended the Legislature weigh the grant's priority against other budget demands and consider strengthening observable eligibility criteria to ensure grants go to firms that cannot use the tax credit.
Committee members asked about oversight, net‑new job calculations, and whether award conditions require that jobs be tradable (export‑oriented) rather than purely local services. GoBiz detailed its milestones, multi‑year contracts (up to five years) and post‑award maintenance requirements — companies must maintain jobs for additional years after achieving milestones — and explained it assesses tradability and competitive impacts as part of the evaluation.
The subcommittee did not act and held the item open for further consideration in the budget process.
