GoBiz seeks five-year extension of CalCompetes tax credit amid debate over recaptured credits
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Summary
GoBiz asked the subcommittee to renew the California Competes Tax Credit for five years; LAO and stakeholders discussed a build-up of unallocated credits and options such as refundability or limits to manage fiscal risk.
The Governor's Office of Business and Economic Development asked the Assembly to extend the California Competes Tax Credit for five years, saying the program is a central tool to attract and retain jobs and manufacturing investment in the state.
"GoBiz shall evaluate the extent to which the credit will influence the applicant's ability or willingness to create new full time jobs that would otherwise not be created in the state," Scott Dossick told the subcommittee, describing the program's multi-phase, competitive application process and recapture provisions for awards that are not earned.
LAO analysis and multiple stakeholders noted that recaptured or unclaimed credits have accumulated into a large pool (the transcript referenced more than $900,000,000 available for the 2025–26 fiscal year). LAO recommended approving an extension but suggested lawmakers consider options to smooth fiscal exposure, and stakeholders urged reforms such as adding refundability so startups and pre‑profit firms can use awards.
GoBiz said the program typically concentrates awards in manufacturing and that awards are subject to recapture if companies fail to meet hiring and retention requirements. The committee discussed recapture mechanics and whether program design changes — including refundability or limits on annual use — would improve deployment of credits to strategic industries.
No committee vote occurred; members and stakeholders asked GoBiz for further data on recapture dynamics and the mix of awardees.
