California Code of Regulations › Title 4 - Business Regulations › Division 13 - California Alternative Energy and Advanced Transportation Financing Authority › Article 2 - Manufacturing Sales and Use Tax Exclusion Program › Section 10035 - Regulatory Agreement and Compliance

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
				Regulatory Agreement. All recipients of sales and use tax exclusions are
				required to execute a Regulatory Agreement as a condition to the Authority's
				making a finding and awarding a sales and use tax exclusion.
(1) This agreement, to be entered into
				between the Applicant and the Authority's Executive Director, will require the
				Applicant to comply with the requirements set forth in these regulations. This
				agreement must be signed by a representative of the Applicant's company
				authorized to enter into contracts on behalf of that company and returned to
				CAEATFA within 30 calendar days from the acceptance date shown on the
				notification provided pursuant to Section
				10034(f).
(2) The Regulatory Agreement will commence
				upon execution and will continue in force for a period equal to the longer of
				(a) three years or (b) one-half of the Estimated Useful Lifespan of the longest
				lived item of Qualified Property identified in the Application. If the
				Applicant is granted an extension of the initial term to make Qualified
				Property purchases pursuant to Section
				10035(b)(1)(B),
				below, the term of the Regulatory Agreement shall be extended for an equal
				amount of time.
(3) The Regulatory
				Agreement shall include but not be limited to the following:
(A) A requirement that the Applicant
				indemnify and hold harmless CAEATFA from claims connected with:
1) the Project,
2) transactions associated with the
				Project,
3) any violation of law
				connected with the Project, and
4)
				any dispute or ruling regarding the ultimate taxability of the sale or use of
				the Qualified Property.
(B) A requirement that the Qualified Property
				be installed, maintained and operated within the State of California, except as
				provided by this section.
(C) The
				Executive Director may approve a request to relocate Qualified Property outside
				of California in an amount up to fifteen percent (15%) of the dollar volume of
				Qualified Property included on all semi-annual reports to the Authority as of
				the date of the request. The amount of Qualified Property relocated shall be
				cumulative and the amount requested will be added to any previously approved
				request and compared to the dollar volume of Qualified Property included on all
				semi-annual reports to determine compliance with the fifteen percent (15%)
				limitation. The Executive Director shall approve a request pursuant to this
				section upon a finding that the relocation is part of an improvement, upgrade
				or increase in the economic efficiency of the Project and that approval of the
				requested relocation is likely to continue or increase the anticipated net
				benefits of the Project. Any denial of a request pursuant to this section may
				be reviewed by the Authority.
(D)
				Requests for relocation of Qualified Property in excess of the fifteen percent
				(15%) requirement set forth in (a)(3)(C) may be approved by the Authority based
				on a recommendation from the Executive Director and upon a finding that the
				relocation is part of an improvement, upgrade or increase in the economic
				efficiency of the Project and that approval of the requested relocation is
				likely to continue or increase the anticipated net benefits of the
				Project.
(E) Any amount of
				Qualified Property may be relocated outside of California upon a voluntary
				payment by the Applicant in an amount calculated by multiplying the original
				purchase price of the Qualified Property to be relocated by the average
				statewide sales tax rate at the time of the proposed relocation.
(F) A requirement that the Applicant file a
				semi-annual report. This report will identify purchases of Qualified Property,
				if any, made during the preceding two calendar quarters.
(i) Each semi-annual report shall include
				information about the Qualified Property purchased, including the acquisition
				date; vendor city, county, and country; cost; address where the Qualified
				Property will be located or installed; a description and explanation of the
				purpose of the Qualified Property; and any other information requested by the
				Executive Director that is reasonably related to the purposes of the
				Program.
(ii) The semi-annual
				report covering the first two calendar quarters of the year shall be submitted
				to the Authority on or before July 31; the semi-annual report covering the last
				two calendar quarters of the year shall be submitted to the Authority on or
				before January 31 of the immediately following calendar
				year.