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California board awards $29 million in tax credits

SACRAMENTO, Calif. (AP) -- A newly created state board awarded nearly $29 million in income tax credits on Thursday for companies that have agreed to expand and retain jobs in California.

The 29 separate credits approved at the first meeting of the California Competes Tax Credit Committee included $20,000 for a Novato-based stem cell biotech research firm that promised to create eight jobs, and $6 million for Samsung Semiconductor, which promises to create 400 jobs in San Jose.

The program was created after lawmakers last year abolished the state's Enterprise Zone program, which Gov. Jerry Brown called wasteful and inefficient.

Nearly 400 companies requested more than $500 million in credits, although only $30 million was available this year. The total will increase to $150 million for the fiscal year that begins July 1.

The program's deputy director, Will Koch, said applicants are assessed using a formula that weighs how many jobs will be created or retained; how much the employees will be paid; the rate of poverty or unemployment in the area where the business will be located; competition from other states; and the strategic importance of the business.

“It's not a grant; we're not writing a check,” Koch said.

The income tax credit is administered by the Democratic governor's GO-Biz Department, while other agencies oversee newly created hiring tax credits and sales tax exemptions for the purchase of manufacturing equipment.

The five-member tax credit board postponed a decision on a $700,000 credit for a subsidiary of German-owned grocer Aldi that is opposed by unions. Board member Greg Conger, president of United Food and Commercial Workers Local 324, which represents grocery and drug store employees in Southern California, said the company's projected wages were below the market average for the area.

The subsidiary, AI California, is proposing to create 182 jobs at a distribution center in Moreno Valley and at 30 grocery stores planned for Southern California next year. Koch said nine of the stores would be located in federally designated “food deserts” that have limited access to fresh fruits and vegetables.

Conger, who was appointed by former Assembly Speaker John Perez, D-Los Angeles, questioned whether the stores would address the problem because he said they are smaller than typical grocery stores.

Other firms awarded the credits include:

_ $2 million to Samsung Information Systems America to add 210 jobs in Mountain View;

_ $2.6 million for San Diego-based Petco to create 263 full-time jobs;

_ $1.58 million for 1,550 jobs at Amazon retail warehouse and distribution centers in Moreno Valley, Tracy, Newark and San Bernardino;

_ $1 million for 28 jobs at Novartis Pharmaceuticals in San Carlos;

_ $40,000 for Animal Memorial Service Inc., a Gilroy-based pet cremation service that promises to add five full-time jobs.


On the Web:

Tax credit awardees: www.business.ca.gov

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