(May 19, 2003) - A bill extending the manufacturer’s investment credit (MIC) is up today in the Assembly Appropriations Committee. The MIC is an important job creator for the state’s manufacturers, and is one factor helping to keep California businesses competitive.
The California Chamber supports AB 122 (Calderon; D-Montebello), which extends the date on which the manufacturer’s investment tax credit will expire.
Provisions in the original bill establishing the MIC make it inoperative if a specified number of jobs are not created. Unfortunately, although there was a job creation boom in the 1990s when the MIC was enacted, other factors have led to a decline in the last two years and put the future of this valuable credit in jeopardy.
“Extending the sunset provision of the MIC is critical to the recovery of the state’s economy. It provides a significant incentive for businesses to invest in California and expand or update their operations,” said Dominic DiMare, Chamber legislative advocate. “The MIC spurred economic growth when it was established. It would have an opposite, chilling effect on economic growth if it were allowed to expire.”
The Chamber’s recent Business Climate Survey revealed that a high number of California business have been offered various tax credits and other incentives to relocate their companies to neighboring states. The Chamber believes the MIC sends an important message that California wants businesses to locate and invest in California.
Elimination of this tax credit now would put California on unequal ground with 48 other states in the nation that offer a similar credit. California’s business climate is already adversely affected by skyrocketing workers’ compensation rates, the budget crisis and some of the most stringent employer regulations in the nation. The state cannot afford to take a step back and allow the sunset of a program that has helped to create jobs.
“For California’s economy to recover, the Legislature needs to nurture job creators and encourage expansion and investment in the state,” continued DiMare. “Extending the MIC is a step in the right direction.”
The Chamber strongly urges businesses to contact their legislators to express support for AB 122. Click Here for information to contact Assembly Appropriations Committee members.
Staff Contact: Dominic DiMare