Governor Schwarzenegger Welcomes House Passage of the American Jobs Creation Act

Legislation Addresses Runaway Production, Expands Energy Tax Credit, Provides Tax Relief for Repatriated Income & Ensures California Credit for Ethanol Use Governor Arnold Schwarzenegger today welcomed the inclusion of provisions which will benefit California in the Conference Report on H.R. 4520, the American Jobs Creation Act of 2004, passed tonight by the House of Representatives. "When I was elected one year ago, I promised to turn-around California's ailing economy and bring more federal assistance to our state," said Governor Schwarzenegger. "In addition to the more than $800 million in assistance and new funds we have received this past year from Washington, this federal tax bill will provide additional incentives for businesses to remain in and return to California." Governor Schwarzenegger previously expressed his strong support for including in the corporate tax bill an incentive to stop runaway film production, an expansion of tax credits for additional renewable energy sources and temporary tax relief for repatriated income. In addition, HR 4520 includes the Volumetric Ethanol Excise Tax Credit ("VEETC") which will mean an estimated $2.7 billion more over five years for California's transportation needs. "I particularly want to thank my fellow Californian Bill Thomas, the Chairman of the Ways & Means Committee, for his fantastic leadership on these important issues. He recognizes that stopping runaway film production, expanding our renewable energy resources, bringing funds earned offshore back home and providing a fairer share of highway transportation funds are crucial to rebuild California's economy." A summary of the specific provisions of HR 4520 mentioned above: Incentive to Stop Runaway Film Production - In recent years, virtually every industrialized nation has adopted incentives to attract U.S. film production. These countries recognize the substantial benefits that accrue to their local economies from film production, including employment for carpenters, electricians, caterers, drivers and seamstresses, many working for small businesses or as independent contractors. Film and television production adds an estimated $34 billion/year to the California economy. This incentive allows taxpayers to immediately deduct up to $15 million of costs incurred for domestic film and television production (up to $20 million if the expenses are incurred in certain distressed areas) and is a crucial component to preserve this vital segment of California's economy. Temporary Tax Relief for Repatriated Income - The temporary removal of the obstacle to domestic reinvestment of profits earned by U.S. companies selling American products overseas is estimated to bring $300-$400 billion of foreign earnings back to the U.S., creating up to 600,000 jobs nationwide. Based on California's share of the national economy, the state could receive between $85-$120 million in additional state revenues and benefit from the resulting new jobs if the provision is enacted. Expansion of Energy Tax Credit - Governor Schwarzenegger's goal of producing 20% of California's electricity from renewable energy sources by 2010 will receive a significant boost from HR 4520. The California Energy Commission estimates this provision will yield over 22,000 gigawatt hours per year of new electricity by 2010. The bill includes a tax credit for electricity produced by wind and closed-loop biomass. It expands the credit to include electricity generating facilities using solar, geothermal, open-loop biomass, municipal solid waste and small irrigation project hydropower. Volumetric Ethanol Excise Tax Credit: The VEETC is worth an estimated $2.7 billion for California over five years after enactment. California is the largest user of ethanol in the nation and this provision will credit the revenue derived from the state's ethanol use directly to the Highway Trust Fund, allowing the state to recoup up to $2.7 billion in transportation funds. Previously, these funds went to the federal treasury.