Incentives

The Sacramento Region offers companies looking to locate or expand in the region many benefits and incentives. They include:

  • an abundant and well-educated workforce;
  • world-class research institutions;
  • a “showcase” location for renewable energy solutions and energy efficiency, including some of the largest installations currently underway in the U.S.;
  • one of the greenest locations in the U.S., regularly ranked in the top 10 metro areas for green jobs, policies, buildings, and technologies;
  • as the capital of California, an active location for policy discussions regarding clean and renewable energy, life sciences, and other technology-intensive industries;
  • lower operational costs than all major metropolitan areas in California, estimated at 30% to 50% less than the San Francisco Bay Area:
  • strong regional efforts to promote clean technology commerce and green policy, including the Green Capital Alliance and Greenwise;
  • the location chosen by a number of international and domestic solar companies as the logical “point of entry” for the U.S. solar market;
  • an excellent transportation system that includes the intersection of the main north/south and east/west freeways for the west coast of the United States, an international airport, a logistics airport, and a seaport with Foreign Trade Zone (FTZ);
  • a central location on the west coast allows single-day freight to nearly all major metro markets in the Western U.S.;
  • progressive and unique “green collar” training programs provided by the three community college districts in the region, in total teaching 130,000 students;
  • seismic stability; and,
  • access to many statewide and local business incentives.

In addition, companies interested in expansion or business relocation can take advantage of the following business economic development financial incentives:

Employment Training Panel Program (ETP)

This program allows a direct reimbursement of wages during a training period. The training period is designated by the company, and can range from eight to 60 hours. The training program is designed by the business to meet their performance needs. An average training reimbursement amount under the Employment Training Panel Program is $20 per hour.

This program is available to businesses statewide.

California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA)

One of a few available manufacturing incentives, this program provides eligible projects financial assistance in the form of a sales and use tax exclusion on property used for the "design, manufacture, production, or assembly" of advanced transportation technologies or alternative energy source products, components, or systems. This program can be an attractive incentive for manufacturing site selection in California.

Enterprise Zones

There are 42 state-designated Enterprise Zones across the State of California. Companies locating in Enterprise Zones can take advantage of special state and local business economic development incentives and benefits, which can be especially impactful in manufacturing site selection decisions such as a plant relocation. Tax credits and benefits available to companies locating in Enterprise Zones include:

  • manufacturing tax credits for sales and use taxes paid on the first $20 million of machinery purchased, which can result in significant savings for site locations such as an industrial expansion or manufacturing plant relocation;
  • a hiring credit for wages paid to qualified employees during the employees’ first 60 months on the job;
  • a 15-year carryover of up to 100% of net operating losses;
  • expensing of certain depreciable property.

A company must be located within the region’s three Enterprise Zones or two Local Agency Military Base Recovery Areas (LAMBRA) to qualify for these business economic development benefits.

Foreign Trade Zones (FTZ)

The Port of West Sacramento is the primary Foreign Trade Zone for the Sacramento Region, and there are a number of sub-zones that have been established to meet the needs of international firms throughout the area. The benefits of the zones are duty exemptions, reductions, and deferrals for products entering and leaving the U.S. through the FTZ. The result can be a tremendous savings in import/export costs, which can be very lucrative for an industrial expansion or other business relocation.

California Infrastructure and Economic Development Bank (I-Bank)

The mission of the I-Bank is to finance public infrastructure and private development that promote economic growth, revitalize communities, and enhance quality of life for Californians. The I-Bank has extremely broad statutory powers to issue revenue bonds, make loans, and provide credit enhancements for a wide variety of infrastructure and economic development projects and other government purposes. Currently the maximum loan amount is $20 million.

Redevelopment Areas

A Redevelopment Area is an approved area within a local jurisdiction, i.e., city or county, where the Redevelopment Agency captures a large share of the 1% property tax levied in the State of California. As such, many local jurisdictions will rebate that portion they collect back to the business for an agreed upon period of time. These moneys can be utilized to write down the cost of land, make infrastructure improvements, or to cover miscellaneous fees, to name just a few options.

This benefit is only allowable in designated Redevelopment Areas, and can offer substantial manufacturing incentives for companies. In the Sacramento Area this would include the city of West Sacramento, McClellan Park, and a portion of South Placer County.

Sacramento Training and Response Team (S.T.A.R.T.)

The S.T.A.R.T. group comprises representatives from federal, state, and local job training agencies, working together to assist Sacramento Area businesses. In the Sacramento Area, the S.T.A.R.T. group can assist companies with recruiting, screening, and implementing any required testing of new employees. If a company locates within an Enterprise Zone, the S.T.A.R.T. group will recruit employees that will allow the company to maximize benefits under the program.

This program is available to businesses in the Greater Sacramento Area.