California Urged to Suspend Program That Gave Solyndra Tax Break
September 27, 2011, 4:37 PM EDTBy James Nash
Sept. 27 (Bloomberg) -- California should freeze awards from a program that gave a $25.1 million tax break to Solyndra LLC, the now-bankrupt solar-panel maker backed by federal loans, said overseers of the state authority in charge.
“We have to pause to make sure we do have safeguards in place,” Robert Weisenmiller, the California Energy Commission chairman and a board member of the state Alternative Energy and Advanced Transportation Financing Authority, said today at a meeting in Sacramento. The agency handles the waiver bids.
A formal vote on suspending the program will be held Oct. 25, the board decided. There are no pending applications set for consideration next month, according to Christine Solich, the authority’s executive director.
Under a 2010 law, the authority can exempt from sales and use taxes equipment engaged in “the design, manufacture, production, or assembly of advanced transportation technologies or alternative energy source products, components or system.” About $31.4 million in taxes have been waived under the program, according to data on Treasurer Bill Lockyer’s website.
“Ultimately, we do need to compete with other states for these emerging technologies,” Weisenmiller said.
Three-year exemptions already granted may save recipients about $104 million, according to a projection from Lockyer’s office. The breaks have gone to manufacturers, utilities, a public-transit district and a nongovernment research institute, helping to create an estimated 653 jobs, the documents show.
Biggest Grant
Solyndra received the largest exemption. The Fremont, California-based solar-panel manufacturer sought bankruptcy court protection Sept. 6, potentially leaving taxpayers on the hook for $528 million in federal loans.
The state won’t be able to seek the money Solyndra saved through the tax break unless it can prove “material misrepresentations” in its application for the waiver, Solich said at the meeting. No such evidence has turned up, she said.
The FBI and agents from the Energy Department raided Solyndra’s offices two days after the bankruptcy filing, while Congress has held hearings into how the company obtained a $535 million federal loan guarantee in 2009. The manufacturer dismissed about 1,100 workers Aug. 31, when it closed its Fremont factory.
While California hasn’t begun its own probe, Solich said the state is monitoring the bankruptcy proceedings and the federal and congressional investigations for evidence of Solyndra misrepresentations in its bid for tax waivers.
--Editors: Ted Bunker, Stephen Merelman, Pete Young.
To contact the reporter on this story: James Nash in Sacramento at Jnash24@bloomberg.net
To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net.
