In January 2022, the California Governor’s Office of Business and Economic Development (GO-Biz) will open the first application period for the new California Competes Grant Program (CCGP).
A total of $120 million is allocated to the 2021–2022 fiscal year, which will become available during the first application period from January 3, 2022, through January 24, 2022.
Below are important elements of the CCGP application process.
CCGP Qualifying Businesses
Much like the existing California Competes Tax Credit (CCTC) program, the CCGP is available to businesses planning to either relocate to or stay and grow in California. However, the CCGP was specifically created to assist businesses that may not benefit from any available tax credits.
GO-Biz has created the CCGP to assist the following three types of qualifying businesses:
- Businesses that continuously reinvest profits, generate significant R&D tax credits, or have net operating losses that result in little-to-no tax liability
- Smaller businesses with relatively low income-tax liabilities
- Start-ups with little-to-no tax liability
Beyond the above qualifications, the CCGP requires businesses to meet one of the following criteria to be eligible to apply:
- Create at least 500 full-time jobs in California
- Spend at least $10 million in infrastructure investment, defined as construction or renovation expenditures
- Project—in terms of job creation or infrastructure investment—is located in a high-poverty or high-unemployment area, as defined in the CCTC regulations
Applications are subject to a minimum request of $5 million and a maximum request of $36 million.
CCGP Application Evaluation Factors
Similar to those for the CCTC, GO-Biz has outlined the following factors that will be considered during the CCGP application review process:
- Number of jobs created or retained as well as the extent to which the grant influences the creation of any new California jobs
- Strategic importance to the state, region, or locality and the overall economic impact
- Amount of investment and the opportunity for future growth and expansion
- Other incentives available—either in state, out of state, and at the federal level
- Compensation paid to employees—including wages and fringe benefits—and training opportunities
- Extent of unemployment and poverty in current or proposed site location
- Duration of the proposed project and applicant’s commitment to remain in California
- Extent to which the benefit to California exceeds the benefit to the applicant
Highly Competitive Program
The CCGP has been allocated $120 million for the 2021–2022 fiscal year. It’s uncertain whether this program will be extended or receive additional funding, which means this application period is expected to be extremely competitive.
In addition to meeting the eligibility criteria outlined above, applicants will want to be able to convincingly demonstrate the following:
- Out-of-state competition. Any job growth is in jeopardy of occurring outside California, ideally shown within the context of a site-selection analysis.
- Grant influence. The requested grant amount will help keep jobs in California.
- Well-paying jobs. The average wage of projected increase in headcount is over $75,000 annually, with entry-level jobs making a living wage.
CCGP Application Period
The application period opens on January 3, 2022 and closes on January 24, 2022. To learn more, visit the GO-Biz Grant Solicitation.
We’re Here to Help
To discuss how your expansion plans may align with the goals of CCGP, contact your Moss Adams professional.