California treasurer: Put renewable-energy tax exemption on hold

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The head of a California panel that hands out sales tax exemptions to renewable-energy manufacturing companies wants to suspend the program in the wake of the Solyndra scandal.

State Treasurer Bill Lockyer said he will ask fellow members of the California Alternative Energy and Advanced Transportation Financing Authority at a meeting Tuesday to not approve any new applications for exemptions from paying California sales tax. The exemptions are aimed at encouraging the purchase of equipment used to make solar panels and other energy-saving projects.

The program was authorized last year by the Legislature when it passed SB 71 by Sen. Alex Padilla (D-Pacoima).

A decision on the request is not likely to be made before late October, a spokesman for Lockyer said.

‘SB 71 created a tax exemption for businesses that requires a level of transparency and public accountability rarely, if ever, seen in California or anywhere else,’ said Lockyer in a statement released by his office. ‘But every government program can be improved.’

He added that ‘in light of recent events’-- the potential loss of a $535-million federal loan guarantee to Solyndra, a bankrupt Fremont solar panel manufacturer -- ‘we owe it to the taxpayers to see if there is more we can do to make sure we don’t give their money to companies headed for a fall or companies that take California’s money and run to other states to create jobs.’

Lockyer’s authority had approved $37 million worth of sales tax exemptions for Solyndra, but the company only used $25.1 million to buy equipment before it closed.

The authority approved 32 sales tax exemption applications, valued at $104 million, of which $31.4 million was used, the treasurer’s office said.

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-- Marc Lifsher in Sacramento

Solyndra Chief Executive Chris Grommet during a visit to the company’s factory in Fremont on May 26, 2010. Credit: Alex Brandon / Associated Press