CAEATFA Overview

Certainly not the best acronym for a government funding agency but the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) has a long history of success.

Established on March 1, 2010, SB 71 (Padilla) CAEATFA’s STE segment advances the state’s goals of advancing economic development, creating high quality employment opportunities, and lessening the state’s dependence on fossil fuels. To support these goals, CAEATFA provides $100 million each calendar year for a full, sales and use tax exclusion (STE) on equipment and machinery used in an Advanced Manufacturing process. Employer in high tech, clean tech, and biotech are eligible to apply.

Under current regulation, CAEATFA Sales and Use Tax Exclusion is authorized to award up to a maximum $100 million annually through 2025. However, Governor Newsom’s proposed budget includes a one-time $100 million replenishment for FY2021-22. Between how quickly the original 2021 funds were exhausted and the complex application submission rules, businesses need to be strategic and ahead of the curve if they want to negotiate/secure a CAEATFA award before the additional funds are also exhausted.