June 2014

Driving an electric Tesla Model S sedan, the governor of Texas whisked into the state capital of California on Tuesday with a not-subtle message that he wants to keep nabbing businesses from the Golden State.

Although in the state for a series of local political fundraisers, Republican Gov. Rick Perry made no secret of his hopes to win a huge, new battery factory that Tesla Motors is planning to build in Nevada, Arizona, New Mexico, Texas or, possibly, California.

Perry, in sunglasses and a business suit, said he’d like to add Tesla to a high-profile list of businesses that have relocated facilities to the Lone Star State. In April, he claimed credit for persuading Toyota Motor Corp. to move its U.S. headquarters and 3,000 marketing and finance workers from Torrance to the Dallas suburb of Plano.

Outside a Sacramento hotel on a 103-degree afternoon, he told reporters he enjoyed driving the Tesla but would have preferred “if it had a made-in-Texas bumper sticker.”

He said he didn’t like being accused of “poaching” jobs and stressed that “competition between states is good for the country.”

Perry came to California to attend political fundraisers for Republican state and congressional candidates. He also met with GOP lawmakers in Sacramento and showed off for television cameras behind the wheel of the luxury Tesla.

Spokesmen for Democratic Gov. Jerry Brown declined to comment on Perry’s brash foray into California.

But Brown, Democratic and some Republican lawmakers weren’t passively waiting for Texas to grab its jobs and employers.

Last year they passed a new $750-million economic development incentive program, and currently are putting together packages to encourage Tesla and other California companies to stay put.

With that in mind, they have launched an all-out effort to persuade Tesla Chief Executive Elon Musk to open a battery plant in California, closer to the firm’s Palo Alto headquarters and Fremont manufacturing plant.

Brown this week telegraphed that he means business. His Governor’s Office of Business and Economic Development, known as Go-Biz, released a list of 31 California companies that have been recommended to get the first $30 million in state income tax credits under the new California Competes program.

“The recommended companies represent a significant impact to California’s economy in terms of new jobs and investments,” said Go-Biz Deputy Director Will Koch.

The California Competes program is authorized to boost its total available incentives to $150 million during the state fiscal year that begins July 1. Tesla would be eligible to apply for some of the benefits if it decides to build its battery plant in its home state.

Brown is also backing a plan by state Senate President Pro Tem Darrell Steinberg (D-Sacramento) and Sen. Ted Gaines (R-Rocklin) for a package of incentives to expedite planning and construction of a 6,500-worker factory in California.

The 31 proposed recipients of the tax credits, including 11 small employers, collectively are committed to adding more than 6,000 new jobs and investing more than $2 billion to expand their businesses. On the list are companies involved in manufacturing, biotech, agriculture, food processing, aerospace and high tech.

Samsung Semiconductor of San Jose tops the list, slated to get a $6-million tax break for creating 400 new Silicon Valley jobs and making $358 million in new investments. A related firm, Samsung Information Systems America Inc. of Mountain View is recommended to get $2 million in tax breaks for hiring 210 people and investing $128.3 million.

Other big names on the list include Petco Animal Supplies Inc. of San Diego, which is committed to hiring 263 workers and making an investment of $84 million for a credit of $2.6 million.

Amazon Fulfillment Services Inc. will hire 1,550 workers and invest $225 million at Amazon.com distribution centers in Moreno Valley, Tracy, Newark and San Bernardino. It would get a credit of $1.6 million.

Go-Biz’s proposed list of companies to be awarded tax credits is expected to be endorsed by members of a California Competes Tax Credit Committee at a June 19 meeting.

The new California investment and hiring incentives are good first steps, said Gary Toebbin, president of the Los Angeles Area Chamber of Commerce.

Whether California, Texas or some other state gets the Tesla battery plant will depend on which governor presents the best offer to the carmaker, he said.

“Rick Perry is doing what Rick Perry does well. He makes it clear he wants business to locate in Texas,” Toebbin said. “In the end, it won’t be driving a Tesla car that wins the day. It’s who can put together the most complete package for Tesla.”

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