The state is attempting to claw back $1.3 million in tax credits from local companies as part of their participation in the California Competes incentive program.

As part of the Governor’s Office of Business and Economic Development (GO-Biz), California Competes was designed to attract and retain employers by offering tax credits incentives if companies meet certain milestones for hiring and private investment.

Companies that don’t meet those milestones for the five-year agreement period can have their tax credits recaptured by the state.

EMD Millipore Corp. a biopharmaceutical research, development and manufacturing facility in Visalia, saw its tax credit agreement expire at the end of its 2022 tax year. As part of the 2018 agreement, it planned to hire 26 employees and invest more than $6.04 million in exchange for a $945,000 tax credit.

Operating as MilliporeSigma, the firm opened a 120,000 square-foot distribution center in the Visalia Industrial Park in 2019.

The state is now seeking the $945,000 back.

GO-Biz also seeks the full $360,000 tax credit from Fresno’s Universal Meditech, maker of medical devices including Covid-19 testing kits. Its 2018 agreement included investing $90,000 and hiring an additional 15 employees.

GO-Biz determined that Universal Meditech was in “material breach” of its agreement.

In February, the company issued a recall of more than 56,000 Covid antigen rapid test kits the Food and Drug Administration said were distributed without “appropriate premarket clearance or approval.”

Food service ingredient manufacturer Lyons Magnus in Fresno was awarded a $99,000 tax credit in 2016 in exchange for hiring 10 additional employees and investing $4.02 million in an expansion.

GO-Biz said Lyons Magnus would not carry out its business as outlined in the tax agreement and requested its termination to make the tax credit available for other California businesses.

As part of the latest round of awards, California Competes is investing $46 million in tax credits to create nearly 500 news jobs and generate $1.3 billion in investment.

Two California businesses will be expanding efforts to domestically design, develop and manufacture the next generation of semiconductors and microchips, according to a GO-Biz news release. Collectively, Bosch in Roseville and Akash Systems in Oakland plan to make more than $1.3 billion in capital investments while creating hundreds of new jobs with a combined average salary of nearly $100,000.

“California has the ecosystem that is ready to maximize the investments, great jobs, and national and economic security benefits that will result from the forthcoming CHIPS and Science Act federal funding,” said CalCompetes Deputy Director Scott Dosick. “These latest investments in the state’s semiconductor and microchip manufacturing sector ensure that California will remain a global leader in technology innovation for decades to come.”

The state having to recapture tax credits through the California Competes program is not an uncommon occurrence — especially in the Central Valley. A hydrogen fuel manufacturing facility in Fresno operated by Ergostech Renewable Energy had to give up a $525,000 tax credit. The Gap also had $4.25 million in tax credits clawed back.

More than half of the last 20 Fresno-area recipients of California Competes tax credits had some amount recaptured by the state, according to its website.

In 2020, Bitwise Industries received a $5 million California Competes tax credit off of plans to invest $24 million and hire 807 new employees.

An attempt to recapture those funds from the now-defunct company could come after the five-year agreement period is complete.