California Alternative Energy and Advanced Transportation Financing Authority Act: sales and use tax exclusion.

Senator McNerney's legislation extends California's alternative energy and advanced transportation manufacturing tax incentives through 2031 while doubling the annual cap on sales tax exclusions to $200 million. The measure expands eligibility to include nuclear fusion power facilities and maintains existing benefits for projects that promote California-based manufacturing, create jobs, or reduce environmental impacts.

The bill preserves the current framework allowing the California Alternative Energy and Advanced Transportation Financing Authority to approve sales and use tax exclusions for qualifying projects. Companies must demonstrate their initiatives will establish manufacturing facilities in California, advance clean technology, or achieve pollution reductions beyond regulatory requirements. Out-of-state and international firms remain eligible if they commit to opening California operations.

For oversight and evaluation, the Authority must submit a report to the Legislature by January 2027 analyzing the program's effects on job creation, economic output, and environmental outcomes. The legislation also authorizes the Authority to issue bonds for refinancing existing projects and maintains exclusions for certain hydroelectric facilities that do not meet state water use requirements.