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    SB-86
    Energy & Environment

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

    Introduced
    CA
    ∙
    2025-2026 Regular Session
    1
    0
    Track
    Track

    Key Takeaways

    • Extends indefinitely the sales tax exclusion program for advanced manufacturing and clean energy projects.
    • Increases the annual tax exclusion cap from $100 million to $300 million starting in 2025.
    • Expands eligibility to include nuclear fusion technology projects and overseas manufacturers.
    • Requires projects to promote California manufacturing, create jobs, or reduce environmental impacts.

    Summary

    Senator McNerney's proposal to modify California's Alternative Energy and Advanced Transportation Financing Authority Act makes three fundamental changes to the state's sales and use tax exclusion program for advanced manufacturing and energy projects. The legislation removes the program's January 2026 sunset date, increases the annual cap on tax exclusions from $100 million to $300 million, and expands eligibility to include electrical generation facilities using nuclear fusion technology.

    The bill maintains the program's core focus on promoting California-based manufacturing, job creation, and environmental benefits through tax incentives for qualifying projects. Under the modified framework, the Authority evaluates applications based on factors including manufacturing facility development, job creation potential, environmental impact, and local unemployment rates. Out-of-state and international entities remain eligible if they commit to establishing manufacturing operations in California.

    For implementation and oversight, the Authority must publish notices about application availability and deadlines, conduct public hearings for project approvals, and submit a report to the Legislature by January 2027 analyzing the program's effects on jobs, economic output, and environmental outcomes. The legislation authorizes the Authority to issue bonds for refinancing existing debt and funding project expansions, with proceeds managed according to specified investment and repayment parameters.

    The bill takes effect immediately upon enactment as a tax levy, ensuring continuous program operation as the current authorization approaches expiration. This timing allows the Authority to implement the expanded funding cap and broader project eligibility without interruption to existing application review and approval processes.

    Key Dates

    Next Step
    Referred to the Senate Standing Committee on Appropriations
    Next Step
    Senate Committee
    Referred to the Senate Standing Committee on Appropriations
    Hearing has not been scheduled yet
    Senate Appropriations Hearing
    Senate Committee
    Senate Appropriations Hearing
    Senate Appropriations Hearing
    Senate Revenue and Taxation Hearing
    Senate Committee
    Senate Revenue and Taxation Hearing
    Senate Revenue and Taxation Hearing
    Introduced. Read first time. To Com. on RLS. for assignment. To print.
    Senate Floor
    Introduced. Read first time. To Com. on RLS. for assignment. To print.
    Introduced. Read first time. To Com. on RLS. for assignment. To print.

    Contacts

    Profile
    Anna CaballeroD
    Senator
    Bill Author
    Not Contacted
    Not Contacted
    Profile
    Tim GraysonD
    Senator
    Committee Member
    Not Contacted
    Not Contacted
    Profile
    Megan DahleR
    Senator
    Committee Member
    Not Contacted
    Not Contacted
    Profile
    Kelly SeyartoR
    Senator
    Committee Member
    Not Contacted
    Not Contacted
    Profile
    Aisha WahabD
    Senator
    Committee Member
    Not Contacted
    Not Contacted
    0 of 8 row(s) selected.
    Page 1 of 2
    Select All Legislators
    Profile
    Anna CaballeroD
    Senator
    Bill Author
    Profile
    Tim GraysonD
    Senator
    Committee Member
    Profile
    Megan DahleR
    Senator
    Committee Member
    Profile
    Kelly SeyartoR
    Senator
    Committee Member
    Profile
    Aisha WahabD
    Senator
    Committee Member
    Profile
    Christopher CabaldonD
    Senator
    Committee Member
    Profile
    Jerry McNerneyD
    Senator
    Bill Author
    Profile
    Laura RichardsonD
    Senator
    Committee Member

    Similar Past Legislation

    Bill NumberTitleIntroduced DateStatusLink to Bill
    AB-2400
    California Alternative Energy and Advanced Transportation Financing Authority Act.
    February 2024
    Failed
    View Bill
    California Alternative Energy and Advanced Transportation Financing Authority: sales and use taxes: exclusions.
    January 2019
    Passed
    View Bill
    Alternative energy financing.
    February 2018
    Failed
    View Bill
    Sales and use taxes: exclusion: alternative energy financing.
    February 2016
    Failed
    View Bill
    Showing 4 of 4 items
    Page 1 of 1

    Get Involved

    Act Now!

    Email the authors or create an email template to send to all relevant legislators.

    Introduced By

    Jerry McNerney
    Jerry McNerneyD
    California State Senator
    Co-Author
    Anna Caballero
    Anna CaballeroD
    California State Senator
    10% progression
    Bill has been formally introduced and read for the first time in its house of origin (1/21/2025)

    Latest Voting History

    View History
    April 7, 2025
    PASS
    Senate Committee
    Senate Appropriations Hearing
    AyesNoesNVRTotalResult
    7007PASS

    Key Takeaways

    • Extends indefinitely the sales tax exclusion program for advanced manufacturing and clean energy projects.
    • Increases the annual tax exclusion cap from $100 million to $300 million starting in 2025.
    • Expands eligibility to include nuclear fusion technology projects and overseas manufacturers.
    • Requires projects to promote California manufacturing, create jobs, or reduce environmental impacts.

    Get Involved

    Act Now!

    Email the authors or create an email template to send to all relevant legislators.

    Introduced By

    Jerry McNerney
    Jerry McNerneyD
    California State Senator
    Co-Author
    Anna Caballero
    Anna CaballeroD
    California State Senator

    Summary

    Senator McNerney's proposal to modify California's Alternative Energy and Advanced Transportation Financing Authority Act makes three fundamental changes to the state's sales and use tax exclusion program for advanced manufacturing and energy projects. The legislation removes the program's January 2026 sunset date, increases the annual cap on tax exclusions from $100 million to $300 million, and expands eligibility to include electrical generation facilities using nuclear fusion technology.

    The bill maintains the program's core focus on promoting California-based manufacturing, job creation, and environmental benefits through tax incentives for qualifying projects. Under the modified framework, the Authority evaluates applications based on factors including manufacturing facility development, job creation potential, environmental impact, and local unemployment rates. Out-of-state and international entities remain eligible if they commit to establishing manufacturing operations in California.

    For implementation and oversight, the Authority must publish notices about application availability and deadlines, conduct public hearings for project approvals, and submit a report to the Legislature by January 2027 analyzing the program's effects on jobs, economic output, and environmental outcomes. The legislation authorizes the Authority to issue bonds for refinancing existing debt and funding project expansions, with proceeds managed according to specified investment and repayment parameters.

    The bill takes effect immediately upon enactment as a tax levy, ensuring continuous program operation as the current authorization approaches expiration. This timing allows the Authority to implement the expanded funding cap and broader project eligibility without interruption to existing application review and approval processes.

    10% progression
    Bill has been formally introduced and read for the first time in its house of origin (1/21/2025)

    Key Dates

    Next Step
    Referred to the Senate Standing Committee on Appropriations
    Next Step
    Senate Committee
    Referred to the Senate Standing Committee on Appropriations
    Hearing has not been scheduled yet
    Senate Appropriations Hearing
    Senate Committee
    Senate Appropriations Hearing
    Senate Appropriations Hearing
    Senate Revenue and Taxation Hearing
    Senate Committee
    Senate Revenue and Taxation Hearing
    Senate Revenue and Taxation Hearing
    Introduced. Read first time. To Com. on RLS. for assignment. To print.
    Senate Floor
    Introduced. Read first time. To Com. on RLS. for assignment. To print.
    Introduced. Read first time. To Com. on RLS. for assignment. To print.

    Latest Voting History

    View History
    April 7, 2025
    PASS
    Senate Committee
    Senate Appropriations Hearing
    AyesNoesNVRTotalResult
    7007PASS

    Contacts

    Profile
    Anna CaballeroD
    Senator
    Bill Author
    Not Contacted
    Not Contacted
    Profile
    Tim GraysonD
    Senator
    Committee Member
    Not Contacted
    Not Contacted
    Profile
    Megan DahleR
    Senator
    Committee Member
    Not Contacted
    Not Contacted
    Profile
    Kelly SeyartoR
    Senator
    Committee Member
    Not Contacted
    Not Contacted
    Profile
    Aisha WahabD
    Senator
    Committee Member
    Not Contacted
    Not Contacted
    0 of 8 row(s) selected.
    Page 1 of 2
    Select All Legislators
    Profile
    Anna CaballeroD
    Senator
    Bill Author
    Profile
    Tim GraysonD
    Senator
    Committee Member
    Profile
    Megan DahleR
    Senator
    Committee Member
    Profile
    Kelly SeyartoR
    Senator
    Committee Member
    Profile
    Aisha WahabD
    Senator
    Committee Member
    Profile
    Christopher CabaldonD
    Senator
    Committee Member
    Profile
    Jerry McNerneyD
    Senator
    Bill Author
    Profile
    Laura RichardsonD
    Senator
    Committee Member

    Similar Past Legislation

    Bill NumberTitleIntroduced DateStatusLink to Bill
    AB-2400
    California Alternative Energy and Advanced Transportation Financing Authority Act.
    February 2024
    Failed
    View Bill
    California Alternative Energy and Advanced Transportation Financing Authority: sales and use taxes: exclusions.
    January 2019
    Passed
    View Bill
    Alternative energy financing.
    February 2018
    Failed
    View Bill
    Sales and use taxes: exclusion: alternative energy financing.
    February 2016
    Failed
    View Bill
    Showing 4 of 4 items
    Page 1 of 1