SB 86: California Alternative Energy and Advanced Transportation Financing Authority Act: sales and use tax exclusion.

Official summary

Legislative Counsel’s Digest (official, as of the latest version). Written by nonpartisan legislative staff; reproduced verbatim.

Existing sales and use tax laws impose taxes on retailers measured by the gross receipts from the sale of tangible personal property sold at retail in this state, or on the storage, use, or other consumption in this state of tangible personal property purchased from a retailer for storage, use, or other consumption in this state. The California Alternative Energy and Advanced Transportation Financing Authority Act establishes the California Alternative Energy and Advanced Transportation Financing Authority. The act authorizes, until January 1, 2026, the authority to provide financial assistance to a participating party by authorizing exclusions from sales and use tax for certain projects, including those that promote California-based manufacturing, California-based jobs, advanced manufacturing, the reduction of greenhouse gases, or a reduction in air and water pollution or energy consumption. The Sales and Use Tax Law, for the purposes of the taxes imposed pursuant to that law, until January 1, 2026, excludes the lease or transfer of title of tangible personal property constituting one of those projects to any contractor for use in the performance of a construction contract for a participating party that will use that property as an integral part of the approved project.

This bill would extend to January 1, 2028, the authorization to provide financial assistance in the form of a sales and use tax exclusion for projects approved by the authority. The bill would add electrical generation facilities using nuclear fusion technology to the types of projects qualifying for this sales and use tax exclusion. The bill would, on and after January 1, 2026, for an applicant that, together with its parent corporation and subsidiaries, employs 500 or more employees, prohibit the authority from approving a project unless the applicant certifies that the applicant and its subcontractors will comply with certain labor requirements. The bill would make other conforming changes.

This bill would take effect immediately as a tax levy.

Sponsors

Sponsors by party (alphabetical): Democratic 5 · Republican 1

“Support” is shown only as formal sponsorship recorded by the legislature. Roll-call votes are available on the official bill page.

Recent official actions

1. October 1, 2025Chaptered by Secretary of State. Chapter 211, Statutes of 2025.
2. October 1, 2025Approved by the Governor.
3. September 16, 2025Enrolled and presented to the Governor at 3 p.m.
4. September 9, 2025Assembly amendments concurred in. (Ayes 40. Noes 0. Page 2710.) Ordered to engrossing and enrolling.
5. September 8, 2025In Senate. Concurrence in Assembly amendments pending.
6. September 8, 2025Read third time. Passed. (Ayes 76. Noes 0. Page 3003.) Ordered to the Senate.
7. September 3, 2025Read third time and amended.
8. September 3, 2025Read second time. Ordered to third reading.
9. September 3, 2025Ordered to third reading.
10. September 2, 2025Read second time and amended. Ordered to second reading.
11. August 29, 2025From committee: Do pass as amended. (Ayes 11. Noes 0.) (August 29).
12. August 20, 2025August 20 set for first hearing. Placed on APPR. suspense file.