KLS Keeping Law Simple Legislation in plain English

Straight-ahead summaries built from the official bill text. We keep the source links front and center and leave the decision up to you.

Back to California

SB-86 • 2026

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

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

Energy Labor Taxes Technology
Enacted

This bill passed the Legislature and reached final enactment based on the latest official action.

Sponsor
McNerney
Last action
2025-10-01
Official status
Chaptered by Secretary of State. Chapter 211, Statutes of 2025.
Effective date
Not listed

Plain English Breakdown

The candidate explanation included speculative claims about the impact on jobs and pollution reduction which are not supported by the official source material.

California Law for Energy Projects: Tax Breaks

The law extends until January 1, 2028, the time when certain energy and transportation projects can get a sales and use tax break.

What This Bill Does

  • Extends the authorization to provide financial assistance in the form of a sales and use tax exclusion for projects approved by the California Alternative Energy and Advanced Transportation Financing Authority until January 1, 2028.
  • Adds electrical generation facilities using nuclear fusion technology to the types of projects qualifying for this sales and use tax exclusion.
  • Requires applicants with over 500 employees, along with their parent corporation and subsidiaries, to certify compliance with certain labor requirements if they want tax breaks after January 1, 2026.

Who It Names or Affects

  • Companies working on projects that promote California-based manufacturing, jobs, advanced manufacturing, reduction of greenhouse gases, or a reduction in air and water pollution or energy consumption.
  • Applicants with over 500 employees who want tax breaks after January 1, 2026.

Terms To Know

sales and use tax
A type of tax that is charged when you buy things or use certain services in California.
participating party
A company or organization that gets help from the California Alternative Energy and Advanced Transportation Financing Authority for their projects.

Limits and Unknowns

  • The tax breaks only last until January 1, 2028.
  • It is not clear how many companies will qualify for these new rules.

Bill History

  1. 2025-10-01 California Legislative Information

    Chaptered by Secretary of State. Chapter 211, Statutes of 2025.

  2. 2025-10-01 California Legislative Information

    Approved by the Governor.

  3. 2025-09-16 California Legislative Information

    Enrolled and presented to the Governor at 3 p.m.

  4. 2025-09-09 California Legislative Information

    Assembly amendments concurred in. (Ayes 40. Noes 0. Page 2710.) Ordered to engrossing and enrolling.

  5. 2025-09-08 California Legislative Information

    In Senate. Concurrence in Assembly amendments pending.

  6. 2025-09-08 California Legislative Information

    Read third time. Passed. (Ayes 76. Noes 0. Page 3003.) Ordered to the Senate.

  7. 2025-09-03 California Legislative Information

    Ordered to third reading.

  8. 2025-09-03 California Legislative Information

    Read third time and amended.

  9. 2025-09-03 California Legislative Information

    Read second time. Ordered to third reading.

  10. 2025-09-02 California Legislative Information

    Read second time and amended. Ordered to second reading.

  11. 2025-08-29 California Legislative Information

    From committee: Do pass as amended. (Ayes 11. Noes 0.) (August 29).

  12. 2025-08-20 California Legislative Information

    August 20 set for first hearing. Placed on APPR. suspense file.

  13. 2025-07-16 California Legislative Information

    Read second time and amended. Re-referred to Com. on APPR.

  14. 2025-07-15 California Legislative Information

    From committee: Do pass as amended and re-refer to Com. on APPR. (Ayes 7. Noes 0.) (July 14).

  15. 2025-07-15 California Legislative Information

    July 14 set for first hearing. Placed on REV. & TAX. suspense file.

  16. 2025-07-08 California Legislative Information

    From committee: Do pass and re-refer to Com. on REV. & TAX. (Ayes 16. Noes 0.) (July 7). Re-referred to Com. on REV. & TAX.

  17. 2025-06-19 California Legislative Information

    Re-referred to Coms. on TRANS. and REV. & TAX. pursuant to Assembly Rule 96.

  18. 2025-06-16 California Legislative Information

    Referred to Coms. on REV. & TAX. and TRANS.

  19. 2025-06-05 California Legislative Information

    In Assembly. Read first time. Held at Desk.

  20. 2025-06-04 California Legislative Information

    Read third time. Passed. (Ayes 39. Noes 0. Page 1521.) Ordered to the Assembly.

  21. 2025-06-02 California Legislative Information

    Ordered to special consent calendar.

  22. 2025-05-27 California Legislative Information

    Read second time. Ordered to third reading.

  23. 2025-05-23 California Legislative Information

    Read second time and amended. Ordered to second reading.

  24. 2025-05-23 California Legislative Information

    From committee: Do pass as amended. (Ayes 6. Noes 0. Page 1191.) (May 23).

  25. 2025-05-16 California Legislative Information

    Set for hearing May 23.

  26. 2025-04-07 California Legislative Information

    April 7 hearing: Placed on APPR. suspense file.

  27. 2025-03-28 California Legislative Information

    Set for hearing April 7.

  28. 2025-03-26 California Legislative Information

    From committee: Do pass and re-refer to Com. on APPR. (Ayes 5. Noes 0. Page 568.) (March 26). Re-referred to Com. on APPR.

  29. 2025-03-18 California Legislative Information

    Set for hearing March 26.

  30. 2025-01-29 California Legislative Information

    Referred to Com. on REV. & TAX.

  31. 2025-01-22 California Legislative Information

    From printer. May be acted upon on or after February 21.

  32. 2025-01-21 California Legislative Information

    Introduced. Read first time. To Com. on RLS. for assignment. To print.

Official Summary Text

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

Current Bill Text

Read the full stored bill text 
Download Bill PDF