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SB 86

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

2025-2026 Regular Session Introduced by Angelique Ashby and 5 co-sponsors

SB 86 extends sales tax exclusions for advanced manufacturing and nuclear fusion projects, promoting clean energy, job creation, and reduced greenhouse gas emissions in California.

Chaptered by Secretary of State. Chapter 211, Statutes of 2025.
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Bill Summary · SB 86

Summary of SB 86: California Alternative Energy and Advanced Transportation Financing Authority Act

Overview

Bill Number: SB 86
Introduced: January 21, 2025
Status: Chaptered by Secretary of State. Chapter 211, Statutes of 2025.
Effective Date: Immediately as a tax levy.

SB 86 aims to extend the provisions of the California Alternative Energy and Advanced Transportation Financing Authority Act, specifically regarding sales and use tax exclusions for projects that promote advanced manufacturing and environmental sustainability.

Purpose and Intent

The primary intent of SB 86 is to support California's transition to cleaner energy and advanced manufacturing technologies by providing financial incentives through sales and use tax exclusions. This legislation seeks to:
- Promote California-based manufacturing and job creation.
- Encourage projects that reduce greenhouse gas emissions and pollution.
- Foster the development of advanced technologies, including nuclear fusion.

Key Provisions

  1. Extension of Tax Exclusion:

    • The bill extends the authorization for sales and use tax exclusions for qualifying projects from January 1, 2026, to January 1, 2028.

  2. Inclusion of Nuclear Fusion Technology:

    • It adds electrical generation facilities using nuclear fusion technology to the list of projects eligible for tax exclusions.

  3. Labor Compliance Requirements:

    • Starting January 1, 2026, applicants with 500 or more employees must certify compliance with specific labor requirements before the authority can approve their projects.

  4. Definition of Advanced Manufacturing:

    • The bill defines "advanced manufacturing" to include processes that utilize innovative technologies and methods to create new materials and products, emphasizing sustainability and efficiency.

  5. Financial Assistance:

    • The California Alternative Energy and Advanced Transportation Financing Authority is authorized to provide various forms of financial assistance, including loans and tax exclusions, to support eligible projects.

Impact

  • Beneficiaries: The bill primarily affects businesses involved in advanced manufacturing and renewable energy sectors, particularly those developing nuclear fusion technologies.
  • Environmental Goals: By incentivizing projects that reduce pollution and greenhouse gases, SB 86 aligns with California's broader environmental objectives.
  • Job Creation: The focus on California-based jobs and manufacturing is expected to stimulate economic growth and employment opportunities within the state.

Procedural Aspects

  • The bill underwent multiple readings and amendments before being approved by the Governor on October 1, 2025.
  • It was passed with a majority vote and did not require appropriations, indicating a focus on tax policy rather than direct state funding.

Conclusion

SB 86 represents a significant legislative effort to bolster California's commitment to clean energy and advanced manufacturing. By extending tax incentives and incorporating new technologies, the bill aims to foster innovation while addressing critical environmental challenges.

Compiled from official sources — confirm details with the bill’s official record.

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