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SB-952 Sales and use taxes: exemption: backup electrical generators: deenergization events.(2019-2020)

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Date Published: 05/29/2020 09:00 PM
SB952:v98#DOCUMENT

Amended  IN  Senate  May 29, 2020

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Senate Bill
No. 952


Introduced by Senator Nielsen

February 10, 2020


An act to amend Section 8385 of the Public Utilities Code, and to add Section 6356.3 to the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


SB 952, as amended, Nielsen. Sales and use taxes: exemption: backup electrical resources: generators: deenergization events.
Existing state sales and use tax laws impose a tax 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 Sales and Use Tax Law provides various exemptions from those taxes.
This bill, on and after January 1, 2021, and before January 1, 2026, would provide an exemption from those taxes with respect to the sale of, or the storage, use, or consumption of, a backup electrical resource, generator as defined, that is purchased for exclusive use by a city, county, special district, or other entity of local government during deenergization events, as defined. if that backup electrical generator is purchased for use exclusively in powering a critical facility, as defined, by a city, county, city and county, special district, or other political subdivision during deenergization events, as defined, and the purchaser provides to the seller a written statement with regard to these facts.
The Bradley-Burns Uniform Local Sales and Use Tax Law authorizes counties and cities to impose local sales and use taxes in conformity with the Sales and Use Tax Law, and existing laws authorize districts, as specified, to impose transactions and use taxes in accordance with the Transactions and Use Tax Law, which generally conforms to the Sales and Use Tax Law. Amendments to the Sales and Use Tax Law are automatically incorporated into the local tax laws.
Existing law requires the state to reimburse counties and cities for revenue losses caused by the enactment of sales and use tax exemptions.
This bill would provide that, notwithstanding Section 2230 of the Revenue and Taxation Code, no appropriation is made and the state shall not reimburse any local agencies for sales and use tax revenues lost by them pursuant to this bill.
This bill would take effect immediately as a tax levy.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.Section 8385 of the Public Utilities Code is amended to read:
8385.

(a)For purposes of this chapter, the following shall apply:

(1)“Backup electrical resource” means portable or fixed sources for generation of electricity and energy storage systems, as defined in Section 2835, that can service electrical supply needs within the area undergoing a deenergization event.

(2)“Compliance period” means a period of approximately one year.

(3)“Deenergization event” means the proactive interruption of electrical service for the purpose of mitigating or avoiding the risk of causing a wildfire.

(4)“Electrical cooperative” has the same meaning as defined in Section 2776.

(b)The commission shall supervise an electrical corporation’s compliance with the requirements of this chapter pursuant to the Public Utilities Act (Part 1 (commencing with Section 201) of Division 1). Nothing in this chapter affects the commission’s authority or jurisdiction over an electrical cooperative or local publicly owned electric utility.

SEC. 2.SECTION 1.

 Section 6356.3 is added to the Revenue and Taxation Code, to read:

6356.3.
 (a) For purposes of this section, the following terms have the following meanings: section:

(1)“Backup electrical resource” and “deenergization event” have the same meanings as defined in Section 8385 of the Public Utilities Code.

(2)“Electrical corporation” means an electrical corporation, as defined in Section 218 of the Public Utilities Code, that has been authorized by the Public Utilities Commission to undertake deenergization events pursuant to a Wildfire Mitigation Plan approved by the commission pursuant to Section 8386 of the Public Utilities Code.

(1) “Backup electrical generator” means a standby or portable device that meets all of the following requirements:
(A) The device can generate at least 20 kilowatts.
(B) The device is designed and manufactured exclusively for the generation of electricity.
(C) The device meets and complies with the State Air Resources Board’s air quality standards for use in California.
(2) “Critical facility” means all of the following facilities:
(A) Emergency service facilities that are police stations, fire stations, and emergency operation centers.
(B) Public health facilities that are hospitals, skilled nursing facilities, nursing homes, blood banks, health care facilities, dialysis centers, and hospice facilities.
(C) Public utility facilities vital to maintaining or restoring normal service, including, but not limited to, interconnected publicly owned utilities and electric cooperatives.
(D) Water and wastewater facilities that are associated with the provision of drinking water or processing of wastewater, including facilities used to pump, divert, transport, store, treat, and deliver water or wastewater.
(E) Communication facilities that are selective routers, central offices, head ends, cellular switches, remote terminals, and cellular sites.
(F) Public schools.
(G) Public jails and public prisons
(H) Public transit stations and public transit districts.
(3) “Deenergization event” means a proactive interruption of electrical service for the purpose of mitigating or avoiding the risk of causing a wildfire.
(b) On and after January 1, 2021, and before January 1, 2026, there are exempted from the taxes imposed by this part the gross receipts from the sale in this state of, and the storage, use, or other consumption in this state of, a backup electrical resource that is purchased for exclusive use by a city, county, special district, or other entity of local government during deenergization events. generator if both of the following are true:
(1) The backup electrical generator is purchased for use exclusively in powering a critical facility by a city, county, city and county, special district, or other political subdivision during deenergization events.
(2) The purchaser of the backup electrical generator provides to the seller a written statement providing that the purchaser purchased the emergency backup generator for use exclusively in powering a critical facility during a deenergization event.
(c) This section shall remain in effect only until December 31, 2026, and as of that date is repealed.

SEC. 3.SEC. 2.

 (a) For the purposes of complying with the intent of Section 41 of the Revenue and Taxation Code, with respect to the tax expenditure created by the addition of Section 6356.3 of the Revenue and Taxation Code made by this act, the Legislature finds and declares all of the following:
(1) Public agencies, including local governments, carry out critical services on behalf of Californians.
(2) During deenergization events, public agencies are expected to perform their functions regardless of access to electricity and some public agencies are required to perform their functions due to potential penalties or legal liabilities.
(3) Public agencies are not in the business of energy generation or storage, but must deepen their experience in that role by necessity as electrical corporations increasingly implement deenergization events.
(4) More affordable equipment for the purpose of backup electricity generation will ensure that residents represented or served by these public agencies are not unduly burdened by costs.
(5) It is the intent of the Legislature to facilitate the purchase of backup electricity generation equipment by public agencies in order to protect public interests, avoid liability, and enhance public health and safety.

(b)Any public agency purchasing equipment that qualifies for the sales and use tax exemption provided by Section 6356.3 of the Revenue and Taxation Code, as added by Section 2 of this act, shall submit a report, in compliance with Section 9795 of the Government Code, to the Senate Committee on Governance and Finance within 30 days of the purchase of that equipment. The report shall contain information identifying the public agency, the purchase price of the equipment, and the amount of state and local sales and use taxes exempted by Section 6356.3 of the Revenue and Taxation Code, as added by this act.

(b) (1) The Legislative Analyst’s Office shall, on an annual basis, collaborate with the California Department of Tax and Fee Administration to review and submit a report to the Legislature regarding the effectiveness of the benefit. The review shall include, but not be limited to, the sales and use tax revenue lost due to the exemption. The report to the Legislature required by this section shall be submitted in compliance with Section 9795 of the Government Code.
(2) The Legislative Analyst’s Office may require information from the California Department of Tax and Fee Administration, and the California Department of Tax and Fee Administration shall provide to the Legislative Analyst’s Office that information, for purposes of complying with paragraph (1).
SEC. 4.

It is the intent of the Legislature to enact legislation to develop a webportal or other procurement source through the Department of General Services that is accessible to any governmental or public entity to directly purchase backup electrical resources at a discounted rate and free of sales and use taxes.

SEC. 5.SEC. 3.

 Notwithstanding Section 2230 of the Revenue and Taxation Code, no appropriation is made by this act and the state shall not reimburse any local agency for any sales and use tax revenues lost by it under this act.

SEC. 6.SEC. 4.

 This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.