SB 1118

Introduced by Senator Alvarado-Gil
(Coauthors: Senators Choi and Ochoa Bogh)
(Coauthors: Assembly Members Castillo, Ellis, Jeff Gonzalez, and Hadwick)
 An act to add and repeal Sections 17053.49 and 23634 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.
taxation, to take effect immediately, tax levy
Personal Income Tax Law: Corporation Tax Law: tax credits: backup generators: solar batteries.
The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws.
This bill would, for taxable years beginning on or after January 1, 2027, and before January 1, 2032, allow a credit against those taxes equal to 50% of the cost of a backup electricity generator or solar battery, as specified, by a qualified taxpayer, as defined, for use in a residence or commercial property. The bill would limit the credit to $5,000 per residence or commercial property in the case of the purchase of a backup electricity generator, and to $7,500 in the case of a solar battery. The bill would only apply these provisions in taxable years for which an appropriation is made in the Budget Act or another statute for the purposes of administering the credits.
Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
This bill would include additional information required for any bill authorizing a new tax expenditure.
This bill would take effect immediately as a tax levy.
The people of the State of California do enact as follows:
SECTION 1.
Section 17053.49 is added to the
Revenue and Taxation Code
, to read:
17053.49.
(a) (1) For each taxable year beginning on or after January 1, 2027, and before January 1, 2032, there shall be allowed as a credit against the “net tax,” as defined in Section 17039, an amount equal to the amount specified in paragraph (2) for qualified expenditures paid or incurred by the qualified taxpayer during the taxable year.
(2) The amount of the credit allowed pursuant to this section shall be equal to 50 percent of the amount paid or incurred by a qualified taxpayer during the taxable year for qualified expenditures, subject to the following limitations:
(A) If the qualified expenditure is the purchase of a backup electricity generator, then the
				  credit shall not exceed five thousand dollars ($5,000) per residence or commercial property, per taxable year.
(B) If the qualified expenditure is the purchase of a solar battery, then the credit shall not exceed seven thousand five hundred dollars ($7,500) per residence or commercial property, per taxable year.
(b) For purposes of this section, the following definitions apply:
(1) “Backup electricity generator” means a standby or portable device that meets all of the following requirements:
(A) The device can generate at least 10 kilowatts.
(B) The device is designed and manufactured exclusively for the purpose of generating electricity.
(C) The device complies with applicable air quality standards promulgated by the State Air Resources Board.
(2) “Designated wildfire zone” means territory within a high fire threat district designated a tier 3 fire threat area, as determined by the Public Utilities Commission.
(3) “Qualified expenditure” means the purchase of one of the following:
(A) A backup electricity generator for use in a residence or commercial property in a designated wildfire zone.
(B) A solar battery for use in a residence or commercial property in a designated wildfire zone.
(4) “Qualified taxpayer” means a natural person or a small business that incurs a qualified expenditure.
(5) “Small business”
				  means a business that has average annual gross receipts of fifteen million dollars ($15,000,000) or less over the previous three taxable years.
(c) In the case where the credit allowed by this section exceeds the “net tax,” the excess may be carried over to reduce the “net tax” in the following taxable year, and succeeding six years if necessary, until the credit is exhausted.
(d) This section shall only be operative for taxable years for which an appropriation is made for its purposes in the annual Budget Act or another statute.
(e) (1) For the purposes of complying with Section 41, as it relates to the credit allowed pursuant to this section or Section 23634, the Legislature finds and declares the following:
(A) The specific goal
				  of the credit is to encourage the purchase of backup electricity generators and solar batteries that are necessary to protect the health and safety of residents and businesses.
(B) The performance indicators for the Legislature to use when measuring whether the credit meets the goal specified in subparagraph (A) are the number of taxpayers allowed a credit, and the total dollar value of credits allowed.
(2) (A) The Franchise Tax Board, no later than April 1, 2029, and annually thereafter, shall submit a report to the Legislature, in accordance with Section 9795 of the Government Code, detailing the number of taxpayers allowed a credit under this section or Section 23634, and the total dollar value of credits allowed.
(B) The disclosure provisions of this paragraph shall be treated as an
				  exception to Section 19542.
(f) This section shall remain operative only until December 1, 2032, and as of that date is repealed.
SEC. 2.
Section 23634 is added to the
Revenue and Taxation Code
, to read:
23634.
(a) (1) For each taxable year beginning on or after January 1, 2027, and before January 1, 2032, there shall be allowed as a credit against the “tax,” as defined in Section 23036, an amount as specified in paragraph (2) for qualified expenditures paid or incurred by a qualified taxpayer during the taxable year.
(2) The amount of the credit allowed pursuant to this section shall be equal to 50 percent of the amount paid or incurred by a qualified taxpayer during the taxable year for qualified expenditures, subject to the following limitations:
(A) If the qualified expenditure is the purchase of a backup electricity generator, then the credit shall not exceed
				  five thousand dollars ($5,000) per commercial property, per taxable year.
(B) If the qualified expenditure is the purchase of a solar battery, then the credit shall not exceed seven thousand five hundred dollars ($7,500) per commercial property, per taxable year.
(b) For purposes of this section, the following definitions apply:
(1) “Backup electricity generator” means a standby or portable device that meets all of the following requirements:
(A) The device can generate at least 10 kilowatts.
(B) The device is designed and manufactured exclusively for the purpose of generating electricity.
(C) The device complies with
				  applicable air quality standards promulgated by the State Air Resources Board.
(2) “Designated wildfire zone” means territory within a high fire threat district designated a tier 3 fire threat area, as determined by the Public Utilities Commission.
(3) “Qualified expenditure” means the purchase of one of the following:
(A) A backup electricity generator for use in a commercial property in a designated wildfire zone.
(B) A solar battery for use in a commercial property in a designated wildfire zone.
(4) “Qualified taxpayer” means a small business that incurs a qualified expenditure.
(5) “Small business” means a business that has average annual gross receipts of fifteen million dollars ($15,000,000) or less over the previous three
				  taxable years.
(c) In the case where the credit allowed by this section exceeds the “tax,” the excess may be carried over to reduce the “tax” in the following taxable year, and succeeding six years if necessary, until the credit is exhausted.
(d) This section shall only be operative for taxable years for which an appropriation is made for its purposes in the annual Budget Act or another statute.
(e) This section shall remain operative only until December 1, 2032, and as of that date is repealed.
SEC. 3.
This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.