BILL ANALYSIS                                                                                                                                                                                                    


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                                    THIRD READING

          Bill No:  AB 792
          Author:   Mullin (D), et al.
          Amended:  7/9/13 in Senate
          Vote:     21

           SENATE GOVERNANCE & FINANCE COMMITTEE  :  7-0, 7/3/13
          AYES:  Wolk, Knight, Beall, DeSaulnier, Emmerson, Hernandez, Liu

           ASSEMBLY FLOOR  :  Not relevant

           SUBJECT  :    Utility user tax:  exemption:  distributed  
          generation systems

           SOURCE  :     Author

           DIGEST  :    This bill exempts, from a utility users tax (UUT),  
          the consumption of electricity generated through a renewable  
          distributed generation system installed before January 1, 2020,  
          for use by a single consumer.

           ANALYSIS  :    The California Constitution allows a city, with the  
          consent of the local voters, to govern its "municipal affairs"  
          by adopting a charter.  The constitutional municipal affairs  
          doctrine allows charter cities to levy taxes which are not  
          preempted by the state or federal governments.  66 charter  
          cities levy a UUT.

          A general law city can impose only those taxes that are allowed  
          by state statutes.  However, the Government Code allows all  
          general law cities to levy any tax which may be levied by any  


                                                                    AB 792

          charter city unless a different general law limits or prohibits  
          such a tax.  87 general law cities levy a UUT.

          This bill exempts, from any UUT imposed by a local jurisdiction,  
          a customer's consumption of electricity generated by a renewable  
          distributed generation system that is installed before January  
          1, 2020, for the exclusive use of a single customer.

          This bill defines "local jurisdiction" as any city, county, city  
          and county, including any charter city, county, or city and  
          county, district, or public or municipal corporation.

          Access to solar electricity is critical to California's  
          achieving its clean energy and greenhouse gas emission goals,  
          while also enabling more homeowners to reduce their electricity  
          bills.  Solar distributed generation is one of the  
          fastest-growing markets in California.  Industry participants  
          estimate that more than 150,000 customers in California  
          self-supply some or all of their electricity using solar  
          distributed generation, and that more than 43,000 Californians  
          are employed by firms that are involved in the market for solar  
          distributed generation.  Uncertainty about the potential  
          application of UUTs to electricity from distributed generation  
          systems poses a threat to continued growth of this dynamic  
          distributed solar generation market.  Applying a UUT to  
          third-party power purchase agreement financing would greatly  
          disadvantage this business model.  An internal analysis  
          conducted by SunEdison found that applying a 7.5% UUT to would  
          make 15% of solar projects financially unviable for SunEdison's  
          customers.  By eliminating uncertainty about the application of  
          local UUT ordinances to renewable distributed generation and  
          ensuring consistent treatment for all customers, this bill will  
          enable the renewable distributed generation industry to continue  
          to grow throughout California.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  No   Local:  

           SUPPORT  :   (Verified  7/10/13)

          California Solar Energy Industries Association
          Environment California


                                                                     AB 792

          Solar Energy Industries Association
          Vote Solar

          AB:d  7/10/13   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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