BILL ANALYSIS �
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THIRD READING
Bill No: AB 792
Author: Mullin (D), et al.
Amended: 8/29/13 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, until January 1, 2020, exempts from a
utility users tax (UUT), the consumption of electricity
generated by a distributed clean energy resource, as defined,
for use by a single consumer, or the customer's tenants.
Senate Floor Amendments of 8/29/13 expand the types of
electricity generation systems that qualify for a UUT exemption,
impose a January 1, 2020 sunset date on the tax exemption, and
make other clarifying changes.
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
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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
charter city unless a different general law limits or prohibits
such a tax. 87 general law cities levy a UUT.
This bill, until January 1, 2020, exempts from any UUT imposed
by a local jurisdiction, a customer's consumption of electricity
generated by a clean energy resource, as defined, for the
exclusive use of a single customer, or the customer's tenants.
This bill specifies that it does not exempt, from a UUT, any
electricity or gas that is not from a "clean energy resource"
and is provided to a customer by an electrical corporation,
publicly owned utility, electrical cooperative, or irrigation
district.
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. Defines
"clean energy resource" as devices or technologies used for a
renewable electrical generation facility or other technologies
that meet specified emissions and electrical efficiency
standards, as defined in state law.
Comments
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
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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:
No
SUPPORT : (Verified 8/30/13)
California Solar Energy Industries Association
Environment California
Silicon Valley Leadership Group
Solar Energy Industries Association
SunEdison
Surun
Vote Solar
AB:d 8/30/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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