BILL ANALYSIS �
AB 204
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Date of Hearing: May 27, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 204 (Halderman) - As Amended: May 24, 2011
Policy Committee: Revenue and
Taxation Vote: 8-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill establishes a partial sales and use tax (SUT)
exemption for equipment purchased by a "biomass energy facility"
for use in its biomass energy production in this state.
Specifically, this bill:
1)Provides that this exemption shall not apply to any tax
levied:
a) By a county, city, or district pursuant to, or in
accordance with, either the Bradley-Burns Uniform Local SUT
Law or the Transactions and Use Tax Law; or,
b) Pursuant to Revenue and Taxation Code Sections 6051.2,
6051.5, 6201.2, and 6201.5, or pursuant to Section 35 of
Article XIII of the California Constitution.
2)Takes immediate effect as a tax levy, but only becomes
operative on the first day of the first calendar quarter
commencing more than 90 days after its effective date.
FISCAL EFFECT
The BOE estimates General Fund revenue losses of $1.04 million
in fiscal year (FY) 2011-12 and $2.08 million in FY 2012-13.
COMMENTS
1)Purpose. The author states that AB 204 is an effort to
encourage private sector green job growth in California's
renewable energy sector. The author argues that biomass
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energy is a smart investment because it creates new jobs,
sends less waste to landfills and reduces the likelihood of
fueling forest fires, all while providing a renewable source
of energy for our growing population. The author also notes
that biomass is a reliable and steady source of energy, and
every effort should be made to provide incentives for its
production in our state. AB 204 is a modest tax exemption for
those businesses that would employ Californians and produce
clean energy - two of the state's most crucial goals.
California is ambitious on both fronts and AB 204 is a step in
the right direction.
2)Background . Under existing law, as provided by SB 71,
(Padilla) Ch. 10, Statutes of 2010, certain projects may be
approved for a state and local sales and use tax exclusion by
the California Alternative Energy and Advanced Transportation
Financing Authority (CAEATFA). Biomass projects are eligible.
According to CAEATFA, because biomass facilities manufacture
an alternative source component (biomass), these facilities
may be eligible for the sales and use tax exclusion under SB
71. According to the California Biomass Energy Alliance which
supports this bill, the existing biomass facilities do not
meet the criteria under SB 71 because they do not create any
new permanent jobs.
3)Biomass in California : According to the California Energy
Commission, biomass consists of organic residues from plants
and animals, which are obtained primarily from harvesting and
processing agricultural and forestry crops. At the peak of
the biomass industry, there were 66 direct-combustion biomass
facilities in operation in the state. Today, there are
roughly 30 such facilities with a combined capacity of 640
megawatts.
4)There is no registered opposition to this bill.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081
AB 204
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