Sen. McNerney Introduces Bill to Extend and Expand Tax Incentives for Green Projects
Senator Jerry McNerney, D-Pleasanton, on Tuesday introduced new legislation that will extend and expand a key program that has helped the state meet its climate goals by providing tax incentives to California manufacturers of green technologies and environmentally friendly projects.
SB 86 would increase the amount of funds available in the tax incentive program, known as the California Alternative Energy and Advanced Transportation Financing Authority Act, and would extend CAEATFA indefinitely. SB 86 would also expand the program to include nuclear fusion, a cutting-edge technology that has the potential to produce unlimited amounts of clean energy.
“CAEATFA has played a vital role in helping California achieve its climate goals, protect our environment, create green jobs, and stimulate the economy. But the successful program is scheduled to expire in less than a year,” said Sen. McNerney, who is chair of the Senate Revenue and Taxation Committee.
“SB 86 will ensure that California continues to incentivize green projects, while also boosting the state’s clean energy sector. Plus, the bill will help California become a national leader in fusion energy, a potential game-changing clean technology.”
California State Treasurer Fiona Ma, who serves as chair of the CAEAFTA authority, is sponsoring SB 86
“As State Treasurer, I am proud that CAEATFA’s sales tax exclusion program is a major driver of green innovation and technology in California,” said Treasurer Ma. “By helping us attract and retain cutting-edge manufacturers in critical industries, it enables the creation of high-paying jobs, boosts the economy, and helps California reach its renewable energy goals. This bill extends the program and strengthens it by adding additional funding and expanding eligible uses. I’m proud to sponsor SB 86.”
“Thank you to Senator McNerney for your leadership in authoring SB 86, which builds on the success of a proven program that has already delivered over $11 billion in clean tech projects across California, creating good-paying green jobs and advancing environmental goals,” said Sen. Anna Caballero, D-Merced, co-author of SB 86. “By extending and expanding this program, the bill ensures California remains a leader in clean energy innovation, including funding for fusion hubs—an exciting new energy source with limitless potential. This legislation not only protects our environment but also creates economic opportunities for Californians.”
The California Legislature established CAEATFA in 2010. Since then, the program has incentivized $11 billion in clean tech and environmental projects in California, funding 256 projects in over 40 counties and creating or retaining 115,000 jobs.
The program, which funds renewable energy sources, energy efficiency, and advanced transportation and manufacturing technologies to reduce air pollution, conserve energy, and promote economic development and jobs, is also fully subscribed. Yet it’s set to expire on Jan. 1, 2026.
Under SB 86, the program would be extended indefinitely and the amount of funding available would increase from $100 million annually to $300 million.
The bill would also provide tax incentives for nuclear fusion energy technology for the first time. Last month, the world’s first fusion energy facility was announced to be built in Virginia. Lawrence Livermore National Laboratory, located in Sen. McNerney’s district has also been on the leading edge of fusion tech.
In addition, the inclusion of fusion energy in SB 86 follows a recent decision by the U.S. Treasury Department to include nuclear fusion in the federal Clean Electricity Production and Investment Tax Credits program.
###