Sales and use taxes: exemption: backup electrical generators: deenergization events.
The enactment of SB 952 has the potential to significantly impact state laws regarding sales and use taxes as it introduces an exemption that allows local governments to acquire backup power generation resources without imposing additional tax burdens. By alleviating these financial pressures, the legislation aims to ensure that critical services remain operational even during electrical outages related to wildfire safety efforts. However, it's important to note that the state will not reimburse local agencies for any loss of sales and use tax revenue resulting from this exemption, which could affect local budgets.
Senate Bill 952, introduced by Senator Nielsen, aims to amend the Sales and Use Tax laws in California to exempt certain sales related to backup electrical resources, specifically generators, during deenergization events. The bill defines 'deenergization events' as proactive interruptions of electrical service intended to mitigate wildfire risks. From January 1, 2021, to December 31, 2026, this measure provides tax exemptions for public entities such as cities and counties purchasing backup generators for use in critical facilities during these events.
The sentiment surrounding SB 952 appears generally supportive among proponents who argue that the measure will ultimately enhance public safety and facilitate a quicker response to emergencies caused by power outages. However, there are concerns expressed by some legislators regarding the potential fiscal implications for local agencies that might experience budgetary strains as a result of un-reimbursed tax losses. These discussions reveal a tension between the immediate benefits of ensuring operational continuity for critical services and the long-term sustainability of local government funding.
Notable points of contention emerged during discussions of SB 952, particularly regarding the financial responsibility for lost tax revenue and the long-term implications of the tax exemption. Critics highlighted that the lack of state reimbursement could place a heavier burden on local governments, prompting debates about the adequacy of state funding in supporting essential services during emergency situations. The bill's provisions about purchasing criteria and the types of facilities that qualify for the exemption are also focal points of attention, ensuring clarity around the types of purchases that state and local governments are motivated to make.