Amended  IN  Assembly  July 03, 2023
Amended  IN  Assembly  June 30, 2023
Amended  IN  Assembly  June 15, 2023
Amended  IN  Senate  April 24, 2023
Amended  IN  Senate  March 21, 2023

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Senate Bill
No. 49

Introduced by Senator Becker

December 05, 2022

An act to add and repeal Sections 17053.10 and 23605 of the Revenue and Taxation Code, and to add Section 91.9 to the Streets and Highways Code, relating to energy.


LEGISLATIVE COUNSEL'S DIGEST


SB 49, as amended, Becker. Renewable energy: solar canopies: income tax credits and Department of Transportation strategic plan.
The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws.
This bill would allow a credit against those taxes for each taxable year beginning on or after January 1, 2024, and before January 1, 2032, 2029, in an amount equal to 5% of the qualified costs paid or incurred during the taxable year for constructing a qualified solar canopy project, as specified.
Existing law requires any bill authorizing a new tax credit to contain, among other things, specific goals that the tax credit will achieve, detailed performance indicators, and data collection requirements.
This bill would make specified findings detailing the goal of the above-described tax credit, performance indicators for determining whether the credit meets that goal, and data collection requirements.
Existing law vests the Department of Transportation with full possession and control of all state highways and all property and rights in property acquired for state highway purposes. Existing law authorizes the department to lease, for up to 99 years, areas above or below state highways to public or private entities, as specified. Existing law also authorizes the department to issue certain permits for a state highway’s right-of-way necessary for telegraph, telephone, or electrical lines or of any ditches, pipes, drains, sewers, or underground structures, unless otherwise specifically provided in the instrument conveying title.
This bill would require the department, in coordination with the State Energy Resources Conservation and Development Commission and the Public Utilities Commission, to develop a strategic plan to develop land within department-owned rights-of-way for renewable energy generation facilities, energy storage facilities, and electrical transmission and distribution facilities, as specified. The bill would require the strategic plan to consider the department owning the facilities, or leasing, granting easements, or entering into joint-use agreements with public utilities or other entities for this purpose. On or before July 1, 2027, the bill would also require the department to publish specified information on its internet website, including the actual amount of area of department-owned rights-of-way subject to a lease, easement, or joint-use agreement for renewable energy generation or energy storage.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 (a) The Legislature finds and declares all of the following:
(1) With Senate Bill 100 (Chapter 312 of the Statutes of 2018) and Senate Bill 1020 (Chapter 361 of the Statutes of 2022), the state has established a target for 100 percent of retail sales of electricity to be from renewable or zero-carbon resources by 2045, with interim targets of 90 percent by 2035 and 95 percent by 2040.
(2) To achieve the 100 percent target for retail sales of electricity, the Senate Bill 100 Joint Agency report from March 2021 estimated that the state will need to add 110 gigawatts of solar generation capacity by 2045.
(3) According to the Solar Energy Industry Association, solar energy generation generally requires 5 to 10 acres per megawatt of generation capacity, and the need for space to support large-scale solar generation can compete against other beneficial uses for that land, including agricultural uses, recreational uses, and land conservation as part of the state’s 30x30 strategy.
(4) It is in the interest of the state to encourage and enable the development of renewable energy generation, including solar energy generation, on land with limited beneficial use, such as along highway rights-of-way, or in rights-of-way where the land can be used for renewable energy generation without interfering with current uses, such as building solar energy generation on canopies above parking lots.
(5) The County of Los Angeles alone has an estimated 101 square miles of parking lots that could provide about 6,500 megawatts of power if they were covered by solar canopies. Encouraging the development of solar canopies could make a significant contribution to achieving the state’s need for increased solar energy generation capacity while reducing the amount of other land required.
(6) Additional renewable energy generation, especially if paired with energy storage, can also help the state achieve better grid reliability and lower the risk of power outages.
(7) Renewable energy generation from solar canopies over surface parking lots and from solar energy generation facilities along highway rights-of-way can provide a local source of electricity for electric vehicle charging stations that are also often located within surface parking lots and along highways.
(8) The Independent System Operator has estimated the need for $30,000,000,000 in investments in increased transmission capacity by 2040 in order to achieve the Senate Bill 100 target.
(9) High-voltage transmission lines are extremely difficult to site and permit, in part because they often require coordination with a large number of landowners and local jurisdictions. Numerous studies have recommended siting new transmission lines along existing rights-of-way as an approach for getting past these siting challenges.
(10) In April 2021, the Federal Highway Administration issued guidance to encourage state departments of transportation to use highway rights-of-way “for pressing public needs relating to climate change,” including “renewable energy generation and electrical transmission and distribution projects.”
(11) Increasing renewable energy generation in urban and suburban areas, including from solar canopies, can also reduce the need for long-distance transmission of renewable energy generated in rural areas into population centers.
(12) Leasing, granting easements over, or entering into joint-use agreements for land within transportation rights-of-way for renewable energy generation, energy storage, and electrical transmission and distribution can be a source of revenue for the state.
(13) Developing renewable energy generation within the transportation rights-of-way can also reduce the state’s roadside maintenance burden by shifting the responsibility for vegetation management to private companies.
(b) It is the intent of the Legislature to do both of the following:
(1) Provide incentives for the development of solar canopies to boost the local generation of renewable energy in urban and suburban areas, thereby reducing the need for dedicated land in rural areas to generate clean energy and for long-distance transmission to deliver that clean energy into population centers.
(2) Increase the availability of state-controlled land within transportation rights-of-way for renewable energy development, energy storage, and electrical transmission and distribution.

SEC. 2.

 Section 17053.10 is added to the Revenue and Taxation Code, to read:

17053.10.
 (a) (1) For each taxable year beginning on or after January 1, 2024, and before January 1, 2032, 2029, there shall be allowed a credit against the “net tax,” as defined in Section 17039, to the owner of a qualified solar canopy project in an amount equal to 5 percent of qualified costs paid or incurred during the taxable year for constructing a qualified solar canopy project.
(2) The credit allowed by this section shall be claimed for the taxable year in which the qualified solar canopy project is first placed in service.
(3) The credit allowed by this section shall not exceed one hundred thousand dollars ($100,000) per qualified solar canopy project.
(b) For the purposes of this section, the following definitions apply:
(1) (A) “Eligible area” means a multifamily residential, commercial, governmental, or industrial site containing an area dedicated to both the placement of a solar canopy and another use, including, but not limited to, use as a parking lot, outdoor seating, or recreation area.
(B) “Eligible area” does not include either of the following:
(i) The roof of a building.
(ii) A site located over a surface parking lot within one-half mile of a major transit stop or a future major transit stop identified in an applicable regional transportation plan.
(2) “Major transit stop” has the same meaning as defined in Section 21064.3 of the Public Resources Code.
(3) “Nameplate capacity” means the maximum rated output of electrical power in alternating current of a solar energy system or an energy storage system.
(4) (A) “Qualified costs” shall include, but not be limited to, costs for materials and equipment, labor, project design and engineering, and permitting.
(B) Notwithstanding subparagraph (A), “qualified costs” shall not include costs for site acquisition or remediation, environmental mitigation, or any other costs not directly related to the design or construction of the solar canopy.

(2)

(5) “Qualified solar canopy project” means construction of a solar canopy over an eligible area with a nameplate capacity of more than 15 kilowatts of alternating current. kilowatts.

(3)

(6) “Solar canopy” means an elevated structure containing a solar energy system. “Solar canopy” includes the solar energy system and powerlines or other equipment required to connect the solar canopy to the electrical grid or a building on the site.

(4)

(7) “Solar energy system” means a solar energy device, with associated energy storage connected to and primarily charged by the solar energy device, that has the purpose of providing for the collection and distribution of solar energy for the generation of electricity. Solar energy systems pursuant to this section must be solar paired with storage systems.

(5)“Major transit stop” has the same meaning as defined in Section 21064.3 of the Public Resources Code.

(c) In the case where the credit allowed by this section exceeds the “net tax,” the excess credit may be carried over to reduce the “net tax” in the following taxable year, and succeeding five taxable years, if necessary, until the credit has been exhausted.
(d) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.
(e) (1) The Franchise Tax Board may prescribe any regulations necessary or appropriate to carry out the purposes of this section.
(2) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any regulation, rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section.

(d)

(f) (1) For purposes of complying with Section 41, the Legislature finds and declares that the objective of the credit created by this section and Section 23605 is to provide incentives for the development of solar canopies to boost the local generation of renewable energy in urban and suburban areas while reducing the need for dedicated land in rural areas and the need for transmission to deliver the clean energy into population centers.
(2) The performance indicators the Legislature can use to determine if the credit is achieving the objective stated in subdivision (a) shall be the dollar amount of tax credit claimed and the nameplate capacity of solar canopies, including both the solar energy device and the energy storage systems, constructed by eligible projects that claimed the tax credits pursuant to this act.
(3) The Franchise Tax Board shall annually prepare a written report that includes both of the following:
(A) The dollar amount of tax credits claimed for eligible solar canopy projects pursuant to this section and Section 23605.
(B) The nameplate capacity of solar canopies and energy storage systems constructed by those eligible projects.
(4) (A) No later than July 1, 2024, and each July 1 thereafter, the Franchise Tax Board shall submit the report prepared pursuant to paragraph (3) to the Senate Committee on Budget and Fiscal Review, the Assembly Committee on Budget, the Senate and Assembly Committees on Appropriations, the Senate Committee on Governance and Finance, and the Assembly Committee on Revenue and Taxation. The report shall be submitted in compliance with Section 9795 of the Government Code. The Franchise Tax Board shall submit the report prepared pursuant to paragraph (3) to the Senate Committee on Budget and Fiscal Review, the Assembly Committee on Budget, the Senate and Assembly Committees on Appropriations, the Senate Committee on Governance and Finance, and the Assembly Committee on Revenue and Taxation beginning in the 2026 calendar year and then on an annual basis each year thereafter, while the credit is in effect, for the most recent taxable year for which information is available.
(B) The disclosure requirements of this paragraph shall be treated as an exception to Section 19542.

(e)

(g) This section shall remain operative until December 1, 2032, 2029, and as of that date is repealed.

SEC. 3.

 Section 23605 is added to the Revenue and Taxation Code, to read:

23605.
 (a) (1) For each taxable year beginning on or after January 1, 2024, and before January 1, 2032, 2029, there shall be allowed a credit against the “tax,” as defined in Section 23036, to the owner of a qualified solar canopy project in an amount equal to 5 percent of qualified costs paid or incurred during the taxable year for constructing a qualified solar canopy project.
(2) The credit allowed by this section shall be claimed for the taxable year in which the qualified solar canopy project is first placed in service.
(3) The credit allowed by this section shall not exceed one hundred thousand dollars ($100,000) per qualified solar canopy project.
(b) For the purposes of this section, the following definitions apply:
(1) (A) “Eligible area” means a residential, commercial, governmental, or industrial site containing an area dedicated to both the placement of a solar canopy and another use, including, but not limited to, use as a parking lot, outdoor seating, or recreation area.
(B) “Eligible area” does not include either of the following:
(i) The roof of a building.
(ii) A site located over a surface parking lot within one-half mile of a major transit stop or a future major transit stop identified in an applicable regional transportation plan.
(2) “Major transit stop” has the same meaning as defined in Section 21064.3 of the Public Resources Code.
(3) “Nameplate capacity” means the maximum rated output of electrical power in alternating current of a solar energy system or an energy storage system.
(4) (A) “Qualified costs” shall include, but not be limited to, costs for materials and equipment, labor, project design and engineering, and permitting.
(B) Notwithstanding subparagraph (A), “qualified costs” shall not include costs for site acquisition or remediation, environmental mitigation, or any other costs not directly related to the design or construction of the solar canopy.

(2)

(5) “Qualified solar canopy project” means construction of a solar canopy over an eligible area with a nameplate capacity of more than 15 kilowatts of alternating current.

(3)

(6) “Solar canopy” means an elevated structure containing a solar energy system. “Solar canopy” includes the solar energy system and powerlines or other equipment required to connect the solar canopy to the electrical grid or a building on the site.

(4)

(7) “Solar energy system” means a solar energy device, with associated energy storage connected to and primarily charged by the solar energy device, that has the purpose of providing for the collection and distribution of solar energy for the generation of electricity. Solar energy systems pursuant to this section must be solar paired with storage systems.

(5)“Major transit stop” has the same meaning as defined in Section 21064.3 of the Public Resources Code.

(c) In the case where the credit allowed by this section exceeds the “tax,” the excess credit may be carried over to reduce the “tax” in the following taxable year, and succeeding five taxable years, if necessary, until the credit has been exhausted.
(d) Any deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer upon which the credit is based shall be reduced by the amount of the credit allowed under this section.
(e) (1) The Franchise Tax Board may prescribe any regulations necessary or appropriate to carry out the purposes of this section.
(2) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any regulation, rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section.

(d)

(f) This section shall remain operative until December 1, 2032, 2029, and as of that date is repealed.

SEC. 4.

 Section 91.9 is added to the Streets and Highways Code, to read:

91.9.
 (a) On or before December 31, 2025, the department, in coordination with the State Energy Resources Conservation and Development Commission and the Public Utilities Commission, shall develop a strategic plan for development of land within department-owned rights-of-way to build and operate renewable energy generation facilities, energy storage facilities, and electrical transmission and distribution facilities. The strategic plan shall consider the department owning the facilities, or leasing, granting easements over, or entering into joint-use agreements with public utilities or other entities for facility development within department-owned rights-of-way.
(b) The strategic plan described in subdivision (a) shall do all of the following:
(1) Evaluate the suitability of department-owned rights-of-way for the development of renewable energy generation and energy storage facilities.
(2) Identify and quantify department-owned rights-of-way that could be made available for the development of renewable energy generation and energy storage facilities, to the maximum extent feasible, after consideration of suitability, safety, and other priorities that the department has identified for the department-owned rights-of-way.
(3) Establish goals for the amount of renewable energy generation capacity for department-owned rights-of-way that will be developed by 2030 and 2045.
(4) Evaluate, in coordination with the Public Utilities Commission, the Independent System Operator, and other balancing authorities, as defined in subdivision (b) of Section 399.12 of the Public Utilities Code, the suitability of department-owned rights-of-way for the development of electrical transmission and distribution facilities. The evaluation of suitability shall consider and prioritize the need for increased electrical transmission and distribution capacity as identified by the Public Utilities Commission, the Independent System Operator, or other balancing authorities, as well as wildfire mitigation projects for electrical transmission and distribution facilities, as identified in state-approved wildfire mitigation plans submitted pursuant to Section 8386 of the Public Utilities Code.
(5) Identify department-owned rights-of-way corridors that could be made available for the development of electrical transmission and distribution facilities, to the maximum extent feasible, after consideration of suitability, safety, and other priorities that the department has identified for the department-owned rights-of-way.
(6) Publish requirements for the development of renewable energy generation, energy storage facilities, and electrical transmission and distribution facilities within department-owned rights-of-way, including any safety or environmental issues and the steps that projects will be required to take to mitigate these issues.
(7) Establish a process for entities interested in leasing or obtaining an easement or joint-use agreement for land within department-owned rights-of-way to operate and build a renewable energy generation facility, an energy storage facility, or an electrical transmission or distribution facility to apply to the department for land use agreements under terms that reasonably encompass the useful life of the project.
(8) Recommend regulatory or statutory changes that, if enacted, would facilitate the development of renewable energy generation facilities, energy storage facilities, and electrical transmission and distribution facilities on department-owned rights-of-way.
(c) On or before July 1, 2027, and annually thereafter, the department shall annually publish on its internet website progress toward the goals established under paragraph (3) of subdivision (b). Measurement of progress shall include, but not be limited to, all of the following information collected during the prior year:
(1) The actual amount of area of department-owned rights-of-way subject to a lease, easement, or joint-use agreement for renewable energy generation or energy storage.
(2) The nameplate capacity of renewable energy generation or energy storage that are operating on department-owned rights-of-way.
(3) The nameplate capacity of renewable energy generation or energy storage that is in the development pipeline to operate on department-owned rights-of-way, and their scheduled commercial operation date.
(4) The number of megawatt-miles of transmission and distribution facilities developed within department-owned rights-of-way.