AB 14 would do two things: temporarily lift state air-regulation barriers to the sale and purchase of portable and emergency backup generators during any period the Governor declares a state of emergency caused by loss of electrical service, and create a state personal income tax credit for natural persons and small businesses who buy backup generators. The tax credit would apply for tax years beginning on or after January 1, 2026, and before January 1, 2031, and is tied to the purchase amount subject to statutory caps.
The bill moves at the intersection of emergency preparedness and air quality law. Practically, it makes noncompliant generators available during declared outages and subsidizes generator purchases for individuals and small firms, while adding additional disclosure/performance information for this new tax expenditure.
That combination raises implementation and air-quality trade-offs that agencies and compliance teams would need to reconcile.
At a Glance
What It Does
The bill exempts the sale and purchase of portable or emergency backup generators from regulations adopted by the State Air Resources Board whenever the Governor proclaims a state of emergency based on an emergency that causes a loss of electrical service to any part of California. It also creates a personal income tax credit for purchases of backup generators made in taxable years starting 2026 through 2030, equal to the amount spent up to $7,000, but limits the credit claimable to $3,500 per taxable year.
Who It Affects
Generator manufacturers, distributors, and retail sellers; homeowners and commercial property owners who buy backup power equipment; small businesses that claim the credit; the State Air Resources Board (CARB) and California Department of Tax and Fee Administration/Franchise Tax Board for administration and enforcement; and local air districts that monitor emissions spikes during emergencies.
Why It Matters
By creating a regulatory carve-out and a purchase subsidy, the bill shifts incentives toward broader generator adoption during emergencies and over a limited period afterward. That alters market dynamics for compliant low-emission units, changes enforcement priorities for air regulators during emergencies, and creates a measurable fiscal exposure for the state budget.
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What This Bill Actually Does
AB 14 amends California’s regulatory framework for small off-road engines by carving out a temporary exemption for the sale and purchase of portable or emergency backup generators whenever the Governor issues a state-of-emergency proclamation tied to a loss of electrical service anywhere in the state. Practically, that means sellers and buyers could transact in generators that otherwise would be prohibited under CARB’s cost-effective and technologically feasible emissions rules during the emergency period identified in the proclamation.
The exemption is tied to the duration of the governor-declared emergency, not indefinitely.
On the tax side, the bill adds a new section to the Revenue and Taxation Code to establish an income tax credit for natural persons and small businesses that purchase backup generators. The credit equals the purchase amount up to a statutory maximum of $7,000 per purchase, but the amount a taxpayer can apply in any single taxable year is capped at $3,500.
The credit window runs for taxable years beginning on or after January 1, 2026, and ending before January 1, 2031, after which the provision is slated to be repealed.The bill also acknowledges the statutory requirement that new tax expenditures include goals, performance indicators, and data-collection instructions; it inserts additional information requirements tied to this credit. That addition is designed so the Legislature and administering agencies can track outcomes, although the text leaves open which agency will collect which data and how success will be measured.
The practical effect is a combination of a time-limited regulatory relief during emergencies and a multi-year, partially annualized subsidy for generator purchases that agencies will need to administer and evaluate.
The Five Things You Need to Know
The exemption applies only during a Governor-declared state of emergency based on an emergency resulting in a loss of electrical service to any part of the state; it covers sales and purchases of portable or emergency backup generators.
The bill adds Revenue and Taxation Code section 17053.49 to authorize a purchase credit equal to the amount spent on a backup generator up to $7,000, but it limits the credit that can be claimed in any single taxable year to $3,500.
The tax credit is available for taxable years beginning on or after January 1, 2026, and before January 1, 2031; the statutory language explicitly provides for repeal after that window.
AB 14 amends Health and Safety Code section 43018.11 (the section governing CARB’s small off‑road engine rules) to create the emergency-period exemption rather than rewriting CARB’s regulatory authority.
The bill requires additional information for this tax expenditure—i.e.
statutory goals, performance indicators, and data collection—building on the existing requirement for new tax expenditures in state law.
Section-by-Section Breakdown
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Emergency-period exemption for generator sales and purchases
This amendment creates an exception within the statutory framework that directs CARB to regulate small off‑road engines. When the Governor proclaims a state of emergency due to loss of electrical service anywhere in California, the sale and purchase of portable or emergency backup generators are exempt from CARB regulations and any other state-board-adopted regulations that would otherwise apply. For practitioners, this changes enforcement during declared emergencies: CARB’s prohibitions on certain generator models would not bar transactions that occur while the proclamation is in effect.
Temporary purchase credit for backup generators
Section 17053.49 creates a refundable or nonrefundable credit? The bill text specifies a credit against personal income tax for natural persons and small businesses for each taxable year beginning on or after January 1, 2026, and before January 1, 2031, equal to the amount incurred for the purchase of a backup generator up to $7,000. The section also caps the credit that can be allowed in any one taxable year at $3,500, effectively requiring taxpayers to spread larger eligible purchases over multiple years or forgo part of the credit in a single year. The provision is scheduled for repeal after the 2030 tax year window.
Additional goals, indicators, and data collection for the new credit
The bill builds on California’s existing requirement that a statute creating a new tax expenditure provide explicit goals and performance indicators. AB 14 inserts additional information to be provided, which will guide how the credit’s effectiveness is measured. It does not, however, specify detailed reporting mechanics or which agency will bear primary responsibility for collecting purchaser-level or outcome data, leaving key implementation choices to administrative guidance or later regulation.
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Explore Energy in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Homeowners and commercial property owners who purchase backup generators — they receive a dollar-for-dollar reduction in tax liability for purchases (subject to the $7,000 and $3,500/year caps), lowering the effective cost of acquiring on-site backup power.
- Small businesses that buy backup generators — they are eligible for the same tax credit treatment and may qualify for reduced downtime risk during outages, improving business continuity at a lower net cost.
- Generator retailers and manufacturers — the emergency-period exemption increases the likelihood they can sell a broader range of generator models during declared outages and could expand overall demand during the multi-year credit window.
- Emergency-preparedness service providers and installers — higher consumer adoption of backup generators creates more business for installation, maintenance, and retrofit services during and after emergencies.
Who Bears the Cost
- State budget / General Fund — the credit creates fiscal exposure for the Franchise Tax Board and the state budget, reducing income tax revenue for the duration of the credit window without offset identified in the bill text.
- Air quality regulators and public health in impacted communities — CARB, local air districts, and residents near dense generator use could face increased emission events and enforcement complexity during emergencies.
- Manufacturers of low-emission and compliant generators — they may lose market advantage if noncompliant, cheaper units become available and subsidized during emergencies, undercutting incentives to invest in cleaner designs.
- Franchise Tax Board and administrative agencies — they inherit program design and operational burdens (eligibility verification, tracking carryforward of capped credits, data collection to satisfy performance indicators) with no implementation detail in the statute.
Key Issues
The Core Tension
The central dilemma is immediate resilience versus long‑term air-quality and climate goals: AB 14 prioritizes rapid access to backup power during widespread outages and subsidizes purchases, which can protect lives and economic activity in the short term, but those benefits come at the cost of increased emissions and weakened regulatory pressure for cleaner backup solutions.
The bill creates practical and analytical knots. First, it relaxes emissions-based sales restrictions only during governor-declared outages, which helps short-term access to equipment but risks localized air-quality impacts at times of peak vulnerability (heat waves, wildfire-driven evacuations).
That trade-off forces air regulators and emergency managers to coordinate in real time: permitting sales may be necessary for safety but will likely increase particulate and NOx emissions precisely when public health is strained.
Second, the tax-credit design raises administrative and equity questions. By capping the credit at $3,500 per taxable year but tying the total eligible amount to $7,000, the statute implicitly allows multi-year claiming, but it does not specify carryforward mechanics, refundability, or interaction with other state credits.
The requirement to include goals and performance indicators increases transparency in theory, yet the bill leaves measurement details unspecified; capturing whether credits actually improved resilience (versus subsidizing purchases by wealthier households who already could afford generators) will be difficult without purchaser-level income and usage data. Finally, the fiscal cost to the state and the potential crowding-out of investment in cleaner backup technologies are not reconciled in the text, leaving policymakers to decide whether short-term resilience justifies a temporary step back from air-quality objectives.
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