BILL NUMBER: AB 1451 AMENDED
BILL TEXT
AMENDED IN SENATE JANUARY 7, 2008
AMENDED IN SENATE AUGUST 28, 2007
AMENDED IN ASSEMBLY JUNE 4, 2007
AMENDED IN ASSEMBLY MAY 16, 2007
AMENDED IN ASSEMBLY MAY 8, 2007
INTRODUCED BY Assembly Member Leno
(Coauthors: Assembly Members Beall, DeSaulnier, Garcia, Garrick,
Horton, Jeffries, Laird, Levine, Lieu, and Portantino)
(Coauthors: Senators Florez and Romero)
FEBRUARY 23, 2007
An act to amend Section 73 of the Revenue and Taxation Code,
relating to taxation, to take effect immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
AB 1451, as amended, Leno. Property tax: exclusion from newly
constructed: active solar energy system.
(1) The California Constitution generally limits ad valorem taxes
on real property to 1% of the full cash value of that property. For
purposes of this limitation, "full cash value" is defined as the
assessor's valuation of real property as shown on the 1975-76 tax
bill under "full cash value" or, thereafter, the appraised value of
that real property when purchased, newly constructed, or a change in
ownership has occurred. The California Constitution authorizes the
Legislature to provide that "newly constructed" does not include,
among other things, the construction or addition of an active solar
energy system. Existing property tax law excludes from the definition
of "newly constructed," through the 2008-09 fiscal year, the
construction or addition of an active solar energy system, as
defined.
This bill would modify this exclusion to instead provide
that an active solar energy system used in the production of
electricity includes equipment used up to, but not including, the
stage of conveyance or use of the electricity, except for an owner of
and active solar energy system that does not receive net energy
metering, as defined, and that is a private energy producer, as
defined, with an electricity purchase agreement to supply specified
customers, in which case the active solar energy system also includes
transmission and distribution equipment, poles, towers, and
structures other than buildings used to convey electricity up to the
point of interconnection with the utility transmission or
distribution network, as specified. This bill would also specify
that, for purposes of this exclusion, specify that
"the construction or addition of an active solar energy system"
includes the construction of an active solar energy system in a new
building in which the owner-builder incorporated an active solar
energy system in the initial construction of the new building and the
owner-builder does not intend to occupy or use the new building.
This bill would provide this exclusion to the initial purchaser of
the new building, but only if the owner-builder did not receive the
exclusion for the same system and the initial purchaser purchased the
new building prior to that building becoming subject to reassessment
to the owner-builder, as provided. This bill would require the State
Board of Equalization, in consultation with the California Assessors'
Association, to prescribe the manner, documentation, and form for a
taxpayer to claim this exclusion. This bill would require the county
assessor to reduce the base year value of these residences by the
value of the active solar energy system, less the total amount of any
rebates for the active solar energy system received by either the
owner-builder or the initial purchaser of the new building, as
specified.
This bill would provide that the changes made by the bill apply
prospectively only, beginning with the lien date
or the 2008-09 fiscal year. This bill would also extend the active
solar energy system exclusion from the definition of "newly
constructed" through the 2015-16 fiscal year. This bill would also
provide that its provisions are severable.
(2) By imposing new duties on county assessors, this bill would
impose a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.
(3) Section 2229 of the Revenue and Taxation Code requires the
Legislature to reimburse local agencies annually for certain property
tax revenues lost as a result of any exemption or classification of
property for purposes of ad valorem property taxation.
This bill would provide that, notwithstanding Section 2229 of the
Revenue and Taxation Code, no appropriation is made and the state
shall not reimburse local agencies for property tax revenues lost by
them pursuant to the bill.
(4) This bill would take effect immediately as a tax levy.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 73 of the Revenue and Taxation Code is amended
to read:
73. (a) Pursuant to the authority granted to the Legislature
pursuant to paragraph (1) of subdivision (c) of Section 2 of Article
XIII A of the California Constitution, the term "newly constructed,"
as used in subdivision (a) of Section 2 of Article XIII A of the
California Constitution, does not include the construction or
addition of any active solar energy system, as defined in subdivision
(b).
(b) (1) "Active solar energy system" means a system that uses
solar devices, which are thermally isolated from living space or any
other area where the energy is used, to provide for the collection,
storage, or distribution of solar energy.
(2) "Active solar energy system" does not include solar swimming
pool heaters or hot tub heaters.
(3) Active solar energy systems may be used for any of the
following:
(A) Domestic, recreational, therapeutic, or service water heating.
(B) Space conditioning.
(C) Production of electricity.
(D) Process heat.
(E) Solar mechanical energy.
(c) For purposes of this section:
(1) "Occupy or use" has the same meaning as defined in Section
75.12.
(2) "Electrical corporation" means an electrical corporation as
defined in Section 218 of the Public Utilities Code.
(3) "Local publicly owned electric utility" means a local publicly
owned electric utility as defined in Section 9604 of the Public
Utilities Code.
(4) "Net energy metering" has the same meaning as defined in
Section 2827 of the Public Utilities Code.
(5) "Private energy producer" has the same meaning as defined in
Section 2802 of the Public Utilities Code.
(d) (1) (A) The Legislature finds and declares that the definition
of spare parts in this paragraph is declarative of the intent of the
Legislature, in prior statutory enactments of this section that
excluded active solar energy systems from the term "newly
constructed," as used in the California Constitution, thereby
creating a tax appraisal exclusion.
(B) An active solar energy system that uses solar energy in the
production of electricity includes storage devices, power
conditioning equipment, transfer equipment, and parts related to the
functioning of those items. In general, the use of solar energy in
the production of electricity involves the transformation of sunlight
into electricity through the use of devices such as solar cells or
other solar collecting equipment. However, an active solar energy
system used in the production of electricity includes only equipment
used up to, but not including, the stage of conveyance or
use of the electricity, except for an owner of an active solar energy
system that does not receive net energy metering and that is a
private energy producer with an electricity purchase agreement to
supply an electrical corporation or local publicly owned electric
utility, in which case the active solar energy system also includes
transmission and distribution equipment, poles, towers, and
structures other than buildings used to convey electricity up to the
point of interconnection with the utility transmission or
distribution network or use of the electricity .
For the purpose of this paragraph, the term "parts" includes spare
parts that are owned by the owner of, or the maintenance contractor
for, an active solar energy system that uses solar energy in the
production of electricity and which spare parts were specifically
purchased, designed, or fabricated by or for that owner or
maintenance contractor for installation in an active solar energy
system that uses solar energy in the production of electricity,
thereby including those parts in the tax appraisal exclusion created
by this section.
(2) An active solar energy system that uses solar energy in the
production of electricity also includes pipes and ducts that are used
exclusively to carry energy derived from solar energy. Pipes and
ducts that are used to carry both energy derived from solar energy
and from energy derived from other sources are active solar energy
system property only to the extent of 75 percent of their full cash
value.
(3) Transmission and distribution equipment, poles, towers, and
structures other than buildings that are part of an active solar
energy system pursuant to this section and that are used to carry
both energy derived from solar energy and energy derived from other
sources are active solar energy system property only to the extent of
75 percent of their full cash value.
(4)
(3) An active solar energy system that uses solar
energy in the production of electricity does not include auxiliary
equipment, such as furnaces and hot water heaters, that use a source
of power other than solar energy to provide usable energy. An active
solar energy system that uses solar energy in the production of
electricity does include equipment, such as ducts and hot water
tanks, that is utilized by both auxiliary equipment and solar energy
equipment, that is, dual use equipment. That equipment is active
solar energy system property only to the extent of 75 percent of its
full cash value.
(e) (1) Notwithstanding any other law, for purposes of this
section, "the construction or addition of any active solar energy
system" includes the construction of an active solar energy system
incorporated by the owner-builder in the initial construction of a
new building that the owner-builder does not intend to occupy or use.
The exclusion from "newly constructed" provided by this subdivision
applies to the initial purchaser who purchased the new building from
the owner-builder, but only if the owner-builder did not receive an
exclusion under this section for the same active solar energy system
and only if the initial purchaser purchased the new building prior to
that building becoming subject to reassessment to the owner-builder,
as described in subdivision (d) of Section 75.12. The assessor shall
administer this subdivision in the following manner:
(A) The initial purchaser of the building shall file a claim with
the assessor and provide to the assessor any documents necessary to
identify the value attributable to the active solar energy system
included in the purchase price of the new building. The claim shall
also identify the amount of any rebate for the active solar energy
system provided to either the owner-builder or the initial purchaser
by the Public Utilities Commission, the State Energy Resources
Conservation and Development Commission, an electrical corporation, a
local publicly owned electric utility, or any other agency of the
State of California.
(B) The assessor shall evaluate the claim and determine the
portion of the purchase price that is attributable to the active
solar energy system. The assessor shall then reduce the new base year
value established as a result of the change in ownership of the new
building by an amount equal to the difference between the following
two amounts:
(i) That portion of the value of the new building attributable to
the active solar energy system.
(ii) The total amount of all rebates, if any, described in
subparagraph (A) that were provided to either the owner-builder or
the initial purchaser.
(C) The extension of the new construction exclusion to the initial
purchaser of a newly constructed new building shall remain in effect
only until there is a subsequent change in ownership of the new
building.
(2) The State Board of Equalization, in consultation with the
California Assessors' Association, shall prescribe the manner,
documentation, and form for claiming the new construction exclusion
required by this subdivision.
(f) This section applies to property tax lien dates for the
1999-2000 fiscal year to the 2015-16 fiscal year, inclusive.
(g) The amendments made to this section by the act that added this
subdivision apply prospectively only, beginning
with the lien date for the 2008-09 fiscal year.
(h) This section shall remain in effect only until January 1,
2017, and as of that date is repealed.
SEC. 2. Notwithstanding Section 2229 of the Revenue and Taxation
Code, no appropriation is made by this act and the state shall not
reimburse any local agency for any property tax revenues lost by it
pursuant to this act.
SEC. 3. If the Commission on State Mandates determines that this
act contains costs mandated by the state, reimbursement to local
agencies and school districts for those costs shall be made pursuant
to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of
the Government Code.
SEC. 4. The provisions of this act are severable. If any provision
of this act or its application is held invalid, that invalidity
shall not affect other provisions or applications that can be given
effect without the invalid provision or application.
SEC. 5. This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.