BILL ANALYSIS
AB 1451
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CONCURRENCE IN SENATE AMENDMENTS
AB 1451 (Leno)
As Amended August 13, 2008
Majority vote. Tax levy
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|ASSEMBLY: |79-0 |(June 6, 2007) |SENATE: |37-1 |(August 14, |
| | | | | |2008) |
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Original Committee Reference: REV. & TAX.
SUMMARY : Extends the existing exclusion through fiscal year
(FY) 2015-16 and extends the existing exclusion from "new
construction" for active solar energy property to initial
purchasers of new specified buildings.
The Senate amendments :
1)Impose an additional requirement, in the case of an original
purchaser of a new building, to purchase the building prior to
that building becoming subject to reassessment to the
owner-builder in order for the active solar energy system
installed on that building to qualify for the exclusion from
the definition of "newly constructed".
2)Delete the provision allowing private non-utility commercial
generators of solar electricity to exclude from taxable value
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.
3)Delete definitions of the following terms: "electrical
corporation," "local publicly-owned electrical utility," "net
energy metering," and " private energy producer".
EXISTING LAW allows the Legislature, pursuant to Article XIII A
of the California Constitution, to enact legislation to exclude
from the definition of "newly constructed" for the construction
or addition of an active solar energy system. The exclusion
sunsets after FY 2008-09. The existing exclusion is terminated
with a change in ownership of the property.
AB 1451
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AS PASSED BY THE ASSEMBLY , this bill:
1)Revised the definition for active solar energy system used in
the production of electricity to include only equipment used
up to, but not including, the stage of conveyance or use of
the electricity. Allowed an exception for an owner of an
active solar energy system that did not receive net energy
metering, and was a private energy producer with an
electricity purchase agreement to supply an electrical
corporation or local publicly owned electric utility.
Provided that the active solar energy system of such owner
also included transmission and distribution equipment, poles,
towers and structures other than buildings conveying
electricity up to the point of interconnection with the
utility transmission or distribution network. Limited the
exclusion to 75% of the full cash value.
2)Included definitions for the following terms: a) "occupy or
use" has the meaning used in Revenue and Taxation Code Section
75.12; b) "electrical corporation" is as defined in Public
Utilities Code (PUC) Section 218; c) "local publicly owned
utility" is as defined in PUC Section 9604; d) "net energy
metering" is as defined in PUC Section 2827; and, e) "private
energy producer" is as defined in PUC Section 2802.
3)Provided that the construction or addition of any active solar
energy system includes that incorporated by the owner-builder
in the initial construction of a new building that the
owner-builder did not intend to occupy or use. Applied this
exclusion from the definition of newly constructed to the
initial purchaser purchasing from the owner-builder, provided
that the owner-builder did not claim the exclusion.
4)Provided direction for the county assessor to administer the
definition of new construction and set forth requirements by
claimants to provide information.
5)Terminated the new building exclusion upon a subsequent change
of ownership.
6)Directed the State Board of Equalization (BOE) to consult with
the California Assessors Association and prescribe procedures
for claiming new construction exclusions.
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7)Extended the repeal date from FY 2008-09 to FY 2015-16.
8)Provided that the state is not required to reimburse any local
agency for property tax revenues lost pursuant to this bill.
9)Contained a severability clause that gave effect to remaining
provisions or applications if a provision of application was
held invalid.
10)Specified that it takes effect immediately as a tax levy but
applies prospectively only, beginning with the lien date for
FY 2008-09.
FISCAL EFFECT : BOE estimates this bill will reduce property tax
revenue by $1.4 million in FY 2008-09, $2.7 million in FY
2009-10, and $3.8 million in FY 2010-11. Committee staff
estimates this bill will reduce General Fund revenue by $532,000
in FY 2008-09, $1 million in FY 2009-10, and $1.4 million in FY
2010-11.
COMMENTS : The author states, "The California Constitution
provides for an exclusion from property tax assessment for the
value of an active solar energy system. This exclusion is a
significant incentive for the expansion of solar electricity
generation and utilization [of] thermal solar technologies. AB
1451 will renew the solar property tax exclusion that expires in
the 2008-09 fiscal year and extend it until the 2015-16 fiscal
year."
Committee staff notes that this bill redresses a perceived
inefficiency in the existing statute: an active solar energy
system is installed in new construction; and, once the property
transfers from the non-occupant owner-builder to the initial
purchaser, the change in ownership from the builder to the
initial purchaser terminates the exemption. This result appears
inconsistent with the policy of the proposition approved by the
voters in 1980. This bill treats someone that purchased from a
builder's inventory similarly to a property owner that hired the
same builder to build a property on land already owned.
Analysis Prepared by : Oksana Jaffe / REV. & TAX. / (916)
319-2098
FN: 0007052
AB 1451
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