Real property tax: valuation: active solar energy system., the official text

An act to add Section 401.7 to the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

LEGISLATIVE COUNSEL'S DIGEST

The California Constitution generally limits the maximum rate of ad valorem tax on real property to 1% of the full cash value of the property and defines “full cash value” for these purposes as the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment. Pursuant to constitutional authorization, existing property tax law excludes from the definition of “newly constructed” for these purposes the construction or addition of any active solar energy system, as defined, through the 2025–26 fiscal year, except as specified.
This bill would prescribe rules for the valuation of an active solar energy system under certain valuation methods, including a requirement that, under the income method, the assessor exclude from income the benefit from, among other things, renewable energy credits, as defined. By expanding the duties of local tax officials, this bill would impose a state-mandated local program.
Existing law requires the state 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 those provisions, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill.
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 the statutory provisions noted above.
This bill would take effect immediately as a tax levy.
This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of 23 of the membership of each house of the Legislature.

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

SECTION 1.
Section 401.7 is added to the Revenue and Taxation Code, to read:
401.7.
(a) In valuing an active solar energy system under the income method of appraisal, the assessor shall exclude from income the benefit from both of the following:
(1) Renewable energy credits, as defined in paragraph (2) of subdivision (h) of Section 399.12 of the Public Utilities Code.
(2) Federal and state tax credits, cash grants, direct payments, or similar governmental subsidies.
(b) In valuing an active solar energy system under the cost method of appraisal, the assessor shall reduce the cost by any federal and state tax credits or similar governmental subsidies.
(c) For purposes of this section, “active solar energy system” shall have the same meaning as is provided in Section 73.

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.
This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.