SB 710: Property taxation: active solar energy systems.
- Session Year: 2025-2026
- House: Senate
- Latest Version Date: 2025-10-03
Current Status:
Passed
(2025-10-03: Chaptered by Secretary of State. Chapter 328, Statutes of 2025.)
Introduced
In Committee
Awaiting First Chamber Vote
Passed First Chamber
In Committee
Awaiting Second Chamber Vote
Passed Second Chamber
Enacted
What does this bill do?
This bill makes a technical wording change to the property tax rule that excludes active solar energy systems from being treated as newly constructed, changing the January 1, 2027 repeal date so the exclusion is described as becoming “inoperative” rather than “repealed”; it affects property owners with active solar systems and local tax assessors. It also specifies that additional edits from Assembly Bill 1516 would be included only if both bills pass and this bill is enacted last.
The summary is provided by generative AI which can make mistakes. For original language, please view the details in the table below.
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 202526 fiscal year. Under existing property tax law, this exclusion remains in effect only until there is a subsequent change in ownership, but an active solar energy system that qualifies for the exclusion before January 1, 2027, continues to receive the exclusion until there is a subsequent change in ownership. Existing law repeals these exclusion provisions on January 1, 2027.
This bill would make a technical change to the existing active solar energy system exclusion by instead making the repeal date of January 1, 2027, the date the exclusion becomes inoperative.
This bill would incorporate additional changes to Section 73 of the Revenue and Taxation Code proposed by AB 1516 to be operative only if this bill and AB 1516 are enacted and this bill is enacted last.
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 202526 fiscal year. Under existing property tax law, this exclusion remains in effect only until there is a subsequent change in ownership, but an active solar energy system that qualifies for the exclusion before January 1, 2027, continues to receive the exclusion until there is a subsequent change in ownership. Existing law repeals these exclusion provisions on January 1, 2027.
This bill would make a technical change to the existing active solar energy system exclusion by instead making the repeal date of January 1, 2027, the date the exclusion becomes inoperative.
This bill would incorporate additional changes to Section 73 of the Revenue and Taxation Code proposed by AB 1516 to be operative only if this bill and AB 1516 are enacted and this bill is enacted last.
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 202526 fiscal year. Under existing property tax law, this exclusion remains in effect only until there is a subsequent change in ownership, but an active solar energy system that qualifies for the exclusion before January 1, 2027, continues to receive the exclusion until there is a subsequent change in ownership. Existing law repeals these exclusion provisions on January 1, 2027.
This bill would remove the repeal of make a technical change to the existing active solar energy system exclusion. exclusion by instead making the repeal date of January 1, 2027, the date the exclusion becomes inoperative.
This bill would incorporate additional changes to Section 73 of the Revenue and Taxation Code proposed by AB 1516 to be operative only if this bill and AB 1516 are enacted and this bill is enacted last.
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 202526 fiscal year. Under existing property tax law, this exclusion remains in effect only until there is a subsequent change in ownership, but an active solar energy system that qualifies for the exclusion before January 1, 2027, continues to receive the exclusion until there is a subsequent change in ownership. Existing law repeals these exclusion provisions on January 1, 2027.
This bill would extend the exclusion to lien dates occurring on or after January 1, 2026, but before January 1, 2031, and would limit the exclusion to qualified active solar energy systems, as defined. The bill would continue to exclude qualified active energy solar systems that qualify for an exclusion prior to January 1, 2031, on and after that date until there is a subsequent change in ownership. The bill would also remove the repeal of the existing active solar energy system exclusion.
By imposing additional duties on local tax officials, the bill would impose a state-mandated local program.Existing law requires any bill extending an existing tax expenditure to contain, among other things, specific goals that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.This bill would exclude the extension of the exclusion from these requirements.This bill would incorporate additional changes to Section 73 of the Revenue and Taxation Code proposed by AB 1516 to be operative only if this bill and AB 1516 are enacted and this bill is enacted last.
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.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 202526 fiscal year. Under existing property tax law, this exclusion remains in effect only until there is a subsequent change in ownership, but an active solar energy system that qualifies for the exclusion before January 1, 2027, continues to receive the exclusion until there is a subsequent change in ownership. Existing law repeals these exclusion provisions on January 1, 2027.
This bill would extend the exclusion to lien dates occurring on or after January 1, 2026, but before January 1, 2031, and would limit the exclusion to qualified active solar energy systems, as defined. The bill would continue to exclude qualified active energy solar systems that qualify for an exclusion prior to January 1, 2031, on and after that date until there is a subsequent change in ownership. The bill would also remove the repeal of the existing active solar energy system exclusion.
By imposing additional duties on local tax officials, the bill would impose a state-mandated local program.
Existing law requires any bill extending an existing tax expenditure to contain, among other things, specific goals that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
This bill would exclude the extension of the exclusion from these requirements.
This bill would incorporate additional changes to Section 73 of the Revenue and Taxation Code proposed by AB 1516 to be operative only if this bill and AB 1516 are enacted and this bill is enacted last.
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.
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 202526 fiscal year. Under existing property tax law, this exclusion remains in effect only until there is a subsequent change in ownership, but an active solar energy system that qualifies for the exclusion before January 1, 2027, continues to receive the exclusion until there is a subsequent change in ownership. Existing law repeals these exclusion provisions on January 1, 2027.
This bill would, beginning with lien dates occurring on or after January 1, 2026, would extend the exclusion indefinitely, to lien dates occurring on or after January 1, 2026, but before January 1, 2031, and would limit the exclusion to qualified active solar energy systems, as defined. The bill would continue to exclude qualified active energy solar systems that qualify for an exclusion prior to January 1, 2031, on and after that date until there is a subsequent change in ownership. The bill would also remove the repeal of the existing active solar energy system exclusion.
By imposing additional duties on local tax officials, the bill would impose a state-mandated local program.
Existing law requires any bill extending an existing tax expenditure to contain, among other things, specific goals that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
This bill would exclude the extension of the exclusion from these requirements.
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.
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 202526 fiscal year. Under existing property tax law, this exclusion remains in effect only until there is a subsequent change in ownership, but an active solar energy system that qualifies for the exclusion before January 1, 2027, continues to receive the exclusion until there is a subsequent change in ownership. Existing law repeals these exclusion provisions on January 1, 2027.
This bill would, beginning with lien dates occurring on or after January 1, 2026, extend the exclusion indefinitely, and would limit the exclusion to qualified active solar energy systems, as defined. The bill would also remove the repeal of the existing active solar energy system exclusion.
By imposing additional duties on local tax officials, the bill would impose a state-mandated local program.
Existing law requires any bill extending an existing tax expenditure to contain, among other things, specific goals that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
This bill would exclude the extension of the exclusion from these requirements.
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.
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 202526 fiscal year. Under existing property tax law, this exclusion remains in effect only until there is a subsequent change in ownership, but an active solar energy system that qualifies for the exclusion before January 1, 2027, continues to receive the exclusion until there is a subsequent change in ownership. Existing law repeals these exclusion provisions on January 1, 2027.
This bill would, beginning with lien dates occurring on or after January 1, 2027, 2026, extend the exclusion indefinitely, and would limit the exclusion to qualified active solar energy systems, as defined. The bill would also remove the repeal of the existing active solar energy system exclusion.
By imposing additional duties on local tax officials, the bill would impose a state-mandated local program.
Existing law requires any bill extending an existing tax expenditure to contain, among other things, specific goals that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
This bill would exclude the extension of the exclusion from these requirements.
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.
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 202526 fiscal year. Under existing property tax law, this exclusion remains in effect only until there is a subsequent change in ownership, but an active solar energy system that qualifies for the exclusion before January 1, 2027, will continue continues to receive the exclusion until there is a subsequent change in ownership. Existing law repeals these exclusion provisions on January 1, 2027.
This bill would, beginning with the 202627 fiscal year, lien dates occurring on or after January 1, 2027, extend the exclusion indefinitely, and would limit the exclusion to customer-sited qualified active solar energy systems, as defined. The bill would also remove the repeal of the existing active solar energy system exclusion.
By imposing additional duties on local tax officials, the bill would impose a state-mandated local program.
Existing law requires any bill extending an existing tax expenditure to contain, among other things, specific goals that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
This bill would exclude the extension of the exclusion from these requirements.
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.
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 202526 fiscal year. Under existing property tax law, this exclusion remains in effect only until there is a subsequent change in ownership, but an active solar energy system that qualifies for the exclusion before January 1, 2027, will continue to receive the exclusion until there is a subsequent change in ownership. Existing law repeals these exclusion provisions on January 1, 2027.
This bill would, beginning with the 202627 fiscal year, extend the exclusion indefinitely, and would limit the exclusion to customer-sited active solar energy systems, as defined.
By imposing additional duties on local tax officials, the bill would impose a state-mandated local program.
Existing law requires any bill extending an existing tax expenditure to contain, among other things, specific goals that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
This bill would exclude the extension of the exclusion from these requirements.
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.
(a)Pursuant to the authority granted to the Legislature pursuant to paragraph (1) of subdivision (c) of Section 2 of Article XIIIA of the California Constitution, the term newly constructed, as used in subdivision (a) of Section 2 of Article XIIIA 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, upon completion of the construction of a system as part of a new property or the addition of a system to an existing property, 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 the purposes of this section, occupy or use has the same meaning as defined in Section 75.12.
(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. 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)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)Notwithstanding any other law, the exclusion from new construction provided by this section shall remain in effect only until there is a subsequent change in ownership.
(g)This section applies to property tax lien dates for the 19992000 fiscal year to the 202526 fiscal year, inclusive.
(h)The amendments made to this section by the act that added this subdivision apply beginning with the lien date for the 200809 fiscal year.
(i)(1)Except as provided in paragraph (2), this section shall remain in effect only until January 1, 2027.
(2)Notwithstanding paragraph (1), active energy solar systems that qualify for an exclusion under this section prior to January 1, 2027, shall continue to be excluded on and after January 1, 2027, until there is a subsequent change in ownership.
(j)Section 41 shall not apply to the extension of the exclusion under this section made by the act adding this subdivision.
SEC. 1.5.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 XIIIA of the California Constitution, the term newly constructed, as used in subdivision (a) of Section 2 of Article XIIIA 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, upon completion of the construction of a system as part of a new property or the addition of a system to an existing property, 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 the purposes of this section, occupy or use has the same meaning as defined in Section 75.12.
(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. 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)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.
(i)(I)The claim for an exclusion under this subdivision shall be considered timely if it is filed within three years of the date of purchase.
(II)An otherwise valid claim for exclusion under this subdivision filed after the deadline set by subclause (I) shall be applied beginning on the lien date of the assessment year in which the claim is filed.
(ii)The provisions of clause (i) shall become operative on January 1, 2027.
(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)Notwithstanding any other law, the exclusion from new construction provided by this section shall remain in effect only until there is a subsequent change in ownership.
(g)This section applies to property tax lien dates for the 19992000 fiscal year to the 202526 fiscal year, inclusive.
(h)The amendments made to this section by the act that added this subdivision apply beginning with the lien date for the 200809 fiscal year.
(i)(1)Except as provided in paragraph (2), this section shall remain in effect only until January 1, 2027.
(2)Notwithstanding paragraph (1), active energy solar systems that qualify for an exclusion under this section prior to January 1, 2027, shall continue to be excluded on and after January 1, 2027, until there is a subsequent change in ownership.
(j)Section 41 shall not apply to the extension of the exclusion under this section made by the act adding this subdivision.
SEC. 2.Section 1.5 of this bill incorporates amendments to Section 73 of the Revenue and Taxation Code proposed by both this bill and Assembly Bill 1516. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2026, (2) each bill amends Section 73 of the Revenue and Taxation Code, and (3) this bill is enacted after Assembly Bill 1516, in which case Section 1 of this bill shall not become operative.
(a)Pursuant to the authority granted to the Legislature pursuant to paragraph (1) of subdivision (c) of Section 2 of Article XIIIA of the California Constitution, the term newly constructed, as used in subdivision (a) of Section 2 of Article XIIIA 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, upon completion of the construction of a system as part of a new property or the addition of a system to an existing property, 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 the purposes of this section, occupy or use has the same meaning as defined in Section 75.12.
(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. 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)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)Notwithstanding any other law, the exclusion from new construction provided by this section shall remain in effect only until there is a subsequent change in ownership.
(g)This section applies to property tax lien dates for the 19992000 fiscal year to the 202526 fiscal year, inclusive.
(h)The amendments made to this section by the act that added this subdivision apply beginning with the lien date for the 200809 fiscal year.
(i)(1)Except as provided in paragraph (2), this section shall remain in effect only until January 1, 2027.
(2)Notwithstanding paragraph (1), active energy solar systems that qualify for an exclusion under this section prior to January 1, 2027, shall continue to be excluded on and after January 1, 2027, until there is a subsequent change in ownership.
(j)Section 41 shall not apply to the extension of the exclusion under this section made by the act adding this subdivision.
SEC. 1.5.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 XIIIA of the California Constitution, the term newly constructed, as used in subdivision (a) of Section 2 of Article XIIIA 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, upon completion of the construction of a system as part of a new property or the addition of a system to an existing property, 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 the purposes of this section, occupy or use has the same meaning as defined in Section 75.12.
(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. 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)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.
(i)(I)The claim for an exclusion under this subdivision shall be considered timely if it is filed within three years of the date of purchase.
(II)An otherwise valid claim for exclusion under this subdivision filed after the deadline set by subclause (I) shall be applied beginning on the lien date of the assessment year in which the claim is filed.
(ii)The provisions of clause (i) shall become operative on January 1, 2027.
(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)Notwithstanding any other law, the exclusion from new construction provided by this section shall remain in effect only until there is a subsequent change in ownership.
(g)This section applies to property tax lien dates for the 19992000 fiscal year to the 202526 fiscal year, inclusive.
(h)The amendments made to this section by the act that added this subdivision apply beginning with the lien date for the 200809 fiscal year.
(i)(1)Except as provided in paragraph (2), this section shall remain in effect only until January 1, 2027.
(2)Notwithstanding paragraph (1), active energy solar systems that qualify for an exclusion under this section prior to January 1, 2027, shall continue to be excluded on and after January 1, 2027, until there is a subsequent change in ownership.
(j)Section 41 shall not apply to the extension of the exclusion under this section made by the act adding this subdivision.
SEC. 2.Section 1.5 of this bill incorporates amendments to Section 73 of the Revenue and Taxation Code proposed by both this bill and Assembly Bill 1516. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2026, (2) each bill amends Section 73 of the Revenue and Taxation Code, and (3) this bill is enacted after Assembly Bill 1516, in which case Section 1 of this bill shall not become operative.
(a)Pursuant to the authority granted to the Legislature pursuant to paragraph (1) of subdivision (c) of Section 2 of Article XIIIA of the California Constitution, the term newly constructed, as used in subdivision (a) of Section 2 of Article XIIIA 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, upon completion of the construction of a system as part of a new property or the addition of a system to an existing property, 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 the purposes of this section, occupy or use has the same meaning as defined in Section 75.12.
(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. 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)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)Notwithstanding any other law, the exclusion from new construction provided by this section shall remain in effect only until there is a subsequent change in ownership.
(g)This section applies to property tax lien dates for the 19992000 fiscal year to the 202526 fiscal year, inclusive.
(h)The amendments made to this section by the act that added this subdivision apply beginning with the lien date for the 200809 fiscal year.
(i)(1)Except as provided in paragraph (2), this section shall remain in effect only until January 1, 2027.
(2)Notwithstanding paragraph (1), active energy solar systems that qualify for an exclusion under this section prior to January 1, 2027, shall continue to be excluded on and after January 1, 2027, until there is a subsequent change in ownership.
(j)Section 41 shall not apply to the extension of the exclusion under this section made by the act adding this subdivision.
SEC. 1.5.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 XIIIA of the California Constitution, the term newly constructed, as used in subdivision (a) of Section 2 of Article XIIIA 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, upon completion of the construction of a system as part of a new property or the addition of a system to an existing property, 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 the purposes of this section, occupy or use has the same meaning as defined in Section 75.12.
(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. 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)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.
(i)(I)The claim for an exclusion under this subdivision shall be considered timely if it is filed within three years of the date of purchase.
(II)An otherwise valid claim for exclusion under this subdivision filed after the deadline set by subclause (I) shall be applied beginning on the lien date of the assessment year in which the claim is filed.
(ii)The provisions of clause (i) shall become operative on January 1, 2027.
(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)Notwithstanding any other law, the exclusion from new construction provided by this section shall remain in effect only until there is a subsequent change in ownership.
(g)This section applies to property tax lien dates for the 19992000 fiscal year to the 202526 fiscal year, inclusive.
(h)The amendments made to this section by the act that added this subdivision apply beginning with the lien date for the 200809 fiscal year.
(i)(1)Except as provided in paragraph (2), this section shall remain in effect only until January 1, 2027.
(2)Notwithstanding paragraph (1), active energy solar systems that qualify for an exclusion under this section prior to January 1, 2027, shall continue to be excluded on and after January 1, 2027, until there is a subsequent change in ownership.
(j)Section 41 shall not apply to the extension of the exclusion under this section made by the act adding this subdivision.
SEC. 2.Section 1.5 of this bill incorporates amendments to Section 73 of the Revenue and Taxation Code proposed by both this bill and Assembly Bill 1516. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2026, (2) each bill amends Section 73 of the Revenue and Taxation Code, and (3) this bill is enacted after Assembly Bill 1516, in which case Section 1 of this bill shall not become operative.
(a)Pursuant to the authority granted to the Legislature pursuant to paragraph (1) of subdivision (c) of Section 2 of Article XIIIA of the California Constitution, the term newly constructed, as used in subdivision (a) of Section 2 of Article XIIIA 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, upon completion of the construction of a system as part of a new property or the addition of a system to an existing property, 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, occupy or use has the same meaning as defined in Section 75.12.
(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. 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)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)Notwithstanding any other law, the exclusion from new construction provided by this section shall remain in effect only until there is a subsequent change in ownership.
(g)This section applies to property tax lien dates for the 19992000 fiscal year to the 202526 fiscal year, inclusive.
(h)The amendments made to this section by the act that added this subdivision apply beginning with the lien date for the 200809 fiscal year.
(i)(1)Except as provided in paragraph (2), this section shall remain in effect only until January 1, 2027.
(2)Notwithstanding paragraph (1), active energy solar systems that qualify for an exclusion under this section prior to January 1, 2027, shall continue to be excluded on and after January 1, 2027, until there is a subsequent change in ownership.
(j)Section 41 shall not apply to the extension of the exclusion under this section made by the act adding this subdivision.
SEC. 1.5.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 XIIIA of the California Constitution, the term newly constructed, as used in subdivision (a) of Section 2 of Article XIIIA 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, upon completion of the construction of a system as part of a new property or the addition of a system to an existing property, 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, occupy or use has the same meaning as defined in Section 75.12.
(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. 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)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.
(i)(I)The claim for an exclusion under this subdivision shall be considered timely if it is filed within three years of the date of purchase.
(II)An otherwise valid claim for exclusion under this subdivision filed after the deadline set by subclause (I) shall be applied beginning on the lien date of the assessment year in which the claim is filed.
(ii)The provisions of clause (i) shall become operative on January 1, 2027.
(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)Notwithstanding any other law, the exclusion from new construction provided by this section shall remain in effect only until there is a subsequent change in ownership.
(g)This section applies to property tax lien dates for the 19992000 fiscal year to the 202526 fiscal year, inclusive.
(h)The amendments made to this section by the act that added this subdivision apply beginning with the lien date for the 200809 fiscal year.
(i)(1)Except as provided in paragraph (2), this section shall remain in effect only until January 1, 2027.
(2)Notwithstanding paragraph (1), active energy solar systems that qualify for an exclusion under this section prior to January 1, 2027, shall continue to be excluded on and after January 1, 2027, until there is a subsequent change in ownership.
(j)Section 41 shall not apply to the extension of the exclusion under this section made by the act adding this subdivision.
SEC. 2.Section 73.1 is added to the Revenue and Taxation Code, to read:73.1.(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 a qualified active solar energy system, as defined in subdivision (b).(b)(1)Qualified active solar energy system means a system that satisfies both of the following:(A)Upon completion of the construction of a system as part of a new property or the addition of a system to an existing property, 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.(B)Satisfies one of the following:(i)The system is physically attached to a residential dwelling or dwellings or to a structure on the same assessors parcel as the dwelling or dwellings, or is not physically attached but is located on the same assessors parcel, is located on a contiguous assessors parcel, or is part of the same appraisal unit as the dwelling or dwellings, and distributes solar energy to those dwellings and, if applicable, structures. For purposes of this clause, residential dwelling means a structure consisting of residential uses only or a mix of residential and nonresidential uses, with at least two-thirds of the square footage of the development designated for residential uses.(ii)(I)The system is located on the same assessors parcel as a nonresidential customer, is located on a contiguous assessors parcel to the nonresidential customer, or is part of the same appraisal unit as the nonresidential customer, distributes solar energy to that customer, and has a rated nameplate capacity of one megawatt of alternating current or lower.(II)For purposes of this clause, customer means a recipient of the energy generated by the system. If there is more than one customer on the parcel, a customer shall be considered nonresidential if the customer consists of nonresidential uses only or a mix of residential and nonresidential uses, with less than two-thirds of the square footage of the development designated for residential uses.(2)Qualified active solar energy system does not include solar swimming pool heaters or hot tub heaters.(3)Qualified 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, occupy or use has the same meaning as defined in Section 75.12.(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)A qualified 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, a qualified 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. For the purposes of this paragraph, the term parts includes spare parts that are owned by the owner of, or the maintenance contractor for, a qualified 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 a qualified 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)A qualified 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 qualified active solar energy system property only to the extent of 75 percent of their full cash value.(3)A qualified 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 uses a source of power other than solar energy to provide usable energy. A qualified 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 qualified 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 qualified active solar energy system includes the construction of a qualified 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 qualified 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)(i)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 qualified 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 qualified 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.(ii)The claim for an exclusion under this subdivision shall be considered timely if it is filed within three years of the date of the initial purchase, in the case of an initial purchaser, or within three years of the date the construction or addition of the system is complete, in the case of an owner-builder.(iii)A claim for exclusion that is not timely filed within the period described in clause (ii) but is valid otherwise shall be applied beginning on the lien date of the assessment year in which the claim is filed.(B)The assessor shall evaluate the claim and determine the portion of the purchase price that is attributable to the qualified 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 qualified 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 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)Notwithstanding any other law, the exclusion from new construction provided by this section shall remain in effect only until there is a subsequent change in ownership.(g)(1)Except as provided in paragraph (2), this section applies to property tax lien dates occurring on or after January 1, 2026, but before January 1, 2031.(2)Notwithstanding paragraph (1), qualified active energy solar systems that qualify for an exclusion under this section prior to January 1, 2031, shall continue to be excluded on and after January 1, 2031, until there is a subsequent change in ownership.(h)Section 41 shall not apply to this section. SEC. 3.Section 1.5 of this bill incorporates amendments to Section 73 of the Revenue and Taxation Code proposed by both this bill and Assembly Bill 1516. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2026, but this bill becomes operative first, (2) each bill amends Section 73 of the Revenue and Taxation Code, and (3) this bill is enacted after Assembly Bill 1516, in which case Section 73 of the Revenue and Taxation Code, as amended by Section 1 of this bill, shall remain operative only until the operative date of Assembly Bill 1516, at which time Section 1.5 of this bill shall become operative.SEC. 4.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. 5.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. 6.This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.SEC. 2.Section 1.5 of this bill incorporates amendments to Section 73 of the Revenue and Taxation Code proposed by both this bill and Assembly Bill 1516. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2026, (2) each bill amends Section 73 of the Revenue and Taxation Code, and (3) this bill is enacted after Assembly Bill 1516, in which case Section 1 of this bill shall not become operative.
(a)Pursuant to the authority granted to the Legislature pursuant to paragraph (1) of subdivision (c) of Section 2 of Article XIIIA of the California Constitution, the term newly constructed, as used in subdivision (a) of Section 2 of Article XIIIA 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, upon completion of the construction of a system as part of a new property or the addition of a system to an existing property, 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, occupy or use has the same meaning as defined in Section 75.12.
(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. 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)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)Notwithstanding any other law, the exclusion from new construction provided by this section shall remain in effect only until there is a subsequent change in ownership.
(g)This section applies to property tax lien dates for the 19992000 fiscal year to the 202526 fiscal year, inclusive.
(h)The amendments made to this section by the act that added this subdivision apply beginning with the lien date for the 200809 fiscal year.
(i)(1)Except as provided in paragraph (2), this section shall remain in effect only until January 1, 2027.
(2)Notwithstanding paragraph (1), active energy solar systems that qualify for an exclusion under this section prior to January 1, 2027, shall continue to be excluded on and after January 1, 2027, until there is a subsequent change in ownership.
(j)Section 41 shall not apply to the extension of the exclusion under this section made by the act adding this subdivision.
SEC. 1.5.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 XIIIA of the California Constitution, the term newly constructed, as used in subdivision (a) of Section 2 of Article XIIIA 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, upon completion of the construction of a system as part of a new property or the addition of a system to an existing property, 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, occupy or use has the same meaning as defined in Section 75.12.
(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. 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)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.
(i)(I)The claim for an exclusion under this subdivision shall be considered timely if it is filed within three years of the date of purchase.
(II)An otherwise valid claim for exclusion under this subdivision filed after the deadline set by subclause (I) shall be applied beginning on the lien date of the assessment year in which the claim is filed.
(ii)The provisions of clause (i) shall become operative on January 1, 2027.
(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)Notwithstanding any other law, the exclusion from new construction provided by this section shall remain in effect only until there is a subsequent change in ownership.
(g)This section applies to property tax lien dates for the 19992000 fiscal year to the 202526 fiscal year, inclusive.
(h)The amendments made to this section by the act that added this subdivision apply beginning with the lien date for the 200809 fiscal year.
(i)(1)This Except as provided in paragraph (2), this section shall remain in effect only until January 1, 2027, and as of that date is repealed. 2027.
(2)Active Notwithstanding paragraph (1), active energy solar systems that qualify for an exclusion under this section prior to January 1, 2027, shall continue to be excluded on and after January 1, 2027, until there is a subsequent change in ownership.
(j)Section 41 shall not apply to the extension of the exclusion under this section made by the act adding this subdivision.
SEC. 2.Section 73.1 is added to the Revenue and Taxation Code, to read:73.1.(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 a qualified active solar energy system, as defined in subdivision (b).
(b)(1)Qualified active solar energy system means a system that satisfies both of the following:
(A)Upon completion of the construction of a system as part of a new property or the addition of a system to an existing property, 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.
(B)Satisfies one of the following:
(i)The system is physically attached to a residential dwelling or dwellings or to a structure on the same assessors parcel as the dwelling or dwellings, or is not physically attached but is located on the same assessors parcel, is located on a contiguous assessors parcel, or is part of the same appraisal unit as the dwelling or dwellings, and distributes solar energy to those dwellings and, if applicable, structures. For purposes of this clause, residential dwelling means a structure consisting of residential uses only or a mix of residential and nonresidential uses, with at least two-thirds of the square footage of the development designated for residential uses.
(ii)(I)The system is located on the same assessors parcel as a nonresidential customer, is located on a contiguous assessors parcel to the nonresidential customer, or is part of the same appraisal unit as the nonresidential customer, distributes solar energy to that customer, and satisfies subclause (II). has a rated nameplate capacity of one megawatt of alternating current or lower.
(II)Except as set forth in subclause (IV), the system shall have a total capacity of more than one megawatt of alternating current pursuant to an agreement with an electrical corporation, as defined in Section 218 of the Public Utilities Code, that complies with Public Utilities Commission Electric Rule 21, or a total capacity of one megawatt of alternating current or lower.(III)Except as set forth in subclause (IV), there shall be a rebuttable presumption that a system that does not satisfy the requirements of this clause is not a qualified active solar energy system. A claimant may overcome this presumption by providing evidence of a net energy metering tariff or contract that the system provides solar energy to the nonresidential customer pursuant to Section 2827 or 2827.1 of the Public Utilities Code or exclusively provides solar energy to the nonresidential customer.(IV)Notwithstanding subclauses (II) and (III), a system with a rated nameplate capacity of five megawatts of alternating current or higher is not a qualified active solar energy system under this clause.(V)(II)For purposes of this clause, customer means a recipient of the energy generated by the system. If there is more than one customer on the parcel, a customer shall be considered nonresidential if the customer consists of nonresidential uses only or a mix of residential and nonresidential uses, with less than two-thirds of the square footage of the development designated for residential uses.
(2)Qualified active solar energy system does not include solar swimming pool heaters or hot tub heaters.
(3)Qualified 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, occupy or use has the same meaning as defined in Section 75.12.
(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.
(d)(1)(B)A qualified 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, a qualified 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. For the purposes of this paragraph, the term parts includes spare parts that are owned by the owner of, or the maintenance contractor for, a qualified 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 a qualified 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)A qualified 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 qualified active solar energy system property only to the extent of 75 percent of their full cash value.
(3)A qualified 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 uses a source of power other than solar energy to provide usable energy. A qualified 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 qualified 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 qualified active solar energy system includes the construction of a qualified 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 qualified 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)(i)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 qualified 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 qualified 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.
(ii)The claim for an exclusion under this subdivision shall be considered timely if it is filed within three years of the date of the initial purchase, in the case of an initial purchaser, or within three years of the date the construction or addition of the system is complete, in the case of an owner-builder.
(iii)A claim for exclusion that is not timely filed within the period described in clause (ii) but is valid otherwise shall be applied beginning on the lien date of the assessment year in which the claim is filed.
(B)The assessor shall evaluate the claim and determine the portion of the purchase price that is attributable to the qualified 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 qualified 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 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)Notwithstanding any other law, the exclusion from new construction provided by this section shall remain in effect only until there is a subsequent change in ownership.
(g)(1)Except as provided in paragraph (2), this section applies to property tax lien dates occurring on or after January 1, 2026, but before January 1, 2031.
(2)Notwithstanding paragraph (1), qualified active energy solar systems that qualify for an exclusion under this section prior to January 1, 2031, shall continue to be excluded on and after January 1, 2031, until there is a subsequent change in ownership.
(h)Section 41 shall not apply to this section.
SEC. 3.Section 1.5 of this bill incorporates amendments to Section 73 of the Revenue and Taxation Code proposed by both this bill and Assembly Bill 1516. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2026, but this bill becomes operative first, (2) each bill amends Section 73 of the Revenue and Taxation Code, and (3) this bill is enacted after Assembly Bill 1516, in which case Section 73 of the Revenue and Taxation Code, as amended by Section 1 of this bill, shall remain operative only until the operative date of Assembly Bill 1516, at which time Section 1.5 of this bill shall become operative.
SEC. 3.SEC. 4.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. 4.SEC. 5.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. 5.SEC. 6.This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.
(a)Pursuant to the authority granted to the Legislature pursuant to paragraph (1) of subdivision (c) of Section 2 of Article XIIIA of the California Constitution, the term newly constructed, as used in subdivision (a) of Section 2 of Article XIIIA 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, upon completion of the construction of a system as part of a new property or the addition of a system to an existing property, 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, occupy or use has the same meaning as defined in Section 75.12.
(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. 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)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)Notwithstanding any other law, the exclusion from new construction provided by this section shall remain in effect only until there is a subsequent change in ownership.
(g)This section applies to property tax lien dates for the 19992000 fiscal year to the 202526 fiscal year, inclusive.
(h)The amendments made to this section by the act that added this subdivision apply beginning with the lien date for the 200809 fiscal year.
(i)(1)Except as provided in paragraph (2), this section shall remain in effect only until January 1, 2027.
(2)Notwithstanding paragraph (1), active energy solar systems that qualify for an exclusion under this section prior to January 1, 2027, shall continue to be excluded on and after January 1, 2027, until there is a subsequent change in ownership.
(j)Section 41 shall not apply to the extension of the exclusion under this section made by the act adding this subdivision.
SEC. 2.Section 73.1 is added to the Revenue and Taxation Code, to read:73.1.(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 a qualified active solar energy system, as defined in subdivision (b).
(b)(1)Qualified active solar energy system means a system that satisfies both of the following:
(A)Upon completion of the construction of a system as part of a new property or the addition of a system to an existing property, 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.
(B)Satisfies one of the following:
(i)The system is physically attached to a residential dwelling or dwellings or to a structure on the same assessors parcel as the dwelling or dwellings, or is not physically attached but is located on the same assessors parcel, is located on a contiguous assessors parcel, or is part of the same appraisal unit as the dwelling or dwellings, and distributes solar energy to those dwellings and, if applicable, structures. For purposes of this clause, residential dwelling means a structure consisting of residential uses only or a mix of residential and nonresidential uses, with at least two-thirds of the square footage of the development designated for residential uses.
(ii)(I)The system is located on the same assessors parcel as a nonresidential customer, is located on a contiguous assessors parcel to the nonresidential customer, or is part of the same appraisal unit as the nonresidential customer, distributes solar energy to that customer, and satisfies subclause (II).
(II)Except as set forth in subclause (IV), the system shall have a total capacity of more than one megawatt of alternating current pursuant to an agreement with an electrical corporation, as defined in Section 218 of the Public Utilities Code, that complies with Public Utilities Commission Electric Rule 21, or a total capacity of one megawatt of alternating current or lower.
(III)Except as set forth in subclause (IV), there shall be a rebuttable presumption that a system that does not satisfy the requirements of this clause is not a qualified active solar energy system. A claimant may overcome this presumption by providing evidence of a net energy metering tariff or contract that the system provides solar energy to the nonresidential customer pursuant to Section 2827 or 2827.1 of the Public Utilities Code or exclusively provides solar energy to the nonresidential customer.
(IV)Notwithstanding subclauses (II) and (III), a system with a rated nameplate capacity of five megawatts of alternating current or higher is not a qualified active solar energy system under this clause.
(V)For purposes of this clause, customer means a recipient of the energy generated by the system. If there is more than one customer on the parcel, a customer shall be considered nonresidential if the customer consists of nonresidential uses only or a mix of residential and nonresidential uses, with less than two-thirds of the square footage of the development designated for residential uses.
(2)Qualified active solar energy system does not include solar swimming pool heaters or hot tub heaters.
(3)Qualified 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, occupy or use has the same meaning as defined in Section 75.12.
(d)(1)A qualified 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, a qualified 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. For the purposes of this paragraph, the term parts includes spare parts that are owned by the owner of, or the maintenance contractor for, a qualified 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 a qualified 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)A qualified 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 qualified active solar energy system property only to the extent of 75 percent of their full cash value.
(3)A qualified 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 uses a source of power other than solar energy to provide usable energy. A qualified 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 qualified 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 qualified active solar energy system includes the construction of a qualified 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 qualified 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)(i)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 qualified 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 qualified 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.
(ii)The claim for an exclusion under this subdivision shall be considered timely if it is filed within three years of the date of the initial purchase, in the case of an initial purchaser, or within three years of the date the construction or addition of the system is complete, in the case of an owner-builder.
(iii)A claim for exclusion that is not timely filed within the period described in clause (ii) but is valid otherwise shall be applied beginning on the lien date of the assessment year in which the claim is filed.
(B)The assessor shall evaluate the claim and determine the portion of the purchase price that is attributable to the qualified 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 qualified 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 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)Notwithstanding any other law, the exclusion from new construction provided by this section shall remain in effect only until there is a subsequent change in ownership.
(g)This (1)Except as provided in paragraph (2), this section applies to property tax lien dates occurring on or after January 1, 2026. 2026, but before January 1, 2031.
(2)Notwithstanding paragraph (1), qualified active energy solar systems that qualify for an exclusion under this section prior to January 1, 2031, shall continue to be excluded on and after January 1, 2031, until there is a subsequent change in ownership.
(h)Section 41 shall not apply to this section.
SEC. 3.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. 4.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. 5.This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.
(a)Pursuant to the authority granted to the Legislature pursuant to paragraph (1) of subdivision (c) of Section 2 of Article XIIIA of the California Constitution, the term newly constructed, as used in subdivision (a) of Section 2 of Article XIIIA 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, upon completion of the construction of a system as part of a new property or the addition of a system to an existing property, 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, occupy or use has the same meaning as defined in Section 75.12.
(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. 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)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)Notwithstanding any other law, the exclusion from new construction provided by this section shall remain in effect only until there is a subsequent change in ownership.
(g)This section applies to property tax lien dates for the 19992000 fiscal year to the 202526 fiscal year, inclusive.
(h)The amendments made to this section by the act that added this subdivision apply beginning with the lien date for the 200809 fiscal year.
(i)(1)Except as provided in paragraph (2), this section shall remain in effect only until January 1, 2027.
(2)Notwithstanding paragraph (1), active energy solar systems that qualify for an exclusion under this section prior to January 1, 2027, shall continue to be excluded on and after January 1, 2027, until there is a subsequent change in ownership.
(j)Section 41 shall not apply to the extension of the exclusion under this section made by the act adding this subdivision.
SEC. 2.Section 73.1 is added to the Revenue and Taxation Code, to read:73.1.(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 a qualified active solar energy system, as defined in subdivision (b).
(b)(1)Qualified solar energy system means a system that satisfies both of the following:
(A)Upon completion of the construction of a system as part of a new property or the addition of a system to an existing property, 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.
(B)Satisfies one of the following:
(i)The system is physically attached to a residential dwelling or dwellings or to a structure on the same assessors parcel as the dwelling or dwellings, or is not physically attached but is located on the same assessors parcel, is located on a contiguous assessors parcel, or is part of the same appraisal unit as the dwelling or dwellings, and distributes solar energy to those dwellings and, if applicable, structures. For purposes of this clause, residential dwelling means a structure consisting of residential uses only or a mix of residential and nonresidential uses, with at least two-thirds of the square footage of the development designated for residential uses.
(ii)(I)The system is physically attached to a commercial building or to a structure on the same assessors parcel as the commercial building, or is not physically attached but is located on the same assessors parcel, is located parcel as a nonresidential customer, is located on a contiguous assessors parcel, parcel to the nonresidential customer, or is part of the same appraisal unit as the building, nonresidential customer, distributes solar energy to that building and, if applicable, structure, customer, and satisfies subclause (II). For purposes of this clause, commercial building means a structure consisting of nonresidential uses only or a mix of residential and nonresidential uses, with less than two-thirds of the square footage of the development designated for residential uses.
(II)The Except as set forth in subclause (IV), the system shall have a total capacity of more than one megawatt of alternating current pursuant to an agreement with an electrical corporation, as defined in Section 218 of the Public Utilities Code, that complies with Public Utilities Commission Electric Rule 21, or a total capacity of one megawatt of alternating current or lower.
(III)There Except as set forth in subclause (IV), there shall be a rebuttable presumption that a system that does not satisfy the requirements of this clause is not a qualified active solar energy system. A claimant may overcome this presumption by providing evidence of a net energy metering tariff or contract that the system provides solar energy to the commercial building nonresidential customer pursuant to a net energy metering tariff or contract pursuant to Section 2827 or 2827.1 of the Public Utilities Code or exclusively provides solar energy to the commercial building and, if applicable, the structure on which it is attached or located. nonresidential customer.
(IV)Notwithstanding subclauses (II) and (III), a system with a rated nameplate capacity of five megawatts of alternating current or higher is not a qualified active solar energy system under this clause.
(V)For purposes of this clause, customer means a recipient of the energy generated by the system. If there is more than one customer on the parcel, a customer shall be considered nonresidential if the customer consists of nonresidential uses only or a mix of residential and nonresidential uses, with less than two-thirds of the square footage of the development designated for residential uses.
(2)Qualified active solar energy system does not include solar swimming pool heaters or hot tub heaters.
(3)Qualified 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, occupy or use has the same meaning as defined in Section 75.12.
(d)(1)A qualified 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, a qualified 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. For the purposes of this paragraph, the term parts includes spare parts that are owned by the owner of, or the maintenance contractor for, a qualified 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 a qualified 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)A qualified 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 qualified active solar energy system property only to the extent of 75 percent of their full cash value.
(3)A qualified 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 uses a source of power other than solar energy to provide usable energy. A qualified 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 qualified 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 qualified active solar energy system includes the construction of a qualified 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 qualified 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)(i)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 qualified 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 qualified 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.
(ii)The claim for an exclusion under this subdivision shall be considered timely if it is filed within three years of the date of the initial purchase, in the case of an initial purchaser, or within three years of the date the construction or addition of the system is complete, in the case of an owner-builder.
(iii)A claim for exclusion that is not timely filed within the period described in clause (ii) but is valid otherwise shall be applied beginning on the lien date of the assessment year in which the claim is filed.
(B)The assessor shall evaluate the claim and determine the portion of the purchase price that is attributable to the qualified 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 qualified 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 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)Notwithstanding any other law, the exclusion from new construction provided by this section shall remain in effect only until there is a subsequent change in ownership.
(g)This section applies to property tax lien dates occurring on or after January 1, 2026.
(h)Section 41 shall not apply to this section.
SEC. 3.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. 4.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. 5.This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.
(a)Pursuant to the authority granted to the Legislature pursuant to paragraph (1) of subdivision (c) of Section 2 of Article XIIIA of the California Constitution, the term newly constructed, as used in subdivision (a) of Section 2 of Article XIIIA 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, upon completion of the construction of a system as part of a new property or the addition of a system to an existing property, 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, occupy or use has the same meaning as defined in Section 75.12.
(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. 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)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)Notwithstanding any other law, the exclusion from new construction provided by this section shall remain in effect only until there is a subsequent change in ownership.
(g)This section applies to property tax lien dates for the 19992000 fiscal year to the 202526 fiscal year, inclusive.
(h)The amendments made to this section by the act that added this subdivision apply beginning with the lien date for the 200809 fiscal year.
(i)(1)Except as provided in paragraph (2), this section shall remain in effect only until January 1, 2027.
(2)Notwithstanding paragraph (1), active energy solar systems that qualify for an exclusion under this section prior to January 1, 2027, shall continue to be excluded on and after January 1, 2027, until there is a subsequent change in ownership.
(j)Section 41 shall not apply to the extension of the exclusion under this section made by the act adding this subdivision.
SEC. 2.Section 73.1 is added to the Revenue and Taxation Code, to read:73.1.(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 a qualified active solar energy system, as defined in subdivision (b).
(b)(1)Qualified solar energy system means a system that satisfies both of the following:
(A)Upon completion of the construction of a system as part of a new property or the addition of a system to an existing property, 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.
(B)Satisfies one of the following:
(i)The system is physically attached to a residential dwelling or dwellings or to a structure on the same assessors parcel as the dwelling or dwellings, or is not physically attached but is located on the same assessors parcel, is located on a contiguous assessors parcel, or is part of the same appraisal unit as the dwelling or dwellings, and distributes solar energy to those dwellings and, if applicable, structures. For purposes of this clause, residential dwelling means a structure consisting of residential uses only or a mix of residential and nonresidential uses, with at least two-thirds of the square footage of the development designated for residential uses.
(ii)(I)The system is physically attached to a commercial building or to a structure on the same assessors parcel as the commercial building, or is not physically attached but is located on the same assessors parcel, is located on a contiguous assessors parcel, or is part of the same appraisal unit as the building, distributes solar energy to that building and, if applicable, structure, and satisfies subclause (II). For purposes of this clause, commercial building means a structure consisting of nonresidential uses only or a mix of residential and nonresidential uses, with less than two-thirds of the square footage of the development designated for residential uses.
(II)The system shall have a total capacity of more than one megawatt of alternating current pursuant to an agreement with an electrical corporation, as defined in Section 218 of the Public Utilities Code, that complies with Public Utilities Commission Electric Rule 21, or a total capacity of one megawatt of alternating current or lower.
(III)There shall be a rebuttable presumption that a system that does not satisfy the requirements of this clause is not a qualified active solar energy system. A claimant may overcome this presumption by providing evidence that the system provides solar energy to the commercial building pursuant to a net energy metering tariff or contract pursuant to Section 2827 or 2827.1 of the Public Utilities Code or exclusively provides solar energy to the commercial building and, if applicable, the structure on which it is attached or located.
(2)Qualified active solar energy system does not include solar swimming pool heaters or hot tub heaters.
(3)Qualified 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, occupy or use has the same meaning as defined in Section 75.12.
(d)(1)A qualified 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, a qualified 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. For the purposes of this paragraph, the term parts includes spare parts that are owned by the owner of, or the maintenance contractor for, a qualified 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 a qualified 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)A qualified 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 qualified active solar energy system property only to the extent of 75 percent of their full cash value.
(3)A qualified 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 uses a source of power other than solar energy to provide usable energy. A qualified 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 qualified 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 qualified active solar energy system includes the construction of a qualified 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 qualified 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)(i)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 qualified 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 qualified 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.
(ii)The claim for an exclusion under this subdivision shall be considered timely if it is filed within three years of the date of the initial purchase, in the case of an initial purchaser, or within three years of the date the construction or addition of the system is complete, in the case of an owner-builder.
(iii)A claim for exclusion that is not timely filed within the period described in clause (ii) but is valid otherwise shall be applied beginning on the lien date of the assessment year in which the claim is filed.
(B)The assessor shall evaluate the claim and determine the portion of the purchase price that is attributable to the qualified 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 qualified 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 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)Notwithstanding any other law, the exclusion from new construction provided by this section shall remain in effect only until there is a subsequent change in ownership.
(g)This section applies to property tax lien dates occurring on or after January 1, 2027. 2026.
(h)Section 41 shall not apply to this section.
SEC. 3.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. 4.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. 5.This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.
(a)Pursuant to the authority granted to the Legislature pursuant to paragraph (1) of subdivision (c) of Section 2 of Article XIIIA of the California Constitution, the term newly constructed, as used in subdivision (a) of Section 2 of Article XIIIA 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, upon completion of the construction of a system as part of a new property or the addition of a system to an existing property, 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, occupy or use has the same meaning as defined in Section 75.12.
(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. 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)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)Notwithstanding any other law, the exclusion from new construction provided by this section shall remain in effect only until there is a subsequent change in ownership.
(g)This section applies to property tax lien dates for the 19992000 fiscal year to the 202526 fiscal year, inclusive.
(h)The amendments made to this section by the act that added this subdivision apply beginning with the lien date for the 200809 fiscal year.
(i)(1)This Except as provided in paragraph (2), this section shall remain in effect only until January 1, 2027, and as of that date is repealed. 2027.
(2)Active Notwithstanding paragraph (1), active energy solar systems that qualify for an exclusion under this section prior to January 1, 2027, shall continue to be excluded on and after January 1, 2027, until there is a subsequent change in ownership.
(j)Section 41 shall not apply to the extension of the exclusion under this section made by the act adding this subdivision.
SECTION 1.SEC. 2.Section 73.1 is added to the Revenue and Taxation Code, to read:73.1.(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 a customer-sited qualified active solar energy system, as defined in subdivision (b).
(b)(1)Active Qualified solar energy system means a system that, upon that satisfies both of the following:
(A)Upon completion of the construction of a system as part of a new property or the addition of a system to an existing property, 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.
(B)Satisfies one of the following:
(i)The system is physically attached to a residential dwelling or dwellings or to a structure on the same assessors parcel as the dwelling or dwellings, or is not physically attached but is located on the same assessors parcel, is located on a contiguous assessors parcel, or is part of the same appraisal unit as the dwelling or dwellings, and distributes solar energy to those dwellings and, if applicable, structures. For purposes of this clause, residential dwelling means a structure consisting of residential uses only or a mix of residential and nonresidential uses, with at least two-thirds of the square footage of the development designated for residential uses.
(ii)(I)The system is physically attached to a commercial building or to a structure on the same assessors parcel as the commercial building, or is not physically attached but is located on the same assessors parcel, is located on a contiguous assessors parcel, or is part of the same appraisal unit as the building, distributes solar energy to that building and, if applicable, structure, and satisfies subclause (II). For purposes of this clause, commercial building means a structure consisting of nonresidential uses only or a mix of residential and nonresidential uses, with less than two-thirds of the square footage of the development designated for residential uses.
(II)The system shall have a total capacity of more than one megawatt of alternating current pursuant to an agreement with an electrical corporation, as defined in Section 218 of the Public Utilities Code, that complies with Public Utilities Commission Electric Rule 21, or a total capacity of one megawatt of alternating current or lower.
(III)There shall be a rebuttable presumption that a system that does not satisfy the requirements of this clause is not a qualified active solar energy system. A claimant may overcome this presumption by providing evidence that the system provides solar energy to the commercial building pursuant to a net energy metering tariff or contract pursuant to Section 2827 or 2827.1 of the Public Utilities Code or exclusively provides solar energy to the commercial building and, if applicable, the structure on which it is attached or located.
(2)Active Qualified active solar energy system does not include solar swimming pool heaters or hot tub heaters.
(3)Active Qualified 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.
(4)Customer-sited means installed on the property of a customer for the purpose of managing the customers own electrical needs.(c)For purposes of this section, occupy or use has the same meaning as defined in Section 75.12.
(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(d)(1)A qualified 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 a qualified 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. For the purposes of this paragraph, the term parts includes spare parts that are owned by the owner of, or the maintenance contractor for, an a qualified 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 a qualified 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 A qualified 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 qualified active solar energy system property only to the extent of 75 percent of their full cash value.
(3)An A qualified 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 uses a source of power other than solar energy to provide usable energy. An A qualified 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 qualified 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 qualified active solar energy system includes the construction of an a qualified 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 qualified 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)(i)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 qualified 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 qualified 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.
(ii)The claim for an exclusion under this subdivision shall be considered timely if it is filed within three years of the date of the initial purchase, in the case of an initial purchaser, or within three years of the date the construction or addition of the system is complete, in the case of an owner-builder.
(iii)A claim for exclusion that is not timely filed within the period described in clause (ii) but is valid otherwise shall be applied beginning on the lien date of the assessment year in which the claim is filed.
(B)The assessor shall evaluate the claim and determine the portion of the purchase price that is attributable to the qualified 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 qualified 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 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)Notwithstanding any other law, the exclusion from new construction provided by this section shall remain in effect only until there is a subsequent change in ownership.
(g)This section applies to property tax lien dates for the 202627 fiscal year, and each fiscal year thereafter. occurring on or after January 1, 2027.
(h)This section shall become operative on January 1, 2026.(i)(h)Section 41 shall not apply to this section.
SEC. 2.SEC. 3.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.SEC. 4.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.SEC. 5.This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.
(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 a customer-sited active solar energy system, as defined in subdivision (b).
(b)(1)Active solar energy system means a system that, upon completion of the construction of a system as part of a new property or the addition of a system to an existing property, 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.
(4)Customer-sited means installed on the property of a customer for the purpose of managing the customers own electrical needs.
(c)For purposes of this section, occupy or use has the same meaning as defined in Section 75.12.
(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. For the purposes 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)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 uses 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 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)Notwithstanding any other law, the exclusion from new construction provided by this section shall remain in effect only until there is a subsequent change in ownership.
(g)This section applies to property tax lien dates for the 202627 fiscal year, and each fiscal year thereafter.
(h)This section shall become operative on January 1, 2026.
(i)Section 41 shall not apply to this section.
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.
|
Date
|
Status
|
|---|---|
| Oct 3, 2025 | Chaptered by Secretary of State. Chapter 328, Statutes of 2025. |
| Oct 3, 2025 | Approved by the Governor. |
| Sep 22, 2025 | Enrolled and presented to the Governor at 2 p.m. |
| Sep 11, 2025 | Assembly amendments concurred in. (Ayes 40. Noes 0. Page 2891.) Ordered to engrossing and enrolling. |
| Sep 9, 2025 | In Senate. Concurrence in Assembly amendments pending. |
| Sep 9, 2025 | Read third time. Passed. (Ayes 77. Noes 0. Page 3090.) Ordered to the Senate. |
| Sep 5, 2025 | Assembly Rule 69(b)(1) suspended. |
| Sep 5, 2025 | Ordered to third reading. |
| Sep 5, 2025 | Read third time and amended. |
| Sep 3, 2025 | Read second time. Ordered to third reading. |
| Sep 2, 2025 | Read second time and amended. Ordered to second reading. |
| Aug 29, 2025 | From committee: Do pass as amended. (Ayes 10. Noes 0.) (August 29). |
| Aug 20, 2025 | August 20 set for first hearing. Placed on APPR. suspense file. |
| Jul 16, 2025 | Read second time and amended. Re-referred to Com. on APPR. |
| Jul 15, 2025 | From committee: Do pass as amended and re-refer to Com. on APPR. (Ayes 4. Noes 0.) (July 14). |
| Jul 8, 2025 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on REV. & TAX. |
| Jul 7, 2025 | July 7 set for first hearing. Placed on REV. & TAX. suspense file. |
| Jul 1, 2025 | June 30 hearing postponed by committee. |
| Jun 23, 2025 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on REV. & TAX. |
| Jun 16, 2025 | Referred to Com. on REV. & TAX. |
| Jun 5, 2025 | In Assembly. Read first time. Held at Desk. |
| Jun 4, 2025 | Read third time. Passed. (Ayes 39. Noes 0. Page 1522.) Ordered to the Assembly. |
| Jun 2, 2025 | Ordered to special consent calendar. |
| May 27, 2025 | Read second time. Ordered to third reading. |
| May 23, 2025 | Read second time and amended. Ordered to second reading. |
| May 23, 2025 | From committee: Do pass as amended. (Ayes 6. Noes 0. Page 1210.) (May 23). |
| May 20, 2025 | Set for hearing May 23. |
| May 19, 2025 | May 19 hearing: Placed on APPR. suspense file. |
| May 15, 2025 | Set for hearing May 19. |
| May 14, 2025 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 5. Noes 0. Page 1083.) (May 14). Re-referred to Com. on APPR. |
| May 7, 2025 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on REV. & TAX. |
| Mar 18, 2025 | Set for hearing May 14. |
| Mar 12, 2025 | Referred to Com. on REV. & TAX. |
| Feb 24, 2025 | Read first time. |
| Feb 24, 2025 | From printer. May be acted upon on or after March 24. |
| Feb 21, 2025 | Introduced. To Com. on RLS. for assignment. To print. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Sep 11, 2025 | Unfinished Business SB710 Blakespear et al. Concurrence | Senate Floor |
Passed |
|
| Sep 9, 2025 | SB 710 Blakespear Senate Third Reading By Berman | Assembly Floor |
Passed |
|
| Aug 29, 2025 | Do pass as amended. | Assembly Standing Committee on Appropriations |
Passed |
|
| Jul 14, 2025 | Do pass as amended and be re-referred to the Committee on [Appropriations] | Assembly Standing Committee on Revenue and Taxation |
Passed |
|
| Jun 4, 2025 | Special Consent SB710 Blakespear et al. | Senate Floor |
Passed |
|
| May 23, 2025 | Do pass as amended | Senate Standing Committee on Appropriations |
Passed |
|
| May 19, 2025 | Placed on suspense file | Senate Standing Committee on Appropriations |
Passed |
|
| May 14, 2025 | Do pass, but first be re-referred to the Committee on [Appropriations] | Senate Standing Committee on Revenue and Taxation |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| 350 Humboldt | ** Support | |
| Bowman Change, Inc. | ** Support | |
| California Apartment Association | ** Support | |
| California Farm Bureau Federation | ** Support | |
| California Interfaith Power and Light | ** Support | |
| California Large Energy Consumers Association (CLECA) | ** Against | |
| California Solar and Storage Association | ** Support | |
| California State Association Of Electrical Workers | ** Against | |
| Center for Sustainable Energy | ** Support | |
| Citizens' Climate Lobby Santa Cruz Chapter | ** Support | |
| Clean Coalition | ** Support | |
| cleanearth4kids.org | ** Support | |
| Climate Action California | ** Support | |
| Climate Alliance, The | ** Support | |
| Climate Center The | ** Support | |
| Coalition of California Utility Employees | ** Against | |
| Dairy Institute Of California | ** Support | |
| Environment California | ** Support | |
| Environmental Working Group | ** Support | |
| Glendale Environmental Coalition | ** Support | |
| Indivisible Marin | ** Support | |
| Pearlx Infrastructure LLC | ** Support | |
| PEARLX INFRASTRUCTURE, LLC | ** Support | |
| recolte energy | ** Support | |
| San Diego Community Power | ** Support | |
| San Diego Regional Chamber Of Commerce | ** Support | |
| Santa Cruz Alliance | ** Support | |
| santa cruz indivisible | ** Support | |
| Solar Rights Alliance | ** Support | |
| Stand.earth | ** Support | |
| SunRun, Inc. | ** Support | |
| The Climate Alliance | ** Support | |
| utility labor organizations | ** Against |
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | SB 710 |
UNFINISHED BUSINESS
Bill No: SB 710
Author: Blakespear (D), et al.
Amended: 10/3/25
Vote: 21
SENATE REVENUE AND TAXATION COMMITTEE: 5-0, 5/14/25
AYES: McNerney, Valladares, Ashby, Grayson, Umberg
SENATE APPROPRIATIONS COMMITTEE: 6-0, 5/23/25
AYES: Caballero, Seyarto, Cabaldon, Grayson, Richardson, Wahab
NO VOTE RECORDED: Dahle
SENATE FLOOR: 39-0, 6/4/25
AYES: Allen, Alvarado-Gil, Archuleta, Arreguín, Ashby, Becker, Blakespear, Cabaldon, Caballero, Cervantes, Choi, Cortese, Dahle, Durazo, Gonzalez, Grayson, Grove, Hurtado, Jones, Laird, Limón, McGuire, McNerney, Menjivar, Niello, Ochoa Bogh, Padilla, Pérez, Richardson, Rubio, Seyarto, Smallwood-Cuevas, Stern, Strickland, Umberg, Valladares, Wahab, Weber Pierson, Wiener
NO VOTE RECORDED: Reyes
ASSEMBLY FLOOR: 77-0, 9/9/25 - See last page for vote
SUBJECT: Property taxation: active solar energy systems
SOURCE: Environment California
DIGEST:
This bill restates provisions of current law ensuring that any newly constructed active solar energy system that qualifies under the current exclusion before January 1, 2027, continues to do so after the exclusion ceases to remain in effect, until there is a subsequent change in ownership.
Assembly Amendments
(1) delete the measure’s more limited new construction exclusion system that would have become effective on January 1, 2027, (2) insert provisions that resolve conflicts with AB 1516 (Committee on Revenue & Taxation), which was enacted earlier this year, and (3) make technical changes.
ANALYSIS:
Existing law:
- Provides that all property is taxable unless explicitly exempted by the Constitution or federal law (California Constitution, Article XIII, Section One).
- Limits the maximum amount of any ad valorem tax on real property at 1% of full cash value, plus any locally-authorized bonded indebtedness, and caps a property’s annual inflationary increase in taxable value to 2%. Provides that assessors reappraise property whenever it is purchased, newly constructed, or when ownership changes (California Constitution, Article XIIIA, as added by Proposition 13, 1978).
- Allows the Legislature to exclude from the definition of “new construction,” the construction or addition of any active solar energy system (California Constitution, Article XIIIA, Section Two, as added by Proposition 7, 1980).
- Implements in statute the active solar energy system new construction exclusion until the 2025-26 fiscal year, which is repealed on January 1, 2027 (SB 1340, Hertzberg, Chapter 425, Statutes of 2022).
- Defines an active solar energy system as one 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.
- States that an active solar energy system excluded from new construction may be used for:
- Domestic, recreational, therapeutic, or service water heating.
- Space conditioning.
- Production of electricity.
- Process heat.
- Solar mechanical energy.
- Excludes from the definition of active solar energy system:
- Solar swimming pool heaters.
- Hot tub heaters.
- Passive energy systems.
- Wind energy systems.
- Applies the active solar energy system exclusion to its first buyer when an owner-builder who does not intend to occupy the property constructs the system, so long as the first buyer purchases the building before it becomes subject to supplemental reassessment to the builder, and files a claim with the assessor containing specified information.
- Provides that first buyers have three years from the date of purchase to file a claim for the active solar energy exclusion that applies retroactively to the date construction is completed; claims filed after that date can be granted, but would only apply prospectively, commencing on the lien date of the year in which the claim is filed (AB 1516, Assembly Committee on Revenue & Taxation, Chapter 72, Statutes of 2026). These provisions become operative on January 1, 2027.
This bill:
- Restates current provisions of law ensuring that any newly constructed active solar energy system that qualifies under the current exclusion before January 1, 2027, continues to do so after the exclusion becomes ineffective, until there is a subsequent change in ownership.
- Contains provisions to resolve conflicts with AB 1516 (Committee on Revenue & Taxation).
- Makes technical changes.
Background.
Active Solar Energy System New Construction Exclusion. Under current law, installing a qualifying solar energy system does not result in either an increase or a decrease in the assessment of the existing property, unlike other physical additions to real property, which are assessed at current market value and whose value is added to the existing base year value of the real property. Only active solar energy systems, fire sprinkler systems, seismic retrofits, disabled access improvements, and rainwater capture systems have similar treatment under the Constitution and statute. While the exclusion applies to “new construction,” it is not an exclusion from “change of ownership.” As a result, the exclusion terminates when the property is sold to a new owner.
In 2022, the Senate approved SB 1340 (Hertzberg), which both extended the active solar energy system’s new construction exclusion, and established a new category for “nonqualified active solar energy systems,” defined as one that qualifies under current law with a rated nameplate capacity of 20 megawatts of alternating current or higher. The measure then applied a partial exclusion, as well as boutique assessment methods, for these larger nonqualified systems. After these provisions were removed in the Assembly, the Legislature then enacted an extension to the long-standing exclusion, which is set to be repealed on January 1, 2027.
When the Senate approved this bill earlier this year, it provided that systems remain excluded if qualified for the current exclusion before January 1, 2027. It then enacted a more limited exclusion that applied to systems attached to residences, or located on the same or a contiguous assessor’s parcel and serve those residences. This bill provided the same treatment for commercial buildings up to one megawatt of alternating current, and sometimes more, so long as the system exclusively serves the commercial building, or is enrolled in a Net Energy Metering (NEM) program, or both. This bill presumed systems with capacities above one megawatt were taxable, which a property owner can overcome if they can demonstrate that the system exclusively serves the commercial building, or is enrolled in a NEM program, or both. This bill’s new exclusion would have applied commencing on January 1, 2027.
The author further modified this bill’s new exclusion before it was approved by the Assembly Revenue & Taxation Committee. However, the Assembly Appropriations Committee deleted the new exclusion in the 9/2/25 amendments.
AB 1516. On July 28, 2025, Governor Newsom signed AB 1516 (Committee on Revenue & Taxation), which amended the same section as SB 710 to provide that property owners have three years from the date of purchase to file a claim for the active solar energy exclusion that applies retroactively to the date construction is completed. AB 1516 provided that this change became operative on January 1, 2027; however, this change will not become operative under current law because current law contains a January 1, 2027, repeal date. This bill instead provides that the exclusion shall only remain in effect until January 1, 2027, on which date AB 1516’s change becomes operative, thereby setting a three year limit for first buyers to file a claim for the active solar energy exclusion that applies retroactively to the date construction is completed.
FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No
According to the Assembly Appropriations Committee, the 7/16/25 version of SB 710:
- Annual property tax revenue loss of at least $11 million. The State Board of Equalization (BOE) notes that the revenue estimate was developed based on ASES volume and costs related to the new construction of single-family and multi-family homes. Since the estimate does not account for qualifying roof retrofits or ASES installations on commercial structures, the revenue estimate is understated. Although this bill specifies that the state is prohibited from reimbursing any local agency for lost property tax revenues and property tax is a local government revenue source, reductions in property tax revenues increase Proposition 98 General Fund (GF) spending by up to roughly 50% (the exact amount depends on the specific amount of the annual Proposition 98 guarantee).
- Costs of approximately $9,200 in FY 2025-26, $3,400 in FY 2026-27, and $2,300 in FY 2027-28 to BOE to issue guidance to county assessors and update informational materials (GF).
- Costs of an unknown amount to county assessors to modify assessment practices. If the Commission on State Mandates determines the provisions of this bill create a new program or impose a higher level of service for which the state must reimburse local costs, counties could claim reimbursement from the state (GF).
SUPPORT: (Verified 9/8/25)
Environment California (source)
OPPOSITION: (Verified 9/8/25)
None received
ARGUMENTS IN SUPPORT: According to the author, “For 25 years, homeowners, small businesses, schools, farms, churches and many others have benefited from a tax exclusion that prevented the cost of solar panels and storage from being added to the building value for the assessment of property taxes. Combined with other state incentives, this ‘behind-the-meter’ exclusion has made solar installation more accessible to those who otherwise would not have been able to afford the upfront costs, with solar panels added to two million roofs in California. This bill maintains the grandfather clause for this exclusion for owners of solar systems installed before January 1, 2027, which otherwise would have
been repealed from code. These early adopters paved the way to California’s status as the state with the highest solar capacity in the nation.”
ASSEMBLY FLOOR: 77-0, 9/9/25
AYES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Arambula, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Caloza, Carrillo, Castillo, Chen, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Flora, Fong, Gabriel, Gallagher, Garcia, Gipson, Jeff Gonzalez, Hadwick, Haney, Harabedian, Hart, Hoover, Irwin, Jackson, Johnson, Kalra, Krell, Lackey, Lowenthal, Macedo, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Michelle Rodriguez, Rogers, Blanca Rubio, Sanchez, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Wicks, Wilson, Zbur, Rivas
NO VOTE RECORDED: Calderon, Mark González, Lee
Prepared by: Colin Grinnell / REV. & TAX. / (916) 651-4117
7/20/26 10:51:22
**** END ****
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | SB 710 |
UNFINISHED BUSINESS
Bill No: SB 710
Author: Blakespear (D), et al.
Amended: 9/5/25
Vote: 21
SENATE REVENUE AND TAXATION COMMITTEE: 5-0, 5/14/25
AYES: McNerney, Valladares, Ashby, Grayson, Umberg
SENATE APPROPRIATIONS COMMITTEE: 6-0, 5/23/25
AYES: Caballero, Seyarto, Cabaldon, Grayson, Richardson, Wahab
NO VOTE RECORDED: Dahle
SENATE FLOOR: 39-0, 6/4/25
AYES: Allen, Alvarado-Gil, Archuleta, Arreguín, Ashby, Becker, Blakespear, Cabaldon, Caballero, Cervantes, Choi, Cortese, Dahle, Durazo, Gonzalez, Grayson, Grove, Hurtado, Jones, Laird, Limón, McGuire, McNerney, Menjivar, Niello, Ochoa Bogh, Padilla, Pérez, Richardson, Rubio, Seyarto, Smallwood-Cuevas, Stern, Strickland, Umberg, Valladares, Wahab, Weber Pierson, Wiener
NO VOTE RECORDED: Reyes
ASSEMBLY FLOOR: 62-0, 9/9/25 – Roll call vote not available.
SUBJECT: Property taxation: active solar energy systems
SOURCE: Environment California
DIGEST:
This bill restates provisions of current law ensuring that any newly constructed active solar energy system that qualifies under the current exclusion before January 1, 2027, continues to do so after the exclusion ceases to remain in effect, until there is a subsequent change in ownership.
Assembly Amendments
(1) delete the measure’s more limited new construction exclusion system that would have become effective on January 1, 2027, (2) insert provisions that resolve conflicts with AB 1516 (Committee on Revenue & Taxation), which was enacted earlier this year, and (3) make technical changes.
ANALYSIS:
Existing law:
- Provides that all property is taxable unless explicitly exempted by the Constitution or federal law (California Constitution, Article XIII, Section One).
- Limits the maximum amount of any ad valorem tax on real property at 1% of full cash value, plus any locally-authorized bonded indebtedness, and caps a property’s annual inflationary increase in taxable value to 2%. Provides that assessors reappraise property whenever it is purchased, newly constructed, or when ownership changes (California Constitution, Article XIIIA, as added by Proposition 13, 1978).
- Allows the Legislature to exclude from the definition of “new construction,” the construction or addition of any active solar energy system (California Constitution, Article XIIIA, Section Two, as added by Proposition 7, 1980).
- Implements in statute the active solar energy system new construction exclusion until the 2025-26 fiscal year, which is repealed on January 1, 2027 (SB 1340, Hertzberg, Chapter 425, Statutes of 2022).
- Defines an active solar energy system as one 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.
- States that an active solar energy system excluded from new construction may be used for:
- Domestic, recreational, therapeutic, or service water heating.
- Space conditioning.
- Production of electricity.
- Process heat.
- Solar mechanical energy.
- Excludes from the definition of active solar energy system:
- Solar swimming pool heaters.
- Hot tub heaters.
- Passive energy systems.
- Wind energy systems.
- Applies the active solar energy system exclusion to its first buyer when an owner-builder who does not intend to occupy the property constructs the system, so long as the first buyer purchases the building before it becomes subject to supplemental reassessment to the builder, and files a claim with the assessor containing specified information.
- Provides that first buyers have three years from the date of purchase to file a claim for the active solar energy exclusion that applies retroactively to the date construction is completed; claims filed after that date can be granted, but would only apply prospectively, commencing on the lien date of the year in which the claim is filed (AB 1516, Assembly Committee on Revenue & Taxation, Chapter 72, Statutes of 2026). These provisions become operative on January 1, 2027.
This bill:
- Restates current provisions of law ensuring that any newly constructed active solar energy system that qualifies under the current exclusion before January 1, 2027, continues to do so after the exclusion becomes ineffective, until there is a subsequent change in ownership.
- Contains provisions to resolve conflicts with AB 1516 (Committee on Revenue & Taxation).
- Makes technical changes.
Background.
Active Solar Energy System New Construction Exclusion. Under current law, installing a qualifying solar energy system does not result in either an increase or a decrease in the assessment of the existing property, unlike other physical additions to real property, which are assessed at current market value and whose value is added to the existing base year value of the real property. Only active solar energy systems, fire sprinkler systems, seismic retrofits, disabled access improvements, and rainwater capture systems have similar treatment under the Constitution and statute. While the exclusion applies to “new construction,” it is not an exclusion from “change of ownership.” As a result, the exclusion terminates when the property is sold to a new owner.
In 2022, the Senate approved SB 1340 (Hertzberg), which both extended the active solar energy system’s new construction exclusion, and established a new category for “nonqualified active solar energy systems,” defined as one that qualifies under current law with a rated nameplate capacity of 20 megawatts of alternating current or higher. The measure then applied a partial exclusion, as well as boutique assessment methods, for these larger nonqualified systems. After these provisions were removed in the Assembly, the Legislature then enacted an extension to the long-standing exclusion, which is set to be repealed on January 1, 2027.
When the Senate approved this bill earlier this year, it provided that systems remain excluded if qualified for the current exclusion before January 1, 2027. It then enacted a more limited exclusion that applied to systems attached to residences, or located on the same or a contiguous assessor’s parcel and serve those residences. This bill provided the same treatment for commercial buildings up to one megawatt of alternating current, and sometimes more, so long as the system exclusively serves the commercial building, or is enrolled in a Net Energy Metering (NEM) program, or both. This bill presumed systems with capacities above one megawatt were taxable, which a property owner can overcome if they can demonstrate that the system exclusively serves the commercial building, or is enrolled in a NEM program, or both. This bill’s new exclusion would have applied commencing on January 1, 2027.
The author further modified this bill’s new exclusion before it was approved by the Assembly Revenue & Taxation Committee. However, the Assembly Appropriations Committee deleted the new exclusion in the 9/2/25 amendments.
AB 1516. On July 28, 2025, Governor Newsom signed AB 1516 (Committee on Revenue & Taxation), which amended the same section as SB 710 to provide that property owners have three years from the date of purchase to file a claim for the active solar energy exclusion that applies retroactively to the date construction is completed. AB 1516 provided that this change became operative on January 1, 2027; however, this change will not become operative under current law because current law contains a January 1, 2027, repeal date. This bill instead provides that the exclusion shall only remain in effect until January 1, 2027, on which date AB 1516’s change becomes operative, thereby setting a three year limit for first buyers to file a claim for the active solar energy exclusion that applies retroactively to the date construction is completed.
FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No
According to the Assembly Appropriations Committee, the 7/16/25 version of SB 710:
- Annual property tax revenue loss of at least $11 million. The State Board of Equalization (BOE) notes that the revenue estimate was developed based on ASES volume and costs related to the new construction of single-family and multi-family homes. Since the estimate does not account for qualifying roof retrofits or ASES installations on commercial structures, the revenue estimate is understated. Although this bill specifies that the state is prohibited from reimbursing any local agency for lost property tax revenues and property tax is a local government revenue source, reductions in property tax revenues increase Proposition 98 General Fund (GF) spending by up to roughly 50% (the exact amount depends on the specific amount of the annual Proposition 98 guarantee).
- Costs of approximately $9,200 in FY 2025-26, $3,400 in FY 2026-27, and $2,300 in FY 2027-28 to BOE to issue guidance to county assessors and update informational materials (GF).
- Costs of an unknown amount to county assessors to modify assessment practices. If the Commission on State Mandates determines the provisions of this bill create a new program or impose a higher level of service for which the state must reimburse local costs, counties could claim reimbursement from the state (GF).
SUPPORT: (Verified 9/8/25)
Environment California (source)
OPPOSITION: (Verified 9/8/25)
None received
ARGUMENTS IN SUPPORT: According to the author, “For 25 years, homeowners, small businesses, schools, farms, churches and many others have benefited from a tax exclusion that prevented the cost of solar panels and storage from being added to the building value for the assessment of property taxes. Combined with other state incentives, this ‘behind-the-meter’ exclusion has made solar installation more accessible to those who otherwise would not have been able to afford the upfront costs, with solar panels added to two million roofs in California. This bill maintains the grandfather clause for this exclusion for owners of solar systems installed before January 1, 2027, which otherwise would have
been repealed from code. These early adopters paved the way to California’s status as the state with the highest solar capacity in the nation.”
Prepared by: Colin Grinnell / REV. & TAX. / (916) 651-4117
9/9/25 14:46:12
**** END ****
SENATE THIRD READING
STR Bill Id:SB 710
Author:(Blakespear)
As Amended Ver:September 5, 2025
Majority vote
SUMMARY
Removes the repeal date for provisions governing the active solar energy system property tax exclusion, but maintains existing law by retaining the inoperative date of January 1, 2027, and includes double-jointing language to avoid a conflict with provisions adopted in AB 1516 (Committee on Revenue and Taxation), Chapter 72, Statutes of 2025.
Major Provisions
COMMENTS
- ASES exclusion: Existing law authorizes a new construction exclusion for an ASES. In other words, the value attributable to an ASES is not included in the assessed value of a property. Certain portions of the system that are not directly part of the ASES itself, but that are used for specified purposes are also excluded, as restricted. These provisions addressing portions not directly a part of the ASES itself have been in existence since 1998.
Additionally, the Legislature has authorized a builder's exclusion and initial purchaser exclusion for the ASES. Thus, a developer would normally be reassessed upon completing the construction of their development and pay tax on that assessed value. Existing law excludes the value derived from an ASES in that reassessment, subject to certain requirements. Moreover, when a developer sells a property to the initial purchaser of the property, the value of the ASES is also excluded from the reassessment resulting from the property changing ownership. Any subsequent changes in ownership are subject to reassessment at full value, absent any other exclusion or base year value transfer applying to that change in ownership. Thus, the ASES exclusion become inoperative beginning January 1, 2027, and any exclusion applied to a property is retained until a subsequent change in ownership.
According to the Author
For 25 years, homeowners, small businesses, schools, farms, churches and many others have benefited from a tax exclusion that prevented the cost of solar panels and storage from being added to the building value for the assessment of property taxes. Combined with other state incentives, this "behind-the-meter" exclusion has made solar installation more accessible to those who otherwise would not have been able to afford the upfront costs, with solar panels added to two million roofs in California.
This bill maintains the grandfather clause for this exclusion for owners of solar systems installed before January 1, 2027, which otherwise would have been repealed from code.
Arguments in Support
None on file
Arguments in Opposition
None on file
FISCAL COMMENTS
- Potential costs of an unknown amount to the State Board of Equalization to issue guidance to county assessors and update informational materials (GF).
VOTES
SENATE FLOOR: 39-0-1
YES: Allen, Alvarado-Gil, Archuleta, Arreguín, Ashby, Becker, Blakespear, Cabaldon, Caballero, Cervantes, Choi, Cortese, Dahle, Durazo, Gonzalez, Grayson, Grove, Hurtado, Jones, Laird, Limón, McGuire, McNerney, Menjivar, Niello, Ochoa Bogh, Padilla, Pérez, Richardson, Rubio, Seyarto, Smallwood-Cuevas, Stern, Strickland, Umberg, Valladares, Wahab, Weber Pierson, Wiener
ABS, ABST OR NV: Reyes
ASM REVENUE AND TAXATION: 4-0-3
YES: Gipson, Bains, Carrillo, Quirk-Silva
ABS, ABST OR NV: Ta, DeMaio, McKinnor
ASM APPROPRIATIONS: 10-0-5
YES: Wicks, Arambula, Caloza, Elhawary, Fong, Mark González, Ahrens, Pacheco, Pellerin, Solache
ABS, ABST OR NV: Sanchez, Calderon, Dixon, Ta, Tangipa
UPDATED
VERSION: September 5, 2025
CONSULTANT: Harrison Bowlby / REV. & TAX. / (916) 319-2098 FN: 0001785
SENATE THIRD READING
STR Bill Id:SB 710
Author:(Blakespear)
As Amended Ver:September 2, 2025
Majority vote
SUMMARY
Removes the repeal date for provisions governing the active solar energy system property tax exclusion, but maintains existing law by retaining the inoperative date of January 1, 2027, and includes double-jointing language to avoid a conflict with provisions adopted in AB 1516 (Committee on Revenue and Taxation), Chapter 72, Statutes of 2025.
Major Provisions
COMMENTS
- ASES exclusion: Existing law authorizes a new construction exclusion for an ASES. In other words, the value attributable to an ASES is not included in the assessed value of a property. Certain portions of the system that are not directly part of the ASES itself, but that are used for specified purposes are also excluded, as restricted. These provisions addressing portions not directly a part of the ASES itself have been in existence since 1998.
Additionally, the Legislature has authorized a builder's exclusion and initial purchaser exclusion for the ASES. Thus, a developer would normally be reassessed upon completing the construction of their development and pay tax on that assessed value. Existing law excludes the value derived from an ASES in that reassessment, subject to certain requirements. Moreover, when a developer sells a property to the initial purchaser of the property, the value of the ASES is also excluded from the reassessment resulting from the property changing ownership. Any subsequent changes in ownership are subject to reassessment at full value, absent any other exclusion or base year value transfer applying to that change in ownership. Thus, the ASES exclusion become inoperative beginning January 1, 2027, and any exclusion applied to a property is retained until a subsequent change in ownership.
According to the Author
For 25 years, homeowners, small businesses, schools, farms, churches and many others have benefited from a tax exclusion that prevented the cost of solar panels and storage from being added to the building value for the assessment of property taxes. Combined with other state incentives, this "behind-the-meter" exclusion has made solar installation more accessible to those who otherwise would not have been able to afford the upfront costs, with solar panels added to two million roofs in California.
This bill maintains the grandfather clause for this exclusion for owners of solar systems installed before January 1, 2027, which otherwise would have been repealed from code.
Arguments in Support
None on file
Arguments in Opposition
None on file
FISCAL COMMENTS
Potential costs of an unknown amount to the State Board of Equalization to issue guidance to county assessors and update informational materials (GF).
VOTES
SENATE FLOOR: 39-0-1
YES: Allen, Alvarado-Gil, Archuleta, Arreguín, Ashby, Becker, Blakespear, Cabaldon, Caballero, Cervantes, Choi, Cortese, Dahle, Durazo, Gonzalez, Grayson, Grove, Hurtado, Jones, Laird, Limón, McGuire, McNerney, Menjivar, Niello, Ochoa Bogh, Padilla, Pérez, Richardson, Rubio, Seyarto, Smallwood-Cuevas, Stern, Strickland, Umberg, Valladares, Wahab, Weber Pierson, Wiener
ABS, ABST OR NV: Reyes
ASM REVENUE AND TAXATION: 4-0-3
YES: Gipson, Bains, Carrillo, Quirk-Silva
ABS, ABST OR NV: Ta, DeMaio, McKinnor
ASM APPROPRIATIONS: 10-0-5
YES: Wicks, Arambula, Caloza, Elhawary, Fong, Mark González, Ahrens, Pacheco, Pellerin, Solache
ABS, ABST OR NV: Sanchez, Calderon, Dixon, Ta, Tangipa
UPDATED
VERSION: September 2, 2025
CONSULTANT: Harrison Bowlby / REV. & TAX. / (916) 319-2098 FN: 0001510
Date of Hearing: August 20, 2025
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Buffy Wicks, Chair
SBPCA Bill Id:SB 710
Author:(Blakespear) – As Amended Ver:July 16, 2025
Policy Committee: | Revenue and Taxation | Vote: | 4 - 0 |
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Urgency: No State Mandated Local Program: Yes Reimbursable: Yes
SUMMARY:
This bill authorizes a new active solar energy system (ASES) property tax exclusion limited to smaller scale systems to replace the existing ASES exclusion, which is applicable to property tax lien dates through fiscal year (FY) 2025-26.
Specifically, this bill:
- Removes the January 1, 2027, repeal date for the existing ASES exclusion and provides that an ASES that qualifies for the existing exclusion prior to January 1, 2027, must continue to receive the exclusion until a subsequent change in ownership.
- Authorizes a new ASES exclusion for a “qualified ASES” applicable to property tax lien dates on or after January 1, 2026, but before January 1, 2031.
- Requires a “qualified ASES” be one of the following:
- Physically attached to a residential dwelling or to a structure on the same assessor’s parcel, or not physically attached but located on the same assessor’s parcel, located on a continuous assessor’s parcel, or part of the same appraisal unit as the dwelling; and distributes solar energy to that dwelling only.
- Located on the same assessor’s parcel as a nonresidential customer, located on a contiguous assessor’s parcel to the nonresidential customer, or part of the same appraisal unit as the nonresidential customer; distributes solar energy to that customer; and has a rated nameplate capacity of one megawatt (MW) of alternating current or lower.
FISCAL EFFECT:
- Annual property tax revenue loss of at least $11 million. The State Board of Equalization (BOE) notes that the revenue estimate was developed based on ASES volume and costs related to the new construction of single-family and multi-family homes. Since the estimate does not account for qualifying roof retrofits or ASES installations on commercial structures, the revenue estimate is understated. Although this bill specifies that the state is prohibited from reimbursing any local agency for lost property tax revenues and property tax is a local government revenue source, reductions in property tax revenues increase Proposition 98 General Fund (GF) spending by up to roughly 50% (the exact amount depends on the specific amount of the annual Proposition 98 guarantee).
- Costs of approximately $9,200 in FY 2025-26, $3,400 in FY 2026-27, and $2,300 in FY 2027-28 to BOE to issue guidance to county assessors and update informational materials (GF).
- Costs of an unknown amount to county assessors to modify assessment practices. If the Commission on State Mandates determines the provisions of this bill create a new program or impose a higher level of service for which the state must reimburse local costs, counties could claim reimbursement from the state (GF).
COMMENTS:
- Purpose. The author notes that “state incentives for solar have diminished in recent years.” According to the author:
A metering regulation change allowed utilities to charge solar-owning customers more for access to the electric grid, while refunding less for energy returned to the grid. Although solar is still a net benefit, both economically and environmentally, this change negatively affected adoption rates at a time when the state is struggling to meet its climate goals.
Now, more than ever, it is important to maintain this crucial exclusion that makes the solar transition more affordable for individuals, businesses, schools and others and helps the state meet its clean energy goals.
- Background. Solar Exclusion. Existing law excludes, through FY 2025-26, the construction or addition of any ASES, from rooftop solar on a single-family home to a large-scale solar farm, from the definition of “new construction,” that would otherwise require an assessor to reappraise property at a higher value. The ASES exclusion ends when ownership of the system changes, triggering assessment of the system’s value for property tax purposes. This bill allows the existing exclusion to sunset, but provides that an ASES qualifying for the existing exclusion prior to January 1, 2027, continues to receive the exclusion until a subsequent change in ownership. This bill creates a new exclusion to replace the expiring exclusion, but limits the exclusion to a qualified ASES on a residential property or nonresidential property with a smaller system of one MW or lower.
Decades Later. Since the enactment of the original exclusion nearly 45 years ago, California has accelerated its clean energy goals. New policies include a commitment to reaching 100% renewable and zero-carbon electricity and 100% zero-emission medium- and heavy-duty vehicles by 2045, which necessitate an increase in generation from clean energy sources and increase market opportunities for larger scale system owners. Solar has also been mandated for new single-family homes and multi-family residences up to three stories high since 2020 and requirements for new commercial buildings took effect in 2023. Generally, tax incentives are conferred to incentivize voluntary behavior deemed beneficial for the public good. To the extent existing law effectively requires installation of solar systems, this bill could provide a windfall for legally mandated behavior.
- Support and Opposition. This bill is supported by a coalition of environmental groups and clean energy associations, which argues, “SB 710 would not continue the property tax exclusion for utility-scale solar farms, which are major construction projects that fundamentally alter a location. Rooftop solar is an appliance.” This bill is also supported by agriculture associations and other business groups.
This bill is opposed by the California Large Energy Consumers Association (CLECA), unless amended to reverse a recent amendment to this bill that removed an ASES with a rated nameplate capacity of five MW of alternating current or higher from the exclusion, arguing, “This threshold effectively excludes most – if not all – CLECA members, whose energy demands require significantly larger systems.” This bill is also opposed by utility labor organizations.
- Prior Legislation. SB 1340 (Hertzberg), Chapter 425, Statutes of 2022, extended the existing ASES exclusion by two years to apply to property tax lien dates through FY 2025-26.
Analysis Prepared by: Irene Ho / APPR. / (916) 319-2081
Date of Hearing: July 14, 2025
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Mike Gipson, Chair
SBPCA Bill Id:SB 710
Author:(Blakespear) – As Amended Ver:July 8, 2025
SUSPENSE
Majority vote. Tax levy. Fiscal committee.
SENATE VOTE: 39-0
SUBJECT: Property taxation: active solar energy systems: extension
SUMMARY: Authorizes a new active solar energy system (ASES) property tax exclusion. Specifically, this bill:
- Authorizes an exclusion from the definition of "new construction" the construction or addition of a "qualified active solar energy system (QASES)," for tax lien dates occurring on or after January 1, 2026 but before January 1, 2031.
- Defines a "QASES" as 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. Additionally, a QASES must either:
- Be physically attached to a "residential dwelling" or dwellings, or to a structure on the same assessor's parcel as the dwelling or dwellings, or if not physically attached but located on the same assessor's parcel, must be located on a contiguous assessor's parcel, or be part of the same appraisal unit as the dwelling or dwellings, and distributes solar energy to those dwellings and, if applicable, structures; or,
- Be located on the same assessor's parcel as a nonresidential "customer," be located on a contiguous assessor's parcel to the nonresidential customer, or be part of the same appraisal unit as the nonresidential customer, distribute solar energy to that customer pursuant to an agreement with an electrical corporation, as defined in existing law, that complies with the [California] Public Utilities Commission (CPUC) Electric Rule 21, or have a total capacity of one MW of alternating current, or lower. A system associated with a nonresidential customer that does not meet the above requirements is rebuttably presumed not to be a QASES. This presumption may be overcome by providing evidence of a net energy metering (NEM) tariff or contract that provides solar energy to the nonresidential customer pursuant to existing law, or evidence that the system exclusively provides solar energy to the nonresidential customer. A QASES associated with a nonresidential customer that has a rated nameplate capacity of five MW of alternating current or higher is excluded from the definition of a "qualified active solar energy system." A "customer" is defined as the recipient of the energy generated by the system, except for a parcel with multiple customers, in which case a customer shall be considered "nonresidential" if the customer consists of nonresidential uses only, or a mix of residential and nonresidential uses, with less than two-thirds of the square footage of the development designated for residential uses.
- Excludes from the definition of a "qualified active solar energy system" a solar swimming pool heater or hot tub heater.
- Provides that a "QASES" may be used for any of the following:
- Domestic, recreational, therapeutic, or service water heating;
- Space conditioning;
- Production of electricity;
- Process heat; or,
- Solar mechanical energy.
- Defines, for the purposes of this bill, "occupy or use" by reference to existing law.
- Provides that a qualified active solar energy system that uses solar energy in the production of electricity includes the 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, a qualified 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. "Parts" includes spare parts that are owned by the owner of, or the maintenance contractor for, a qualified 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 a qualified 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 bill.
- Provides that a qualified 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 qualified active solar energy system property only to the extent of 75% of their full cash value.
- Provides a "builder's exclusion" and "initial purchaser exclusion" to a QASES in the same manner as existing law provides those exclusions to an ASES. The State Board of Equalization (BOE), in consultation with the California Assessors' Association, must prescribe the manner, documentation, and form for claiming the "builder's exclusion" or "initial purchaser exclusion."
- Establishes a three-year deadline to claim the "builder's exclusion" and "initial purchaser exclusion." These exclusions are authorized if a claim is filed after the 3-year deadline established by this bill, but the exclusion only applies to the lien date of the assessment year in which the claim is filed.
- Provides that, notwithstanding any other law, the QASES exclusion proposed in this bill remains in effect only until there is a subsequent change in ownership.
- Provides that this bill's provisions apply to property tax lien dates occurring on or after January 1, 2026, but before January 1, 2027.
- Provides that a QASES qualifying for an exclusion under this bill prior to January 1, 2031, continues to be excluded on and after January 1, 2031, until a subsequent change in ownership occurs.
- Provides that Revenue and Taxation Code (R&TC) Section 41 does not apply to this bill.
- Prohibits the state from reimbursing any local agency for lost property tax revenues resulting from this bill's provisions.
- Requires the state to reimburse local agencies and school districts if the Commission on State Mandates determines that this bill contains costs mandated by the state.
- Takes immediate effect as a tax levy.
EXISTING LAW:
- Provides that all property is taxable unless otherwise provided by the California Constitution or the laws of the United States. (California Constitution, Article XIII, Section 1.)
- Limits the maximum amount of ad valorem property taxation to 1% of the full cash value of the property. Generally, the Constitution restricts the full cash value of a property to the assessed value upon a change of ownership in, or new construction on, the property. This is referred to as the base year value, which may be adjusted upwards for inflation at no more than 2% annually. (California Constitution, Article XIIIA, Sections 1 and 2.)
- Authorizes the Legislature to exclude from the definition of new construction the construction or addition of an active solar energy system. (California Constitution, Article XIII, Section 2.) In implementing this authorization, the Legislature defines an "active solar energy system" as a system that upon completion of the construction of a system as part of a new property or the addition of a system to an existing property, 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. Solar swimming pool and hot tub heaters are explicitly excluded from the definition, and statute specifies that an active solar energy system may be used for domestic, recreational, therapeutic or service water heating, space conditioning, production of electricity, process heat, and solar mechanical energy. The Legislature further finds and declares that certain parts associated with the active solar energy system are within the exclusion, as specified. An ASES is eligible for a builder's exclusion, where a developer who intends to sell the property containing an ASES may claim the exclusion, and an initial purchaser exclusion, which transfers the excluded value to the first purchaser, ensuring that initial purchaser is not taxed on the value attributable to the ASES. These exclusions are subject to certain requirements and restrictions. The ASES exclusion remains in effect only until a subsequent change in ownership, and applies until, and including, property tax lien dates for the 2025-2026 fiscal year. The exclusion remains in effect only until January 1, 2027, except that an ASES excluded prior to this repeal date remains excluded, until a subsequent change in ownership. R&TC Section 41 does not apply to this exclusion. (R&TC Section 73.)
- Requires every electric utility, as defined, to develop a standard contract or tariff providing for NEM, among other provisions. An electric utility must make this contract or tariff available to eligible customer-generators, as defined. (Public Utilities Code Sections 2827 and 2827.1.)
- Requires that certain percentages of all retail sales of electricity to California end-use customers be supplied by eligible renewable energy and zero-carbon resources by specified dates. (Public Utilities Code Section 454.43.)
FISCAL EFFECT: The BOE, in its analysis of this bill, states that this bill would reduce property tax revenues by an estimated $11 million annually.
COMMENTS:
- The author has provided the following statement in support of this bill:
In order to meet our clean energy goals by 2045, California needs three times the amount of clean generation and eight times the amount of storage than we currently have, according to a joint report led by the California Energy Commission. Solar is a well-established alternative energy source that is crucial to achieving those goals.
For 25 years, homeowners, small businesses, schools, farms, churches and many others have benefited from a tax exclusion that prevented the cost of solar panels and storage from being added to the building value for the assessment of property taxes. Combined with other state incentives, this "behind-the-meter" exclusion has made solar installation more accessible to those who otherwise would not have been able to afford the upfront costs, with solar panels added to two million roofs in California.
However, state incentives for solar have diminished in recent years. A metering regulation change allowed utilities to charge solar-owning customers more for access to the electric grid, while refunding less for energy returned to the grid. Although solar is still a net benefit, both economically and environmentally, this change negatively affected adoption rates at a time when the state is struggling to meet its climate goals.
Now, more than ever, it is important to maintain this crucial exclusion that makes the solar transition more affordable for individuals, businesses, schools and others and helps the state meet its clean energy goals.
- A coalition of renewable electrical generation businesses and environmental advocacy groups, writing in support of this bill, state, in part:
Rooftop solar and storage is great for the state as a whole. Recent analysis shows that rooftop solar provided $1.5 billion worth of benefits for non-solar customers just in 2024. Especially when paired with batteries, solar projects also build more resilient communities by helping to keep the lights on during disasters like wildfires when utilities shut off the power. A new property tax would raise costs for property owners looking to help the environment and save on their electricity bills.
A new property tax would be particularly devastating for low-income communities. Some solar systems are fully subsidized by state programs for the lowest-income customers who cannot afford any amount of investment. Those programs would be undermined if the customers faced supplemental property tax assessments.
SB 710 would not continue the property tax exclusion for utility-scale solar farms, which are major construction projects that fundamentally alter a location. Rooftop solar is an appliance. Adding a room to a house triggers a supplemental property tax assessment, but putting solar on an existing roof does not need to get the same treatment.
- The California Large Energy Consumers Association (CLECA), writing in opposition to this bill, states, in part:
California's electric grid urgently needs an influx of clean energy to meet rising demand. Yet long delays in transmission upgrades and the interconnection queue threaten progress. One of the most effective solutions – installing clean energy resources directly at customer sites – enables faster deployment by expediting these infrastructure bottlenecks.
SB 710, as recently amended, will disincentivize investment in new, or the expansion of, solar projects by industrial customers, at a time when the state is mandating electrification. California has set goals to generate 60% of its electricity from renewable resources by 2030 and 100 percent by 2045. Many CLECA members are recognized as Energy Intensive and Trade Exposed by the California Air Resources Board, recognizing the high-energy requirements for these companies to make their products, high trade exposure, and their sensitivity to emissions leakage. SB 710 will be cutting off some of the state's largest industrial energy users from utilizing solar energy.
- Committee staff comments:
- ASES exclusion: Existing law authorizes a new construction exclusion for an ASES. In other words, the value attributable to an ASES is not included in the assessed value of a property. Certain portions of the system that are not directly part of the ASES itself, but that are used for specified purposes are also excluded, as restricted. These provisions addressing portions not directly a part of the ASES itself have been in existence since 1998.
Additionally, the Legislature has authorized a builder's exclusion and initial purchaser exclusion for the ASES. Thus, a developer would normally be reassessed upon completing the construction of their development and pay tax on that assessed value. Existing law excludes the value derived from an ASES in that reassessment, subject to certain requirements. Moreover, when a developer sells a property to the initial purchaser of the property, the value of the ASES is also excluded from the reassessment resulting from the property changing ownership. Any subsequent changes in ownership are subject to reassessment at full value, absent any other exclusion or base year value transfer applying to that change in ownership.
- Housing affordability crisis: California is in the midst of a housing affordability crisis. According to the Legislative Analyst's Office, prices for a California bottom-tier home, defined as those with values in the 5th to 35th percentile range, are now 32%t higher than a mid-tier home, defined as home values in the 35th to 65th percentile range, elsewhere in the nation[1].
- Aggressive climate change goals: In 2018, the Legislature passed SB 100 (De León), Chapter 312, Statutes of 2018, which required that retail electricity sales in the state be supplied by certain percentages of renewable and zero-carbon sources. Specifically, existing law requires the state to supply 60% of sales from renewable and zero-carbon sources by 2030, 90% by 2035, 95% by 2040, and 100% by 2045.
- Rooftop solar mandate: In the 2019 triennial edition of the California Building Standards Code, a new requirement mandated that all new construction occurring after January 1, 2020 include photovoltaic rooftop solar arrays. Thus, any newly constructed home, as defined, built during or after 2020 must include a photovoltaic solar energy system in its construction.
- NEM: Existing law directs every electric utility, as defined, to develop a standard contract or tariff providing for NEM, and requires an electric utility to make the standard contract or tariff available to eligible customer-generators, as defined. In other words, an owner that generates electricity on their property is eligible for compensation on the excess generation exported to the grid.
- CPUC Electric Rule 21: According to the CPUC, Electric Rule 21 is "a tariff that describes the interconnection, operating, and metering requirements for generation facilities to be connected to an investor-owned utility's public distribution system and transmission system over which the CPUC has jurisdiction."[2] In other words, Electric Rule 21 provides the means by which a facility generating electricity may safely and reliably provide electricity to the grid by interconnecting with the transmission and distribution systems of certain existing utility companies.
- Letter to assessors (LTA) 2024/031: In response to the passage of SB 1340 (Hertzberg), Chapter 425, Statutes of 2022, the BOE issued LTA 2024/031 providing guidance to assessors regarding the implementation of the exclusion's extension. In that letter, BOE staff note that the language in SB 1340 reflected long-standing drafting in the exclusion that is confusing. The exclusion has references to a "remain in effect only until" a specified date, and that the exclusion "apply to lien dates" for a corresponding fiscal year. Generally, the lien date corresponding to a given fiscal year is the January 1 of the same calendar year in which the fiscal year commences. Relevant to this bill, the property tax lien date for the 2025-26 fiscal year would be January 1, 2025. The existing exclusion, however, remains effective only until January 1, 2027. Given legislative inaction to remedy this discrepancy, the BOE has long interpreted, since the early 1990's, that the exclusion is available until the date listed on which the exclusion no longer becomes effective. The letter further states that construction added after January 1, 2026 and before December 31, 2026 is generally not excluded unless the construction is completed before January 1, 2027.
- This bill: As currently drafted, this bill would create a novel new construction exclusion for QASES, and apply this exclusion to property tax lien dates occurring on or after January 1, 2026, and before January 1, 2031. This new exclusion makes three deviations from existing law.
The first deviation limits the types of properties to which an eligible system may be attached and the generation capacity of the system. This bill provides that a QASES associated with a residential dwelling is eligible for this bill's exclusion. A QASES associated with a nonresidential customer, however, is subject to certain maximum MW generation limits and specified contracts. A system associated with a nonresidential customer is eligible if it generates one MW of electricity or less. A system that generates greater than one MW of electricity is presumed to not qualify, but may qualify if the claimant for the exclusion provides evidence that the system provides solar energy to a nonresidential customer pursuant to a NEM tariff or contract or evidence that the system provides solar energy exclusively for that nonresidential customer. A system generating five MW or more of electricity that is associated with a nonresidential customer is not eligible for this bill's exclusion.
The second deviation imposes a three-year deadline to claim the builder's exclusion or the initial purchaser exclusion. A claim for these exclusions would still be eligible after the three-year period, but would apply to lien dates for the assessment year in which the claim was made.
The third deviation deletes provisions that made legislative findings and declarations establishing a tax appraisal exclusion for certain parts related to the operation of a solar energy system, and other equipment that may be used in conjunction with a solar energy system.
- Restriction of the exclusion to certain uses: Committee staff notes that, on the one hand, the restriction of this bill's exclusion to certain residential uses would provide a tax benefit for compliance with a state mandate. Subsidizing compliance with requirements in law is generally counter to sound tax policy. On the other hand, California's aggressive policy goals to address climate change, coupled with an affordability crisis in housing supply, may warrant preferential tax treatment for the types of solar energy systems this bill addresses.
- Three-year deadline to claim certain exclusions: The deadline to claim the builder's exclusion and the initial purchaser exclusion are also contained in a bill authored by this Committee, AB 1516. To prevent a conflict in statute, the author and Committee may wish to consider amending this bill to reconcile the two bills.
- Deletion of existing findings and declarations: This bill's deletion of provisions making legislative findings and declarations regarding the treatment of certain parts appears to have been erroneously included in this bill's exclusion. This bill should be amended to reflect those provisions as they are currently stipulated in existing law.
- Related legislation: AB 1516 (Committee on Revenue and Taxation) would, among other provisions, establish a three-year deadline to claim the builder's exclusion and the initial purchaser exclusion under the ASES exclusion, beginning for lien dates occurring on or after January 1, 2027. AB 1516 is currently pending a hearing by the Senate Committee on Appropriations.
- Previous legislation: SB 1340 (Hertzberg), Chapter 425, Statutes of 2022, extended the existing ASES by two years such that it sunsets on January 1, 2027.
REGISTERED SUPPORT / OPPOSITION:
Support
California Apartment Association
San Diego Community Power
Opposition
None on file
Analysis Prepared by: Harrison Bowlby / REV. & TAX. / (916) 319-2098
Bentz, California Housing Affordability Tracker (1st Quarter 2025), Legislative Analyst's Office (April 21, 2025). https://lao.ca.gov/LAOEconTax/Article/Detail/793, accessed June 2025. ↑
CPUC, Electric Rule 21: Generating Facility Interconnection. https://www.cpuc.ca.gov/Rule21/, accessed June 2025. ↑
Date of Hearing: June 30, 2025
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Mike Gipson, Chair
SBPCA Bill Id:SB 710
Author:(Blakespear) – As Amended Ver:June 23, 2025
Majority vote. Tax levy. Fiscal committee.
SENATE VOTE: 39-0
SUBJECT: Property taxation: active solar energy systems: extension
SUMMARY: Authorizes a new active solar energy system (ASES) property tax exclusion. Specifically, this bill:
- Authorizes an exclusion from the definition of "new construction" the construction or addition of a "qualified solar energy system (QSES)," for tax lien dates occurring on or after January 1, 2027.
- Defines a "QSES" as 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. Additionally, a QSES must either:
- Be physically attached to a "residential dwelling" or dwellings, or to a structure on the same assessor's parcel as the dwelling or dwellings, or if not physically attached but located on the same assessor's parcel, must be located on a contiguous assessor's parcel, or be part of the same appraisal unit as the dwelling or dwellings, and distributes solar energy to those dwellings and, if applicable, structures; or,
- Be located on the same assessor's parcel as a nonresidential "customer," be located on a contiguous assessor's parcel to the nonresidential customer, or be part of the same appraisal unit as the nonresidential customer, distribute solar energy to that customer pursuant to an agreement with an electrical corporation, as defined in existing law, that complies with the [California] Public Utilities Commission (CPUC) Electric Rule 21, or have a total capacity of one MW of alternating current, or lower. A system associated with a nonresidential customer that does not meet the above requirements is rebuttably presumed not to be a QSES. This presumption may be overcome by providing evidence of a net energy metering (NEM) tariff or contract that provides solar energy to the nonresidential customer pursuant to existing law, or evidence that the system exclusively provides solar energy to the nonresidential customer. A QSES associated with a nonresidential customer that has a rated nameplate capacity of five MW of alternating current or higher is excluded from the definition of a "qualified active solar energy system." A "customer" is defined as the recipient of the energy generated by the system, except for a parcel with multiple customers, in which case a customer shall be considered "nonresidential" if the customer consists of nonresidential uses only, or a mix of residential and nonresidential uses, with less than two-thirds of the square footage of the development designated for residential uses.
- Excludes from the definition of a "qualified active solar energy system" a solar swimming pool heater or hot tub heater.
- Provides that a "qualified active solar energy system" may be used for any of the following:
- Domestic, recreational, therapeutic, or service water heating;
- Space conditioning;
- Production of electricity;
- Process heat; or,
- Solar mechanical energy.
- Defines, for the purposes of this bill, "occupy or use" by reference to existing law.
- Provides that a qualified active solar energy system that uses solar energy in the production of electricity includes the 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, a qualified 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. "Parts" includes spare parts that are owned by the owner of, or the maintenance contractor for, a qualified 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 a qualified 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 bill.
- Provides that a qualified 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 qualified active solar energy system property only to the extent of 75% of their full cash value.
- Provides a "builder's exclusion" and "initial purchaser exclusion" to a QSES in the same manner as existing law provides those exclusions to an ASES. The State Board of Equalization (BOE), in consultation with the California Assessors' Association, must prescribe the manner, documentation, and form for claiming the "builder's exclusion" or "initial purchaser exclusion."
- Establishes a three-year deadline to claim the "builder's exclusion" and "initial purchaser exclusion." These exclusions are authorized if a claim is filed after the 3-year deadline established by this bill, but the exclusion only applies to the lien date of the assessment year in which the claim is filed.
- Provides that, notwithstanding any other law, the QSES exclusion proposed in this bill remains in effect only until there is a subsequent change in ownership.
- Provides that this bill's provisions apply to property tax lien dates occurring on or after January 1, 2026.
- Provides that Revenue and Taxation Code (R&TC) Section 41 does not apply to this bill.
- Prohibits the state from reimbursing any local agency for lost property tax revenues resulting from this bill's provisions.
- Requires the state to reimburse local agencies and school districts if the Commission on State Mandates determines that this bill contains costs mandated by the state.
- Takes immediate effect as a tax levy.
EXISTING LAW:
- Provides that all property is taxable unless otherwise provided by the California Constitution or the laws of the United States. (California Constitution, Article XIII, Section 1.)
- Limits the maximum amount of ad valorem property taxation to 1% of the full cash value of the property. Generally, the Constitution restricts the full cash value of a property to the assessed value upon a change of ownership in, or new construction on, the property. This is referred to as the base year value, which may be adjusted upwards for inflation at no more than 2% annually. (California Constitution, Article XIIIA, Sections 1 and 2.)
- Authorizes the Legislature to exclude from the definition of new construction the construction or addition of an active solar energy system. (California Constitution, Article XIII, Section 2.) In implementing this authorization, the Legislature defines an "active solar energy system" as a system that upon completion of the construction of a system as part of a new property or the addition of a system to an existing property, 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. Solar swimming pool and hot tub heaters are explicitly excluded from the definition, and statute specifies that an active solar energy system may be used for domestic, recreational, therapeutic or service water heating, space conditioning, production of electricity, process heat, and solar mechanical energy. The Legislature further finds and declares that certain parts associated with the active solar energy system are within the exclusion, as specified. An ASES is eligible for a builder's exclusion, where a developer who intends to sell the property containing an ASES may claim the exclusion, and an initial purchaser exclusion, which transfers the excluded value to the first purchaser, ensuring that initial purchaser is not taxed on the value attributable to the ASES. These exclusions are subject to certain requirements and restrictions. The ASES exclusion remains in effect only until a subsequent change in ownership, and applies until, and including, property tax lien dates for the 2025-2026 fiscal year. The exclusion remains in effect only until January 1, 2027, except that an ASES excluded prior to this repeal date remains excluded, until a subsequent change in ownership. R&TC Section 41 does not apply to this exclusion. (R&TC Section 73.)
- Requires every electric utility, as defined, to develop a standard contract or tariff providing for NEM, among other provisions. An electric utility must make this contract or tariff available to eligible customer-generators, as defined. (Public Utilities Code Sections 2827 and 2827.1.)
- Requires that certain percentages of all retail sales of electricity to California end-use customers be supplied by eligible renewable energy and zero-carbon resources by specified dates. (Public Utilities Code Section 454.43.)
FISCAL EFFECT: The BOE, in its analysis of this bill, states that this bill would reduce property tax revenues by an estimated $11 million annually.
COMMENTS:
- The author has provided the following statement in support of this bill:
In order to meet our clean energy goals by 2045, California needs three times the amount of clean generation and eight times the amount of storage than we currently have, according to a joint report led by the California Energy Commission. Solar is a well-established alternative energy source that is crucial to achieving those goals.
For 25 years, homeowners, small businesses, schools, farms, churches and many others have benefited from a tax exclusion that prevented the cost of solar panels and storage from being added to the building value for the assessment of property taxes. Combined with other state incentives, this "behind-the-meter" exclusion has made solar installation more accessible to those who otherwise would not have been able to afford the upfront costs, with solar panels added to two million roofs in California.
However, state incentives for solar have diminished in recent years. A metering regulation change allowed utilities to charge solar-owning customers more for access to the electric grid, while refunding less for energy returned to the grid. Although solar is still a net benefit, both economically and environmentally, this change negatively affected adoption rates at a time when the state is struggling to meet its climate goals.
Now, more than ever, it is important to maintain this crucial exclusion that makes the solar transition more affordable for individuals, businesses, schools and others and helps the state meet its clean energy goals.
- A coalition of renewable electrical generation businesses and environmental advocacy groups, writing in support of this bill, state, in part:
Rooftop solar and storage is great for the state as a whole. Recent analysis shows that rooftop solar provided $1.5 billion worth of benefits for non-solar customers just in 2024. Especially when paired with batteries, solar projects also build more resilient communities by helping to keep the lights on during disasters like wildfires when utilities shut off the power. A new property tax would raise costs for property owners looking to help the environment and save on their electricity bills.
A new property tax would be particularly devastating for low-income communities. Some solar systems are fully subsidized by state programs for the lowest-income customers who cannot afford any amount of investment. Those programs would be undermined if the customers faced supplemental property tax assessments.
SB 710 would not continue the property tax exclusion for utility-scale solar farms, which are major construction projects that fundamentally alter a location. Rooftop solar is an appliance. Adding a room to a house triggers a supplemental property tax assessment, but putting solar on an existing roof does not need to get the same treatment.
- The California Large Energy Consumers Association (CLECA), writing in opposition to this bill, states, in part:
California's electric grid urgently needs an influx of clean energy to meet rising demand. Yet long delays in transmission upgrades and the interconnection queue threaten progress. One of the most effective solutions – installing clean energy resources directly at customer sites – enables faster deployment by expediting these infrastructure bottlenecks.
SB 710, as recently amended, will disincentivize investment in new, or the expansion of, solar projects by industrial customers, at a time when the state is mandating electrification. California has set goals to generate 60% of its electricity from renewable resources by 2030 and 100 percent by 2045. Many CLECA members are recognized as Energy Intensive and Trade Exposed by the California Air Resources Board, recognizing the high-energy requirements for these companies to make their products, high trade exposure, and their sensitivity to emissions leakage. SB 710 will be cutting off some of the state's largest industrial energy users from utilizing solar energy.
- Committee staff comments:
- ASES exclusion: Existing law authorizes a new construction exclusion for an ASES. In other words, the value attributable to an ASES is not included in the assessed value of a property. Certain portions of the system that are not directly part of the ASES itself, but that are used for specified purposes are also excluded, as restricted. These provisions addressing portions not directly a part of the ASES itself have been in existence since 1998.
Additionally, the Legislature has authorized a builder's exclusion and initial purchaser exclusion for the ASES. Thus, a developer would normally be reassessed upon completing the construction of their development and pay tax on that assessed value. Existing law excludes the value derived from an ASES in that reassessment, subject to certain requirements. Moreover, when a developer sells a property to the initial purchaser of the property, the value of the ASES is also excluded from the reassessment resulting from the property changing ownership. Any subsequent changes in ownership are subject to reassessment at full value, absent any other exclusion or base year value transfer applying to that change in ownership.
- Housing affordability crisis: California is in the midst of a housing affordability crisis. According to the Legislative Analyst's Office, prices for a California bottom-tier home, defined as those with values in the 5th to 35th percentile range, are now 32%t higher than a mid-tier home, defined as home values in the 35th to 65th percentile range, elsewhere in the nation[1].
- Aggressive climate change goals: In 2018, the Legislature passed SB 100 (De León), Chapter 312, Statutes of 2018, which required that retail electricity sales in the state be supplied by certain percentages of renewable and zero-carbon sources. Specifically, existing law requires the state to supply 60% of sales from renewable and zero-carbon sources by 2030, 90% by 2035, 95% by 2040, and 100% by 2045.
- Rooftop solar mandate: In the 2019 triennial edition of the California Building Standards Code, a new requirement mandated that all new construction occurring after January 1, 2020 include photovoltaic rooftop solar arrays. Thus, any newly constructed home, as defined, built during or after 2020 must include a photovoltaic solar energy system in its construction.
- NEM: Existing law directs every electric utility, as defined, to develop a standard contract or tariff providing for NEM, and requires an electric utility to make the standard contract or tariff available to eligible customer-generators, as defined. In other words, an owner that generates electricity on their property is eligible for compensation on the excess generation exported to the grid.
- CPUC Electric Rule 21: According to the CPUC, Electric Rule 21 is "a tariff that describes the interconnection, operating, and metering requirements for generation facilities to be connected to an investor-owned utility's public distribution system and transmission system over which the CPUC has jurisdiction."[2] In other words, Electric Rule 21 provides the means by which a facility generating electricity may safely and reliably provide electricity to the grid by interconnecting with the transmission and distribution systems of certain existing utility companies.
- Letter to assessors (LTA) 2024/031: In response to the passage of SB 1340 (Hertzberg), Chapter 425, Statutes of 2022, the BOE issued LTA 2024/031 providing guidance to assessors regarding the implementation of the exclusion's extension. In that letter, BOE staff note that the language in SB 1340 reflected long-standing drafting in the exclusion that is confusing. The exclusion has references to a "remain in effect only until" a specified date, and that the exclusion "apply to lien dates" for a corresponding fiscal year. Generally, the lien date corresponding to a given fiscal year is the January 1 of the same calendar year in which the fiscal year commences. Relevant to this bill, the property tax lien date for the 2025-26 fiscal year would be January 1, 2025. The existing exclusion, however, remains effective only until January 1, 2027. Given legislative inaction to remedy this discrepancy, the BOE has long interpreted, since the early 1990's, that the exclusion is available until the date listed on which the exclusion no longer becomes effective. The letter further states that construction added after January 1, 2026 and before December 31, 2026 is generally not excluded unless the construction is completed before January 1, 2027.
- This bill: As currently drafted, this bill would create a novel new construction exclusion for QSES, and apply this exclusion to property tax lien dates occurring on or after January 1, 2026. This new exclusion makes three deviations from existing law.
The first deviation limits the types of properties to which an eligible system may be attached and the generation capacity of the system. This bill provides that a QSES associated with a residential dwelling is eligible for this bill's exclusion. A QSES associated with a nonresidential customer, however, is subject to certain maximum MW generation limits and specified contracts. A system associated with a nonresidential customer is eligible if it generates one MW of electricity or less. A system that generates greater than one MW of electricity is presumed to not qualify, but may qualify if the claimant for the exclusion provides evidence that the system provides solar energy to a nonresidential customer pursuant to a NEM tariff or contract or evidence that the system provides solar energy exclusively for that nonresidential customer. A system generating five MW or more of electricity that is associated with a nonresidential customer is not eligible for this bill's exclusion.
The second deviation imposes a three-year deadline to claim the builder's exclusion or the initial purchaser exclusion. A claim for these exclusions would still be eligible after the three-year period, but would apply to lien dates for the assessment year in which the claim was made.
The third deviation deletes provisions that made legislative findings and declarations establishing a tax appraisal exclusion for certain parts related to the operation of a solar energy system, and other equipment that may be used in conjunction with a solar energy system.
- Restriction of the exclusion to certain uses: Committee staff notes that, on the one hand, the restriction of this bill's exclusion to certain residential uses would provide a tax benefit for compliance with a state mandate. Subsidizing compliance with requirements in law is generally counter to sound tax policy. On the other hand, California's aggressive policy goals to address climate change, coupled with an affordability crisis in housing supply, may warrant preferential tax treatment for the types of solar energy systems this bill addresses.
- Three-year deadline to claim certain exclusions: The deadline to claim the builder's exclusion and the initial purchaser exclusion are also contained in a bill authored by this Committee, AB 1516. To prevent a conflict in statute, the author and Committee may wish to consider amending this bill to reconcile the two bills.
- Deletion of existing findings and declarations: This bill's deletion of provisions making legislative findings and declarations regarding the treatment of certain parts appears to have been erroneously included in this bill's exclusion. This bill should be amended to reflect those provisions as they are currently stipulated in existing law.
- Undefined terms: This bill provides a definition for a "qualified solar energy system," but uses this term interchangeably with a "qualified active solar energy system." This bill should be amended such that the newly authorized exclusion refers to a "qualified active solar energy system" throughout.
- Violation of this Committee's policy: Currently, this bill would authorize this new exclusion beginning with lien dates occurring on or after January 1, 2026, but does not provide an appropriate five-year sunset. To be eligible for a vote in this Committee, this bill should be amended to apply a five-year sunset.
- LTA consideration: Given the longstanding BOE interpretation of the conflicting statutory requirements, the author and Committee may wish to make clear that the existing exclusion would sunset in its entirety on January 1, 2027 and commence the new exclusion on that date. Thus, construction would simply need to be completed before January 1, 2027. Regardless, in the application of a sunset date to this bill, this bill should be amended to remove the conflicting statutory language.
- Related legislation: AB 1516 (Committee on Revenue and Taxation) would, among other provisions, establish a three-year deadline to claim the builder's exclusion and the initial purchaser exclusion under the ASES exclusion, beginning for lien dates occurring on or after January 1, 2027. AB 1516 is currently pending a hearing by the Senate Committee on Appropriations.
- Previous legislation: SB 1340 (Hertzberg), Chapter 425, Statutes of 2022, extended the existing ASES by two years such that it sunsets on January 1, 2027.
REGISTERED SUPPORT / OPPOSITION:
Support
350 Humboldt
Bowman Change, Inc.
California Apartment Association
California Farm Bureau Federation
California Interfaith Power and Light
California Solar and Storage Association
Center for Sustainable Energy
Citizens' Climate Lobby, Santa Cruze Chapter
Clean Coalition
Cleanearth4kids.org
Climate Action California
Climate Alliance, The
Climate Center, The
Environment California
Environmental Working Group
Glendale Environmental Coalition
Indivisible Marin
Pearlx Infrastructure, LLC
Recolte Energy
San Diego Community Power
San Diego Regional Chamber of Commerce
Santa Cruz Indivisible
Santa Cruz Alliance
Stand.earth
Opposition
California Large Energy Consumers Association
California State Association of Electrical Workers
Coalition of California Utility Employees
Analysis Prepared by: Harrison Bowlby / REV. & TAX. / (916) 319-2098
Bentz, California Housing Affordability Tracker (1st Quarter 2025), Legislative Analyst's Office (April 21, 2025). https://lao.ca.gov/LAOEconTax/Article/Detail/793, accessed June 2025. ↑
CPUC, Electric Rule 21: Generating Facility Interconnection. https://www.cpuc.ca.gov/Rule21/, accessed June 2025. ↑
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | SB 710 |
THIRD READING
Bill No: SB 710
Author: Blakespear (D), et al.
Amended: 5/23/25
Vote: 21
SENATE REVENUE AND TAXATION COMMITTEE: 5-0, 5/14/25
AYES: McNerney, Valladares, Ashby, Grayson, Umberg
SENATE APPROPRIATIONS COMMITTEE: 6-0, 5/23/25
AYES: Caballero, Seyarto, Cabaldon, Grayson, Richardson, Wahab
NO VOTE RECORDED: Dahle
SUBJECT: Property taxation: active solar energy systems: extension
SOURCE: Environment California
DIGEST:
This bill provides that any newly constructed active solar energy system that qualified under the current exclusion, continues to do so after the exclusion expires on January 1, 2027; enacts a new, more limited exclusion to replace the current one.
ANALYSIS:
Existing law:
- Provides that all property is taxable unless explicitly exempted by the Constitution or federal law (California Constitution, Article XIII, Section One).
- Limits the maximum amount of any ad valorem tax on real property at 1% of full cash value, plus any locally-authorized bonded indebtedness, and caps a property’s annual inflationary increase in taxable value to 2%. Provides that assessors reappraise property whenever it is purchased, newly constructed, or when ownership changes (California Constitution, Article XIIIA, as added by Proposition 13, 1978).
- Allows the Legislature to exclude from the definition of “new construction,” the construction or addition of any active solar energy system (California Constitution, Article XIIIA, Section Two, as added by Proposition 7, 1980).
- Implements in statute the active solar energy system new construction exclusion until the 2025-26 fiscal year, which is repealed on January 1, 2027 (SB 1340, Hertzberg, Chapter 425, Statutes of 2022).
- Defines an active solar energy system as one 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.
- States that an active solar energy system excluded from new construction may be used for:
- Domestic, recreational, therapeutic, or service water heating.
- Space conditioning.
- Production of electricity.
- Process heat.
- Solar mechanical energy.
- Excludes from the definition of active solar energy system:
- Solar swimming pool heaters.
- Hot tub heaters.
- Passive energy systems.
- Wind energy systems.
- Requires the California Public Utilities Commission (CPUC) to develop a standard contract or tariff, which may include Net Energy Metering (NEM), for eligible customer-generators with a renewable electrical generation facility that is a customer of a large electrical corporation no later than December 31, 2015. Authorizes the CPUC to require a large electrical corporation that has reached the net energy metering program limit (of NEM 1.0) to offer the standard contract or tariff to eligible customer-generators (known as NEM 2.0). Requires the CPUC, in developing the standard contract or tariff for large electrical corporations to take specified actions. Provides that there is no limitation on the amount of generating capacity or number of new eligible customer-generators.
This bill:
- Provides that any newly constructed active solar energy system that qualified under the current exclusion, continues to do so after the exclusion expires on January 1, 2027, and as a result, deletes the exclusion’s current repeal date.
- Enacts a new, more limited exclusion from new construction reassessment for “qualified” active solar energy systems, and imports many of the same requirements and limitations as the current one. Specifically, SB 710 defines “qualified” to include only those systems that:
- Are physically attached to a residential dwelling or dwellings, or a structure on the same assessor’s parcel as the residential dwelling or dwellings; is not physically attached but located on the same assessor’s parcel, a contiguous assessor’s parcel, or part of the same appraisal unit as the residential dwelling or dwellings; and provides solar energy to those dwellings and structures.
- Are physically attached to a commercial building, or a structure on the same assessor’s parcel as the commercial building, or is not physically attached but located on the same assessor’s parcel, a contiguous assessor’s parcel, or part of the same appraisal unit, that provides solar energy to that building or structure, either:
- With a total capacity of one megawatt of alternating current, or lower; or
- With a total capacity of more than one megawatt of alternating current, pursuant to an agreement with an electric corporation that complies with California Public Utilities Commission Energy Rule 21.
- Creates a rebuttable presumption that a system which does not satisfy the above requirements is not a qualified active solar energy system. The property owner can overcome this presumption via evidence supplied by the property owner that the active solar energy system exclusively provides solar energy either: to buildings or structures on the same parcel, or under a NEM tariff or contract pursuant to specified sections of the Public Utilities Code.
- Defines “residential dwelling” to include mixed-use developments when 2/3 of the square footage is designated for residential uses.
- Defines “commercial building” as one with commercial uses only, or one with more than 2/3 of its square footage dedicated to commercial uses.
- Applies to lien dates beginning on or after January 1, 2026.
Background
Active Solar Energy System New Construction Exclusion. Under current law, installing a qualifying solar energy system does not result in either an increase or a decrease in the assessment of the existing property, unlike other physical additions to real property, which are assessed at current market value and whose value is added to the existing base year value of the real property. Only active solar energy systems, fire sprinkler systems, seismic retrofits, disabled access improvements, and rainwater capture systems have similar treatment under the Constitution and statute. While the exclusion applies to “new construction,” it is not an exclusion from “change of ownership.” As a result, the exclusion terminates when the property is sold to a new owner.
In 2022, the Senate approved SB 1340, which both extended the active solar energy system’s new construction exclusion, and established a new category for “nonqualified active solar energy systems,” defined as one that qualifies under current law with a rated nameplate capacity of 20 megawatts of alternating current or higher. The measure then applied a partial exclusion, as well as boutique assessment methods, for these larger nonqualified systems. After these provisions were removed in the Assembly, the Legislature then enacted an extension to the long-standing exclusion, which expires after this year. While SB 1340 chose one way to distinguish merchant solar generation from residential rooftop solar, SB 710 adopts a different approach: Systems remain excluded if they were constructed before January 1, 2027, and systems constructed after that date are excluded too, so long as they are attached to residences, or located on the same or a contiguous assessor’s parcel and serve those residences. The bill provides the same treatment for commercial buildings up to one megawatt of alternating current, and sometimes more, so long as the system exclusively serves the commercial building, or is enrolled in a NEM program, or both. Systems with capacities above one megawatt are presumed to be taxable, which a property owner can overcome if they can demonstrate that the system exclusively serves the commercial building, or is enrolled in a NEM program, or both. While systems that generate electricity sold outside of NEM contracts would be taxable, this treatment would continue the exclusion for self-generation systems serving large energy users, regardless of size, so long as the system is located on the same or a contiguous parcel.
Net energy metering. NEM allows an electric utility customer who self-generates electricity using specified renewable energy technologies (most commonly solar energy on the rooftop) to receive a credit on their utility bill for generation that is not consumed onsite and is instead exported to the electric grid. The credits may be used to offset the customer’s utility bill and reduce the amount of electricity consumed from the electric grid. As such, the reduced volumetric usage also reduces the collection of public purpose programs, distribution, and transmission charges that are otherwise collected via a volumetric charge from customers. Pursuant to SB 656 (Alquist, Chapter 369, Statutes of 1995), in 1996, the CPUC created the first NEM tariff, commonly known as “NEM 1.0.” The CPUC created the second NEM tariff, “NEM 2.0,” in 2016 pursuant to AB 327 (Perea, Chapter 611, Statutes of 2013). In December 2022, CPUC decision (D. 22-12-056) adopted a new successor tariff, a net-billing tariff (NBT), to better align the costs and benefits of customer-generated onsite renewable electricity and align price signals with the electric grid’s conditions. The December 2022 decision primarily focused on single-meter properties/customers.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes
According to the Senate Appropriations Committee:
- The Board of Equalization (BOE) indicates that this bill would reduce annual property tax revenues by $11 million. Reductions in local property tax revenues, in turn, can increase General Fund Proposition 98 spending by up to roughly 50% (the exact amount depends on the specific amount of the annual Proposition 98 guarantee, which in turn depends upon a variety of economic, demographic and budgetary factors). BOE would incur minor administrative costs to implement the provisions of the bill.
- By changing the duties of local tax officials, this bill creates a state-mandated local program. To the extent the Commission on State Mandates determines that the provisions of this bill create a new program or impose a higher level of service on local agencies, local agencies could claim reimbursement of those costs. The magnitude is unknown (General Fund).
SUPPORT: (Verified 5/23/25)
Environment California (source)
Bowman Change, Inc.
California Apartment Association
California Center for Sustainable Energy
California Interfaith Power & Light
California Large Energy Consumers Association
California Solar & Storage Association
Citizens’ Climate Lobby, Santa Cruz Chapter
Clean Coalition
Clean Earth 4 Kids
Climate Action California
Dairy Institute of California
Environmental Working Group
Glendale Environmental Coalition
Indivisible Marin
PearlX Infrastructure, LLC
Récolte Energy
San Diego Community Power
San Diego Regional Chamber of Commerce
Solar Rights Alliance
Stand.earth
Sunrun, Inc.
The Climate Alliance
350 Humboldt
OPPOSITION: (Verified 5/23/25)
California State Association of Electrical Workers
Coalition of California Utility Employees
ARGUMENTS IN SUPPORT: According to the author, “In order to meet our clean energy goals by 2045, California needs three times the amount of clean generation and eight times the amount of storage than we currently have, according to a joint report led by the California Energy Commission. Solar is a well-established alternative energy source that is crucial to achieving those goals. For 25 years, homeowners, small businesses, schools, farms, churches and many others have benefited from a tax exclusion that prevented the cost of solar panels and storage from being added to the building value for the assessment of property taxes. Combined with other state incentives, this “behind-the-meter” exclusion has made solar installation more accessible to those who otherwise would not have been able to afford the upfront costs, with solar panels added to two million roofs in California. However, state incentives for solar have diminished in recent years. A metering regulation change allowed utilities to charge solar-owning customers more for access to the electric grid, while refunding less for energy returned to the grid. Although solar is still a net benefit, both economically and environmentally, this change negatively affected adoption rates at a time when the state is struggling to meet its climate goals. Eliminating the sunset on this exclusion for behind-the-meter solar and storage systems would prevent costly property value reassessments. Now, more than ever, it is important to maintain this crucial exclusion that makes the solar transition more affordable for individuals, businesses, schools and others and help the state meet its clean energy goals.”
ARGUMENTS IN OPPOSITION: According to the Coalition of California Utility Employees and the California State Association of Electrical Workers “Currently, rooftop solar systems are 100% excluded from property value for the purpose of determining property taxes until there is a change in ownership. This exclusion expires in 2027. The bill would extend the 100% exclusion for rooftop solar systems indefinitely. The bill essentially provides double the subsidy for those who can already afford rooftop solar and exacerbates the existing, massive rooftop solar wealth transfer. SB 710 is poor policy, inequitable and should be rejected. Extending 100% tax breaks for any period of time for rooftop solar will exacerbate an already unsustainable wealth transfer. Under net energy metering, customers receive large economic incentives to install rooftop solar. Solar customers sell power into the grid at the full retail rate (even though the value of renewable generation is far less) and they also avoid paying their share of the cost of distribution and transmission service. This creates a revenue shortfall that, in turn, leads to extra costs imposed on non-solar customers since utilities must recover the costs of grid service. Solar customers, who are typically wealthier, shift costs to non-solar customers, who typically cannot afford rooftop solar or cannot install rooftop solar because they are renters. The subsidy to the rooftop solar industry was $8.5 billion in 2024 and will grow as retail electricity rates rise. This wealth transfer is never just, but now, when Californians are facing quickly rising electricity bills, the wealth transfer is devastating.”
Prepared by: Colin Grinnell / REV. & TAX. / (916) 651-4117
5/27/25 14:18:11
**** END ****
SENATE COMMITTEE ON APPROPRIATIONS
Senator Anna Caballero, Chair
2025 - 2026 Regular Session
SB 710 (Blakespear) - Property taxation: active solar energy systems: extension
Version: May 7, 2025 | Policy Vote: REV. & TAX. 5 - 0 |
Urgency: No | Mandate: Yes |
Hearing Date: May 23, 2025 | Consultant: Robert Ingenito |
Bill Summary:
SB 710 would (1) provide that any newly constructed active solar energy system that qualified under the current exclusion, would continue to do so after the exclusion expires on January 1, 2027, and (2) enact a new, more limited exclusion to replace the current one.
*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********
The following information is revised to reflect amendments
adopted by the committee on May 23, 2025
Fiscal Impact:
- The Board of Equalization (BOE) indicates that this bill would reduce annual property tax revenues by $11 million. Reductions in local property tax revenues, in turn, can increase General Fund Proposition 98 spending by up to roughly 50 percent (the exact amount depends on the specific amount of the annual Proposition 98 guarantee, which in turn depends upon a variety of economic, demographic and budgetary factors). BOE would incur minor administrative costs to implement the provisions of the bill.
- By changing the duties of local tax officials, this bill creates a state-mandated local program. To the extent the Commission on State Mandates determines that the provisions of this bill create a new program or impose a higher level of service on local agencies, local agencies could claim reimbursement of those costs. The magnitude is unknown (General Fund).
Committee Amendments:
Make a technical change to a lien date.
-- END --
SENATE COMMITTEE ON APPROPRIATIONS
Senator Anna Caballero, Chair
2025 - 2026 Regular Session
SB 710 (Blakespear) - Property taxation: active solar energy systems: extension
Version: May 7, 2025 | Policy Vote: REV. & TAX. 5 - 0 |
Urgency: No | Mandate: Yes |
Hearing Date: May 19, 2025 | Consultant: Robert Ingenito |
Bill Summary:
SB 710 would (1) provide that any newly constructed active solar energy system that qualified under the current exclusion, would continue to do so after the exclusion expires on January 1, 2027, and (2) enact a new, more limited exclusion to replace the current one.
Fiscal Impact:
- The Board of Equalization (BOE) indicates that this bill would reduce annual property tax revenues by $11 million. Reductions in local property tax revenues, in turn, can increase General Fund Proposition 98 spending by up to roughly 50 percent (the exact amount depends on the specific amount of the annual Proposition 98 guarantee, which in turn depends upon a variety of economic, demographic and budgetary factors). BOE would incur minor administrative costs to implement the provisions of the bill.
- By changing the duties of local tax officials, this bill creates a state-mandated local program. To the extent the Commission on State Mandates determines that the provisions of this bill create a new program or impose a higher level of service on local agencies, local agencies could claim reimbursement of those costs. The magnitude is unknown (General Fund).
Background:
Under the California Constitution, all property is taxable unless explicitly exempted by either itself or federal law. The Constitution limits the maximum amount of any ad valorem tax on real property at one percent of full cash value, plus any locally-authorized bonded indebtedness. County assessors reappraise real property whenever it is purchased, newly constructed, or when its ownership changes. The Legislature is permitted to exclude from the definition of “new construction,” the construction or addition of any active solar energy system. Through various bills, the Legislature enacted the exclusion from 1980-81 to 1993-94, allowed it to sunset from 1994-95 to 1998-99, and reinstated it in 1998. An extension is currently in place through 2025-26.
The exclusion provides that installing a qualifying solar energy system does not result in either an increase or a decrease in the assessment of the existing property, unlike other physical additions to real property, which are assessed at current market value and whose value is added to the existing base year value of the real property. Only active solar energy systems, fire sprinkler systems, seismic retrofits, disabled access improvements, and rainwater capture systems have similar treatment under the Constitution and statute.
State law defines an active solar energy system as one 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. An active solar energy system may be used for (1) domestic, recreational, therapeutic, or service water heating, (2) space conditioning, (3) production of electricity, (4) process heat, or (5) solar mechanical energy. State law explicitly excludes from the definition (1) solar swimming pool heaters, (2) hot tub heaters, (3) passive energy systems, and (4) wind energy systems.
The new construction exclusion has not distinguished between active solar energy systems affixed to residential real property and systems used by electrical generation companies who sell the solar energy to energy purchasers. Additionally, the Constitutional exclusion only applies to new construction; once a property with a system changes ownership, it becomes taxable like any other form of real property. However, AB 1451 enacted an exclusion for the first buyer when an owner-builder who does not intend to occupy the property constructs the system. Lastly, the exclusion only applies to locally-assessed property; systems owned by state assessees, like public utilities, are taxable property.
Net energy metering allows an electric utility customer who self-generates electricity using specified renewable energy technologies (most commonly rooftop solar energy) to receive a credit on their utility bill for generation that is not consumed onsite and is instead exported to the electric grid. The credits may be used to offset the customer’s utility bill and reduce the amount of electricity consumed from the electric grid.
In 1996, the California Public Utilities Commission (CPUC) created the first NEM tariff, commonly known as “NEM 1.0,” following enactment of SB 656 (Alquist, 1995). Twenty years later, CPUC created the second NEM tariff, “NEM 2.0,” after the Legislature enacted AB 327 (Perea, 2013). In December 2022, CPUC decision (D. 22-12-056) adopted a new successor tariff, a net-billing tariff (NBT), to better align the costs and benefits of customer-generated onsite renewable electricity and to align price signals with the electric grid’s conditions. The December 2022 decision primarily focused on single-meter properties/customers. However, the decision allowed projects greater than one megawatt (those that do not have a significant impact on the distribution grid) to be built to the size of the onsite load, if the projects with a capacity of more than one megawatt are subject to reasonable interconnection charges in compliance with Energy Rule 21.
In a Virtual Net Metering (VNEM) tariff system, the generation facility is installed on the building roof or nearby, often on a carport. A simple system design includes one central generation facility, multiple tenants, and one service delivery point. The generation facility generates electricity and sends it to the electrical grid, while tenant and common area units consume energy from the grid. The utility then allocates compensation for the tenant and common area units’ virtual self-generation via monthly utility bill credits. VNEM was originally adopted as a tariff, to facilitate benefits to tenants from a solar energy system installed by a building owner on an affordable housing complex without master metering hardware or site specific electric utility infrastructure upgrades, as part of the Multifamily Affordable Solar Housing (MASH) Program. In 2008, CPUC directed the electric utilities to file tariffs for a VNEM program to “allow electricity produced by a single solar installation to be credited to the benefit of multiple tenants in the building without requiring the system to be physically connected to each tenant’s meter.” In that same decision, CPUC authorized the expansion of VNEM to apply to any multi-tenant property that installs a generation facility, not just affordable housing. CPUC decision D.11-070-031 established several policies for VNEM, including limiting sharing the bill credits to only those multi-tenant or multi-meter property accounts which are served by a single service delivery point and that receive a full retail rate credit, with the exception of MASH participants.
Proposed Law:
This bill would make two changes to property tax law. Specifically, it would do the following:
- Provide that any newly constructed active solar energy system that qualified under the current exclusion would continue to do so after the exclusion expires on January 1, 2027, and consequently delete the exclusion’s current repeal date.
- Enact a new, more limited exclusion from new construction reassessment for “qualified” active solar energy systems, replacing the current one. Specifically, this bill would define “qualified” to include only those systems that:
- Are physically attached to a residential dwelling or dwellings, or a structure on the same assessor’s parcel as the residential dwelling or dwellings; is not physically attached but located on the same assessor’s parcel, a contiguous assessor’s parcel, or part of the same appraisal unit as the residential dwelling or dwellings; and provides solar energy to those dwellings and structures.
- Are physically attached to a commercial building, or a structure on the same assessor’s parcel as the commercial building, or is not physically attached but located on the same assessor’s parcel, a contiguous assessor’s parcel, or part of the same appraisal unit, that provides solar energy to that building or structure, either with (1) a total capacity of one megawatt of alternating current, or lower, or (2) a total capacity of more than one megawatt of alternating current, pursuant to an agreement with an electric corporation that complies with California Public Utilities Commission Energy Rule 21.
- Create a rebuttable presumption that a system which does not satisfy the above requirements is not a qualified active solar energy system. The property owner can overcome this presumption via evidence supplied by the property owner that the active solar energy system exclusively provides solar energy either: to buildings or structures on the same parcel, or under a NEM tariff or contract pursuant to specified sections of the Public Utilities Code.
- Define “residential dwelling” to include mixed-use developments when 2/3 of the square footage is designated for residential uses, and define “commercial building” as one with commercial uses only, or one with more than 2/3 of its square footage dedicated to commercial uses.
- Apply to lien dates beginning on or after January 1, 2027.
- Provide that property owners have three years from the date of purchase to file a claim for the exclusion that applies retroactively; claims filed after that date could be granted, but would only apply prospectively.
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SENATE COMMITTEE ON REVENUE AND TAXATION
Senator Jerry McNerney, Chair
2025 - 2026 Regular
Bill No: | SB 710 | Hearing Date: | 5/14/25 |
Author: | Blakespear | Tax Levy: | Yes |
Version: | 5/7/25 Amended | Fiscal: | Yes |
Consultant: | Grinnell | ||
Property taxation: active solar energy systems: extension
Provides that any newly constructed active solar energy system that qualified under the current exclusion, continues to do so after the exclusion expires on January 1, 2027; enacts a new, more limited exclusion to replace the current one.
Background
Property taxation. Section One of Article XIII of the California Constitution provides that all property is taxable unless explicitly exempted by the Constitution or federal law. The Constitution limits the maximum amount of any ad valorem tax on real property at 1% of full cash value, plus any locally-authorized bonded indebtedness. Assessors reappraise property whenever it is purchased, newly constructed, or when ownership changes. The Constitution and statute define those terms.
New construction exclusion. Section Two of Article XIIIA allows the Legislature to exclude from the definition of “new construction” the construction or addition of any active solar energy system (Proposition 7, 1980). Through various bills, the Legislature enacted the exclusion from 1980-81 to 1993-94, allowed it to sunset from 1994-95 to 1998-99, and reinstated it in 1998 (AB 1755, Keeley, 1998). After AB 1755 was set to sunset, the Legislature extended it until 2015-16 (AB 1451, Leno, 2008), and again until 2024-25 (SB 871, Committee on Budget and Fiscal Review, 2014). In 2022, the Legislature again extended the exclusion through the lien date for the 2025-26 fiscal year, with a repeal date of January 1, 2027 (SB 1340, Hertzberg).
The exclusion provides that installing a qualifying solar energy system does not result in either an increase or a decrease in the assessment of the existing property, unlike other physical additions to real property, which are assessed at current market value and whose value is added to the existing base year value of the real property. Only active solar energy systems, fire sprinkler systems, seismic retrofits, disabled access improvements, and rainwater capture systems have similar treatment under the Constitution and statute.
State law defines an active solar energy system as one 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. An active solar energy system may be used for:
- Domestic, recreational, therapeutic, or service water heating.
- Space conditioning.
- Production of electricity.
- Process heat.
- Solar mechanical energy.
State law explicitly excludes from the definition:
- Solar swimming pool heaters.
- Hot tub heaters.
- Passive energy systems.
- Wind energy systems.
The new construction exclusion has neither historically nor currently distinguished between active solar energy systems affixed to residential real property and systems used by electrical generation companies who sell the solar energy to energy purchasers. Additionally, the Constitutional exclusion only applies to new construction; once a property with a system changes ownership, it becomes taxable like any other form of real property. However, AB 1451 enacted an exclusion for the first buyer when an owner-builder who does not intend to occupy the property constructs the system. Lastly, the exclusion only applies to locally-assessed property; systems owned by state assessees, like public utilities, are taxable property.
Net energy metering (NEM). NEM allows an electric utility customer who self-generates electricity using specified renewable energy technologies (most commonly rooftop solar energy) to receive a credit on their utility bill for generation that is not consumed onsite and is instead exported to the electric grid. The credits may be used to offset the customer’s utility bill and reduce the amount of electricity consumed from the electric grid.
In 1996, the California Public Utilities Commission (CPUC) created the first NEM tariff, commonly known as “NEM 1.0,” following enactment of SB 656 (Alquist, 1995). Twenty years later, the CPUC created the second NEM tariff, “NEM 2.0,” after the Legislature enacted AB 327 (Perea, 2013). In December 2022, CPUC decision (D. 22-12-056) adopted a new successor tariff, a net-billing tariff (NBT), to better align the costs and benefits of customer-generated onsite renewable electricity and to align price signals with the electric grid’s conditions. The December 2022 decision primarily focused on single-meter properties/customers. However, the decision allowed projects greater than one megawatt (those that do not have a significant impact on the distribution grid) to be built to the size of the onsite load, if the projects with a capacity of more than one megawatt are subject to reasonable interconnection charges in compliance with Energy Rule 21.
Virtual Net Metering (VNEM). In a VNEM tariff system, the generation facility is installed on the building roof or nearby, often on a carport. A simple system design includes one central generation facility, multiple tenants, and one service delivery point. The generation facility generates electricity and sends it to the electrical grid, while tenant and common area units consume energy from the grid. The utility then allocates compensation for the tenant and common area units’ virtual self-generation via monthly utility bill credits. VNEM was originally adopted as a tariff, to facilitate benefits to tenants from a solar energy system installed by a building owner on an affordable housing complex without master metering hardware or site-specific electric utility infrastructure upgrades, as part of the Multifamily Affordable Solar Housing (MASH) Program. In 2008, the CPUC directed the electric utilities to file tariffs for a VNEM program to “allow electricity produced by a single solar installation to be credited to the benefit of multiple tenants in the building without requiring the system to be physically connected to each tenant’s meter.” In that same decision, the CPUC authorized the expansion of VNEM to apply to any multi-tenant property that installs a generation facility, not just affordable housing. CPUC decision D.11-070-031 established several policies for VNEM, including limiting sharing the bill credits to only those multi-tenant or multi-meter property accounts which are served by a single service delivery point and that receive a full retail rate credit, with the exception of MASH participants.
With the extension set to sunset after the current property tax year, the author wants to enact a new exclusion that applies to residential systems, and to commercial ones that generate power used on site or pursuant to a NEM or VNEM contract or tariff, but not to merchant solar energy systems.
Proposed Law
SB 710 makes two changes. First, it provides that any newly constructed active solar energy system that qualified under the current exclusion, continues to do so after the exclusion expires on January 1, 2027, and as a result, deletes the exclusion’s current repeal date. Second, the measure enacts a new, more limited exclusion from new construction reassessment for “qualified” active solar energy systems, replacing the current one. Specifically, SB 710 defines “qualified” to include only those systems that:
- Are physically attached to a residential dwelling or dwellings, or a structure on the same assessor’s parcel as the residential dwelling or dwellings; is not physically attached but located on the same assessor’s parcel, a contiguous assessor’s parcel, or part of the same appraisal unit as the residential dwelling or dwellings; and provides solar energy to those dwellings and structures.
- Are physically attached to a commercial building, or a structure on the same assessor’s parcel as the commercial building, or is not physically attached but located on the same assessor’s parcel, a contiguous assessor’s parcel, or part of the same appraisal unit, that provides solar energy to that building or structure, either:
- With a total capacity of one megawatt of alternating current, or lower; or
- With a total capacity of more than one megawatt of alternating current, pursuant to an agreement with an electric corporation that complies with California Public Utilities Commission Energy Rule 21.
SB 710 creates a rebuttable presumption that a system which does not satisfy the above requirements is not a qualified active solar energy system. The property owner can overcome this presumption via evidence supplied by the property owner that the active solar energy system exclusively provides solar energy either: to buildings or structures on the same parcel, or under a NEM tariff or contract pursuant to specified sections of the Public Utilities Code.
The bill also defines “residential dwelling” to include mixed-use developments when 2/3 of the square footage is designated for residential uses. The measure defines “commercial building” as one with commercial uses only, or one with more than 2/3 of its square footage dedicated to commercial uses.
The measure applies to lien dates beginning on or after January 1, 2027. SB 710 also provides that property owners have three years from the date of purchase to file a claim for the exclusion that applies retroactively; claims filed after that date can be granted, but would only apply prospectively.
State Revenue Impact
According to BOE, eliminating the January 1, 2027, solar exclusion sunset date, and extending the exclusion indefinitely, would likely result in estimated annual property tax revenue loss of $11 million.
Comments
1. Purpose of the bill. According to the author, “In order to meet our clean energy goals by 2045, California needs three times the amount of clean generation and eight times the amount of storage than we currently have, according to a joint report led by the California Energy Commission. Solar is a well-established alternative energy source that is crucial to achieving those goals. For 25 years, homeowners, small businesses, schools, farms, churches and many others have benefited from a tax exclusion that prevented the cost of solar panels and storage from being added to the building value for the assessment of property taxes. Combined with other state incentives, this “behind-the-meter” exclusion has made solar installation more accessible to those who otherwise would not have been able to afford the upfront costs, with solar panels added to two million roofs in California. However, state incentives for solar have diminished in recent years. A metering regulation change allowed utilities to charge solar-owning customers more for access to the electric grid, while refunding less for energy returned to the grid. Although solar is still a net benefit, both economically and environmentally, this change negatively affected adoption rates at a time when the state is struggling to meet its climate goals. Eliminating the sunset on this exclusion for behind-the-meter solar and storage systems would prevent costly property value reassessments. Now, more than ever, it is important to maintain this crucial exclusion that makes the solar transition more affordable for individuals, businesses, schools and others and help the state meet its clean energy goals.
2. Fielding the punt. In 2022, the Senate approved SB 1340, which both extended the active solar energy system’s new construction exclusion, and established a new category for “nonqualified active solar energy systems,” defined as one that qualifies under current law with a rated nameplate capacity of 20 megawatts of alternating current or higher. The measure then applied a partial exclusion, as well as boutique assessment methods, for these larger nonqualified systems. After these provisions were removed in the Assembly, the Legislature then enacted an extension to the long-standing exclusion, which expires after this year. While SB 1340 chose one way to distinguish merchant solar generation from residential rooftop solar, SB 710 adopts a different approach: Systems that serve residences remain excluded if they were constructed before January 1, 2027, and systems constructed after that date are excluded too so long as they are attached to residences, or located on the same or a contiguous parcel and serve those residences. The bill provides the same treatment for commercial buildings up to one megawatt of alternating current, and sometimes more, so long as the system exclusively serves the commercial building, or is enrolled in a NEM program, or both. Systems with capacities above one megawatt are presumed to be taxable, which a property owner can overcome if they can demonstrate that the system exclusively serves the commercial building, or is enrolled in a NEM program, or both. While systems that generate electricity sold outside of NEM contracts would be taxable, this treatment would continue the exclusion for self-generation systems serving large energy users, regardless of size, so long as the system is located on the same or a contiguous parcel. As a result, commercial users that can afford to build large-scale solar systems need not pay property taxes on those systems under SB 710.
3. Not like the others. Voters chose to treat active solar energy systems differently in 1980, and authorized the Legislature to implement the exclusion as it saw fit. Property owners installing systems on their homes could do so without affecting their property taxes. Large-scale solar producers came to rely upon the exclusion to reduce costs, which they argued directly led to California’s leadership position in cost-effective solar energy production necessary to meet state climate and reliability targets. However, one can argue that the exclusion has no current justification; when voters approved the initiative adding the exclusion in 1980, they could scarcely imagine solar farms with more than one million solar panels generating more than 500 megawatts of electricity, commercial buildings with several megawatts of self-generation, and millions of residential systems. Additionally, state law requires that all electricity in the state come from carbon-free resources by 2045, and starting in 2020, all new homes built in California must have rooftop solar. Is an exclusion still necessary given all of the other measures the state has taken to encourage or require solar energy?
4. Who are you? Unlike almost every other form of real property, assessors have only valued active solar energy systems upon a change in ownership, as the exclusion dates back to 1980. Should the Legislature not enact an extension of the current exclusion, they will have to do so for at least some systems, beginning in 2027. While SB 1340 set very prescriptive measures for valuing large solar generation facilities, SB 710 does not contain similar provisions. As a result, assessment practices could vary across California counties where systems are assessed.
5. Mandate. The California Constitution requires the state to reimburse local governments for the costs of new or expanded state mandated local programs. Because SB 710 changes the way that assessors value real property, Legislative Counsel says that this bill imposes a new state mandate. The measure provides that the state shall not reimburse local agencies for property tax revenue losses, instead stating that, should the Commission on State Mandates determine that the bill imposes a reimbursable mandate, reimbursement must be made pursuant to existing statutory provisions.
Support and Opposition
(5/9/25)
Support: Environment California (Sponsor)
Bowman Change, Inc.
California Center for Sustainable Energy
California Interfaith Power & Light
California Solar & Storage Association
Citizens’ Climate Lobby, Santa Cruz Chapter
Clean Coaliton
Clean Earth 4 Kids
Climate Action California
Dairy Institute of California
Environmental Working Group
Glendale Environmental Coalition
Indivisible Marin
PearlX Infrastructure, LLC
Récolte Energy
San Diego Community Power
Solar Rights Alliance
Stand.earth
Sunrun, Inc.
The Climate Alliance
350 Humboldt
Opposition: California State Association of Electrical Workers
Coalition of California Utility Employees
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Discussed in Hearing
1MIN
Senate Floor
1MIN
Assembly Floor
10MIN
Assembly Standing Committee on Revenue and Taxation
5MIN
Senate Standing Committee on Revenue and Taxation
Bill Author
Bill Co-Author(s):
