SB 1329: Real property tax: valuation: active solar energy system.

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, except as specified.

This bill would establish uniform rules regarding the method of valuation of an active solar energy system. The bill would provide that the preferred valuation of an active solar energy system is the replacement cost new less depreciation and all other forms of obsolescence. The bill would set forth parameters for determining the replacement cost new value and would provide that the valuation of such a system is limited to only the tangible property comprising the active solar energy system, and does not include intangible assets and rights of the system, as described. The bill would also provide that, with respect to an active solar energy system or portion thereof excluded in whole or part from the definition of newly constructed, as specified, the active solar energy system or portion thereof shall be treated as a separate appraisal unit from any property not excluded. By expanding the duties of local tax officials, this bill would impose a state-mandated local program.

Existing law requires the state to reimburse local agencies annually for certain property tax revenues lost as a result of any exemption or classification of property for purposes of ad valorem property taxation.

This bill would provide that, notwithstanding those provisions, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

This bill would take effect immediately as a tax levy.

This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIIIA of the California Constitution, and thus would require for passage the approval of ²/₃ of the membership of each house of the Legislature.