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<ns0:Id>20250SB__132998AMD</ns0:Id>
<ns0:VersionNum>98</ns0:VersionNum>
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<ns0:Action>
<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2026-02-20</ns0:ActionDate>
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<ns0:ActionText>AMENDED_SENATE</ns0:ActionText>
<ns0:ActionDate>2026-03-23</ns0:ActionDate>
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<ns0:SessionYear>2025</ns0:SessionYear>
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<ns0:MeasureNum>1329</ns0:MeasureNum>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Senator McNerney</ns0:AuthorText>
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<ns0:Legislator>
<ns0:Contribution>LEAD_AUTHOR</ns0:Contribution>
<ns0:House>SENATE</ns0:House>
<ns0:Name>McNerney</ns0:Name>
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<ns0:Title>An act to add Section 73.3 to the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.</ns0:Title>
<ns0:RelatingClause>taxation, to take effect immediately, tax levy</ns0:RelatingClause>
<ns0:GeneralSubject>
<ns0:Subject>Real property tax: valuation: active solar energy system.</ns0:Subject>
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<html:p>The California Constitution generally limits the maximum rate of ad valorem tax on real property to 1% of the full cash value of the property and defines “full cash value” for these purposes as the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment. Pursuant to constitutional authorization, existing property tax law excludes from the definition of “newly constructed” for these purposes the construction or addition of any active solar energy system, as defined, through the 2025–26 fiscal year, except as specified. </html:p>
<html:p>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.</html:p>
<html:p>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.</html:p>
<html:p>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.</html:p>
<html:p>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.</html:p>
<html:p>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.</html:p>
<html:p>This bill would take effect immediately as a tax levy.</html:p>
<html:p>
This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII
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A of the California Constitution, and thus would require for passage the approval of
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of the membership of each house of the Legislature.
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<ns0:VoteRequired>TWO_THIRDS</ns0:VoteRequired>
<ns0:Appropriation>NO</ns0:Appropriation>
<ns0:FiscalCommittee>YES</ns0:FiscalCommittee>
<ns0:LocalProgram>YES</ns0:LocalProgram>
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<ns0:ImmediateEffect>YES</ns0:ImmediateEffect>
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<ns0:Urgency>NO</ns0:Urgency>
<ns0:TaxLevy>YES</ns0:TaxLevy>
<ns0:Election>NO</ns0:Election>
<ns0:UsualCurrentExpenses>NO</ns0:UsualCurrentExpenses>
<ns0:BudgetBill>NO</ns0:BudgetBill>
<ns0:Prop25TrailerBill>NO</ns0:Prop25TrailerBill>
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<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
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<ns0:Num>SECTION 1.</ns0:Num>
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Section 73.3 is added to the
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, to read:
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<ns0:Num>73.3.</ns0:Num>
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(a)
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An assessor shall value an active solar energy system or portion thereof consistent with the requirements of Section 401. The methods of valuation shall include, but are not limited to, the comparable sales method, the income method, or the cost method. The preferred method of any valuation of an active solar energy system or portion thereof is the replacement cost new value less depreciation and all other forms of obsolescence.
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<html:p>
(b)
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For purposes of applying Sections 110 and 212 to determine the “full cash value,” “fair market value,” or “taxable value” of any active solar energy system or portion thereof, as defined in Section 73, all of the following shall apply:
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<html:p>
(1)
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“Full cash
value,” “fair market value,” or “taxable value” shall include only the tangible property comprising the active solar energy system or portion thereof, excluding value attributable to any assets in accordance with subdivision (d) of Section 110 and subdivision (c) of Section 212.
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(2)
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“Obsolescence” includes, but is not limited to, external obsolescence. “External obsolescence” includes the amounts of any United States duties and tariffs.
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(3)
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“Replacement cost new” means the original cost or taxable original cost of the active solar energy system, reduced by government subsidies in the form of tax credits or other similar subsidies, and subsequently multiplied by a depreciation percent good factor and by an inflation cost index factor. In determining “replacement cost new,” the following shall apply:
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<html:p>
(A)
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The original
cost or taxable original cost shall be limited to the actual cost of the active solar energy system build and shall exclude developer step-ups and other similar costs.
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<html:p>
(B)
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The tax credits and similar subsidies to be deducted from the original cost or taxable original cost shall include those set forth under clause (i) of subparagraph (A) of paragraph (4) that are applicable to the active solar energy system.
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<html:p>
(C)
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The equipment index factors shall be derived from utility-scale solar specific data publications, including, but not limited to, the United States Energy Information Administration Annual Energy Outlook, or the Lawrence Berkeley National Laboratory Utility-Scale Solar Report, except that this factor shall be adjusted to exclude amounts attributable to United States import customs and duties.
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(4)
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(A)
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For purposes of paragraph (1), “tangible property” shall not include intangible assets and rights relating to an active solar energy system or portion thereof, including, but not limited to, all of the following:
</html:p>
<html:p>
(i)
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Federal and state tax credits, cash grants, direct payments, or similar federal subsidies received or to be received.
</html:p>
<html:p>
(ii)
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Contracts for energy, resource adequacy, ancillary services, or related market products.
</html:p>
<html:p>
(iii)
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Renewable energy credits, as defined in paragraph (2) of subdivision (h) of Section 399.12 of the Public Utilities Code.
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<html:p>
(iv)
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Environmental commodities, including, but not limited to, carbon credits and emissions credits.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Nothing in this
paragraph shall be construed to mean that a business operating an active solar energy system does not also have intangible assets and rights commonly found in general businesses, including, but not limited to, concessions, franchises, workforce in place, customer lists, trademarks, and copyrights.
</html:p>
<html:p>
(C)
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The treatment of intangible assets, rights, and attributes, as described in this paragraph, shall be consistent with Section 110. In this regard, the assets, rights, and attributes set forth in paragraph (3) shall not be considered intangible attributes of real property under subdivision (f) of Section 110.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
For purposes of Section 51, in the case of any active solar energy system or portion thereof excluded in whole or in part from the term “newly constructed” pursuant to Section 73, such an active solar energy system or portion thereof shall be treated as a separate appraisal
unit from any other property that is not excluded from the definition of “newly constructed” pursuant to Section 73.
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<ns0:BillSection id="id_1B6357A0-A211-4E01-A53E-9ADEC656B42F">
<ns0:Num>SEC. 2.</ns0:Num>
<ns0:Content>
<html:p>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.</html:p>
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<ns0:Num>SEC. 3.</ns0:Num>
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<html:p>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.</html:p>
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<ns0:Num>SEC. 4.</ns0:Num>
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<html:p>This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.</html:p>
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