BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 871| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- UNFINISHED BUSINESS Bill No: SB 871 Author: Senate Budget and Fiscal Review Committee Amended: 6/13/14 Vote: 21 PRIOR VOTES NOT RELEVANT ASSEMBLY FLOOR : Not available SUBJECT : Budget Act of 2014: Extension of Sunset for Solar Tax Exemption for New Construction SOURCE : Author DIGEST : This bill extends the sunset for a solar tax exemption for new active solar energy systems on new construction. Assembly Amendments delete the prior version of the bill and insert the current language for new active solar energy systems. ANALYSIS : This bill extends the sunset for a solar tax exemption for new active solar energy systems on new construction. This bill extends the exemption through 2023-24, and extends the sunset through January 1, 2025. The California Constitution generally limits ad valorem taxes on real property to 1% of the full cash value of that property. For purposes of this limitation, full cash value is defined as the assessor's valuation of real property as shown on the 1975-76 tax bill under full cash value, or thereafter, the appraised value of CONTINUED SB 871 Page 2 that real property when purchased, newly constructed, or a change in ownership has occurred. Pursuant to authority granted to the Legislature in the California Constitution, existing law excludes, from the definition of "newly constructed," the construction or addition of an active solar system. This bill specifies that this exclusion for the construction or addition of an active solar energy system applies through the 2023-24 fiscal year, and remains in effect only until January 1, 2025. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: Yes According to the Senate Budget and Fiscal Review Committee, this bill should not result in an immediate reduction in ad valorem tax revenues in the 2014-15 budget year. Thereafter, this bill should result in reductions of $5 million, per year, in ad valorem tax revenues. This would be offset somewhat by the purchase of active solar systems statewide. AB:k 6/15/14 Senate Floor Analyses SUPPORT/OPPOSITION: NONE RECEIVED **** END ****