BILL NUMBER: AB 1099	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Leno

                        FEBRUARY 22, 2005

   An act to amend Section 73 of the Revenue and Taxation Code,
relating to taxation, to take effect immediately, tax levy.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1099, as introduced, Leno.   Property tax: exclusion from new
construction: active solar energy systems.
   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
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,
for the 1999-2000 fiscal year to the 2004-05 fiscal year, inclusive,
from the definition of "newly constructed" the construction or
addition of an active solar energy system, as defined.
   This bill would specify that this exclusion for the construction
or addition of an active solar energy system applies for the
1999-2000 fiscal year and each fiscal year thereafter, to extend this
exclusion indefinitely.
   Section 2229 of the Revenue and Taxation Code requires the
Legislature 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 Section 2229 of the
Revenue and Taxation Code, no appropriation is made and the state
shall not reimburse local agencies for property tax revenues lost by
them pursuant to the bill.

  This bill would take effect immediately as a tax levy.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  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
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 any active solar energy system, as defined in subdivision
(b).(b) (1) "Active solar energy system" means 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.
   (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) (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 collectors. However, an active solar energy system used in the
production of electricity includes only equipment used up to, but not
including, the stage of the transmission 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.
   (d) This section  shall apply   applies 
to property tax lien dates for the 1999-2000  to 2004-05
fiscal years, inclusive   fiscal year and for each
fiscal year thereafter  . For purposes of supplemental
assessment, this section  shall apply   applies
 only to qualifying construction or additions completed on or
after January 1, 1999.  
   (e) This section shall remain in effect only until January 1,
2006, and as of that date is repealed, unless a later enacted statute
that is enacted before January 1, 2006, deletes or extends that
date. 
  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.
  This act provides for a tax levy within the meaning of Article IV
of the Constitution and shall go into immediate effect.