BILL ANALYSIS                                                                                                                                                                                                    �






                  SENATE COMMITTEE ON BUDGET AND FISCAL REVIEW
                                Mark Leno, Chair
                                        
          Bill No:       AB 1475
          Author:        Committee on Budget
          As Amended:    June 15, 2014
          Consultant:    Catherine Freeman 
          Fiscal:        Yes
          Hearing Date:  June 15, 2014
          
          Subject:  Extension of Sunset for Solar Tax Exemption for  
          New Construction

          Summary:  This bill extends the sunset for a solar tax  
          exemption for new active solar energy systems on new  
          construction.

          Background:  As part of the 2014-15 budget package, AB 1475  
          makes various statutory changes to implement the budget  
          act.

          Proposed Law:  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 one percent 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, 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:  This bill should not result in a immediate  
          reduction in ad valorem tax revenues in the 2014-15 budget  
                                       -1- 










          year.  Thereafter, the 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. 

          Opposed:  Unknown

          Comments:  This bill provides the necessary statutory  
          references to enact the 2014-15 budget related to energy
          

































                                       -2-