Property taxation: active solar energy systems.

Senator Blakespear, with coauthor Senator Jones, advances a measure that retools California’s property tax treatment of active solar energy systems by tying the exclusion’s operative status to a clear sunset and expanding eligibility mechanics for owner-builders. The key change specifies that the exclusion from a newly constructed status becomes inoperative on January 1, 2027, rather than being repealed on that date, and it would incorporate related amendments proposed by a parallel measure if enacted and applied in a particular order.

At the heart of the bill is a detailed definition of an “active solar energy system,” coupled with a scope of uses that may be included for property tax purposes and a set of exclusions and inclusions that affect appraisal. The bill defines active solar energy systems as those using solar devices to collect, store, or distribute energy, with storage devices, power conditioning equipment, transfer equipment, and related parts treated as part of the system. It excludes solar swimming pool heaters and hot tub heaters. It permits active solar energy systems to be used for domestic or service water heating, space conditioning, electricity production, process heat, and solar mechanical energy, and clarifies that “occupy or use” follows an established use definition. The measure also addresses components such as spare parts, pipes, and ducts, including rules for 75 percent valuation on pipes and ducts used to carry energy from solar sources when they also convey energy from other sources, and it sets limits on dual-use equipment.

The bill creates an extension mechanism for initial purchasers following owner-builder construction. It allows claims to identify the value attributable to the solar system and any rebates received, and it instructs the assessor to reduce the new base year value by the difference between the system’s allocated value and total rebates. The extension is limited to the initial purchaser and remains in effect only until a subsequent change in ownership. The definitions and procedures for claiming the exclusion include a framework for documentation, a prescribed process, and a value-offset calculation, with an emphasis on how rebates are treated in determining the reduction to the base year value. The proposed timelines include a three-year claim window for qualifying exclusions, with the timing operable beginning January 1, 2027, and mechanisms to apply late-filed claims from the lien-date perspective.

Implementation would hinge on coordination with another bill and specific regulatory actions. The amendments to the Revenue and Taxation Code would become operative only if both bills are enacted and effective by a set date, with a sequencing condition that this bill be enacted after the companion measure. Administration of the new-construction exclusion claims would be overseen in consultation with the State Board of Equalization and the California Assessors’ Association to prescribe the required forms, documentation, and procedures. The measure maintains that the exclusion from new construction remains in effect only until a subsequent change in ownership, and it includes explicit references to the period and scope of applicability, affecting property tax lien dates through the indicated fiscal years. This approach situates the proposal within a broader framework of existing tax rules for active solar energy systems while introducing a defined sunset and expanded owner-builder provisions.