Bill Text: CA SB710 | 2025-2026 | Regular Session | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Property taxation: active solar energy systems.
Sponsorship: Bipartisan Bill
Status: (Passed) 2025-10-03 - Chaptered by Secretary of State. Chapter 328, Statutes of 2025. [SB710 Detail]
Download: California-2025-SB710-Amended.html
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.
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.
This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.
Bill Title: Property taxation: active solar energy systems.
Sponsorship: Bipartisan Bill
Status: (Passed) 2025-10-03 - Chaptered by Secretary of State. Chapter 328, Statutes of 2025. [SB710 Detail]
Download: California-2025-SB710-Amended.html
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July 16, 2025 |
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July 08, 2025 |
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June 23, 2025 |
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May 23, 2025 |
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May 07, 2025 |
CALIFORNIA LEGISLATURE—
2025–2026 REGULAR SESSION
Senate Bill
No. 710
| Introduced by Senator Blakespear (Coauthor: Senator Jones) |
February 21, 2025 |
An act to amend Section 73 of, and to add Section 73.1 to, the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
SB 710, as amended, Blakespear.
Property taxation: active solar energy systems: extension.
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. Under existing property tax law, this exclusion remains in effect only until there is a subsequent change in ownership, but an active solar energy system that qualifies for the exclusion before January 1, 2027, continues to receive the exclusion until there is a subsequent change in ownership. Existing law repeals
these exclusion provisions on January 1, 2027.
This bill would extend the exclusion to lien dates occurring on or after January 1, 2026, but before January 1, 2031, and would limit the exclusion to qualified active solar energy systems, as defined. The bill would continue to exclude qualified active energy solar systems that qualify for an exclusion prior to January 1, 2031, on and after that date until there is a subsequent change in ownership. The bill would also remove the repeal of the existing active solar energy system exclusion.
By imposing additional duties on local tax officials, the bill would impose a state-mandated local program.
Existing law requires any bill extending an existing tax expenditure to contain, among other things, specific goals that the tax expenditure will achieve, detailed
performance indicators, and data collection requirements.
This bill would exclude the extension of the exclusion from these requirements.
This bill would incorporate additional changes to Section 73 of the Revenue and Taxation Code proposed by AB 1516 to be operative only if this bill and AB 1516 are enacted and this bill is enacted last.
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.
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.
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.
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.
This bill would take effect immediately as a tax levy.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YESBill Text
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, upon completion of the construction of a system as part of a new property or the addition of a system to an existing property, 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) For purposes of this section, “occupy or use” has the same meaning as defined in Section 75.12.
(d) (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 solar collecting equipment. However, an active solar energy system used in the production of electricity includes only equipment used up to, but not including, the stage of conveyance 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.
(e) (1) Notwithstanding any other law, for purposes of this section, “the construction or addition of any active solar energy system” includes the construction of an active solar energy system incorporated by the owner-builder in the initial construction of a new building that the owner-builder does not intend to occupy or use. The exclusion from “newly constructed” provided by this subdivision applies to the initial purchaser who purchased the new building from the owner-builder, but only if the owner-builder did not receive an exclusion under this section for the same active solar
energy system and only if the initial purchaser purchased the new building prior to that building becoming subject to reassessment to the owner-builder, as described in subdivision (d) of Section 75.12. The assessor shall administer this subdivision in the following manner:
(A) The initial purchaser of the building shall file a claim with the assessor and provide to the assessor any documents necessary to identify the value attributable to the active solar energy system included in the purchase price of the new building. The claim shall also identify the amount of any rebate for the active solar energy system provided to either the owner-builder or the initial purchaser by the Public Utilities Commission, the State Energy Resources Conservation and Development Commission, an electrical corporation, a local publicly owned electric utility, or
any other agency of the State of California.
(B) The assessor shall evaluate the claim and determine the portion of the purchase price that is attributable to the active solar energy system. The assessor shall then reduce the new base year value established as a result of the change in ownership of the new building by an amount equal to the difference between the following two amounts:
(i) That portion of the value of the new building attributable to the active solar energy system.
(ii) The total amount of all rebates, if any, described in subparagraph (A) that were provided to either the owner-builder or the initial purchaser.
(C) The extension of
the new construction exclusion to the initial purchaser of a newly constructed new building shall remain in effect only until there is a subsequent change in ownership of the new building.
(2) The State Board of Equalization, in consultation with the California Assessors’ Association, shall prescribe the manner, documentation, and form for claiming the new construction exclusion required by this subdivision.
(f) Notwithstanding any other law, the exclusion from new construction provided by this section shall remain in effect only until there is a subsequent change in ownership.
(g) This section applies to property tax lien dates for the 1999–2000 fiscal year to the 2025–26 fiscal year, inclusive.
(h) The amendments made to this section by the act that added this subdivision apply beginning with the lien date for the 2008–09 fiscal year.
(i) (1) Except as provided in paragraph (2), this section shall remain in effect only until January 1, 2027.
(2) Notwithstanding paragraph (1), active energy solar systems that qualify for an exclusion under this section prior to January 1, 2027, shall continue to be excluded on and after January 1, 2027, until there is a subsequent change in ownership.
(j) Section 41 shall not apply to the extension of the exclusion under this section made by the act adding this
subdivision.
SEC. 1.5.
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, upon completion of the construction of a system as part of a new property or the addition of a system to an existing property, 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) For purposes of this section, “occupy or use” has the same meaning as defined in Section 75.12.
(d) (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 solar collecting equipment. However, an active solar energy system used in the production of
electricity includes only equipment used up to, but not including, the stage of conveyance 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.
(e) (1) Notwithstanding any other law, for purposes of this section, “the construction or addition of any active solar energy system” includes the
construction of an active solar energy system incorporated by the owner-builder in the initial construction of a new building that the owner-builder does not intend to occupy or use. The exclusion from “newly constructed” provided by this subdivision applies to the initial purchaser who purchased the new building from the owner-builder, but only if the owner-builder did not receive an exclusion under this section for the same active solar energy system and only if the initial purchaser purchased the new building prior to that building becoming subject to reassessment to the owner-builder, as described in subdivision (d) of Section 75.12. The assessor shall administer this subdivision in the following manner:
(A) The initial purchaser of the building shall file a claim with the assessor and provide to the assessor any documents necessary to identify the value attributable to the active solar energy system included in the purchase price of the
new building. The claim shall also identify the amount of any rebate for the active solar energy system provided to either the owner-builder or the initial purchaser by the Public Utilities Commission, the State Energy Resources Conservation and Development Commission, an electrical corporation, a local publicly owned electric utility, or any other agency of the State of California.
(i) (I) The claim for an exclusion under this subdivision shall be considered timely if it is filed within three years of the date of purchase.
(II) An otherwise valid claim for exclusion under this subdivision filed after the deadline set by subclause (I) shall be applied beginning on the lien date of the assessment year in which the claim is filed.
(ii) The provisions of clause (i) shall become operative on January 1, 2027.
(B) The assessor shall evaluate the claim and determine the portion of the purchase price that is attributable to the active solar energy system. The assessor shall then reduce the new base year value established as a result of the change in ownership of the new building by an amount equal to the difference between the following two amounts:
(i) That portion of the value of the new building attributable to the active solar energy system.
(ii) The total amount of all rebates, if any, described in subparagraph (A) that were provided to either the owner-builder or the initial purchaser.
(C) The
extension of the new construction exclusion to the initial purchaser of a newly constructed new building shall remain in effect only until there is a subsequent change in ownership of the new building.
(2) The State Board of Equalization, in consultation with the California Assessors’ Association, shall prescribe the manner, documentation, and form for claiming the new construction exclusion required by this subdivision.
(f) Notwithstanding any other law, the exclusion from new construction provided by this section shall remain in effect only until there is a subsequent change in ownership.
(g) This section applies to property tax lien dates for the 1999–2000 fiscal year to the 2025–26 fiscal year, inclusive.
(h) The amendments made to this section by
the act that added this subdivision apply beginning with the lien date for the 2008–09 fiscal year.
(i) (1) This Except as provided in paragraph (2), this section shall remain in effect only until January 1, 2027, and as of that date is repealed. 2027.
(2) Active Notwithstanding paragraph (1), active energy
solar systems that qualify for an exclusion under this section prior to January 1, 2027, shall continue to be excluded on and after January 1, 2027, until there is a subsequent change in ownership.
(j) Section 41 shall not apply to the extension of the exclusion under this section made by the act adding this subdivision.
SEC. 2.
Section 73.1 is added to the Revenue and Taxation Code, to read:73.1.
(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 a qualified active solar energy system, as defined in subdivision (b).(b) (1) “Qualified active solar energy system” means a system that satisfies both of the following:
(A) Upon completion of the
construction of a system as part of a new property or the addition of a system to an existing property, 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.
(B) Satisfies one of the following:
(i) The system is physically attached to a residential dwelling or dwellings or to a structure on the same assessor’s parcel as the dwelling or dwellings, or is not physically attached but is located on the same assessor’s parcel, is located on a contiguous assessor’s parcel, or is part of the same appraisal unit as the dwelling or dwellings, and distributes solar energy to those dwellings and, if applicable,
structures. For purposes of this clause, “residential dwelling” means a structure consisting of residential uses only or a mix of residential and nonresidential uses, with at least two-thirds of the square footage of the development designated for residential uses.
(ii) (I) The system is located on the same assessor’s parcel as a nonresidential customer, is located on a contiguous assessor’s parcel to the nonresidential customer, or is part of the same appraisal unit as the nonresidential customer, distributes solar energy to that customer, and satisfies subclause (II). has a rated nameplate capacity of one megawatt of alternating current or lower.
(II)Except as set forth in subclause (IV), the system shall have a total capacity of more than one megawatt of alternating current pursuant to an agreement with an electrical corporation, as defined in Section 218 of the Public Utilities Code, that complies with Public Utilities Commission Electric Rule 21, or a total capacity of one megawatt of alternating current or lower.
(III)Except as set forth in subclause (IV), there shall be a rebuttable presumption that a system that does not satisfy the requirements of this clause is not a qualified active solar energy system. A claimant may overcome this presumption by providing evidence of a net energy metering tariff or contract that the system provides solar energy to the nonresidential customer pursuant to Section 2827 or 2827.1 of the Public Utilities Code or exclusively provides solar energy to the nonresidential customer.
(IV)Notwithstanding subclauses (II) and (III), a system with a rated nameplate capacity of five megawatts of alternating current or higher is not a qualified active solar energy system under this clause.
(V)
(II) For purposes of this clause, “customer” means a recipient of the energy generated by the system. If there is more than one customer on the parcel, a customer shall be considered “nonresidential” if the customer consists of nonresidential uses only
or a mix of residential and nonresidential uses, with less than two-thirds of the square footage of the development designated for residential uses.
(2) “Qualified active solar energy system” does not include solar swimming pool heaters or hot tub heaters.
(3) Qualified 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) For purposes of this section, “occupy or use” has the same meaning as defined in Section 75.12.
(d) (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.
(d)(1)
(B) A qualified 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 solar collecting equipment. However, a qualified active solar energy system used in the production of electricity includes only equipment used up to, but not including, the stage of conveyance or use of the electricity. For the purposes of this paragraph, the term “parts” includes spare parts that are owned by the owner of, or the maintenance contractor for, a qualified 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 a qualified 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) A qualified 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 qualified active solar energy system property only to the extent of 75 percent of their full cash value.
(3) A qualified 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 uses a source of
power other than solar energy to provide usable energy. A qualified 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 qualified active solar energy system property only to the extent of 75 percent of its full cash value.
(e) (1) Notwithstanding any other law, for purposes of this section, “the construction or addition of any qualified active solar energy system” includes the construction of a qualified active solar energy system incorporated by the owner-builder in the initial construction of a new building that the owner-builder does not intend to occupy or
use. The exclusion from “newly constructed” provided by this subdivision applies to the initial purchaser who purchased the new building from the owner-builder, but only if the owner-builder did not receive an exclusion under this section for the same qualified active solar energy system and only if the initial purchaser purchased the new building prior to that building becoming subject to reassessment to the owner-builder, as described in subdivision (d) of Section 75.12. The assessor shall administer this subdivision in the following manner:
(A) (i) The initial purchaser of the building shall file a claim with the assessor and provide to the assessor any documents necessary to identify the value attributable to the qualified active solar energy system included in the
purchase price of the new building. The claim shall also identify the amount of any rebate for the qualified active solar energy system provided to either the owner-builder or the initial purchaser by the Public Utilities Commission, the State Energy Resources Conservation and Development Commission, an electrical corporation, a local publicly owned electric utility, or any other agency of the State of California.
(ii) The claim for an exclusion under this subdivision shall be considered timely if it is filed within three years of the date of the initial purchase, in the case of an initial purchaser, or within three years of the date the construction or addition of the system is complete, in the case of an owner-builder.
(iii) A claim for exclusion that is not timely filed within the period described in clause (ii) but is valid otherwise shall be applied beginning on the lien date of the assessment year in which the claim is filed.
(B) The assessor shall evaluate the claim and determine the portion of the purchase price that is attributable to the qualified active solar energy system. The assessor shall then reduce the new base year value established as a result of the change in ownership of the new building by an amount equal to the difference between the following two amounts:
(i) That portion of the value of the new building attributable to the qualified active solar energy system.
(ii) The total amount of all rebates, if any, described in subparagraph (A) that were provided to either the owner-builder
or the initial purchaser.
(C) The extension of the new construction exclusion to the initial purchaser of a newly constructed building shall remain in effect only until there is a subsequent change in ownership of the new building.
(2) The State Board of Equalization, in consultation with the California Assessors’ Association, shall prescribe the manner,
documentation, and form for claiming the new construction exclusion required by this subdivision.
(f) Notwithstanding any other law, the exclusion from new construction provided by this section shall remain in effect only until there is a subsequent change in ownership.
(g) (1) Except as provided in paragraph (2), this section applies to property tax lien dates occurring on or after January 1,
2026, but before January 1, 2031.
(2) Notwithstanding paragraph (1), qualified active energy solar systems that qualify for an exclusion under this section prior to January 1, 2031, shall continue to be excluded on and after January 1, 2031, until there is a subsequent change in ownership.
(h) Section 41 shall not apply to this section.
