A bill pending in Sacramento has revived one of Kern County’s biggest complaints about being California’s leading producer of large-scale solar energy.
Senate Bill 1329 by state Sen. Jerry McNerney, D-Pleasanton, would change state rules on how solar projects are assessed when calculating their owners’ property tax bills. The effect would be to lower how much money the companies pay counties like Kern to help fund public services.
The legislation, supported by the solar power industry but opposed by assessor groups and counties including Kern, has surfaced ahead of the Dec. 31 expiration of a longtime exemption allowing owners of large solar power developments to avoid paying their full share of taxes on their property.
McNerney says SB 1329 would set a common standard for how solar properties are valued for tax purposes, rather than leave it to individual counties to negotiate with developers, as Kern does. He notes that Texas’ use of a similar arrangement has allowed the state to surpass California as the nation’s top solar-producing state.
“Without SB 1329, California runs the risk of large-scale solar companies moving to states like Texas that have lower property taxes and selling their power back to California,” McNerney said in a statement Tuesday.
The idea of giving solar companies another break on their tax bill has infuriated state Sen. Shannon Grove, R-Bakersfield. Speaking on the floor of the Senate, she recently told representatives of Santa Monica, which receives 77 megawatts of renewable power generated in Kern, to “come get your solar panels and put them on the beach!”
“I am so tired of providing the energy and using our energy and our resources, and now you … won’t even let us have the tax revenue,” she added.
Kern’s opposition to the solar tax exclusion peaked during the pandemic after the state Legislature voted to extend the measure even as the Newsom administration was taking steps to curtail oil production, which provides most of the county’s largest individual property tax payments.
An estimated 60% of California’s renewable power is generated in Kern County.
Property tax revenue is considered particularly valuable to counties because it can be spent on virtually anything the county Board of Supervisors decides. It is considered a primary support for major expenses such as law enforcement and fire protection.
A letter the board sent last month to McNerney raises several concerns. It said his bill would undermine established appraisal standards, artificially depress market value through mandatory adjustments and erode local control.
Board Chairman Phillip Peters said by text Tuesday the bill is another example of Sacramento putting Kern in “California’s crosshairs.”
“The state continues to pass costs, unfunded mandates and other financial obligations down to the county,” he wrote.
“They claim they want a ‘just transition’ away from oil but the reality is while Kern County continues to be a good faith partner, we remain the target of Sacramento’s attacks.”
SB 1329 would set a uniform assessment practice across the state directing county assessors to look only at tangible property, irrespective of non-physical assets and rights. It would essentially value a development by what it would cost to rebuild while excluding the value of power purchase agreements, tax credits and government subsidies.
Among many private interests supporting the bill is the Solar Energy Industries Association.
California state Director Stephanie Doyle said by email the legislation “supports the local economy and energy affordability by ensuring that solar can keep growing with tax certainty across all of California’s 58 counties.”
The chairman of the California Association of Assessors’ legislative committee, San Francisco Assessor-Recorder Joaquín Torres, noted the group is sensitive to the importance of clean energy. But conceptually, he said, assessors are responsible for fair, equitable and accurate assessments in accord with the state Constitution.
He said the legislation would introduce inconsistencies and unequal assessments.
“Most specifically, we were concerned this was going to be shifting the valuation process … away from a fair market value toward something that isn’t recognized in fair appraisal practice,” Torres said.
He emphasized the association is willing to consider any amendments McNerney may add to the bill.
(Editor's note: This story has been changed to attribute the SEIA's statement to California state Director Stephanie Doyle.)