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AB-881 Property taxation: new construction exclusion: methane digester.(2017-2018)

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Date Published: 03/28/2017 04:00 AM
AB881:v98#DOCUMENT

Amended  IN  Assembly  March 27, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 881


Introduced by Assembly Member Gallagher

February 16, 2017


An act relating to solid waste. An act to add Section 74.8 to the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 881, as amended, Gallagher. Solid waste: composting: anaerobic digestion. Property taxation: new construction exclusion: methane digester.
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.
This bill would exclude from classification as “newly constructed” and “new construction” the construction or addition, on or after January 1, 2018, of a methane digester or methane digester electric generating system, as provided.
By imposing new duties upon county assessors, this bill would impose a state-mandated local program.
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.
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.
This bill would take effect immediately as a tax levy.

The California Integrated Waste Management Act of 1989 establishes an integrated waste management program administered by the Department of Resources Recycling and Recovery that requires each city, county, and regional agency, if any, to develop a source reduction and recycling element of an integrated waste management plan. The element is required to provide for the diversion of 50% of the solid waste subject to the element through source reduction, recycling, and composting activities, only 10% of which may be satisfied by diversion through transformation. The act specifies that “composting,” defined as the controlled or uncontrolled biological decomposition of organic wastes, is not transformation for these purposes, and therefore is not limited regarding contributing to the source reduction and recycling element.

This bill would express the intent of the Legislature to enact legislation to encourage investment in anaerobic digestion.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NOYES   Local Program: NOYES  

The people of the State of California do enact as follows:


SECTION 1.

 Section 74.8 is added to the Revenue and Taxation Code, to read:

74.8.
 (a) “Newly constructed” and “new construction” do not include the construction or addition of a methane digester or methane digester electric generating system.
(b) (1) Notwithstanding any other law, for purposes of this section, “the construction or addition of a methane digester or methane digester electric generating system” includes the construction of a methane digester or methane digester electric generating 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.
(2) The exclusion provided by this section applies to the initial purchaser who purchased the new building from the owner-builder only if the owner-builder did not receive an exclusion pursuant to this section for the same methane digester or methane digester electric generating system and only if the initial purchaser purchased the new building before that building become subject to reassessment to the owner-builder, as described in subdivision (d) of Section 75.12.
(c) This section shall be administered as follows:
(1) The initial purchaser of the new building shall file a claim with the assessor and provide to the assessor any documents necessary to identify the value attributable to a methane digester or methane digester electric generating system included in the purchase price of the new building. The claim shall also identify the amount of any rebate for a methane digester or methane digester electric generating 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.
(2) The assessor shall evaluate the claim and determine the portion of the purchase price that is attributable to a methane digester or methane digester electric generating 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:
(A) That portion of the value of the new building attributable to a methane digester or methane digester electric generating system.
(B) The total amount of all rebates, if any, described in paragraph (1) that were provided to either the owner-builder or the initial purchaser.
(3) The extension of the new construction exclusion to the initial purchaser of a new constructed new building shall remain in effect only until there is a subsequent change in ownership of the new building.
(d) This section applies to new construction completed on or after January 1, 2018.
(e) For purposes of this section, the following terms have the following meanings:
(1) “Methane digester” means a system designed to facilitate the production, recovery, and storage of biogas from the anaerobic microbial digestion of animal, food, or other organic material.
(2) “Methane digester electric generating system” means a methane digester and the apparatus and equipment used to generate electricity or heat from biogas or to store biogas for the future generation of electricity or heat.

SEC. 2.

 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.

SEC. 3.

 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. 4.

 This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.
SECTION 1.

It is the intent of the Legislature to enact legislation to encourage investment in anaerobic digestion.