Solar energy groups file lawsuit in Riverside County, California, to halt 'Sun Tax'--US$450/acre tax imposed on large-scale solar projects--arguing it violates state constitution, discourages energy independence
February 7, 2012
– Solar industry associations call county solar policy illegal
The Independent Energy Producers Association (IEP) and the Large-scale Solar Association (LSA) have filed a lawsuit in Riverside County Superior Court asking the court to invalidate the county's Board Policy B-29, commonly known as the "Sun Tax." The lawsuit, which was filed on Friday in Riverside County's Desert Judicial District, alleges that the Sun Tax is illegal in that it violates California Proposition 26 and fails to conform to the California Mitigation Fee Act.
"In order for California to meet its renewable energy objectives and take real strides toward energy independence, the solar industry needs to be nurtured, not attacked by illegal county policies," said Jan Smutny-Jones, executive director of the IEP.
"The Sun Tax not only discourages the development of solar energy projects in Riverside County – it does so by violating the California Constitution," said Shannon Eddy, executive director of the LSA.
The Sun Tax is a charge of $450 per acre imposed annually by Riverside County on large-scale solar projects. The lawsuit challenges the imposition of this charge based upon a number of key issues. According to the plaintiffs the charge is actually a tax, as evidenced by the Board of Supervisors' instructions (in its June 28, 2011 meeting) to "prepare a policy of revenue generating agreements pertaining to renewable energy projects."
"Because this charge has no relationship with impacts on or services provided by the county, it must be considered a tax," said Smutny-Jones. "According to Proposition 26, taxes cannot masquerade as 'fees' or 'charges,' and this tax cannot be imposed without voter approval."
In the past, Riverside County has attempted to differentiate its policy from a tax by characterizing it as a payment designed to compensate the county for the impacts of solar development. However, the California Mitigation Fee Act prevents the county from charging a development fee unless there is a connection to actual impacts. "The county has never shown a connection between the fee and actual impacts," said Eddy. "Furthermore, the money raised would go directly to its general fund rather than to mitigating any alleged impact. This is a Sun Tax, not a development fee."
Other issues raised in the suit involve a property tax exemption granted by California to solar providers, which the IEP and LSA allege the county is trying to replace with its charge, and a guarantee of sales tax revenue, which has never before been requested of any industry and is therefore in violation of the California Constitution.
"This is a straightforward case challenging the constitutionality of a county action," said Smutny-Jones, who does not anticipate a lengthy trial process. Because these concerns were brought to the county's attention in writing in June, he said, they should come as no surprise now. "At this critical moment for the future of Riverside County's solar industry, we need to do all we can to protect jobs, economic growth and an industry that represents the region's future. This is no time for additional – and illegal – burdens that will drive projects and jobs out of Riverside County for good."
For more information on the Sun Tax, and to view a copy of the lawsuit, visit NoSunTax.com.
About the Independent Energy Producers Association (IEP)
The Independent Energy Producers Association (IEP) is California's oldest and leading nonprofit trade association, representing developers and operators of independent energy facilities and independent power marketers with the goal of proposing open and fair competition and market opportunities in the power supply industry. IEP members collectively own and operate approximately one-third of California installed generating capacity, including renewable products derived from biomass, geothermal, small hydro, solar, and wind, as well as producers of cogeneration and owners/operators of gas-fired merchant facilities.
About the Large-scale Solar Association (LSA)
The Large-scale Solar Association (LSA) is a non-partisan, solar advocacy association whose purpose is to support market growth of utility-scale solar technologies through appropriate policy mechanisms. Member companies in the LSA represent leaders in the utility-scale solar industry, and share a common understanding of and concern for the issues facing development of the solar industry.