Solano supervisors direct staff to draft ballot measures to tax energy projects and raise hotel tax

The Solano County Board of Supervisors on June 9 gave staff direction to draft two countywide ballot measures: one to modernize and expand the county's business license tax for commercial energy and resource extraction, and another to raise the transient occupancy tax (TOT) in unincorporated areas.

Resource Management staff explained that the county’s wind turbine business license tax was adopted in 1994 and is unchanged; staff proposed indexing the rate to inflation and adding a future escalator. They also presented options for taxing front‑of‑meter battery storage (a per‑nameplate capacity fee), natural gas extraction (a per‑thousand cubic feet fee), and commercial solar. Staff estimated that combining a wind tax inflation adjustment with a natural gas extraction tax could yield about $225,000 in new annual revenue; including other options would change the projection.

The presentation noted legal limits: several SMUD‑operated wind projects are not currently taxable due to the court decision in SMUD v. County of Solano, and staff said the board is too late to appeal that ruling; the exemption stems from the court’s interpretation of whether an entity is a “business” under the county code. County counsel said changing that outcome would require new legislation or a statutory redefinition and would likely face litigation.

Supervisors asked whether the county could set a tax higher than CPI if it wished; staff said the rate and structure are policy decisions for the board and can be modeled ahead of a ballot placement. Supervisor Mashburn and others argued for capturing a larger share of revenue than a CPI adjustment alone, citing county needs and the fact that some projects supply power outside the county. After discussion and with an amendment to explicitly include data centers in the review, the board directed staff to return June 23 with a proposed resolution to place a measure on the November ballot. The measure would be countywide and require a simple majority (50%+1) if proposed as a general tax for the general fund; a specific‑use measure would require a two‑thirds majority.

On the TOT, Treasurer‑Tax Collector staff proposed increasing the county unincorporated TOT rate from 5% to 12% to align with neighboring jurisdictions and estimated roughly $550–580k in additional annual general‑fund revenue. The board also directed staff to return on June 23 to place a TOT measure on the November ballot.

Both items were advanced with unanimous board direction to continue drafting measure language and to return for formal placement decisions. Staff estimated the cost to place the energy tax on the November ballot at roughly $140,000.

What happens next: staff will prepare draft ballot language, revenue modeling and an ordinance amendment for board consideration on June 23; the board may refine the tax base (which energy resources to include), set rates, and choose whether revenue is general fund or earmarked for specific programs.