(a) The value of all improvements affixed to land (not including a building or its structural components, except where renewable energy improvements are incorporated into the building, and then only that part of the building necessary to such improvement) and actually used for a renewable energy improvement is exempt from real property taxes, as provided in this section, if a timely claim for exemption is approved by the director.
(b) The portions of land actually used for the active production or storage of renewable energy shall be exempt from 80 percent of its value from the measure of the taxes imposed by this chapter; provided that:
(1) A state-approved special use permit or county-approved conditional use permit allowing for such production is required if the production of renewable energy is inconsistent with or not permitted by the underlying zoning; and
(2) The production or storage of renewable energy must be primarily for use, distribution, or sale to public utilities or for public consumption under a power purchase agreement or power purchase contract with the utility.
As used in this subsection, "portions of land actually used" means the land area in physical contact with renewable energy structures.
(c) The exemption provided in this section does not apply to any portion of land or improvements used primarily for the production or storage of renewable energy for personal use, or used to sustain private enterprises or operations.
(d) As used in this section, “renewable energy improvement” means any construction or addition, alteration, modification, improvement, or repair work undertaken upon or made to any building, property, or land that results in:
(1) The production or storage of energy from a source, or uses a process that does not use fossil fuels, or nuclear fuels. Such energy source may include, but is not limited to, solid wastes, wind, sun, falling water, biogas, geothermal, ocean water, currents and waves, biomass biofuels, hydrogen, or any combination of the foregoing; or
(2) An increased level of efficiency in the use of energy produced by fossil fuels or in the use of secondary forms of energy dependent upon fossil fuels for its generation.
(e) Application for the exemption provided by this section must be filed by the taxpayer with the director on or before September 30 preceding the tax year for which the exemption is claimed. No improvement exemption may be claimed for devices that convert solar radiation to electricity or heat because these devices are excluded from the definition of “property” or “real property” and are not assessed. The director may require the taxpayer to furnish reasonable information in order that the director may ascertain the validity of the claim for exemption.
(f) The claim for exemption, once allowed, shall continue for the period of the power purchase agreements or contract with the utility.
(g) The director may require that the claimant provide documentation to support an initial claim for exemption or the continuing qualification for the exemption. Failure to provide the director with such documentation is grounds for denying a claim for an exemption or disallowing an existing exemption. The director may require that the claimant provide documentation evidencing active production of renewable energy, such as a current, valid copy of a state-approved special use permit or county-approved conditional use permit, approvals or orders from the state public utilities commission, or if the claimant is not the fee owner, a copy of the lease or agreement describing the allowable uses and period of use of the real property. Failure to provide the director with such documentation within 30 days of the director's request is grounds for disallowance or denial of a claim for the exemption.
(h) The director may cancel the exemption if the renewable energy improvement ceases operations that generate or store renewable energy, and when the production or storage of renewable energy on the land ceases or terminates. Scheduled equipment maintenance and forced shut downs due to unforeseen circumstances beyond the control of the claimant will be considered.
(i) The claimant may cancel the exemption by filing a written notice of cancellation with the director.
(j) The land portions granted in this exemption may not be subject to other real property tax exemption in this article or dedication program in Article 7.
(k) The director may adopt rules in accordance with HRS Chapter 91 to implement this section.
(Sec. 8-10.15, R.O. 1978 (1983 Ed.)) (1990 Code, Ch. 8, Art. 10, § 8-10.15) (Am. Ords. 96-15, 09-31, 15-23; 21-32)
Editor’s note:
Pursuant to Ordinance 21-32, properties for which an exemption under § 8-10.12, as it read prior to December 14, 2021 (as ROH 1990 § 8-10.15), had been granted by the Director of Budget and Fiscal Services will continue to be allowed the exemption until the exemption expires under § 8-10.12(d), as it read prior to December 14, 2021 (as ROH 1990 § 8-10.15(d)).