| 47 | | - | SECTION 1. The legislature finds that Act 97, Session Laws of Hawaii 2015, requires electric utilities in the State to achieve a one hundred per cent renewable portfolio standard by December 31, 2045, with the intent to transition the State away from imported fossil fuels and toward renewable local resources that provide a secure source of affordable energy. The successful deployment of large-scale renewable energy projects is integral to the achievement of this goal. Additionally, fixed pricing for renewable energy over the life of utility contracts has the potential to reduce the negative impacts of price volatility. The legislature further finds that implementation of Act 97, Session Laws of Hawaii 2015, can be better served by allowing counties the flexibility to accept payments in lieu of real property tax for renewable generation improvements upon real property and that the counties need authority from the State to establish a payment in-lieu-of-real-property-tax program with payments based on a per megawatt nameplate capacity basis. In cases such as In re Tax Appeal of Kaheawa Wind Power, LLC v. County of Maui, the Hawaii supreme court affirmed important distinctions relating to taxation, clearly requiring the counties to obtain authority delegated from the State to allow payments in lieu of real property tax for renewable generation projects. Furthermore, under section 239-5, Hawaii Revised Statutes, and section 8-10.24, Revised Ordinances of Honolulu, public service companies, including electric utilities, are assessed public service taxes by the city and county of Honolulu in lieu of real property taxes. The legislature additionally finds that a payment in-lieu-of-real-property-tax program may provide the stability necessary for renewable energy projects to bid into long-term contracts, often twenty years or more, with fixed pricing. The purpose of this Act is to authorize the counties to establish an opt-in program that allows an annual payment in lieu of real property taxes for land or improvements that produce or store renewable energy sold to an electric utility. SECTION 2. Chapter 46, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows: "§46- Renewable energy projects; payment in lieu of real property taxes. A county may enact an ordinance to establish an opt-in by the property owner or taxpayer program that allows an annual payment in lieu of real property taxes on land or improvements thereon that are actively used to produce or store renewable energy primarily for the purpose of public consumption that is sold under a power purchase agreement to an electric utility; provided that: (1) The ordinance also exempts renewable energy projects from one hundred per cent of real property taxes; and (2) The payment may be determined by the county on a per megawatt nameplate alternating current capacity basis." SECTION 3. If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the invalidity does not affect other provisions or applications of the Act that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable. SECTION 4. New statutory material is underscored. SECTION 5. This Act shall take effect on July 1, 3000. |
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| 47 | + | SECTION 1. The legislature finds that Act 97, Session Laws of Hawaii 2015, requires electric utilities in the State to achieve a one hundred per cent renewable portfolio standard by December 31, 2045, with the intent to transition the State away from imported fossil fuels and toward renewable local resources that provide a secure source of affordable energy. The successful deployment of large-scale renewable energy projects is integral to the achievement of this goal. Additionally, fixed pricing for renewable energy over the life of utility contracts has the potential to reduce the negative impacts of price volatility. The legislature further finds that implementation of Act 97, Session Laws of Hawaii 2015, can be better served by allowing counties the flexibility to accept payments in lieu of real property tax for renewable generation improvements upon real property and that the counties need authority from the State to establish a payment in-lieu-of-property-tax program with payments based on a per megawatt nameplate capacity basis. In cases such as In re Tax Appeal of Kaheawa Wind Power, LLC v. County of Maui, the Hawaii supreme court affirmed important distinctions relating to taxation, clearly requiring the counties to obtain authority delegated from the State to allow payments in lieu of real property tax for renewable generation projects. Furthermore, under section 239-5, Hawaii Revised Statutes, and section 8-10.24, Revised Ordinances of Honolulu, public service companies, including electric utilities, are assessed public service taxes by the city and county of Honolulu in lieu of real property taxes. The legislature additionally finds that a payment in-lieu-of-tax program may provide the stability necessary for renewable energy projects to bid into long-term contracts, often twenty years or more, with fixed pricing. The purpose of this Act is to authorize the counties to establish an opt-in program that allows an annual payment in lieu of real property taxes for land or improvements that produce or store renewable energy sold to an electric utility. SECTION 2. Chapter 46, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows: "§46- Renewable energy projects; payment in lieu of real property taxes. A county may enact an ordinance to establish an opt-in by the property owner or taxpayer program that allows an annual payment in lieu of real property taxes on land or improvements thereon that are actively used to produce or store renewable energy primarily for the purpose of public consumption that is sold under a power purchase contract to an electric utility; provided that: (1) The ordinance also exempts renewable energy projects from one hundred per cent of real property taxes; and (2) The payment may be determined by the county on a per megawatt nameplate alternating current capacity basis." SECTION 3. If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the invalidity does not affect other provisions or applications of the Act that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable. SECTION 4. New statutory material is underscored. SECTION 5. This Act shall take effect on July 1, 3000. |
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