Tax breaks for commercial renewable energy facilities

Definitions. When used herein:means a form of energy or matter that is capable of being converted into useful and marketable forms of energy, including electricity, from sources that are not deemed exhaustible. The term includes, but is not limited to:Solar energy;Geothermal energy;Conversion of biomass;Fuel cells that do not require hydrocarbon fuel;Hydroelectric generators;Methane from solid waste.means an energy production facility that generates, stores, or distributes energy from alternative renewable energy sources with the selling of more than 25% of the energy produced to the electric utility.means the Director of Finance or the Director's duly authorized representative.refers to machinery, equipment, structures, transmission lines, generators, associated prime movers, measuring and regulating equipment, and any other physical improvements that are normally operated together to produce electric power, but does not include the owner's residence or other property improvements that are non-essential to the production, storage, or distribution of alternative renewable energy.means the fee option paid in place of the real property tax.means gross income as defined in Chapter 239 of the Hawai'i Revised Statutes.Eligibility; Application. The commercial alternative energy facility projects shall sell at least 25% of the energy being produced at the facility to the electric utility; the energy generation improvements are located on and affixed to the property under consideration for exemption; and the property owner, lessee, or qualified representative applies for the commercial alternative energy facilities exemption on or before September 30th of the year preceding the tax year in which the exemption is being sought.The Director shall prescribe the form of the application for the exemption which shall be filed with the Director by September 30th of any year and shall contain such information as the Director prescribes by rules. The application shall include, but not be limited to the following:Name and contact information of applicant;Physical address and tax map key number of said property or properties;A site plan, including defined land area(s), indicating where the commercial alternative energy facility and associated energy generation improvements are located;A copy of the approved use permit for constructing (or adding additional energy generation improvements to) the commercial energy facility;Photographs of the energy generation improvements; andCopies of energy purchase agreement contracts with the electric utility, if any.The application form must be signed by the property owner or duly appointed legal representative.An eligible commercial alternative energy facility shall be assessed and taxed in accordance with Paragraph (1) of this Subsection. After a commercial alternative energy facility has had, at a minimum, a full year of gross income, it may make a one time selection on a form prescribed by the Director to be assessed and taxed in accordance with Paragraph (2) of this Subsection for the duration of its time as a commercial alternative energy facility.Exemption. Energy generation improvements shall be 100% exempt from real property taxes and the lands underlying areas that are designated and approved for commercial alternative energy facilities shall be 50% exempt from real property taxes provided the form of energy being produced originates from an alternative renewable energy source.Exemption by Commutation. In lieu of the assessment method specified in Sec. 5A-8.4 and Paragraph (1) of this Subsection, the commercial alternative energy facility shall be assessed and shall pay property tax of 1% multiplied by the gross income generated by the commercial alternative energy facility in the prior tax year.If a commercial alternative energy facility has selected the exemption by commutation, it shall provide the Director proof of gross income, as prescribed by the Director, with its exemption application on or before September 30th. If the commercial alternative energy facility fails to provide said proof by the deadline, it shall be assessed and taxed in accordance with Paragraph (1) of this Subsection.Where the commercial alternative energy facility is 100% owned by a public utility which currently pays a public service company tax in lieu of real property taxes, the commercial alternative energy facility will be 100% exempt from real property tax, provided the form of energy being produced originates from an alternative renewable energy source.