S1497

An Act concerning taxation of solar energy systems, supplementing chapter 4 of Title 54 of the Revised Statutes, and repealing P.L.1977, c.256.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. As used in this act:

"Board of appeals" means the county construction board of appeals established under section 9 of P.L.1975, c.217 (C.52:27D-127);

"Commissioner" means the Commissioner of Community Affairs;

"Local enforcing agency" means the enforcing agency in any municipality provided for under the "State Uniform Construction Code Act," P.L.1975, c.217 (C.52:27D-119 et seq.) and regulations adopted pursuant thereto;

"Solar energy" means energy which has recently originated in the sun, including direct and indirect solar radiation and intermediate solar energy from wind and sea thermal gradients; and

"Solar energy system" means any system which uses solar energy to provide all or a portion of the heating, cooling, or general energy needs of a building including, but not necessarily limited to, such means as nocturnal heat radiation, evaporation cooling towers, flat plate or focusing solar collectors, photovoltaic solar cells or windmills.

2. A solar energy system which has been certified by the local enforcing agency as a solar energy system shall be exempt from taxation under chapter 4 of Title 54 of the Revised Statutes. The owner of real property which is equipped with a certified solar energy system may have exempted annually from the assessed valuation of the real property a sum equal to the remainder of the assessed valuation of the real property with the solar energy system included, minus the assessed valuation of the real property without the solar energy system included.

3. No certification shall be made by the local enforcing agency as provided herein, except upon written application therefor, which application shall be made under oath on a form prescribed by the Director of the Division of Taxation in the Department of the Treasury and provided for the use of claimants by the local enforcing agency. The local enforcing agency may at any time inquire into the right of a claimant to the exemption and for that purpose the local enforcing agency may require the filing of a new application or the submission of such proof as the local enforcing agency shall deem necessary to determine the right of the claimant to the continuance of the exemption. The local enforcing agency shall have the right to make an inspection of the premises which are the subject of the claim for exemption under this act.

4. The local enforcing agency, when requested for a certification pursuant to this act, shall certify a system as being a solar energy system whenever the local enforcing agency finds the equipment, facility, device, or system installed was designed primarily as a solar energy system, in accordance with rules and regulations adopted by the commissioner pursuant to section 7 of this act. The certificate shall contain information identifying the system and the cost thereof and shall be in such form and detail as the Director of the Division of Taxation in the Department of the Treasury shall prescribe. The certificate shall be provided to the applicant therefor, with a copy retained on file by the local enforcing agency, and a copy of the certificate shall be sent to the assessor of the taxing district in which the solar energy system is located and has been installed. The exemption from taxation for the solar energy system shall become effective for the tax year following the year in which certification has been granted and thereafter during its use primarily for such purposes.

5. The local enforcing agency, after giving notice to the holder of a solar energy certificate, may revoke a certificate whenever any of the following appears:

a. the certificate was obtained by fraud or misrepresentation;

b. the claimant for tax exemption has failed substantially to proceed with the construction, reconstruction, installation or acquisition of a solar energy system;

c. the structure or equipment or both to which the certificate relates has ceased to be used for the primary purpose of providing solar energy and is being used for a different primary purpose; or

d. the claimant for the tax exemption has so departed from the equipment, design and construction previously certified by the local enforcing agency that, in the opinion of the local enforcing agency, the solar energy system is not suitable and reasonably adequate for the purpose of providing solar energy.

6. a. Any person aggrieved by any action of the local enforcing agency may seek review before the board of appeals.

b. Any person aggrieved by any action of the assessor or of the county tax board may seek a review before the Director of the Division of Taxation in the Department of the Treasury pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).

7. a. The Director of the Division of Taxation in the Department of the Treasury, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), shall adopt any rules and regulations necessary for the proper certification of any tax exemption pursuant to this act, the form of any certificate to be issued and any other matter related to the exemption.

b. The Department of Community Affairs, in consultation with the Board of Public Utilities, shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), standards with respect to the technical sufficiency of solar energy systems for purposes of qualification for exemption.

8. P.L.1977, c.256 (C.54:4-3.113 et seq.) is repealed.

9. This act shall take effect immediately.

STATEMENT

This bill would establish a property tax exemption for the installation of a solar energy system. The bill defines "solar energy system" as any system which uses solar energy to provide all or a portion of the heating, cooling, or general energy needs of a building through, but not limited to, such means as nocturnal heat radiation, evaporation cooling towers, flat plate or focusing solar collectors, photovoltaic solar cells or windmills.

Under the bill, a solar energy system installed in any building, whether residential, commercial or industrial, which has been certified by the local enforcing agency as a solar energy system, would be exempt from taxation under chapter 4 of Title 54 of the Revised Statutes. The owner of real property which is equipped with a certified solar energy system may have exempted annually from the assessed valuation of the real property a sum equal to the remainder of the assessed valuation of the real property with the solar energy system included, minus the assessed valuation of the real property without the solar energy system included.

P.L.1977, c.256 (C.54:4-3.113 to 54:4-3.120) previously provided such an exemption. However, that exemption expired on December 31, 1987. This bill would repeal these expired provisions of law.

This bill would require the Department of Community Affairs, in consultation with the Board of Public Utilities, to adopt standards with respect to the technical sufficiency of solar energy systems for purposes of qualification for the exemption.