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House Bill No. 5442
Public Act No. 26-134
AN ACT CONCERNING THE PROPERTY TAX EXEMPTION FOR
AND TAX AGREEMENTS RELATED TO CERTAIN CLASS I
RENEWABLE ENERGY SOURCES.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Subdivision (57) of section 12-81 of the 2026 supplement to
the general statutes is repealed and the following is substituted in lieu
thereof (Effective from passage):
(57) (A) (i) Any Class I renewable energy source, as defined in section
16-1, or hydropower facility described in subdivision (21) of subsection
(a) of section 16-1, installed for the generation of electricity where such
electricity is intended for private residential use or on a farm, as defined
in subsection (q) of section 1 -1, provided (I) such installation occurs on
or after October 1, 2007, (II) the estimated annual production of such
source or facility does not exceed the estimated annual load for the
location where such source or facility is located, where such load and
production are estimated as of the date of installation of the source or
facility as indicated in the written application filed pursuant to
subparagraph [(G)] (F) of this subdivision, and (III) such installation is
for a single family dwelling, a multifamily dwelling consisting of two to
four units or a farm; (ii) any passive or active solar water or space
heating system; or (iii) any geothermal energy resource. In the case of
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clause (i) of this subparagraph, the utilization of or participation in any
net metering or tariff policy or program implemented by the state or
ownership of such source or facility by a party other than the owner of
the real property upon which such source or facility is installed shall not
disqualify such source or facility from exemption pursuant to this
section. In the case of clause (ii) or (iii) of this subparagraph, such
exemption shall apply only to the amount by which the assessed
valuation of the real property equipped with such system or resource
exceeds the assessed valuation of such real property equipped with the
conventional portion of the system or resource;
(B) For assessment years commencing on and after October 1, 2013,
any Class I renewable energy source, as defined in section 16 -1,
hydropower facility described in subdivision (21) of subsection (a) of
section 16-1, or solar thermal or geothermal renewable ene rgy source,
installed for generation or displacement of energy, provided (i) such
installation occurs on or after January 1, 2010, (ii) such installation is for
commercial or industrial purposes, (iii) the nameplate capacity of such
source or facility does not exceed the load for the location where such
generation or displacement is located, and (iv) such source or facility is
located in a distressed municipality, as defined in section 32 -9p, with a
population between one hundred twenty -five thousand an d one
hundred thirty-five thousand;
(C) For assessment years commencing on and after October 1, 2013,
any municipality may, upon approval by its legislative body or in any
town in which the legislative body is a town meeting, by the board of
selectmen, abate up to one hundred per cent of propert y tax for any
Class I renewable energy source, as defined in section 16-1, hydropower
facility described in subdivision (21) of subsection (a) of section 16-1, or
solar thermal or geothermal renewable energy source, installed for
generation or displace ment of energy, provided (i) such installation
occurs between January 1, 2010, and December 31, 2013, (ii) such
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installation is for commercial or industrial purposes, (iii) the nameplate
capacity of such source or facility does not exceed the load for the
location where such generation or displacement is located, and (iv) such
source or facility is not located in a municipality described in
subparagraph (B) of this subdivision;
(D) [Subject to the provisions of subparagraph (E) of this subdivision,
for] For assessment years commencing on and after October 1, 2014, any
(i) Class I renewable energy source, as defined in section 16-1, other than
a nuclear power generating facility, (ii) hydropower facility described
in subdivision (21) of subsection (a) of section 16-1, or (iii) solar thermal
or geothermal renewable energy source, installed for generation or
displacement of energy, provided (I) such installation occurs on or after
January 1, 2014, (II) is for commercial or industrial purposes, (III) the
nameplate capacity of such source or facility does not exceed the load
for the location where such generation or displacement is located or the
aggregated load of the beneficial accoun ts for any Class I renewable
energy source participating in virtual net metering pursuant to section
16-244u, and (IV) in the case of clause (iii) of this subparagraph, such
exemption shall apply only to the amount by which the assessed
valuation of the re al property equipped with such source exceeds the
assessed valuation of such real property equipped with the
conventional portion of the source;
[(E) For assessment years commencing on and after October 1, 2025,
the exemption provided for under subparagraph (D)(i) of this
subdivision shall apply only to equipment and devices that have the
primary purpose of generating electricity and shall not apply to any real
property on which such equipment and devices are located or installed;]
[(F)] (E) For assessment years commencing on and after October 1,
2025, any Class I renewable energy source consisting of equipment and
devices that have the primary purpose of collecting solar energy and
generating electricity by photovoltaic effect, for which the owner of such
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equipment and devices receives, on or after July 1, 2025, permission to
operate from an electric distribution company, as defined in section 16-
1, or a municipal utility furnishing electricity. The exemption under this
subparagraph shall apply only to equipment and devices that have the
primary purpose of generating electricity and shall not apply to any real
property on which such equipment and devices are located or installed;
[(G)] (F) Any person claiming an exemption provided in this
subdivision for any assessment year shall, on or before the first day of
November in such assessment year, file with the assessor or board of
assessors in the town in which such hydropower facility, Class I
renewable energy source, solar thermal or geothermal renewable
energy source or passive or active solar water or space heating system
or geothermal energy resource is located, a written application claiming
such exemption. Such application shall be made on a form prepared for
such purpose by the Secretary of the Office of Policy and Management,
in consultation with the Connecticut Association of Assessing Officers
and the Connecticut Green Bank established pursuant to section 16 -
245n, and shall i nclude, but not be limited to, a statement of the
estimated annual load and production of a source or facility described
in clause (i) of subparagraph (A) of this subdivision as of the date of the
installation of such source or facility. Said secretary sha ll make such
application available to the public on the Internet web site of the Office
of Policy and Management. Failure to file such application in the
manner and form as provided by the secretary within the time limit
prescribed shall constitute a waive r of the right to such exemption for
such assessment year. Such application shall not be required for any
assessment year following that for which the initial application is filed,
provided if such hydropower facility, Class I renewable energy source,
solar thermal or geothermal renewable energy source or passive or
active solar water or space heating system or geothermal energy
resource is altered in a manner that would require a building permit,
such alteration shall be deemed a waiver of the right to such exemption
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until a new application, applicable with respect to such altered source,
is filed and the right to such exemption is established as required
initially. If a person owns more than one such source or facility in a
municipality, such person may file a single application identifying each
source or facility;
[(H)] (G) For assessment years commencing on and after October 1,
2015, any municipality may, by vote of its legislative body or, in a
municipality where the legislative body is a town meeting, by vote of
the board of selectmen, abate up to one hundred per cent of the property
taxes due for any tax year, for not longer than the term of the power
purchase agreement, with respect to any Class I renewable energy
source, as defined in section 16 -1, that is the subject of such power
purchase agreement approved b y the Public Utilities Regulatory
Authority pursuant to section 16a-3f;
Sec. 2. ( Effective from passage ) If the grand list for a municipality for
the assessment year commencing October 1, 2025, has been published
and lodged for inspection on or before the effective date of this section,
the assessor or board of assessors for such municipality shall issue a
certificate of correction for said grand list to implement the changes
made to subparagraph (E) of subdivision (57) of section 12 -81 of the
general statutes, as amended by this act, pursuant to section 1 of this act.
Sec. 3. Section 12-121dd of the 2026 supplement to the general statutes
is repealed and the following is substituted in lieu thereof (Effective July
1, 2026):
(a) As used in this section:
(1) "Solar photovoltaic system" means equipment and devices (A)
that have the primary purpose of collecting solar energy and generating
electricity by photovoltaic effect, (B) that have a nameplate capacity
greater than one megawatt of electricity and such nam eplate capacity
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exceeds the load for the location where such generation is located, and
(C) for which the owner of such equipment and devices receives, on or
after July 1, [2026] 2025, permission to operate from an electric
distribution company, as defined in section 16 -1, or a municipal utility
furnishing electricity;
(2) "Municipality" means any town, city, consolidated town and city
or consolidated town and borough; and
(3) "Uniform solar capacity tax year" means the annual accounting
period used to calculate the tax under this section, consisting of a
twelve-month period commencing on July first and ending on the
following June thirtieth.
(b) (1) Except as provided in subdivision (3) of this subsection and
subsection (h) of this section, for uniform solar capacity tax years
commencing on and after July 1, 2026, each person that owns a solar
photovoltaic system in the state for generation or displac ement of
energy shall pay an annual tax for a period of either (i) for a solar
photovoltaic system that receives permission to operate from an electric
distribution company, as defined in section 16 -1, or a municipal utility
furnishing electricity on or af ter July 1, 2025, but before July 1, 2026,
nineteen solar capacity tax years, or (ii) for a solar photovoltaic system
that receives such permission to operate on or after July 1, 2026, twenty
solar capacity tax years to the department of finance of each
municipality in which the system or any part thereof is located, or, if the
municipality does not have a department of finance, to the tax collector
for such municipality. For any such solar photovoltaic system [that
receives permission to operate in the uni form solar capacity tax year
commencing on and after July 1, 2026,] the tax shall be, for the duration
of the [twenty-year] period such tax is imposed, the product of ten
thousand dollars multiplied by the number of megawatts, and any
fractional portion thereof, of nameplate capacity for each such system.
If a solar photovoltaic system has multiple owners, each owner shall be
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jointly and severally liable for the tax owed pursuant to this section.
(2) [Each] On and after July 1, 2026, each person that owns a solar
photovoltaic system in the state that receives [, on or after July 1, 2026,]
permission to operate from an electric distribution company or a
municipal utility furnishing electricity shall notify, not later than seven
days after the date of such receipt, the department of finance of each
municipality in which the system or any part thereof is located or, if the
municipality does not have a department of finance, the tax collector for
such municipality, of the effective date of such permission to operate ,
provided, for any solar photovoltaic system that receives such
permission to operate on or after July 1, 2025, but before July 1, 2026,
shall provide such notification not later than July 10, 2026.
(3) The tax imposed under this section shall not apply to solar
photovoltaic systems in the state that (A) are located on (i) state-owned
land, (ii) brownfields, as defined in section 32 -760, (iii) landfills, (iv)
residential, commercial or industrial rooftops , or (v) solar canopies, as
defined in section 8 -2q, or (B) are part of a microgrid serving a critical
facility, as those terms are defined in section 16-243y.
(c) The Office of Policy and Management shall develop a form to be
submitted with the tax due under this section. Not later than July 31,
2026, the department of finance in each municipality, or, for any
municipality that does not have a department of finance, the tax
collector of such municipality, shall furnish such form upon request.
The tax imposed under this section shall be due and payable on the due
date or due dates of such return, as determined by the department of
finance or tax collector, as appl icable. The department of finance or tax
collector, as applicable, may require a single annual payment of the tax
imposed under this section or may require semiannual or quarterly
installments of such payment. Such tax shall be due and collectible as
other property taxes and subject to the same liens and processes of
collection.
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(d) The revenues generated by the tax imposed under this section
shall become part of the general revenue of the municipality in which
the tax is paid.
(e) If a solar photovoltaic system is located in more than one
municipality, the tax shall be allocated between or among the
municipalities in proportion to the nameplate capacity of the solar
photovoltaic system located in each municipality.
(f) Whenever the tax imposed under this section is not paid when due
to the department of finance or tax collector, as applicable, in a
municipality, interest at the rate of one and one-half per cent per month
or fraction thereof shall accrue on such tax from the due date of such tax
until the date of payment.
(g) Any person claiming to be aggrieved by the action of a
department of finance or tax collector under this section may appeal the
tax to the superior court for the judicial district in which the
municipality is located. Any person appealing the tax that pays a
portion of such tax during the pendency of such appeal and indicates
that such portion is paid "under protest" shall not be liable for any
interest on the tax, provided such person pays not less than seventy-five
per cent of the amount of the tax as sessed by the municipality during
the time limits prescribed by the department of finance or tax collector,
as applicable, in such municipality in accordance with this section.
(h) (1) (A) Any municipality acting through its board of selectmen,
town council, court of common council or other legislative body shall
have the power to enter into an agreement to freeze or stabilize the tax
imposed under this section for any owner of a solar photovoltaic system
located in such municipality, as provided in this subsection.
(B) The terms of such agreement shall apply in lieu of the tax imposed
under this section, including any agreement pertaining to the tax
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imposed under chapter 203 entered into prior to July 1, 2025, but for
which such owner receives permission to operate, as described under
subdivision (1) of subsection (a) of this section, on or after July 1, 2025.
(2) With respect to any photovoltaic system located in more than one
municipality, such agreement shall only pertain to the tax that is
allocated, in accordance with the provisions of subsection (e) of this
section, to the municipality that enters into such agreement.
(i) For purposes of calculating the nameplate capacity of a solar
photovoltaic system, the following shall be deemed to be part of the
same solar photovoltaic system: (1) All equipment and devices that have
the primary purpose of collecting solar energy and generating electricity
by photovoltaic effect that are located on the same parcel; (2) all
equipment and devices that have the primary purpose of collecting solar
energy and generating electricity by photovoltaic effect that are located
on land that the current owner of any part of such land subdivided into
multiple parcels but was part of the same parcel prior to such
subdivision; and (3) all equipment and devices that have the primary
purpose of collecting solar energy and generating electricity by
photovoltaic effect that are located on adjoining parcels. Nothing in this
subsection shall be construed to limit tax liability or the definitions in
subsection (a) of this section.