Relating to property taxes; prescribing an effective date.
Summary
HB 3823 amends Oregon’s property tax exemption statute for alternative energy systems and related equipment. The bill expands the exemption to cover personal property used by a for-profit or nonprofit business to generate or store energy for the business’s own on-premises use, while expressly excluding utility business property from that new exemption. It also creates a parallel exemption for property installed at a residence to generate or store energy for use at the residence.
The measure continues existing exemptions for certain alternative energy systems, including net metering facilities, systems primarily designed to offset onsite electricity use, and community solar projects. It also provides that when exempt energy equipment is affixed to otherwise tax-exempt real property, the exempt portion of value is removed from ad valorem taxation. For residences, the exemption is measured by the increase in real market value attributable to the installed energy property. The bill applies to property tax years beginning on or after July 1, 2026, and takes effect 91 days after adjournment sine die.
Impact
HB 3823 would change Oregon property tax law by broadening ORS 307.175 to include more behind-the-meter energy generation and storage equipment at both business and residential sites. The practical effect is to reduce assessed value for qualifying solar, battery storage, and other alternative energy systems used on-site, lowering property tax liability for eligible owners. Utility-owned property remains outside the new business exemption, and community solar projects remain subject to the bill’s existing exemption framework and limits.
Sentiment
The available legislative history suggests the bill was received favorably at the committee level, with an 11-0 vote to move it forward without recommendation and refer it to Revenue by prior reference. That unanimous vote indicates broad procedural support, at least at the committee stage. No opposing testimony or recorded floor debate is provided in the materials, so the overall sentiment appears positive or at minimum noncontroversial in the available record.
Contention
The main policy distinction in the bill is between private on-site energy systems and utility business property: the bill grants tax relief to business-owned generation and storage used for the business’s own consumption, but excludes utility businesses from that benefit. Another point that may draw attention is the treatment of residential installations, because the exemption is tied to the added market value from the equipment, which could affect how assessors calculate the tax benefit. The bill also preserves limits on community solar projects by preventing them from stacking this exemption with another property tax exemption for the same tax year.