Current law, GS 105-275(45), excludes 80% of the appraised value of a solar energy electric system from the tax base. This act specifies that this existing exclusion applies to solar energy electric systems used for residential use, and additionally establishes an exclusion of 60% of the appraised value of a solar energy electric system used for nonresidential use, effective for taxes imposed for taxable years beginning on or after July 1, 2018. The act phases out the exclusion for solar energy electric systems used for non-residential use, decreasing the percentage of appraised value excluded to 40% for taxes imposed for taxable years beginning on or after July 1, 2019; 20% for taxes imposed for taxable years beginning on or after July 1, 2020; and finally providing for no exclusion for taxes imposed for taxable years beginning on or after July 1, 2021.

Effective July 1, 2018, amends GS 153A-149 to require each county to calculate the tax expenditure of GS 105-275(45), as amended, for solar energy electric systems used for nonresidential use at the percentage provided and at 80%, and use the difference between the two calculations for construction of and repairs and renovations to public school property and facilities, including measures taken to improve or harden school structures for safety purposes and associated debt service. Further amends the statute, effective for taxes imposed for taxable years beginning on or after July 1, 2021, requiring each county to calculate the tax revenue generated on solar energy electric systems for nonresidential use and use the revenue for the same public school property purposes described above.

Appropriates from the General Fund to the Department of Revenue (Department) $50,000 in nonrecurring funds for the 2018-19 fiscal year to study the number of solar energy electric systems affected by the tax changes in the act and the additional revenue resulting in each county for each year the rate of the exemption changes. Directs the Department to report to the Joint Legislative Oversight Committee on Agriculture and Natural and Economic Resources no later than January 1, 2019.

Effective July 1, 2018.