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Officials ask for end to wind tax break

Wind turbines in Kansas could be taxed by the state and local governments under legislation supported Friday by a group of western Kansas officials. A bill before the House Taxation Committee would eliminate the lifetime property tax exemption granted in 1998 to renewable energy resources and technologies. The Kansas Legislative Policy Group, a coalition of 30 county commissions in western Kansas, offered the sole testimony in support of the change Friday.

TOPEKA (HNS) - Wind turbines in Kansas could be taxed by the state and local governments under legislation supported Friday by a group of western Kansas officials.

A bill before the House Taxation Committee would eliminate the lifetime property tax exemption granted in 1998 to renewable energy resources and technologies.

The Kansas Legislative Policy Group, a coalition of 30 county commissions in western Kansas, offered the sole testimony in support of the change Friday.

Several wind developers opposed repealing the exemption outright, saying it could make it more difficult to compete with surrounding states for wind farm projects.

"This sends a clear signal to investors that regulations in Kansas cannot be relied upon in the long term," said Zeina El-Azzi, south region development director for Clipper Windpower Development Co., which is based in California.

Hamilton County Commissioner Randy Braddock said western Kansas officials support the development of wind energy, which is expected to increasingly contribute to the region's economy.

But he said offering a permanent tax break in state law for wind towers and turbines prevents local governments from recouping costs... more [truncated due to possible copyright]  

TOPEKA (HNS) - Wind turbines in Kansas could be taxed by the state and local governments under legislation supported Friday by a group of western Kansas officials.

A bill before the House Taxation Committee would eliminate the lifetime property tax exemption granted in 1998 to renewable energy resources and technologies.

The Kansas Legislative Policy Group, a coalition of 30 county commissions in western Kansas, offered the sole testimony in support of the change Friday.

Several wind developers opposed repealing the exemption outright, saying it could make it more difficult to compete with surrounding states for wind farm projects.

"This sends a clear signal to investors that regulations in Kansas cannot be relied upon in the long term," said Zeina El-Azzi, south region development director for Clipper Windpower Development Co., which is based in California.

Hamilton County Commissioner Randy Braddock said western Kansas officials support the development of wind energy, which is expected to increasingly contribute to the region's economy.

But he said offering a permanent tax break in state law for wind towers and turbines prevents local governments from recouping costs of the additional burdens that wind projects place on local services.

As a result, the bill for paying of those services is shifted to other Kansas businesses. He also said that some areas are seeing their tax bases wane because of declining oil and natural gas production.

Braddock said the tax break began as a way to help Kansas take advantage of its wind resource, rated third nationally, and the state now strongly competes for projects.

"The need to subsidize the wind industry no longer exists," Braddock said in testimony.

While several nearby states offer some form of property tax exemption or reduction, Dave Corbin of the state Department of Revenue said Kansas is the only state offering a lifetime exemption for renewable energy technology and resources.

The list of electricity-producing industries eligible for the tax break includes wind, solar, photovoltaic, biomass, hyrdopower, geothermal and landfill gas resources or technologies.

Repealing the tax break would help local governments that levy taxes on property within their borders and bring additional dollars to the state, including an additional $3 million in taxes for public schools in fiscal year 2011.

Although they aren't required to pay property taxes, developers do frequently strike agreements with county governments to make voluntary payments in lieu of taxes.

For example, TradeWind Energy, the developer of the 248.5-megawatt Smoky Hill Wind Project, expects to pay Lincoln and Ellsworth counties a combined annual payment of about $750,000 a year for 10 years.

Kimberly Gencur Svaty, a lobbyist representing the Lenexa-based firm, said many other energy producers, including coal and nuclear generators, receive fixed-term property tax exemptions from the state.

She said the property tax break for renewable energy represents the one incentive that state officials offer to wind developers to locate in the state, while other states offer additional opportunities.

Developers are willing to keep discussing the issue in future years, but she said removing the tax exemption now could stall wind power-related development in Kansas or send companies to neighboring states.

Vaughn Flora of the Kansas Rural Center suggested taxing wind farms based on their level of electricity production, a system used in Minnesota, as one alternative to repealing the property tax break.

House Taxation Committee Chairman Richard Carlson, R-St. Marys, said the hearing on the issue would resume on Monday.


Source: http://www.gctelegram.com/n...

FEB 28 2009
http://www.windaction.org/posts/19304-officials-ask-for-end-to-wind-tax-break
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