Kansas bill targeting property tax breaks for wind farms fails in committee vote

‘We’re bending over backwards to subsidize these industries,’ says bill’s sponsor   

Another bill targeting wind energy failed to make it out of a Kansas Senate committee. (Jill Hummels for Kansas Reflector)

Another in a series of bills criticized as an effort to end development of wind farms in Kansas failed to make it out of committee Thursday.

The bill was introduced by Sen. Mike Thompson, a Shawnee Republican and chairman of the Senate Utilities Committee, who has proposed a number of bills critics say are attempts to stymie renewable energy development dressed as efforts to protect rural Kansas.

In February, Thompson set aside an entire week of committee meetings to hear from skeptics of renewable energy and consider his bills. He later considered striking the testimony of one pro-renewable expert.

The Senate Assessment and Taxation Committee considered another one of his bills, which would end a property tax exemption for renewable energy facilities, this week.

Thompson told the committee the property tax exemption was created as an incentive when wind energy was new to Kansas. He argues it’s not anymore.

“We’re bending over backwards to subsidize these industries that are basically using our state as a giant electrical industrial revenue source until it becomes unprofitable,” Thompson said.

But despite the interest that some members of the Senate Assessment and Taxation Committee expressed in curbing subsidies to industrial wind projects, the committee voted not to advance Thompson’s bill after a quick debate. Thompson did not return a request for comment on Thursday.

Proponents of the legislation said the state was picking winners and losers by subsidizing wind energy while charging fossil fuel companies severance taxes for extracting nonrenewable resources. But opponents pointed out that oil and gas facilities, too, receive property tax exemptions.

Aaron Popelka, a lobbyist for the Kansas Livestock Association, said renewable energy projects put a tax on the infrastructure in small communities and should pay for that.

Wind projects typically include an agreement for renewable developers to rebuild roads damaged by heavy equipment, and the companies make payments to counties and cities in lieu of their property taxes.

But Popelka said it’s also an issue of fairness.

“When my members build a feed yard, a swine facility, machine shed, home, those go on the property tax rolls immediately,” he said.

Dave Trabert, CEO of the Kansas Policy Institute, claimed the state was favoring the renewable energy industry over fossil fuel interests.

Sen. Tom Holland, a Baldwin City Democrat, asked if KPI would also support eliminating subsidies for pipelines and fossil fuel infrastructure.

“Just read through the statute books. We have a plethora of tax subsidies provided to the fossil —” Holland trailed off as Trabert replied.

“We would be very interested in having a discussion of eliminating all subsidies, not just on fossil fuels or renewables, but all of them, like the $1 billion subsidy this legislature just voted to give to one company,” Trabert said, alluding to the incentives Kansas offered to woo a secret company the Kansas City Star reported was likely a battery manufacturer for electric vehicles.

Kimberly Gencur Svaty, a lobbyist for the Kansas Advanced Power Alliance, said all forms of electric generation — except nuclear plants — have gotten the same 10-year property tax exemption for years now. Before that, renewable projects were granted lifetime exemptions.

“The difference is that in the case of renewable energy, we’re also paying a payment in lieu of taxes, and that is not something that any other form of generation or transmission line pays,” she said.

Gencur Svaty said the renewable sector will gladly have another conversation about the level of property taxes it pays as long as the state also includes oil and gas and agricultural sectors.

Gencur Svaty said competition to serve large energy customers with new renewable projects is fierce and can provide lots of jobs for the state.

“Maybe the state of Kansas has decided that’s not something that it’s interested in anymore, and the states around us will absolutely stand up and applaud,” she said.