One of the major concerns for Illinois counties looking to lure wind farms to the area is the tax assessment. That problem is now a step closer to being resolved.
Thursday, during the prolonged legislative overtime session resulting from the budget impasse, the Illinois Senate voted 53-0 to pass legislation that sets an assessment rate. It still must pass the House and be signed by the governor. If enacted, the tax value would be $9,000 per megawatt for wind farms.
Presently, counties do not have any guidance for tax values on wind farm turbines because they were not in the state’s assessment manual, said Knox County Assessor Joyce Skinner.
The County Board did approve a permit charge of $25 per linear foot for each tower. Thus far, that charge has only affected a few individual, residential wind turbine owners. The county does not yet have any wind farms. The board decided on that rate by talking with surrounding counties. The idea was to create a situation in which counties all had similar permit rates and were not driving the prices down when trying to attract wind farms to the area. The legislation passed by the Senate would have a similar affect on tax values.
“I’m glad that they finally set a value on it because that was hanging out there for a lot of farmers,” said County Board Chairman Allen Pickrel.
Sen. Dale Risinger, R-Peoria, voted in favor of the bill.
“There should be a statewide standard,” he said. “That is important so we can have these wind farms being built with certainty, knowing what the tax rate is going to be.”
Risinger said the figure was a compromise born, in part, through the recently passed electricity rate relief package. The relief package requires utility companies to add renewable energy, creating what Risinger called “a pre-definite market.”
“That caused operators to go along with this assessment because they know the industry is going to grow,” he said.
The Environmental Law and Policy Center, an environmental advocacy group, is still reviewing the legislation to determine if it makes Illinois competitive with other states.
“It is important for Illinois to have a uniform assessment of wind farms,” said co-legislative director Bary Matchett. “But it is important for it to be one that is appropriate and helpful. Illinois has the opportunity to become a leader nationwide in wind energy development.”
The American Wind Energy Association lists the state 16th nationally in wind energy potential.
If the rate is eventually passed by the House and governor, one remaining barrier to wind farms remains in the way property owners are taxed. Property owners are concerned about how the tax is billed. Skinner said the county does have a method for sending the bill directly to the wind energy company. However, if the company does not pay, the responsibility ultimately falls back on the land owner.
At a June forum, Chicago-based wind energy company Invenergy said it plans to build 266 turbines in Knox County. The company spokesman said it would reimburse the land owner for the taxes, which would be laid out in the contract. However, some audience members were concerned about prompt payment.
Pickrel warned that property owners would have to be cautious and make sure to review the wording of their contracts.
Risinger acknowledged some people are “uneasy about that,” but he said the contract language would protect land owners. In addition, a bill passed in the spring will create a fund – generated from wind energy companies – to remove defunct equipment from property if a company goes bankrupt.
“You can never predict when a company’s going to go bankrupt,” he said.
Invenergy’s Knox County wind farm would be called Pilot Knob Wind Energy Center and would eventually generate enough electricity for 133,000 average homes. Invenergy’s potential investment could be about $800 million.
A representative for Invenergy could not be reached for comment Friday.
By Matt Hutton
11 August 2007
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