SINCLAIRVILLE – The cost of a wind energy system for a residence or farm is not a breeze to understand or estimate. There can be tax incentives available for construction which make construction more affordable. Yet there is also the question of how the improvement to the property will impact property taxes.
Merle Goot, a local landowner, said that he asked Bill Daly, the Chief Executive Officer of the Chautauqua County Industrial Development Agency (CCIDA), representatives of companies that manufacture the systems, and interested landowners to attend the recent meeting of the Charlotte Town Board. County Legislator Jerry Park (R-5), Timothy Bingham, Area Field Supervisor for the New York State Farm Bureau, and Charlotte Town Assessor Kevin Okerlund also attended the meeting.
Some of the confusion stems from New York Real Property Tax, Article 4, Title 2, Section 487. This law provides “exemption from taxation for certain solar or wind energy systems or farm waste energy systems.” In Chautauqua County, the legislature unanimously voted to opt out of this exemption a few years ago, as did some school districts and towns.
Since the town opted out, Kevin Okerlund, the Town of Charlotte’s assessor said he would have to come up with an assessment for a wind system. He could not legally ignore the increase in property value.
According to Daly, the reason the county opted out was to deal with “the big commercial wind farms so they wouldn’t be tax free. Sometimes when you throw the net you get the whale; sometimes you get everyone else.”
Daly continued, “What we (CCIDA) would be willing to do is to stand ready to grant PILOTs (payment in lieu of taxes) to individual property owners.” It was foreseen that these PILOTs would be for 15 years with no payment. Although the term might imply that there would be a payment, a PILOT can be for no payment.
Daly further explained that “the property goes under the name of the IDA for tax purposes only. You have the liability; it is your property. You have everything to do with it. It’s just in our name because we’re not taxable.”
Rich Dixon, the CCIDA’s Chief Financial Officer, explained further the rationale for opting out. “If you don’t opt out, you can go and negotiate a PILOT (with the large commercial wind farms). We talked to some of the lawyers in Albany. There is no teeth in this because it is tax negotiation.” In other words, there is no guarantee that a PILOT would successfully be negotiated.
Explaining how the CCIDA would work with the small wind systems, Dixon gave an example, ” The IDA will take title to the three foot by three foot base where the wind tower is. We will work with the assessors to make sure (there would be no increase in taxes) with the increased value and that, Jerry (Park) was the commitment to the legislature when they opted out. They wanted to make sure that methane digesters, small solar, and small wind were not going to be taxed.”
He said, “Anyone that is going to build one of these should contact us. We’ll work with the assessor, we’ll work with everyone to make it as painless as we can for the property owner. We do want to encourage this investment.”
One member of the audience asked what would happen after 15 years. Okerlund answered that there would be more data then on which to make an assessment, but noted that he expected that a lot of the value would have depreciated.
Local dairy farmer Vicki Williams questioned whether an agreement with the CCIDA would require a lawyer.
Daly answered, “It depends on how much you trust us.” He further explained they were developing a one page form, but that there are three pages of notes in small print. He also offered to share the form with Charlotte to get comments or suggestions.
In answer to another question about whether the agreement could change, Daly answered, “The only thing that trumps the IDA is the state legislature. … If something were done, it would be by legislative fiat. I think they are loath to do that.”
The Town Supervisor, Kenneth Bochman, felt that Charlotte would not need to take action to change their decision to opt out. The board was in agreement.
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