UPPER THUMB – 84th District State Rep. Kurt E. Damrow on Wednesday presented a plan to tax wind turbines to the Legislative Service Bureau.
The Port Austin Republican told the Tribune he submitted his proposed Alternative Commercial Energy Tax (ACET) to the bureau as a request for legislation. He said it’s a good chance it will be introduced in House next week or by the end of the month.
“I’m really looking forward to seeing this move forward,” said Damrow, who hopes the House will make a decision on the bill by mid-November.
To save time, he is going to try to get Sen. Mike Green to introduce the ACET in the Senate so the bill runs through both chambers at the same time. If it’s not possible, Damrow will request joint House-Senate committee meetings, he said.
He said he’s been discussing the ACET for the past four months, so it shouldn’t come as a surprise to lawmakers in Lansing.
The ACET would cover solar, biomass and wind facilities.
“I think it’s a real good proposal,” Damrow said. “It’s substantially more money for the county and the townships.”
Tax revenue generated by the ACET would be distributed as follows: 50 percent to the county’s general fund, 30 percent to the host township and 20 percent to school districts, he said.
Damrow said the tax is based on the first year of personal property tax and power production.
“There’s a bottom line of first year personal property tax and the rest of it is based on power production,” he said noting no matter what the power production is, the tax revenue will not be less than the first year personal property tax.
He said he based it on the first year personal property tax and power production because it prevents having to have assessors physically inspect hundreds of turbines to see if any equipment, such as gears or a generator box, has been replaced.
If a turbine is upgraded to a higher capacity generator, it will be easily identified because the power production is so closely monitored by the Michigan Public Service Commission, Damrow said.
“The nice thing it is it already has a state (regulatory agency), and the county and townships won’t have to go out and read meters,” he said.
Damrow said he wanted to make the tax simple and eliminate the current practice of having the taxable value depreciate by a certain percentage each year a project is constructed.
The state still won’t see any revenue from these alternative energy projects, however it will benefit in other ways, such as job creation, Damrow said.
Wind farms wouldn’t pay any local millages in Damrow’s proposed plan. However, counties and townships will be able to direct the revenue that will go into the general fund to any taxpayer entity within their district, Damrow said.
He said he’s particularly excited about the aspect of the plan that would direct 20 percent of the taxes to schools. That funding will go to all schools across the county, and it’s based on residency – not Schools of Choice, Damrow said.
In Huron County, the revenue that would be raised by this tax is very substantial, he said.
Damrow said he’s previously estimated 1,000 turbines could raise $73.1 million after the first year, and the yearly revenue to schools would breakdown to $2,400 per student. He noted those estimates are on the high side.
“But even if you cut it in – (based it on 500 turbines) – the revenue is very substantial,” he said, adding he’s spoken with wind developers and they are very excited about 20 percent of the revenue going to school districts.