UPPER THUMB – A state lawmaker told the Tribune on Wednesday he plans to present proposed legislation to phase out personal property taxes on industrial equipment next week. But it will not include commercial wind turbines.
“We are looking, in the legislation, (at) not giving relief to wind turbines on the personal property tax issue,” said Sen. Mike Nofs, a Battle Creek Republican.
Last year, Nofs introduced legislation eliminating the personal property tax, which is the only tax revenue local governments receive from wind energy developments. Shortly after he did so, he was contacted by local lawmakers who wanted to make sure local communities get personal property tax revenue from wind farms.
Nofs said when he originally introduced the bill, the intent was just to show other lawmakers that he was working on the issue. Since then, he’s worked with Lt. Gov. Brian Calley, Gov. Rick Snyder and other lawmakers in drafting a specific plan. That plan will be introduced in a series of bills that he anticipates will be unveiled during a press conference next Friday.
Originally, Nofs planned on granting wind developers relief from paying industrial personal property taxes. However, after speaking with the area’s lawmakers – Sen. Mike Green, R-Mayville, and Rep. Kurt Damrow, R-Port Austin – there was a change of heart. Nofs said Damrow and Green did a good job of promoting the issue and made a good argument as to why wind companies should pay personal property taxes. One argument was that wind developers do not need to be granted tax relief because the taxes they pay are incorporated into electric rates.
“In reality, wind turbines aren’t paying personal property tax,” Nofs said. “… They’re paying it, but they get relieved through what they sell the energy for.”
He noted he thinks his colleagues in the Senate will agree.
Nofs anticipates much discussion will follow his presentation of the proposed legislation. But it’s his hope the bills can pass the Senate before the Legislature goes on summer break.
“If we get it out quickly enough, maybe it could pass the House and be on the governor’s desk before summer break,” he said.
If it’s not approved by the end of the year, the proposed legislation will expire because it will be the end of the current legislative two-year cycle.
Damrow told the Tribune he learned of commercial wind energy developments being excluded in the proposed personal property tax changes during a Wednesday morning meeting with Calley.
He said he was told the legislation would make it very clear that commercial wind energy systems will not be exempt from paying industrial personal property taxes.
“It will not become a non-taxable system,” said Damrow, who was pleased with the news. “… What I’m pushing for is that the wind farm developers understand ‘you’re not going to end up with a system that makes you non-taxable. One or two things is going to go through here: They’re going to be taxed with some form of personal property tax or through separate legislation.’”
Damrow said he supports approving legislation, such as bills he’s introduced that would create a separate tax for wind energy developments.
“I’m pretty partial to the legislation because that locks it in,” he said in regard to revenue, which can change based on decisions by the Michigan State Tax Commission.
It’s far easier – and quicker – for the tax commission to make changes in turbine values than it would be to amend legislation, Damrow noted. As a result, revenue to local governments would be more secured – and less susceptible to change – if it was included in legislation.
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