A proposal for a wind farm on Turkey Heaven Mountain in southern Cleburne County has been touted as a source of easy tax dollars, and it may be.
But after a query to the Alabama Department of Revenue, Revenue Commissioner Joyce Fuller notified county commissioners by email Monday that the project may qualify for an abatement of non-educational property taxes. Property taxes levied for local school systems cannot be abated, Fuller said.
Fuller asked the department after local residents opposed to the proposed development asked her if the law applied to wind farms, she said Thursday.
In May, the commissioners had asked for an estimate of how much property tax 25 wind turbines valued at $2 million each would bring into the county. Fuller had estimated about $550,000 annually, Commission Chairman Ryan Robertson said at the time.
Fuller couldn’t say how any abatement could affect the property taxes of the wind farm until a company decides to build in Cleburne County and the commissioners approved an abatement, she said.
“Right now, we’re talking about something that hasn’t even happened,” Fuller said.
If the proposal were to become reality, then she would request an opinion from the department and from an attorney, Fuller said.
Alabama law allows counties and municipalities to abate taxes of certain businesses to help attract those businesses to their region. One of the businesses defined in the law includes electricity producers including renewable energy, which could include wind farms.
However, an email to Fuller from Jennifer Byrd, personal property valuation supervisor of the Property Tax Division of the Alabama Department of Revenue, stressed that all other requirements under the law must be met.
Those requirements include that the company request the abatement and that the local governing body – in this case the Cleburne County Commission – approve it.
County Administrator Steve Swafford said the company hasn’t approached the county about an abatement. Instead it has told the commissioners how much property tax it estimates it would bring to the county, Swafford said.
In his 22 years working in the county, Swafford said he had never had a business request a tax abatement.
“I’m completely unaware it’s a possibility,” Swafford said. “It’s never come up.”
Mary Pons, counsel for the Association of County Commissions of Alabama, agreed it is a possibility, and for this type of business it’s a county decision to award one or not.
“They’re never required to approve a tax abatement,” Pons said.
Commissioner Bobby Brooks said he might entertain the idea of a tax abatement to draw in industry, but hasn’t looked into it.
Commissioner Terry Hendrix said he would have to hear the proposal, including how many jobs it might bring and what other benefits it might bring to the county before he could make a decision. However, he noted that other businesses in the county are paying their taxes.
Commissioner Emmett Owen also said he’d listen to the company’s proposal and try to keep an open mind.
“But if it’s not going to generate any money for the county, I’d really have to think long and hard about why we wanted it,” Owen said.
Fuller said regardless of whether there was an abatement on the wind turbines, the property they would sit on would be rented and the property owners would be paying taxes on that.
Right now most of the property up there is being used for agriculture and is appraised at “current use value” rather than “market value.” The current use value is much lower – something like a fifth of the market value on some properties, Fuller said. In addition, the tax rate is low, she said.
However, if the property is rented it would be appraised at market value and the tax rate would be higher. However that wouldn’t change the tax rolls much, Fuller added. The property in question may be only an acre here and there, and it may change the taxes from a few dollars to maybe $30 a year, Fuller said.
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