October 27, 2016
New York

Montgomery County law will tax solar facilities

By OPAL JESSICA BOGDAN , Leader Herald | October 26, 2016 | www.leaderherald.com

FONDA – Montgomery County enacted legislation Tuesday that could discourage solar and wind companies from developing facilities in the county. The county Board of Legislatures passed a resolution to tax properties with solar and wind energy systems through a PILOT – Payment in Lieu of Taxes – agreement.

According to the resolution, Montgomery County had started to experience an influx of solar energy facilities and wanted to capture tax revenues from the development of companies and ensure these facilities are treated equally with other commercially taxed properties.

A PILOT is an agreement to pay a reduced tax based on a percentage of the total property value. PILOT agreements are often offered as incentive for industries to locate in a given area.

Prior to the PILOT schedule, a state real property tax law, which exempted certain properties from taxes for 15-years, was set up in order to encourage solar and wind energy development. The law also included the option for local governments to opt out of the exemption.

According to the resolution, the exemption under the PILOT schedule in the first year will be 50 percent of the increase in assessed value attributed to the solar or wind improvements. The exception amount will then decrease by 5 percent over the next nine years. The property will then be assessed at the initial assessment without the improvements, and during the next five years, taxed at full value.

Residential properties are exempt from the increase in assessed value unless they sell excess electricity back to the power company. Solar facilities developed to produce energy for on-site commercial buildings, such as farm buildings, remain exempt from an increase in value because of the equipment, unless power is sold back to the power companies.

In addition, any commercial solar facility projects presently under construction are grandfathered in with the original exemption.

Josh Katz of Onyx Renewables Partners, a New York-based solar company, felt the PILOT agreement of taxing properties will deter solar companies from investing in properties looking to incorporate solar and wind energy systems.

Katz presented numbers before the board explaining how solar companies, Onyx in specific, will be affected by this agreement.

“After 15 years of operating these projects, before property taxes, our company has made $891,000, which is after investing $5 million,” Katz said. “With the current property tax proposal that you all are voting on, that will result in a tax obligation of $1.4 million, meaning that after 15-years of operation, and a $5 million investment, our company has lost $524,000. That’s negative 2 percent return.”

County Executive Matthew Ossenfort spoke before the vote to say that he fully supports the legislation.

“We’ve talked about this quite a bit, going back and forth, and the best I can say is that I support this resolution,” Ossenfort said.

Through the passing of the resolution, local governments will still have the option to stay with the state Real Property Tax law, or pass PILOT agreements just as the Board of Legislatures did.

Other business Tuesday evening included honoring James Wray as Montgomery County 2016 Caregiver of the Year. Terry Bieniek, chairman of the legislature, presented a proclamation proclaiming Oct. 25 as the official day in Montgomery County to honor, thank and recognize Wray.

Bieniek recognized Wray as the primary caregiver for his wife, Julia Wray, who he stated have been married for 52-years and raised six children. Wray served on the school board at the Fonda Fultonville School District and served as board president for two years. The Legislatures honored Wray for “providing around the clock care including house keeping, meal preparations, personal care and companionship” for his wife, during which he also gave back to the community.