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County opts out of state law for solar project tax exemption  

Credit:  By Chantelle DeRose, Recorder News Staff | The Recorder | Mar 28, 2018 | www.recordernews.com ~~

FONDA – A local law concerning solar energy was unanimously adopted during Tuesday’s Montgomery County Legislature meeting.

During the meeting, legislators adopted Local Law 2, entitled “A Local Law Opting Out of Real Property Tax Law,” which states that no exemption shall be applicable to Montgomery County taxes with respect to any solar or wind energy system or farm waste energy system.

County legislators in 2016 first considered and approved a local law which established a payment in lieu of taxes (PILOT) schedule for utility-scale solar farms, rather than opting out of a state law that allows a 15-year tax exemption for solar projects.

The local law adopted Tuesday also applies to any micro-hydroelectric energy system, fuel cell electric generating system, micro-combined heat and power generating equipment system or electric energy storage system.

Prior to the local law’s approval, a brief discussion among legislators took place.

District 9 Legislator Robert A. Purtell said he did not initially realize the law would be affecting area homeowners.

“I didn’t think that this affected homeowners and their addition of solar equipment to their property,” Purtell said. “It says ‘In respect to any solar or wind energy systems.’”

Montgomery County Attorney Meghan M. Manion clarified that homeowners would indeed be impacted.

“My feeling is that unless there’s some legal reason that we should segregate the two, I don’t think that the financial return by adding to the assessments of homeowners is worth what we’re trying to do,” Purtell said. “I think it’s one of the benefits that they’ve received for using solar energy, so I’m not going to support this with that language in there.”

District 1 Legislator Martin P. Kelly then recalled previous solar power discussion.

“I know when we passed the – it was similar to a PILOT for solar farms and stuff – the former legislative body discussed at great lengths about not putting the tax burden on residential properties that decide to have solar for their own properties, and that we would strictly opt out of the exemption for the solar farms,” Kelly said. “Is there a reason that we are deciding now to close that hole for everybody including residents?”

“The reason why this is back before you is the law was amended to include geothermal and other forms of energy, so this is brought back up again to include those additions,” Manion said. “To address your points about homeowners, as a reminder, any revisions by this local law would only be effective moving forward and would not affect current people in the county that have solar.”

Manion added that based on discussions between the Economic Development Department and local assessors, there would not be a large change in local homeowner taxes with the addition of solar panels.

“This is something they’re still figuring out, but it seems that would not be a very big change – if anything,” Manion said. “Another reason this was brought back up is, administratively speaking, doing the pilots has become a big use of resources at the county. There’s a lot of solar farms coming in and it’s become a big time sink trying to chase a lot of them down and put these PILOT’s in place and get the payments scheduled.”

According to Manion, the county has not been capturing all of the possible revenue from large solar farms.

Montgomery County Business Development Center CEO Kenneth Rose agreed that it has been a difficult process in terms of county resources.

“We’ve had companies that we’ve been working with now for eight or nine months with regards to our current solar PILOT that’s in place. We do not have one executed yet because they keep coming back and requesting more and more and more,” Rose said. “A couple of them kind of just went off the radar. One of the fears of that obviously is to keep track of if they’re actually undertaking the project, they should be a part of our solar PILOT. It looks to us – with what we’re seeing out there being proposed throughout the county – it would really strain not only some of our resources in our department, but also the county attorney’s office.”

Montgomery County Executive Matthew Ossenfort said he is “100 percent in support” of the local law based on the “tremendous burden” the Economic Development Department and county attorney have dealt with.

“I think it was a laudable effort to look at doing a pilot program, but this will be much cleaner and much easier to enforce,” Ossenfort said. “There’s been – and I speak for myself – an unexpected level of interest in big solar farms in Montgomery County because of our geographic position and some of the infrastructure.”

Ossenfort continued to say that Montgomery County would be “in a much better place to simply opt out,” and noted that many municipalities and school districts have already done so.

“Rather than having the PILOT in place – I don’t think the pilot is going to make or break a project, but it will provide us the revenue that we need,” Ossenfort said. “Let’s remember that these projects also do not create a lot of jobs. There’s not a lot of local benefit. So really, after going through this, I can say that we had good intentions with the PILOT but I don’t think that was the right way to go. I think simply opting out for the reasons described is going to be much easier to enforce and hold folks accountable and make sure they’re paying what they’re supposed to pay.”

Ossenfort said if the county were to continue with the old PILOT program, it would be “a tough hill to climb.”

Purtell said he would not have any problem putting the burden on commercial facilities and reiterated that his issue specifically related to how homeowners would be impacted by the change.

“I have no problem supporting this without respect to local residences,” Purtell said. “I encourage us to go ahead with it so it takes away the PILOT program from the commercial entities.”

Purtell then said he would like to make a motion to remove any reference to residential properties. Manion said due to the structure of the law, that would not be possible.

“Under the way the law is set up, you can’t do it that way,” Manion said. “It would have to either be a PILOT or an opt out. You can’t pick and choose.”

All nine legislators proceeded to vote in favor of the proposed local law.

“We wanted to treat the solar projects like we would treat any other PILOT program,” Ossenfort said after the meeting. “I think it was a good idea, but the administration and the enforcement of that is just far too great to continue down that road. In addition to that, any impact of opting out would be very minimal for residential folks. I think the benefits from opting out and fully taxing commercial properties would provide a significant boost to the county as a whole. It’s OK sometimes to say ‘You know, we should go in a different direction even when we decided something different previously.’ I feel very confident that this is the right way to go.”

Source:  By Chantelle DeRose, Recorder News Staff | The Recorder | Mar 28, 2018 | www.recordernews.com

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

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