Windfarm funfacts... a little more sunshine

[Patriot]

Monies to be paid to Elk Co. under The Payment In Lieu of Taxes (PILOT) entered by the county commission and the wind project folks on December 31, 2008 involve some interesting facts that give rise to some interesting questions:  

Fact 1. The land involved is exempted from property taxation in accordance with K.S.A. 79-201:

Chapter 79: Taxation
Article 2: Property Exempt From Taxation
Statute 79-201: Property exempt from taxation; religious, educational, literary, scientific, benevolent, alumni association, veterans' organization or charitable purposes; parsonages; community service organizations providing humanitarian services; electric generating property using renewable technology; landfill gas and production property. The following described property, to the extent herein specified, shall be and is hereby exempt from all property or ad valorem taxes levied under the laws of the state of Kansas:...


...Eleventh.   For all taxable years commencing after December 31, 1998, all property actually and regularly used predominantly to produce and generate electricity utilizing renewable energy resources or technologies. For purposes of this section, "renewable energy resources or technologies" shall include wind, solar, photovoltaic, biomass, hydropower, geothermal and landfill gas resources or technologies.


Fact 2.  If the legislature modifies or repeals that statute, the PILOT payments are reduced by any amount of property taxes the wind farm ends up having to pay.  (See Paragraph 15, PILOT agreement)

Fact 3.  Owners of the land leased for the wind farm may enjoy two important benefits:  1) Potential reduction or elimination of their property tax payments on the land, and;  2)  Receipt of lease payments as should be.

Fact 4.  If the wind farm is ever required to pay property taxes, the 'wind farm money' begins to shrink.

Since the 'wind farm money' being paid to Elk County actually replaces the tax revenues lost to tax exemption, the amount available for things like tax relief or a golf course may be less than anticipated or non-existent depending on current tax receipts.  Further, since the wind farm money replaces taxes already accounted for in the county budget, the only extra available would be that above what land owners are currently paying to the county.

This all leaves 3 questions of interest:

1.  How much, if any, is the 'extra' money (amounts above exempted tax losses) to be received by the county?  

2.  Will the affected land owners see their property taxes shrink (and by how much) or evaporate, and have they had any unique influence in the overall project (placement negotiations, PILOT terms, etc.)?

3.  Do citizens who are busy having 'conversation meetings' really know how much will be available for their desired projects?  That might be important so their recommendations are realistic.

What are the answers?

[Ross]

That's a lot of good questions. Does anyone out there know any answers?
I.d like to hear some.

[Lookatmeknow!!]

I really don't understand all that, not trying to be dumb or anything, but are you saying that if the in lieu of tax thing doesn't pan out that Elk county won't be making any money?

As of right now, to me the windfarm people are creating money flow in Elk County. The office is up town and there are lots of new guys coming in to work on it daily. We have a rental house and have been flooded with people wanting it. Isn't this a good thing??

[srkruzich]

I really don't understand all that, not trying to be dumb or anything, but are you saying that if the in lieu of tax thing doesn't pan out that Elk county won't be making any money?

As of right now, to me the windfarm people are creating money flow in Elk County. The office is up town and there are lots of new guys coming in to work on it daily. We have a rental house and have been flooded with people wanting it. Isn't this a good thing??

Essentially its a zero flow. No taxes are being collected and what they pay is covering the tax loss.  So if they reduce the payement it will quickly go into the negative resulting in the rest of the taxpayers supporting yet again another for profit company on the taxpayer dime.

[Ross]

. Isn't this a good thing??

On the surface it looks terrific. The farmers that own the land make money and that's good.
The majority of the money made off the electricity will go to Italy. The company is owned by a company in Italy
and the Italian Government own 1/3 of the company. Is that good for our country?

[redcliffsw]

An oil well would look much better.

Besides, the whole wind power thing does not seem right.  When the gov't is involved, you're gonna lose.

[Janet Harrington]

I am sure this is on the forum somewhere, but I want to ask this question...how do I find out who the "15" landowners are that are going to have the turbines on their property? Do I go to the county clerk or what?

[Hefe de vaca]

    Does it matter who the landowners are? Do their taxes change, no, unless they're increased.

   Know this, PILOT is letting the company off cheap, but no different a scenario than large cities trying to lure manufacturing in by giving them a break. What is more important to the county as a whole, this windfall needs to be used , or invested , wisely; because it will go away and not come back . It will be like those who win the lottery and two years later are broke ,or in debt.

     This is not a new perpetual source of revenue. It is temporary.

[Wilma]

Janet, I have a new Rural Directory and a map of the wind project and with a little concentration, the names of the landowners within the wind project area can be extracted.

[readyaimduck]

The landowners will not be free of all taxes.  They will still pay for what they own LESS what they have leased.
Granted, they will have a small income from the lease, and will have to report that on their  personal taxes.

The company that leases will pay the differential difference between owed on the first year on a sliding scale until contract is completed.
The amount is reduced by a percentage each year after x many years, untill they have paid off the in lieu of.

Sort of complicated, but it happens all the time with business' in order to give them a break to start up a business.