Bill would remove Knox County wind turbine tax credit

Wind facilities that paid personal property taxes on wind turbines would be required to pay the full nameplate capacity tax under a bill heard by the Revenue Committee Feb. 23.

Prior to the passage of an omnibus wind energy bill last session, wind turbines were taxed via personal property taxes. The personal property taxes were replaced by a nameplate capacity tax of $3,518 per megawatt, which was intended to offset personal property tax revenue generated over a five-year depreciation schedule.

When the nameplate capacity tax was created, a provision was added that permitted property tax paid on wind turbines that exceeded the nameplate capacity tax to be used as a credit toward the nameplate capacity tax.

LB253, introduced by O’Neill Sen. Tyson Larson, would remove the credit and would be retroactive to Jan. 1, 2010.

Larson said the bill would pertain only to the Elkhorn Ridge Wind project in Knox County. After the credit accompanying the nameplate capacity tax was applied, he said, Knox County and the Bloomfield school district both had to increase property taxes to offset revenue lost due to the credit.

“This credit changed the rules of the game for Knox County after there was an expectation of revenue,” Larson said.

Robert Marks, superintendent for Bloomfield Public Schools, testified in support of the bill, saying the district based five-year plans on revenue that would have been derived from personal property taxes.

Knox County supervisor Jim Fuchtman also testified in favor of LB253. The first personal property tax payments provided by the Elkhorn Ridge project increased county valuation by $126 million, he said, so the county lowered its property tax rate. That relief, however, was replaced with a property tax increase after the credit for the nameplate capacity tax was implemented, he said.

Andy Pollock, representing the Nebraska Energy Export Association, opposed the bill, saying the credit is necessary to avoid “double taxation.” The transition from the personal property tax to the nameplate capacity tax was meant to avoid burdensome upfront costs, he said, and LB253 would require the Knox County facility to pay both taxes.

The committee took no immediate action on the bill.