January 10, 2023 |
The tug-of-war between counties in Wyoming that are home to wind turbines, the State Department of Revenue and independent energy producers over ad valorem taxes is back before the Legislature. Counties appear to have the power to win the fight.
At stake is the amount of ad valorem taxes wind energy producers say they’ll contribute to a county’s tax base when they’re seeking permits and other concessions versus what they actually pay over a project’s lifetime.
Carbon County Commissioner John Johnson raised the topic last week. Johnson asked County Assessor Renee Snyder if she has discussed the issue with assessors of other counties. Snyder said the assessors have held general discussions on the issue, and suggested a problem exists.
Pictured above: Jim O’Reilly/Bigfoot 99.
How the installations of independent power producers are valued is a something of a mystery. The Department of Revenue is charged with conducting the assessments on privately owned projects. How an assessment is conducted and what information is used to calculate the ad valorem taxes due are not public records, though.
The under-the-table process allows companies to oversell the value of a project to county officials prior to construction and then underdeliver on ad valorem taxes once the operation is up and running. The assessor of Converse County, Dixie Huxtable, told the Cowboy State Daily recently that some projects deliver only 30% of the revenues promised up-front.
Commissioner Johnson wondered if Carbon County is experiencing the same kind of lopsided discrepancy.
In Cheyenne, the Wyoming Department of Revenue director reports that it does not have the legal authority to value independent power producers. The agency handed off the responsibility to counties last year.
Here’s how the process works. Privately-owned developers provide the state Department of Environmental Quality Siting Council with an estimate of what property taxes, including taxes on power generation equipment, that they will pay over the life of a project. The estimate is submitted to the DOR, which then sends the assessed property tax bill to the company.
Officials in counties that are home to the wind energy projects suspect something is lost in the process, and they’re being shortchanged.
The legislature tried and failed to clarify the issue last year. Both the House and the Senate drafted bills, but neither version was introduced in the chaotic budget session.
This year, the Corporations, Elections and Political Subdivisions Committee will consider similar legislation. To allow for greater transparency on how valuations are reached, House Bill 3 requires that information used by the state to assess ad valorem taxes be released to county assessors for their review. The legislation protects the financial information of private companies by requiring any government employee receiving the information to sign a confidentiality agreement.
Carbon County Commissioners say they will be in Cheyenne to testify and to lobby against the legislation.
Commissioner John Espy said he discussed the matter with Jeremiah Rieman, the Executive Director of the Wyoming County Commissioners Association. Espy said he wants to arrange a meeting between county officials and the Department of Revenue to compare the audit numbers the county has received from an independent assessor with the state’s financial figures on existing projects.
Commissioner Espy added that he would like House Bill 3 be assigned on introduction to the Revenue Committee, not Corporations. Espy is in favor of the switch because he wants to see the bill die in committee, or if passed, not implemented until at least next year.
Espy told Bigfoot 99 that essentially HB 3 is not ready for prime time. When the legislature failed to pass legislation last year, the Department of Revenue told the counties to conduct their own assessments. The counties hired a third-party Texas firm that specializes in wind projects.
If HB 3 does pass in its current form, Espy said he wants to wait a year to implement the legislation because the counties have paid the contractor and the data has been collected for this year. He also said transparency issues between independent power producers and regulated power public utilities need to be sorted out.
The chairman of the Corporations, Rep. Dan Zwonitzer of Cheyenne has been quoted in published reports that he is opposed to counties using a third-party, contracted assessor because it is a burden to taxpayers. The Department of Revenue does the work for free he said.
Therein lies the rub. County officials wonder if the DOR is doing the work at all, and if so, how. Commissioner Espy said the contractor used for this year’s wind energy plant assessment work is the same one used for the refinery, Brush Creek and other large entities.
And what is costing taxpayers more: The money paid to the independent contractor, or the tax money not being paid by producers as promised?
Espy told commissioners at last week’s meeting that part of lobbying effort over HB 3 with the Department of Revenue is that the DOR will have to accept the assessments provided by the third-party contractor.
TY Pickett of LaGrange, Texas, performed the audit in Carbon County. The financial services company specializes in appraisals of complex properties, including public utilities, minerals, chemical and industrial plants.
Espy said he wants to compare the valuation produced by TY Pickett with the state’s valuation to quantitate the discrepancy. Espy said he suspects companies are using accelerated depreciation on IRS tax forms to lower the value of their properties. Meanwhile, the county bears the impacts of the operations while realizing less revenue than promised.
Espy said his first goal by going to Cheyenne this session is to make sure the bill does not reach the floor for debate.
Commission Chairwoman Sue Jones told Bigfoot 99 that anytime a company wants to have the taxing authority remain with state, a suspicion exists among local officials that the tax is not accurate or too low.
Two other counties may join the lobbying effort, including Converse and Sweetwater, other commissioners said during the meeting.
