Legislation to change distribution of wind farm taxes
Legislative action affects distribution of wind farm revenue
Property taxes from new and aging wind farms will be shared with the state government under a new law passed by the 2019 Legislature, according to information presented to the Ward County Commission Tuesday.
“They’ve changed how property taxes are going to be allocated going forward,” said Robert Harms, policy adviser for North Dakotans for Comprehensive Energy Solutions. “One third of it will go to the state general fund. The other two-thirds will stay at the local level.”
The revenue sharing will affect wind farms constructed after December 2020 or that have been in place 20 years or more.
The state currently doesn’t collect from taxes paid by wind farms other than sales tax on equipment purchases, which they have paid since an exemption ended in 2016. Harms explained the Legislature wanted to limit the impact on the local taxing entities by making the change effective only for new or long-term projects. There was a reluctance to change the revenue stream for local entities that already had approved a project thinking they were going to gain a certain amount of revenue over the first 20 years, he said.
Harms added the state did change the property tax formula for wind farms in 2015 that increased the taxes paid to local entities by about 50 percent.
“Wind energy has been in the state now since 2002. Currently we have 3,100 megawatts online. That compares to coal, which has about 4,000 megawatts,” said Tammy Ibach, director for North Dakotans for Comprehensive Energy Solutions. “It is benefiting 28 counties across the state. And many of those counties are outside what we call the Bakken play. So counties are seeing nice revenue from wind, with the average wind project bringing in about a million dollars in revenue to a county annually. And here in Ward County, you have the Prairie (Winds) project, which is roughly in that $400,000 figure.”
The $400,000 represents 2017 collections. The Prairie Winds/Minot Wind project has since changed from a property tax to a production tax. This year $545,256 has come into Ward County for distribution to various taxing entities.
PrairieWinds 1, which went into operation in late 2009, consists of 77 1.5-MW turbines. It is located directly adjacent to Minot Wind, which consists of two 1.3-MW turbines built in 2002, and three 1.5-MW turbines built in 2009.
Other wind projects are being considered or are moving forward that are at least partially located in Ward County. A Public Service Commission public hearing is scheduled on the Ruso Wind project June 17 at 9 a.m. in the Sleep Inn & Suites in Minot.
Area counties also could see new wind projects. A wind farm proposed in Burke County could generate about $900,000 in tax revenue, while a wind farm being built in Williams County is expected to pay about $1.2 million, Ibach said.
Asked about the opportunity for anyone living in the footprint of a wind farm to receive compensation, Ibach said there is discussion in that direction. The rationale is landowners without towers on their land are impacted by being in the project area because of the presence of towers and the taking of their wind resources.
Harms said landowners should negotiate, band together and get legal counsel on these matters. Ward County Planning Director Nancy Simpson reported Ruso Wind has negotiated to provide compensation to landowners in the project area even if not leasing their land for towers.