Committee hears HB 440/1160: sponsors propose local tax, 500-foot setbacks for large solar farms; industry and utilities urge fixes

Representative Ken Hayden (R-43) and Representative Danny Busick (R-3) presented a House committee substitute combining House Bill 440 and House Bill 1160 that would change how large solar and certain commercial renewable projects are taxed and sited in Missouri.

The sponsors said the bill would move assessment and tax revenue to the local level, require a tax of $2,500 per megawatt for commercial-scale facilities over 5 megawatts, and limit solar development on cropland to 4 percent of a county's cropland (measured by the perimeter of panels), with the county commission able to opt in to the program and to administer allocation. The draft also sets a 500-foot setback from the nearest panel to an occupied residence, church or school for new projects built after the bill's establishment date; projects completed by an initial cutoff date would be grandfathered, sponsors said.

"It says that they will be taxed at a rate of $2,500 per megawatt based upon the panel... it only applies to greater than 5 megawatts," Representative Hayden said. He described large-scale projects in his district and said many are being developed on cropland, which he and other sponsors argued generates more economic activity per acre than some pasture or idle lands. Representative Busick said converting land to commercial use by large renewable projects should change its tax classification.

Industry witnesses and utilities told the committee they are not categorically opposed to local taxation but urged changes to several provisions in the substitute. Jeremy Lefavor and Scott Swain of the Clean Grid Alliance said they oppose a hard county cap because it would limit property rights and could impede development. Jay Hahn of Azmuth Renewables said many counties already use chapter 100 tax-in-lieu agreements to negotiate payments per megawatt and setbacks; he recommended the bill be tightened to reassess only ground directly under panels rather than buffer or ancillary land and to allow counties discretion to set higher caps if they choose.

Zac Monroe of Ameren Missouri said the utility supports keeping taxes local but warned that the 500-foot setback and the draft's opt-in/cap language could upend projects now in the development pipeline, including projects for which Ameren has submitted planning materials or certificates of convenience and necessity (CCN) to regulators. He asked for clearer timing and certainty for projects that have active development approvals.

Witnesses raised drafting and implementation concerns: several said the bill duplicates reclassification language in separate sections, that the definition of the cropland cap and the measurement method need clarity, and that the opt-in language and severability phrasing are awkward or possibly self-contradictory. Industry representatives asked that counties be allowed to exceed a 4 percent cap if they wish and that reassessment not sweep in peripheral hayfields or staging areas.

Committee members questioned the 500-foot setback as larger than many typical agricultural buffers (representatives noted manure-application setbacks commonly at 50 feet from property lines and 150 feet from dwellings) and probed how the proposed changes would affect local schools, ethanol/soy processing plants, farm leases, and county revenue. Representative Hayden acknowledged the bill was a compromise aimed at keeping revenue local and said some projects in his district represent significant lease payments to landowners but may not result in much local employment during operations.

Representatives also asked whether federal tax credits are necessary to make projects viable; witnesses said some projects have been developed without federal credits and that tax credits are not the sole driver for all projects. Witnesses and sponsors agreed to continue conversations to refine language on setbacks, the cropland cap, reassessment scope, timeline exemptions for projects under active construction, and the opt-in mechanics for counties.

The chair said the committee expects to "exact this out" (finalize language) on Tuesday and directed staff to gather requested information. The record closes with the chair listing additional bills planned to be attached to this package in future sessions.