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PVD and Nebraska official describe divergent approaches to taxing renewable energy projects
Summary
PVD staff told the committee that Kansas treats renewable projects differently depending on whether facilities sell to wholesale resellers (locally appraised) or retail customers (state‑assessed), and explained that projects applying after Dec. 31, 2016 may receive only 10‑year exemptions. Nebraska officials described a nameplate‑capacity excise alternative of $3,518 per MW.
Kansas Division of Property Valuation staff and an invited Nebraska official briefed the committee about renewable‑energy valuation and tax choices.
Bob Kent of Kansas PVD told the committee that under Kansas law projects that sell energy to wholesale customers (generators that sell to resellers) are locally appraised as personal property; projects that serve retail customers (energy sold directly to consumers) are state‑assessed utilities. Kent explained that projects with applications received and approved by the board under the statutory provision in effect before Dec. 31, 2016 obtained lifetime exemptions, while projects applying after that date qualify only for a 10‑year exemption if they meet statutory requirements and file the required applications.
Kent said renewable property that is locally appraised is classified as a personal‑property subclass and valued by situs (with a retail cost‑when‑new approach, depreciation and a statutory assessment rate). Sites and land remain subject to local land valuation rules; PVD has issued a directive to help counties value site land for renewable projects.
Sarah Scott, Nebraska’s property tax administrator, described Nebraska’s nameplate‑capacity program (LB1048, enacted 2011) that replaced personal property taxation on wind projects and stabilizes local revenue. Nebraska’s program charges an excise assessed as $3,518 per megawatt (pro rated for fractional megawatts), collected by the Department of Revenue and distributed to counties where the facilities sit. Nebraska exempts public power and certain customer generators; the tax is intended to be competitive with other states and stable for both local governments and project owners.
Scott noted Nebraska’s program includes a distribution rule that prorates receipts among political subdivisions that otherwise would have received personal property tax and that Nebraska’s statute allows proration and special handling during the first years that projects come online. She added that Nebraska’s per‑MW rate has not been indexed for inflation since adoption and recommended indexing if a nameplate approach were considered.
Committee members discussed tradeoffs between Kansas’ current exemption pathway and Nebraska’s excise approach. Members asked PVD to assemble a list of Kansas projects, their exemption status and the number of projects remaining that could come onto local rolls after the 2016 policy change.
