LANSING – What seems like a
relatively mundane change – altering the definition of a wind turbine in
several tax laws – has prompted a significant battle pitting energy groups on
one side and local governments and public school districts on the other.
Aric Nesbitt (R-Lawton) introduced HB
4570
, HB
4571, HB
4572 and HB
4573 to address a situation in his district where New Covert
Generating Company won a case before the Michigan Tax Tribunal that, according
to Live, reduced the company’s property taxes by 70 percent, from $12.5 million
to $3.5 million, affecting Van Buren County and five other governments that
received revenues from it.
The case is pending before the Court
of Appeals. The issue is that the company convinced the Tax Tribunal that its
equipment did not fall within the definition of a turbine and thus qualified
for an exemption on industrial personal property.
A 2011 statute, to address a similar
situation in Midland, was designed to assure turbines were considered utility
personal property and thus not exempt. The bills taken up Thursday by the House
Government Operations Committee, which did not vote on them, are designed to
clear up any ambiguity on the matter.
“If they get to redefine their
specifics, then there could be a ripple effect statewide,” Nesbitt said
after the hearing of what could happen if New Covert Generating Company’s
position prevails.
But the bills came under criticism
from Charles Dunn, corporate counsel for Midland Cogeneration Venture, a
natural gas cogeneration facility that supplies most of its energy to Consumers
Energy. Dunn said the bill would define turbine as the entire power block and
lead to a 15-20 percent increase in their taxes, upwards of $1.8 million a
year.
Dunn also said he found it troubling
that the Legislature would consider the bill at a time when it is trying to
make energy more efficient and affordable, saying that effort and these bills
are at cross-purposes.
Nesbitt said it is not his intent to
affect the Midland facility, saying it should have been protected under the 2011
statute, and he would need to discuss the situation with Midland Cogeneration
Venture officials.
Bradford Jacobsen (R-Oxford), the committee chair, said the bills would
undergo more work before they come back before the committee.
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