Council passes solar tax bill to maintain control of future energy sites

Bob Zimberoff
Posted 4/7/17

CAMBRIDGE — Sometimes bills become effective even before they become law. Such is the case with Dorchester County Bill No. 2017-2 — the solar tax bill.

The Maryland Public Service Commission …

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Council passes solar tax bill to maintain control of future energy sites

Posted

CAMBRIDGE — Sometimes bills become effective even before they become law. Such is the case with Dorchester County Bill No. 2017-2 — the solar tax bill.

The Maryland Public Service Commission has a lot of power when it comes to power-generating facilities like utility-scale solar fields. The PSC can pre-empt local decisions involving planning, zoning and power production. If the PSC decides a facility that generates power is a good fit for an area in any county, that decision pre-empts local control.

Dorchester County, however, has the power to tax those facilities, and a hefty tax can make just about any business venture unprofitable. Bill No. 2017-2, approved Tuesday by the Dorchester County Council, establishes a big tax on utility-scale power-generating facilities including solar fields. Coupled with the county’s ability to offer payments in lieu of taxes, or PILOTs, the tax can be used to steer these projects to more properly suited locations.

After entering into legislative session Tuesday, the councilmen, County Manager Jeremy Goldman, and County Attorney E. Thomas Merryweather, fielded questions from members of the public. Lin Spicer, a member of the county board of appeals, and Tracy Whitby-Fairall, a leader of the North Dorchester Neighborhood Coalition, asked for more details about the bill, and how the tax works.

“The biggest concern that all of us had was we did not want something to come in that went to an area that impacted citizens, and we ended up with … no negotiation ability and it was forced on us,” Councilman Don Satterfield said. “This gives us, the county council, the ability to control, with a PILOT, where specific projects go. … It was most important that we did not have an impact on the citizens that was negative.”

While the legislation is referred to as the solar tax bill, Mr. Goldman explained, “It doesn’t actually single out solar companies. ... This covers utility-grade energy generation — wind, solar, coal, oil, nuclear, all of it.”

Council President Ricky Travers said that the tax does not affect local planning or zoning controls. Any company or interest looking to build a utility-scale energy-generating facility will still have to go through the usual process that might include seeking special exceptions and variances from the board of appeals and approval from the county planning commission.

“This will stop none of that,” Mr. Travers said. If a company seeks approval from the PSC, “OK, they might break pre-emption, but they won’t break this tax bill.”

Mr. Goldman also explained that a company or individual could attempt to negotiate a PILOT at any point during the planning and zoning process. The county council has the right to approve or reject any PILOT based on its merits and public response.

According to Mr. Goldman, the bill establishes a yearly tax rate of $2.44 per $100 of the assessed value of equipment used to generate electricity. Assessments are made by a state agency.

“It’s a big tax,” the county manager said. “It’s a big number.”

Mr. Spicer expressed concern about the precedent set by the tax, and the county council’s ability to negotiate a PILOT.

“This PILOT,” Mr. Spicer said, “it’s been my experience with most things that when you start making exceptions, that’s when you get in trouble, and I can foresee this being an exception that might cause a lot of trouble down the road.”

Mr. Goldman responded, “PILOT taxation … is the one and only time that the county council does not have to be even or fair, and this is not the only piece of tax legislation that has PILOTs. There are a lot of PILOTs in the county already. They’re not necessarily done evenly. ...

“PILOTs for taxes are used throughout the state and actually throughout the United States. They are not even and they are not perfectly fair. They are absolutely dependent on particular situations and this is the one time that that’s actually OK. The legislation and the case law actually supports that.”

The bill had a big effect soon after it was introduced.

A 400-acre solar-panel facility was proposed by OneEnergy near the town limits of East New Market. Of those 400 acres, some 130 to 160 acres would have contained solar panels according to the plan. In response, residents in the area formed the NDNC. The group packed the county meeting room during two board of appeals meetings to show their opposition to the project. While both meetings were continued, the county council introduced the solar tax bill.

In response to public outcry, the county’s rejection of a PILOT related to the project, and the introduction of Bill No. 2017-2, OneEnergy pulled it’s request before the board of appeals. The company must now wait a year before it can present the same project again.

“The funny thing about this bill is, tonight’s the hearing on it, and that bill’s already working,” Mr. Travers said Tuesday.

The council voted 3-1 to approve the legislation. Councilman William Nichols was absent due to illness and Councilman Rick Price voted against the bill.

“I have a record of opposing any new taxes that is just as strong as raising current taxes,” Mr. Price said. “I just feel that this (issue of solar facilities), with regard to it being considered as a special exception, and not part of the current comprehensive plan, that it needs to be addressed more so in the comprehensive plan, with these solar additions that are being considered, especially the major ones.”

The county’s comprehensive plan has not been updated since the 1990s, and the council is in the beginning phases of updating the plan. Bill No. 2017-2 will become codified and effective in about two months.

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