Relative to the application of utility property taxes and statewide education property taxes to electric generating facilities.
Impact
The bill is set to impact the Education Trust Fund, with estimated decreases in revenue due to the exemptions established in HB696. According to fiscal notes, the properties likely to be exempted have a significant valuation that, if subjected to the utility property tax, would contribute considerable revenue to the Education Trust Fund. This change is anticipated to reduce funding by an indeterminate amount beginning in fiscal year 2028, as the Department of Revenue Administration cannot precisely predict future valuation impacts of the facilities involved.
Summary
House Bill 696 (HB696) proposes amendments to the existing laws governing the application of utility property taxes and the statewide education property taxes as they relate to electric generating facilities. Specifically, the bill exempts certain electric generating properties from the utility property tax if they are engaged in making payments in lieu of taxes (PILOT) to municipalities. This exempt status will remain in effect until either the PILOT agreements expire or a specified future date, July 1, 2032, whichever occurs first. The intent is to provide relief to these facilities while establishing terms for future taxation once agreements expire.
Sentiment
Legislative sentiment regarding HB696 is mixed. Proponents argue that the bill is a step towards encouraging renewable energy generation by alleviating tax burdens on electric generating facilities, effectively promoting growth in this sector. Opponents, however, may view these exemptions as potentially detrimental to local education funding, voicing concerns that the reduction of property tax revenue could adversely affect educational resources in their communities.
Contention
A notable point of contention around HB696 is its fiscal implications for local education resources against the backdrop of shifting tax burdens. Critics express concern that while the bill aims to foster renewable energy projects, it simultaneously risks undercutting crucial funding sources for education. Moreover, the reliance on PILOT agreements rather than traditional tax mechanisms may complicate the financial landscape for municipalities, raising questions about accountability and the sustainability of the funding structure.
Relative to application of the utility property tax to certain renewable electric generating facilities, and relative to communications services tax revenues.
Relative to requiring excess revenues raised through the statewide education property tax to be remitted to the education trust fund and prohibiting the department of revenue administration from setting negative local and county tax rates on real property.
Requires detailed disclosure of information concerning required payments in lieu of property taxes to be provided to purchaser of real property constructed pursuant to financial agreement containing long term tax exemption.