VACo opposes bills extending state-mandated exemption from local taxes for large solar projects

February 4, 2020

HB 1131(Jones), HB 1434 (Jones) and SB 762 (Barker), SB 763 (Barker), if adopted, would extend a state mandate to exempt utility-scale solar projects from local tax to 2030 (currently set to expire in 2024). HB 1131 and HB 1434 passed in subcommittee earlier this week on identical 6 to 4 votes and will be heard in the full House Finance Committee in the afternoon of Wednesday, February 5. SB 762 and SB 763 will be heard in the Senate Finance and Appropriations Committee on the morning of Wednesday February 5.

ACTION REQUIRED – Contact Senate Finance and Appropriations Committee Members today to oppose SB 762 and SB 763 AND contact House Finance Committee Members to oppose to HB 1131 and HB 1434.

In 2016 the state mandated an 80 percent exemption from local Machinery and Tool Tax (M&T) for solar projects greater than 5 megawatts (MW) in energy capacity. Legislators, recognizing the impact this could have on local revenues and wary of providing the tax subsidy in perpetuity, set an expiration date for the exemption. Specifically, for projects greater than 20 MW the mandatory exemption expires for any project that has not begun construction by January 1, 2024. Four years in advance of the expiration, the utility-scale solar construction industry wants to extend this exemption an additional six years.

VACo supports returning the authority to counties to determine local tax incentives for utility-scale solar installations and opposes any expansion or extension of the state-mandated tax exemption on local property taxes for solar equipment. Successful legislation supported by VACo in 2018 returned this authority to counties for projects 150 MW or larger in capacity in advance of the 2024 expiration date.

KEY POINTS

  • Many counties are concerned about the loss of valuable farm and forest land, critical to local economies. Solar facilities generating greater than 20 MW and less than 150 MW in generating capacity can occupy anywhere from several hundred acres to more than two square miles and are in effect largescale power plants with oversized footprints.
  • HB 1131, HB 1434 and SB 762, SB 763 extend a state-mandated exemption from local tax. This extension of a mandated subsidy from local revenues will result in significant loss of future revenues that would otherwise be utilized to fund state-mandated services such as education, police, and human services.

KEY CONTACTS

SENATE FINANCE AND APPROPRIATIONS COMMITTEEHowell (Chair), Saslaw, Norment, Hanger, Lucas, Newman, Ruff, Vogel, Barker, Edwards, Deeds, Locke, Petersen, Marsden, Ebbin, McClellan

Email entire committee at once – Senate Finance and Appropriations Committee

HOUSE FINANCE COMMITTEE Watts (Chair), Keam (Vice Chair), Kory, Lindsey, Sullivan, Murphy, Heretick, Ayala, Carter, Carroll Foy, Mugler, Hudson, Scott, Orrock, Byron, Ware, Wright, Gilbert, Poindexter, Fowler, McNamara, Campbell, R.R.

Email entire committee at once – House Finance Committee

VACo Contacts: Joe Lerch, AICP and Chris McDonald, Esq.

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