Senate kills proposed wind power tax


Tara Bordewyk, Cns

PIERRE (CNS) – A proposal for taxing wind power was killed by the Senate State Affairs Committee Feb. 7.

State Sen. Paul Symens, D-Amherst, who has worked with the issue of wind power for several years, felt that taxing companies by each kilowatt-hour of produced electricity would build a consistent structure for taxing wind energy in the future.

Senate Bill 161 would eliminate property, sales and contractor’s excise taxes and create one excise tax on the wind power structures. Companies would pay 15 thousandths of a dollar for each kilowatt-hour of energy produced.

Symens said the money generated from the taxes, about $5,900 a tower per year, would be returned to the areas where the energy was produced.

Fifty percent would go to the county, and another 50 percent would go to the state’s general fund.

Under Symen’s bill, Ed Anderson of the South Dakota Rural Electric Association said that the counties and state would only be receiving revenues when the wind blows.

FPL Group, Inc, a subsidiary of Florida Power & Light Company, plans to build a wind farm near Highmore. Basin Electric will purchase the energy.

Anderson said that those companies negotiated the project’s construction in South Dakota based on a different tax structure. He fears that if the state makes them change that, the companies will not work under the new specifications.

On Jan. 30, Gov. Mike Rounds announced introduction of a bill that would tax the towers and concrete bases as real property. Equipment connected with utilities like transmission lines typically are centrally assessed.

Rounds said the generator and propellers on top of the towers wouldn’t be taxed.

That plan was supported by FPL and Basin.

There will be more legislation on this matter, said Paul Kinsman, director of property and special taxes for the Department of Revenue. Kinsman said the governor’s proposal, House Bill 1235, taxes wind power like commercial property, and the rates differ from county to county.

The committee voted 8-1 to refer Senate Bill 161 to the 41st day. This officially kills the bill since there are 40 days in the 2003 legislative session.