By Mark Waite
TONOPAH — Nye County won’t be receiving as much property tax from the SolarReserve project as thought, due to a 55 percent property tax abatement on renewable energy projects.
County Commissioner Butch Borasky asked property appraiser Marie Becht from the appraiser’s office to explain a report on the abatements listed on last week’s consent agenda, in which a number of items are routinely approved in one motion, without any discussion.
Assembly Bill 522, passed in the 2009 session of the Nevada Legislature, granted a 55 percent property tax abatement to renewable energy projects like solar, wind and geothermal over 20 years.
In counties of under 100,000 population, like Nye County, the project has to employ over 50 full-time construction workers, invest at least $3 million, pay 150 percent of the average state hourly pay for construction workers and 110 percent of the average pay for workers operating the plant.
“The SolarReserve people appeared before the state energy director and made their case and the state energy director approved those abatements,” Commissioner Joni Eastley said.
She said unfortunately the only abatements were for property taxes paid to the counties, not state taxes or school taxes.
Eastley said she testified at the abatement hearing on behalf of Nye County.
This year, some of the reductions in property taxes were counteracted by a change in use from agricultural to commercial. But overall, the net taxes and assessments paid were reduced from $28,459 to $18,391.
Parcels owned by Tonopah Solar Energy got reductions of net assessed value, a 79.07-acre parcel was reduced from $97,214 to $43,626, but a $40,473 assessment was added for the conversion to commercial property. That raised the tax bill for that parcel from $248.82 to $1,366.38.
The assessment of an 80.92-acre parcel was reduced from $98,702 to $43,710, but the conversion to commercial use meant $40,473 in additional value. The tax bill increased from $254.54 to $1,368.94.
A 121.6-acre parcel assessed at $149,942 was reduced to $67,474, but $61,729 in value was added on as a commercial parcel. That raised the tax bill from $606.17 to $2,094.17.
However Tonopah Solar Energy LLC got a major reduction in a net assessed value of improvements for a 20,923-acre parcel leased from the U.S. Bureau of Land Management from $887,837 to $399,527. That chopped the tax bill for that parcel from $27,095.01 to $12,192.75.
Marie Becht, a property appraiser with the Nye County Assessor’s Office, said the Nevada Department of Taxation sent her a letter giving guidance on how to appropriate the funds. Tonopah Solar Energy gets a 55 percent abatement on their property taxes, out of that money Nye County gets to keep 55 percent while 45 percent goes to a renewable energy fund, she said.
Borasky also asked for a report on the development agreement Nye County signed with SolarReserve, developers of the Crescent Dunes project. One of the stipulations was that SolarReserve would hire 90 percent of their work force from Nevada.
During a September interview with SolarReserve Chief Executive Officer Kevin Smith, he said at that time 73 percent of the construction workers were Nevada residents. Smith said his company doesn’t expect to reach the 90 percent goal but will pay the financial penalty, which will go toward worker training and educational resources.
“I expect we’ll pay a little bit of a penalty, because it’s going to be a little difficult, 90 percent was a little aggressive but we’re in the 70s, which is the best of any of the big projects built in Nevada in the near term,” Smith told the Pahrump Valley Times.
The Crescent Dunes project is expected to employ 600 construction workers at the peak and 45 employees to operate the plant once it opens. SolarReserve estimates the plant will contribute $47 million in tax revenue over the first decade.
Eastley brought up another problem, 11 cows that were struck on Pole Line Road, between Highway 95 just west of Tonopah and the SolarReserve project, in the last couple of months.
“That’s $17,000 revenue that’s out of that rancher’s pocket. What he wanted us to do is reduce the speed limit to 35 mph from the posted 55 mph that it is and put up some open range signs,” Eastley told the Board of Road Commissioners.
The rancher, John Young, was asked to make a Power Point presentation to SolarReserve, Nye County Public Works Director Dave Fanning said. SolarReserve offered to help Young pump water to another side of the road, to keep his cattle off the road, he said.
“His concern is not the cattle, it’s the public that hits them and possibly what could happen to them,” Fanning said.
Under Nevada’s open range law, motorists are responsible for compensating ranchers for livestock struck on the road.
Eastley said some of the cattle weren’t killed outright by motorists, but walked around on broken legs.
Commissioners also heard District 32 Assemblyman Ira Hansen, R-Sparks, who now represents northwestern Nye County and much of Tonopah, express his opposition to subsidies for solar projects.
“The problem is that subsidy is going on and on. We have to cut the subsidies off. They’re either going to make it on their own or not. Secondly we’re reducing our ability to compete,” Hansen told commissioners in a briefing on the upcoming 2013 state legislative session. “One of the things that make us less competitive is our energy costs are high. One of the reasons why our energy costs are high is because we subsidize these solar energy projects.”
SolarReserve received a $737 million U.S. Department of Energy loan guarantee last year for the Crescent Dunes project, expected to cost $960 million. But after testifying at a congressional hearing in May 2011, Smith explained that is a loan which will be repaid with $300 million interest. He said SolarReserve has a completely different project than the much criticized Solyndra, a company that built solar panels, which declared bankruptcy and laid off over 1,000 workers after receiving a loan guarantee. Smith added the federal government has a tradition of subsidizing other types of energy.