First, I think it's useful to recap some of the MEC wind property tax information I uploaded to the blog over the last several months, and see how it is related to the current re power issue. I'd recommend that interested readers first review my previous post for some additional insight.
I contacted my district state senator, Daryl Beall, in 2014 about my concerns with MidAmerican wind project valuations being too low . Senator Beall promptly scheduled a meeting with Julie Roisen at the department of revenue property tax division . Mr. Beall was unable to attend so a senate staff person and myself attended the meeting together. We met with Ms.. Roisen and a staff person. I got the distinct impression that the department of revenue thought I was wasting their time at this meeting. It was explained to me that wind property was locally assessed, and that DOR only issued advice on how to perform that task. If I was worried about wind property valuations, I was directed by DOR to use the local property tax review board, and DOR explained that process along with the state appeal process. They also provided me with a letter from their legal adviser, that seemed to once again direct county assessors to fully account for all wind project costs. It is posted on this blog.
Afterwards, I wrote a thank you letter which recapped my understanding of what was discussed at the meeting. DOR has never disagreed. I've since updated the undervaluation number in the email to $150 million , and MidAmerican now has more than 20 wind projects. I also sent additional information to DOR in 2016,and hearing nothing back reached out to the Department of Management in 2017. DOR called me soon after that, stating they were not going to devote resources to this issue, but mainly, it amounted to chewing me out for a half an hour. Here's the 2014 DOR email.
I then followed DOR advice and asked the Calhoun county property tax review board to look into my concerns the MidAmerican's wind property was undervalued . I met with the review board. Later, the Calhoun assessor sent a letter that denied my "protest" , but included information that basically said I was right. That information is here.
So to recap,
Every MidAmerican wind project I've checked so far shows lower valuations at the county level than MEC has stated at the federal level, in MEC press releases, and some information I was able to review at the Iowa utilities board.
MEC is placing property in the Iowa utility replacement tax that meets the definition of wind property when the wind code is reviewed IMO. DOR says that is not happening. I've got an email from a MidAmerican employee that says it is. Pocahontas county has 2 large wind projects. The one not owned by MEC declared similar property to the MEC replacement tax items as wind property.
The replacement tax issues leads to a much bigger concern. state officials and local officials had not noticed the replacement tax problem, and I've found an example of MEC wind property that was never added to replacement tax rolls as MEC has stated. Since Iowa utilities pay most of their state taxes through the replacement tax system... Well.... MEC replacement tax filings need a proper audit IMO, probably several years worth.
So there is some precedent to resolving wind property valuations locally, That's what I was told to do. For the folks currently worried about the wind re power issue, I'd recommend they try to resolve this locally. However, the Pocahontas record Democrat reports that after noting it may be some time before the state AG office looked into the wind re power issue, AG promptly replied, and encouraged BV and Pocahontas county to request a formal opinion on this issue from. DOR.
State AG also mentioned using the existing local property tax review and appeal process. I haven't seen the AG letter. Hopefully I can get a copy.
I noted in the previous post that I was concerned about a potential state AG office conflict of interest. Now the AG has referred this matter to the department that so far is declining to look into potential lost revenue that I've listed on this blog, and who has already wrote an opinion unfavorable to counties on the re power issue.
The counties should try to solve this locally before ceding their authority to the state level, and risking an unfavorable ruling. Whatever the outcome, county assessors seem to think they can't assess wind property unless the wind project owners do it for them.. even though a lot of DOR memos seem to say otherwise. It concerns me when all this is said and done, that MEC will still self report their wind valuations to county assessors, when I've listed a number of examples that seem to point out that MEC shouldn't be allowed to do that. A Webster county supervisor mentioned they sometimes retain 3rd party consultants to make sure industrial property tax filings are accurate, seems like that would work for wind property. More precedent for resolving this locally IMO. And if MEC is self reporting their replacement tax filings, that shouldn't be allowed either
I'll be uploading the emails that I sent to DOR on this issue soon.
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