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H0816...............................................by REVENUE AND TAXATION
WIND ENERGY - TAX - Amends and adds to existing law relating to producers
of electricity by means of wind energy to provide a wind energy tax; to
provide for the filing of operators' statements; to provide for the
computation, allotment and apportionment of the tax; to provide for the
collection and distribution of taxes; to provide for tax liens; to provide
for the assessment of nonoperating property; and to provide an exemption
from taxation for certain operating property.
03/15 House intro - 1st rdg - to printing
03/16 Rpt prt - to Rev/Tax
03/20 Rpt out - rec d/p - to 2nd rdg
03/21 2nd rdg - to 3rd rdg
03/23 3rd rdg - PASSED - 68-0-2
AYES -- Anderson, Andrus, Barraclough, Barrett, Bastian, Bayer,
Bedke, Bell, Bilbao, Black, Block, Boe, Bolz, Brackett, Bradford,
Cannon, Chadderdon, Clark, Collins, Crow, Deal, Denney, Edmunson,
Ellsworth, Eskridge, Field(18), Field(23), Garrett, Hart, Harwood,
Henbest, Henderson, Jaquet, Kemp, Lake, LeFavour, Loertscher,
Martinez, Mathews, McGeachin, McKague, Miller, Moyle, Nielsen,
Pasley-Stuart, Pence, Raybould, Ring, Ringo, Roberts, Rusche,
Rydalch, Sali, Sayler, Schaefer, Shepherd(2), Shepherd(8), Shirley,
Skippen, Smith(30), Smith(24), Smylie, Snodgrass, Stevenson, Trail,
Wills, Wood, Mr. Speaker
NAYS -- None
Absent and excused -- Mitchell, Nonini
Floor Sponsor - Crow
Title apvd - to Senate
03/24 Senate intro - 1st rdg - to Loc Gov
03/29 Rpt out - rec d/p - to 2nd rdg
03/30 2nd rdg - to 3rd rdg
Ret'd to Loc Gov
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-eighth Legislature Second Regular Session - 2006
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 816
BY REVENUE AND TAXATION COMMITTEE
1 AN ACT
2 RELATING TO PRODUCERS OF ELECTRICITY BY MEANS OF WIND ENERGY; AMENDING SECTION
3 63-3501, IDAHO CODE, TO REVISE DEFINITIONS AND TO PROVIDE CORRECT TERMI-
4 NOLOGY; AMENDING CHAPTER 35, TITLE 63, IDAHO CODE, BY THE ADDITION OF A
5 NEW SECTION 63-3502B, IDAHO CODE, TO PROVIDE FOR A WIND ENERGY TAX; AMEND-
6 ING CHAPTER 35, TITLE 63, IDAHO CODE, BY THE ADDITION OF A NEW SECTION
7 63-3503B, IDAHO CODE, TO PROVIDE FOR THE FILING OF OPERATORS' STATEMENTS
8 BY PRODUCERS OF ELECTRICITY BY MEANS OF WIND ENERGY, TO PROVIDE FOR THE
9 COMPUTATION, ALLOTMENT AND APPORTIONMENT OF TAX DUE FROM PRODUCERS OF
10 ELECTRICITY BY MEANS OF WIND ENERGY BY THE STATE TAX COMMISSION AND TO
11 REQUIRE CERTAIN NOTIFICATIONS; AMENDING SECTION 63-3504, IDAHO CODE, TO
12 AUTHORIZE COUNTY TREASURERS TO COLLECT SPECIFIED TAXES FROM PRODUCERS OF
13 ELECTRICITY BY MEANS OF WIND ENERGY, TO PROVIDE AN EXCEPTION RELATING TO
14 DISTRIBUTION OF THOSE TAXES AND TO MAKE A TECHNICAL CORRECTION; AMENDING
15 CHAPTER 35, TITLE 63, IDAHO CODE, BY THE ADDITION OF A NEW SECTION
16 63-3504A, IDAHO CODE, TO PROVIDE FOR THE DISTRIBUTION OF TAXES PAID BY
17 PRODUCERS OF ELECTRICITY BY MEANS OF WIND ENERGY; AMENDING SECTION
18 63-3505, IDAHO CODE, TO PROVIDE FOR TAX LIENS ON PROPERTY OF PRODUCERS OF
19 ELECTRICITY BY MEANS OF WIND ENERGY, TO PROVIDE CORRECT TERMINOLOGY AND TO
20 MAKE A TECHNICAL CORRECTION; AMENDING SECTION 63-3506, IDAHO CODE, TO PRO-
21 VIDE FOR THE ASSESSMENT OF NONOPERATING PROPERTY OF PRODUCERS OF ELECTRIC-
22 ITY BY MEANS OF WIND ENERGY; AMENDING CHAPTER 6, TITLE 63, IDAHO CODE, BY
23 THE ADDITION OF A NEW SECTION 63-602JJ, IDAHO CODE, TO PROVIDE AN EXEMP-
24 TION FROM TAXATION FOR CERTAIN OPERATING PROPERTY OF PRODUCERS OF ELEC-
25 TRICITY BY MEANS OF WIND ENERGY; AND TO PROVIDE AN EFFECTIVE DATE.
26 Be It Enacted by the Legislature of the State of Idaho:
27 SECTION 1. That Section 63-3501, Idaho Code, be, and the same is hereby
28 amended to read as follows:
29 63-3501. DEFINITIONS. For the purposes of this act chapter:
30 (a) The term "cooperative electrical association" means any nonprofit,
31 cooperative association organized and maintained by its members, whether
32 incorporated or unincorporated, for the purpose of transmitting, distributing
33 or delivering electric power to its members.
34 (b) The term "cooperative natural gas association" means any nonprofit
35 cooperative association organized and maintained by its members, whether
36 incorporated or unincorporated, for the purpose of transmitting, distributing
37 or delivering natural gas to its members.
38 (c) The term "cost of power" means the cost of power purchases and gener-
39 ation included in reports to, and in accordance with applicable requirements
40 of, the rural electrification administration, United States department of
41 agriculture, by cooperative electrical associations which are borrowers from
42 the rural electrification administration, and for cooperative electrical asso-
43 ciations which are not borrowers from the rural electrification administra-
2
1 tion, such costs which could have been included by such cooperative electrical
2 associations using equivalent reporting and accounting requirements. The state
3 tax commission shall prescribe necessary rules and regulations for the purpose
4 of providing a uniform method of reporting cost of power purchases and genera-
5 tion by cooperative electrical associations, consistent with the reporting and
6 accounting requirements of the rural electrification administration.
7 (d) The term "cost of gas" means the cost of natural gas purchased by
8 cooperative natural gas associations from wholesale or other suppliers of nat-
9 ural gas for delivery to members of the cooperative natural gas association.
10 (e) The term "gross electrical earnings" means the gross receipts of a
11 cooperative electrical association from the distribution, delivery and sale of
12 electric power within the state of Idaho, but shall not include any earnings
13 or receipts from the distribution, delivery or sale of electric power consumed
14 in pumping water for irrigation or drainage purposes within the state of
15 Idaho, upon the land of such consumer and for the use and benefit of his own
16 land, and where such consumer has received from the association a refund,
17 rebate, or credit of three and one-half percent (3 1/2%) of the cost to him of
18 the electric power so used and consumed.
19 (f) The term "gross natural gas earnings" means the gross receipts of a
20 cooperative natural gas association from the distribution, delivery and sale
21 of natural gas within the state of Idaho.
22 (g) The term "operating property" means and includes all real estate,
23 fixtures or personal property owned, controlled, operated or managed by such
24 electrical or natural gas association, or producer of electricity by means of
25 wind energy, in connection with or to facilitate the generation, transmission,
26 distribution, delivery, or measuring of electric power, or natural gas, or
27 electrical energy generated, manufactured or produced by means of wind energy,
28 and all conduits, ducts, or other devices, materials, apparatus or property
29 for containing, holding or carrying conductors used or to be used for the
30 transmission, distribution and delivery of electric power, and natural gas, or
31 electrical energy generated, manufactured or produced by means of wind energy,
32 including construction tools, materials and supplies.
33 (h) The term "nonoperating property" means all other property, real or
34 personal, owned, controlled or managed by such electrical or natural gas asso-
35 ciation.
36 (i) The term "taxing unit" shall include any of the following that had
37 property taxes levied in the prior year: the separate taxing districts of the
38 county as well as the county itself and any such taxing district's fund having
39 a different geographical boundary than such taxing district itself.
40 (j) The term "tax levy" means the total tax levies fixed by each taxing
41 district, as defined herein, in the prior calendar year. next preceding.
42 (k) The term "WPPSS 4 and 5 costs" means, for a cooperative electrical
43 association which is a participant under the Washington public power supply
44 system nuclear projects numbers 4 and 5 participants' agreement, dated July
45 14, 1976, all of its costs in connection with Washington public power supply
46 system nuclear projects numbers 4 and 5.
47 (l) The term "weighted wire mileage factor" means a figure which is
48 arrived at by multiplying the tax levy of each taxing unit by the number of
49 wire miles of transmission and distribution lines of such cooperative electri-
50 cal association situated in such taxing unit.
51 (m) The term "gas line mileage factor" means a figure which is arrived at
52 by multiplying the tax levy of each taxing unit by the number of miles of nat-
53 ural gas transmission and distribution lines of such cooperative natural gas
54 association situated in such taxing unit.
3
1 SECTION 2. That Chapter 35, Title 63, Idaho Code, be, and the same is
2 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
3 ignated as Section 63-3502B, Idaho Code, and to read as follows:
4 63-3502B. LEVY OF TAX ON WIND ENERGY ELECTRICAL PRODUCTION. There shall
5 be levied against every producer of electricity by means of wind energy a wind
6 energy tax of two-tenths of one cent ($.002) per kilowatt hour on all such
7 electrical energy so generated, manufactured or produced. This wind energy tax
8 shall be in lieu of all other taxes on the operating property of such producer
9 for the prior calendar year preceding the filing of the statement hereinafter
10 provided for, and which shall be paid in the manner and at the time prescribed
11 herein.
12 SECTION 3. That Chapter 35, Title 63, Idaho Code, be, and the same is
13 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
14 ignated as Section 63-3503B, Idaho Code, and to read as follows:
15 63-3503B. FILING OPERATORS' STATEMENT -- ALLOTMENT AND APPORTIONMENT OF
16 TAX DUE FROM PRODUCERS OF ELECTRICITY BY MEANS OF WIND ENERGY BY STATE TAX
17 COMMISSION. Every producer of electricity by means of wind energy in this
18 state shall file with the state tax commission of the state of Idaho an opera-
19 tors' statement in the manner as provided for in section 63-404, Idaho Code,
20 and shall include thereon a statement of the amount of kilowatt hours of elec-
21 trical energy generated, manufactured or produced during the prior calendar
22 year. Kilowatt hour production shall be measured at the electricity grid
23 interconnection meter. Upon examining and verifying said statement, the state
24 tax commission shall compute the amount of the wind energy tax measured by the
25 kilowatt hours of electrical energy generated, manufactured or produced and
26 shall allot to each county in which the operating property of such producer is
27 situate that proportion of the total wind energy tax of such producer shown to
28 be due as the same proportion that the total original cost of operating prop-
29 erty situate in such county bears to the total original cost of operating
30 property of such producer for the wind energy project. The state tax commis-
31 sion shall then, for each county, apportion the wind energy tax so allotted to
32 such county among the several taxing units thereof within which any operating
33 property of such producer is situate, by apportioning to each such taxing unit
34 that proportion of the wind energy tax so allotted to such county. For such
35 apportionment, the state tax commission shall calculate the weighted original
36 cost which shall be the product of the original cost of such operating prop-
37 erty within such taxing unit times such taxing unit's property tax levy for
38 the prior year and the weighted apportionment rate which shall be the ratio of
39 the wind energy tax, allotted to such county, to the aggregate weighted origi-
40 nal cost for all such taxing units within which the operating property is
41 located and then shall calculate the apportionment of the wind energy tax for
42 each such taxing unit to be equal to the product of the weighted original cost
43 times the weighted apportionment rate. The state tax commission shall, on or
44 before the second Monday in August, notify the state superintendent of public
45 instruction, the county auditor, and the county treasurer of such allotment
46 and apportionment and the amounts thereof. On or before the third Monday in
47 August, the county auditor shall notify the appropriate taxing units of the
48 amount of wind energy tax being apportioned.
49 SECTION 4. That Section 63-3504, Idaho Code, be, and the same is hereby
50 amended to read as follows:
4
1 63-3504. COLLECTION BY COUNTY TREASURER -- PENALTY AND INTEREST IMPOSED
2 WHEN DELINQUENT. Upon receipt of the notification of the allotment and appor-
3 tionment of such taxes by the state tax commission by the county treasurer,
4 said county treasurer shall, not later than June 15th of each year, notify
5 each cooperative electrical association, and each natural gas cooperative, and
6 producer of electricity by means of wind energy, of the amount of taxes owed,
7 and the apportionment thereof to the county and to the several taxing dis-
8 tricts in the county and such tax shall be due and payable not later than July
9 1, following and, upon the payment thereof, the county treasurer shall pay
10 over to each taxing district its apportionment as herein determined. Provided
11 however, that in regard to taxes paid by producers of electricity by means of
12 wind energy, distribution of taxes shall be made pursuant to section 63-3504A,
13 Idaho Code. Any such taxes not paid by July 1, as aforesaid, shall become
14 delinquent and a penalty of five percent (5%) thereof shall be imposed,
15 together with interest at the rate of one percent (1%) per month from July 1
16 until paid.
17 SECTION 5. That Chapter 35, Title 63, Idaho Code, be, and the same is
18 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
19 ignated as Section 63-3504A, Idaho Code, and to read as follows:
20 63-3504A. DISTRIBUTION OF TAXES PAID BY PRODUCERS OF ELECTRICITY BY MEANS
21 OF WIND ENERGY. (1) Any county that notifies producers of electricity by means
22 of wind energy of taxes owed pursuant to section 63-3504, Idaho Code, shall
23 establish in the office of the county treasurer a county property tax relief
24 fund into which shall be placed fifty percent (50%) of revenue received from
25 tax on such wind energy. On or before the first Monday in August of each year,
26 the county treasurer shall submit to the board of county commissioners, the
27 county auditor, and the state tax commission a statement showing the balance
28 in the county property tax relief fund as of August 1 of that year.
29 (2) No later than October 10, the balance in the county property tax
30 relief fund, as of the first Monday in August, shall be distributed to the
31 taxing districts within the county entitled to receive revenues from the wind
32 energy tax. Moneys distributed shall be in accordance with the procedures
33 found in section 63-3503B, Idaho Code. For the purposes of the limitation pro-
34 vided by section 63-802, Idaho Code, moneys distributed from the county prop-
35 erty tax relief fund shall be treated as property tax revenue.
36 (3) The dollar amount subject to the limitations of section 63-802, Idaho
37 Code, shall be the sum of the dollar amount of the portion of property taxes
38 certified to the board of county commissioners under section 63-803, Idaho
39 Code, and subject to the limitations of section 63-802, Idaho Code, as if no
40 county property tax relief fund moneys were to be distributed, and the dollar
41 amount to be received from the property tax relief fund. The division of the
42 resulting sum by the value subject to taxation is a quotient that shall not
43 exceed the levy limits prescribed by Idaho Code. If these limitations are
44 exceeded, the board of county commissioners shall reduce any applicable budget
45 request to comply with this section. The levy set to fund this portion of the
46 budget shall be calculated based on the budget subject to the limitations of
47 section 63-802, Idaho Code, less the money to be received from the county
48 property tax relief fund.
49 (4) The remaining fifty percent (50%) of revenue received from tax on
50 producers of electricity by means of wind energy shall be distributed pursuant
51 to section 63-3503B, Idaho Code.
52 SECTION 6. That Section 63-3505, Idaho Code, be, and the same is hereby
5
1 amended to read as follows:
2 63-3505. TAXES A LIEN ON PROPERTY OF ASSOCIATION OR PRODUCER UNTIL PAID.
3 All taxes due and payable under this act chapter shall be a lien on all prop-
4 erty, real and personal, of the electrical, or natural gas association, or the
5 producer of electricity by means of wind energy, owing the same, as of June
6 15th of each year and shall be discharged only by the payment thereof. In any
7 action to enforce payment of any delinquent taxes due under this act chapter,
8 the county prosecuting such action shall be entitled to a judgment for the
9 reasonable costs of prosecuting such action, as well as for the delinquent
10 taxes, penalty and interest.
11 SECTION 7. That Section 63-3506, Idaho Code, be, and the same is hereby
12 amended to read as follows:
13 63-3506. ASSESSMENT OF NONOPERATING PROPERTY BY ASSESSOR. The
14 nonoperating property of any cooperative electrical or natural gas
15 association, or producer of electricity by means of wind energy, shall be
16 assessed by the county assessor of the county wherein such property is situ-
17 ate, and taxes levied against the same shall be a lien, and shall be due and
18 payable, in the same manner as are any other taxes on property.
19 SECTION 8. That Chapter 6, Title 63, Idaho Code, be, and the same is
20 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
21 ignated as Section 63-602JJ, Idaho Code, and to read as follows:
22 63-602JJ. PROPERTY EXEMPT FROM TAXATION -- CERTAIN OPERATING PROPERTY OF
23 PRODUCER OF ELECTRICITY BY MEANS OF WIND ENERGY. The following property is
24 exempt from taxation: Operating property of producers of electricity by means
25 of wind energy as defined in section 63-3501, Idaho Code, where for the tax
26 year, in lieu of all other taxes on the operating property of such producer
27 for the prior calendar year, there is levied against such producer, tax on all
28 electrical energy generated, manufactured or produced by the producer and paid
29 by the producer pursuant to the provisions of section 63-3502B, Idaho Code.
30 SECTION 9. This act shall be in full force and effect on and after Janu-
31 ary 1, 2007.
STATEMENT OF PURPOSE
RS 16237
The purpose of this proposed legislation is to change the
method of taxation on producers of wind energy from an
advalorem tax to a tax on production. The legislation also
provides for the filing of operators' statements and
provides for the computation, allotment and apportionment of
tax due from producers of wind energy. The legislation also
provides for the distribution of taxes paid by producers of
wind energy and to provide tax liens on property of
producers of wind energy and provides for the assessment of
nonoperating property of producers of wind energy.
FISCAL NOTE
No fiscal impact to the general fund.
CONTACT: Ridgeline Energy
Dar Olberding,
Phone 208-761-6012
Stan Boyd,
Phone 208-890-9914
STATEMENT OF PURPOSE / FISCAL NOTE H 816