In August 2011, Paul W. Jackson from Michigan Farm News interviewed Harold Durling, farmer and advanced development engineer, more than two years after Durling had constructed a $15,000 wind turbine on his personal property. Durling completed the wiring from the wind turbine to his house, as well as purchased a program that sends real-time wind and energy data to his office computer; this data allowed Durling to determine that the wind turbine was generating 30 percent of his household power (Jackson).. However, Durling was confronted with a Michigan tax policy which classifies his wind turbine as personal property; consequently, Durling is forced to pay a property tax on turbine, resulting in his $15,000 investment costing him more money up, than if he were to take it down and pay a typical electric bill. Jackson argues that "in a world in which governments give lip service to developing alternative energy, the tax system guarantees that alternative energy will be discouraged" (Jackson). So, are Michigan lawmakers blocking attempts to develop alternative energy systems?
In May 2011, the Michigan Senate Republicans introduced Senate Bill No. 391, an amendment to sections 2 and 8 of the General Property Tax Act (1893 PA 206), that would classify wind energy systems as real property for property tax purposes. Essentially, the bill would provide that wind energy systems would have the same classification as land and buildings, rather than business equipment - making wind systems eligible for certain tax breaks and exemptions. According to Senator Mike Green who introduced the bill, Senate Bill 391 would apply to large wind systems that were designed to produce electricity for large scale power grids, and make the creation of wind energy systems more appealing to businesses and investors (michiganvotes.org).
As is the case with most bills that come before legislatures, there is a significant amount of support and opposition regarding Senate Bill 391. As such, proponents of Senate Bill 391 praise the bill, for it creates incentives for companies to build "wind parks" while providing jobs and some direct tax benefits to local governments; moreover, proponents praise local governments that have already begun to developing alternative energy systems in areas like Mason county since these governments are demonstrating "political courage" and bringing Mason "into the future" (Alexander). Additionally, Muskegon County is considering building a $300 million wind farm that proponents maintain constructing the wind farm will reduce Muskegon's carbon footprint, create local jobs, and provide new revenue for the local government (Gaertner).
However, the opposition has raised an array of valid concerns. Foremost, while some people support efforts to construct wind farms, concerns have been raised about the elimination of the personal property tax on wind turbines since the result would be a loss of expected revenue for local governments (Gaertner). Consequently, passage of Senate Bill 328 would result in a projected loss of $7.8 million in potential income from personal property taxes over a twenty year period in Mason County. Moreover, citizens in Mason County like Evelyn Bergaila maintain that constructing 312 foot tall turbines will harm property value in the county. Others cite that the turbines are located far too close to homes, and that the wind farms in Mason County will be constructed in an area that has natural and sour gas lines - raising concerns of safety for local residents (Alexander).
Despite these concerns, many people have argued that any potential revenue resulting from the construction of wind farms is an added perk since the county will already benefit from the creation of clean energy sources and jobs. Additionally, for people like Harold Durling from the aforementioned Michigan Farm News article, Senate Bill 391 could likely work in conjunction with Senate Bill 328 which clarifies "that alternative energy personal property shall not be assessed as real property, or have any tax assessed on the system under the general property tax Act" according to Rebecca Park from the Michigan Farm Bureau (Jackson). To that means, lobbyists are working with Senators to include provisions to these bills that would tax commercial wind farms, but would exempt wind turbine construction on personal property like Harold Durling's turbine. These changes could change the incentives for companies, and consequently diminish the appeal for companies to invest in Michigan. Will Michigan see an increase in alternative energy? Only time will tell as lawmakers continue to work out provisions for wind energy found in proposal like Senate Bill 391.
Alexander, Dave. "Mason County planners unanimously approve Consumers wind farm plan." MLive.com. 8 Jul. 2011. 20 Feb. 2012
Alexander 2, Dave. "Opposition to Lake Winds Energy Park continues as construction of wind farm progresses." MLive.com. 8 Dec. 2011. 21 Feb. 2012.
Alexander 3, Dave. "Wind energy link: Tax ruling diminishes property taxes on wind turbines." MLive.com. 20 Dec. 2011. 21 Feb. 2012.
Gaertner, Eric. "Wind-farm lease approval generates excitement for Muskegon County, developer." MLive.com. 25 Oct. 2011. 21 Feb. 2012.
Jackson, Paul W. "Wind, sun and taxes: Energy or ambiguity?" Michigan Farm Bureau. 30 Aug. 2011. 20 Feb. 2012.
MichiganVotes.com. "2011 Senate Bill 391: Extend certain tax breaks to wind energy systems." Michgan Votes. 21 Feb. 2012.