Clean and Green Amendment Preserves Most Real Estate Tax Benefits for Land Leased for Wind Power Generation
In late 2010, the Pennsylvania General Assembly amended the Clean and Green statute to preserve most clean and green real estate tax benefits for land used for wind power generation.
The Clean and Green program provides reduced property tax assessments for certain agricultural and forest land. Historically, if the owner of clean and green property "split off" part of the property by sale or lease, the entire property lost its clean and green status and was subject to "roll-back" tax in the amount of the Clean and Green tax benefit received for the previous seven years. While the Clean and Green regulations contain an exception for cell tower leases, they contain no exception for wind power leases.
House Bill 1394, signed into law as Act 2010-190, amended the Clean and Green statute to preserve most clean and green benefits if the "split-off" land is used for a wind power generation system. So long as the remainder of the property continues to be used for qualifying clean and green purposes, the property owner will not be subject to roll-back tax on the entire property. Instead, roll-back tax will apply only to the part of the land actually used for the wind power generation system, which includes "the foundation of the wind turbine and the area of the surface covered by appurtenant structures" such as new roads, bridges, transmission lines, substations and related buildings.
For example, if the owner of a 100-acre clean and green parcel leased the entire property for wind power generation, and five acres of the property were used for the wind power generation system, the clean and green result before and after Act 2010-190 changed the law would be as follows:
|Roll-Back Tax||Future Clean & Green Benefit|
|Old Law||Due on entire 100-acre parcel||Forfeited for entire 100 acres|
|New Law||Due only on 5 acres used for wind farm||Preserved for 95 acres used for wind farm|
The landowner is required to provide the county assessor a "notice of installation of wind power generation system" within 30 days after the system begins generating electricity. The seven years of roll-back taxes are due on the date the notice is received by the county assessor.
The potential loss of Clean and Green tax benefits has long been a source of concern for both wind power companies and property owners. Act 2010-190 should alleviate those concerns by clarifying that wind power leases in most cases will have relatively minor impact on property owners' preferential clean and green real estate tax assessments.
Please call Lafe Metz at (412) 562-1044 or Marcy Hamilton at (412) 562-1973 if you would like to discuss how these changes may affect you or your business.