One year ago this week, Governor Brewer cut the ribbon for the new Arlington Valley Solar plant and said:
“Watch out, California, because we are coming for you,” Brewer said, adding that the state helped clear red tape for such projects.
“Now let’s go build a dozen more and claim that number-one spot,” Brewer said. “Arizona can do it.”
Governor Brewer didn't just cut red tape. She also worked with the Legislature to ensure that companies that invested in solar power plants also had a stable and predictable tax environment. Here's the statute for valuing a solar plant.
Through December 31, 2040, the department shall determine the valuation of taxable renewable energy equipment in the manner prescribed by this section.
B. The value of renewable energy equipment is twenty per cent of the depreciated cost of the equipment.
This post isn't about solar energy. It's about how the legislature sets policy and bureaucrats undermine that policy behind the scenes.
Take a look at that statute again. Those two lines are very important and very clear. Solar plants are valued at a percentage of their depreciated cost....and they are only valued using this section.
The folks at the Department of Revenue then asked the solar companies about the stimulus funds that they got from the federal government....
The companies responded that they are not allowed to record those funds as assets, which means that they can't depreciate them....which means that those funds are not included in depreciated cost...which means that they aren't taxable.
Then the good folks at DOR said....hmm. We think that the federal money is taxable and if you don't like it, you can either sue us or change the statute.
I suggested that they just put an exclamation point on the original statute....but nobody listens to me.
So then the companies had to go back to the legislature and change the law to make it double dog clear that the federal dollars that are already not on their books....really, seriously, are not on their books.
That bill is HB 2403 and it's sitting on Governor Brewer's desk.
I don't know if Arizona is going to "build a dozen more and claim that number-one spot."
But I do know that the best laid plans of Governors, Legislators and investors can be wiped out by some accountant in the basement of some government building....
I guess those high school government classes are due for an update.