COUNTY OF ALBEMARLE
Ordinance to amend Chapter 15, Taxation, of the Albemarle County Code, by adding Article XVII, Certified Solar Energy Equipment, Facilities or Devices and Certified Recycling Equipment, Facilities or Devices
Public hearing to consider adoption of an ordinance to amend Chapter 15, Taxation, of the Albemarle County Code.
Tucker, White, Davis, Herrick, Wiggans, Woodzell
LEGAL REVIEW: Yes
October 5, 2005
ACTION: X INFORMATION:
Virginia Code § 58.1-3661 permits localities to exempt or partially exempt certified solar energy equipment, facilities, or devices and certified recycling equipment, facilities, or devices from local taxation. At the Board’s request, staff provided the Board a report on this issue on August 3, 2005. After considering the report, the Board directed staff to prepare an ordinance for public hearing exempting certified solar energy equipment, facilities, or devices and certified recycling equipment, facilities, or devices from local taxation.
Goal 4.2. Fund County Services in a fair, efficient manner and provide needed public facilities and infrastructure.
Virginia Code § 58.1-3661 defines certified solar energy equipment, facilities, or devices as “any property, including real or personal property, equipment, facilities, or devices, certified by the local certifying authority to be designed and used primarily for the purpose of providing for the collection and use of incident solar energy for water heating, space heating or cooling or other application which would otherwise require a conventional source of energy such as petroleum products, natural gas, or electricity.” Certified recycling equipment, facilities, or devices are defined as “machinery and equipment which is certified by the Department of Waste Management as integral to the recycling process and for use primarily for the purpose of abating or preventing pollution of the atmosphere or waters of the Commonwealth, and used in manufacturing facilities or plant units which manufacture, process, compound, or produce for sale recyclable items of tangible personal property at fixed locations in the Commonwealth.” In order to qualify for tax exemption, equipment must meet these criteria defined in the Virginia Code.
Based on staff interpretation of the Virginia Code, property would continue to be assessed at fair market value. The County Assessor would then deduct the certified value of qualifying solar equipment, facilities, or devices on the property. Under Virginia Code § 58.1-3661(E), that value is presumed to be “not less than the normal cost of purchasing and installing” the equipment. That value would be deducted from the property’s overall fair market value, and the owner taxed on the resulting reduced property value. The exemption would apply to both new and existing equipment. The process would be the same for recycling equipment, with the exception that Department of Waste Management, instead of the County Assessor, would certify the value of the recycling equipment. Any exemption for solar or recycling equipment would be effective for the next succeeding tax year after the application, and would have to be for a term of not less than five years, as required by state law.
Brief Discussion of Ordinance
The attached ordinance would exempt certified solar energy equipment, facilities, or devices and certified recycling equipment, facilities, or devices from local taxation. Under Section 15-1702, applicant owners of solar or recycling equipment would apply to the inspections division of the county’s Department of Community Development. Under Section 15-1703, this local building department would then examine the equipment and determine whether it met the required definitions set out in Section 15-1700. Once certified, under Sections 15-1704 and 15-1705, approved applications would be transmitted to the county assessor for exemption from taxation. In determining the amount of the exemption, the assessor would subtract the tax incurred by the normal purchase cost of the equipment from the total tax otherwise due on the taxpayer’s property. Granted exemptions would be effective for five years.
· Loudoun County – Loudoun has approved the exemption and reports one or two qualifying homes.
· City of Alexandria – Alexandria has approved the exemption and reports having handled only a couple of exemptions several years ago.
· Arlington County – Arlington has approved the exemption and reports having not exempted any solar energy equipment in the past twenty years.
· City of Roanoke – Roanoke has approved the exemption and reports that no one has requested it yet but expects about 30 properties to be requesting this exemption soon.
· City of Charlottesville – Charlottesville has approved the exemption, but reports no participants.
Several jurisdictions, including the City of Virginia Beach, City of Newport News, City of Manassas, Goochland County, Henrico County, Chesterfield County, and the City of Petersburg, report not offering this exemption.
Approximately 20 parcels in the County are presently marked as having solar heat. However, with no tax incentives currently in place, a significant number of parcels may have unreported solar equipment. The true number of taxpayers owning this equipment or seeking this exemption really cannot be known unless and until such an exemption is offered. Without a complete count of eligible owners, staff cannot determine the exact impact on the County, in terms of either foregone revenue or staff resources needed to administer the program. Assuming that there were only 20 parcels with qualifying equipment and if the equipment on each parcel cost $10,000, exempting all such equipment would reduce property tax revenues by $1,480 per year. Staff is not aware of significant recycling equipment, facilities, or devices in the County that would qualify for exemption.
Following the public hearing, if the Board wishes to exempt certified solar energy equipment, facilities, or devices and certified recycling equipment, facilities, or devices from local taxation, staff recommends adoption of the attached ordinance.
A – Proposed ordinance amendment
Return to regular agenda