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Williamsport mayor opposes change sought in utility taxation provision

As law is written now, town would get a share of PILOT from Maryland Solar, even though the solar farm is elsewhere

February 08, 2012|By ANDREW SCHOTZ | andrews@herald-mail.com

Washington County is trying to change a taxation provision that was never used, but is now relevant.

Sen. Christopher B. Shank said that in 2007, the Maryland General Assembly reduced an operating grant to local jurisdictions to help offset the cost of property taxes that utilities didn’t pay.

Instead, the legislature established a payment in lieu of taxes, or PILOT, program.

Washington County’s PILOT program was written with the R. Paul Smith electric plant in Williamsport in mind.

The county had to give Williamsport 35 percent of a payment in lieu of taxes for an electricity generation facility in Washington County. Shank said the R. Paul Smith plant was the only plant in the county, so the broad wording of the law didn’t matter.

Now, Washington County is scheduled to get a PILOT from Maryland Solar for a 20-megawatt solar farm on state prison land south of Hagerstown.

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County Administrator Gregory B. Murray said the PILOT will generate $120,000 per year for 25 years, including a five-year option after the initial 20-year period, for a total of $3 million.

As the law is written now, Williamsport would get 35 percent, or $1.05 million, even though the solar farm is elsewhere.

A Senate bill Shank filed to update the wording was heard Wednesday in Annapolis. The Washington County delegation has a companion bill in the House.

The bill would allow Williamsport only to collect a PILOT share for an electricity generation facility in the town.

“It’s clear to me that there was never any type of intent that Williamsport capture revenue for any type of facility outside of the corporate limits,” Shank said after the hearing. “It was designed, as everybody knew back then, to assist the town and county with a taxation issue surrounding R. Paul Smith.”

It’s a coincidence that FirstEnergy recently announced it will close the R. Paul Smith plant, Shank said.

Williamsport Mayor James G. McCleaf II wrote Shank a letter last month opposing the proposed bill.

McCleaf said in a telephone interview on Wednesday that he’s concerned about the town losing money.
“We want to keep as much revenue as we can,” he said.

Even though a Department of Legislative Services analysis notes that Williamsport never received any money under the PILOT law, McCleaf said he’d like to hear that directly from state and county officials.

McCleaf said Edward Kuczynski, the town’s attorney, was supposed to talk to Assistant Washington County Attorney Kirk C. Downey.

Downey, who attended Wednesday’s hearing, said he and Kuczynski exchanged phone messages, but didn’t connect.

Shank said Williamsport didn’t take in any money through the PILOT law, but instead assesses a higher personal property rate on the electric plant than it charges for general personal property. The bill will not change that, he said.

Other than the solar farm, the county has no current PILOT agreements that would be affected by the law, Murray said.

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