Lawyers representing Kingfisher and Canadian counties are asking the state Supreme Court to reconsider its unanimous decision taking wind energy production tax credits (PTCs) out of the equation for property tax assessment.

Kingfisher County Assessor Carrie Turner told board of county commissioners chairman Heath Dobrovolny and county school superintendents about the legal move in a special county meeting last Wednesday.

School superintendents attending the meeting included: Kingfisher – David Glover; Dover – Jay Wood; Lomega – Steve Shiever; Cashion – Leon Ashlock; Okarche – Josh Sumrall, and Chisholm Trail Technology Center – Kurt Thomas.

Hennessey Superintendent Jason Sternberger did not attend.

The state’s highest court issued the decision last month in an appeal filed by Kingfisher and Canadian county assessors against Kingfisher Wind LLC, a 149-turbine wind farm that straddles the border between the two counties.

The appeal stems from the company’s protest of taxes assessed by both counties in 2016.

The court ruled that PTCs were intangible property and thus not taxable by counties as part of the fair cash value assigned to wind energy property to determine the amount of property tax owed.

In their petition asking the court to reconsider that decision, attorneys for the county argue that even though PTCs aren’t taxable property themselves, they add value to the company’s actual taxable property that should be included in the assessment.

The Supreme Court also upheld the total valuation of $175 million assigned by a Canadian County judge for Kingfisher Wind’s property in both counties, with $105,385,000 being the share assigned to Kingfisher County.

That amount is slightly more than the valuation Kingfisher Wind was arguing for but nearly 62% less than the assessed value used to determine the company’s 2016 tax bill.

Under state law, entities lodging protests still have to pay their entire tax bill to the county treasurer’s office in the year taxes are due, but the amount under dispute is held in escrow until the dispute is decided.

So the lion’s share of the more than $2.4 million the company paid in taxes in 2016 has been sitting in an escrow account since that time.

Based on a spreadsheet from the county treasurer’s office which Turner distributed to superintendents last week, the funds under protest amount to $785,485 for Okarche school district, $631,996 for Cashion and $129,519 for Kingfisher.

(The portion of Kingfisher Wind’s 2016 tax bill that wasn’t protested – $860,970 – has already been distributed to the respective school districts.)

In addition to potentially losing some or all of the escrowed funds if the dispute is decided in the taxpayer’s favor, the county and schools also are out the expense of legal fees paid to the law firm fighting on their behalf.

Dobrovolny told the

Times & Free Press last week that a total of $494,821 had been paid to date to the Oklahoma City law firm of Tisdal & O’Hara to fight the Kingfi sher Wind tax protest.

Turner told superintendents that the law firm is not charging either county for the cost of preparing and filing the motion for rehearing.

But if the Supreme Court grants the motion and schedules another hearing, more legal fees would accrue for the hearing itself.

When Turner asked for input, none of the superintendents said they supported the idea of paying more money to prolong what they saw as a losing battle at this point.

Turner also pointed out that the Supreme Court opinion left open the possibility that the State Legislature could statutorily redefine PTCs as taxable property, thus nullifying the court’s ruling.

“We all need to reach out to our legislators to ask them to do that,” she said.

Other Concerns

If a petition for rehearing is unsuccessful and unless and until the Legislature chooses to act, the Supreme Court opinion becomes binding precedent for all undecided wind farm tax protests (several dozen are pending in 15 counties) and any future protests raising the same issue.

Red Dirt Wind Energy, located in the northern part of the county, is currently protesting more than $1.5 million in property taxes it owes for 2018 and another $1.63 million for 2019.

Dobrovolny said the county had just received a letter of intent to build another 600-watt wind farm called Wagon Wheel, consisting of 176 turbines to be constructed in Kingfisher, Logan, Garfield and Noble counties.

Once built, the assessed value of that company’s property also would be governed by the Supreme Court’s exclusion of production tax credits if the ruling remains unchanged.