Hopkins County Set To Approve BT Solterra Solar Chapter 381 Agreement On Monday

Hopkins County Commissioners Court will meet Monday morning, January 10, 2022 to discuss and approve the reinvestment zone for BT Solerra Solar, LLC, a $140 million solar project planned in the Saltillo area. Also on the agenda is the approval of a 381 agreement with the solar company which will stipulate the level of tax-refund to the solar company as well as any PILOT payments to the county.

KSST News attempted to get details of the 381 agreement ahead of the scheduled Monday meeting, but those details were unavailable. If the agreement between Hopkins County and BT Solterra, LLC. follows earlier similar agreements, it will include a 100% tax refund to the solar company each year, after the county receives an annual PILOT, or “Payment In Lieu Of Taxes”. The PILOT payments have generally been substantially lower than the estimated tax burden. BT Solterra’s tax burden is approximated at almost $500,000 for the first year of operation for Hopkins County taxes alone. The contract could also include an up front one-time payment to the county for anticipated road damage to county roads during the construction of the project. Details of the contract will not be known until after the contract is approved Monday morning by the Hopkins County Commissioner’s Court.

Reinvestment Zone

Austin Willis, director of Solar and Storage for Belltown Power Texas

The reinvestment zone as proposed in the Commissioners Court agreement is a contiguous geographic area which includes five properties owned by Delbert “Chip” Tully spanning across just over 260 acres and 10 owned by Los Senderos Cattle and Ranch Company totally just over 1,170 acres. Overall, that’s a little more than 1,430 acres, all located west of FM 900, starting south of FM 3536 and continuing to property across FM 3532 and narrowing to property west of FM 3536, the proposed reinvestment zone map shows.

Austin Willis said Belltown Power Texas hopes to begin construction in the second half of 2022 and operations in the second half of 2023.

The resolution designates the area as a commercial-industrial or residential reinvestment zone for a 5 year span to begin in December 2021, renewable for an additional 5 years at a time or sooner with an order for those parts if any section, paragraph, clause or provision in the document is found to be invalid or unenforceable.

The company, as has been the case with the six other planned solar projects in Hopkins County (including Stampede Solar which is also planned in the Saltillo area), is seeking tax incentives from local taxing entities (Hopkins County, Saltillo ISD and Hopkins County Hospital District) to build solar powered facilities.

Chapter 313 Application

The Chapter 313 application accepted by Saltillo ISD on Oct. 26, 2021, by Superintendent David Stickels and submitted for review by Texas Comptroller’s Office asks the school district for a 10 year tax exemption for the 10 year project, with operations expected to begin during the 2028-2029 school year and conclude during the 2052-2053 school year.

Tab 11 in the Chapter 313 application submitted by Belltown Power Texas to Saltillo ISD for consideration on Oct. 26, 2021, that was determined by Rick L. Lambert of Powell Law Group determined was complete
by the District on October 29, 2021. The application was then forwarded Nov. 16, 2021, and is being reviewed by Texas Comptroller’s Office.

The application shows one qualified employee would be employed to oversee project operations at an annual salary of $47,221, which would require approval for a job waiver to meet Chapter 313.025 (F-1) of the Tax Code, which stipulates creation of 10 permanent jobs unless the jobs created exceeds the industry standard.

“The solar energy industry standard for committed jobs is one job per 350MW. In line with these industry standards for solar project’s job requirements, BT Solterra Solar, LLC, as a 143MW project, has committed to create one qualified job,” Brandon Westlake, senior tax consultant for Cummings Westlake property tax advisers, wrote in a letter to Stickels with the application.

The 143 MW facility will all be located within Saltillo ISD. Panel placement is subject to change but for purposes of this application, the Project anticipates using approximately 321,617 PV modules or equivalent and 49 inverters.

The “Qualified Investment and qualified property” for the requested 313 agreement with Saltillo ISD would include “solar modules/panels, tracking equipment, racking and mounting structures, O&M building, substation, inverters boxes, combiner boxes, meteorological equipment, foundations, roadways, paving, fencing, collection system, generation transmission lines, interconnection facilities, SCADA systems, transformers, fire suppression systems and all necessary ancillary equipment for commercial generation of electricity.”

Solterra Solar Reinvestment Zone as proposed in the Chapter 313 agreement submitted to Saltillo ISD, which is being reviewed by the state Comptroller’s Office. The “Saltillo ISD No. 1662, BT Solterra Solar, LLC,” application received Nov. 12, 2021, by the Texas Comptroller of Public Accounts’ Office he does note, however, “The map in TAB 11 shows the potential locations of improvements within Saltillo ISD boundaries; however, the final number of panels and inverters and the location of each of these facilities is dependent upon ongoing negotiations with power purchasers and other factors.

The map in TAB 11 shows the potential locations of improvements within Saltillo ISD boundaries; however, the final number of panels and inverters and the location of each of these facilities is dependent upon ongoing negotiations with power purchasers and other factors. That application, however, said the project is “anticipated to begin in the Q1 2027 with completion by December 31, 2027.”

The 313 application also notes Belltown Power Texas anticipates producing final proof of a reinvestment zone or enterprise zone for the proposed solar powered electric generating facility known as BT Solterra Solar, LLC, by April 2022.

The company anticipates asking for a 100% tax incentive from the $0.8688 Saltillo ISD maintenance and operations tax, a 100% tax incentive from Hopkins County’s tax rate and a 100 percent tax incentive from Hopkins County Hospital District’s $0.22 per $100 valuation tax rate. BT Solterra Solar, LLC, being built in Hopkins County is contingent on the tax incentives, “due to the extremely competitive power market in Texas.”

“The property tax liabilities of a project without tax incentives in Texas lowers the return to investors and financiers to an unacceptable level at today’s contracted power rates under a PPA. A signed PPA in the Texas market is at a much lower rate than other states because of competitively low electricity prices. Both parties of the PPA have an escape clause if the terms of the PPA cannot be met. Without the tax incentives in Texas, a project with a PPA becomes non-financeable. Therefore, this appraised value limitation is critical to the ability of the proposed Project to move forward as currently sited,” the Chapter 313 application made to Saltillo ISD and the Comptroller’s Office states.

Author: Chad Young

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