Ellington

The House Ways and Means Committee may be making a $1.16 billion miscalculation regarding an ad valorem tax exemption bill for a Kemper County coal plant. The committee appears to be considering a massive $1.32 billion tax exemption for the plant, though lobbyists for the development could be playing down the numbers, telling legislators that the exemption is only $4 million.

Mississippi Power officially proposed the $2.2 billion plant to the Mississippi Public Services Committee last year, and public utility lobbyists devised four legislative bills arranging for tax deductions and state construction loans for the plant. House Bill 1723 and Senate Bill 3269, designed to provide a $30 million state loan to Kemper County for infrastructure development for the coal plant site, are dead. But SB 3201 and HB 1639, which authorize exemptions from ad valorem taxes for up to 50 percent of the $2.2 billion project, are still alive in conference.

State law establishes the $2.2 billion plant's assessment rate—or tax value—at 30 percent, so the tax value of the $2.2 billion is $660 million. A millage rate of 100 mills amounts to $66 million per year. The 50 percent ad valorem tax deduction outlined in SB 3201 and HB 1639 would reduce that figure to $33 million, annually.

Documents Mississippi Power filed with the Department of Energy last year place the lifespan of the plant at 40 years, which amounts to a $1,320,000,000 total tax cut over the life of the plant if the governor signs either of the bills.

Mississippi Sierra Club Legislative Director Louie Miller said Mississippi Power lobbyists are claiming to House Ways and Means Chairman Percy Watson that the bill only exempts the gas-fire portion of the plant's turbines from full ad valorem taxes—comparable perhaps to exempting your car's fuel injector from road taxes. Miller said House committee members were told the actual tax deduction outlined in the two bills amount to $4 million annually, or $160 million over a 40-year lifespan.

Watson, the author of HB 1639, which passed the Senate March 17, could not immediately be reached for comment, but the language in neither of the bills appears to set a $4 million cap on the deduction. In fact, the bill defines the deduction as applying to "the project," not a portion of it.

Kemper County Sen. Sampson Jackson, D-DeKalb, said representatives of the Mississippi Development Authority told him that the exemption only applied to a portion of the plant, not the whole thing.

"It's only for the gasification part of it, not the whole power plant itself," said Jackson, who could not name the MDA representative who had depicted the bill along those terms.

Language in the one-page bills states, however, that "all property, real personal, or mixed, including … operational and environmental property, utilized in the project shall be exempt from ad valorem taxation" up to 50 percent of the total assessed value.

Mississippi Power Company attorney Ben Stone did not immediately return calls.