Perry County Fiscal Court approves revenue bonds for solar energy project on reclaimed mine fields

The Perry County Fiscal Court approved and authorized the issuance of taxable industrial building revenue bonds during its regular meeting on April 1, paving the way for a major solar energy project on reclaimed coal mine land.

“This particular project is a solar park development,” said Jim Parsons, a partner at the Cincinnati-based law firm Keating Muething & Klekamp and special counsel to Perry County. “It is solar energy development, to generate solar power on a fairly large site in Perry County, on what I think is a former coal field that has been reclaimed and will be redeveloped into a solar energy field.”

The development is being led by Bright Mountain, a company at the forefront of the renewable energy transition in the region.

“Bright Mountain is the main player on the project,” Parsons said. “In Kentucky, industrial revenue bonds (IRB) are primarily issued to reduce some of the property tax liability associated with developing the land and improvements, but also the tangible equipment associated with it. In this case, most of the solar panels are taxed as tangible property. So in Kentucky, that would not be subject to the local rate in Hazard and Perry County because that type of property is only associated to a tangible tax rate. The whole purpose of IRB is to provide property tax relief for the project as an incentive.”

Parsons emphasized that while the IRB offers tax incentives, the Perry County school district will still receive full property tax revenue from the improvements made on the land.

“In this particular situation though, the one unit of government we get 100 percent property tax payment is the school district,” he said. “Whatever would have been subject to taxation on the improvement of property, the school district will see 100 percent of the profit.”

He also clarified that the bonds pose no financial risk to the county itself.

“The one thing to point out is that this is not the debt of the county,” Parsons said. “This is a conduit type of bond issue. When the county issues it, they provide the benefit but they’re not responsible.”