Valuing Vineyard Wind Machines
There are many risks to growing grapes in Napa County including the danger of frost damaging new growth that would otherwise mature to produce the valuable crop. To protect against frost, grape growers use several methods, including orchard heaters which warm the air; sprinkler frost protection which protects the vines by coating them in ice at a temperature above the danger point and wind machines which keep the air circulating so that the coldest air does not settle on the vines.
Wind machines have a powerful motor powered by gasoline, diesel or propane, a propeller to move the air and a support structure that can either be at ground level or consist of a tower. Wind machines cost in the range of $7,500 for a reconditioned model to $20,000 for a new model. Once installed, wind machines in Napa County stay in one place even though some models are mounted on skids. Owners of wind machines keep them well maintained so that they have a long, useful life.
Napa County values orchard heaters as personal property and sprinkler frost protection systems as real property structures. Until this year we valued wind machines as real property structures because of their long life and permanency. A Proposition 13 base year value was established at the time the wind machine was installed which then increased each year by the required inflation factor, not to exceed two per cent. If there was a change of ownership of the vineyard on which the wind machine was located, a new base year for the machine was established as of the date of change of ownership based on the age and condition of the machine. The assessed value of the machine appeared in the Improvement-structure portion of the vineyard owner's tax bill.
In 2001, the State Board of Equalization, which provides guidance to local assessors on assessment practices, adopted a rule classifying wind machines as real property fixtures. Fixtures do not have a base year value and are not subject to an inflation factor. Instead fixtures are valued annually based on original cost to which a valuation factor is applied that accounts for the age of the machine and for changes in the value of a dollar over time. The valuation factor table is based on a twenty-five year life for wind machines. Acquisition cost adjusted by a valuation factor represents a good estimate of the current market value of the fixture.
The Napa County Assessor's office is in the process of changing the assessment of all wind machines in Napa County from structures to fixtures. This process entails removing the factored base year value of the wind machine from the real property structure records and then enrolling the wind machine as a fixture on the assessment roll. The following example will show the difference in value for the vineyard owner. A new wind machine installed in September, 1994 at a cost of $15,000 has a 1995 Proposition 13 base year value of $15,000. For 2001 its Improvement-structure value would have increased because of the required annual inflation factor from 1995 to 2001 to $16,721. We will remove this amount from the Improvement-structure value of the property on the 2002-2003 tax bill. The wind machine will now be assessed as a fixture for the 2002 year. After applying the valuation factor that accounts for the passage of seven years since installation, its value will be 92% of its original cost of $15,000 or $14,100 that will appear as an Improvement fixture on the 2002-2003 tax bill.
Property owners can assist our staff in insuring this assessment change is applied to all wind machines. If you have one or more wind machines on your property, please check your 2002-2003 tax bill for a value in the fixture column. If there is no value in the fixture column, please contact our office so that we can apply the new assessment procedure to your wind machines.
Should you have any questions please contact Napa County Assessor-Recorder-County Clerk John Tuteur at (707) 253.4459 or by e-mail firstname.lastname@example.org.