Free Martins and Wind Rights

Monday, October 15, 2007
Contributed by: Alan Rhodes

During this week I'll take a detour as I learn more about free martins. I'm interested to know if the industry standard is for these calves to be moved into the beef cycle shortly after their birth. If you have thoughts or input, I'd like to know.

On Tuesday October 13, 2007, I'll speak at Underwood's wind energy seminar in Plainview. Most of the attendees at the seminar will be representatives of South Plains or Panhandle school districts or counties. Wind rights concepts are important to school districts and counties because of the tax abatement applications they have received and will continue to receive under Chapter 313 of the Texas Tax Code.

I'll speak on the diligence that the school district or county should complete before entering into a 313 agreement. In my view, the first question that you should ask about a contract relates to the exit strategy that can be used. Because wind farms and tax abatement are a relatively permanent asset, the exit strategy is limited or nonexistent. The lack of an exit strategy increases the need for effective and complete diligence.

As to diligence in dairy transactions, Lynn Tate and I have spent some time developing knowledge about water resources in the South Plains and the Panhandle. Water resources have been very important, particularly in dairy and farming transactions south of Amarillo. As we've moved north in looking at sites, we know that, like the rest of the area, it's possible for water to be spotty.

A diligence issue that I've been considering relates to financial stability and the current position of the operating lender. There's no doubt that "he with the gold makes the rules." However, it would be a shame to be in the middle of a construction project if/when a lender fails.

All the best.

This column is published for informational purposes only. It should not be construed as legal advice and is not intended to create an attorney client relationship. The views expressed are those of the author and do not necessarily reflect the views of the author's law firm or its individual partners.