OKLAHOMA CITY (AP) - The Oklahoma Senate gave unanimous approval on Friday to a pair of bills that will end two separate tax subsidies for the wind industry in Oklahoma, including one that costs the state tens of millions of dollars each year.
With little discussion and no debate, the Senate approved one bill to eliminate a 5-year property tax exemption for wind manufacturers, starting in 2017. Because the state reimburses counties for the revenue lost from the exemption, the cost of the subsidy has skyrocketed with the expansion of wind farms in Oklahoma. It’s expected to cost the state about $44 million in the current fiscal year.
“This incentive was first enacted when Oklahoma was trying to encourage the development of wind farms and the jobs that would be created as a result,” said Sen. Mike Mazzei, R-Tulsa. “Given our current fiscal reality, the need for reform was clear.”
Although Mazzei said the bill ultimately is expected to save the state an estimated $500 million over ten years, those savings won’t begin until after 2021.
The bill, which now returns to the House for final consideration, was named in honor of the late state Rep. David Dank, an Oklahoma City Republican known for his crusade against tax credits, who died in office last month.
The Senate also passed a bill that prohibits wind farms from qualifying for an investment/new jobs tax credit after January 2017, although state tax officials say it’s impossible to predict how many wind facilities may qualify for that credit. That measure now goes to the governor.
A third tax credit offered to wind developers based on per-kilowatt production that can be applied to any corporate income tax liability will remain on the books. Those subsidies are expected to total more than $80 million over the next four years, according to estimates from the Oklahoma Tax Commission.
“As a negotiated component of the compromise, the Legislature will keep the zero-emission tax credit active until it sunsets in 2021,” Jeff Clark, the executive director of The Wind Coalition, said in a statement. “This will allow Oklahoma to remain competitive with neighboring wind-producing states such as Kansas and Texas.”
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Online:
Senate Bill 498: https://bit.ly/1Izv0gI
Senate Bill 502: https://bit.ly/1E4d9IB
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