Proposed legislation would reform new wind farm subsidies

Staff Writer
Pawhuska Journal-Capital

Legislation was filed last week to reform existing state subsidies for all new Oklahoma industrial wind facilities.

The legislation, sponsored by Rep. Earl Sears, R-Bartlesville, and Sen. Mike Mazzei, R-Tulsa, would take effect Jan. 1, 2016, and would establish laws to regulate industrial wind companies and oversee future development in Oklahoma.

“I support tax incentives; however, the tax credits for wind power are overly generous and must be modified for all new wind power development projects in the state,” said Sears, House Appropriations and Budget chair. “The cost of these wind subsidies is mounting at an alarming rate and if we do not address the policies now, Oklahoma will suffer the consequences.”

Both Sears and Mazzei anticipate significant revenue reductions for the coming fiscal year, while also facing serious needs for additional resources in core government services. Currently, wind developers qualify for three major subsidies: Zero Emissions Tax Credits, Investment Tax Credits and Ad Valorem Tax Exemptions.

According to the Oklahoma Tax Commission, the state’s ad valorem reimbursement cost was more than $41 million in 2002. By 2013, the amount increased to more than $64 million, with approximately half resulting from ad valorem exemptions for wind farms.

“To protect entities that depend upon local property tax collections, Oklahoma law requires the state to reimburse counties for the ad valorem exemption. Those payments have increased at an alarming rate, and it’s becoming increasingly difficult to meet that obligation without compromising funding for other critical services,” Mazzei said.