On Friday, the Oklahoma State Senate unanimously approved S.B.498, legislation that would eliminate the state's current property tax exemption for wind developers. The state House of Representatives previously passed the bill in April, and the legislation now goes to Gov. Mary Fallin, R-Okla., for final consideration.
The bill was introduced by Rep. Earl Sears, R-Bartlesville, and Sen. Mike Mazzei, R-Tulsa. In a press release, Mazzei says state lawmakers have been wrestling with a $611 million shortfall for the fiscal-year 2016 budget and have already passed measures to reform other incentives. Ultimately, he believes S.B.498 will save approximately $500 million over 10 years.
If signed into law, the bill would end the five-year ad valorem tax exemption for new wind farms beginning Jan. 1, 2017.
"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. But now that tax incentive is costing our state $44 million a year, and without adjustments it could easily double," says Mazzei. "Given our current fiscal reality, the need for reform was clear."
Meanwhile, Sears has applauded representatives of the wind industry for their willingness to be a part of the process.
"The passage of this bill will help us in our journey in reducing tax credits on behalf of Oklahoma citizens," says Sears. "The industry will continue to be competitive in our state as it moves forward in developing wind power energy."
In fact, because the industry willingly conceded S.B.498, The Wind Coalition says Oklahoma's legislative leaders agreed to keep the zero-emission tax credit – more commonly referred to as the state's production tax credit – intact until its full phase-out at the end of 2020.
"Thanks to an outstanding wind resource and competitive state economic development policies, Oklahoma has long been a prime location for wind energy development," says Jeffrey Clark, executive director at The Wind Coalition. "This year, in an effort to help the state address its fiscal challenges, The Wind Coalition worked closely with lawmakers to help them revise the incentives available to wind energy projects. The package approved by the legislature keeps Oklahoma open for investment, job creation and energy production.Â
"This important legislation sets the stage for economic growth by providing predictability and certainty to investors in Oklahoma wind," he continues.