Two measures reforming tax incentives for future wind farms in Oklahoma have cleared another legislative hurdle. The full Senate on Tuesday gave approval to Senate Bill 498 and Senate Bill 501. Sen. Mike Mazzei is principal author of the measures, which would take effect beginning January 1, 2016.
“These credits were originally approved to encourage job growth through incentives for what was then a fledgling industry in this state,” said Mazzei, R-Tulsa. “That is no longer the case, so in a time of limited state resources, revisiting those incentives to ensure the benefits do not outweigh the cost is a responsible approach on behalf of Oklahoma taxpayers. We know that without reform, the cost of these tax breaks will continue to grow at a troubling rate.”
SB 498 will adjust the state’s ad valorem policy to change the exemption for wind manufacturing that requires specific job creation in order to qualify for the tax exemption. SB 501 will reduce zero emissions tax credits over a five year period and establish a $6 million statewide cap.
“If we fail to adjust these incentives, the consequences to state services could be devastating. Looking at the combined impact of tax breaks for current and planned industrial wind facilities, the cost is projected to be at least $700 million over a ten year period,” Mazzei said. “I have long supported the use of incentives to boost job growth, but I believe there is an increasing awareness that we must exert greater oversight over these incentives to make sure they are doing what they were designed to do without costing more than they generate for our state.”
Both measures now advance to the House of Representatives for further consideration. Rep. Earl Sears, R-Bartlesville, is the principal author in that chamber.