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Wyoming House narrowly passes wind bill on second reading

CHEYENNE – Legislation that would dramatically change the way Wyoming’s wind energy industry is taxed – and the way the tax revenue is distributed – narrowly advanced in the state House on Friday.

The bill, which faces a final House vote on Monday, would combine the upcoming $1-per-megawatt-hour wind energy tax and the sales tax on wind energy equipment into a single $3-per-megawatt-hour excise tax.

It would also change the way that tax revenue would be distributed and create a $15 million impact assistance account to help local governments pay for infrastructure costs associated with wind energy projects.

Right now, existing wind farms would pay the $1-per-megawatt-hour excise tax when it takes effect in 2012. A sales tax exemption on renewable energy equipment is set to expire at the end of this year.

State Rep. Tim Stubson, R-Casper, said his proposal, which is supported by most within the state’s nascent wind energy industry, would bring in slightly more revenue for state and local governments than the current tax system. At the same time, he said, his plan would also encourage growth in Wyoming’s nascent wind energy industry.

That’s because wind companies would otherwise have to pay millions in sales taxes when they buy the turbines, machinery and other equipment for new wind farms, Stubson said. Those companies would often have to borrow large amounts of money to pay up-front sales taxes, he said, which means they would pay millions in interest payments over the years.

Stubson said some economic models show that his proposal would save wind developers about $30 million over 20 years for an average-sized wind project.

“It’s a win-win,” said state Rep. Rosie Berger, R-Sheridan.

The bill would also change the current 60-40 split of wind tax revenue between local governments and the state.

Under HB191, 20 percent of tax paid by each wind facility would go toward funding the proposed $15 million impact assistance account.

Of the other 80 percent, 31 percent would go to the county or counties where the wind farm is located, and 69 percent would go toward the counties and funding the assistance account until it reaches $15 million. After that point, the money would go to the state’s general fund.

Stubson plans to introduce another amendment next week to fund the $15 million up front through a state loan; the money would be paid back through wind tax revenue.

But there’s wariness among many legislators about HB191 and the general prospects of the wind energy industry as a whole.

The bill only passed second reading in the House by a 28-24 vote.

State Rep. Mike Madden, R-Buffalo, said he was worried about the state fronting money to an industry that has yet to prove itself viable and is reliant on federal subsidies.

“We’ve never gotten involved in an industry where we shared the risk,” Madden said. “We’re saying to wind companies, ‘We’re going to put money into this impact fund, and we’re betting on you being around 20 to 25 years to pay us back.’ But what if we’re wrong?”