Senators moved forward Wednesday on promoting renewable energies in the state with a bill that would give incentives to companies – initially a Kansas wind energy company – to develop in rural Nebraska.
Omaha Sen. Steve Lathrop said he prioritized the bill (LB104) to remove a barrier to the development and export of wind energy in Nebraska.
“It is going to be a boon for rural Nebraska,” he said. “You can’t bring more money and more development to rural Nebraska by any other way than the development of wind farms.”
The bill advanced to a second round of debate on a 30-0 vote.
Nebraska has an opportunity to see $300 million to $400 million of investment yet this year, Lathrop said.
It is a preferred investment location for TradeWind Energy of Lenexa, Kan., but the company needs LB104 to get to the finish line, said Executive Vice President Frank Costanza. It has been developing the Rattlesnake Creek Wind project in Dixon County, the first export project in Nebraska, for more than two years.
The project would involve 40-year lease payments to land owners averaging $10,000 to $15,000 per tower per year, he said. It would create 15 to 20 new jobs at an average salary of more than $50,000. An estimated $1.5 million new tax dollars would be collected.
Sen. Galen Hadley, Revenue Committee chairman, said timing is critical.
“Economic development never rests,” he said. “If we are truly committed to continually attracting new advancement and creating more jobs, particularly in rural areas of Nebraska, we simply cannot stand at ease with respect to the Nebraska Advantage Act.”
The bill would encourage the development of alternative energy by adding qualifying renewable energy projects to the act, which, Hadley said, would enable Nebraska to be more competitive in attracting projects.
The state needs to be positioned to take advantage of company decisions, he said. Iowa – with the capacity to produce 4,536 megawatts of wind power, compared to Nebraska’s 337 – recently reeled in investments in data centers from Facebook and an expansion of Google.
With the bill, Nebraska could allow a refund of sales tax to qualifying companies. It was expected that in the next two-year budget, tax refunds could equal about $7.5 million.
Another renewable energy bill (LB402) introduced by Omaha Sen. Heath Mello, is making its way to first-round debate and would encourage more local ownership of renewable energy projects. It would allow a sales tax exemption on materials used in the projects, as long as 33 percent of gross revenues go to Nebraska businesses or individuals.
That bill would cost the state about $6.5 million in revenue in the next budget.
“We can contrast the two,” Lathrop said, “and at some point we can make a decision about whether Sen. Mello’s bill serves a purpose for … the smaller projects and (LB)104 is available for the larger projects that involve exporting of wind developed energy.”
The Revenue Committee decision to move Lathrop’s bill to the full Legislature this session was a source of controversy. It advanced after two bills introduced on behalf of Gov. Dave Heineman were killed in favor of a comprehensive study of tax reform.
Heineman complained the committee’s priorities were misguided.
“Instead of carving out an exemption for out-of-state special interests, the Legislature should be working to lower the taxes of Nebraska citizens who continue to bear the burden for special interest tax breaks,” he said at the time.
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