A major property tax exemption for new wind developers will end on Jan. 1, 2017, under a bill signed into law Wednesday by Gov. Mary Fallin.
The exemption allows wind developers to avoid paying property taxes for five years.
It has proven costly for the state at a time when Oklahoma is facing funding shortfalls.
Sen. Mike Mazzei, R-Tulsa, said his Senate Bill 498 could save the state $500 million over the next 10 years. Exemptions by wind developers made up half of the $64 million in claims in 2013, according to the Oklahoma Tax Commission.
Fallin said that when the exemption was conceived it was meant to support a fledgling industry.
“Today, Oklahoma’s wind industry is among the strongest in the nation and is an integral part of our power grid and our economy,” she said.
“Wind energy is here to stay. It no longer needs the same level of support and encouragement from the state.”
Incentive’s rising cost
Tax Commission projections for the property tax exemption for wind developers estimated $28.8 million in claims for 2014, $38.2 million for 2015 and $44.9 million for 2016.
The Wind Coalition, which represents wind developers, manufacturers and customers, said the industry recognized the rising cost of the incentive on future state budgets and worked with lawmakers to craft a deal.
Fallin noted a zero-emissions tax credit, tied to pollution-free energy production, will still be available to the industry.
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