A bill that would take an expired federal incentive for wind energy out of the tax code is expected to be introduced Wednesday by U.S. Sen. James Lankford, R-Oklahoma City.
The production tax credit expired at the end of 2014, but wind projects that started development last year can still qualify if they complete construction by the end of 2016.
A Senate committee passed an extension of the credit in July. The extension, which was part of a $95 billion package of incentives that passed 23-3, hasn’t yet been scheduled for a full vote.
In an interview Tuesday, Lankford said he didn’t support extending the wind production tax credit. His legislation would take it out of the tax code altogether. That would stop it being included in future packages of tax extenders, a grab-bag of incentives that typically gains passage because it includes popular tax credits and the pet tax credits of some lawmakers.
The incentive offers a 2.3 cent tax credit per kilowatt hour of electricity generated from wind for up to 10 years. It began in 1992, but Congress has let it expire five times. The wind industry said those stops and starts have led to uncertainty for investors and job losses as factories cut production.
Lankford said he supports wind energy as part of the energy mix. But he said the industry is now strong and doesn’t need the incentive anymore. The last extension, approved in the final weeks of 2014, was retroactive for the whole year.
“That’s not an incentive when you make a tax credit retroactive,” Lankford said. “That’s just cash that they’re giving away with federal dollars. I’m trying to stop that from occurring again.”
The American Wind Energy Association supports a two-year extension of the wind production tax credit passed by the Senate Finance Committee in July. Congress’ Joint Committee on Taxation estimated the extension would cost $10.5 billion over 10 years.
“This is an enormous expense to try to jump-start a brand-new industry, and it’s not a brand-new industry anymore and doesn’t need that tax credit in order to survive,” Lankford said.
The wind energy association released a letter this week from more than 580 companies supporting extension of the wind production tax credit. The association didn’t have an immediate comment Tuesday on Lankford’s proposal.
With other priorities such as highway and defense funding taking center stage in the Senate, Lankford conceded it’s unlikely his standalone bill on the wind production tax credit would make it to a floor vote. But he said he hopes to offer it as an amendment to other legislation.
“That is the reality of the Senate, but I’m putting a marker out there into the Senate to say this is the direction we need to go,” Lankford said.
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