The Oklahoma Senate gave final approval Monday to a measure ending income tax credits for wind production more than three years early.
House Bill 2298 now heads to Gov. Mary Fallin, who asked for the early sunset legislation in February.
Leadership in both chambers have praised the bill, citing it as one way the state can reclaim revenue in future budget years. Oklahoma law allows owners of wind turbines that begin operation before 2021 to claim a credit on the income earned from energy production. HB 2298 would end the credit July 1.
According to the Oklahoma Tax Commission, the credit costs the state more than $65 million per year in unpaid tax revenue. An analysis by the Oklahoma House showed there would be no short-term effect to the budget, with a potential increase in tax collections not occurring until the 2028 budget year.
On Monday, the Oklahoma Senate approved the bill by a vote of 40-3. The House advanced it a month ago by a vote of 74-24.
Jeffrey Clark, president of The Wind Coalition, said the wind industry wanted to talk more about the end date. Still, he said, the coalition has worked with Oklahoma lawmakers since 2014 to roll back tax incentives.
“They’ve been incredibly beneficial, but we remain the first and only industry to offer to phase out its incentives,” Clark said. “This is just the culmination of that. I hope other industries will follow the example we set.”
Lawmakers who opposed the bill have said that ending incentives earlier than their sunset date sets a poor example to other industries who use tax incentives.
The zero-emissions tax credit is worth 0.5 cents per kilowatt hour of electricity generated by renewable resources. It is refundable at 85 percent of its value and can be carried forward up to 10 years.
HB 2298 was authored by House Speaker Charles McCall, R-Atoka, and Senate President Pro Tempore Mike Schulz, R-Altus.
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