Wind energy tax credit expansion advanced

Senators gave first-round approval to a bill April 29 that would allow more wind projects to qualify for a wind energy sales tax exemption.

Currently, private wind energy projects can qualify for a sales tax exemption on the equipment and supplies used in construction if at least 33 percent of the revenue from the project for the first 20 years is directed back to Nebraska residents or companies.

LB402, as originally introduced by Omaha Sen. Heath Mello, would relax current restrictions to allow more projects to qualify for the exemption. Mello said since its adoption in 2007, only one utility-scale wind project has utilized the exemption.

“One of the key remaining barriers to wind energy development is that the equipment and supplies used are subject to sales tax in most circumstances,” he said. “[This bill] represents a vital vehicle to promote Nebraska wind energy.”

A Natural Resources Committee amendment, adopted 32-0, replaced the bill. It defines a qualifying community-based energy development (C-BED) project as a new wind energy generation project using a wind, solar, biomass, landfill gas or low-emission fuel source that reduces the overall carbon emissions of the generation system.

The bill would amend the current statute by:
• expanding the definition of “payments to the local community” to include payments for products manufactured in Nebraska or by Nebraska companies and services provided by Nebraska companies as well as lease and easement payments to property owners;
• reducing the qualifying percentage threshold from 33 percent to 25 percent; and
• loosening corporate restrictions by allowing corporations domiciled in Nebraska to meet the definition of “qualified owner.”

Ogallala Sen. Ken Schilz supported the bill, saying it would create new jobs in the state.

“It is much more beneficial for Nebraska if there’s Nebraska resources involved in these [developments],” he said. “In my district, it’s not about green energy. It’s about the ability and having the resources for economic development for smaller communities.”

Fremont Sen. Charlie Janssen also supported the bill. He said LB402 could lead to significant economic development.

“I like [the idea of] using Nebraska-based companies,” Janssen said. “It could lead to companies expanding their operations and bringing companies to rural parts of the state.”

Senators adopted a technical amendment 27-0 and advanced the bill on a 33-0 vote.