As House Democrats put the finishing touches on a plan to ease the tax burden on renewable energy, the Republican Senate Energy & Public Utilities Committee chairman on Wednesday unveiled a proposal he says is much simpler and less contentious.
Rep. Roland Winburn (D-Dayton) announced plans to introduce legislation to eliminate the Tangible Personal Property tax on wind and solar facilities’ generation equipment to spur renewable energy development in the state.
The measure, which is similar to his previous measure designed to reduce the TPP for green energy production (HB 218), is a response to Gov. Ted Strickland’s call to phase out the tax on wind and solar facilities to help Ohio compete for renewable energy job creation.
“Our neighboring states are competing aggressively for renewable energy jobs,” Rep. Winburn said in a news release. “We must position Ohio to compete just as effectively. This legislation will help see construction on wind and solar production facilities in Ohio by the end of this year, and for Ohio to become a leader in tomorrow’s green economy.”
House Ways & Means Committee Chairman Rep. Tom Letson (D-Warren), who will likely oversee the proposal in his committee, said, “I would like to thank Gov. Strickland for his leadership on this issue, and hope we can work with the Senate to find a solution to bring new, green jobs to Ohio as quickly as possible.”
Meanwhile, the Senate will soon take up a separate proposal from Sen. Chris Widener (R-Springfield). Rather than phasing out the tax, it would allow renewable energy companies to apply to the Ohio Air Quality Development Authority for an exemption from the TPP and instead pay an annual fee of $6,000 per megawatt of installed capacity for the life of the facility.
The measure would reduce a wind facility’s total average state tax liability from more than $40,000 per megawatt to $6,000, which is comparable to rates charged in Michigan, Pennsylvania, Indiana and West Virginia, he said during a news conference.
Eliminating the TPP on renewable energy generation is difficult because it involves defining new technology that isn’t already defined in law, he said. Further, the tax burden varies in each locality and depreciates over time.
Moreover, local governments and school districts that receive TPP revenue will likely oppose efforts to eliminate the tax, Sen. Widener said. However his legislation would ensure a continued revenue stream.
“When you do something related to the TPP and personal property tax for local governments, they’re going to get upset,” he said. “What we offer in Senate Bill 232 is much more simple, easy to understand, easy for them… to predict what the revenue stream’s going to be.”
Chairman Widener said he believed the two parties and chambers could work together to quickly pass the measure. “I hope they quickly can see that we need to be more simple than complex when it comes to dealing with something of this nature.”
Rep. Cliff Hite (R-Findlay), who previously planned to be a primary co-sponsor of Rep. Winburn’s bill, said he hoped to persuade fellow House members that Sen. Widener’s proposal was a better approach that adequately quells the concerns of the many interested parties.
“If it gets political and I feel I have to do a stand-alone bill, I will do that. But I don’t think that would be the best avenue. I would like for them to come in with us at least close to this – if not a companion bill, something relatively close so we can work it out quickly and get it done,” he said.
Republicans and Democrats agree that passing a measure quickly is critical to beat deadlines to qualify for a windfall in federal stimulus funding for renewable energy development. Both measures call for the facilities to be operational by 2012 and both would require companies to commit to create jobs in Ohio.
Sen. Widener said changes to the tax code are necessary to ensure that the six proposed wind projects pending before the Power Siting Board would create an estimated 700 jobs.