Tax policy watchers have been waiting for some direction on tax reform from Congress, and it came Wednesday with the unveiling of draft legislation by U.S. Rep. Dave Camp, R-Michigan, chairman of the powerful House Ways and Means Committee.
Buried deep within the 979-page bill draft is some clue to the fate of the federal production tax credit, a key incentive for wind developers and utilities. The credit expired Dec. 31, but offered a 2.3 cent tax credit per kilowatt hour generated from renewable resources such as wind. The credit could be taken for up to 10 years.
Under Camp’s proposed reforms, the credit would fall to 1.5 cents per kilowatt hour generated and be eliminated by 2024. A discussion draft of proposed tax reform changes by the committee’s majority staff said the production tax credit appeared to be an inefficient incentive.
“Businesses in the wind industry have represented to the Committee that that the industry could survive with a credit worth 60 percent of the current credit, implying that the credit provides a windfall that does not serve the intended policy,” majority staff said in the report.
The wind industry, led by its main lobbying group, the American Wind Energy Association, has been urging Congress to renew the production tax credit.
For more on the production tax credit and how it’s been used to grow wind production in Oklahoma, see these recent stories from NewsOK: