Oklahoma could end coal, wind cash-back rebates

Source: By Dale Denwalt, The Daily Oklahoman • Posted: Monday, November 6, 2017

 Coal is stacked inside a restored steam locomotive at the Oklahoma Railway Museum in this 2014 photo. [Oklahoman Archives Photo]
Coal is stacked inside a restored steam locomotive at the Oklahoma Railway Museum in this 2014 photo. [Oklahoman Archives Photo]

Coal and wind production companies could lose a valuable tax incentive under two state Senate bills that advanced Thursday.

The Senate Rules Committee adopted Senate Bills 13 and 14, which would eliminate the industry’s ability to get cash back for unused income tax credits.

Both bills won’t become law in time for Oklahoma to see more revenue this budget year. Once they take effect, however, the state will avoid paying $4.3 million to coal producers and $5.5 million to the Oklahoma wind industry.

“It’s one thing to offset tax credits. It’s another to send them a check in the mail,” said the Senate Bill 13’s author, state Sen. Josh Brecheen, R-Coalgate.

State Sen. Mark Allen, R-Spiro, suggested the bills would have a negative effect on the industry, which he said supports people in his district with a $25 million payroll.

Brecheen noted an Incentive Evaluation Commission report that there is no evidence the rebate led to more capital investment in Oklahoma. The report also recommended a full repeal of the tax credit, but the commission is scheduled to reanalyze the issue at a hearing on Friday.

Senate Bill 14 would end the same type of tax credit rebate for wind energy producers. Brecheen said the state’s savings could be $54 million per year once fully realized.

Tulsa Republican Gary Stanislawski said the rebate was part of an incentive package to lure more investment.

If we unilaterally break that contract and say you can no longer have refundability, I think that’s a breach of contract,” Stanislawski said. “I think that’s poor on the state’s part that we would do such a thing and encourages other industries to not even look at Oklahoma.”

Brecheen replied that the rebate was originally scheduled to end a decade ago.

Lawmakers also advanced Senate Bill 17, which temporarily restricts the purchase of “swag,” or nonessential items agencies use to promote their mission, programs and services. In future years, spending would be limited statewide to $10 million.

The bill exempts the Department of Tourism and CareerTech. The bill’s author, state Sen. Rob Standridge, R-Norman, said lawmakers may also consider an arbitration clause where agencies could argue that their purchases are essential to their operations.

Critics of the legislation say that the so-called swag is important, especially for state services that help people in crisis. For example, veterans are given stress-relief balls that include a number for a suicide prevention hotline.