Southwest lawmakers seek tribal access to tax credits

Source: Dylan Brown, E&E reporter • Posted: Tuesday, July 14, 2015

Sen. Martin Heinrich (D-N.M.) and Rep. Raúl Grijalva (D-Ariz.) today debuted legislation to open up renewable energy tax credits to Native American tribes.

While the Senate scrambles to extend tax incentives for the expanding alternative energy sector, Heinrich and Grijalva offered their bills to give federally recognized Indian tribes access to breaks offered under Section 48 of the tax code.

Tribes are cut out under the current system because they are not tax-liable entities, a requirement to receive the benefit.

Heinrich said his bill would allow tribes to “monetize” the tax credit, allowing them to pass capital along to a developer or develop their own taxable entity.

Currently, Heinrich said, this “structural unfairness in the tax code” has left American Indian communities, especially in his home state of New Mexico and across the sunny Southwest, on the outside looking in at the booming solar industry, which accounted for nearly half the 47,000 new clean-energy jobs created last year (ClimateWire, March 6).

“Those investments are not happening on tribal land at near the rates they are happening on private and federal land simply because of this differential … basically,” he said. “This levels that playing field, and if we can move this forward, I think you’ll see a lot more of this kind of development moving onto tribal lands across the Southwest.”

With energy development a promising component of much-needed economic growth in Indian Country, Heinrich said he is looking for avenues to streamline the processes for both traditional oil and gas development and the clean energy sector.

“These economic opportunities need to be accessible to tribes by making the infrastructure necessary to take advantage of their natural resources attainable,” he said.

In introducing the companion legislation in the House today, Grijalva, the ranking member of the House Natural Resources Committee, said most tribes in his home state of Arizona have expressed a desire to explore more than just traditional fossil fuels as a way of spurring economic development.

“If you talk to any of those tribal leaders, they will tell you that they have a huge interest in it, but they’ve had a barrier in front of them,” he said.

Grijalva said the Senate bill and his companion legislation have benefits beyond the short-term boost to competition with neighboring towns or counties.

“More importantly, what it does is it’s going to stimulate other kinds of significant development on tribal land,” he said, which could lead to long-term jobs and growth.

The fate of the legislation, Heinrich said, rests on Congress’ ability to preserve the renewable energy credits as a whole and then adding the tweak that Indian tribes deserve.

“I think a lot of it will depend in terms of whether it is able to move forward in this Congress on what kind of package we might see come out of” the Finance and Energy and Natural Resources committees, he said.

Heinrich noted the wishes expressed to him by a group of tribal youth from New Mexico’s San Felipe Pueblo on their recent visit to his Washington, D.C., office: “They talked to me about how they saw clean energy as part of a future that was compatible with the values of their history and their culture.”

Heinrich cited the recent example of the Santo Domingo Pueblo, which partnered with the Department of Energy on solar panels to power their community water system and water treatment facility, leading to an estimated 75 percent reduction in power consumption.

“Stories like this could be replicated across Indian Country if the right policies were in place,” he said. “Giving tribes access to renewable energy tax incentives is key to creating the kind of energy autonomy that our Native American tribes deserve.”