WALZ, PETERSON INTRODUCE TWO BILLS TO EXPAND WIND ENERGY PRODUCTION

Legislation will help ensure more clean energy production is owned by rural Americans

For Immediate Release
July 9, 2009

Contact: Meredith Salsbery
507-388-2149

WASHINGTON D.C. — Today, Rep. Tim Walz and House Agriculture Committee Chairman Collin Peterson introduced the Wind Energy Promotion Act, which will make it easier for entrepreneurs and small businesses in rural America to take ownership in wind energy production through tax incentives, and the Renewable Energy Project Grant Extension, which will extend a wind-related grant program in the American Recovery and Reinvestment Act.

“Raising capital for wind energy projects is difficult, because many residents of rural America do not qualify for the Renewable Energy Production Tax Credit (PTC), which is one of the major incentives to promote wind energy production,” said Walz. “The Wind Energy Promotion Act will expand renewable energy production by leveling the playing field for individuals in rural America who are looking to enter the industry. Everyone wins if we pass this legislation. It will mean that as our country increasingly transitions to clean energy, more of the energy produced will be owned by Americans, keeping the profits in our local communities.”

“We think it is unfortunate that our tax code makes it easy for corporations to receive the Production Tax Credit, but not for individuals in rural America who wish to do the same,” said Chairman Peterson. “I’m pleased to join Congressman Walz in introducing these bills to make our tax code fairer and to bring the benefits of renewable energy investments to more of our rural citizens.”

The problem: Many Americans, especially farmers want to diversify their income by installing wind turbines. But the incentives do not currently exist to make turbine installation a viable option for the average American farmer. This is because the vast majority of these farmers do not qualify for the Renewable Energy Production Tax Credit which only benefits those with passive income – like investments. As a result, American wind farms are largely being funded by foreign multi-national corporations, meaning that the investment returns aren’t going to Americans. Our current tax code makes investing in wind energy a bad option for rural Americans and even cooperative groups with pooled resources.

Currently, the PTC provides a 2.1 cent-per-kilowatt-hour tax credit for individuals who invest in wind energy generation. However, only passive income—such as income from investments—may be offset by the PTC; someone who merely invests in a wind farm cannot receive the PTC unless they have other sources of passive income to offset.

The Solution: The Walz-Peterson Wind Energy Promotion Act provides the long-overdue incentives necessary to encourage American investment in renewable wind energy. Most ordinary Americans do not have the substantial passive income that is currently incentivized – most only have ordinary income. The Wind Energy Promotion Act allows the PTC to be used against this ordinary income, and therefore properly and effectively incentivizes American investment into wind technology. The bill also serves to eliminate the negative impacts of the Alternative Minimum Tax on income those middle-class Americans derive from the PTC

Also, the Renewable Energy Project Grant Extension will extend a temporary wind-energy provision of the American Recovery and Reinvestment Act. The bill would extend the provision through 2012, and would allow qualified projects, like the construction of wind turbines or wind energy farms, to receive a grant for 30% of their construction costs in lieu of the tax credits that they’d normally be eligible for.

Walz, a member of the Agriculture Committee, said he heard about the need for the legislation while he was holding a series of Farm Bill forums throughout Southern Minnesota during 2007. Walz previously introduced the Wind Production Tax Credit during the 110th Congress. The bills introduced today improve and expand upon Walz’s previous legislation.