Bill would extend renewable tax credits

By David McGrath Schwartz (contact), Cy Ryan (contact)

Saturday, May 16, 2009 | 2 a.m.

Carson City — Nevada would increase tax incentives for renewable energy projects under an Assembly bill heard Friday.

Earlier this session legislators had questioned whether the state was getting enough benefit from renewable energy projects that qualified for tax exemptions. The hearing Friday on Assembly Bill 522 offered the first glimpse at the agreement reached after months of negotiations involving Assemblywoman Marilyn Kirkpatrick, D-North Las Vegas, and the renewable energy industry.

Nevada has handed out renewable energy tax incentives worth an estimated $45 million to lure solar and geothermal projects. So far the state has received in return promises that project developers will create 89 permanent jobs.

Those incentives end in June. The new incentives, if passed by the Legislature, would take effect July 1.

The new legislation would require projects to meet stricter job requirements, particularly during construction, when most of the hiring occurs. It would also divert some property tax money from local governments to the state and place it in a fund that two years from now would be used to lower electricity rates.

Projects would be required to employ 75 people during construction in Clark and Washoe counties and 50 in rural counties, and at least 30 percent of those employed would have to be Nevada residents. Wages would have to be 110 percent of the statewide average hourly wage.

Property tax exemptions for solar and wind projects that qualify would go from the existing 50 percent for 10 years to 55 percent for 20 years.

Solar, wind and geothermal project developers would pay a 2.5 percent sales tax on capital equipment, up from the current 2 percent.

A study by the solar industry this session found Nevada’s existing tax incentives slightly lead those of surrounding states. Kirkpatrick, chairwoman of the Assembly Ways and Means Committee, said she wanted to keep education funding whole, thus the small tax increase, and to keep Nevada competitive with surrounding states.

In March, Kirkpatrick proposed a tax on renewable energy production to secure a benefit for the state. But the renewable energy lobby resisted. The solar industry has also been pushing for a 75 percent property tax abatement.

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The Assembly Ways and Means Committee agreed, in an 8-6 vote, to scrap the state’s Washington office, which monitors federal issues for state officials.

The office, created in 1985, would have continued under Gov. Jim Gibbons’ budget with $247,079 in funding for each of the coming two years. But Assemblywoman Sheila Leslie, D-Reno, said the same information is available via the Internet and television.

“We have an active congressional delegation,” Leslie said, and the office of Senate Majority Leader Harry Reid, D-Nev., helps those seeking assistance.

The Washington office is headed by Ryan McGinness, the son of Sen. Mike McGinness, R-Fallon. It is financed with money from the Nevada Transportation Department and commissions on tourism and economic development.

The fate of the office will be resolved in negotiations between Assembly and Senate budget committees.

Correction: The hearing on a bill to increase tax incentives for renewable energy projects was heard Friday.