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economic incentives

The Oklahoma Incentive Evaluation Commission endorses its consultants’ recommendations to retain 10 state business incentives that are reducing state revenues.
Warren Vieth / Oklahoma Watch

A state oversight panel voted Tuesday to retain 10 business incentives after its consultants rescinded a recommendation to repeal one of them and the state commerce secretary intervened to rescue another.

The panel’s actions provided an immediate reprieve to the Oklahoma Film Enhancement Rebate Program and the state’s Industrial Access Road Program. But they could provide more momentum to efforts to rein in a fast-growing wind-power tax credit. All of the proposals would require legislative approval.

The Arbuckle Mountain Wind Farm in southern Oklahoma.
Brian Hardzinski / KGOU

State officials will consider recommending cuts to tax credits Tuesday as they look for a way to bring more money into the state.

Oklahoma's Incentive Evaluation Commission is meeting at 1 p.m. at the state Capitol to discuss what will go into a final report it plans to submit to lawmakers and Gov. Mary Fallin next month.

Expansion of Michelin's tire manufacturing plant in Ardmore and Goodyear's plant in Lawton are being subsidized by the state for nearly $89 million over 13 years.
Laura Estes / Oklahoma Watch

When a state commission examining business incentives voted in June to review 53 of them over four years, one did not appear by name on the list: a subsidy for big tire manufacturers in Oklahoma.

Lyle Roggow, chairman of the Oklahoma Incentive Evaluation Commission, said when the group voted, members weren’t familiar with the little-known incentive, which is costing the state nearly $89 million over 13 years. Roggow said he learned about it after Oklahoma Watch asked the Office of Management and Enterprise Services why the incentive wasn’t named on the list for review.

Wind turbines at dusk
Samir Luther / Flickr (CC BY-SA 2.0)

Oklahoma remained No. 4 in the U.S. in installed wind power capacity during the second quarter of 2016, but a national industry group expects the state to move up the ranks by the end of the year.

No new wind farms have been completed in recent months, according to a report from the American Wind Energy Association, but more than 1,100 megawatts are currently under construction, The Oklahoman’s Paul Monies reports:

Oklahoma state Capitol
elasticsoul / Flickr (CC BY-SA 2.0)

A panel established last year to study billions of dollars in tax credits and incentives met at the state Capitol Thursday to figure out what criteria they’ll use during their examination.

The Incentive Evaluation Commission will meet annually, and this year plan to look at a five-year property tax exemption for new and expanding manufacturing. The Associated Press says it costs about $67 million per year.

Columbus Oil Company owner Darlene Wallace in the field with a "stripper well," which produces two-and-a-half barrels of oil a day.
Joe Wertz / StateImpact Oklahoma

The deadline to fund state government is rapidly approaching, and legislators are struggling to bridge a $1.3 billion budget gap. One idea is to end a tax rebate for unprofitable oil and gas wells, but small oil and gas producers say their safety net shouldn’t be used to plug the state’s budget hole.

Revenue, Rebates

The Oklahoma House of Representatives is in session, and Darlene Wallace is blocking the ornate entrance to the main floor. She’s an obstacle, an oil producer — and she’s clutching a clipboard with the names of lawmakers.

An American Energy Woodford well near Perkins, Okla.
Joe Wertz / StateImpact Oklahoma

The oil boom minted millionaire executives and transformed Oklahoma City into a corporate energy hub, but industry tax breaks and funding cuts kept much of the prosperity from reaching public services, a new Reuters investigation shows.

An American Energy Woodford well near Perkins, Okla.
Joe Wertz / StateImpact Oklahoma

As crude prices limp along, a tax rebate for “economically at-risk” wells is poised to grow into one of the state’s biggest tax breaks for business and industry.

Two years ago, when Oklahoma crude was selling for about $100 a barrel, the rebates totaled just $11 million, Oklahoma Watch’s Warren Vieth reports:

Continental Resources founder and CEO Harold Hamm, second to the left, at the Oklahoma Independent Petroleum Association's office in Oklahoma City.
Joe Wertz / StateImpact Oklahoma

Oklahoma legislators are considering eliminating some tax credits and incentives for businesses to help plug a $1.3 billion budget gap. The state’s fiscal crisis has led some oil and gas leaders to push lawmakers to end incentives for the wind industry.

INCENTIVE AGREEMENT

The Chisholm View wind farm near Hunter, Okla.
Joe Wertz / StateImpact Oklahoma

Gov. Mary Fallin signed a bill in May 2015 ending a program that afforded many wind developers a five-year exemption on property taxes. The measure, Senate Bill 498, authored by Mike Mazzei, R-Tulsa, was projected to save the state $500 million over 10 years by sunsetting an ad valorem exemption on Jan. 1 2017.

Wind turbines near Hunter in Garfield County reflect the growth of the wind energy business in the state. Tax breaks for wind power are among incentives recommended for review by an Incentive Evaluation Commission.
Bonnie Vcluek / Enid News and Eagle

Responding to a new law that took effect Nov. 1, state officials are suggesting an independent review of up to 75 business incentives that have reduced state revenue by more than $335 million a year.

The list, compiled by four state agencies with help from nongovernment advisors, is dominated by two big incentives designed to boost employment in Oklahoma: the Quality Jobs Program and the Investment/New Jobs Tax Credit.

The Chisholm View wind farm near Hunter, Okla.
Joe Wertz / StateImpact Oklahoma

U.S. Sen. James Lankford is introducing a bill to remove an expired wind energy incentive from the federal tax code.

The federal Production Tax Credit for wind energy expired in December 2014, but since it’s part of the tax code, lawmakers can extend it by bundling it with legislation to extend other tax credits and incentives. That has happened as recently as July, when a Senate committee voted to extend the PTC as part of a $95 billion bundle of incentives.

The Blue Canyon wind farm near Carnegie, Okla.
Joe Wertz / KGOU

State legislators and wind industry representatives are close to a deal that would end two tax incentives and preserve a third, The Oklahoman‘s Paul Monies reports:

Under the tentative agreement, a five-year property tax exemption for new wind farms would end after 2016, but a zero-emissions tax credit would remain in place. Another incentive that isn’t used much by wind developers, the investment tax credit, would end Jan. 1, 2017.

windmills
mtneer_man / Flickr

Legislation adding siting restrictions and reporting requirements to new wind energy developments passed a House committee Tuesday.

Senate Bill 808 is now the primary wind regulation bill for the 2015 legislative session, replacing the similarly worded House Bill 1549, Rep. Earl Sears, R-Bartlesville, tells The Oklahoman‘s Paul Monies:

Provided / Oklahoma Senate

The Oklahoma Senate approved two bills Wednesday designed to provide more scrutiny and oversight of some of the hundreds of millions of dollars’ worth of state tax credits. Both bills by Senate President Pro Tem Brian Bingman (R-Sapulpa) now go to the House for consideration.

A wind turbine under assembly near Balko in Oklahoma's Panhandle. When completed, the turbine will be part of D.E. Shaw Renewable Investments' 300-megawatt Balko Wind Project.
Joe Wertz / StateImpact Oklahoma

The wind energy boom has largely evaded Oklahoma’s Panhandle, but new turbine projects and a proposal for a $2 billion transmission line could transform the prairie into a national wind energy hub.

But the projects are being planned amid uncertainty at the state Capitol, where tax credits for the wind industry are in the crosshairs.

FILLING IN THE TRANSMISSION GAP

Despite being one of the state’s richest sources of wind energy, the Oklahoma Panhandle is home to very few wind farms.

House Speaker Jeff Hickman (R-Fairview) at Gov. Mary Fallin's State of the State address - February 3, 2014.
Joe Wertz / StateImpact Oklahoma

Oklahoma House and Senate leaders have introduced legislation that would require thorough reviews every four years of several dozen business incentives that are costing the state as much as $300 million annually.

Companion bills authored by House Speaker Jeff Hickman, R-Fairview, and Senate President Pro Tem Brian Bingman, R-Sapulpa, would create a seven-member Incentive Evaluation Commission to conduct the quadrennial reviews.

Frank Robson, a wind farm opponent and property developer from Claremore, Okla., at an Oct. 21 Senate hearing on tax incentives for the wind industry.
Joe Wertz / StateImpact Oklahoma

Members of the state Senate Finance Committee heard testimony on Tuesday from the wind industry and a representative of a group of property owners pushing for stricter regulation of wind farms.

The Senate study centered on the cost-benefit of tax credits and incentives used by the wind industry. Supporters said Oklahoma’s incentives attract projects that might otherwise be built in other states with similar wind potential, including sites in Kansas, Nebraska and Texas.

Monte Tucker, left, stands with his son and dad on the family's farm near Sweetwater, Okla.
Joe Wertz / StateImpact Oklahoma

In the ongoing debate about Oklahoma’s wind industry and whether it needs stricter regulation, two types of property owners have been the most vocal: those who hate the idea of turbines next door, and those eager to lease land to a wind company.

But there’s a voice that’s been largely absent from the discussion so far: Landowners who have wind farms and like them.

Family, Factory

Rebecca Cruise reports on the Xi Jinping's tour of South Asia and its effects on the future of trade between China and those countries. She also outlines President Obama's strategy to help contain the Ebola outbreak devastating West Africa.

Later in the program, Suzette Grillot interviews groundbreaking social entrepreneur Paul Polak about his strategies for pulling people out of poverty around the world.

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