Neb. lawmakers advance wind tax-incentive bill

LINCOLN, Neb. (AP) -- Lawmakers moved ahead Wednesday with a tax incentive bill designed to attract wind-energy companies to Nebraska, little more than a day after the state officially lost a $300 million Facebook data center to Iowa.

The 30-0 vote also came as a Kansas-based company, TradeWind Energy, considers building a possible wind farm in northeast Nebraska.

Despite the measure's popularity, some lawmakers challenged the decision to advance it ahead of a broader, statewide tax study that was agreed upon earlier this year.

The bill's sponsor, Sen. Steve Lathrop of Omaha, said it was designed to attract large-scale wind farms, which would help Nebraska export more energy and generate new revenue. Lathrop said wind farms serve as an extra revenue source for landowners, generating $10,000 to $15,000 per turbine each year for a 40-year lease.

"We're also sending what I believe to be a very important message to businesses, both inside and outside of Nebraska," Lathrop said. "Many are making major, long-term investment decisions now. Nebraska has an excellent reputation, and our actions on this bill will strengthen that message."

TradeWind Energy executive Frank Costanza said the company is interested in Nebraska's wind capacity, which ranks third nationwide. But he said the state has done "almost nothing" to compete with Kansas, Oklahoma or South Dakota, all of which offer tax benefits for wind energy. The company is looking to build 118 turbines in Dixon County, on the South Dakota border.

Nebraska ranks as the third-best wind-producing state in the nation, but 26th in the energy it could produce with the equipment currently installed, according to the U.S. Department of Energy. Nebraska lags behind its neighboring states: Iowa, South Dakota, Wyoming, Colorado and Kansas.

Costanza said Nebraska has trailed its neighboring states because it doesn't offer as many wind-energy tax incentives. He pointed to Kansas, which shields wind companies from both property and sales and use taxes.

"Wind will be built, over time, in the wind belt — the Dakotas down to the Texas Panhandle," said Costanza, the company's executive vice president business development. "But it is competitive. Other states are doing things, and Nebraska has done almost nothing."

The first-round vote in Nebraska came one day after Iowa formally approved $18 million in tax credits for Facebook to build its data center in Altoona, a Des Moines suburb. Kearney, Neb., was vying for the project, but a Facebook executive told Iowa reporters on Tuesday that the state's reputation as a wind-energy leader played a big role in the company's decision.

Nebraska currently charges a sales tax on all equipment and materials used in wind-energy projects. The state ranks fourth nationwide in its ability to produce electricity from wind power.

Environmental groups and the Nebraska Chamber of Commerce and Industry have both endorsed the bill.

Sen. Galen Hadley of Kearney, who introduced a similar bill that was merged into the final legislation, said the tax incentives would put Nebraska on a level playing field with other states. Hadley said the bill would generate jobs in rural Nebraska, and he argued that the possible wind-energy project could not wait until next year.

Sen. Annette Dubas of Fullerton said the bill builds on an existing push by rural lawmakers.

The renewable energy bill has drawn criticism from Republican Gov. Dave Heineman. When the Legislature's Revenue Committee voted 5-3 to advance the bill in March, Heineman said he was "very disappointed" and accused supporters of supporting "special interest tax breaks" to out-of-state companies.

Lathrop, a Democrat, is considering a run for governor.

Some lawmakers said they supported the general push for wind energy but challenged the bill's timing.

Sen. Beau McCoy of Omaha, a Republican Revenue Committee member who voted "no" on the bill, said he supports wind energy but questioned why it should pass in advance of the statewide study that will examine Nebraska's overall tax climate. Lawmakers had previously agreed to delay all major tax-cut bills this year so they could conduct the study.

"I question whether or not now is the time," McCoy said.

Sen. Ernie Chambers of Omaha, who is known for his ability to stall and derail bills he opposes, asked why the proposal was getting preference over a sales-tax measure he introduced.

Chambers said he wasn't opposed to the wind-energy bill, but he criticized the Revenue Committee for holding onto his legislation that would repeal a sales-tax law for cities. Chambers has argued that a sales tax imposed by cities disproportionately affects the poor.

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The bill is LB104