Texas Senate Bill SB1971

Texas 2021 - 87th Regular

Caption

Relating to imposing a tax on the amount of federal renewable energy production credits received by wind electric generators.

Impact

The introduction of this tax represents a significant shift in the economic landscape for wind electric generators in Texas. Since a tax imposed will equate to the amount of federal production tax credits these generators receive, it is anticipated that this will affect their profitability and financial planning. Furthermore, the revenue generated from this tax is earmarked for the foundation school fund and the state's general revenue fund, which could have implications for education funding and state budget allocations. The ability of electric generators to maintain or increase their operations may be hindered due to the financial strain caused by this new tax policy.

Summary

Senate Bill 1971 aims to impose a tax on the federal renewable energy production credits that wind electric generators receive. This legislation introduces a new chapter in the Texas Tax Code specifically targeting the financial incentives provided at the federal level for renewable energy. The main purpose of this bill is to create a state-level tax mechanism that is directly tied to these federal credits, ensuring that wind electric generators contribute financially to the state government based on the benefits they receive from federal production tax credits.

Contention

There are notable potential points of contention surrounding SB1971. Proponents of the bill may argue that this tax program helps to ensure that the benefits derived from federal subsidies are appropriately taxed at the state level, thereby contributing to the broader public good. However, opponents could express concerns that this tax may undermine the incentives originally established to promote renewable energy production. They may contend that additional financial burdens placed on wind electric generators could deter investment in renewable energy infrastructure, ultimately stalling growth in a sector critical for environmental sustainability.