Texas House Bill HB4470

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

This legislation aims to impact state revenue by directly taxing federal production tax credits tied to wind energy. The tax will be calculated as an equivalent amount to the credits received by the generators, which means that, theoretically, as these operators benefit financially from federal incentives, the state can capture some of that financial benefit through taxation. Proponents of the bill argue that this would contribute positively to the state’s general revenue and education funding (e.g., by allocating 25% of the proceeds to the foundation school fund).

Summary

House Bill 4470 proposes the imposition of a tax on the amount of federal renewable energy production credits received by wind electric generators operating in Texas. Specifically, the bill amends the Tax Code by adding Chapter 165, which outlines the definitions of relevant entities, the imposition of the tax, and the reporting and payment process for electric generators. It mandates that generators file an annual report detailing the federal production tax credits they receive and remit the corresponding tax amount by April 15 each year.

Contention

Notable points of contention surrounding HB4470 may arise from discussions about the taxation of renewable energy and how it could impact the broader effort to promote clean energy solutions in Texas. Advocates for renewable energy might argue that imposing taxes on federal credits could discourage investment in wind energy by reducing the financial incentives that make such projects viable. Opponents will likely highlight the need to balance state revenue objectives with the promotion of sustainable energy practices, which is critical considering the growing focus on climate and environmental concerns.