State Tax Credits News Briefs - January 2011

Saturday, January 1, 2011

The Virginia Department of Environmental Quality (DEQ) approved the state's first permit regulation for renewable energy projects. Legislation passed in 2009 transferred permitting authority from the State Corporation Commission to DEQ. The permit regulation, known as a permit by rule, details what applicants must do to gain permit coverage. This permit by rule applies to wind energy projects with a rated capacity under 100 megawatts (MWs). Developers of projects more than 500 kilowatts (kWs) and as much as 5 MWs must notify DEQ. No requirement is placed on projects under 500 kWs. For projects with a capacity of more than 5 MWs, the regulation establishes requirements for potential environmental impact analysis, mitigation plans, facility site planning, public participation, permit fees, inter-agency consultations, compliance and enforcement. DEQ said this regulation only addresses wind energy, and subsequent regulations will focus on other types of energy projects. The permit regulation was developed by two stakeholder panels that included state agencies, environmental organizations, wind developers, academia, local government and the military. More information about the rule is available on DEQ's web site at www.deq.virginia.gov.

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The cost of tax subsidies for film productions outweighs their benefits, according to a Center on Budget and Policy Priorities (CBPP) report. The report, "State Film Subsidies: Not Much Bang for Too Many Bucks," found that 43 states had adopted the subsidies, which cost approximately $1.5 billion nationwide in 2009. The median state gives producers a 25 percent tax credit for every dollar of subsidized production expense, the report stated, and the subsidies fail to produce benefits because film makers usually give the best jobs to talent brought in from other states. The report also noted that several states, including Kansas, Iowa, New Jersey, Arizona and Rhode Island have suspended, eliminated or scaled-back their film tax credits. View the full report online at www.cpbb.org.

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Wisconsin Gov. Jim Doyle announced $46 million in enterprise zone tax credits for Quad/Graphics, a commercial printing company in Sussex that will consolidate and expand its state operations. Quad/Graphics is restarting equipment that it was forced to shut down in 2009 due to the economic downturn. In addition, the funding will enable the company to make investments in new equipment and technology to fortify its capabilities. It plans to create as many as 1,300 jobs and retain 5,500 jobs. Doyle's office said the state has used enterprise zone tax credits to help retain and create jobs at Bucyrus, Harley Davidson, Mercury Marine and Republic Airways, among others.

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The U.S. Department of the Interior's Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) issued a request for interest (RFI) and a map of an offshore wind leasing area in federal waters adjacent to Maryland's coast. The documents were issued after BOEMRE's acceptance of the Maryland Offshore Task Force's planning recommendations, which were two years in the making. Maryland is only the second state to reach this stage of the process of achieving offshore wind power generation. The state is striving to generate 20 percent of its energy from renewable sources by 2022. In addition to the environmental benefits, the governor's office said a 1 gigawatt offshore wind farm could create as many as 4,000 manufacturing and construction jobs during the five-year development period and another 800 jobs when the turbines become operational. A map of the area of interest and an electronic copy of the RFI are available at www.boemre.gov.

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Ohio Sen. Eric Kearney introduced a bill to create a tax credit for landlords who improve their buildings' energy efficiency. Kearney said Senate Bill 310 would encourage residential landlords to update their units and lower tenants' utility costs, UrbanCincy reported. The bill would provide a 15 percent income tax credit for installing energy-conserving devices, replacing old appliances with Energy Star appliances, improving insulation and upgrading exterior windows and doors. The legislation also incentivizes upgrades to historic structures. Prior to S.B. 310's introduction, Kearney introduced complementary legislation that proposed a 25 percent tax credit for renovating homes built before 1950 in low-income neighborhoods.

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