Creates the clean fuel and job creation tax credit

BILL NUMBER:S4502

Title of bill

An act to amend the public service law and the tax law, in relation to creating the clean fuel and job creation tax credit to incentivize power plants to repower existing facilities or construct new facilities which use cleaner burning fuels or add significant pollution control technologies

Purpose

To create the clean fuel and job creation tax credit to incentivize power plants to repower existing facilities or construct new facilities which use cleaner burning fuels or add significant pollution control technologies.

Summary of provisions

Section 1 of the bill amends the public service law to authorize the department of public service to request information from the department of taxation and finance in relation to electric generating facilities that have received a clean fuel and job creation tax credit. Sections 2, 3, 4, 5 & 6 of the bill amend various sections of the tax law to establish the clean fuel and job creation tax credit, and set forth how it will be applied. Section 7 is the effective date.

Justification

Many power plants in New York State are contemplating repowering or making other investments in infrastructure in order to meet new environmental standards and to remain competitive in the marketplace. Some power plants are even considering the construction of new electric generating units on the same or adjacent property in order to remain competitive and improve their overall environmental performance. Enhancing competition and improving environmental compliance are worthy goals that should be encouraged and incentivized.

Unfortunately, many of these power plants are prevented from taking steps to repower or otherwise improve their infrastructure and environmental profile because of the high costs associated with doing so. By creating a meaningful tax credit based on beneficial investments in electric generating facilities, these power plants may lower the cost of repowering and other infrastructure upgrade projects. This tax credit, which ranges from 12.5% to 20% based on the amount of the investment, will encourage power plants to undertake important investment projects which will result in a cleaner, stronger and more modem generating fleet. It will also allow the power plant to maintain job levels and pave the way for job growth.

Furthermore, these power plants often represent a significant portion of the local tax base for the municipality where they are located. Loss of such local tax base will be devastating for these communities. By providing an appropriate tax credit for repowering and other infrastructure projects, this legislation will allow power plants to become more competitive and remain in operation for a longer period of time. This is a significant benefit for our local communities due to the local tax revenue that will be maintained and because of the jobs it will create in the local economy. For this and the aforementioned reasons, it is imperative that this bill pass.

Prior legislative history

2013-2014: S.2520-B

Fiscal implications

To be determined.

Effective date

This act shall take effect on the ninetieth day after it shall become a law.