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SD gov vetoes tax refund for wind energy projects

Gov. Mike Rounds vetoed a bill Friday that sought to modify South Dakota's tax refund program for wind farm development, saying it would have unfairly provided large wind farms a better deal than what was offered to other construction projects. But there's a good chance lawmakers will override the veto when they convene Monday for the final two days of this year's session, said House Republican Leader Bob Faehn of Watertown.

PIERRE, S.D. -- Gov. Mike Rounds vetoed a bill Friday that sought to modify South Dakota's tax refund program for wind farm development, saying it would have unfairly provided large wind farms a better deal than what was offered to other construction projects.

But there's a good chance lawmakers will override the veto when they convene Monday for the final two days of this year's session, said House Republican Leader Bob Faehn of Watertown. A bill can become law over a governor's objection with a two-thirds vote in both the House and Senate.

"Wind power in general is a pretty popular issue in the Legislature," Faehn said.

The Republican governor and lawmakers of both parties have worked to reform South Dakota's refunds for large construction projects. They are intended to encourage industrial projects, agricultural processing facilities and other endeavors to come to South Dakota, but lawmakers want to limit the refunds to keep more money in the state treasury.

Until now, state law gave back varying percentages of sales taxes and contractor's excise taxes paid when projects such as wind farms, ethanol plants or pipelines are built. Current law gives tax refunds of 90 percent to projects... more [truncated due to possible copyright]  

PIERRE, S.D. -- Gov. Mike Rounds vetoed a bill Friday that sought to modify South Dakota's tax refund program for wind farm development, saying it would have unfairly provided large wind farms a better deal than what was offered to other construction projects.

But there's a good chance lawmakers will override the veto when they convene Monday for the final two days of this year's session, said House Republican Leader Bob Faehn of Watertown. A bill can become law over a governor's objection with a two-thirds vote in both the House and Senate.

"Wind power in general is a pretty popular issue in the Legislature," Faehn said.

The Republican governor and lawmakers of both parties have worked to reform South Dakota's refunds for large construction projects. They are intended to encourage industrial projects, agricultural processing facilities and other endeavors to come to South Dakota, but lawmakers want to limit the refunds to keep more money in the state treasury.

Until now, state law gave back varying percentages of sales taxes and contractor's excise taxes paid when projects such as wind farms, ethanol plants or pipelines are built. Current law gives tax refunds of 90 percent to projects costing $600 million or more.

Rounds noted that he already signed a bill that changes refunds for all categories of construction projects, and he believes that bill should apply to wind farms. The bill he signed allows rebates of 45 percent of taxes on projects costing $10 million to $40 million, and 55 percent for those costing $40 million to $500 million. Projects of less than $10 million or more than $500 million would not qualify.

The vetoed bill included the same breakdown, except there was no upper limit on the cost of projects involving the generation of electricity from wind. That meant all wind farms costing more than $40 million would get a 55 percent tax refund.

The governor said the refunds shouldn't favor one industry. He said the bill would give special treatment to large wind projects, possibly affecting only one or two large projects. Rounds also said the bill would give away too much money through tax refunds and noted that wind turbines have already received other property tax breaks.

"I cannot agree with that decision, because it is inequitable," Rounds wrote in his veto message to lawmakers.

Senate Republican Leader Dave Knudson said it makes sense to allow large wind projects the tax refunds because developers could easily choose to build in a neighboring state.

"The governor's veto message seems to ignore the fact that these wind projects are very mobile in terms of where they locate," said Knudson, of Sioux Falls. "Wind is one of the areas where the tax incentives actually do make a difference."


Source: http://www.businessweek.com...

MAR 26 2010
http://www.windaction.org/posts/25383-sd-gov-vetoes-tax-refund-for-wind-energy-projects
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