Income tax, state; Renewable Energy Job tax credit. (HB2374)

Introduced By

Del. David Englin (D-Alexandria) with support from co-patrons Del. Al Eisenberg (D-Arlington), Del. Margi Vanderhye (D-McLean), Del. Jeion Ward (D-Hampton), Sen. Adam Ebbin (D-Alexandria), and Sen. Dave Marsden (D-Burke)

Progress

Introduced
Passed Committee
Passed House
Passed Senate
Signed by Governor
Became Law

Description

Income tax; Renewable Energy Job tax credit. Provides an income tax credit to corporations for each "Renewable Energy Job" created and filled. The amount of the credit for each such job is (i) two percent of each salary that is less than $50,000 a year, and (ii) $1,000 for each salary of $50,000 and more a year. A Renewable Energy Job is employment in an industry related to renewable alternative energies. The credit is available for taxable years beginning on or after January 1, 2009, but before January 1, 2014. Read the Bill »

Outcome

Bill Has Failed

History

DateAction
01/14/2009Committee
01/14/2009Prefiled and ordered printed; offered 01/14/09 091930500
01/14/2009Referred to Committee on Finance
01/25/2009Impact statement from TAX (HB2374)
02/10/2009Left in Finance

Comments

Anne Haynes writes:

This approach to creating renewable energy jobs was dropped by the Obama team from the Stimulus paln. They had proposed a $3,000 tax credit,but found that most economists don't think that will create jobs. I suggest a substitute: An incentive (state tax credit) for home owners who take stepes to conserve energy in their homes. These steps should include an energy audit so the state can be assured that steps were take that really reduce energy consumption. How about that as an alternative?

James Hutzler writes:

Tax credits should be extended for qualifying employment in the following endeavors:

1) Green residential, commercial and office building audits, construction and retrofits.

2) Geothermal heating systems, solar heating systems, hydropower systems, and biomass and biofuel systems (as in the draft bill), as well as properly sited small-scale personal wind systems.

Large scale land-based wind farms should NOT be a part of this bill, as, in Virginia, the benefits of these installations are dubious at best, and the impact on our mountains catastrophic. Before any encouragement to the grid-scale wind industry is granted, proper state siting guidelines must be in place that exempt national and state forests and parks for any such use, and give local communities veto power.

Del. David Englin writes:

Anne and Jim - Thanks for your feedback. Please keep in mind that this is one part of a larger renewable energy and energy conservation agenda. There will be other bills this year addressing some of the terrific ideas you mention, some of which are part of Governor Kaine's Renew Virginia agenda. It's also important to understand on this particular bill that it's structured so that the state gets the new income tax revenue from the new job -- which more than offsets the cost of the tax credit -- before the state pays out the corporate income tax credit.

Paul Friedman writes:

Are there empirical studies to show that jobs are created based upon tax credit incentives? Without demand for the job, would an employer create a job just to receive a tax credit? Are there examples of this happening? I am concerned this would give away tax dollars to companies.

Whether or not it is part of Governor Kaine's Renew Virginia agenda, I would urge you to promote an incentive for homeowners to retrofit their homes with more insulation and take other steps to conserve energy. I agree with Anne that promoting conservation is critical both to reducing demand for energy and, at the same time, cutting greenhouse gas emissions.