Tribal Joint Venture Production Tax Credit

An Intertribal COUP Background Policy Paper for a Comparable and Appropriate Tribal Energy Production Incentive

Prepared by Intertribal COUP ~ June 21, 2006

http://www.intertribalcoup.org/policy/index.html

Western Governors Support Needed Tribal Renewable Energy Incentive

In the context of reaching the Western Governors' goal of 30,000 MWs of clean and diversified energy throughout the West by 2015, it is recognized that Indian Tribes control a vast renewable power potential, including the wind resource found across the western reservations, but that a comparative and appropriately tailored incentive is needed to encourage tribal development compatible with tribal aspirations, federal responsibilities and the financial realities of the existing energy system.

A Tribal Joint Venture Production Tax Credit incentive for "partnership sharing" of the PTC is needed to spur Tribally owned renewable energy development, attract needed capital investment to reservations in an equitable and respectful manner, reduce the cost of clean power, and keep more of the benefits in the local community.

This tribal "partnership sharing" concept was proposed by the Wind Task Force and recommended by the Clean and Diversified Energy Advisory Committee of the Western Governors' Association after 18 months of study. This recommendation was adopted unanimously by the Western Governors at their June 11th meeting in Sedona, AZ, and is fully supported by the Intertribal Council On Utility Policy (COUP).

A tribal energy production incentive is recommended, whereby Tribes may assign their share of any production tax credit (PTC) within a tribal joint venture, such as a tribal energy resource development organization (EPAct 2005, Section 2602), so that Tribes can retain significant project ownership while allocating their share of the PTC to their taxable partners:

Section 45(d)(3) of 26 USC 45 (relating to additional definitions and special rules) should be amended by adding at the end the following new paragraph:

PTC Sharing Allowed within a Tribal Joint Venture:

In the case of a qualified facility as defined in 26 USC 45 (c)(3) in which one or more of the persons with an ownership interest is an Indian tribe or tribes, the tribal owner or owners may allocate their share of the renewable electricity production credit among the other, non-tribal, taxpaying owner or owners of the production in the gross sales from such facility.

Read more at http://www.intertribalcoup.org/policy/index.html