Washington, D.C. — Congressman Raúl M. Grijalva introduced legislation today that will bring tribes one step closer to economic self-sufficiency and help to address the climate crisis.
The Fair Allocation of Internal Revenue Credit for Renewable Electricity Distribution by Indian Tribes Act or FAIR CREDIT Act will give tribes an opportunity to venture into large-scale renewable energy projects on their own lands.
Under current federal law, tribes are tax-exempt and are prevented from taking advantage of the production tax credit. Further, private entities that seek to partner with tribes for renewable energy projects on Indian lands will only obtain 50% of the credit, rather than 100% if they invest in such projects on private lands. This puts tribes at a huge disadvantage in the renewable energy generation arena. The new legislation would make a simple but significant change in the Internal Revenue Code of 1986. The change would allow tribes to transfer their share of the production tax credit (PTC) to private entities providing financing for joint venture renewable energy projects on tribal lands. Tribes will be able to offer 100% of the tax credit to their partners.
“This legislation will allow Native Nations to attract clean, non-polluting business ventures to their lands,” said Grijalva. “It will create outstanding economic development opportunities for tribes, whose lands have vast renewable energy potential. In addition, many tribes are deeply interested in helping to address the climate crisis, and this would provide them the opportunity to be part of the solution to this urgent problem.”
Tribal lands offer vast potential for renewable energy generation. Wind generation on tribal lands was estimated at 14% of total U.S. energy production in 2007, while the solar electricity potential were estimated at 4.5 times the annual total electricity needs of the U.S. (2004 figures – source Department of Energy). Additionally, tribal lands contain significant geothermal resources. Tribes are primed for renewable energy development and generation.
Renewable energy projects on tribal lands have the potential to bring much-needed economic development, provide employment opportunities, as well as improve the quality of life for many Native people. Currently, nearly 37 percent of all households on the Navajo Nation are without electricity and unemployment is above 50%. Such renewable energy projects may provide tribes with opportunities to offer electricity to their own people and much-needed jobs to many Indian reservations.
Representatives David Wu (OR), Stephanie Herseth-Sandlin (SD) and Ed Pastor (AZ) are original cosponsors of the legislation.