Kentucky should be a national leader,' Richards says
Kentucky is well positioned to lead our nation's turn toward energy independence, according to Democratic gubernatorial candidate and House Speaker Jody Richards, and his first budget as Governor will feature major, concrete steps to take Kentucky to a new level in this effort.
Once elected, the Jody Richards-John Y. Brown III team will launch initiatives to spur development of alternative and renewable energy facilities and create incentives for establishing more bio-fueling stations along Kentucky's roadways.
"Kentucky cannot realize its full potential on the energy independence front or anywhere else unless our state has the kind of innovative gubernatorial leadership now lacking in that office," Richards said. "My administration will be committed to transforming Kentucky into the leading state in the nation for energy independence."
The Richards budget will include any unfinished business from this year's HB 5 if the Republican-controlled Senate prevents passage of the legislation.
In addition, the first Richards budget will include the following new steps:
1. Establish Small Business Entrepreneurial Fund for Energy Independence
As Governor, Richards will establish Kentucky's Small Business Entrepreneurial Fund for Energy Independence to serve as a logical complement to HB 5's extension of the coal tax-credit incentive to alternative and renewable energy facilities.
While the energy-facility tax credits in HB 5 will mainly go to bigger and more established firms which can use credits to offset tax liability, many smaller and start-up enterprises do not yet have tax liability and are still sustaining losses as they build up and invest for the future. And although larger firms have the capacity to take on larger projects, smaller entrepreneurial firms will often make more of the innovative breakthroughs. Governor Richard's development of a Small Business Entrepreneurial Fund will provide Kentucky with the needed other half to have a full-sized economic incentive strategy.
The Fund will initially provide up to $12 million annually in grants and low-interest loans to start-ups and other smaller businesses in Kentucky that are pursuing innovations for greater energy independence. The scope of the Fund's financial support will cover the same diversity of energy areas as found in HB 5.
2. Expand Alternative Energy Facilities and R&D in Kentucky
Last year's Energy Security National Leadership Act and this year's HB 5 directed the Office of Energy Policy (OEP) to assist the development of alternative energy industries.
To support OEP activities, the state has provided $7 million in funding over the past two years. Governor Richards' first budget will triple funding to $21 million over the biennium. Such expanded support will expedite and serve as a strong incentive for the development of alternative energy facilities and industries throughout Kentucky. Governor Richards' larger goal is to turn Kentucky into a major hub for alternative energy research and development activity and establish it as a prime candidate for a top federal research center.
3. Develop "Kentucky Patriot" Bio-fueling Stations
Despite growing popularity, the appeal of new bio-friendly vehicles is tempered by motorists' concern of finding bio-friendly stations on the road. At the same time, station owners are often financially hard pressed to increase their capacity and provide alternative bio-fueling at their pumps. As a result, major automakers remain concerned about making larger investments in manufacturing and marketing more bio-fueled vehicles.
According to Richards, our state government is well positioned to bridge this bio-fueling gap. In his first budget as Governor, Richards will provide funding for a new initiative consisting initially of $10 million in grants and tax credits to establish bio-fueling alternative pumps throughout Kentucky. Stations interested in providing either "E-85" (85 percent ethanol, 15 percent gasoline) or "B-20" (20 percent bio-diesel, 80 percent diesel) will be eligible under the Richards initiative.
These initiatives will build on the proposals of HB 5, which is designed to move Kentucky ahead on the alternative energy as well as energy-efficiency fronts. Its major elements include:
Extending the state's coal tax-credit incentive to the full range of alternative and renewable fuel facilities from bio-fuels to hydrogen, wind and solar power.
Providing a tax exemption for tangible personal property used to build, repair, renovate, or upgrade alternative fuel and renewable energy facilities.
Refunding sales and use tax paid on energy-efficiency machinery.
Directing state government to pursue the goal of converting at least half its fleet to alternative energy vehicles; and
Instructing the Finance and Administration Cabinet to enhance the use of energy-efficient state buildings and establish benchmarks for energy savings procedures throughout state government.