State lawmakers offered four different bills to a House committee Monday to fix a $15 million mistake they made last year with solar tax credits.
Last July, more than 1,000 solar panel customers learned they had lost out on a refundable tax credit for the rooftop systems they installed in 2015, when they believed they were guaranteed the credit.
Customers typically bought $25,000 solar panel systems and collected $7,500 in federal tax credits when they filed their taxes in 2016. They were also supposed to get 50-percent rebates from the state, or $12,500 back in cash, to bring their total out-of-pocket expense down to just $5,000.
Instead, the Louisiana Legislature, scrambling to cover a big budget hole in April 2015, retroactively capped the state tax credits starting at the beginning of 2015. That meant thousands of people who purchased or installed the systems in the first half of 2015, before any cap was imposed, were in danger of losing the refunds.
And hundreds more installed the panels in the second half of 2015 because the program was still open on a first-come, first-served basis. Some solar installation companies told customers they were taking a risk of not receiving the tax refund, but others failed to inform the customers before signing them up.
In the end, 1,280 families claimed credits who were not able to collect them because the state had blown through the cap.
“I’m upset, I’m angry, and I have to come out of pocket for all this money,” said X-ray technician Jesse Mangum, who bought his system in the fall of 2015 and was never told he may not be able to get the refund. “It’s a financial hardship for me, my family, for everyone.”
Legislators like Julie Stokes of Kenner and Greg Cromer of Slidell said today it’s high time for the Legislature to fix its own mistake.
“We need to do right by the taxpayers who didn’t have enough warning on this issue to make the right decision, and we made a mistake,” said Stokes as she backed Cromer’s bill.
“The cap was possibly just a knee-jerk reaction to a budget crisis and we need to see beyond that and correct this legislation,” Cromer said.
Stokes and Cromer, along with Walt Leger of New Orleans and Kirk Talbot of River Ridge, each proposed bills that will cost the cash-strapped state $15.7 million, just when lawmakers are trying to plug another massive budget hole.
Rep. Ted James of Baton Rouge questioned the cost of the bill, saying he would like to pay solar customers what they were promised but noting that “many promises are broken in this building.” Representatives of the solar industry and others who testified Monday acknowledged that some solar installation companies may have misled customers after the cap was imposed. But, they said, the people who installed systems before July 2015 were truly victimized by bad legislation and had no chance to protect themselves.
The Ways and Means Committee voted 14-0 to send Cromer's version of the bill to the House floor.
An alternate bill, also proposed in the Ways and Means Committee hearing Monday by Rep. Major Thibaut of New Roads, would spread the cost out over the next five years by letting affected customers claim future tax credits. It would not pay them cash. Thibaut said he supported Cromer’s bill to pay the rebates in full, but offered his bill as a fallback plan.
CORRECTION: A previous version of this story erroneously reported that Jerry "Truck" Gisclair authored one of the bills before the Ways and Means Committee today. The story has been updated to name Rep. Kirk Talbot as the author of that version of the bill and to note that Rep. Greg Cromer's version was passed out of the committee.