Senate Democrats are expected to try again the week of July 28 to extend tax incentives to boost production of wind and solar energy in a tax package introduced July 24 by Senate Finance Committee Chairman Max Baucus, D-Mont.
Calling for passage of legislation to extend renewable energy tax incentives this month, Baucus said the text of his bill, the Jobs, Energy, Families and Disaster Relief Act of 2008, Senate Bill 3335, can replace the text of House tax legislation to comply with procedural rules.
“This bill will create jobs, jump-start alternative energy, and ease financial burdens for American families, and Congress needs to act on it now,” Baucus said in a news release. “Senators who support good-paying jobs, new energy solutions, and America’s working families must vote to pass this legislation before Congress heads home.”
Baucus said the bill seeks to reduce America’s dependence on increasingly expensive foreign oil by facilitating independent energy solutions, including the production and use of wind and solar energy, biofuels and carbon sequestration technologies. The legislation also includes provisions to improve transportation and domestic fuel security and energy and conservation efficiency. The proposal extends several tax incentives that expired at the end of 2007 or are set to expire at the end of 2008, such as the research and development tax credit, college tuition deduction, and the state and local sales tax deduction.
The bill extends the placed-in-service date for wind facilities for one year, through Dec. 31, 2009. It also extends the placed-in-service date for three years, through 2011, for certain other qualifying facilities, including closed-loop biomass, open-loop biomass, geothermal, small irrigation, qualified hydropower, landfill gas and trash-combustion facilities. The legislation includes a new category of marine facilities that generate electricity from waves and tides, which will benefit from the 2011 placed-in-service date.
In addition, the bill extends the 30% investment tax credit for solar energy property and qualified fuel cell property and the 10% investment tax credit for microturbines for eight years, through 2016. It also increases the $500 per half-kilowatt of capacity cap for qualified fuel cells to $1,500 per half-kilowatt of capacity. The bill removes an existing limitation that prevents public utilities from claiming the investment tax credit. In addition, the legislation would provide a new 10% investment tax credit for combined heat and power systems.
Tax incentives for renewable energy enjoy broad bipartisan support in Congress, but have been mired in bickering between the House and Senate over offsets to pay for them. Senate Minority Leader Mitch McConnell, R-Ky., has argued that the tax credits do not need to be offset. However, House Democrats have said they will not pass a tax incentive package that is not paid for fully in accordance with their “pay-go” pledge.
On June 10, Senate Republicans blocked debate on an earlier version of the bill, the Renewable Energy and Job Creation Act. By a vote of 263-160, the House of Representatives on May 21 passed legislation to extend tax incentives that encourage the production of renewable energy.
As a sweetener for Republicans, the new Senate version of the bill contains a tax measure that would add $8 billion to the Highway Trust Fund to avert a funding shortfall in the coming fiscal year. Baucus said that the fix is needed to keep as many as 380,000 good-paying jobs available to American workers and to sustain infrastructure projects that will make the U.S. highway and bridge systems safer. He noted that this proposal passed the House of Representatives on July 23 by a vote of 387-37, and has no revenue effect.
By Kathleen Hart
25 July 2008
|Wind Watch relies entirely
on User Funding