After months of partisan gridlock on the issue, it appears that Congress is (finally) poised to pass a tax package that includes incentives for clean renewable energy and energy efficiency. The compromise includes many provisions which Sen. Bingaman developed and has championed with Finance Committee Chairman Baucus since the beginning of this Congress. It could get a floor vote as early as tonight. With passage, the bipartisan bill would be on track to clear both sides of the Capitol and reach the White House before Congress adjourns.
Sen. Bingaman, chairman of the Energy Committee and also a senior member of the tax-writing Finance Committee, took to the floor today to cheer the compromise and urge his colleagues to support it. Excerpts:
BINGAMAN: Tax Incentives Bill Will Encourage Clean, Efficient Energy
“This compromise will enable us to become a more energy efficient nation and wean us off our dependence on fossil fuels. It extends the production tax credit by one year for wind energy and by two years for other qualified renewable resources – a category that the bill expands to include marine renewable, such as waves and tides. I had hoped that we could achieve a longer-term extension of the PTC, but this is all we could afford within the package’s cost constraints. Undoubtedly, this bill’s extension of the PTC will enable our renewable industries to stay afloat. But today, I renew my commitment to a long-term extension of the PTC, which I hope we will be able to achieve in the next Congress.
“The package does, however, include long-term extensions of tax credits that make distributed green energy technologies affordable for American businesses and families. The investment tax credit, which gives businesses a 30 percent tax credit for investing in solar, wind, geothermal and ocean energy equipment, is extended for eight years. So, too, is the residential energy-efficiency property credit, which gives families a 30 percent tax credit for the cost of installing solar equipment at the residences.
“For both these tax incentives, the bill expands the classes of qualifying equipment, which means that businesses and families will have added flexibility in choosing the energy-saving technologies that make the most sense for them.
“The bill also expands the business credit to include combined heat and power systems, which use a heat engine or power station to simultaneously generate both electricity and useful heat. Businesses that install these systems are able to get both heat and electricity from the same source, which decreases both energy costs and greenhouse gas emissions.
“Shifting to the need to reduce demand for petroleum, the bill creates a new plug-in electric drive vehicle credit. I am hopeful that plug-in electric vehicles will come on the market next year, and the government will help individuals purchase these vehicles through tax credits that will start at $2,500 and climb as high as $7,500, depending on the vehicle’s battery capacity.
“For commercial vehicles, the bill adds incentives for idling reduction units, which provide an alternative source of power used to heat, cool, or provide electricity to the cab or other parts of a truck in lieu of operating the truck's main drive engine to power these services. There are more than 200,000 trucks carrying refrigerated cargo across the country, and fleet owners will be incentivized to install advanced insulation – which can dramatically reduce the amount of gasoline required to keep cargo cooled – through an exemption from the heavy vehicle excise tax for the installation of such insulation.
“The bill addresses our nation’s conservation and efficiency needs. It extends credits for energy-efficient improvements to new and existing homes and commercial buildings. Because energy used to heat and cool residential and commercial buildings accounts for nearly 40 percent of U.S. energy consumption – and nearly as much of our carbon dioxide emissions – these tax incentives are especially important.
“Owners of existing homes will be able to claim a tax credit of up to 10 percent of the combined costs from all qualified energy efficiency improvements – such as installing insulation, replacement windows, water heaters and high-efficiency heating and cooling equipment. For new homes, a $2,000 tax credit will be available to a home builder that constructs a qualified new energy-efficient home, certified to achieve a 50 percent reduction in energy usage.
“Finally, the bill includes the Secure Rural Schools and Payments in Lieu of Taxes legislation that three-quarters of the Senate previously voted for, but was not enacted. It will provide $3.8 billion to some 2,000 county governments in 49 States to increase support for schools, roads and other critical needs. We have schools laying off hundreds of teachers because we have not been able to enact this reauthorization of the program, which is also desperately needed to help cover increasing energy costs. We increase funding for the Payments in Lieu of Taxes Program in the current fiscal year, and fully fund the program for four years. These Federal payments are essential to local governments – including many in New Mexico – to offset losses in property taxes due to nontaxable Federal lands within their boundaries. This funding is long-overdue and it is more desperately needed now than ever before.
“Passage of this package of energy incentives will demonstrate to the American people that we are willing to shift our tax policies in a new direction -- toward a national energy policy that promotes diversified, domestic sources of clean energy. It furthers the significant progress we have made in recent years, with respect to promoting investment in efficiency and the renewable energy technologies that can help grow our economy. It addresses key concerns of American families, businesses, and municipalities.”
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