Grassley: Senate Passes Tax Incentives For Renewable, Clean-Burning Energy
Senator Chuck Grassley today hailed Senate passage of bipartisan legislation he sponsored to extend tax incentives for wind energy, biodiesel and other clean energy sources that are critical to helping consumers and building the nation's energy independence. The legislation also includes a tax incentive for oil refineries to encourage more refining and lead to lower gas prices.
"Congress is learning what Iowa has known for a long time. Renewable energy is the future," Grassley said. "For the environment, for sticker shock at the gas pump, for American energy independence, and for job creation, wind energy and biodiesel are among the answers. It's good to see a tax package advancing that recognizes forward-looking energy tax policy."
Grassley, as Ranking Member of the Committee on Finance, with exclusive jurisdiction over Senate tax policy, worked to include these energy provisions in a year-end tax bill which also protects of millions of Americans from the alternative minimum tax (AMT) and extends expiring family and business tax cuts. The House of Representatives could take up the overall bill at any time.
The energy provisions include:
Extension and Modification of Production Tax Credit for Renewables Including Wind. The bill extends the placed-in-service date for the Section 45 credit through December 31, 2009 in the case of wind and refined coal, and through December 31, 2010, in the case of other sources. The bill expands the types of facilities qualifying for the credit to new biomass facilities and to those that generate electricity from marine renewables (e.g., waves and tides). The bill updates the definition of an open-loop biomass facility, the definition of a trash combustion facility, and the definition of a non-hydroelectric dam. The bill also increases emissions standards on the refined coal credit and removes its market value test. The estimated cost of this proposal is $5.817 billion over 10 years.
Grassley authored the Wind Energy Incentives Act of 1993, which established the first-ever wind energy production tax credit, and has worked ever since to continue the tax credit without interruption to foster the ever-growing wind energy industry.
Expansion of Allowance for Cellulosic Biofuels Property. Taxpayers are allowed to immediately write off 50% of the cost of facilities that produce cellulosic biofuels ethanol if such facilities are placed in service before January 1, 2013. The bill makes this benefit available for the production of other cellulosic biofuels in addition to cellulosic ethanol. This proposal is estimated to be revenue neutral over 10 years.
Extension of Biodiesel Production Tax Credit; Extension and Modification of Renewable Diesel Tax Credit. The bill extends the $1.00 per gallon production tax credit for biodiesel and the 10¢/gallon credit for small biodiesel producers through 2009. The bill also extends the $1.00 per gallon production tax credit for diesel fuel created from biomass. The bill eliminates the current-law disparity in credit for biodiesel and agri-biodiesel, and eliminates the requirement that renewable diesel fuel must be produced using a thermal depolymerization process. As a result, the credit will be available for any diesel fuel created from biomass without regard to the process used, so long as the fuel is usable as home heating oil, as a fuel in vehicles, or as aviation jet fuel. Diesel fuel created by co-processing biomass with other feedstocks (e.g., petroleum) will be eligible for the 50¢/gallon tax credit for alternative fuels. Biodiesel imported and sold for export will not be eligible for the credit effective May 15, 2008. The estimated cost of this proposal is $451 million over 10 years.
BREAK IN TRANSCRIPT