The leadership and majority members of the tax-writing Finance Committee today rejected an effort by Senator Chuck Grassley to secure jobs in wind energy production and generate more clean-burning renewable energy.
Grassley said the outcome was "disappointing and shortsighted because my amendment was about fostering the kind of entrepreneurial activity that sustains and creates both jobs and taxpayers, while also strengthening an environmentally friendly energy source for the future."
Grassley offered amendments to the economic stimulus legislation to extend section 45 of the federal tax code for five years and establish a new 10-year carry-back of either the production tax credit or the investment tax credit depending on the wind energy company's election. Grassley said this change to current law is would encourage greater investment.
"The economic stimulus bill is the perfect place to make this policy change because the tax-equity financing market, which is typically how wind-energy projects are financed, has dried up as the investors in these projects, which are mainly large financial institutions, no longer seek out the production tax credit because they have income tax liabilities," Grassley said. "A lot of projects are on hold, jobs are on the line, and a longer carry-back could help some of those stalled projects get going again."
The underlying bill that Grassley tried to improve contains only an election to take the production tax credit or the earned income tax credit in 2009 and 2010 and a five-year carry-back of the either credit against prior income taxes paid by a wind energy company. The economic stimulus passed last week by the House of Representatives is the same as the pending Senate committee bill.
Grassley is the father of the wind energy tax credit, having sponsored the first-ever provision enacted in 1992. As Chairman of the Senate Finance Committee in 2001 and 2005, his legislation significantly expanded and extended the production tax credit for wind energy. In addition to his work to extend and expand the wind energy production tax credit, Grassley also has successfully fought to keep the tax credit from being cut. Last year and the year before, he was able to restore the wind energy tax credit after it had been substantially diminished in tax legislation passed by the House of Representatives.