GRASSLEY SECURES EXTENSION OF WIND, BIOMASS ENERGY PRODUCTION TAX CREDITS
Sen. Chuck Grassley, chairman of the Committee on Finance, today praised congressional action to extend the tax credits he authored for the production of energy from wind, biomass, and other renewable sources. The House and Senate gave final approval to the extension before adjourning last weekend, sending the measure to the President for his expected signature.
"Alternative energy production requires investment, and investment takes planning," Grassley said. "Investors need certainty about tax policy before putting their money into a wind energy or biomass project. The tax extension gives them certainty for another year. Iowans will continue to benefit from this growing industry."
Grassley has long advocated using the tax code to develop clean, renewable sources of energy production such as wind. As chairman of the Finance Committee, with jurisdiction over tax policy, he has secured several extensions of production tax credits for renewable energy and tax incentives to promote energy efficiency and drafted new such policies. The tax extension bill given final approval last weekend includes:
An extension of the wind energy production tax credit until Dec. 31, 2008. The tax credit had been set to expire on Jan. 1, 2008. Grassley authored the Wind Energy Incentives Act of 1993, which established the first-ever wind energy production tax credit.
An extension of the tax credit for the production of electricity from biomass - organic material from plants -- until Dec. 31, 2008. The credit first became law in 1992 for crops grown specifically for electricity. Grassley significantly expanded the definition in 2004. Biomass includes saw dust, tree trimmings, and agricultural byproducts.
A new tax incentive to produce ethanol from certain plants. The provision provides 50-percent bonus depreciation for new qualified cellulosic ethanol plants placed in service through Dec. 31, 2012. This provision applies to cellulosic ethanol derived from feedstocks such as switchgrass, wood fibers, shell hulls, agricultural residue and other organic sources.
An extension of the tax credit for new energy efficient homes. This extends the tax credit for builders of new energy efficient homes for one year through Dec. 31, 2008. The credit applies to both manufactured homes and other homes meeting a 50 percent standard.
An extension of the deduction for energy efficient commercial buildings. This extends for one year, through Dec. 31, 2008, the deduction for energy efficient commercial buildings meeting a 50 percent energy reduction standard. The maximum deduction is $1.80 per square foot of the building.
"Investing in alternative forms of clean energy is good for the environment, good for national security and energy independence, good for job creation and economic development, and good for taxpayers," Grassley said. "Congress took the right step in approving these bipartisan alternative energy tax incentives."