With rapidly rising energy costs changing the way Americans live and work, and global warming threatening even greater harm to our future prosperity and well-being, it is clear that a fundamental change in America’s energy policy is needed. Bold new policies and leadership can turn these twin crises into historic opportunities.
In that spirit, NDN is pleased to announce that on Friday, Aug. 1, Assistant Senate Majority Leader Dick Durbin will deliver an address on the economic benefits for America in moving from carbon-based fuels to renewable energy sources. Senator Durbin’s remarks will be followed by a panel discussion on “Energy and the American Way of Life.” Both events are hosted by the NDN Green Project.
During the panel discussion, energy leaders and experts will discuss how this transition can take place. The discussion will be moderated by NDN Green Project Director Michael Moynihan. Michael also will be discussing his new paper entitled, Solar Energy: The Case for Action.
Senator Durbin will speak at 11:15 a.m., and the panel will follow the senator’s remarks.
NDN’s Green Project is a program of the Globalization Initiative and seeks to develop the legislative and regulatory framework to address climate change, enhance energy security, and accelerate the development of green technologies to promote economic growth. Through this initiative, NDN serves as a bridge between key stakeholders such as the new clean technology community and public leaders as we build a post-carbon economy. For more on the Green Project’s work, please visit our blog.
Joining us will also be:
- Roger Efird, President of Suntech America and Solar Energy Industry Association Chairman, and a renewable energy pioneer with over 20 years experience in the solar industry.
- Greg Kats, head of Good Energies’ Green Buildings and Energy Efficiency investment cluster.
- Jack D. Hidary, Chairman of Americans for Renewable Energy.
- Shyam Kannan, LEED® AP, Vice President – Director of Research and Development, RCLCO, a real estate consulting company.
The Phoenix Park Hotel Ballroom 520 N. Capitol Street, NW Washington, D.C.
From the Wonk Room.
Former Vice President Al Gore is set to give a major energy policy speech today, in which he will challenge “the nation to produce every kilowatt of electricity through wind, sun and other Earth-friendly energy sources within 10 years, an audacious goal he hopes the next president will embrace.” Gore is speaking at noon at the Daughter of the American Revolution Constitution Hall in Washington D.C.
The electricity sector is the largest producer of greenhouse gases in the United States, with its fossil-fired power plants and an obsolete power grid generating one-third of all our global warming emissions. Gore’s “unprecedented challenge” is a “moonshot” goal, but it is also on the scale of what is needed to avoid climate catastrophe. To stabilize the climate, the Intergovernmental Panel on Climate Change found that industrialized nations need to cut emissions to 25 to 40 percent below 1990 levels. For the United States, whose emissions have risen 15 percent since 1990, that goal translates to 34 to 48 percent below today’s pollution. Transforming the grid would cut global warming pollution by 33 percent from current levels by 2018—what we need for an even shot to halt our global fever.
Moving to all clean electricity would likely spur related reductions in the transportation sector, as the new “smart grid” of electricity distribution designed for renewable sources such as solar and wind power would be able to use plug-in hybrid vehicles for distributed electricity storage. Instead of everyone reliant on a few massive power plants controlled by large utilities, the system would allow both large and small-scale electricity production and storage. The giant wind farms of T. Boone Pickens would be complemented by millions of solar roofs, all feeding into the same dynamic electricity network.
The Heinrich Böll Foundation and the Environmental and Energy Study Institute cordially invite you to a discussion featuring
Rep. Jay Inslee (D-WA)
- Wilson Rickerson, Rickerson Energy Strategies
- Janet Sawin, Worldwatch Institute
- Dr. Anthony White, Climate Change Capital
A light lunch will be served.
Please join us for a lunch briefing that explores the potential for renewable energy payment legislation within the US electricity sector. Renewable energy payments (also known as feed-in tariffs in Europe and elsewhere) guarantee smaller renewable energy technologies a connection to the electricity grid, and provide a premium rate to these investors designed to generate a reasonable profit over a long term. Representative Jay Inslee (D-WA) will begin the event by introducing his forthcoming bill (The Renewable Energy Jobs and Security Act), which incorporates the renewable energy payment for these industries that enter the US electricity market. The event will give an overview about first experiences with such legislation on the US state level. Also, the briefing will review the experiences of Europe, particularly in Germany, where renewable energy payment legislation has created rapid growth in the renewable energy industries since 1990, causing the nation to become the world’s largest market for photovoltaic systems and wind energy. By the end of 2007, 46 countries and federal states, including 18 of the 27 EU member-states, had introduced renewable energy payment legislation as a major incentive to deploy renewable energy.
Seating is limited. Please RSVP to Amy Sauer at email@example.com
HBF and EESI are 501©(3) public policy institutes that neither employ nor retain any registered lobbyists.
The Environmental and Energy Study Institute (EESI) invites you to a briefing on the opportunities and barriers facing renewable energy development in the United States with regard to the electric transmission infrastructure. Like any infrastructure, the transmission grid is aging and needs upgrading to meet future load requirements. While the country has very large low and no-carbon energy resources, including a broad variety of renewable energy resources (solar, geothermal, wind, biomass and water power), the existing transmission grid was not designed to tap into all of these resources. The Western Governors’ Association (WGA) recently said, “A critical barrier to continued expansion of renewable energy in the region has been the lack of transmission lines to areas with the greatest potential.”
There is a significant backlog of renewable energy projects waiting to sign the interconnection agreements necessary to bring power to market. According to the Independent, thousands of wind turbines in the United States are sitting idle or failing to meet their full generating capacity because of a shortage of power lines able to transmit their electricity to the rest of the grid. A proposal for $6.4 billion of new power lines linking new wind farms with Texas’ public electricity grid, whose cost will be borne mainly by consumers, is proving politically controversial. The American Wind Energy Association (AWEA) recently said, “There are large backlogs of interconnection requests around the country. . . .The result is that many good projects are unreasonably delayed, harming wind development nationally and harming many states’ ability to meet renewable energy goals.” Additional transmission concerns include cost allocation for new transmission, integration of intermittent resources and energy storage technologies, high upfront capital costs, integrated regional planning, the role of energy efficiency, conservation, demand response programs and distributed generation, and whether DOE transmission studies conducted under EPACT 05 are being done in a manner that takes into account the opportunities for renewable energy. Our speakers include:
- Jon Wellinghoff, Commissioner, Federal Energy Regulatory Commission (FERC)
- Robert Gramlich, Policy Director, American Wind Energy Association (AWEA)
- Raymond Wuslich, Partner, Winston & Strawn LLP
The Energy Policy Act of 2005 (P.L. 109-58) requires the Department of Energy (DOE) to complete a study of the nation’s electric transmission congestion every three years. On May 28, DOE announced that it will work with the Western Governors’ Association (WGA) to identify areas in the West with substantial renewable energy resources and to expedite the development and delivery of that energy to meet regional energy needs. On September 20, 2007, Senate Majority Leader Harry Reid (D-NV) introduced the Clean Renewable Energy and Economic Development Act (S. 2076) which would provide additional financing options for building new transmission lines and interconnections to areas rich with renewable energy resources. By designating renewable energy zones, where natural clean resources could generate at least 1,000 megawatts of power, the bill would establish a framework for developing new renewable energy-dedicated transmission. The Senate Committee on Energy and Natural Resources is expected to hold a hearing on renewable energy and transmission in the near future.
This briefing is free and open to the public. No RSVP required. Please forward this notice. For more information, contact Fred Beck at firstname.lastname@example.org or 202-662-1892.
Cross-posted from Gristmill.
With gas prices now averaging a record $4.04 a gallon in the United States, the Senate voted on two bills Tuesday that would have revoked tax breaks for Big Oil and extended tax credits to renewable energy. Proponents of the two measures touted them as vital for consumer relief and transition to new energy sources, but both measures failed to muster the 60 votes needed to proceed.
The first vote, on the Consumer First Energy Act (S. 3044), fell short of cloture by a vote of 51-43. The second, on the Renewable Energy and Job Creation Act of 2008 (H.R. 6049), failed by a vote of 50-44. Both votes fell largely along party lines.
The Consumer First Energy Act
The Consumer First Energy Act would have levied a 25 percent tax on “windfall profits” of major oil companies, the proceeds of which would be invested in the Energy Independence and Security Act Trust Fund. Companies could avoid the tax by investing in renewable energy.
“It will force the oil companies to do something to help us get out of this mess instead of just profiting from it,” said Sen. Chuck Schumer (D-N.Y.) on the floor shortly before the vote.
The bill would also repeal tax breaks for major oil and gas companies, estimated at a value of $17 billion over the next 10 years, and suspend filling of the Strategic Petroleum Reserve through the end of 2008. There were measures to discourage “price gouging” and limit speculation in oil markets. The bill would also call for a NOPEC policy (clever acronym alert: “No Oil Producing and Exporting Cartels”). This would crack down on the Organization of the Petroleum Exporting Countries (OPEC) by amending anti-trust laws and allowing the U.S. Attorney General to take legal action against countries and companies. Currently, a court ruling from 1979 gives OPEC members immunity in U.S. courts.
Republican leaders spoke on the floor in favor of expanding domestic oil drilling in places like the Arctic National Wildlife Refuge as a solution to gas-price woes rather than measures to move toward renewable energy sources. “This bill isn’t a serious response to high gas prices. It’s just a gimmick,” said Minority Leader Mitch McConnell (R-Ky.). “Republicans are determined to lower gas prices the only way we can: increasing supply.”
But proponents of the bill were adamant that the only way to bring down the costs of oil in the long term is to curb the country’s dependence on the fossil fuel. “We are in an oil crisis, and we better start taking action to get out of this mess,” said Bob Menendez (D-N.J.). “Feeding that addiction by tapping another vein just drills us into a deeper hole.”
Democratic leaders pointed out that Republicans wanted to talk about gas prices last week, when a climate change bill was on the floor, but when a bill addressing the underlying causes of high gas prices came up, Republicans refused to let it proceed.
“Last week they wanted to make global warming legislation about gas prices,” said Majority Leader Harry Reid (D-Nev.). “When they have the chance to vote on it, they walk away.”
Six Republicans – Norm Coleman (Minn.), Susan Collins (Maine), Chuck Grassley (Iowa), Gordon Smith (Ore.), Olympia Snowe (Maine), and John Warner (Va.) – voted in favor of moving to debate on the proposed legislation. Democrat Mary Landrieu (La.) voted against it (as did Reid, but his was a procedural move to ensure that he can bring the bill to the floor again in the future).
The Renewable Energy and Job Creation Act
The second bill, the Renewable Energy and Job Creation Act of 2008, was the Senate partner to the tax-extenders legislation that passed in the House last month. The $54 billion package would have extended tax breaks for renewable energy that are set to expire at the end of this year. It includes a six-year extension of the investment tax credit for solar energy; a three-year extension of the production tax credit for biomass, geothermal, hydropower, landfill gas, and solid waste; and a one-year extension of the production tax credit for wind energy. The bill also has incentives for the production of renewable fuels such as biodiesel and cellulosic biofuels, incentives for companies that produce energy-efficient products, and incentives to improve efficiency in commercial and residential buildings. Funding for the tax credits would come from closing loopholes for hedge-fund managers and multinational corporations.
Republicans Smith, Snowe, and Bob Corker (Tenn.) voted in favor of cloture on the bill, as did all of the Democrats present for the vote.
The tax-break extensions have stalled in the Senate several times before, and folks in the renewables industry are starting to get nervous as we near the expiration of those credits at the end of this year.
“More than ever, with record energy prices, record unemployment, and grave concerns about global warming, Congress needs to work out differences so we can stabilize energy costs for consumers and businesses, improve our nation’s energy security, and create tens of thousands of quality, green-collar jobs,” said Solar Energy Industries Association President Rhone Resch following the vote.
Green groups rushed to chastise GOP leaders for the obstruction. “By once again blocking efforts to extend these crucial clean energy tax incentives that are in danger of expiring, this minority is responsible for kicking the economy while it’s down,” said Sierra Club Executive Director Carl Pope in a written statement. “Jobs are already being lost in the renewable-energy industry and at least 100,000 more could disappear unless Congress acts to immediately renew these tax incentives.”
As oil and gas hit new records above $128 a barrel and $3.78 this week, many analysts are predicting even further increases in the price of gasoline as we edge towards the travel months of summer. To explore the Bush administration’s contributions to this energy crisis and the administration’s refusal to respond, Chairman Edward J. Markey (D-Mass.) and the Select Committee on Energy Independence and Global Warming announced today that Secretary of Energy Stephen Bodman will testify before the Committee on Thursday, May 22, as Americans prepare for the Memorial Day weekend, the beginning of the summer driving season.
Chairman Markey will also seek answers from Secretary Bodman on why the Bush administration continues to defend $18 billion in tax breaks to the top five most profitable oil companies that House Democrats want to redirect to fund renewable energy that could help consumers.Witness
- Samuel Bodman, Secretary, U.S. Department of Energy
On May 16, 2008 the U.S. Environmental Protection Agency (EPA) announced that it is seeking comments regarding a recent petition to reduce the volume of renewable fuels required under the Renewable Fuel Standard (RFS). In a letter sent to EPA on April 25, 2008, Governor Rick Perry of Texas requested that the EPA cut the RFS mandate for ethanol production in half (RFS mandate for 2008 is 9 billion gallons), citing recent economic impacts in Texas. In response, EPA will soon publish a Federal Register Notice opening a 30-day comment period on the request.
In the Energy Policy Act of 2005, which established the RFS program, provisions were included enabling the EPA Administrator to suspend part of the RFS if its implementation would severely harm the economy or environment of a state, region, or the entire country. EPA must make a decision on a waiver request within 90 days of receiving it.
The Effects of Ethanol on Texas Food and Feed (PDF) — Study from Texas A&M University (April 2008)
If you have questions, please email or call Jetta Wong at jwong [at] eesi.org or (202) 662-1885.
The House Committee on Ways and Means today passed bipartisan legislation to extend vital tax relief to millions of families, strengthen investment opportunities for American businesses and encourage the production and use of renewable energy. The legislation, H.R. 6049, the Energy and Tax Extenders Act of 2008, was introduced by Committee Chairman Charles B. Rangel (D-NY) and could be considered by the full House of Representatives as early as next week. H.R. 6049 passed the Committee by a vote of 25-12.
H.R. 6049 Energy and Tax Extenders Act of 2008
Summary: H.R. 6049, the Energy and Tax Extenders Act of 2008, will provide almost $20 billion of tax incentives for investment in renewable energy, carbon capture and sequestration demonstration projects, energy efficiency and conservation. The bill will also extends $27 billion of expiring temporary tax provisions, including the research and development credit, special rules for active financing income, the State and local sales tax deduction, the deduction for out-of-pocket expenses for teachers, and the deduction for qualified tuition expenses. In addition, the bill provides almost $10 billion of additional tax relief for individuals through an expansion of the refundable child tax credit and a new standard deduction for property taxes. The bill would be primarily offset by closing a tax loophole that allows individuals that work for certain offshore corporations, such as hedge fund managers, to defer tax on their compensation and would delay the effective date of a tax benefit that has not yet taken effect for multinational corporations operating overseas.
ENERGY TAX INCENTIVES
I. ENERGY PRODUCTION INCENTIVES
Renewable Energy Incentives
Long-term extension and modification of renewable energy production tax credit. The bill extends the placed-in-service date for wind facilities for one year (through December 31, 2009). The bill would also extend the placed-in-service date for three years (through December 31, 2011) for certain other qualifying facilities: closed-loop biomass; open-loop biomass; geothermal; small irrigation; hydropower; landfill gas; and trash combustion facilities. The bill also includes a new category of qualifying facilities that will benefit from the longer December 31, 2011 placed-in-service date—facilities that generate electricity from marine renewables (e.g., waves and tides). The bill would cap the aggregate amount of tax credits that can be earned for these qualifying facilities placed in service after December 31, 2009 to an amount that has a present value equal to 35% of the facility’s cost. The bill clarifies the availability of the production tax credit with respect to certain sales of electricity to regulated public utilities and updates the definition of an open-loop biomass facility, the definition of a trash combustion facility, and the definition of a nonhydroelectric dam. This proposal is estimated to cost $7.046 billion over ten years.
Long-term extension and modification of solar energy and fuel cell investment tax credit. 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 six years (through the end of 2014). 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. The bill would also provide a new 10% investment tax credit for combined heat and power systems. The bill also allows these credits to be used to offset alternative minimum tax (AMT). This proposal is estimated to cost $1.376 billion over 10 years.
Long-term extension and modification of the residential energy-efficient property credit. The bill would extend the credit for residential solar property for six years (through the end of 2014). The bill would also increase the annual credit cap (currently capped at $2,000) to $4,000. The bill would include residential small wind equipment and geothermal heat pumps as property qualifying for this credit. The bill also allows the credit to be used to offset alternative minimum tax (AMT). This proposal is estimated to cost approximately $666 million over ten years.
Sales of electric transmission property. The bill extends the present-law deferral of gain on sales of transmission property by vertically integrated electric utilities to FERC-approved independent transmission companies. Rather than recognizing the full amount of gain in the year of sale, this provision allows gain on such sales to be recognized ratably over an 8-year period. The rule applies to sales before January 1, 2010. This proposal is revenue neutral over 10 years.
New Clean Renewable Energy Bonds (“CREBs”). The bill authorizes $2 billion of new clean renewable energy bonds to finance facilities that generate electricity from the following resources: wind; closed-loop biomass; open-loop biomass; geothermal; small irrigation; hydropower; landfill gas; marine renewable; and trash combustion facilities. This $2 billion authorization will be subdivided into thirds: 1/3 will be available for qualifying projects of State/local/tribal governments; 1/3 for qualifying projects of public power providers; and 1/3 for qualifying projects of electric cooperatives. This proposal is estimated to cost $548 million over 10 years.
Carbon Mitigation Provisions
Carbon capture and sequestration (CCS) demonstration projects. The bill would provide $1.5 billion of tax credits for the creation of advanced coal electricity projects and certain coal gasification projects that demonstrate the greatest potential for carbon capture and sequestration (CCS) technology. Of these $1.5 billion of incentives, $1.25 billion would be awarded to advanced coal electricity projects and $250 million would be awarded to certain coal gasification projects. These tax credits would be awarded by Treasury through an application process, with the applicants that demonstrate the greatest carbon capture and sequestration percentage of total CO2 emissions receiving the highest priority. Applications will not be considered unless applicants can demonstrate that either their advanced coal electricity project would capture and sequester at least 65% of the facility’s carbon dioxide emissions or that their coal gasification project would capture and sequester at least 75% of the facility’s carbon dioxide emissions. Once these credits are awarded, recipients that fail to meet these minimum levels of carbon capture and sequestration would forfeit these tax credits. This proposal is estimated to cost $1.422 billion over 10 years.
Refund of certain coal excise taxes unconstitutionally collected from exporters. The Courts have determined that the Export Clause of the U.S. Constitution prevents the imposition of the coal excise tax on exported coal and, therefore, taxes collected on such exported coal are subject to a claim for refund. The bill would create a new procedure under which certain coal producers and exporters may claim a refund of these excise taxes that were imposed on coal exported from the United States. Under this procedure, coal producers or exporters that exported coal during the period beginning on or after October 1, 1990 and ending on or before the date of enactment of the bill, may obtain a refund (plus interest) from the Treasury of excise taxes paid on such exported coal and any interest accrued from the date of overpayment. _This proposal is estimated to cost $199 million over 10 years._
Solvency for the Black Lung Disability Trust Fund. The bill would enact the President’s proposal to bring the Black Lung Disability Trust Fund out of debt. Under current law, an excise tax is imposed on coal at a rate of $1.10 per ton for coal from underground mines and $0.55 per ton for coal from surface mines (aggregate tax per ton capped at 4.4 percent of the amount sold by the producer). Receipts from this tax are deposited in the Black Lung Disability Trust Fund, which is used to pay compensation, medical and survivor benefits to eligible miners and their survivors and to cover costs of program administration. The Trust Fund is permitted to borrow from the general fund any amounts necessary to make authorized expenditures if excise tax receipts do not provide sufficient funding. Reduced rates of excise tax apply after the earlier of December 31, 2013 or the date on which the Black Lung Disability Trust Fund has repaid, with interest, all amounts borrowed from the general fund of the Treasury. The President’s Budget proposes that the current excise tax rate should continue to apply beyond 2013 until all amounts borrowed from the general fund of the Treasury have been repaid with interest. After repayment, the reduced excise tax rates of $0.50 per ton for coal from underground mines and $0.25 per ton for coal from surface mines would apply (aggregate tax per ton capped at 2 percent of the amount sold by the producer). The bill would enact the President’s proposal. This proposal is estimated to raise $1.287 billion over 10 years.
Carbon audit of the tax code. The bill directs the Secretary of the Treasury to request that the National Academy of Sciences undertake a comprehensive review of the tax code to identify the types of specific tax provisions that have the largest effects on carbon and other greenhouse gas emissions and to estimate the magnitude of those effects. This proposal has no revenue effect.
II. TRANSPORTATION AND DOMESTIC FUEL SECURITYCreates a new tax credit for cellulosic biofuels. The bill would create a new $1.01 per gallon tax credit for the production of cellulosic biofuels. This tax credit will be available through 2015. This proposal is estimated to cost $1.145 billion over ten years. Expansion of allowance for property to produce cellulosic alcohol. Under current law, taxpayers are allowed to immediately write off 50% of the cost of facilities that produce cellulosic ethanol if such facilities are placed in service before January 1, 2013. Consistent with other provisions in the bill that seek to be technology neutral, the bill would allow this write off to be 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 for one year (through December 31, 2009) the $1.00 per gallon production tax credits for biodiesel and the small biodiesel producer credit of 10 cents per gallon. The bill also extends for one year (through December 31, 2009) 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. The bill also clarifies that the $1 per gallon production credit for renewable diesel is limited to diesel fuel that is produced solely from biomass. Diesel fuel that is created by co-processing biomass with other feedstocks (e.g., petroleum) will be eligible for the 50 cent per gallon tax credit for alternative fuels. This proposal is estimated to cost $456 million over 10 years.
Reduces and modifies the ethanol tax credit. The bill reduces the current-law ethanol tax credit by more than 10% from 51 cents per gallon to 45 cents per gallon. In addition to this change, the bill would also limit the extent to which denaturants (i.e., chemicals added to ethanol and other alcohol fuels to make them undrinkable) may be counted in calculating the available credit. This proposal is estimated to raise $1.327 billion over 10 years.
Plug-in electric drive vehicle credit. The bill establishes a new credit for each qualified plug-in electric drive vehicle placed in service during each taxable year by a taxpayer. The base amount of the credit is $3,000. If the qualified vehicle draws propulsion from a battery with at least 5 kilowatt hours of capacity, the credit amount is increased by $200, plus another $200 for each kilowatt hour of battery capacity in excess of 5 kilowatt hours up to 15 kilowatt hours. Taxpayers may claim the full amount of the allowable credit up to the end of the first calendar quarter after the quarter in which the manufacturer records 60,000 sales. The credit is reduced in following calendar quarters. The credit is available against the alternative minimum tax (AMT). This proposal is estimated to cost $1.056 billion over 10 years.
Incentives for idling reduction units and advanced insulation for heavy trucks. The bill provides an exemption from the heavy vehicle excise tax for the cost of idling reduction units, such as auxiliary power units (APUs), which are designed to eliminate the need for truck engine idling (e.g., to provide heating, air conditioning, or electricity) at vehicle rest stops or other temporary parking locations. The bill would also exempt the installation of advanced insulation, which can reduce the need for energy consumption by transportation vehicles carrying refrigerated cargo. Both of these exemptions are intended to reduce carbon emissions in the transportation sector. This proposal is estimated to cost $96 million over 10 years.
Restructuring of New York Liberty Zone tax credits. The bill would implement a proposal included in the President’s FY 2009 Budget to provide the City of New York and the State of New York with tax credits for expenditures made for transportation infrastructure projects connecting with the New York Liberty Zone. This proposal is estimated to cost $1.117 billion over 10 years.
Fringe benefit for bicycle commuters. The bill allows employers to provide employees that commute to work using a bicycle limited fringe benefits to offset the costs of such commuting (e.g., bicycle storage). This proposal is estimated to cost $10 million over 10 years.
Extension and increase of alternative refueling stations tax credit. The bill increases the 30% alternative refueling property credit (capped at $30,000) to 50% (capped at $50,000). The credit provides a tax credit to businesses (e.g., gas stations) that install alternative fuel pumps, such as fuel pumps that dispense E85 fuel. The bill also extends this credit through the end of 2010. This proposal is estimated to cost $156 million over ten years.
Comprehensive study of biofuels. The bill directs the Secretary of the Treasury, in consultation with the Secretary of Agriculture and the Secretary of Energy and the Administrator of the Environmental Protection Agency, to request that the National Academy of Sciences produce an analysis of current scientific findings relating to the future production of biofuels and the domestic effects of a dramatic increase in the production of biofuels. This proposal has no revenue effect.
III. ENERGY CONSERVATION AND EFFICIENCY
Qualified Energy Conservation Bonds. The bill creates a new category of tax credit bonds to finance State and local government programs and initiatives designed to reduce greenhouse gas emissions. There is a national limitation of $3 billion which is allocated to States, municipalities and tribal governments. This proposal is estimated to cost $1.027 billion over 10 years.
Extension and modification of credit for energy-efficiency improvements to existing homes. The bill extends the tax credits for energy-efficient existing homes for one year (through December 31, 2008) and includes energy-efficient biomass fuel stoves as a new class of energy-efficient property eligible for a consumer tax credit of $300. This proposal is estimated to cost $1.061 billion over 10 years.
Extension of energy-efficient commercial buildings. The bill extends the energy-efficient commercial buildings deduction for five years (through December 31, 2013). This proposal is estimated to cost $891 million over 10 years.
Modification and extension of energy-efficient appliance credit. The bill would modify the existing energy-efficient appliance credit and extend this credit for three years (through the end of 2010). This proposal is estimated to cost $323 million over 10 years.
Accelerated depreciation for smart meters and smart grid systems. The bill would provide accelerated depreciation for smart electric meters and smart electric grid systems. Under current law, taxpayers are generally able to recover the cost of this property over the course of 20 years. The bill would cut the cost recovery time in half by allowing taxpayers to recover the cost of this property over a 10-year period. This proposal is estimated to cost $921 million over 10 years.
Extension and modification of qualified green building and sustainable design project bond. The bill would extend the authority to issue qualified green building and sustainable design project bonds through the end of 2012. Authority to issues these bonds is currently set to expire on September 30, 2009. The bill would also clarify the application of the reserve account rules to multiple bond issuances. This proposal is estimated to cost $45 million over 10 years.
EXTENSION OF TEMPORARY TAX PROVISIONS
I. EXTENDERS PRIMARILY AFFECTING INDIVIDUALS
Extension of the deduction of State and local general sales taxes. The bill extends for one year (through 2008) the election to take an itemized deduction for State and local general sales taxes in lieu of the itemized deduction permitted for State and local income taxes. This proposal is estimated to cost $1.742 billion over 10 years.
Extension of above-the-line deduction for qualified tuition and related expenses. The bill extends the above-the-line tax deduction for qualified education expenses for one year (through 2008). For tax year 2007, the maximum deduction was $4,000 for taxpayers with AGI of $65,000 or less ($130,000 for joint returns) or $2,000 for taxpayers with AGI of $80,000 or less ($160,000 for joint returns). This proposal is estimated to cost $2.603 billion over 10 years.
Extension of special rules for regulated investment companies. The bill would for one year (through 2008) extend the tax treatment of interest-related dividends, short-term capital gain dividends, and other special rules applicable to foreign shareholders that invest in regulated nvestment companies. This proposal is estimated to cost $81 million over 10 years.
Extension of provision encouraging contributions of capital gain real property made for conservation purposes. The bill would extend for one year (through 2008) the increased contribution limits and carryforward period for amounts in excess of these limits for contributions of appreciated real property (including partial interests in real property) for conservation purposes. This proposal is estimated to cost $54 million over 10 years.
Extension of tax-free distributions from individual retirement plans for charitable purposes. The bill would extend for one year (through 2008) the provision that permits tax-free charitable contributions from an Individual Retirement Account (IRA) of up to $100,000 per taxpayer, per taxable year. This proposal is estimated to cost $465 million over 10 years.
Extension of above-the-line deduction for certain expenses of elementary and secondary school teachers. The bill extends for one year the $250 above-the-line tax deduction for teachers and other school professionals for expenses paid or incurred for books, supplies (other than nonathletic supplies for courses of instruction in health or physical education, computer equipment (including related software and services), other equipment, and supplementary materials used by the educator in the classroom for one year (i.e., to expenses paid or incurred in 2008). This proposal is estimated to cost $204 million over 10 years.
Extension of election to include combat pay in earned income for purposes of the earned income credit. The bill extends for one year (through 2008) the special rules that allow members of the armed services to include their combat pay in their earned income in order to qualify for the earned income tax credit. This proposal is estimated to cost $20 million over 10 years.
Extension of special rules for qualified mortgage bonds for veterans. The bill extends for one year (through 2008) the special rules that allows veterans to qualify for State-operated, tax-exempt mortgage revenue bond programs to provide lower-income individuals with access to mortgages with lower interest costs without regard to first-time home buyer requirement. This proposal is estimated to cost $158 million over 10 years.
Extension of special rules for distributions from retirement plans to individuals called to active duty. The bill extends for one year (through 2008) special rules that permit active duty reservists to make penalty-free withdrawals from retirement plans. This proposal is estimated to cost less than $500,000 over 10 years.
Reinstate the exclusion of amounts received under qualified group legal services plans. The bill reinstates for one year (through 2008) a provision that allows individuals to exclude certain amounts received under qualified group legal services plans from income. This proposal is estimated to cost $40 million over 10 years.
II. EXTENDERS PRIMARILY AFFECTING BUSINESSESExtension of R&D credit. The bill extends the research credit for one year (through 2008). This proposal is estimated to cost $8.761 billion over 10 years.
Extension of Indian employment credit. The bill extends for one year (through 2008) the business tax credit for employers of qualified employees that work and live on or near an Indian reservation. The credit is for wages and health insurance costs paid to qualified employees (up to $20,000) in the current year over the amount paid in 1993. Wages for which the work opportunity tax credit is available are not qualified wages for the Indian employment tax credit. This proposal is estimated to cost $59 million over 10 years.
Extension of New Markets Tax Credit. The bill extends for one year (through 2009) the new markets tax credit, permitting a $3.5 billion maximum annual amount of qualified equity investments. This proposal is estimated to cost $1.315 billion over 10 years.
Extension of railroad track maintenance credit. The bill extends for one year (through 2008) the railroad track maintenance credit. The railroad track maintenance credit provides Class II and Class III railroads (e.g., short-line railroads) with a tax credit equal to 50 percent of gross expenditures for maintaining railroad tracks that they own or lease. This proposal is estimated to cost $165 million over 10 years.
Extension of 15-year straight-line cost recovery for qualified leasehold improvements and qualified restaurant improvements. The bill would extend for one year (through 2008) the special 15-year cost recovery period for certain leasehold and qualified restaurant improvements. Absent an extension of this provision, the cost recovery period for these facilities would be 39 years. This proposal is estimated to cost $5.399 billion over 10 years.
Extension of 7-year straight-line cost recovery period for motorsports entertainment complexes. The bill would extend for one year (through 2008) the special 7-year cost recovery period for property used for land improvement and support facilities at motorsports entertainment complexes. Absent an extension of this provision, the cost recovery period for these facilities would be 15 years. This proposal is estimated to cost $48 million over 10 years.
Extension of accelerated depreciation for business property on an Indian reservation. The bill would extend for one year (through 2008) the placed-in-service date for the special depreciation recovery period for qualified Indian reservation property. In general, qualified Indian reservation property is property used predominantly in the active conduct of a trade or business within an Indian reservation, which is not used outside the reservation on a regular basis and was not acquired from a related person. _ This proposal is estimated to cost $152 million over 10 years.
Extension of expensing of “brownfields” environmental remediation costs. The bill would extend for one year (through 2008) the provision that allows for the expensing of costs associated with cleaning up hazardous (“brownfield”) sites. This proposal is estimated to cost $178 million over 10 years.
Extension of deduction allowable with respect to income attributable to domestic production activities in Puerto Rico. The bill would extend for one year (through 2008) the provision extending the section 199 domestic production activities deduction to activities in Puerto Rico. This proposal is estimated to cost $116 million over 10 years.
Extension of special tax treatment of certain payments to controlling exempt organizations. The bill would extend for one year (through 2008) the special rules for interest, rents, royalties and annuities received by a tax exempt entity from a controlled entity. This proposal is estimated to cost $35 million over 10 years.
Reauthorization of Qualified Zone Academy Bonds (QZABs). The bill allows an additional $400,000,000 of QZAB issuing authority to State and local governments, which can be used to finance renovations, equipment purchases, developing course material, and training teachers and personnel at a qualified zone academy. In general, a qualified zone academy is any public school (or academic program within a public school) below college level that is located in an empowerment zone or enterprise community and is designed to cooperate with businesses to enhance the academic curriculum and increase graduation and employment rates. QZABs are a form of tax credit bonds which offer the holder a Federal tax credit instead of interest. The bill would improve the marketability of these bonds by modifying the current-law arbitrage restrictions. This proposal is estimated to cost $202 million over 10 years.
Extension of tax incentives for investment in the District of Columbia. The bill extends the designation of certain economically depressed census tracts within the District of Columbia as the District of Columbia Enterprise Zone. Businesses and individual residents within this enterprise zone are eligible for special tax incentives. The bill would also extend the $5,000 first-time homebuyer credit for the District of Columbia. The bill would extend both of these provisions for one year (through 2008). This proposal is estimated to cost $129 million over 10 years.
Extension of American Samoa economic development credit. The bill extends for one year (through 2008) the American Samoa economic development credit. In general, this credit provides certain domestic corporations operating in American Samoa with a possessions tax credit to offset their U.S. tax liability on income earned in American Samoa from active business operations, sales of assets used in a business, or certain investments in American Samoa. This proposal is estimated to cost $16 million over 10 years.
Extension of enhanced charitable deduction for contributions of food inventory. The bill would extend for one year (through 2008) the provision allowing businesses to claim an enhanced deduction for the contribution of food inventory. This proposal is estimated to cost $71 million over 10 years.
Enhanced charitable deduction for contributions of book inventories to public schools. The bill would extend for one year (through 2008) the provision allowing C corporations to claim an enhanced deduction for contributions of book inventory to public schools (kindergarten through grade 12). This proposal is estimated to cost $31 million over 10 years.
Extension of enhanced deduction for corporate contributions of computer equipment for educational purposes. The bill would extend for one year (through 2008) a provision that encourages businesses to contribute computer equipment and software to elementary, secondary, and post-secondary schools by allowing an enhanced deduction for such contributions. This proposal is estimated to cost $260 million over 10 years.
Extension of special rule for S corporations making charitable contributions of property. The bill would extend for one year (through 2008) the provision allowing S corporation shareholders to take into account their pro rata share of charitable deductions even if such deductions would exceed such shareholder’s adjusted basis in the S corporation. The bill would also make a technical correction clarifying the application of this provision. This proposal is estimated to cost $62 million over 10 years.
Extension of work opportunity tax credit for Hurricane Katrina employees. The bill would extend for one year (through 2008) the provision that expired in August of 2007 which allowed employers to claim the work opportunity tax credit for hiring employees who were affected by Hurricane Katrina. This proposal is estimated to cost $16 million over 10 years.
Extension of active financing exception. The bill extends the active financing exception from Subpart F of the tax code for one year (through 2009). This proposal is estimated to cost $3.970 billion over 10 years.
Extend look-through treatment of payments between related controlled foreign corporations. The bill extends the current law look-through treatment of payments between related controlled foreign corporations for one year (through 2009). This proposal is estimated to cost $611 million over 10 years.
Extend special expensing rules for certain film and television productions. The bill would extend the current law special expensing rules for U.S. film and television productions for one year (through 2009). This proposal is estimated to cost $10 million over 10 years.
III. OTHER EXTENDERSExtension of disclosures of certain tax return information. The bill would permanently extend the current-law terrorist activity disclosure provisions and the authority for purposes of coordination with the Department of Veterans Affairs. This proposal estimated to have no revenue effect.
Extension of authority for undercover operations. The bill would permanently extend the authorization for the IRS to engage in certain activities related to undercover operations, such as purchasing property, organizing business entities and use the proceeds from an undercover operation to pay additional expenses incurred in the undercover operation. This proposal is estimated to have a negligible revenue effect.
Extension of temporary increase in limit on cover over of run excise tax revenues to Puerto Rico and the Virgin islands. The bill extends for one year the provision providing for payment of $13.25 per gallon to cover over a $13.50 per proof gallon excise tax on distilled spirits produced in or imported into the United States. This proposal is estimated to cost $96 million over 10 years.
Extension of tax on failure to comply with mental health parity requirements applicable to group health plans. The bill extends on a prospective basis through the end of 2008 the $100 per day excise tax on group health plans that impose limits on mental health benefits that are not imposed on medical and surgical benefits. _This proposal is estimated to cost $25 million over 10 years._
ADDITIONAL TAX RELIEF
I. INDIVIDUAL TAX RELIEFAdditional standard deduction for real property taxes. The bill would provide an additional standard deduction for State and local real property taxes paid or accrued by taxpayers who claim the regular standard deduction. The maximum amount that may be claimed under this provision is $700 for joint filers and $350 for individuals. This proposal applies only for 2008. This proposal is estimated to cost $1.174 billion over 10 years.
Change in refundable child credit. The bill would increase the eligibility for the refundable child tax credit in 2008. The child tax credit is refundable to the extent of 15 percent of the taxpayer’s earned income in excess of approximately $12,050 as a result of inflation adjustments to the original floor of $10,000. The bill would reduce this floor to $8,500 for 2008. This proposal is estimated to cost $3.129 billion over 10 years.
Extension and modification of AMT credit allowance against incentive stock options (ISOs). Exercise of an ISO is a preference in the individual minimum tax. The amount of the preference is the difference between the market price on the date of exercise and the option price. In the past, many individuals exercised these options and there were dramatic reductions in the value of the stock after exercise. These individuals found that their minimum tax liability far exceeded any gain from the exercise of the option. The bill would waive past underpayments and would guarantee that minimum tax actually paid on the exercise of these options would be returned to the taxpayer. This proposal is estimated to cost $2.291 billion over 10 years.
II. BUSINESS-RELATED PROVISIONSUniform treatment of attorney-advanced expenses and court costs in contingency fee cases. Under current law, the tax treatment of attorney-advanced expenses and court costs in contingency fee cases depends on whether the contingency fee is structured as a “net” fee (i.e., the attorney’s compensation is based on a percentage of the gross recovery in the litigation net of the advanced litigation costs) or as a “gross” fee (i.e., the attorney’s compensation is based on a percantage of the gross recovery without regard to the amount of advanced litigation costs). Where the contingency fee is structured as a “gross” fee, the attorney is allowed to take a current deduction for advanced litigation costs as they are paid. Where the contingency fee is structured as a “net” fee, the attorney is not allowed to take a current deduction for advanced litigation costs. The bill would conform the tax treatment of “net” fee arrangements to the tax treatment of “gross” fee arrangements by allowing all advanced litigation costs to be deducted currently by the attorney. This proposal is estimated to cost $1.572 billion over 10 years.
Provisions related to film and television productions. Under current law, taxpayers have not been able to take full advantage of tax incentives that are intended to encourage film and television companies to produce films here in the United States rather than overseas because of a number of technical issues. The bill would fix these issues. This proposal is estimated to cost $468 million over 10 years.
Modification of penalty on understatement of taxpayer’s liability by tax return preparer. The bill would conform the penalty standards for return preparers with the standards for taxpayers. For undisclosed positions, the penalty standard for return preparers is reduced to substantial authority. For disclosed positions, a return preparer generally must have a reasonable basis for the position. For positions involving tax shelters and certain reportable transactions, a return preparer must have a reasonable belief that the position would more likely than not be sustained on the merits. This proposal is estimated to cost $22 million over ten years.
III. EXTENSION AND EXPANSION OF CERTAIN GO ZONE INCENTIVESExtension and Expansion of Certain Gulf Opportunity (GO) Zone Incentives. The bill would allow taxpayers in affected GO Zone areas to amend prior returns to take into account receipt of hurricane-related recovery grants, waive the start-construction deadline for certain property eligible for bonus deprecation in the GO Zone, and allow projects in two additional counties in Alabama to qualify for tax-exempt bond financing. This provision is estimated to cost $1.333 billion over ten years.
Current inclusion of deferred compensation paid by certain tax indifferent parties. *The bill would tax individuals on a current basis if such individuals receive deferred compensation from a tax indifferent party. Current law generally allows executives and other employees to defer paying tax on compensation until the compensation is paid. This deferral is made possible by rules that require the corporation paying the deferred compensation to defer the deduction that relates to this compensation until the compensation is paid. Matching the timing of the deduction with the income inclusion ensures that the executive is not able to achieve the tax benefits of deferred compensation at the expense of the Treasury. Instead, the corporation paying the compensation bears the expense of paying deferred compensation as a result of the deferred deduction. Where an individual is paid deferred compensation by a tax indifferent party (such as an offshore corporation in a tax haven jurisdiction), there is no offsetting deduction that can be deferred. As a result, individuals receiving deferred compensation from a tax indifferent party are able to achieve the tax benefits of deferred compensation at the expense of the Treasury. This proposal is estimated to raise $24.289 billion over 10 years.
Delay implementation of worldwide allocation of interest.* In 2004, Congress provided taxpayers with an election to take advantage of a liberalized rule for allocating interest expense between United States sources and foreign sources for purposes of determining a taxpayer’s foreign tax credit limitation. Although enacted in 2004, this election is not available to taxpayers until taxable years beginning after 2008. The bill would delay the phase-in of this new liberalized rule for ten years (for taxable years beginning after 2018). This proposal is estimated to raise $29.962 billion over 10 years.
Woody biomass refers to wood, branches, and other organic matter from trees and shrubs that can be used as a renewable substitute for fossil fuels in the production of both energy and products. Woody biomass can be an important component in a national renewable electricity standard (RES), a renewable energy feed-in tariff or any other efforts to reduce greenhouse gas emissions.
The Environmental and Energy Study Institute (EESI) invites you to learn about the direct linkage between scale and sustainability inherent in the biomass technologies. A good understanding of this relationship is essential for the development of biomass applications that are economically and environmentally sustainable. Compared to fossil fuel deposits, forests are incredibly dynamic systems. They develop within relatively short time periods (tens to thousands of years) and are subject to sudden and unpredictable disturbances from fires, windstorms, and pest infestations. Forests are also complex systems, created and maintained in a state of flux by the innumerable interactions of biota, soils, topography, hydrology, climate, and human communities; but when forest ecosystems are perceived as static pools of market commodities, the door is opened to unsustainable exploitation. Excessive harvesting and bad management practices result in reduced ecosystem services, biodiversity loss, soil degradation, and other environmental impacts. They also result in the “boom-and-bust” cycles that have traditionally characterized many timber markets, leading to economic stagnation and reduced quality-of-life in many rural, forest-dependent communities.
Sustainable, appropriately-scaled biomass applications, on the other hand, can reverse this trend, providing forest communities with stable jobs, a local source of renewable energy, and full participation in the stewardship of diverse forest ecosystems. There is a wide array of biomass technologies available across a large range of scales, including thermal applications (wood pellets, “combined heat and power” or CHP), electric generation (steam boilers, gasification, co-firing), liquid transportation fuels (cellulosic ethanol, methanol, renewable diesel), and biobased co-products. Determining what is appropriate in a given location is not a small task. It requires a comprehensive evaluation of many resources in addition to the forest itself, such as infrastructure, available labor, and market demand for energy and products. In addition to these quantifiable resources, local culture and public values will also help determine what is appropriate, as well as the management constraints necessary to ensure biodiverse landscapes, ecological functioning, clean water, recreational opportunities, and the other values and environmental services that society demands. These are the topics that will be addressed at the briefing.
Speakers for this event include:
- Mark Spurr, Legislative Director, International District Energy Association
- Charlie Niebling, Director of Public Affairs, New England Wood Pellet LLC
- Christopher Recchia, Executive Director, Biomass Energy Resource Center
- Lowell Rasmussen, Master of Planning, University of Minnesota Morris
- Marvin Burchfield, Vice President, Decker Energy International, Inc.
This briefing is open to the public and no reservations are required. Please feel free to forward this notice. For more information, contact Jetta Wong at 202-662-1885 (email@example.com) or Jesse Caputo at 202-662-1882 (firstname.lastname@example.org)
The Environmental and Energy Study Institute (EESI) invites you to a briefing on the critical role renewable energy electricity generation technologies can play in reducing US greenhouse gas (GHG) emissions. The climate challenge is urgent, with the UN Intergovernmental Panel on Climate Change (IPCC) finding that global GHG emissions need to peak and begin declining before 2015 if we are to avoid the most damaging effects of climate change.
Renewable energy can play a key role in meeting the challenge of climate change because it can respond to the short time frame needed to address climate mitigation, the United States has a large and widespread renewable energy resource base, and renewable energy is not subject to price volatility such as seen with natural gas. What has not been ever explored is what renewable energy can do if given a full-out effort by the United States. Other countries, in addressing the urgency of climate change, have made renewable energy a fundamental component of their climate strategies. As a result of these all-out efforts, we have seen explosive growth in jobs and renewable energy technology deployment in many countries, including Germany, Japan, Denmark and Spain.
The briefing will discuss key federal policies needed to allow renewable energies to achieve their full potential in climate change mitigation in the near and long-term. It features several renewable energy industry associations as well as a respondent from the public interest community:
- Randy Swisher, Executive Director, American Wind Energy Association
- Karl Gawell, Executive Director, Geothermal Energy Association
- Jeff Leahey, Senior Manager of Government and Legal Affairs, National Hydropower Association
- John Stanton, Executive Vice President, Solar Energy Industries Association
- John Coequyt, Senior Washington Representative, Global Warming and Energy Program, Sierra Club
According to the Congressional Research Service, more than 280 bills on energy efficiency and renewable energy have been introduced in the 110th Congress. At least seven economy-wide cap-and-trade proposals have been put forward in the same time frame. Senate Leader Harry Reid (D-NV) has said that the Lieberman-Warner Climate Security Act of 2007 (S. 2191) will be given Senate floor time on June 2. All three major Presidential candidates support mandatory national climate legislation. While putting a price on carbon through “cap-and-trade” or carbon tax legislation will help address GHG emissions, complementary policies to spur additional renewable energy and energy efficiency development will be needed to address the climate and energy challenges facing the United States.
This briefing is free and open to the public. No RSVP required. Please forward this notice. For more information, contact Fred Beck at email@example.com or 202-662-1892.