Slater for Congress

Tuesday, March 4, 2008

Renewable Energy and Energy Conservation Tax Act of 2008

On February 27, 2008, the House of Representatives passed the Renewable Energy and Energy Conservation Tax Act of 2008, H.R. 5351, which will end unnecessary subsidies to Big Oil companies and invest in clean, renewable energy and energy efficiency.

The bill will expand tax incentives for renewable electricity, energy and fuel, as well as for plug-in hybrid cars, and energy efficient homes, buildings, and appliances. These provisions will create hundreds of thousands of jobs. It will preserve existing jobs: a recent study showed that allowing the renewable energy incentives to expire would lead to about 116,000 jobs being lost in the wind and solar industries through the end of 2009.

Speaker Nancy Pelosi claims that "the bill is fiscally responsible – paying for these energy incentives by repealing unnecessary tax subsidies for large integrated oil companies. The big five oil companies recently reported record profits for 2007, with ExxonMobil earning $40.6 billion - the largest corporate profit in American history. While oil company profits have quadrupled, high energy prices continue to squeeze American families – gas prices have skyrocketed and home heating oil has jumped along with other household costs."

High energy prices continue to squeeze American families. Since August of 2008, the price of oil has increased about $25 per barrel to another new record high of $102 per barrel (2/27/08). Gas prices are up 75 cents from one year ago. Home heating oil costs have tripled for American families since 2001.

This legislation reduces our dependence on foreign oil, increase renewable electricity production, and encourage greater energy efficiency.

To uphold fiscal responsibility by paying for these renewable energy incentives, the bill includes narrowly targeted provisions repealing unnecessary tax subsidies and loopholes only for the large integrated oil companies.

Incentives:

The bill includes over $8 billion in long-term clean renewable energy tax incentives for electricity produced from renewable resources, including wind, solar, geothermal, biomass, hydropower, ocean tides, and landfill gas. The bill also includes $2 billion in new clean renewable energy bonds for electric cooperatives and public power providers to finance facilities that generate electricity from these renewable resources.
The bill helps working families reduce their fuel bills by providing between $4,000 and $6,000 in tax credits toward the purchase of fuel-efficient, plug-in hybrid vehicles
The bill helps State and local governments finance a variety of environmental conservation and efficiency programs by providing up to $3.6 billion in interest-free financing.
The bill provides tax incentives to help homeowners and businesses reduce their energy costs by investing in energy efficient property. The bill would encourage manufacturers to build affordable appliances that push the boundaries of efficiency and help finance more energy efficiency improvements to homes and commercial buildings.
The bill contains incentives to expand production of homegrown fuels, including creating a new production tax credit for cellulosic ethanol produced from domestic, non-food feedstocks such as switchgrass, corn stover, cereal straws, sugar cane, sawdust and paper pulp, as well an extension of the tax credits for biodiesel and renewable diesel. It also includes incentives to increase the number of E-85 pumps for consumers with flexfuel vehicles.

Uphold Fiscal Responsibility

The bill invests in Renewable Energy Without Adding to the Deficit. To pay for renewable energy incentives, the bill repeals $18 billion in unnecessary tax subsidies for big, multinational oil and gas companies.
Scaled-Back Provision Closing Manufacturing Tax Subsidy for Large Oil Companies. The bill includes a scaled-backed provision that would eliminate a subsidy in the 2004 international tax bill (H.R. 4520) for major integrated oil and gas companies. Small, independent oil and gas companies would continue to benefit from the deduction at the current rate.
Closes Foreign Tax Loophole for Large Oil Companies. To ensure that oil and gas companies are paying their fair share of taxes, the bill closes a tax loophole identified by the non-partisan Joint Committee on Taxation that allows big oil and gas companies operating overseas to game the system by understating their foreign oil and gas extraction income.
From Hummer to Hybrid. It also closes the “Hummer” Tax Loophole, fixing a serious mistake that currently encourages taxpayers to buy heavy, gas-guzzling luxury SUVs instead of lighter, fuel-efficient vehicles for business use. The provision would not negatively affect businesses that rely on SUVs for legitimate business purposes, such as farmers and ranchers.

Sources: DCCC, DNC, Nancy Pelosi, U.S. House of Representatives Speaker