September 11,2008

Baucus, Grassley Offer Tax Incentives for Clean Energy, Homegrown Jobs

Finance leaders seek to extend wind, solar, other incentives to secure America's energy, economic future

Washington, DC – Senate Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Member Chuck Grassley (R-Iowa) today unveiled energy tax legislation that they intend to bring to the Senate for consideration this month. The Finance tax measures seek to reduce America's dependence on foreign oil and create good-paying, homegrown, clean energy jobs by providing credits and incentives to facilitate independent energy solutions. These include the production and use of wind and solar energy, biofuels, and carbon sequestration technologies. Provisions in the bill improve transportation and domestic fuel security, as well as conservation and energy efficiency. The cost of the package is offset in part with reductions in tax breaks for major oil and gas companies. The tax offsets in the package are used entirely for tax relief.

"Congress needs to put aside its differences and move this country toward new forms and sources of energy. We know this bill can be a bipartisan solution for the entire Senate, because it reflects bipartisan success here on the tax-writing committee. This bill has the right tax policy to create thousands of jobs, jump-start alternative energy solutions and finally move America away from our dependence on foreign oil," Baucus said. "Senators who support good-paying jobs, energy independence, and America's working families can and should support this bill."

"This energy tax package builds on the ground work laid by the Senate tax-writing committee to establish the vibrant alternative and renewable energy industry we have today and takes those incentives to the next level in order to meet the need for a more stable and sustainable energy supply in America. This bill doesn’t go backwards on wind energy, like the House is trying to do again this year. It pushes forward on solar, biofuels, carbon sequestration technology and ethanol initiatives,”

Grassley said. “This tax package comes from the tax-writing committee led by Chairman Baucus, so it’s done right. It also reflects the principle that tax-related offsets should be used for tax relief not more spending. This package ought to be part of a balanced Senate energy plan that works for consumers and includes more domestic production of oil.”

Additional provisions in the bill include an increase in the nuclear production tax credit and extensions for alternative fuels credits. Key provisions in the bill include:

  • Long-term extensions of wind and solar energy tax credits
  • Consumer credit of up to $7,500 for plug-in electric vehicles
  • New credit for capture and storage of carbon dioxide
  • Extension of tax incentives for energy-efficiency including buildings, appliances and smart meters
  • Long-term extensions of credits for alternative transportation fuels
  • $2.5 billion in new credits for clean coal facilities
  • New tax incentive for smart meters, which provide real-time feedback on electricity use

The cost of the bill is offset in part by reducing the manufacturing deduction for the domestic manufacturing activities of the five largest oil and gas companies. As with other oil and gas incentives, the manufacturing deduction has been left intact for smaller independent domestic producers.

A full summary of the bill's provisions can be found in the printer-friendly version of the release.