July 27,2005

Baucus Applauds Final Energy Package

Legislation Nears Final Passage

(WASHINGTON, D.C.) U.S. Senator Max Baucus praised the agreement of a comprehensiveenergy package that will lessen America’s reliance on foreign sources of energy, boostrenewable resources, and provide reliable energy for the nation. As a lead negotiator in the talks,Baucus played a lead role in crafting the final deal.

Baucus, ranking member of the Senate Finance Committee, worked with ChairmanGrassley to write the tax provisions in the legislation. Tax incentives in the bill will acceleratedomestic energy production, increase conservation efforts, and develop alternative sources ofenergy such as wind, solar, bio-mass, ethanol, and clean-coal technology.

“Energy is vital to our nation’s economy and security,” Baucus said. “Our country reliestoo heavily on unstable, expensive sources of energy. This tax package will provide affordableenergy for the country and lessen our dependence on foreign oil. Conservation efforts, improvedenergy efficiency, and expanded use of alternative fuels will be generously rewarded by these taxincentives.”

The energy tax plan also includes new incentives for energy efficient homes, alternativefuel vehicles, and developing fuel cell technology Baucus noted.“This energy tax package will help provide reliable, affordable energy for jobs, homes,and businesses,” Baucus said. “These incentives will create jobs and spur domestic energyproduction.”

Baucus also emphad the importance of the overall package. The bill contains newprograms and incentives aimed to promote alternative resources, like wind, solar and ethanol aswell as increasing the availability, efficiency and environmental performance of traditionalenergy resources, like coal, oil, and gas. The bill also promotes conservation and energyefficiency, and mandates new reliability standards for the nation’s electricity gird in and effort toprevent another large-scale blackout.

“This bill will conserve resources, make traditional means of energy more efficient, andcreate good-paying jobs,” Baucus said. “I am proud of the cooperative effort to get agreementon this important legislation.”

A brief summary of the Energy Tax Package is below and a technical description of theconference agreement is also attached.

Electricity Infrastructure

• Extending the Sec. 45 production tax credit for wind, biomass, geothermal, trashcombustion and small irrigation hydro through 2007.
• Clean Energy Bonds that will provide tax credit bond authority for electric cooperatives,tribes and municipal utilities to finance renewable energy facilities.
• A credit for the production of electricity from nuclear facilities.
• Tax incentives for clean coal facilities.
• 15-year depreciation for electricity transmission linesDomestic Fossil Fuel Security
• Credit for investment in coke manufacturing facilities.
• Expensing for refinery capacity investments.
• 2-year amortization for oil and gas exploration costs
• Reduce depreciation period for natural gas distribution pipelines from 20 years to 15years.

Conservation and Energy Efficiency

• Tax credit up to $2000 for the builder of an energy efficient home.
• Tax credit up to $500 for homeowners making significant efficiency improvements toexisting homes.
• 30% investment tax credits for fuel cell and solar equipment.
• Various tax credits for energy efficient appliances.Alternative Vehicles and Alternative Fuels Incentives
• Variable tax credits for purchasers of alternative fuel vehicles. Credit adjusteddepending on the fuel economy and incremental cost of the vehicle.
• $1000 tax credit for residential alternative fuel refueling stations; $30,000 tax credit forcommercial refueling stations.
• Extension of the biodiesel credit.