The House advanced legislation yesterday that would renew billions of dollars in tax breaks for wind, solar, biomass, and other renewable energy sources, and extend a proposed new tax credit for biofuels derived from sources other than corn.
The “Energy and Tax Extenders Act of 2008” was approved by the Ways and Means Committee by a vote of 25-12. The total package, which also includes tax breaks for education and business expenses and expands the refundable child tax credit, is worth $54 billion. The bill also provides tax incentives for businesses to invest in new technology by extending the research and development credit.
“The legislation would … make an important investment in renewable energy and energy conservation to reduce our dependency on foreign oil,” said Ways and Means Chairman Charles Rangel (D-N.Y.) in a statement after yesterday’s markup. “This is a strong, timely, and fiscally responsible tax relief package.”
Here are the renewable energy goodies in the legislation:
- A six-year extension of the investment tax credit for solar energy
- Three-year extensions of the production tax credit for biomass, geothermal, hydropower, landfill gas, and solid waste
- A one-year extension of the production tax credit for wind energy
- Incentives for the production of renewable fuels such as biodiesel and cellulosic biofuels
- Incentives for companies that produce energy-efficient products like plug-in hybrids
- Incentives for energy conservation in both commercial and residential buildings
- Tax credit bonds providing state and local governments with funds to make energy conservation investments in public infrastructure and invest in research
There are also some incentives in there for coal — the package expands tax breaks for investment in coal-gasification projects, as well as tax incentives for coal electricity plants that capture and sequester carbon dioxide. You can read the full text of the bill here (PDF).
Speaker Nancy Pelosi (D-Calif.) has said she wants the House to vote on the legislation next week, before their Memorial Day recess. The bill is expected to pass there, but will face a tougher challenge in the Senate. These extended tax breaks are paid for in large part through the closure of other tax loopholes, which is likely to raise the ire of Senate Republicans and the president, who are quite happy leaving those loopholes open.