Three significant pieces of legislation moved forward on Capitol Hill yesterday.
A bill that would renew billions of dollars in tax breaks for the renewable energy industry was approved by the Ways and Means Committee of the House of Representatives by a vote of 25-12 and could be taken up by the full House as early as next week.
Tax incentives for solar, wind, biomass and other renewable energy sources are set to expire at the end of the year.
Congressional Democrats have been unsuccessful in recent attempt to extend these incentives, insisting that they be paid for by cutting back on incentives for the oil and gas industry. Senate Republicans, who want to protect the oil and gas industry, have been able to block these measures.
In the new bill, the tax credit extensions would be paid for by closing a loophole that allows hedge fund managers to defer taxes by sheltering money in offshore tax havens. Additional funds would also be raised by delaying for 10 years rules that would change the way multinational corporations account for interest expenses.
It’s unclear how Senate Republicans will respond to the new bill, should it clear the House, but the White House, not surprisingly, has expressed opposition to changes in the rules for hedge fund managers and multinational corporations.
In addition to extending $54 billion in expiring tax breaks for the renewable energy industry, the new bill also includes $2 billion in bonds to help local governments and power companies finance renewable energy projects.
The bill also extends by three years–from 2012 to 2015–a $1.01 per gallon tax credit for next generation (cellulosic) ethanol, produced from non-food sources. The Cellulosic Biofuel Credit is provided for up through 2012, as a result of the Farm Bill, which passed both houses of Congress yesterday.
The Farm Bill
The long-debated Farm Bill passed by a vote of 81 to 15 in the Senate and 318 to 106 in the House. The $289 billion bill provides funds over five years for commodity, rural development, nutrition, conservation and energy programs, and is expected to be vetoed by President Bush, although the bill has support to overturn a veto.
The farm bill creates the long-awaited Cellulosic Biofuel Credit of $1.01 per gallon, which is designed to push the biofuels market beyond corn-based ethanol to the next generation of ethanol, produced from grasses, woodchips and other non-food sources.
The bill also includes a reduction in the 51 cent Volumetric Ethanol Excise Tax Credit (VEETC) to 45 cents. The bill also extends the secondary ethanol tariff for two years, through 2010. The secondary ethanol tariff of 54 cents is not reduced. The biodiesel tax credit was not included in the bill.
The farm bill also includes $1 billion in funds for renewable energy programs and new feedstock production for bioenergy. This bill reauthorizes several programs, including the 2002 Farm Bill’s energy title. Programs include grants and loan guarantees for rural communities and farmers to install renewable energy and energy efficiency systems; feedstock diversification and production; and biomass research and development.
Several other important energy programs were also included in other titles of the bill:
- The Conservation Stewardship Program provides incentives for adopting, improving and maintaining sound conservation practices on land in agricultural production. The program will enroll just under 13 million acres each year (starting in 2009) through 2017, for a total of nearly 115 million acres. An additional $1.1 billion was provided for CSP for a total of $12 billion over 10 years.
- The bill funds and strengthens a range of conservation programs including the Wetlands Reserve, Grassland Reserve and Environmental Quality Incentives Programs. In total, the farm bill provides 5.2 billion in new budget authority for conservation.
- Funding for The National Organic Certification Cost-Share Program has been increased from $5 million in the last farm bill, to $22 million. The farm bill also supports the Organic Data Collection Initiative, which provides USDA and organic producers with national production and market data to effectively market their products.
- Expansion of the Farmers’ Market Promotion Program, first created in the 2002 farm bill, by providing $33 million over the next five years to continue our investment in promoting fresh, local foods.
Public Transportation Act of 2008
The House Committee on Transportation and Infrastructure approved H.R. 6052, the "Saving Energy Through Public Transportation Act of 2008," which attempts to encourage the growth of public transit in the U.S. The legislation provides support to public transportation agencies and increases incentives for commuters to choose transit options.
Representative James L. Oberstar, Chairman of the Committee, said, "This legislation authorizes $1.7 billion over two years for transit agencies nationwide to reduce fares and expand transit services to meet the needs of the growing number of transit commuters."
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