Environmental Law

Renewable Tax Credit Extensions Still Pending

By Dennis Pfaff and Kevin Livingston, Editors

A day after legislation was overwhelmingly passed by the U.S. Senate to extend federal tax credits for wind, solar and other renewable energy sources the House had yet to act and it appeared the chamber would take yet another new look at the issue.

If nothing is done, the credits would expire at the end of the year.

The Senate approved its estimated $18 billion measure on Tuesday. Shortly thereafter,  Rep. Charles B. Rangel, D-NY (pictured), chairman of the House Ways and Means Committee, introduced his own and different version of the bill. It was not certain when the House would tackle the measue, despite earlier reports, such as a dispatch from Bloomberg, that lawmakers would act on the matter Wednesday.

Some key elements of both bills appeared to be identical. For instance, each would renew tax incentives for wind for another year and would give an investment tax credit for solar projects a new eight-year lease on life. They would also extend incentives for other sources, such as biomass, geothermal and marine, although for slightly different periods of time.

But the House version was valued at somewhat less than the Senate bill, $16 billion as opposed to $18 billion. Rangel, in a statement earlier in the week, had criticized the Senate measure -- which curtailed some tax breaks for fossil fuels in order to pay for the renewable incentives -- for still not doing enough to pay for the tax breaks:

“Sadly, they did not live within their means, and their bill would add billions to the national deficit at a time when we can hardly afford it. The House will soon consider, and pass legislation providing the Senate with an opportunity to pass and help enact these tax incentives, fully offset by the provisions they have already blessed."

The Senate measure had also come in for criticism from some environmentalists, such as the Sierra Club, for giving some tax breaks to industries involved in liquid coal, tar sands and oil shale. But the Bloomberg story had suggested that extending an incentive for refineries that can handle fuels such as those from Canadian tar sands was critical to reaching a compromise allowing the measure to move forward. The House version appears to drop those provisions, a Sierra Club official told Climate Law Update on Wednesday.

It was not clear exactly when lawmakers would move on the legislation. On Wednesday, Rangel issued another statement saying that the new version would be up for a vote by the full House in "the very near future."

On Wednesday, Sen. Max Baucus, D-Mont., the chairman of the Senate Finance Committee, who spearheaded support for the Senate bill, prodded his House counterparts to move forward. In a statement, Baucus said:

“We know this bill can be a bipartisan solution for the entire Congress because it reflects bipartisan success here in the Senate with a majority of 93-2. This is something both parties on both sides of the Hill can agree on, and I’m calling on the House to cut through the noise, come together and swiftly pass this legislation to get help to businesses and families back home.” 

In addition, an industry group, the American Wind Energy Association, issued a call for its members to urge the House to approve the bill.

Efforts to extend the tax credits have been tied up in Congress for months. Lawmakers are expected to end their pre-election session of Congress on Friday.

--Dennis Pfaff of Thelen LLP

Photo: U.S.  Rep. Charles B. Rangel; Courtesy: Congressional Pictorial Directory 

Full post as published by Climate Law Update on September 24, 2008 (boomark / email).