U.S. Senator Ken Salazar

Member: Finance, Agriculture, Energy, Ethics and Aging Committees

 

2300 15th Street, Suite 450 Denver, CO 80202 | 702 Hart Senate Building, Washington, D.C. 20510

 

 

For Immediate Release

Thursday, April 10, 2008

CONTACT:Stephanie Valencia – 202-494-8790
Cody Wertz – 303-350-0032

Sen. Salazar Hails Extension of Renewable Energy Production Incentives/ Passage is Good First Step to Provide Stability in Sector

 

WASHINGTON, DC – The United States Senate took another step toward extending renewable energy production and energy efficiency tax incentives today when it passed an amendment sponsored by Senator Maria Cantwell (D-WA) to the housing bill, by a vote of 88 to 8. The housing bill passed the Senate 87 to 12 earlier today. Senator Salazar, who is a member of the Senate Finance Committee, has long supported extending these incentives for one year to prevent a downturn in the renewable energy production sectors, prevent a lapse in tax law, create more jobs and help reduce our dependence on foreign oil.

According to the Denver Metro Economic Development Council, direct employment in renewable energy sector jobs in the Denver metro area surged from 5,760 in 2004 to 13,940 in 2007. The number of renewable energy companies in the seven county metro area, including Weld and Larimer counties exploded from 104 in 2004 to 1,010 in 2007.

The provision extends clean energy production incentives including:
• Renewable energy production tax credits,
• Solar energy and fuel cell investment tax credits, and
• Residential energy-efficient property credits.

In addition, the provision extends energy efficiency improvement tax credits for:
• Improvements to new and existing homes,
• Commercial buildings, and
• The purchase of energy-efficient appliances.

“In Colorado, and across America, renewable energy businesses and producers are making huge strides in providing cleaner, more efficient power from the wind, the sun, biological materials and more,” said Senator Salazar. “These businesses work in a technological frontier where there are many risks but where the rewards will serve the public and our nation for years to come. We owe it to them to ensure stability in their sector so that they can provide more jobs in our rural areas and help improve our economic, energy and national security – extension of these tax incentives will help do just that.”

Specifics on the amendment are included below.

Title I – Extension of Clean Energy Production Incentives

Extension and modification of renewable energy production tax credit (IRC Section 45).
• The provision extends the placed in service date for qualified facilities for one year (through 2009). The placed in service date applies for all qualified facilities except for qualified solar and Indian coal facilities.
• The provision adds marine and hydrokinetic renewable energy as a qualified energy resource and marine and hydrokinetic renewable energy facilities as qualified facilities.
• The proposal provides that electricity sold by a taxpayer to a regulated utility shall be considered to be sold to an unrelated person.

Extension and modification of solar energy and fuel cell investment tax credit (IRC Section 48).
• The provision extends the 30% credit for solar and fuel cell property and the 10% credit for stationary microturbines.
• The fuel cell credit cap of $500 for each 0.5 kilowatt of capacity is repealed.
• The provision makes the energy credit allowable against the alternative minimum tax.
• The restriction on public utility property being eligible for the credit is eliminated. This applies to periods after date of enactment, in taxable years ending after such date, under rules similar to the rules of section 48(m) of the Code (as in effect on the day before the enactment of the Revenue Reconciliation Act of 1990).

Extension and modification of the residential energy-efficient property credit (IRC Section 25D).
• The proposal would extend the credit for residential solar property for one year (through the end of 2009).
• The bill would also increase the annual credit cap (currently capped at $2,000) to $4,000.
• The bill also allows the credit to be used to offset alternative minimum tax (AMT).
• The provision is effective for expenditures made after December 31, 2007, for property placed in service prior to January 1, 2010.

Clean Renewable Energy Bonds (“CREBs”) (IRC Section 54).
• The proposal authorizes an additional $400 million of CREBs that may be issued and extends the authority to issue such bonds through 2009.
• This authorization will be subdivided into thirds: 1/3 will be available for qualifying projects of State/local/tribal governments; 1/3 for qualifying projects of public power providers (defined as a State utility with a service obligation, as such terms are defined in section 217 of the Federal Power Act (as in effect on the date of the enactment of this paragraph); and 1/3 for qualifying projects of electric cooperatives (defined as a mutual or cooperative electric company (described in section 501(c)(12) or section 1381(a)(2)(C)).

Extension of special rule to implement FERC restructuring policy (IRC section 451(i)).
The provision extends the treatment under the present-law deferral provision to sales or dispositions by a qualified electric utility prior to January 1, 2010.

Title II – Extension of Incentives to Improve Energy Efficiency

Extension and modification of credit for energy-efficiency improvements to existing homes (IRC section 25C).
• The provision extends the credit through December 31, 2009.
• The provision adds biomass fuel property to the list of qualified energy efficient building property eligible for a $300 credit.

Extension of energy-efficient commercial buildings (IRC section 179D).
The proposal extends the energy efficient commercial buildings deduction for property placed in service through December 31, 2009, and the deduction amount is increased to $2.25 per square foot ($0.75 in the case of subsystems).

Modification and extension of energy-efficient appliance credit (IRC section 45M).
The provision extends and modifies the energy efficient appliance credit, as modified below:

Extension of tax credit for energy efficient new homes (IRC section 45L).
The proposal extends the energy efficient new homes credit for two years, through
December 31, 2010, and permits the eligible contractor to claim the credit on a home built for personal use as a residence.

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