Senate Passes Grassley’s Renewable Energy Tax Package
WASHINGTON – Sen. Chuck Grassley, chairman of the Committee on Finance, today called Senate approval of broad renewable energy tax incentives a victory for Iowa’s economy and the nation’s green energy supplies.
“It makes sense to use the tax code to develop alternative energy,” Grassley said. “Cutting taxes is an effective way to encourage positive, environmentally conscious ways to produce electricity and fuel. This is a good, green energy tax package. Anyone who’s pumped gas latelywill appreciate alternative fuel incentives.”
The Senate today passed Grassley’s renewable energy tax incentives as part of his bipartisan Jumpstart Our Business Strength (JOBS) Act, which cuts taxes for U.S. factories and farms and is meant to head off more trade sanctions from Europe on those producers. Grassley’s energy tax incentive priorities passed today include:
An extension of the wind energy production tax credit until Jan. 1, 2007. Grassley authoredthe Wind Energy Incentives Act of 1993, which established the first-ever wind energy productiontax credit.
An income tax credit and excise credit for biodiesel fuel mixtures. These new incentiveswould encourage the production of biodiesel, a clean-burning alternative fuel made from domesticrenewable sources, such as soybean oil. The tax credit applies to biodiesel made from vegetableoil, animal fats, recycled oils, and other greases.
An extension of the tax credit for the production of electricity from biomass, organic materialfrom plants. The credit first became law in 1992. This bill expands the definition of biomass toinclude saw dust, tree trimmings, and agricultural byproducts.
An expansion of the definition of an eligible small ethanol producer so small cooperativeproducers of ethanol will receive the same tax benefits as large companies. It also clarifies that thetax credit can flow through to the patrons of the cooperatives.
Encouragement of the manufacture and use of super energy-efficient washing machines andrefrigerators with a tax credit for the production of those appliances.
New opportunities for energy production, a useful method of waste disposal and increasedfarm income by creating a production tax credit for electricity generated from agricultural animalwaste.
Tax incentives aimed at improving the energy efficiency of homes.A tax credit for the purchase of alternative motor vehicles, including electric cars, and anextension of the deduction for alternative vehicles, including hydrogen fuel-cell cars.
In addition, the Volumetric Ethanol Excise Tax Credit Act would become law. This proposalsubstantially overhauls the fuel excise tax system by ensuring that every gallon of gasoline orgasoline blended with ethanol contributes a full 18.4 cents to the Highway Trust Fund. These initialsteps begin restructuring tax incentives for ethanol so ethanol use would contribute to the HighwayTrust Fund instead of unrelated government programs.
“Investing in alternative forms of clean-burning energy is good for the environment, goodfor national security and energy independence, good for job creation and economic development,and good for taxpayers,” Grassley said. “I look forward to final congressional approval of thesebipartisan alternative energy tax incentives.”
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