Salazar wins major victories on renewable energy incentives

As the Senate continues consideration of H.R.6, the Renewable Fuels, Consumer Protection, and Energy Efficiency Act of 2007, the Senate Finance Committee approved June 19 a broad package of energy tax incentives, several of which were driven by Senator Salazar. The Finance Committee energy tax package helps further America's progress towards energy independence and includes two Salazar-authored renewable energy incentives which will benefit farmers, ranchers, small businesses and homeowners.

"Renewable energy is a major force for the future for America's energy independence," said Senator Salazar. "It strengthens our national security by reducing our dependence on oil resources in frequently hostile parts of the world. It increases our economic security by reducing costs for consumers and helping rural communities diversify their economies. And it increases our environmental security by reducing carbon emissions."

Sen. Salazar's two major renewable energy priorities:

--Wind Energy Investment Tax Credit: Included in the energy tax package is Senator Salazar's "Rural Wind Energy Development Act" (S.673), which provides a 30 percent tax credit (up to $4,000) on the purchase of small residential wind systems generating less than 100 kilowatts. A typical 10 kilowatt system, enough to power a home or family farm or ranch for a year, can cost as much as $50,000, pricing these systems out of most consumers' budgets. Senator Salazar's credit would be the first federal wind tax credit aimed at such small producers in more than 20 years; and

--Cellulosic Biofuels Tax Credit: Included in the energy tax package is legislation based upon Senator Salazar's bipartisan cellulosic biofuels tax credit bill (S.1618), introduced in mid-June. The energy tax package includes a tax credit of 50 cents per gallon for up to 60 million gallons of cellulosic fuel production in a taxable year to producers of biofuels derived from a cellulosic resource. Combined with the current 51-cents-per-gallon ethanol credit and 10-cents-per-gallon small producer credit, this would provide a $1.11-cents-per-gallon credit to producers of cellulosic biofuels. Cellulosic biofuels production will provide farmers and rural communities a new economic resource and has the potential to be an immediate "difference-maker" in America's effort to reduce its dependence on foreign oil, meaning the potential for immediate savings for consumers.

Overall, the energy tax incentives package covers a broad range of areas, many of which were supported or even championed by Senator Salazar, including:

--Improving America's Electricity Infrastructure and Renewable Electricity Production Capabilities, including extending the tax credit for owners or operators of renewable electricity producers and extending the existence of the Clean Renewable Energy Bonds program (which provides an investment tax credit for solar, fuel cells, and microturbines), both of which Sen. Salazar has consistently supported. It also includes Sen. Salazar's small wind tax credit (as detailed above), and an extension of the 30 percent investment tax credit of up to $4,000 for qualified solar energy property and fuel cell property, similar to bipartisan legislation introduced by Sens. Salazar and Smith--the Securing America's Energy Independence Act (S. 590);

--Carbon Mitigation Incentives to encourage the capture and disposal of carbon dioxide. Its provisions include accelerated tax depreciation for new dedicated pipelines used to transport CO2 from an industrial source to a geologic formation for permanent disposal, and tax credits on a per-ton basis for CO2 that is captured and transported from an industrial source for use in enhanced oil recovery or for permanent storage in a geologic formation. Senator Salazar has been a leader in the Senate on carbon sequestration, pushing for a full assessment of the Nation's ability to capture and sequester carbon emissions through his bipartisan National Carbon Dioxide Storage Capacity Assessment Act of 2007 (S. 731);

--Promoting Domestic Fuel Security with a new tax credit for the production of cellulosic biofuels (championed by Senator Salazar and detailed above), an extension of the biodiesel and renewable diesel production tax credits, and an extension of tax incentives for refinery expansion;

--Increasing Access to Advanced Technology Vehicles, such as plug-in hybrids, with a new $2,500 credit for each qualified plug-in vehicle placed in service during each taxable year by a taxpayer, and an extension of the advanced lean burn technology vehicle credit through 2012 (2016 for qualified fuel cell vehicles). These provisions are based on provisions of the DRIVE Act (S. 339), of which Senator Salazar is an original co-sponsor; and

--Enhancing Energy Conservation Efficiency in Homes and Buildings by extending the home energy efficiency improvement tax credit, the energy efficient new homes credit, and the energy efficient commercial buildings deduction. These provisions are based on provisions of the bipartisan EXTEND Act (S. 822), of which Senator Salazar is an original cosponsor.

Having been approved by the full Committee, this full package of energy tax incentives will now be submitted as an amendment to H.R.6. It is expected to be the final amendment added to the bill.