Wednesday, February 27, 2008

H.R.5351, The Renewable Energy and Energy Conservation Tax Act of 2008

Introduced February 12, 2008, by Representative Charlie Rangel and 35 co-sponsors the red hot H.R.5351 Renewable Energy and Energy Conservation Tax Act of 2008 is one of the most viewed bills before Congress this week.

The high profile bill has already drawn a veto threat and a similar bill was stymied by Senate Republicans last year. Oil company lobbyists are speaking out against it. Why? Wouldn't you think that a high profile renewable energy and energy conservation bill would be the kind of warm and fuzzy legislation legislators of both parties would support in an election year? Blogger Jumperhead at Greenbang cuts right to the chase. The bill is

(i)nteresting not only for the pat on the head it will deliver to clean, renewable energy and energy efficiency companies but interesting because it will finance that tax break by repealing other tax breaks to big oil and energy companies, reportedly worth $18 billion.
UPDATE: Howard Beale at Fired UP! Missouri notes that
In his last bid for re-election, Rep. Roy Blunt accepted more than $230,000 from PACs and individuals involved in the Oil and Energy Industries.
Guess who is leading the charge against H.R. 5351? Roy's argument is that Rangel's bill will raise taxes on gasoline making energy more expensive. How? By stripping obscenely profitable oil companies of their existing special tax breaks? After all the oil companies are extraordinarily profitable. Roy never says why the oil companies should continue to get special tax breaks, but I think about $230,000 good reasons for his opposition can be found in his campaign war chest. Thanks Howard for connecting the dots.

More after the break.

The official summary says the bill
Amends Internal Revenue Code provisions relating to renewable energy sources and energy conservation. Extends: (1) the tax credit for production of electricity from renewable resources through 2011; (2) th more...e energy tax credit for solar energy and fuel cell property through 2016; (3) the special rule for treatment of gain from electronic transmission transactions by certain electric utilities through 2009; (4) the tax credit for residential energy efficient property expenditures through 2014; (5) the tax credit for alternative fuel vehicle refueling property expenditures through 2010; (6) the tax credit for biodiesel and renewable diesel used as fuel through 2010; (7) the tax credit for nonbusiness energy property expenditures through 2009; and (8) the tax deduction for energy efficient commercial buildings through 2013. Allows new tax credits for: (1) investment in new clean renewable energy bonds and qualified energy conservation bonds; and (2) the production of plug-in hybrid motor vehicles, cellulosic alcohol fuel, and electricity from marine and hydrokinetic renewable energy sources. Revises the definition of "passenger automobile" for purposes of the limitation on depreciation deductions. Allows a tax exclusion for bicycle commuting reimbursements. Revises certain tax incentives for investment in the New York Liberty Zone. Revises tax credit amounts for certain energy efficient household appliances produced after 2007. Allows a five-year recovery period for the depreciation of qualified energy management devices. Places limits on the tax deduction for income attributable to the domestic production of oil, natural gas, and any related products. Revises tax rules relating to foreign oil and gas extraction income and foreign produced fuel used or sold outside the United States.
WebCPA reports that
(t)he bill would transfer about $18 billion in tax breaks over 10 years from oil and gas producers to provide tax incentives for hybrid cars, and energy-efficient homes, appliances and buildings. The bill would also extend tax credits that are due to expire at the end of the year for wind, solar and other forms of renewable energy.
According to CQ Politics republicans and industry lobbyists are screaming that depriving oil sheiks of their tax breaks will drive up prices.
American Petroleum Institute tax lobbyist Mark Kibbe said he couldn't comment directly about prices because of antitrust considerations, but he said any new costs must be absorbed.

“They have to go somewhere,” he said. “They either end up in the price of the product, in reduced returns for shareholders, decreased income for employees.”
The White House has issued a formal veto threat. Dana Chasin of OMBWatch reports the official threat makes the interesting argument that "Industries should be taxed on a level playing field, and that field should be leveled by lowering rates, not by raising them." Does that mean the Administration would support simply eliminating the 18 Billion dollar subsidy going to the oil companies to level the playing field? How about giving 18 billion in tax incentives to renewable energy? Wouldn't that be lowering taxes? What about PayGo? You know, the idea that Congress needs to pay for what it does in some fashion other than merely borrowing from the Chinese. Why doesn't some intrepid reporter ask Dick Cheney?