Sunday, August 12, 2012

Senate Finance Moves Forward On Energy Tax Credit Extension

Just before the summer recess in Congress was declared, the Senate Finance Committee passed a measure including a one year extension of production tax credits for wind and geothermal energy projects, making the incentive applicable to projects breaking ground any time until the end of 2013. The credit is set to expire at the end of 2012 unless both houses of Congress pass the measure, cobbled together by Senate Finance chairman Max Baucus and ranking member Orin Hatch. Reported out of the Senate Finance Committee on a bipartisan vote of 19-5, the bill includes a total of $205 billion in tax cut extensions for individuals and businesses.

While Committee passage of the bill is welcomed by energy businesses, some renewable energy advocates mourn that it does not go far enough. “A temporary tax provision I don’t think provides enough incentive for capital investment, and that’s what our industry needs,” according to Associated General Contractors of America Senior Executive Director of Governmental Affairs Jeff Shoaf.

American Council of Engineering Companies Vice President of Governmental Affairs Steve Hall, says the tax credits are “absolutely essential” for the health of the renewable energy economy.

The fate of this legislation when Congress reconvenes after the summer break is still uncertain. Tax credit extensions are just the first step in comprehensive reform of the Internal Revenue Code, and all such legislation may well be pushed back on the Congressional calendar until after the November elections. Furthermore, should some sort of tax cut extender bill get passed when Congress comes back into session, there will be heated debate over, and revisions to, the contents of this bill before anything reaches the Oval Office for signature.

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