Opportunities Overlooked
December 20, 2010
09:39 AM
During this week’s tax bill debate, Energy Committee Chairman Bingaman voiced disappointment over the absence of key incentives to facilitate the transition to an energy efficient economy. At the insistence of Republican negotiators, the bill eliminated major incentives (such as the Section 48C advanced energy manufacturing credit) and reduced others (such as the Section 25C home retrofit credit) that had been included in earlier packages. In a floor speech, Bingaman also questioned the bill’s excessively generous credit for ethanol while missing the opportunity to include reasonable, common-sense proposals (S. 3935) that he and Senator Snowe have developed.
Bingaman, who also chairs the Senate Finance Subcommittee on Energy, Natural Resources & Infrastructure, will hold hearings early in the next Congress to revisit these missed opportunities. He will continue to work with Senator Snowe, a top Republican on the Finance Committee, to advance these bipartisan priorities.
Floor Statement of Sen. Jeff Bingaman on H.R. 4853
Tax Incentives for Advanced Energy
Dec. 14, 2010
“Mr. President, yesterday the Senate voted on proceeding to the most significant revenue bill of the 111th Congress. As I explained when I came to the floor earlier today, this bill contains important provisions that will stimulate the economy. I strongly support extending tax cuts to the overwhelming majority of American families. But this bill goes further than that. It extends tax cuts to the very highest earners and adds a substantial estate tax cut. And it does so without offsets or a plan to address the deficit. The inclusion of those provisions will make it difficult for the next Congress to act in a responsible way to address our serious deficit situation. For those reasons, I voted against proceeding to the bill.
“While my vote was driven primarily by the bill’s fiscal recklessness, I am also disappointed by the inadequacy of its energy tax provisions. Aside from a one-year extension of the Section 1603 grant-in-lieu-of-credit program, which will offer some support to our renewable energy industries, every meaningful advanced energy incentive that was included in the package Senator Baucus offered on Dec. 4 has been stripped from the bill before us, or reduced to the point of near-ineffectiveness. These include key provisions to promote energy efficiency, clean technology manufacturing, energy independence and pollution reduction.
“Among its most disappointing provisions, this bill extends the Volumetric Ethanol Excise Tax Credit, or VEETC, for an additional year at its current rate of 45 cents per gallon. When we include the associated income tax deductions, this extension will cost American taxpayers about $6 billion. But the VEETC subsidizes production of a fuel whose consumption is already mandated by our Renewable Fuel Standard. The House was poised to reduce the credit to 36 cents, a level that I would support. Extending the credit at 45 cents a gallon costs $1 billion more – and that $1 billion could be far better spent funding other clean energy technologies that do not enjoy the market protection of the Renewable Fuel Standard. For instance, we could much better use the $1 billion for the Advanced Energy Project Credit, or Section 48C, which enables companies to establish, re-equip and expand factories in the U.S. to manufacture advanced energy technologies.
“Failing to enhance this bill’s energy provisions will ensure that the 111th Congress will be recorded as one that failed to maximize its potential in using the Tax Code to promote advanced energy priorities. To be sure, the American Recovery and Reinvestment Act included many significant tax innovations that promote clean renewable energy and energy efficiency. But since ARRA’s enactment at the very beginning of this Congress, the Senate has failed to consider any legislation that would build off those innovations. Time and again, energy tax legislation was pushed back, delayed and obstructed. Particularly galling is that this obstruction occurred in a year that saw the worst environmental disaster in the history of this nation, one that resulted from our overdependence on fossil fuels.
“But we still have an opportunity to turn things around before this Congress adjourns. And so I urge the Senate to consider the comprehensive package of commonsense provisions that Senator Snowe and I have offered as an amendment.
“Our Amendment, number 4783, is modeled on a standalone bill, the Advanced Energy Tax Incentives Act of 2010 (S. 3935), which Senator Snowe and I introduced in September. Our bipartisan package focuses on enhancing energy efficiency, deploying renewable energy and rebuilding our domestic manufacturing base. These incentives will make our businesses more dynamic and competitive, our homes more efficient, our energy supply more secure, and our skies and waters cleaner.
“Among other highlights, our amendment would enable home and business owners to defray upfront costs of investing in energy-saving technologies, including the introduction of performance-based tax credits for whole home retrofits. It would make $2.5 billion in tax credits available to attract manufacturers of technologies that harness clean renewable energy or enhance energy efficiency and establish a $1 billion tax credit program to enable American manufacturers to undertake energy-saving measures that advance their competitiveness. Our amendment would facilitate the growth of renewable electricity by creating a tax incentive for energy storage systems, which will enable utilities to deploy intermittent energy sources like wind and solar power while reducing energy demands during peak hours and contributing to an overall more reliable smart grid. And the amendment would retool the tax credit for carbon capture and storage (CCS) to give CCS projects greater certainty.
“Mr. President, we must continue to ensure that the Tax Code contains well-designed incentives that will help us transition to an energy efficient economy. The most significant revenue bill of the 111th Congress should include robust provisions that expand domestic clean energy manufacturing; help American businesses and families reduce their energy use and dependence on fossil fuels; and create thousands of jobs. I deeply regret that in considering the bill before us, it appears that the Senate is not prepared to give priority consideration to our amendment.
“I yield the floor.”
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