The Senate failed to pass an amendment that would have extended a set of expiring tax credits for wind energy, biofuels, energy efficient homes and other tax breaks.
Like what you see? Click here to sign up for Accounting Today's daily newsletter to get the latest news and behind the scenes commentary you won't find anywhere else.
The wind energy production tax credit and the other tax breaks are set to expire at the end of the year. The amendment, introduced by Sen. Michael Bennet, D-Colo., needed 60 votes to pass in the Senate, but failed by a vote of 49-49 on Tuesday. However, a new bill was introduced Thursday in an attempt to extend the tax credit again.
“I’m disappointed that the wind energy PTC extension did not move forward today,” Bennet said in a statement Tuesday. “I have visited with Colorado companies and met with Colorado workers who stand to suffer a huge economic blow if Congress can’t get its act together and extend this critical tax credit. With thousands of high-quality jobs at stake across our state and the entire country, we need to provide certainty for this industry, so we do not derail its current growth. Standing on its own, this tax credit has bipartisan support, and Colorado companies are counting on us to get it across the finish line. I will continue the fight and look for the next opportunity to extend the wind energy tax credit. We cannot afford to delay. Congress needs to act now before more Americans lose their jobs.”
A spokesman told the Huffington Post that Bennet plans to re-introduce an extension of the wind energy tax credit later this year before it expires. On Thursday, Bennet, along with several other senators introduced a biparrtisan bill that would do just that.
Senators Chuck Grassley, R-Iowa, Mark Udall, D-Colo., Scott Brown, D-Mass., Tom Harkin, D-Iowa, Dean Heller, R-Nev., Ron Wyden, D-Ore., and Bennet proposed a two-year extension of the wind energy production tax credit before it expires at the end of the year.
The bipartisan proposal would prevent a lapse in the credit. Without an extension, as many as 37,000 jobs nationwide could be lost. The senators hope to have the extension passed as quickly as possible in order to provide tax certainty for the renewable energy sector. The bill is entitled the American Energy and Job Promotion Act.
“Tax reform efforts might modify or address this incentive in the near future, but the jobs and opportunities provided by wind energy should not be abandoned in the meantime,” said Grassley in a statement. “And limiting the bill’s impact on the deficit can be addressed. Tax relief has succeeded in developing this clean, renewable and innovative energy source, and it ought to be continued with the degree of certainty that encourages continued investment. Unemployment remains high at 8.3 percent and energy costs are on the rise. Congress should renew the wind energy tax credit to develop clean energy alternatives and good paying jobs.”
Separately, Bennet introduced a bill Tuesday that would allow small businesses and startups to raise capital online and through social media. The so-called “crowdfunding” concept has attracted bipartisan support, and a bill that included similar provisions, along with other incentives for small business job creation, passed the House last week (see Congress Cooperates on Small Business Jobs Bills).
Bennet introduced a crowdfunding bill in the Senate on Tuesday, co-sponsored by Senators Jeff Merkley, D-Ore., Scott Brown, R-Mass., and Mary Landrieu, D-La. The Capital Raising Online While Deterring Fraud and Unethical Non-Disclosure (“CROWDFUND”) Act would allow small businesses and start-up companies to raise capital from individual investors online and through social media.
“These proposals will help inject capital into small businesses and startups in Colorado and throughout the country and harness potential small investors who otherwise would not have the infrastructure to invest in these smaller companies,” Bennet said in a statement. “We can help drive innovation, promote job growth and support small businesses, the backbone of our economy, in a way we have not seen before by bringing our securities regulations into the 21st century.”
Crowdfunding would work like the Web site Kickstarter, which relies on groups of relatively small dollar participants for their success. Kickstarter, which supports artists, disburses funds for a given project only once all necessary funding has been secured. In crowdfunding for business investment, a start-up venture would publish information on its proposed business and invite potential small investors to offer capital. Once pledges for a project reach a predetermined threshold, the deal would move forward.
However, the idea has also attracted some controversy, with some warning that small investors could be duped into making investments in dubious ventures.
Securities and Exchange Commission chair Mary Schapiro sent a letter to the Senate Banking Committee on Wednesday evening outlining her concerns with the legislation passed by the House, which would do away with a number of regulations that hinder smaller companies from going public.
“Too often, investors are the target of fraudulent schemes disguised as investment opportunities,” Schapiro wrote, according to the Washington Post. “As you know, if the balance is tipped to the point where investors are not confident that there are appropriate protections, investors will lose confidence in our markets, and capital formation will ultimately be made more difficult and expensive.”
The American Institute of CPAs has also warned about provisions in the legislation passed by the House that would create a category of smaller public companies known as “emerging growth companies” with up to $1 billion in annual revenue that would be exempted from Sarbanes-Oxley rules requiring audits of internal controls. Currently, under the Dodd-Frank Act of 2010, an exemption already exists for companies with a “public float” of under $75 million.