Senate Finance Committee Chairman Max Baucus, D-Mont., and House Ways and Means Committee Chairman Charles Rangel, D-N.Y., unveiled a $21 billion package of energy tax legislation that Congress will consider this year, although opposition is expected from the White House as the bill would raise taxes on major oil and gas producers.
The House is expected to vote this week on the package, known as the Clean Renewable Energy and Conservation Tax Act of 2007. It contains incentives to mitigate carbon emissions, promotes the production of alternative energy, supports the use of alternative vehicles, and encourages energy efficiency.
The legislation also provides long-term extensions of tax credits for renewable electricity. In addition, it includes tax credits for carbon capture and sequestration demonstration projects, as well as tax credits for production of biofuels, including cellulosic ethanol. The bill also provides tax credit bonds for renewable energy and conservation, costing $550 million over 10 years, as well as extensions of energy efficiency tax incentives.
To pay for the bill, the oil and gas industry would see the repeal of the Section 199 domestic manufacturing tax incentive for the top five integrated producers, while freezing the deduction at 6 percent for all others in the sector. The bill also tightens rules governing the payment of taxes by oil and gas producers on foreign income.
"Our country needs to make a big turn in terms of energy policy, and this tax package will help to steer the ship," said Baucus in a statement.
House Speaker Nancy Pelosi, D-Calif., also announced that the House and Senate had reached an agreement on a related package of energy policies and tax changes. The compromise, known as the Energy Independence and Security Act, includes provisions from two bills that have already passed in the House and another bill that has passed in both the House and Senate.
The act contains new fuel economy standards for cars and trucks, a requirement that utility companies generate 15 percent of their electricity from renewable sources by 2020, a tax credit for plug-in hybrid/electric vehicles, the repeal of about $13 billion in tax subsidies to the oil industry, and the extension of renewable energy tax credits.
