House Democrats plan to reintroduce a bill this week that would shift tax breaks from oil and gas to renewable energy sources.
The 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.
Under the bill, oil and gas companies would lose about $13.6 billion in domestic tax breaks and about $4.1 billion in tax breaks for some types of foreign income. The bill, the Renewable Energy and Energy Conservation Tax Act of 2008 (H.R. 5351), is similar to a bill that passed the House last year but was later blocked by Senate Republicans.
"With the price of oil above $100 a barrel, this Congress is again taking action to reduce our dependence on foreign oil and support the domestic production of renewable energy," said a statement from Speaker Nancy Pelosi, D-Calif., House Majority Leader Steny Hoyer, D-Md., and Ways and Means Committee Chairman Charles Rangel, D-N.Y.
The bill extends the renewable energy credit from Jan. 1, 2009 to Jan. 1, 2013, and adds energy derived from waves, tides, ocean currents, free-flowing rivers and canals, and other marine sources to the list of qualified renewable energy sources. It also extends solar energy property credits to Jan. 1, 2017 and fuel cell property credits to Dec. 31, 2016.
In addition the bill allows a base tax credit for plug-in hybrid vehicles of $4,000, with an additional $200 per kilowatt-hour for hybrid vehicles with a capacity above five kilowatt-hours. It phases out the hybrid tax credit a year after the number of hybrid vehicles sold totals 60,000, and authorizes a 50-cent-per-gallon credit for any qualified cellulosic alcohol fuel producer.
In addition, the bill repeals the 9 percent tax deduction for income attributable to the sale, exchange, or other disposition of oil, natural gas or any of their primary products, and extends the amortization period of geological and geophysical expenditures for major integrated oil companies from five to seven years.
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