All Eyes on Corporate Tax Bill for Renewable Energy

All Eyes on Corporate Tax Bill for Renewable Energy

by Jesse Broehl, Editor, SolarAccess.com

"Surprises are always possible, with the Energy Bill perhaps more than anywhere, but prospects are dim this year."

- SEIA

Washington, D.C. - July 15, 2004 [SolarAccess.com] Prospects are dim this year for passage of some key renewable energy legislation in the United States. At least, that's the general feeling from both the Solar Energy Industries Association (SEIA) and the American Wind Energy Association (AWEA), the main groups lobbying on Capitol Hill for renewable energy.

Many industry and policy sources view passage of the corporate tax bill as the best, and perhaps only, vehicle to get some important legislation for renewable energy passed.

The underlying corporate tax bill is intended to bring about the lifting of European Union trade sanctions on some U.S. products (now at 9 percent) by repealing a current export tax break that has been ruled a violation of World Trade Organization free trade rules.

Four weeks ago, the U.S. House of Representatives passed their version (H.R. 4520) which contains an extension of the production tax credit (PTC) - an item crucial to pick up the stalled U.S. wind industry.

Roughly seven weeks ago, the U.S. Senate passed a similar bill (S. 1637) which is the current vehicle for a 15 percent residential solar tax credit, as well as a means to extend the PTC and expanding it to solar, geothermal, and some forms of biomass.

The problem is, Congress has yet to start up the next stage of the process, called the conference committee.

In the conference committee process, select members of the House and Senate negotiate differences between competing versions of legislation to arrive at one bill that must be passed again by both houses. There is never a fixed schedule for the beginning or end of a conference committee. The first step in the process is to name conferees. At the moment, neither the House nor the Senate has yet named members to serve as conferees on the corporate tax bill.

According to AWEA, the delay in naming conferees stems from behind-closed-door negotiations between Republican and Democratic Congressional leaders over the ground rules for how the conference will progress. All year long Democrats have complained that they have been excluded from playing a decision-making role during crucial conferences on numerous bills.

While a renewed spirit of bipartisanship may burst forth from Congress in a flury of cooperative lawmaking -- it's highly unlikely. So in the meantime, the longer legislators stall on creating the conference committee, the less time there will be for Congress to iron out the differences between the versions and pass the corporate tax bill before legislative sessions are over for the year.

Senate Finance Committee Chairman Chuck Grassley (R-Iowa) said that even if conferees were named this week, July would not offer enough time to complete conference negotiations on the bill containing the energy tax credits before the summer recess (Congress begins a six-week summer break in late July and returns to work on September 7). Sen. Grassley has predicted that the bill will be completed before Congress adjourns for the November elections.

"The general feel on the Hill and in the DC publications is that movement is unlikely until after August at the earliest, at which point there will be very few legislative days to deal with a number of pressing bills (including most appropriations measures)," SEIA said in a recent statement. "Surprises are always possible, with the Energy Bill perhaps more than anywhere, but prospects are dim this year."

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