Renewable Energy Tax Bill Advances In US House
US: May 16, 2008
WASHINGTON - Legislation that would renew billions of dollars in tax breaks
for solar, wind, biomass and and other renewable energy sources and extend a
proposed new tax credit for ethanol fuels not produced from corn advanced in
the US House of Representatives on Thursday.
The bill approved by the Ways and Means Committee by a vote of 25-12 would
extend about $54 billion in expiring tax breaks for renewable energy
sources, education and a number of business expenses including research and
development.
It would also extend federal tax deductions for state and local sales taxes.
Tax breaks for investment in coal gasification projects would also be
expanded under the legislation, which comes as oil hit a record just below
$127 a barrel this week and hovered above $124 a barrel on Thursday.
"This is a strong, timely and fiscally responsible tax relief package," Ways
and Means Committee Chairman Charles Rangel, a New York Democrat, said in a
statement, adding that it would reduce US dependence on foreign oil.
High prices at the gasoline pump with no relief in sight have become a major
issue in this year's presidential and congressional election campaigns.
The legislation would also give an extra three years for a $1.01 per gallon
tax credit for ethanol produced from grass and waste materials that was
included in a $289 billion farm bill approved on Thursday by Congress. The
Ways and Means legislation would provide for the tax credit through 2015,
while the farm bill allows for the new tax credit through 2012.
President George W. Bush opposes the farm bill, but it passed Congress by
enough votes to overturn a veto.
Record gasoline prices have encouraged the use of corn-based ethanol, which
enjoys generous tax breaks. About one-third of this year's corn crop will go
to ethanol producers, prompting livestock feeders and foodmakers to blame
the ethanol boom for driving up their costs.
CLOSING HEDGE FUND TAX LOOPHOLE
To help pay for the cost of extending those and other tax breaks, the bill
would close a tax loophole that allows hedge fund managers to defer taxes on
their pay by sheltering it in offshore tax havens. The bill also would raise
money by delaying for 10 years proposed rules affecting the way
multinational corporations account for interest expenses.
The legislation now goes to the House which could take it up as early as
next week.
The bill also provides $2 billion in bonds to help governments and power
companies to finance clean renewable energy projects.
The bill also would renew through the end of this year a program allowing
state and local governments to issue $400 million in bonds for updating
public school facilities.
It also extends tax breaks aimed at helping rebuild areas devastated by
Hurricane Katrina in 2005 and give New York City some tax credits for
transportation spending in the area destroyed by the Sept. 11.
( Editing by Philip Barbara)
Story by Donna Smith
REUTERS NEWS SERVICE
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