Washington (Platts)--25Sep2008

The tax committee chairman of the US House of Representatives introduced
Thursday a bill to extend federal tax credits to develop renewable energy.

Senate leaders said, however, that the House should take up the
Senate-passed legislation or risk allowing these credits to expire.

The Senate-passed bill is scheduled for a House vote on Thursday.

House Ways and Means Committee Chairman Charles Rangel, a New York
Democrat, offered the new bill (HR 7060) with $15 billion in tax credits for
renewable energy and $42 billion in businesses tax credits and revenue-raisers
to pay for the credits.

The business credits are extended by two years, a move Rangel said the
Senate wanted, but Senate Majority Leader Harry Reid, a Nevada Democrat, said
Thursday that the House instead should consider the bill the Senate passed
Tuesday in a 93-2 vote.

That bill pays for $17 billion in low-emission energy incentives,
partially pays for business credits and addresses the alternative minimum tax
without a budget offset.

Reid said the measure was a carefully crafted compromise that won support
of Senate Republicans who had opposed eight separate times other packages to
extend renewable tax credits.

The Senate package would carry House Republicans as well if it were
brought up for a vote. "It would pass overwhelmingly," Reid said. "It would be
a terrible shame to the American people that a small group of members of the
House of Representatives held up this extremely important package."

Tax credits for wind and solar power development expire December 31. Both
the Senate package and the House bill would extend investment tax credits
for commercial and residential solar power by eight years and lift the $2,000
cap on residential credits.

Both also would extend the production tax credit for wind by one year.

The Senate bill, however, would extend the credits for generating
facilities fueled by geothermal, biomass and other resources for two years
while the new House bill would extend the credit for these resources through
September 30, 2011. The House bill would also cap the PTC at 35% of the
present value for these facilities placed in service after 2009.

Revenue raisers in both bills include freezing, at 6%, oil and gas
companies' income deductions; preventing the understatement of foreign oil and
gas extraction income in determining foreign tax credits; and extending and
increasing the per-barrel tax for the oil spill liability trust fund.

Other revenue raisers would mandate basis reporting from securities
brokers, extend the federal unemployment tax through 2009 and close a tax
loophole for hedge fund managers that work for certain offshore corporations.

--Cathy Cash, cathy_cash@platts.com