Tax Incentives Proposals from the 110th Congress

S. 1370: Clean Energy Investment Assurance Act of 2007. This bill contains a variety of amendments to the Internal Revenue Code of 1986 intended to ensure investment and innovation in clean energy technologies. Among other provisions, it extends the renewable electricity production credit to those facilities which use zero-carbon emissions resources to produce electricity.

Sponsor: Sen. Maria Cantwell (D-WA) (3 Cosponsors)

S. 1508: Clean Energy Production Tax Incentives Act of 2007. This bill amends various provisions of the Internal Revenue Code of 1986 to promote investment in a variety of energy technologies through the creation, expansion and extension of certain tax credits. Among other provisions, the bill extends the tax credit for qualifying advanced clean coal projects, and instructs the Secretary of Energy to give high priority to projects that incorporate capture and long-term storage of carbon dioxide (CO2), including CO2 enhanced oil recovery. It also establishes a credit for clean coal energy bonds, a tax credit for the capture and storage or use of CO2 , and CO2 capture bonds.

Sponsor: Sen. Byron Dorgan (N-ND)

S. 1617: Fuel Reduction using Electrons to End Dependence On the Mid-East (FREEDOM) Act of 2007. Among other provisions amending the Internal Revenue Code of 1986 to promote the development and use of plug-in electric drive motor vehicles, this bill would establish a utility rebate for customers purchasing such vehicles. The quantity of the rebate would be inversely proportional to the amount of greenhouse gases emitted by the taxpayer’s electric utility.

Sponsor: Sen. Orrin Hatch (R-UT) (5 Cosponsors)

S. 2242: Heartland, Habitat, Harvest, and Horticulture Act of 2007. This bill would amend the Internal Revenue Code of 1986 to, among other purposes, provide tax incentives for conservation and alternative energy sources. The bill requires that, in order for coal-to-liquid fuel projects to qualify for incentives, they must capture between 50 and 75% of the carbon dioxide they generate.

Sponsor: Sen. Max Baucus (D-MT) 10/4/07—Reported by the Senate Committee on Finance by voice vote.

S. 701: Strategic Energy Fund Act of 2007. Among other provisions, the Act would amend the Internal Revenue Code of 1986 to impose a temporary oil profit fee, and use the profits of this fee to create and expand energy tax incentives, including incentives for and coal-to-liquid projects that practice carbon capture and sequestration.

Sponsor: Sen. Hillary Rodham Clinton (D-NY)

S.2149: Coal Fuels and Industrial Gasification Demonstration and Development Act of 2007. This bill, among other provisions, establishes a carbon dioxide (CO₂) sequestration tax credit equal to $20/metric ton if the CO₂ is disposed of in secure geological storage, and to $10/metric ton if the CO₂ is used as an injectant in an enhanced oil or natural gas recovery project. The bill also directs the Secretary of Energy to establish a program to provide grants for projects to produce synthetic gas, liquid fuels, and other products from coal and other feedstocks; grants will be provided through a reverse auction system, in which eligible projects proposed to be carried out that have the greatest percentage reduction of lifecycle greenhouse gas (GHG) emissions in comparison to facilities that use conventional feedstocks and do not use carbon capture and sequestration technologies, are given priority.

Sponsor: Sen. Byron Dorgan (N-ND)

H. Res. 987:   A resolution encouraging Americans to use their rebate checks to invest in renewable energy and energy-efficient products and services in order to save money, stimulate the economy, and reduce greenhouse gas emissions.

Sponsor: Rep. Brian Baird (D-WA) (38 Cosponsors)

H.R. 1451: New Options Petroleum Energy Conservation Act of 2007. The purpose of the bill is to “provide incentives to reduce dependence on foreign oil,” and includes a Climate Neutral Combustion Credit among other incentives for investing in renewable and alternative fuels and sources of energy.

Sponsor: Rep. Dan Lungren (R-CA) (1 Cosponsors)

H.R. 2652: Generating Renewable Energy and Encouraging Novel Technologies Act of 2007. This bill amends various provisions of the Internal Revenue Code with measures intended to generate renewable energy and encourage novel technologies related to the production of energy. Among other provisions, the bill adds enhanced oil recovery projects which enable the capture or sequestration of carbon dioxide produced at a coal-to-liquid fuel facility to those which are eligible for tax credits.

H.R. 2776: Renewable Energy and Energy Conservation Tax Act of 2007. Among other provisions, this bill expands and extends tax credits and deductions for renewable energy, energy efficient appliance credit for a variety of appliances produced after 2007, energy-efficient commercial buildings deduction for five years (through December 31, 2013), and allows electric utilities to depreciate smart electric meters over a five year period. In addition, the bill orders the Secretary of the Treasury and the National Academy of Sciences to review the Internal Revenue Code of 1986 to identify the types of and specific tax provisions that have the largest effects on carbon and other greenhouse gas emissions and to estimate the magnitude of those effects.

(21 Cosponsors)

H.R. 3089: No More Excuses Energy Act of 2007. Among other provisions, this bill amends the Internal Revenue Code of 1986 to establish a tax credit for carbon dioxide captured from industrial sources and permanently sequestered as a tertiary injectant in enhanced oil and natural gas recovery.

(2 Cosponsors)

H.R. 3221: New Direction for Energy Independence, National Security, and Consumer Protection Act. This is the House of Representatives’ energy bill for 2007. The following summary includes only the provisions most pertinent to climate change.

· Among other provisions, the bill makes a Congressional declaration that it shall be United States policy to engage in international climate negotiations with the objective of creating a new instrument that will come into force by the time that the first commitment period under the Kyoto Protocol ends in 2012. Such an instrument will, at a minimum, require binding mitigation commitments from all major emitting countries. The title also mandates the creation of an Office on Global Climate Change within the State Department.

· The bill also authorizes funds to promote research in solar energy, biofuels, marine renewable energy, and geothermal energy, and authorizes funds for carbon capture and storage research, development, and demonstration.

· In addition, it directs the President to “establish an interagency committee to ensure cooperation and coordination of all Federal research activities” pertaining to human-induced or natural changes in the global environment, including global climate change.

· The bill contains provisions which direct each federal agency to annually inventory and report its GHG emissions, and requires the EPA to promulgate annual greenhouse gas (GHG) reduction targets for the total emissions of all agencies taken as a whole, for each fiscal year from 2010 through 2050.

· The bill also sets GHG emissions standards for federal vehicle fleets, based on the California Code of Regulations, and requires the Secretary of Energy to establish new efficiency standards for federal buildings.

· The bill requires the Secretary of the Interior to develop a methodology for assessing the nation’s capacity to store carbon dioxide in geologic formations. It also requires the Secretary to conduct an assessment of the amount of carbon stored in terrestrial, aquatic, and coastal ecosystems, including estuaries; and to determine the potential for increasing carbon storage in natural ecosystems.

· It also requires the Secretary of the Interior to create the National Resources Management Council on Climate Change to address the impacts of climate change on Federal lands, the ocean environment, and the Federal water infrastructure. It requires the Secretary to promulgate a national strategy for assisting wildlife populations and their habitats in adapting to the impacts of global warming. The title also directs the Secretary of Commerce to develop and implement a national strategy to predict, plan for, and mitigate the impacts on ocean and coastal ecosystems from global warming, relative sea level rise and ocean acidification; and ensure the recovery, resilience, and health of ocean and coastal ecosystems.

· The title also authorizes $250 million to establish a National Integrated Coastal and Ocean Observation System to improve the nation’s ability to measure, track, explain, and predict events related directly and indirectly and indirectly to weather and climate change.

· The Transportation and Infrastructure section of this bill, among other provisions, mandates the establishment of a Center for Climate Change and Environment within the Department of Transportation, which would plan, coordinate, and implement department-wide initiatives and research to reduce transportation-related energy use, mitigate the effects of climate change, and address the impacts of climate change on transportation and infrastructure. The title also directs Secretary of Transportation and the Administrator of the EPA to report to Congress on low-cost solutions to reducing congestion and transportation-related energy use and mitigating the effects of climate change.

· The Energy and Commerce section of this bill contains a number of energy efficiency provisions, among them: improving the schedule for consensus standards, updating appliance test procedures, new efficiency standards for lighting, residential boilers, industrial motors, washing machines, and dishwashers. The title also establishes new efficiency standards for power supplies and transformers for consumer electronic equipment.

· In addition, the bill mandates the creation of an Office of High-Performance Green Buildings, and sets out increased efficiency standards for federal buildings, as well as increased efficiency standards for state residential and commercial building codes. It also authorizes grants to support state implementation of green building codes.

· The title also provides technical assistance and a revolving fund for implementing combined heat and power (CHP) systems and sustainable energy infrastructure. Finally, the title contains a number of provisions promoting creation of a Smart Grid, and mandates the promulgation of a National Action Plan for Demand Response.

· The tax provisions of this bill expand and extend tax credits and deductions for renewable energy, energy efficient appliance credit for a variety of appliances produced after 2007, energy-efficient commercial buildings deduction for five years (through December 31, 2013), and allows electric utilities to depreciate smart electric meters over a five year period. In addition, the bill orders the Secretary of the Treasury and the National Academy of Sciences to review the Internal Revenue Code of 1986 to identify the types of and specific tax provisions that have the largest effects on carbon and other greenhouse gas emissions and to estimate the magnitude of those effects.

Sponsor: Rep. Nancy Pelosi (D-CA) (18 Cosponsors)

H.R. 4612:

Climate Neutral Electricity Generation Act of 2007. This bill would amend the Internal Revenue Code of 1986 to provide an investment credit for electric generation facilities with “climate neutral combustion.” The credit would be applicable to up to 20% of investment in facilities that:

· use combustion to generate electricity, and

· which capture carbon dioxide released by such combustion and use it to recover hydrocarbon fuel from below ground, and

· which produce no atmospheric emissions of mercury or GHGs, and no emissions that form fine particulate, smog, or acid rain.

Sponsor: Rep. Jim Costa (D-CA) (2 Cosponsors)

H.R. 5351:   Renewable Energy and Energy Conservation Tax Act of 2008. This bill would amend the Internal Revenue Code of 1986 to provide tax incentives for the production of renewable energy and energy conservation. It contains many similar provisions to H.R. 2776, by the same sponsor.   In addition to its production tax credits and incentives, this bill would require the Secretary of the Treasury to enter into an agreement with the National Academy of Sciences to undertake a comprehensive review of the Internal Revenue Code of 1986 to identify the types and specific tax provisions that have the largest effects on carbon and other greenhouse gas emissions, and to estimate the magnitude of those effects.

Sponsor: Rep. Charles B. Rangel (36 Cosponsors)

2/27/08: Passed the House by 236-182.

(Special note: H.R. 2776, which is by the same sponsor andcontains similar provisions to this bill, was incorporated into H.R. 3221 and passed the House by 241-172 on 8/4/07; however, H.R. 2776’s language was removed during the negotiation process between the House and Senate that ultimately produced H.R. 6, the Energy Independence and Security Act of 2007, which was signed by the President on 12/19/07)

H.R. 5858:

Combating Climate Change Through Individual Action Act of 2008. This bill would establish tax credits for farmers who incur expenditures in the process of sequestering carbon in soils and in conserving soils. These tax credits would be limited to $10,000 per taxpayer per year. The bill would also establish qualified planting expenditure credits for taxpayers that purchase and plant trees, plants, shrubs, or bushes, as long as such plants are quick-growing, appropriate for the region in which it is planted, and effective in capturing carbon; taxpayers who purchase and install a vegetated roof system would also be eligible for a tax credit. The tax credit would be limited to $5,000 for a taxpayer’s principal residence, and $50,000 for a taxpayer’s business. In addition, the bill would establish a tax credit for: conversion of cropland to pasture for grazing purposes, or to grassland or rangeland; and for reforestation or afforestation of land. The amount of this latter credit would be determined by the efficacy of carbon sequestration and prevention of soil erosion. Finally, the bill would require the Secretary of the Treasury to reassess these credits in the case of any substantial change in the carbon sequestration market, including the enactment into law of a carbon cap-and-trade program.

Sponsor: Rep. Leonard Boswell (D-IA) (1 Cosponsors)

H.R. 6049:

Renewable Energy and Energy and Job Creation Act of 2008. This bill would amend the Internal Revenue Code of 1986 to provide tax incentives for the production of renewable energy—including wind, solar, wave and tidal energy and cellulosic ethanol and energy conservation.

The bill would also expand and modify the advanced coal project investment credit. It would authorize the Secretary of Energy to direct $800 million for integrated combined cycle projects, $500 million for other advanced coal-based generation technologies, and $1.25 billion. The bill would require projects applying for this investment credit to separate and sequester at least 65% of their total carbon dioxide (CO₂) emissions. The bill would give highest priority to projects with the greatest separation and sequestration percentage of total CO₂ emissions.

The bill also would expand and modify the coal gasification investment credit. It raises the investment credit cap by $250 million for gasification projects which separate and sequester at least 75% of their total CO₂emissions.

In addition to its production tax credits and incentives, this bill would require the Secretary of the Treasury to enter into an agreement with the National Academy of Sciences to undertake a comprehensive review of the Internal Revenue Code of 1986 to identify the types and specific tax provisions that have the largest effects on carbon and other greenhouse gas emissions, and to estimate the magnitude of those effects.

Sponsor: Rep. Charles Rangel (D-NY) (17 Cosponsors)

5/15/08: Reported by the House Committee on Ways and Means by 25-12; 5/21/08: Passed the House 263-160; 6/10/08: the Senate failed to invoke cloture on the motion to proceed to the bill by 50-44; 6/17/08: the Senate failed to invoke cloture on the motion to proceed to the bill by 52-44; 7/29/08: the Senate failed to invoke cloture on the motion to proceed to the bill by 53-43. (N.B. If successful, these votes for cloture would have allowed the bill to have been taken up by the Senate and possibly amended. Therefore, a vote for cloture can not necessarily be interpreted as support by that Senator for the unamended version of the bill).

This bill contains many similar provisions to H.R. 2776 and H.R. 5351, by the same sponsor. I include the following material as a footnote or parenthetical to the Action section, since it doesn’t actually summarize the substance of the bill: H.R. 2776 had been incorporated into H.R. 3221 and passed the House by 241-172 on 8/4/07; however, H.R. 2776’s language was removed during the negotiation process between the House and Senate that ultimately produced H.R. 6, the Energy Independence and Security Act of 2007, which was signed by the President on 12/19/07. H.R. 5351 was passed by the House by 236-182, and referred to the Senate Finance Committee; no further action has been taken.

H.R. 683: Investment in Energy Independence Act of 2006. The Act would provide income tax credits for investment in coal-to-liquid fuel, biomass, and oil shale energy projects. Investments in facilities which allow for the capture, transportation, or sequestration of carbon dioxide produced by the coal-to-liquid fuel process are also eligible for tax credits.

Sponsor: Rep. Ron Lewis (R-KY) (11 Cosponsors)

(11 Cosponsors)

H.R. 1128: The bill would allow a tax credit for CO₂ captured from anthropogenic industrial sources and used as an injectant in enhanced oil and natural gas recovery.

H.R. 2828: H.R. 2828: New Apollo Energy Act, which includes a slightly modified version of H.R. 759. The bill would also, among other things, establish a national goal of reducing total CO₂ emissions in the United States to the 2000 level by 2015; authorize a program of research, development, demonstration, and commercial application of carbon sequestration and carbon recapture methods with the goal of sequestering 20% of US GHG emissions from stationary sources by 2010, 40% by 2015, and 60% by 2020; create tax incentives for emission control systems that removes or reduces at least 90% of CO₂ emissions; guarantee up to 80% of the principal of any loan for a coal-burning power plant that sequesters at least 90% of its CO₂ emissions; authorize a pilot program for financial assistance for projects in developing countries that result in a GHG reduction per unit of energy produced (compared to the technology that would otherwise be implemented) of at least 20% for a unit in service before 2010; 40% if put in service between 2010 and 2020; or 60% if put in service between 2020 and 2030.

Sponsor: Rep. Jay Inslee (D-WA) (21 Cosponsors)

H.R. 4520 EAS: Jumpstart Our Business Strength (JOBS) Act, as passed by the Senate, includes an extensive energy tax incentives title, that, among other things, establishes carbon emission rate requirements that advanced clean coal technology units must meet to be eligible for a clean coal technology tax credit; extends the enhanced oil recovery credit to high volume natural gas facilities which produce carbon dioxide that is injected into hydrocarbon-bearing geological formations.

Sponsor: Rep. William M. Thomas (R-CA) (40 Cosponsors)

H.R. 4704: To amend the Internal Revenue Code of 1986 to establish tax credits for climate neutral combustion technologies -- combustion systems to generate electricity from which the carbon dioxide emissions are captured and applied to a useful purpose, or stored in the Earth's subsurface by sequestration, and from which there are no atmospheric emissions of mercury or greenhouse gases, nor emissions that form fine particles, smog, or acid rain.

Sponsor: Rep. Doug Ose (R-CA) (3 Cosponsors)

S. 1293: Climate Change Tax Amendments, which create tax incentives for facilities (e.g., coal-fired power plants) that (a) replace existing facilities; (b) reduce, avoid, or sequester greenhouse gas emissions on a per unit of output basis compared to the replaced facilites; and (c) use the same type of fuel as the replaced facilities.

(1 Cosponsors)

S. 1294: Climate Change Risk Management Act, which requires development and implementation of a national strategy to manage the risks posed by potential climate change; reforms the voluntary reporting program established by section 1605(b) of the Energy Policy Act of 1992; and promotes technology research and dissemination.

(5 Cosponsors)

S. 389: The National Energy Security Act, which includes provisions of S.60, establishing carbon emission standards that clean coal facilities must meet in order to be eligible for a tax credit.

(20 Cosponsors)

S. 765: Carbon Sequestration Investment Tax Credit Act, which creates a carbon sequestration investment tax credit.

Sponsor: Sen. Sam Brownback (R-KS) (3 Cosponsors)

S. 1777: Climate Change Tax Amendments of 1999.

(8 Cosponsors)

S. 1833: Energy Security Tax Act of 1999.

(6 Cosponsors)

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Tax Incentives Proposals from the 110th Congress