Senate Passes Energy Tax Bill Offering Solar Industry a Boost
By Daniel Whitten
Sept. 23 (Bloomberg) -- The Senate passed a $17 billion energy tax measure that gives an unprecedented boost to the solar-power industry and extends tax credits for wind as well as for refineries that process heavy oil.
The energy measure, passed by a 93-2 vote margin, is part of a tax bill pegged at more than $100 billion. The energy portion of the bill failed eight times in the Senate and has faced opposition in the House because portions of the legislation haven't been paid for with offsetting revenue.
``It is the most significant legislation ever introduced in Congress for solar,'' said Rhone Resch, president of the Solar Energy Industries Association. ``It will provide a stable market for businesses to grow over the next 10 years.''
First Solar Inc., Suntech Power Holdings Co. Ltd., SunPower Corp. and other companies would create 441,000 permanent jobs and inject $232 billion in new spending into the economy by 2016 because of the tax credits, according to a study commissioned by Resch's group.
The legislation ``will help take that industry to new heights,'' said Senator Maria Cantwell, a primary proponent of the renewable energy tax credits. The Washington Democrat told reporters today the proportion of renewable tax breaks to those for fossil fuels was two-thirds to one-third.
The measure extends through 2016 an investment-tax credit for solar projects. A narrower version of the credit has been in effect for three years, and with other renewable electricity tax breaks, is set to expire this year.
It will extend by one year a tax break for wind-power production and by two years for other renewable sources such as geothermal and biomass electricity. It also includes credits for coal projects that mitigate carbon emissions and for advanced cars such as plug-in hybrids.
Tax-Break Extension
Lawmakers broke a logjam and paved the way for today's passage last week with a two-year extension of a tax break that goes to refineries retooled to handle heavier fuels, such as from Canadian oil sands production. The measure also would send money to 29 Texas counties to respond to the effects of Hurricane Ike, which hit the state's coast on Sept. 13.
Senate Majority Leader Harry Reid, a Nevada Democrat, said the bill would go to the House for a possible vote tomorrow and asked lawmakers in that chamber not to alter the Senate bill.
``Don't send us back something else,'' Reid said in comments on the Senate floor today addressed to the House. ``It will not pass. If they try to mess with our package, it will die.''
Senator Max Baucus, a Montana Democrat who sponsored the measure, said he expected the House would tweak the bill, but that it would be ``window dressing'' and he said the bill will go to President George W. Bush for his signature.
Provision for Revenue
The revenue-generating provisions include curtailing a tax break oil companies get for job creation and for overseas production and ending the ability of hedge-fund managers to defer taxes on profits earned in offshore funds.
The White House Office of Management and Budget issued a statement today saying the administration opposes the new taxes, but that the president would sign the bill.
``These provisions will increase the costs of American oil production, will give further advantages to foreign suppliers, and will likely result in higher prices at the pump,'' the office said.
The agreement would extend the alternative-minimum tax relief without revenue increases. The other so-called tax ``extenders'' in the bill, such as the research credit, will be ``substantially paid for,'' said Baucus, the Finance Committee Chairman.
To contact the reporter on this story: Daniel Whitten in Washington at dwhitten2@bloomberg.net
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