House approves renewable energy tax package.
The roughly $18 billion plan to extend and create new alternative energy tax breaks and offset the costs by repealing tax incentives for major oil companies is similar to measures the House approved last year as part of the comprehensive energy reform bill. Last year the Senate, however, fell one vote short of the necessary 60 votes to end debate on the provisions, and they were subsequently removed from the energy bill that was signed by President Bush in December 2007.
The House legislation would provide a three-year production tax credit extension for wind and other renewable energy generation. Incentives would also be given to solar, efficiency, plug-in hybrid vehicles and biofuels.
A majority of these credits would be financed by repealing domestic manufacturing tax deductions for the major oil companies, totaling $13.6 billion over a decade.
The five big companies targeted by the bill--Chevron, BE ExxonMobil, Shell and ConocoPhillips--produce and refine oil and sell gasoline in the United States, and therefore under the bill would lose the domestic manufacturing deduction they received as part of a corporate tax law in 2004.
Meanwhile, Venezuelan-owned Citgo Petroleum Corp., would continue to receive a 6 percent deduction for domestic manufacturing. Because Citgo does not drill for oil and gas domestically or abroad, it does not fall under the bill's definition of companies that will lose a major tax break.
GOP lawmakers argued that such a policy runs counter to the Democrats' goals for the bill--to reduce dependence on foreign oil and increase national security--by providing a tax break to a foreign petroleum company.
In 2006, the United States imported 518 million barrels of oil from Venezuela, a country that ranks fourth behind Canada, Mexico and Saudi Arabia in supplying oil to the U.S., according to the Energy Department.
One possibility being considered in the Senate is to reconsider the renewable energy tax measures this session as part of their budget process, which is immune from filibuster and would not require 60 votes to end debate.
The White House has threatened to veto the House energy bill.
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|Title Annotation:||Renewable Energy and Energy Conservation Tax Act of 2008|
|Publication:||Nation's Cities Weekly|
|Date:||Mar 10, 2008|
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