Legislation pending in Congress would expand the exempt facility category of private-activity bonds to include renewable energy and conservation facilities, as well as zero emission vehicles.
The bill, introduced late last month by Rep. Mike Thompson, D-Calif., would add three new categories to the section of the tax code listing what projects can be financed with exempt facility bonds: renewable energy resource facilities; conservation, efficient facilities and projects; and zero emission vehicles and related facilities or projects.
Thompson said he introduced the bill after discussing with California Treasurer Bill Lockyer ways to spur green energy investments. The bill is currently pending before the House Ways and Means Committee, of which Thompson is a member.
"We need to act quickly to change our methods of energy consumption," Thompson said. "By making it easier for local governments and private entities to finance alternative energy projects, we can help move our economy towards a greener future."
"Expanding the benefits of tax-exempt bond financing to privately-developed renewable technologies is a win-win for California's environment and economy," Lockyer added. "We'll spur green projects that produce alternative energy sources and stimulate the economy by creating green-collar jobs."
The bill details what types of projects would fall under each of the new categories.
A "renewable energy resource facility" would be any facility used to produce electric or thermal energy from the following energy sources: solar, wind, or geothermal energy; marine and hydrokinetic renewable energy; incremental hydropower; biomass; or landfill gas.
Exempt facility bonds could also be used to finance projects that in turn would manufacture those facilities.
A "conservation and efficiency facility" would be any facility used for the conservation or efficient use of water, including projects that reduce demand for water, improve the efficiency of its use, or improve land management practices to conserve it. Bonds also be used to finance facilities that manufacture those facilities.
In addition, exempt facility bonds could be used to finance either the purchase of zero emission vehicles or any facilities that are used to design, manufacture, assemble, distribute, or service those vehicles, which could include not just electric cars, but also bicycles or fuel cell vehicles powered by hydrogen.
Currently, exempt facility bonds can be issued to finance a wide variety of projects, including airports, docks, mass commuting facilities, sewage facilities, qualified residential rental projects, solid waste disposal facilities, and water facilities.
