WASHINGTON — The Senate Finance Committee’s top Republican introduced legislation yesterday that would authorize another $2.2 billion of clean renewable energy bonds, while the House Ways and Means Committee is expected to introduce a bill next week that would extend a number of expiring tax provisions.
Sen. Charles Grassley, R-Iowa, yesterday introduced the Clean Renewable Energy Advancement Tax Extension Jobs Act, which also would be environmentally friendly. Grassley hopes the measure will be included in forthcoming jobs legislation, sources said.
“Green energy is a real bright spot in our economic future,” he said. “Getting these tax incentives extended is important to help businesses secure the loans they need to make the investments necessary to create jobs.”
Grassley’s bill would further boost the CREB program, which already received an additional $1.6 billion in authority from the American Recovery and Reinvestment Act enacted in February.
Since 2007, just 10 CREB deals have been done totaling $96.3 million, according to data from Thomson Reuters, though market sources have said those figures may be low and not include some small deals.
Meanwhile, a spokesperson for the House committee said yesterday that its members hope to unveil an “extenders” package as early as next week. Given that the bill would extend tax provisions scheduled to expire at the end of the month, members have said they want to bypass the committee and send the bill straight to the full House.
Although this annual legislative effort typically has included a number of expiring municipal bond provisions, this year’s iteration will come on the heels of the ARRA, which already addressed some of the extensions.
For example, extenders legislation that was passed last fall as part of the $700 billion bailout package Congress approved in the midst of the financial crisis included several bond-related tax extensions, renewable energy incentives, and disaster relief, as well as a one-year “patch” to the alternative minimum tax. It included an additional $400 million for qualified zone academy bonds and $800 million for CREBs.
However, this year’s stimulus package authorized $1.4 billion more of QZABs in addition to the boost to CREBs. The new law also exempted from the individual and corporate alternative minimum tax all new-money bonds issued in 2009 and 2010, as well as all bonds issued to refund debt offered in 2004 through 2008.
Though the extenders bill in the House has not yet been released, a conceptual document from the committee dated Nov. 19 included a one-year extension of relaxed mortgage revenue bond limitations for federal disaster areas. That provision would allow disaster areas to issue tax-exempt housing bonds to finance the repair or reconstruction of homes or rental housing units that were damaged or destroyed by a federally declared disaster.
The draft also included a one-year extension of tax incentives for so-called empowerment zones, which are economically distressed areas where businesses are eligible for tax incentives, including tax-exempt bonds, to spur development.
Tax-exempt bonds can be issued in these areas to provide low-cost financing to private businesses, provided that at least 35% of the business’ employees are residents of the empowerment zone for the life of the bonds.