The House was close to taking up broad energy legislation yesterday that would authorize $5.5 billion of taxable tax-credit bonds, including up to $2 billion of a new type of clean renewable energy bond to be issued by public power providers, electric cooperatives, and states and localities. But at press time last night debate on the legislation had not started. Some observers said that Democratic leaders may delay consideration of the measure until today. The Senate is expected to take up the bill after House approval. In a statement yesterday touting the measure’s $21 billion tax package, House Ways and Means Committee chairman Charles B. Rangel, D-N.Y., said: “This legislation helps ensure that our tax code is a partner in moving our energy policies into the 21st century.” “By creating and expanding incentives for the use and production of renewable energy and conservation, we help break our dependence on foreign oil and promote America’s energy independence,” he said. “Investments in cutting-edge renewable energy technologies will also help keep American manufacturers and producers at the forefront of technological developments internationally.” In order to pay for the bill’s $21 billion in renewable energy tax benefits, the measure would roll back $21 billion in subsidies to the oil and gas industry. If passed by the House, the oil and gas provisions could hold up the measure in the Senate, where a similar energy tax package died earlier this year due to objections by senators from oil-producing states. However, Senate Finance Committee chairman Max Baucus, D-Mont., said he thinks that the bill can pass the Senate. “Our country needs to make a big turn in terms of energy policy, and this tax package will help to steer the ship,” Baucus said in the statement with Rangel. “An economically strong, globally competitive future for America just won’t run on the fuels of the past. It’s high time to focus our energy efforts on sources that will be available and affordable for Americans decades from now. And it’s appropriate to pay for these new energy incentives by closing loopholes in our current energy tax policy. I am sure the Senate will have a robust debate on some provisions of this important legislation, but I expect that we will all work together to see it passed.” Another potential stumbling block is that President Bush is likely to veto the bill over the oil and gas tax provisions. Bush has said that raising taxes on the industry would increase gas prices and reduce incentives for domestic energy exploration. Bush threatened to veto a version of the legislation approved by the House earlier this year over the same issue. Many Republicans also object to the rollback of the oil and gas subsidies. “Democrats are trying to increase taxes on our domestic energy industry, raising prices at the pump and making our country even more dependent on foreign oil,” the Ways and Means Committee’s top Republican, Jim McCrery of Louisiana, said in a statement yesterday about the bill. The clean renewable energy bonds, or CREBs, provisions included in the measure’s tax package would cost $550 million over 10 years, according to the House and Senate tax committees. The bonds would differ from previous CREB authorizations, which were divided between governmental entities and electric cooperatives with no separate category for public power utilities. The bill does not include a time limit on issuance of the debt. Of the $2 billion in new CREBs’ authority, a third would be used for public power projects and a third would be used for electric cooperative projects. The rest would go to non-utility state and local government projects, such as transit agencies, which have shown interest in the program. The CREBs provision was drafted in response to complaints from the American Public Power Association, which has claimed that public power renewable energy projects have not received their fair allocation of CREBs in the past, in part because they have to compete with governmental bodies and electric cooperatives as eligible issuers. The group lobbies Congress on behalf of municipal utilities. Created in 2005, CREBs are taxable tax-credit bonds used by municipal issuers to finance renewable energy projects. Tax-credit bonds provide the holder with an income tax credit in lieu of tax-exempt interest payments. Congress has authorized the issuance of $1.2 billion of CREBs to date. The bill also includes two new categories of tax-credit bonds. Under one bond program, states and localities would be allowed to issue up to $3 billion of qualified conservation bonds to fund initiatives designed to reduce greenhouse gas emissions. The other would authorize issuance of up to $500 million of bonds for projects designed to acquire land for forestry conservation purposes. No sunset dates have been proposed for these two bond programs, which are estimated to cost $864 million and $161 million, respectively, over 10 years.
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