House Ways and Means Committee chairman Charles B. Rangel, D-N.Y., unveiled roughly $17 billion in renewable energy tax breaks over 10 years, including authorization for $5.6 billion of taxable tax-credit bonds.
The House is expected to take up the bill after Congress' week-long Presidents' Day recess next week.
Under the proposal, which was released Tuesday night, municipal utilities and electric cooperatives would be allowed to issue up $2 billion of clean renewable energy bonds, or CREBs, for projects that generate electricity from wind, biomass, or other renewable sources. Of the $2 billion, public power providers would issue 60% and cooperatives would issue the remaining 40%.
The program, which is estimated to cost $640 million over 10 years, would differ from previous CREB authorizations, which were divided between governmental entities and electric cooperatives with no separate category for public power utilities.
CREBs were created in 2005 and Congress has authorized $1.2 billion of them to date. Tax-credit bonds provide the holder with an income tax credit in lieu of tax-exempt interest payments.
The legislation also included authorization of $3.6 billion for energy conservation bonds that would be issued by states, localities, and tribal governments to finance initiatives to reduce greenhouse gas emissions. That proposal is estimated to cost $1.9 billion over 10 years.
Projects financed under the bond programs would be required to pay prevailing wages, in accordance with the Davis-Bacon Act, a Depression-era labor law mandating that prevailing wages be paid on federally funded construction projects. Republicans tend to oppose the provision, while Democrats typically insist on it.
The energy tax legislation is likely to be opposed by Republicans, because the measure includes a provision to pay for the renewable energy incentives by repealing existing tax breaks for the oil and gas industry. Those two proposals are estimated to raise about $17 billion over 10 years.
While a similar bill passed the House late last year, it failed to win enough support to limit debate so that it could be voted on by the Senate because of opposition to a similar oil and gas provisions included in the legislation.
But Rangel believes that the oil and gas industries can afford to help support renewable energy projects.
"The American taxpayer should not be subsidizing oil and gas companies during times of record profits and record prices at the pump," he said in a release. "Instead, we need an energy plan that reduces our dependency on foreign oil and invests in clean, renewable technology that will create jobs here in America."
Rangel's comments come after Senate Democrats recently sought and failed to include $400 million of CREBs in an economic stimulus package. q