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Following the national conventions, Congress is back, and it is still uncertain if the House of Representatives is going to vote on lifting the moratorium on drilling for oil and natural gas on the Outer Continental Shelf, or vote on the American Energy Act, which was discussed in a newsletter last month.
The American Energy Act lifts the moratorium, allows drilling to go forward in the Arctic National Wildlife Refuge and permits development of our shale oil resources and increases the supply of gas at the pump by cutting bureaucratic red tape that essentially blocks construction of new refineries.
The bill also includes a number of tax credits that would benefit individuals and businesses. In the case of those who buy more fuel efficient vehicles, there is a $3,000 base tax credit, which is adjusted up or down depending upon certain considerations, such as the efficiency of the power supply and the weight of the vehicle. And, there are tax credits for businesses, which make their companies more energy efficient.
For several years now, there have been tax credits available for purchases in other energy-efficient areas. Those tax credits are set to expire in 2010. However, if this bill were to pass, it would extend those credits for: energy efficient appliances, non-business energy property, residential energy efficient property, new energy efficient home credit, energy efficient commercial buildings deduction, renewable electricity and refined coal production credit, credits for biodiesel and renewable diesel.
One specific example is to allow a tax credit of ten percent of the cost of a qualified plug-in hybrid vehicle, up to $4,000 for vehicles with a 4kWh traction battery, and $250 for each additional kWh of traction battery capacity that exceeds 4kWh but does not exceed 50kWh. Another would qualify new flexible fuel hybrid motor vehicles for the alternative motor vehicle tax credit through December 31, 2014. A "new flexible fuel hybrid motor vehicle" is defined as a qualified hybrid motor vehicle which is capable of operating on an alternative fuel, on gasoline, and on any blend thereof, and which is certified by the EPA to have achieved a certain level of city fuel economy using E85 ethanol fuel.
In addition, the tax credit for the production of electricity from renewable resources (e.g., biomass, geothermal energy, landfill gas, and trash combustion) is extended through 2009. This includes marine and hydrokinetic renewable energy as a renewable resource eligible for such credit. And, the sale of electricity produced from renewable resources to regulated public utilities is allowed.
Further, the bill extends through 2009 the tax credit for residential energy efficient property expenditures, repeals the $2,000 limitation on the tax credit for solar electric property and allows an offset against the alternative minimum tax of tax credit amounts.
In the case of new home construction a tax credit of up to $2,000 can be achieved. To meet the energy saving requirements, a home must be certified to provide a level of heating and cooling energy consumption that is at least 30 to 50 percent in the case of manufactured homes, and 50 percent for other homes below that of a comparable home constructed in accordance with the standards of the International Energy Conservation Code. It must also have building envelope component improvements providing a level of heating and cooling energy consumption that is at least 10 percent below that of a comparable home.
Liquified coal can be another alternative source for our fuel needs. Right now, there is a ban on coal to liquid CLT being produced. The American Energy Act authorizes the Secretary of Energy to enter into standby loan agreements with up to six qualifying CTL projects, at least one of which shall be owned by two or more small coal producers.
Please keep in touch with me on issues that are important to you. You may write Congressman Virgil Goode, 70 East Court Street, Room 215, Rocky Mount, VA 24151; or fax to 1-540-484-1459; or call toll-free to the Danville office, 1-800-535-4008.