Energy Provisions in Latest Jobs Bill
Energy, Business Provisions in the American Workers, State and Business Relief Act (HR 4213 as amended):

Heavy Hybrid Credit. The bill extends for one year, through 2010, the alternative motor vehicle credit for so-called heavy hybrids (i.e., hybrid motor vehicles that are not passenger automobiles or light trucks). This proposal is estimated to cost $8 million over ten years.

Extension of Tax Incentives for Biodiesel and Renewable Diesel. The bill extends for one year, through 2010, the $1.00 per gallon tax credit for biodiesel, as well as the small agri-biodiesel producer credit of 10 cents per gallon. The bill also extends through 2010 the $1.00 per gallon tax credit for diesel fuel created from biomass. This proposal is estimated to cost $1.008 billion over ten years.

Biomass Facilities. The bill extends for one year, through 2010, the credit period for electricity
produced at open-loop biomass facilities placed in service before October 22, 2004. This proposal is estimated to cost $105 million over ten years.

Refined Coal. The bill extends for one year, through 2010, the placed-in-service deadline for qualifying refined coal facilities. This proposal is estimated to cost $63 million over ten years.

Steel Industry Fuel. The bill extends for one year, through 2010, the placed-in-service deadline for qualifying steel industry fuel facilities. The cost of this proposal is included in the estimate for refined coal, above.

Small Business Refiners. The bill extends for one year, through 2010, two provisions that assist small business refiners in complying with EPA sulfur regulations. The first is a deduction of up to 75 percent of the costs related to compliance with EPA’s Highway Diesel Fuel Sulfur Control requirement. The second is a credit of 5 cents for each gallon of low sulfur diesel fuel produced during the taxable year. This proposal is estimated to cost $20 million over ten years.

Credit for Producing Fuel from Coke or Coke Gas. The bill extends for one year, through 2010, the placed-in-service date for qualified facilities producing coke or coke gas, byproducts of the coal refining process that are used to make fuel. This proposal is estimated to cost $21 million over ten years.

Extension of Credit for Energy‐Efficiency Improvements to New Homes. The bill extends for one year, through 2010, the credit for the construction of energy-efficient new homes that achieve a 30% or 50% reduction in heating and cooling energy consumption relative to a comparable dwelling constructed per the standards of the 2003 International Energy Conservation Code (including supplements). This proposal is estimated to cost $66 million over ten years.

Extension and Modification of Alternative Fuels Credit. The bill extends for one year, through 2010, the alternative fuel excise tax credit for all fuels except hydrogen (which maintains its current‐law expiration date of September 30, 2014). Beginning January 1, 2010, the proposal modifies the definition of alternative fuel to exclude any fuel (including lignin, wood residues, or spent pulping liquors) derived from the production of paper or pulp. Thus, such fuel would no longer qualify for the alternative fuel credit, alternative fuel mixture credit, and related payment provisions. This proposal is estimated to cost $196 million over ten years.

Temporary Rule for Sales or Dispositions to Implement FERC or State Electric Restructuring Policy for Qualified Electric Utilities. The bill extends for one year, for sales prior to January 1, 2011, the present law deferral of gain on sales of transmission property by vertically integrated electric utilities to FERC approved independent transmission companies. Rather than recognizing the full amount of gain in the year of sale, this provision would allow gain on such sales to be recognized ratably over an eight‐year period. This proposal is revenue neutral over ten years.

Research and Development Credit. The bill extends for one year, through 2010, the research tax credit equal to 20 percent of the amount by which a taxpayer’s qualified research expenses for a taxable year exceed its base amount for that year and provides an alternative simplified credit of 14 percent. The proposal is effective for amounts paid or incurred after December 31, 2009. This proposal is estimated to cost $6.650 billion over ten years.

OFFSETS
Cellulosic Biofuels Loophole. This provision modifies the $1.01 per gallon cellulosic biofuel producer credit to exclude fuels with significant water, sediment, or ash content, such as black liquor. The provision excludes from the definition of cellulosic biofuel any fuels that (1) are more than four percent (according to weight) water and sediment in any combination, or (2) have an ash content of more than one percent (according to weight). The provision is effective for fuel sold or used after date of enactment. This proposal is estimated to raise $23.9 billion over ten years.

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