The Senate on June 28, 2005, by a vote of 85 to 12, passed energy legislation (H.R. 6) that includes tax provisions of the Energy Policy Tax Incentives Bill of 2005. The tax title, projected to cost $14 billion over ten years, includes tax incentives for renewable energy and energy conservation. Among the seven provisions included in the area of electricity infrastructure are an extension and modification of the Code Sec. 45 renewable electricity production credit and investment incentives for production of electricity and gasification from advance clean coal. The four provisions related to domestic fossil fuel security include an enhanced oil recovery credit modification for new or expanded carbon dioxide recoveries. The nine provisions related to energy conservation include a deduction for certain energy efficient commercial building property, a business credit for construction of new energy efficient homes, incentives for certain energy efficient property used in business, a credit for certain nonbusiness energy property, an energy credit for combined heat and power systems, a credit for energy efficient appliances, and a credit for residential purchases and installations of solar and fuel cells. Included in the five provisions related to alternative motor vehicles and fuels incentives is an alternative motor vehicle credit and a modification and extension of the credit for electric vehicles. The tax title also includes $4.3 billion in revenue offsets spread over 12 provisions, generally related to fuel excise taxes.
The Senate tax provisions differ significantly from the tax provisions included in the energy legislation passed by the House on April 21, 2005. The House tax provisions total approximately $8 billion over ten years. The House provisions tend to focus more on tax breaks for conventional sources of energy, such as oil and gas. A House / Senate conference will be convened to resolve the differences. The President has requested an energy bill on his desk before Congress adjourns for the August recess.