Support is building in Congress for extending production tax credits
The federal government offers a tax credit of 1.7 cents per kWh for producing electricity from wind or “closed-loop biomass.” Credits may be claimed for 10 years after a project goes into service. However, projects must be in service by June 30, 1999 to qualify.
Support is building to extend the credit and perhaps also to broaden it. Rep. William Thomas (R.-Calif.) and 19 other members of the House tax-writing committee introduced a bill to allow another five years through June 2004 to place projects in service, but the bill would only apply to wind projects. Rep. Wally Herger (R.-Calif.) has a bill, with six tax-writing committee members as cosponsors, to extend the credit through June 2008 for all projects and allow credits for a broader class of biomass fuels. The Herger bill would cover waste fuels from farm, industrial and forest-related sources, but not garbage at municipal landfills.
House action is unlikely until next year. However, Sen. William Roth (R.-Del.), chairman of the Senate Finance Committee, said on September 11 he would try to expand the list of eligible fuels to cover chicken litter and extend the credit for another five years in a tax bill this year.