How many got this? O Snowe

Dear Alice:

Thank you for contacting me about our nation's energy tax policy. I appreciate having your thoughts on this issue.

You expressed opposition  to legislation intended to extend or expand tax credits for wind energy.  Currently, for owners of wind facilities there is a federal tax credit equal to either 30 percent of the capital costs of the project or 2.2 cents per kilowatt hour produced from the facility for 10 years.  A taxpayer may only claim either the investment tax credit or production tax credit, but not both.  As you noted tax credit for wind facilities is scheduled to expire at the end of 2012. 

As you know, there were a number of amendments proposed to the highway bill, known as Moving Ahead for Progress in the 21 st Century or MAP-21 (S. 1813), that would have extend ed or expanded this tax policy.  One amendment, sponsored by Senator Stabenow, would have reinstated a policy that would provide a cash grant equal to 30 percent of the construction costs for this year and also extend the production tax credit for wind facilities until January 1, 2014.  The amendment failed in a vote of 49 to 49 on March 13, 2012. 

I opposed this amendment because it failed to provide any offsets for this loss of federal revenue and frankly at a time when Americans pay nearly $4 per gallon at the pump, it is clear that every federal energy tax policy must be reexamined in order to properly assess exactly how these policies are helping to reduce energy bills for the American people.  In fact, I believe our federal energy policies should be focused on assisting households in improving their energy efficiency and promote energy savings for homeowners, and therefore have called upon Secretary of the Department of Treasury, Tim  Geithner , and Acting Director of the Office of Management and Budget, Jeffrey  Zients , to work with Congress to fundamentally  reform our energy tax policies.  The Stabenow amendment simply extended or expanded current tax policies rather than reforming these policies in a manner that will actually work for the American people. 

You may be interested to know that the Congressional Research Service reported in early May of 2011 that approximately 39 percent or $3.4 billion of energy tax expenditures support the development of  renewable energy while 28 percent or $8.7 billion support fossil fuels.  Many of these tax incentives, which increase our country's unsustainable deficit, were enacted years ago and the merits of their extension have not been demonstrated to Congress or the American people.  As a senior member of the Finance Committee, which is charged with addressing our nation's tax code, I believe it is imperative that we begin to reevaluate the efficacy of America's energy tax policies.  Given the reality of our economic climate, I strongly believe that the 112 th Congress must work tirelessly to rein in burgeoning deficits to return the budget to fiscal sanity while prioritizing any investment into energy efficiency.

This is why I, along with Senators Bingaman and Feinstein, introduced the Cut Energy Bills at Home Act, S.1914, on November 18, 2011.  The Cut Energy Bills at Home Act seeks to amend the Internal Revenue Code of 1986 to provide individual taxpayer credit for performance-based home energy improvements. Upon introduction, S.1914 was referred to the Senate Finance Committee for further review, and you can be assured I will fight tirelessly for its passage in the Senate. In the third quarter of last year, consumers spent 6.2 percent, or $668 billion on an annualized basis, of their personal income on energy, which is the highest amount on record to date. Such a burdensome expense drains household incomes and further reduces expenditures that promote job creation and improve overall quality of life. 

As Congress considers any tax legislation, I will continue to further review the effectiveness of our nation's energy tax policy in the critical effort to reestablish a pro-growth and sustainable tax code, end wasteful government subsidies, and meet our nation's investment priorities without subjecting our children and grandchildren to continued deficit spending.  Should the full Senate consider additional legislation concerning wind and other forms of renewable energies, please be assured that I will examine it carefully, keeping your thoughts and concerns in mind.

Again, thank you for taking the time to share your views. I value your opinion and hope that you continue to inform me of the issues that concern you.

Sincerely, OLYMPIA J. SNOWE United States Senator