Production Tax Credit for Energy Extended

October 22, 1999

The Senate Finance Committee has extended to Dec. 31, 2000, a production tax credit for wind and biomass energy. The tax incentive expired June 30.

A similar proposal was included in the tax relief bill vetoed last month by President Clinton. This time, the finance committee included it in another tax relief plan. Sen. Charles Grassley (R-IA) says the bill builds on an effort begun in 1992 when he authored a production tax credit for wind and biomass energy. Every 10,000 megawatts of wind energy produced in the United States can reduce carbon monoxide emissions by 33 million metric tons by replacing the combustion of fossil fuels."

Grassley says the legislation would restrict qualifying biomass materials to organic, non-hazardous materials that burn clean. It would allow tax credits for clean combustion of wood waste and similar residues.

"It only makes sense to encourage the conversion of 20 million tons of waste into clean electricity each year," Grassley says. "Biomass facilities are making a valuable contribution to a cleaner environment, but we have left them in a financially precarious position without favorable tax treatment."