President Bush Signs New Energy Tax Incentives Into Law
October 27, 2004
President Bush signed H.R. 4520, the "American Jobs Creation Act of 2004," into law on October 22nd. The new law creates and extends a number of energy-related tax credits, including an expansion of the renewable energy production tax credit. This credit formerly applied only to wind energy and some biomass energy projects, but Section 710 of the law now expands the credit to a wide range of biomass, geothermal, and solar energy projects, as well as hydropower produced from small irrigation projects. The tax credit applies to facilities placed in service before the end of next year.
The bill's Title III also extends the tax credit for ethanol through 2010 and creates a new tax credit for biodiesel, effective through 2006. It also removes a disincentive for ethanol and biodiesel production by eliminating any impact on the Highway Trust Fund caused by the tax credits.
Section 701 of the law places the U.S. Environmental Protection Agency (EPA) in charge of a demonstration program to provide up to $2 billion in tax-exempt financing to green building and sustainable design projects on so-called "brownfields"—abandoned industrial sites. The EPA's aggregate goal for the program will be to reduce electric consumption from traditional sources by 150 megawatts, reduce daily U.S. sulfur dioxide emissions by 10 tons, expand the domestic solar photovoltaic market by 75 percent (compared to the market growth from 2001 to 2002), and generate at least 25 megawatts of power from fuel cells. The projects must be partly supported by state or local governments and must be nominated by state or local governments within the next six months.
See the White House announcement on the bill signing, or go directly to the full text of the law. The new law was greeted with enthusiasm by the National Ethanol Vehicle Coalition; the Renewable Fuels Association, which issued press releases on October 10th and October 22; and the National Biodiesel Board, which issued press releases on October 11th (PDF 35 KB) and October 22nd (PDF 35 KB). Download Acrobat Reader.