Several good summaries of the energy-related provisions in the stimulus bill

Stimulus Bill Provides Major Increase in Plug-in Vehicle Purchase Credit Program 13 February 2009

The $787-billion stimulus bill (HR 1, the American Recovery and Reinvestment Act) that emerged from the joint House-Senate conference committee this week provides funds for a large range of transportation-related projects. It also made significant changes in the current plug-in vehicle tax credit program, including increasing the limit from a program total of 250,000 vehicles to a maximum of 200,000 plug-ins per manufacturer.

The US House of Representatives passed HR1 on Friday morning, on a partisan 246-183 vote. No Republicans voted for the measure, and seven Democrats voted against it. The Senate is expected to vote on the bill Friday as well.

Tax Credits for Plug-ins

Under current law, a credit is available for each new qualified fuel cell vehicle, hybrid vehicle, advanced lean burn technology vehicle, and alternative fuel vehicle placed in service by a taxpayer during the taxable year. In general, the credit amount varies based on technology, weight, fuel efficiency, and other factors. The credit generally is available for vehicles purchased after 2005. The credit terminates after 2009, 2010, or 2014, depending on the type of vehicle. The alternative motor vehicle credit is not allowed against the alternative minimum tax.

A credit is also available for each qualified plug-in electric drive motor vehicle placed in service-qualified being a four-wheel, on-road vehicle equipped with a grid-chargeable battery pack of at least 4 kWh capacity.

The base amount of the plug-in electric drive motor vehicle credit is $2,500, plus another $417 for each kWh of battery capacity in excess of four kilowatt-hours. The maximum credit for qualified vehicles weighing 10,000 pounds or less is $7,500.

This maximum amount increases to $10,000 for vehicles weighing more than 10,000 pounds but not more than 14,000 pounds, to $12,500 for vehicles weighing more than 14,000 pounds but not more than 26,000 pounds, and to $15,000 for vehicle weighing more than 26,000 pounds.

Once a total of 250,000 credit-eligible vehicles have been sold for use in the United States, the credit phases out over four calendar quarters.

The House bill made no provisions modifying the current credit. The Senate version made substantial changes, expanding the type of vehicles qualifying for a credit, adding a credit for PHEV conversions, and doubling the 250,000 vehicle limitation to 500,000.

The conference agreement follows the Senate version with substantial modifications. Provisions include:

· A maximum credit of $2,500 is available for electric drive low-speed vehicles, motorcycles and three-wheeled vehicles.

· A 10% credit, up to a maximum of $4,000, for the cost of converting any motor vehicle into a qualified PHEV. Minimum capacity of a qualified battery is 4 kWh. Plug-in conversions made after 31 December 2011 are not eligible.

· The conference agreement limits the maximum credit to $7,500 regardless of vehicle weight. The conference agreement also eliminates the credit for low-speed plug-in vehicles and for plug-in vehicles weighing 14,000 or more.

· The conference agreement replaces the 250,000 total plug-in vehicle limitation with a 200,000 plug-in vehicle per manufacturer limitation.

· Changes to the plug-in credit are effective for vehicles acquired after 31 Dec 2009.

Department of Energy

EERE. The conferees agree to provide an additional $16.8 billion for the Department of Energy's Energy Efficiency and Renewable Energy program, instead of $18.5 billion as proposed by the House and $14,398,000,000 as proposed by the Senate.

Funds under this heading include:

· $2.5 billion for applied research, development, demonstration and deployment activities to include $800 million for projects related to biomass and $400 million for geothermal activities and projects.

· $2 billion for Advanced Battery Manufacturing grants to support the manufacturing of advanced vehicle batteries and components, as proposed by the Senate, instead of $1,000,000,000 as proposed by the House. The conference agreement does not include the Advanced Battery Loan Guarantee program as proposed by the House. The Senate bill carried no similar provision.

· $300 million for the Alternative Fueled Vehicles Pilot Grant Program (funding for the acquisition of alternative fueled vehicles or fuel cell vehicles, EPACT 2005, 42 USC 16071), instead of $400 million as proposed in the House bill. The Senate had originally proposed $350 million.

· $400 million for Transportation Electrification, instead of $200 million as proposed in the House bill. The Senate proposed $200 million in report language.

Fossil Energy. The conferees agree to provide an additional $3.4 billion for the Fossil Energy Research and Development program, instead of $2.4 billion as proposed by the House and $4.6 billion as proposed by the Senate.

Funds under this heading include:

· $1 billion for fossil energy research and development programs;

· $800 million for additional amounts for the Clean Coal Power Initiative Round III Funding Opportunity Announcement;

· $1.52 billion for a competitive solicitation for a range of industrial carbon capture and energy efficiency improvement projects, including a small allocation for innovative concepts for beneficial CO2 reuse;

· $50 million for a competitive solicitation for site characterization activities in geologic formations; and

· $20 million for geologic sequestration training and research grants.

The conference agreement does not include $2.4 billion for Section 702 of EISA 2007 (a provision to carry out fundamental science and engineering research on carbon capture and sequestration), as proposed by the House. The Senate bill contained no similar provision.

Innovative Technology Loan Guarantees. The conference agreement includes $6 billion for the cost of guaranteed loans authorized by section 1705 of the Energy Policy Act of 2005, instead of $8 billion as proposed by the House and $9.5 billion as proposed by the Senate. This new loan program would provide loan guarantees for renewable technologies and transmission technologies. The $6 billion in appropriated funds is expected to support more than $60 billion in loans for these projects.

Funds under this heading include $10 million for administrative expenses to support the Advanced Technology Vehicles Manufacturing Loan program. The House bill and the Senate bill included no similar provision.

General Services Administration

Energy-Efficient Federal Motor Vehicle Fleet Procurement. The conference agreement includes $300 million for the acquisition of motor vehicles for the Federal fleet as proposed by the Senate, instead of $600 million as proposed by the House. The conferees "remain hopeful" that domestically produced plug-in hybrid-electric vehicles will be commercially available in sufficient quantities before 30 September 30 2010, such that these funds could be used to acquire this technology for the Federal fleet.

Each vehicle purchased must have a higher combined fuel economy, as measured by EPA, than the vehicle being replaced and the overall government-purchased vehicles must have an improved fuel economy at least 10% greater than the vehicles being replaced.

Department of Transportation

The conference agreement provides $1.5 billion for supplemental discretionary grants instead of $5.5 billion as proposed by the Senate. The House did not include a similar provision. These funds are to be used to award grants on a competitive basis for projects across all surface transportation modes that will have "a significant impact on the Nation, a metropolitan area or a region." Other funds under this heading include:

· $27.5 billion for highway infrastructure instead of $30 billion as proposed by the House and $27.060 billion as proposed by the Senate.

· $8 billion instead of $300 million as proposed by the House and $2.250 billion as proposed by the Senate for capital assistance for high-speed rail corridors and intercity passenger rail service.

· $1.3 billion instead of $800 million as proposed by the House and $850 million as proposed by the Senate in capital grants to Amtrak.

Federal Transit Administration

Funds under this heading include:

· $6.9 billion for transit capital assistance instead of $8.4 billion as proposed by the Senate and $7.5 billion as proposed by the House. Within the total amount, 80% of the funds shall be provided through the Federal Transit Administration's (FTA) urbanized formula; 10% shall be provided through FTA's rural formula, and, 10% shall be provided through FTA's growing states and high density formula. In

· $750 million for investment in fixed guideway infrastructure instead of $2 billion as proposed by the House.

· $750 million for capital investment grants instead of $2.5 billion as proposed by the House. The funds will be distributed on a discretionary basis for New Starts and Small Starts projects that are already in construction or are nearly ready to begin construction.

Environmental Protection Agency

The amended bill provides $300 million for Diesel Emission Reduction Act (DERA) grants as proposed by both the House and the Senate.

Resources

· Conference Report to Accompany H.R. 1 - The American Recovery and Reinvestment Act of 2009

· Joint Explanatory Statement of the Committee of Conference, Division A

· Joint Explanatory Statement of the Committee of Conference, Division B



Clean, Efficient, American Energy: To put people back to work today and reduce our dependence on foreign oil tomorrow, we will increase renewable energy production and renovate public buildings to make them more energy efficient.

* Smart Grid/Advanced Battery Technology/Energy Efficiency
o Provides more than $30 billion for energy initiatives such as a new, smart power grid, advanced battery technology, and energy efficiency measures, which will create hundreds of thousands of jobs.
o Transforms the nation's electricity systems through the Smart Grid Investment Program to modernize the electricity grid to make it more efficient and reliable.
o Supports U.S. development of advanced vehicle batteries and battery systems through loans and grants so that America can lead the world in transforming the way automobiles are powered.
o Helps state and local governments make investments in innovative best practices to achieve greater energy efficiency and reduce energy usage.
o Spurs energy efficiency and renewable energy R&D.
* Tax Incentives to Spur Energy Savings and Green Jobs
o Provides $20 billion in tax incentives for renewable energy and energy efficiency over the next 10 years.
o Includes a three-year extension of the production tax credit (PTC) for electricity derived from wind (through 2012) and for electricity derived from biomass, geothermal, hydropower, landfill gas, waste-to-energy, and marine facilities (through 2013).
o Provides grants of up to 30 percent of the cost of building a new renewable energy facility to address current renewable energy credit market concerns.
o Promotes energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.
o Provides a tax credit for families that purchase plug-in hybrid vehicles of up to $7,500 to spur the next generation of American cars.
o Includes clean renewable energy bonds for State and local governments.
o Establishes a new manufacturing investment tax credit for investment in advanced energy facilities, such as facilities that manufacture components for the production of renewable energy, advanced battery technology, and other innovative next-generation green technologies.
* Landmark Energy Savings at Home
o Provides $5 billion for landmark provisions to improve the energy efficiency of more than 1 million modest-income homes through weatherization.
o This will save modest-income families on average $350 per year on their heating and air conditioning bills.
* Repairing Public Housing and Making Key Energy Efficiency Retrofits to HUD-Assisted Housing
o Provides more than $4 billion for increasing energy efficiency in federally-supported housing programs.
o Specifically, establishes a new program to upgrade HUD-sponsored low-income housing (elderly, disabled, and Section 8) to increase energy efficiency, including new insulation, windows, and frames.
o Also invests in energy efficiency upgrades in public housing, including new windows, furnaces, and insulation to improve living conditions for residents and lower the cost of operating these facilities.


Transform our Economy with Science and Technology: To secure America's role as a world leader in a competitive global economy, we are renewing America's investments in basic research and development, in training students for an innovation economy, and in deploying new technologies into the marketplace. This will help businesses in every community succeed in a global economy.

* Investing in Scientific Research (More than $15 Billion)
o Provides $3 billion for the National Science Foundation, for basic research in fundamental science and engineering – which spurs discovery and innovation.
o Provides $1.6 billion for the Department of Energy's Office of Science, which funds research in such areas as climate science, biofuels, high-energy physics, nuclear physics and fusion energy sciences – areas crucial to our energy future.
o Provides $400 million for the Advanced Research Project Agency-Energy (ARPA-E) to support high-risk, high-payoff research into energy sources and energy efficiency in collaboration with industry.
o Provides $580 million for the National Institute of Standards and Technology, including the Technology Innovation Program and the Manufacturing Extension Partnership.
o Provides $10 billion for NIH, including for expanding good jobs in biomedical research to study diseases such as Alzheimer's, Parkinson's, cancer, and heart disease, and for improving NIH facilities.
o Provides $1 billion for NASA, including $400 million to put more scientists to work doing climate change research.
o Provides $1.5 billion for NIH to renovate university research facilities and help them compete for biomedical research grants.
* Extending Broadband Services
o Provides $7 billion for extending broadband services to underserved communities across the country, so that rural and inner-city businesses can compete with any company in the world.
o For every dollar invested in broadband, the economy sees a ten-fold return on that investment.



Modernize Roads, Bridges, Transit and Waterways: To build a 21st century economy, we must create jobs rebuilding our crumbling roads and bridges, modernizing public buildings, and putting people to work cleaning up our air, water and land.

* Modernizing Roads and Bridges
o Provides $27.5 billion for modernizing roads and bridges. This investment creates jobs in the short term while saving commuters time and money in the long term.
o Requires states to obligate at least half of the highway/bridge funding within 120 days.
o States have over 6,100 projects totaling over $64 billion that could be under contract within 180 days.
* Improving Public Transit and Rail
o Provides $8.4 billion for investments in transit and $8 billion for investment in high-speed rail. These investments will reduce traffic congestion and our dependence on foreign oil.
o Includes funds for new construction of commuter and light rail, modernizing existing transit systems, and purchasing buses and equipment to needed to increase public transportation and improve intermodal and transit facilities.
o States have 787 ready-to-go transit projects totaling about $16 billion.
* Prioritizing Clean Water/Flood Control/Environmental Restoration
o Provides $19 billion for clean water, flood control, and environmental restoration investments, which will create more hundreds of thousands of jobs.
o Experts note that $16 billion in water projects could be quickly obligated.
* Modernizing Public Infrastructure, Including To Achieve Major Energy Cost Savings
o Provides billions to modernize federal and other public infrastructure with investments that lead to long-term energy cost savings, including about $4.2 billion to make improvements in DOD facilities, including housing for our troops and about $4.5 billion to make federal office buildings more energy-efficient in order to achieve long-term savings for taxpayers.


Tax Cuts to Make Work Pay and Create Jobs: More than 35 percent of the package will provide direct tax relief to 95 percent of American workers, as President-elect Obama pledged, and spur investment and job growth for American businesses. To gain the support of the needed Senate Republicans, the amount of Make Work Pay Tax credit has been scaled back, the AMT has been added, and several business tax incentives have been added (cancellation of debt income).

* Tax Relief for American Families
o Provides immediate and sustained tax relief to 95 percent of American workers through the Making Work Pay Tax Cut, a refundable tax credit of up to $400 per worker ($800 per couple filing jointly), phasing out completely at $200,000 for couples filing jointly and $100,000 for single filers.
o Cuts taxes for the families of millions of children through an expansion of the child tax credit (allowing families to begin qualifying for the child tax credit with every dollar earned over $3,000).
o Expands the Earned Income Tax Credit by providing tax relief to families with three or more children and increasing marriage penalty relief.
o Helps more than 4 million additional students attend college with a new, partially refundable $2,500 tax credit for families.
o Protects 26 million middle-class families from being hit by the AMT.
o Helps first-time homebuyers and strengthens the housing market by enhancing the current credit for first-time home purchases with the removal of the repayment requirement.
o Provides incentives to buy new cars, including light trucks and SUVs, with a tax deduction for State and local sales taxes paid on the purchase.
o Temporarily suspends the taxation of some unemployment benefits.
* Business Tax Incentives to Create Jobs and Spur Investment
o Helps businesses quickly recover costs of new capital investments by extending the bonus depreciation and increased small business expensing for businesses making investments in plants and equipment in 2009.
o Includes a variety of provisions to help small business, including small business expensing for investment in new plants and equipment, loss carry back for small businesses, a delay of the 3% withholding tax on payments to businesses that sell goods or services to governments, and a cut in the capital gains tax cut for investors in small businesses who hold stock for more than five years.
o Provides assistance to companies looking to reduce their debt burdens by delaying the tax on businesses that have discharged indebtedness, which will help these companies strengthen their balance sheets and obtain resources to invest in job creation.
o Provides incentives to create new jobs with tax credits for hiring recently discharged unemployed veterans and youth that have been out of work and out of school for the 6 months prior to hire.
* Tax Incentives to Spur Energy Savings and Green Jobs
o Provides $20 billion in tax incentives for renewable energy and energy efficiency over the next 10 years.
o Includes a three-year extension of the production tax credit (PTC) for electricity derived from wind (through 2012) and for electricity derived from biomass, geothermal, hydropower, landfill gas, waste-to-energy, and marine facilities (through 2013).
o Provides grants of up to 30 percent of the cost of building a new renewable energy facility to address current renewable energy credit market concerns.
o Promotes energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.
o Provides a tax credit for families that purchase plug-in hybrid vehicles of up to $7,500 to spur the next generation of American cars.
o Includes clean renewable energy bonds for State and local governments.
o Establishes a new manufacturing investment tax credit for investment in advanced energy facilities, such as facilities that manufacture components for the production of renewable energy, advanced battery technology, and other innovative next-generation green technologies.
* Tax Incentives for State and Local Economic Development
o Includes provisions to enhance the marketability for state and local government bonds, which will reduce the costs they incur in financing state and local infrastructure projects.
o Includes a new bond-financing program for school construction, rehabilitation, and repair.