Charles B. Rangel, Chairman of the tax-writing House Ways and Means Committee, has said that the Committee has shown showed bi-partisan support for “responsible, innovative tax policies” to promote energy conservation and the production and use of renewable energy.

The Committee voted 24 to 16 to approve the Renewable Energy and Energy Conservation Act of 2007. The bill has now been passed to the full House floor for consideration. Like similar legislation currently before the Senate, the tax breaks are paid for in part by the elimination of tax breaks for US oil and gas companies.

“This is an innovative bill to help America address concerns about climate change and energy security through the increased production and use of renewable energy,” explained Rangel. “We have crafted a package of tax incentives that will foster the development of new technologies and encourage responsible, energy-efficient purchases by American consumers. Through a combination of tax incentives and new partnerships with state and local governments, we will help our country move away from dependence on foreign oil while addressing the growing concerns about global climate change.”

The House bill provides for a number of production incentives, including: the long-term extension and modification of renewable energy production tax credits and solar energy and fuel cell investment tax credits; $2 billion of new clean renewable energy bonds for public power providers and electric cooperatives; extension of the present-law deferral on sales of transmission property from electric utilities and their affiliates to a FERC-approved independent transmission company; and the removal of caps on the credit for residential solar property (currently capped at $2,000) and residential fuel cell property (currently capped at $500 per half kilowatt of capacity).

Clean transportation incentives include: a plug-in hybrid vehicle credit; a cellulosic alcohol production credit; the extension of a biodiesel production tax credit and the extension and modification of renewable diesel tax credit; the extension and increase of a alternative refueling stations tax credit; a fringe benefit for bicycle commuters; the modification of depreciation and expensing rules for certain vehicles; and the restructuring of New York Liberty Zone tax credits.

Other conservation provisions include: the creation of new qualified energy conservation and energy efficiency assistance bonds; the extension of the energy-efficient commercial buildings deduction; the modification and extension of energy-efficient appliance credit; and five-year depreciation for smart meters.

The Committee also approved by voice vote an amendment offered by Representative Eric Cantor (R-VA) which would prohibit the use of tax credit bond proceeds to purchase certain products, regardless of EnergyStar rating. Those products prohibited under the amendment are: water heaters installed for a hot tub or pool; cordless phones; digital to analog converter boxes; DVD players; home audio equipment; televisions and VCRs.

On the revenue side, the House legislation: denies a deduction for oil and gas firms for income attributable to domestic production of oil, natural gas or other primary products; increases the amortization of geological and geophysical expenditures for certain major integrated oil companies to seven years; limits the ability for US oil and gas companies to benefit from foreign tax credits; and clarifies eligibility for certain fuel credits.