Senators Feinstein and Brown Introduce Measure to Enable Renewable Energy Development Projects to Qualify for Low-Cost Private Activity Bond Financing
-Bill would expand allowable activities under Private Activity Bond financing program-
May 11 2010
Washington, DC – U.S. Senators Dianne Feinstein (D-Calif.) and Sherrod Brown (D-Ohio) today introduced a measure designed to help spur the pace of renewable energy development and the creation of clean energy jobs by expanding access to a low-cost federal financing program.
Specifically, the Private Activity Renewable Energy Bonds Act (S.3336), amends the Internal Revenue Code of 1986 to provide access to low-interest, tax-free Private Activity Bonds for clean energy businesses. This includes projects that generate renewable energy; produce energy or water savings; or develop highly efficient vehicles. This would include projects such as wind and solar farms, solar panel factories, efficient vehicle manufacturing plants, and water recycling facilities. The bill allows these three new categories to be financed in conjunction with other federal incentives, such as renewable energy tax credits, hybrid vehicle tax credits and energy efficiency tax deductions.
The legislation caps the value of bonds at $2.5 billion annually, the amount necessary to replace at least one percent of U.S. electricity generation with renewable sources over the next ten years.
“Private Activity Bonds have long been used to generate private sector investment in critically important infrastructure projects across the country – including airports, wharves, hospitals, intercity rail, and solid waste disposal facilities. There’s no question that that allowing renewable energy developers to qualify for this low-cost financing would greatly enhance the pace of construction of projects such as wind farms, solar farms, water recycling facilities and efficient vehicle manufacturing plants – since these projects generally require a substantial amount of front-end capital,” Senator Feinstein said. “This legislation is one more tool we can use to accelerate the construction of a cleaner and greener infrastructure for the 21st century, and I urge my colleagues to support it.”
“Our nation’s economic future depends both on our global competitiveness and access to reliable energy sources,” Senator Brown said. “This bill would provide tax-free financing so manufacturers can retool for the clean energy economy. Growing the clean energy industry means creating new jobs, rewarding business innovation, and rebuilding our middle class.”
The bill is supported by a number of renewable energy companies and industry leaders, including Solar Millennium, the Center for Energy Efficiency and Renewable Technologies, the National Association of Energy Service Companies, Johnson Controls, the U.S. Fuel Cell Council, EnLink GeoEnergy, the Applied Solutions Coalition, the Solar Energy Industries Association, A123 Systems, and Nano Solar. California State Treasurer Bill Lockyer has also expressed his support for this approach.
Representatives Mike Thompson (D-Calif.), Dean Heller (R-Nev.) and Mary Bono Mack (R-Calif.) have sponsored companion legislation in the House.