5.4. ERMUSR 03-20-2007 - Laserfiche WebLink

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generating portfolio. After exploring various options, APPA and NRECA (the national trade association representing rural electric cooperatives) recommended that Congress endorse the "taxable tax r.rcdit bond" approach. This financing mechanism, which is contained in the tax code fur other purposes, allows not-for-profit entities to issue interest free debt for the development of qualified renewable energy facilities. APPA and NRECA then worked for inclusion of the taxable tax credit bond, known as Clean Renewable Energy Bonds (CREBs), pro~~sion in EPAct05. The provision was ultimately signed into law, but because of budgetary constraints, a cap was put on the amount of bonds that could be issued. Like the limits imposed on the REPI program, this limit means that not all applicants will receive CREB funding. Therefore it is important to note that the REPI and CREB programs are complementary, and must both continue to receive support from Congress. www.APPAnet.org The CREB program was included as part of the tax title of EPAct05, which was signed into law in August of 2005, and the U.S. Treasury issued its preliminary guidelines on the program in December of 2005. In November of 2006, the Internal Revenue Service (IRS) notified issuer- applicants about CREB allocations, but did not release indi~~dual recipient information to the public. However, we do know that many APPA applicants did not receive allocations because of the cap described above and because the allocation methodology pro~~ided funds starting with the smallest requested amount until the allowed amount was exhausted could be improved. Regardless of the imperfections in the program (which APPA wall work to rectify in future legislation), it has broad support in Congress as evidenced by the recent approval of an extension of the CREB program through December 31, 2008. The extension of the program was included in a broader tax package signed into law in December 2006, and authorizes an additional $400 million of CREBs to be issued. IRS is expected to issue a notice about a new application process for the additional CREB allocations in 2007. Reauthorization of the REPI program was also achieved in EPAct05, acid on August 14, 2006, the Department of Energy (DOE) issued its final rule on the reauthorized REPI program. For FY 2007, the House has passed legislation that funds the REPI program at $4.96 million, the same amount requested by the Administration in its Fl' 2007 budget. The Senate Appropriations Committee has approved $4.946 million for the REPI program for FY 2007. But as of this writing in January of 2007, Congress has not finalized the Energy and Water Development appropriations bill. Until they do, REPI is being funded at the FY 2006 level, which is $4.96 million. Investment tax credits are not limited to a specific dollar amount. To be truly comparable, ~ the CREB program should likewise not be subject to a dollar limit. Therefore, Congress M should extend the CREB program beyond 2008, and ensure that all qualifed facilities that apply for the program receive full funding for their projects, at the same time as it extends the production tax credit and investment tax credit for the for-profit utility sector. Congress should also continue to fund the REPI program at higher levels than have been requested by DOE in the past. 1