Legislation

Details of Final Economic Stimulus Bill

Energy Tax Provisions:

Extends home energy efficiency tax credits (**Section 25C Credits**) through 2010, increases for 2009 and 2010 the eligible percentage of the amount paid or incurred by the taxpayer from 10 to 30 percent, and eliminates the property-by-property monetary cap and replaces it with a $1,500 aggregate cap. The $1,500 amount is an aggregate amount, and taxpayers may deduct the whole amount for one single efficiency upgrade to their home (subject to the 30 percent qualifier), including their heating system, if the system meets the following criteria:

• Electric Heat Pump with highest efficiency achieved by the Consortium for Energy Efficiency, as in effect on January 1, 2009
• Central Air Conditioners with highest efficiency achieved by the Consortium for Energy Efficiency, as in effect on January 1, 2009
• Natural Gas, Propane or Oil Water Heater with an energy factor of .82 or a thermal efficiency of at least 90 percent
• Natural Gas Furnace with AFUE rating of not less than 95
• Natural Gas Hot Water Boiler with AFUE rate of not less than 90
• Propane Furnace with AFUE rate of not less than 95
• Propane Hot Water Boiler with AFUE rate of not less than 90
• Qualified Oil Furnaces with AFUE rate of not less than 90
• Qualified Oil Hot Water Boiler with AFUE rate of not less than 90.
  

It is likely the IRS will allow deduction of both the cost of equipment and installation. Because the $1,500 non-refundable personal tax credit for home energy efficiency improvements is an aggregate credit, taxpayers installing more efficient windows, insulation, etc must count the credit against the aggregate. Therefore, members that wish to use the credit in order to promote upgrades should do so in a timely manner but not without first consulting legal counsel or a qualified tax professional.

Project Spending:

• $1.2 billion for national EPA environmental cleanup programs, including $200 million for the Leaking Underground Storage Tank (LUST) Trust Fund.
  
• $5 billion for the federal Weatherization Assistance Program (or "WAP" — this is up from $477 million in FY2009 and $227 in FY2008); increases the WAP eligibility from 150 percent of the federal poverty level to 200 percent; and increases the maximum per-home benefit from $2,500 to $6,500.
  
• Does not contain the $1 billion for the federal Low Income Home Energy Assistance Program (LIHEAP) that was originally included in version passed in the U.S. House.

Energy Research Spending:

• $2 billion for Scientific research at the DOE including $400 million for the Advanced Research Projects Agency-Energy (or ARPA-E).
  
• $3.4 billion for Fossil Energy research and development.
  
• $6.3 billion for Energy Efficiency and Conservation Grants.
  
• $2.5 billion for energy efficiency and renewable energy research.
  
• $2 billion in grant funding for the manufacturing of advanced vehicle battery systems.
  
• $6 billion for new loan guarantees for renewable energy (wind, solar) and electricity transmission projects.

Please note: The above is a summary of federal legislation and was written as neither tax advice nor guidance. Consult with a qualified tax professional regarding how the tax measures of the economic stimulus package affect you or your business for tax filing or planning purposes.

Obama Makes Energy A Top Priority In Inaugural Address

Barack Obama, who was sworn in on January 20, 2009, announced energy is a top priority for his administration. The President said, "Each day brings further evidence that the ways we use energy strengthen our adversaries and weaken our planet." Later in his address, he implied that the problem might be met, in part, by renewable energy and biofuels. "We will harness the sun and the winds and the soil to fuel our cars and run our factories," the President promised. To watch a video of President Obama's inaugural address, click here.

Within 24-hours of his inauguration, the new White House website posted details of the President's energy plan. The new President promises to:

• Create 5 million new jobs in the "clean" energy sector by investing $150 billion over ten years;
  
• Weatherize one million homes each year;
  
• By 2020, displace an annual volume of petroleum use that is equal to the amount imported from the middle east and Venezuela through aggressive new efficiency and conservation practices and technologies, alternatives and domestic energy production;
  
• Reduce greenhouse gas emissions by 80 percent by 2050 by implementing a national cap & trade program;
  
• Prevent excessive speculation in the commodity futures markets;
  
• Permit short-term price relief by swapping oil from the Strategic Petroleum Reserve (SPR) to cut prices; and
  
• Position the U.S. as a world leader on climate change.

It is still unclear how the new administration will implement the above proposals with minimal harm to the American economy and its consumers, businesses and entrepreneurs. Some of his proposals will be implemented by the President through executive order, administrative action or through government departments and agencies. Some of the most controversial proposals, including a national cap & trade program, will require debate in Congress and new legislative action.

Irrespective of how the President or Congress move forward with new energy policy, rest assured that we will continue to advocate for our members' best interests, stay vocal and keep a watchful eye.

House And Senate Leaders Draft New Futures Market Reform Legislation

House Agriculture Committee Chairman Colin Peterson (D-MN) and Senate Agriculture Committee Chairman Tom Harking (D-IA) have drafted new futures market reform legislation for consideration in the new Congress.

Both pieces of legislation seek to bring new transparency and oversight to unregulated markets and trades, including over-the-counter derivatives and other off-market trades. They also seek to strengthen position limits and other anti-speculation measures. Ag Committee Chairman Peterson has also announced his intention to hold hearings on his draft legislation next week.

Commodity Markets Oversight Coalition

NJCA Oil Group is constantly on the front line fighting for better oil prices for our members. We want to put an end to the excessive speculation and trade practices in the commodities trading markets that led to the historically high prices earlier this year by approving new legislation and regulations.

Read the letter to President Elect Barack Obama that the Oil Group signed onto in support.

Make Your Voice Heard!

The Commodity Futures Trading Commission (CFTC), a government oversight commission, has a new feature on their website called Public Comments. This allows visitors to file a public comment in response to a proposed Commission rule or an industry submission pending.

We encourage you to use this platform to voice your concerns about oil prices being affected by the stock market. Make your voice heard — let them know that you won't stand for high oil prices anymore!

VICTORY! Federal Energy Assistance Funding Doubled; Off-Shore Drilling Ban Expires

Congress gave final approval to a FY2009 stop-gap funding measure that doubles funding for the federal Low Income Home Energy Assistance Program (LIHEAP). This is a major victory. NJCA has been fighting for a fully funded LIHEAP program for years. New Jersey will receive an additional $89,996,000, bringing the total LIHEAP funds to $166,861,000!

Also included were measures allowing states to increase LIHEAP eligibility to 75 percent of state median income, and providing $477 million (also double FY2008 level) for the federal Weatherization Assistance Program (WAP). The bill also let the moratorium on off-shore drilling expire (October 1, 2008). Democratic leaders may pursue limits on off-shore drilling next year, but it is unlikely that the full ban will be reinstated.

VICTORY! House And Senate In Stalemate On Energy Tax Extenders Bill

Congress has passed a "tax extenders" bill that includes vital biofuels tax credits. Among other things, the bill extends the biodiesel tax credit, closes the so-called biodiesel "splash and dash" loophole, and corrects the Alternative Minimum Tax (AMT).