**[The Clean Energy Investment Assurance Act of 2007]{.underline}**

**A bill to provide reliable federal tax incentives to help ensure more
private sector led investment and innovation in clean energy
technologies.**

**[Guiding principles for energy tax legislation:]{.underline}**

-   Provide a sufficient duration to the incentives for investment in
    and wide-scale deployment of renewable energy technologies.

-   Provide incentives for improved efficiency to reduce energy
    consumption and enhanced management of energy demand.

-   Set an overall goal for the tax incentives---production of energy
    resulting in zero carbon emissions---and enable all technologies to
    become cost competitive within the defined timeframe of the
    incentives.

**[Elements of the Bill:]{.underline}**

**[Extension (through 2013) and modification of the tax credit for
energy (electricity and thermal) production using renewable
resources]{.underline}**

-   Extend though 2013 the placed-in-service date for purposes of the
    production tax credit (Section 45).

-   Modify the rules to allow a credit for thermal [or]{.underline}
    electricity production using qualified renewable resources. This
    encourages the efficient use of district energy facilities that
    provide power in the form of thermal energy using renewable
    resources, rather than electricity.

-   Eliminate the reduction in the credit rate for electricity produced
    from open-loop biomass, small irrigation power, landfill gas, trash
    combustion, and hydropower facilities (thus allowing the same credit
    rate for all renewable resource facilities).

-   Provide Treasury regulatory authority to grant eligibility under
    Section 45 for energy production using any renewable resource that
    is not articulated in the statute provided that it results in zero
    carbon emissions.

-   Modify certain technical rules under Section 45 that are restricting
    the broader deployment of biomass and incremental hydropower as
    energy resources. This includes repeal of the rule that up to 50
    percent of the credits are reduced by reason of grants, tax-exempt
    bonds, subsidized energy financing. This will remove an impediment
    that limits the ability of states and localities to partner with
    private industry in the overall management of environmental and
    clean energy policy.

-   Provide a similar incentive for public, non-taxed utilities to
    invest in renewable energy resources by extending and modifying the
    Clean Renewable Energy Bond program (Section 54(m)). The bill
    extends the authority to issue CREBS through 2013 and establishes an
    annual volume cap rather than cumulative cap, to encourage
    additional investments.

**[Extension (through 2016) of the credit for residential and business
investments in solar and fuel cell power plants to provide some economic
certainty to producers, investors and manufacturers]{.underline}**

-   Extend through 2016 the Investment credits (Section 48 and Section
    25D) for investments in solar and fuel cell power plants.

-   Remove the \$1000 cap on the business investment credit for fuel
    cell power plant property.

-   Enable expenditures for energy storage air conditioner property to
    qualify for the investment credits. This will enhance demand
    management of energy by enabling greater integration of intermittent
    renewable resources, such as wind and solar, while reducing grid
    integration costs.

**[Extension (until 2013) of tax credits to promote more rapid
deployment of energy efficient improvements and smart
meters]{.underline}**

-   Extend until 2013 the tax credit (Section 25C(g)) for energy
    efficient improvements in homes and modify the credit to increase
    the incentive effect.

-   Extend until 2013 the business tax credit (Section 45L) for
    construction of energy efficient new homes.

-   Extend until 2013 the deduction (Section 179D) for energy efficient
    property expenditures in commercial buildings. Increase the amount
    of the deduction to \$2.25/square foot and \$0.75/square foot for
    building subsystems. Modify the technical rules to make the
    deduction more useful.

-   Encourage investment in the next generation of technologies that
    will enhance the smarter management of our energy demands over the
    electricity grid. Provide for accelerated depreciation of qualified
    "smart meters" by treating these devices as qualified technological
    property eligible for 5-year cost recovery period. The current
    20-year cost recovery for old-style electromagnetic meters does not
    reflect the technological advances in energy management devices and
    is an impediment toward adoption of this next generation of smart
    meters.