goals in dealing with global warming and conservation and to get out nation moving in the area of lack of dependence and nonrenewable energy the energy and commerce committee are working on different parts of the bill and we're excited about the role that this this committee is going to play right commander ranking member mccree and i had decided some months ago that that we doubt whether they will the big problems and the goals in which we try to achieve in a bipartisan way but i did differences in the philosophy of our parties from time to time is going to cause us to differ and how we reach that goal but we don't want that to be interpreted as any lack of commitment on outside to maintain with staff and members a bipartisan approach to the problems facing our great nation congress and this committee and to that and i'd just like to before i yield indicate for those who thought that we were taking up the a and e and e and extensions we cancel that postpone that there's some problems that potential problems that we want to discuss with the senate finance committee but it is solid intention to get back to that as soon as possible hopefully next week at the latest since we were working with a deadline of exploration then we may have to use the suspension callen today to reach out goal it's my pleasure to recognize my friend and the ranking member of this committee jim mccrery thank you mr chairman indeed german wrangling and i think members of the committee on both sides of the aisle have strived to conduct our business this year and a way that we could all be proud of and certainly building respect in this committee and and we intend to continue to do that and i thank the chairman for his indulgence on the andy and preferences issue as we try to work through that in a bipartisan way earlier this year the chairman made reference to how in the past maybe we had been in a nasty divorce but that we were in a period of reconciliation and indeed the reconciliation went so well some would even say we got married i think today's markup on the energy bill  will tell you that the honeymoon is over we're still trying to get along with we do differ today on the particulars of an approach to securing our nation's energy future when it comes to energy it seems that many of my colleagues on the majority side have developed a kind of schizophrenia throughout last year they held press conferences after press conferences saying that we in the majority of them and already now weren't doing enough to lower the price of gasoline at the pump yet since our new democratic majority was elected the price of gasoline has jumped an average of nearly one dollar a gallon across the country now that my colleagues have rolled out their new energy legislation we find it includes a substantial tax increase on the oil and gas industry which will raise gasoline prices even more the same majority say that our thirst for foreign oil has put america's national security at risk yet this legislation creates a disincentive for the domestic production of oil and gas it also provides no incentive for domestic clean coal technology or nuclear power which would reduce our dependence on foreign oil the majority is invited witnesses to a global warming hearing that unanimously agree th climate change is a global problem requiring a global answer they agree we must engage india and china in any meaningful approach yet this legislation today opts to battle global climate change by creating a fund for governors state legislatures mayors and city councils to pursue ineffective piecemeal efforts the democrats railed against the oil and gas industry for lacking a commitment to developing biofuels yet this legislation was specifically denied the renewable diesel tax credit for an extremely promising renewable fuel technology simply because it was developed by an oil company there are elements of this bill that deserve our support it extends many of the tax incentives that we republicans created spur renewable energy production overall though we think it's an unbalanced and poorly targeted approach to this important problem and i urge all my colleagues to oppose this and maybe we could get back to the drawing board and the committee will now can set it to seven seven six three new energy and energy conservation act without objection the bill is considered as read and open for members at any point at the cio office an amendment in the nature of a substitute and without objection the amendment is considered as read the amendment in the nature of subject before the members would agree and she explained in that chair recognizes that we have come bottle from the joint committee on taxation here with us as well as eric solomon objections from the committee the chair would recognize the bottle thank you mr chairman and mr mccrary you have before you in addition to the green sheet that the chairman just referenced to joint committee documents table i will try and highlight changes in the chairman's mark and go through them in the order of the revenue of the revenue table the first first provision a men's section forty five of the internal revenue code which is the section provides for our production tax credit for alternative sources of electricity at the chairman's mark would extend the section forty five credit placed in service date for four years two thousand and twelve for all facilities other than the two coal facilities and solar facility it also makes a modification to expand water a certain water resource facilities and lastly the chairman's  k places a cap on the annual amount of credit that can be claimed per facility with respect to the present law investment tax credit for energy property in particular solar and fuel cell property the chairman's mark would extend those benefits for eight years through two thousand and sixteen would provide for relief from the alternative minimum tax for for that credit it increases the cap that supply couple to fuel cell investments and the chairman's mark and the sub amendment in the nature of substitute provide that public utilities may make such may make such investments the next provision provides for an expansion and modification of the clean renewable energy bonds that are provided under present law provides for an additional two billion dollars worth of such bo to be allocated and makes two modifications one in terms of governmental bonds that are that are issued it limits the use of governmental bonds to public power providers governmental entities modification further extends the special non recognition deferral rules for sales of transmission property and with respect to residential solar and fuel cell property the chairman's mark removes the present law caps that limit the amount that a tax payer may claim in any one year and provides far alternative minimum tax relief under the second section of the of the mark the chairman's mark provides for a tax credit of four thousand dollars plus an additional amount depending upon battery capacity of plug in hybrid automobiles  and it would generally follow the same sorts of rules as exist for the current alternative fuel vehicles with the sixty thousand dollars per manufacturer limitation the chairman's mark with respect to vehicles further provides that credits for exist for current purchases of currently defined alternative vehicles as well as the new plug in hybrids would be personal credits for the purpose of the alternative minimum minimum tax  extends for one year the benefits provided for installing refueling refueling property it extends for two more years the current tax benefits provided to bio diesel a renewable diesel all although as was noted there's a modification to that which i'll explain further a little later the chairman's mark provides an additional credit of fifty six fifty cents for production expands transportation fringe benefits to provide a benefit of up to twenty dollars per month exclusion from employees income for certain expenses the employee might incur related to commuting by  by bicycle and they mark also modifies current law limitations on automobile depreciation and this is known to members as a limitation under section two eighty f of internal revenue code present present law applies these depreciation limitations only to vehicles under six thousand pounds the chairman's mark would increase that weight limitation to a fourteen thousand pound rating and provide two exceptions two sorts of exceptions one exception is a design based exception and this is the same exception that's in present law section one one seventy nine it relates to the design of the vehicle whether it has cargo space behind whether it has a driver's compartment is separated from the from the cargo space and then it also provides an exception for certain uses not exclusively but farming vehicles used in farming vehicles example a plumber's van plumber always carrying materials would qualify for this use exception the chairman's mark also provides for a change in a certain tax benefits that were provided with respect to the new york city liberty zone it would repeal the present law tax benefits and create a new benefit of a credit against withholding taxes at the rate of one hundred qualified energy conservation bonds these could be issued by state or large local governments to seventy percent of use would have to be for governmental purposes at least seventy percent have to be forgo purposes other remaining amounts could be used for what would otherwise be considered private activity purposes under present law the other new bond bonding provision created referred to as qualified residential energy assistance bonds two point four billion dollars of them may be issued and at least twenty percent must be for low income residents low income residential assistance the chairman's mark extends for five years the present law provision for special depreciation for energy efficient commercial building property it provides new credits for manufacturers of certain energy efficient compliance is generally available before two thousand and ten and with a cap per manufacturer seventy five million dollars per manufacture there's there's some details so that's not doesn't apply in all cases the chairman's mark provides special five year depreciation for certain energy management equipment this is equipment that provides for  close to real time reporting in terms of energy use between the between the utility for example and the and use customer to to manage better maybe time of day use of of energy  as revenue raising provisions the mark provides for provision for two provisions that were previously passed by the house of representatives the denial of the section one ninety nine deduction for income attributable to all natural gas in the primary products there of provides for seven year amator zation of geological and geophysical expenses for major integrated oil companies under present law they have a five year that are seen to create a lot of flexibility in how prices might be determined for allocating income between what is considered fogy income and what is considered for income and in addition it would provide that where a foreign country has a separate limited application tax that applies to the oil or gas oil or gas producers in that country that such taxes and the income related to such carbons and lastly the chairman's the chairman's mark would make modifications to the present law bio diesel benefits and renewable diesel benefits to provide th first foreign produced fuel is in eligible for the benefits and that second in the case where domestic fuel is produced domestically it can only claim the benefit if the fuel is intended for use in the united states there's also t studies provided for that concludes my walkthrough which i hope was brief enough mr chairman and we're happy to answer any questions that you are the members might have thank you before i recognize them members for the purpose of offering amendments and we hope that the members that have more than one that will do one at a time and then will come back for the this before i do that i ask  this bill dealing with qualified energy conservation bonds and qualified residential energy efficiency assistance bonds what kind of bonds are these these are tax credit bonds mr mccurry so these are like in terms of their their structure their like present law q s abs qualified zone academy bonds and present law krebs clean renewable energy bonds how are they different from each of those and they just qualified energy conservation bonds are arse well i guess actually they're both different in that the states make the final allocations in the case of qualified zone academy bonds and present law crab's  allocations come slowly from the from the treasury so in both of these two applications it's the the states or in the case of qualified energy conservation bonds certain large local governments make  final allocation of the bonds to issuers now aren't they under these new bonds in this bill aren't the tax credits strip can't they be separated from the bonds themselves yes that's presented i don't know that they're for additional difference like i'm so these are not really like any bonds that we have in practice are they not in terms of the tax credit bonds bonds corporate uses of these tax credit bonds where the credits are stripped of all the words they could be removed and sold in a secondary market want to ask you some of the things that they could possibly be used for under the provision dealing with the demonstration of green building technologies could a city for example seek to attract a new wal mart by using the proceeds of one of these bonds to subsidize the construction of a new retail structure that contains some green building features let me let me give a qualified yes that would seem to be permissible within the general the general guidelines of the chairman's mark but it is the is the case that in our providing that states and large local governments would allocate their decisions that the i mean the state may be sure it's not an automatic thing the state may say that's not a use to which we could it would seem to be generally permissible if it were a green green building concept it could go too far i don't know really provisions saying that the bonds can be used for implementing a green community program gr community program is not defined as it no a green community vote and so could beverly hills for example proposed to use some of these tax credit bonds to replace their fleet of police cars with lex hybrid since they're better energy users and that be a community police program i guess that but again that that would seem to to fit the description of how about the city of aspen the posh ski resort of aspen they have snowmobiles that they use for their ski patrol that's a community program could they replace their ski  possibility that the tax credit bonds could also be used to fund demonstration projects on technologies to reduce peak use of electricity that's in the bill isn't it  yes that would be consistent with it vance technologies so there's an actor ed begley jr that boasts that he generates the heat necessary to toast as bread each morning by getting on a stationary bicycle plugged into his toaster could the city of berkeley then purchase and distribute such bicycles to help reduce peak hour electricity  that on on we would expect that my friend mr solomon and the i r s would all will be off would be offering some general guidance but it if your point is does this seem to be precluded on the on the face of the words it does not seem to be precluded on the face i mean there's a lot of discretion isn't there under this bill to governors mayors i mean there's an allocation an automatic allocation of these bonds isn't that correct there's  allocation of the qualified energy conservation bonds the total amount is to be three point six billion dollars and as as you were pointing out the there is a breath to a potential bret's to uses and the total we've got about five billion dollars worth of mons that are allocated that that's correct the qualified energy conservation bonds are three point six billion dollars and the qualified residential energy efficiency assistant bonds are two point four for total fof six also under this bill there's a provision  dealing with energy star so that any purchase of energy star i would qualify for purchase with the proceeds of these bonds isn't that correct  energy the energy star that would come under the residential energy efficiency assistance bob ok and course there are lots of things that have energy star ratings now  let's look at vice former vice president gore's twenty room house outside of nashville there's been some reports in the media about how inefficient his home is well we all want to help with that so it couldn't these bonds be used the proceeds of these energy efficiency assistance bonds do have a set aside for low income individuals the former vice president probably wouldn't qualify for that but he would qualify for the non set aside part it would seem that 's correct he would qualify if the city which would be under this bill a city large enough to get allocated bonds they could if they chose to do  that yes if i go through all this most support old mr chairman just to point out how loosely drafted this bill is throughout but particularly with respect to the tax credit bonds provisions five billion dollars of tax credit bonds a completely new type of tax credit bond for this country we will through other questions highlight some other deficiency deficiencies we think in the creation of these bonds but certainly the way the bill is drafted there are all sorts of haphazard inefficient things that could be done in the name of energy  conservation and and creation of a better energy policy for the united states and i just don't think this this these provisions stand up to that scrutiny and i thank the chairman for his indulgence thank you so much for pointing out the bro s of this provision it was outthinking that government did not have all of the answer is that one size didn't fit all that we had to have some confidence in local communities and local decisions that local people seem to have the better so we'll keep doing it to get it right but i'm glad that you took the time to show that it is and the question really isn't the anatomy of the will again i want to thank you mr chairman for at least thinking outside of the box and considering programs that might bring in local solutions although as a former city controller i'm probably a little more skeptical of how mayors and city councils sometimes use funds that land in their laps and on that point might inquire of mr barr told i believe there is a provision in the chairman's mark that energy conservation education programs information programs would be a qualified use of proceeds so there would be the potential for a mayor to use the proceeds of these putting their own face on it or or having simply bring this up because i know in pennsylvania we have a lot of bipartisan experience with politicians public funds to put their own faces on you know otherwise worthwhile advertising efforts there'd be nothing to constrain america under this bill from actually using the funds to run advertisements that say feature themselves with a conservation message and federal legislation the federal legislation would not place any limit of of that sort of number of states states i can understand why somebody from another part of the world might feel their way about their local government officials but i think if you would look to the west coast you will find that the mayor of san francisco and the people of san francisco put up a bond issue and put solar panel ing on every public building in san francisco it's also happening in los angeles it's happening in sacramento the star energy program is in seattle you can buy your war sure dryer your refrigerator and get a seventy five dollars rebate any piece of equipment you put in your remodel on your house and to imply that this bill's likes ability is somehow weakness seems strange from people who talk about states rights to denigrate all government officials as though they will not know how to put together a program that makes sense for the area i think simply doesn't look at the history of what's going on in this energy question and i think is there anything in this bill that would be called an earmark on the on this energy stuff maybe they want earmarks so i want to know are there any year marks in there mia under the house rule on on earmarks mr  any money directed to any particular place now any particular government official no sir and i think that's the point the point is that this money is going to be used efficiently and effective y by local governments who have their heads screwed on right the mayor seattle started an accord on energy conservation and got a hundred and thirty four mayors around this country to sign on now the president of the united states doesn't want to have us get into kyoto accords or refuses to negotiate or do anything about it but the mayors of this country are leading the way and i think that's the point of this particular provision in the bill is to give to local governments the ability to use these bonds creatively as we deal with what is clearly the biggest crisis this country faced with a gentleman  could you perhaps outline for us what the president's position is on global warming well i think it's to find more oil and keep burning oil fossil fuel that seems to be his only plan i don't see anything else that has come out of the white house or most saying i mean there is some confusion or maybe you could clear it up for is that after six and a half years i i thought that the president grudgingly acknowledged that it might be happening is that your understanding yes yes he says it might be happening as the the witnesses said the c e o of people could do crazy stupid things with these bonds but the fact is th local officials have not been and the president has not taken a leadership role in the world on an issue that where we can serve twenty five percent of the world's energy it's not for us to be standing back and saying somebody else will lead the way back the gentleman thank you mr chairman i want to thank my colleague from seattle because many mayors of big and small towns including mayor daley of chicago are leading the way on different energy alternatives and so my colleague from louisiana highlighted where maybe the definitions on the bond issues may be loose and therefore need tightening the general idea that a we would not have a one size fits all approach which used to be the mantra of the minority party be allow local initiatives to step forward was the concept and the idea intellectual construct going into this if it needs tightening right but the city of chicago has led the effort in big knowledge not only for its environmental sensitivity but for setting a goal to cut its energy consumption the city itself since four out of four fifths of all greenhouse gas emissions come out of urban centers in fact many mayors of big and small towns are leading the effort can you identify abuses i don't know of anybody who's actually as you talked about using advertising if it needs to be tightened there so be it let's do it if other abuses need to be do we want to write off al gore's house and said he can use it fine i don't problem with that but the notion that we would stop local initiatives where in fact chicago has set a goal and has led other new york city under former republican mayor as of yesterday different examples of places where they can have single initiatives and different ways of dealing with both cutting energy use and that is also good for our environment i am shocked that the other party doesn't want to do that and i'm taking at face value not that you're opposed to the bonds of your post the definitions being loose we're living in you know what second i just like finish one second and then i will and my colleague from wisconsin would also like time which i also yield to the notion here and i wish to take your concept of years pass which is local initiatives no one size fits all and give either states and localities the resources to do innovative and interesting things to do to both cut energy use and help the environment and if that definition needs tightening i'm for it but the notion that you want to discredit something i do not know of a single city that is just said by advertising although a lot of my colleagues do support the notion of using advertising to cut drug use what we're you know if somebody want to use advertising and advocate conservation and ways to do it to cut energy use i'd be interested in if you want to exclude politicians from being on all before not a problem with that let me deal to my colleague from wisconsin then to my colleague from pittsburgh i think the gentleman for yielding an idea of just a quick question for mr barr who there's nothing in this legislation that would prevent states or cities or local municipalities of tightening up the restrictions on the use of these bonds as they see fit if they want to further define the appropriate use in their own state or their own local community they're allowed to tighten up those definitions i assume that that's correct sir as with any bond issue the state or local government can set its own rules for use of the proceeds as long as those rules are consistent with the with the federal rules on top so you can be narrow or you can't be brought  well many of them are choosing to do so and we've cited examples here already throughout the country and i think this is one of the most innovative in the exciting features of this energy tax package today is the fact that we're establishing these tax credit bonds giving states and local governments the opportunity to choose what works best for them in the energy needs of western wisconsin i assume it's going to be drastically different from the energy needs of louisiana for instance and allowing these municipalities these states to be able to move forward i think makes a lot of sense because it's tough for us here sitting in washington even with the collective wisdom on this committee to be expected to choose the winners and losers in the exciting technological changes in the advancements are taking place throughout the country and also in our  respective states and congressional districts and that's really what this tax credit bond speaks to and i thank the gentleman for yielding you my time so i want to make a closing comment so if you can be sensitive to that i will i will make it very brief and i simply suggest to the gentleman that while i appreciate his confidence in his local government there have been instances in pennsylvania where public funds have been used by politicians for advertisements that have been useful to themselves and one example i cannot think of a single politician would use public money for advertising but i think i would i would simply i would simply point out to the gentleman we in our community in erie pennsylvania not pittsburgh but i understand the confusion i had at least one recent instance where a mayor now former mayor i believe had used recycling funds received from the state and i may be wrong on those particular details but it clearly is public funds for advertisements and it recycling which i think is directly where this program is aimed at that that included ads that featured himself and i i think that's an abuse and i don't think we should be living it and i'm grateful that the gentleman has opened the potential i'm opening to make that mr chairman i meant to say one closing comment possible thank you i'm commend the chairman and the will of the majority party for recognizing the importance of deferring to local control and deferring to the fact that we don't have all the answers here in washington and for putting forth a bill that is an attempt to try and foster innovation although i would come down on the side of the ranking member in saying that the provisions in here troubled me  given that what we're doing is we're setting up a structure whereby a state or city city can give its residents grants or loans to pretty much pursue whatever it is that local government thinks would qualify as a conservation program you know we have the instance here for a situation where a high definition television is rated by energy the case could we see a scenario where a local government or state puts in place a program whereby it goes and borrows money and then sets up a grant program all on the taxpayer dime to the that is permissible if an individual could then take advantage of this tax subsidy which is funded by taxpayer dollars we could then could we not see a convicted felon who's completing his or her sentence through home detention receive a grant so my question is is that true is there a means test for the grant so if we had this if not if we had a situation where someone like martha stewart could also receive a grant while completing her sentence and use it to purchase a home theater system while she is filling out the rest of her sense at home mr cantor has as i explained the the chairman's mark on the qualified residential energy efficiency assistance bonds does have a low income set aside so the intention of the provision seems to have an income test for the use of some of the  some of the proceeds so assuming that you're selling was was low income arguably that would be permitted again within what b what the state or the locality decide again are permitted if i can follow up then is it a required is a requirement or just a set aside and i think that's the point it's the minimum twenty percent has to be so i mean it's a so eighty percent could be taken advantage of by anyone on the income eighty percent to eighty percent is general use again the city i mean the state in this case could decide that it wanted to use all of the proceeds for low income it just says  every state has to use at least twenty percent for low wages so i think i think the point is made again the way that the provisions are drafted the way these funds could be used as you could very well see tax payer dollars tax increase revenues produced by tax increase used by the likes of a martha stewart to go in and have a plasma t v which is exactly the point mr chairman you know this we're talking about taxpayer dollars we're not saying that some of these programs may not be laudable but to have a contract here where something like this could occur i think is probably not the direction the american taxpayers want this congress to go and i you know back i thank the gentleman for his contribution i assume that a local government could set up a bipartisan lower income brothel as long as it was a green house if the i was able to do it but i  distrust but really doesn't say much for confidence and in local government but we have to move on let me an outside mr blumenthal kind davis and lebanon has requested also i want to thank you for the work that you've done not just for the committee but for the congress thank you mr chairman and i'm just i just this last colloquy just i find stunning because it betrays i think a lack of what is going on at the local level mr mcdermott is right under the leadership of mayor nickels from seattle there has been a partnership although he's off on his numbers but i find the same thing every time i quote the number of cities that are part of this coalition i find that it's wrong i think it's up to five hundred thirty two cities now across the country i wish the committee could have been at our select committee on global warming yesterday when we heard from mayor daley when we heard coincidentally from the mayor of portland tom potter the mayor from gainesville florida representative of what is going on across the country with innovative programs and i think it's insulting to suggest that we're talking about martha stewart and plasma televisions with a straight face that beatle little's the work that people are doing without the support without leadership from the federal level will german you i will yield in a moment i would be happy to yield the chairman's notion that maybe some people think that their local governments are incapable of structuring something that is focused and direct and involves the public i have no problem having politicians prohibited from public information but we have people who are moving across the country to make up where the federal government has failed and failed miserably to provide leadership in terms of energy conservation i put the question to mayor daley to mayor potter to mayor rayner i believe her name was from gainesville about the potential of having resources in these bonds to be able to stretch what they're doing you know they didn't talk about plasma t v s for martha stewart they talked about putting low income high school students into neighborhoods to switch out energy efficient bulbs replacing energy  in terms of what they're doing with transportation in water conservation these people are pushing the limits and they're doing so without help from the federal government and with all due respect with trying to come up with worst case scenarios i can understand why you do that given the performance of this administration in high priority areas like the war in iraq and looking at the abuses of federal contractors and the loss of billions of dollars in iraq that the department of defense can't account for i can understand why you would be nervous but by any stretch of the imagination i think structuring some sort of bizarre hypothetical for martha stewart is not giving credence to the work that is happening in hundreds of cities across the country and i would be happy to yield for my food to my friend from just i think zones in oregon and i would simply respond by the fact that you know the the illustration that we could we may we may be finding ourselves in if this were to pass and become law and martha stewart would benefit i think just makes the point that we ought to be about prioritizing when we're talking about spending dollars and that's really the question because if there are wonderful programs out there i think what the taxpayers are owed is certain level of our common accountability gentleman's notion about the administration or its priorities i would certainly think that when you look at the challenges that this nation is facing on a national security front and compare that to perhaps some of the priorities  reflected in this bill we have we find ourselves in this bill promoting the use of bicycles in the commute to work where i would question the the outcomes and the real impact of that in terms of when i would just hope mr chairman that people do look at this in terms of the work that's going on but i appreciate the gentleman suggestion about the use that it is made i think that that is a very good standard we could talk about the use of corporate jets to go to fly people to golf courses and see if that's what was intended and the tax breaks that are given i think this is a great standard i think we ought to apply it more generally but i think what the chairman and the staff it come up with to offer for us today meets the mark and i appreciate the work and i  thank you mr chairman and i like all of my colleagues i'm enjoying this conversation we're having this morning and i just want to make it very clear for the record that i love each and every one of my local officials all democrat and republican and i've enjoyed over the years i've been a legislator in assembly and here in congress working with them on their local projects recognize anyone else that want to put out a disclaimer but let me but i do have a couple questions i'd like to ask  our panelist and mr barthold mr barthold in the two thousand and five energy bill which is now been in effect now for about two two and a half years and we did a number of things emphasizing alternative sources of energy promoting biofuels and as well as promoting energy conservation and i've seen tremendous economic opportunity as a result of the two thousand and five energy bill hundreds of millions of dollars invested in new wind energy new biofuels production manufacturers that supply the power industry for example or doubling tripling their employment so we've had a very very positive impact and there was also a provision in the two thousand and five energy bill that  credit so that homeowners could recover the cost of making their home more energy efficient and also for those who build houses they'd be able to take advantage of that as well to make new homes more energy efficient can you tell me in the mark that we have before us are those provisions extended the particular provision on existing homes which provided for  such things this credits for energy efficient windows and the like that that is not extended under the under the chairman's mark nor energy efficient new homes at new homes so those those would be the items in the mark which directly on unofficial numbers tallied up about ten thousand newly constructed homes which have been built  as a result of the incentive for new construction of energy efficient homes here saying that this legislation allows that that incentive which has been working to expire is that correct it does not change that incentive i guess it does not change that expiration date that that's correct i should fire under this legislation we lose that incentive after the end of zero eight after the end of after the end of  a new and existing homes there were incentives for middle class homeowners people i represent as do my colleagues in our districts now also we also work successfully in the two thousand five energy bill incentive to make their buildings more energy efficient the commercial buildings provision to which you refer which is extra depreciation allowance of what is it it's a dollar eighty per square foot for qualified commercial building proper is extended five years through two thousand and thirteen and i didn't want to make it very clear i support this extension but it's interesting that we extend an incentive for leaving out middle class homeowners and those build houses as part of our effort to provide more energy efficiency in our homes and it's very important recognize twenty percent of the energy we consume in america is consumed in our residences and irman thank you i just have another quick follow up question mr barr again redirecting your attention to this tax credit bonds that's contained in the legislation and just so we're clear this isn't free money that we're just handing out to states and local governments the way this is structured is will cover the interest on the bonds that the states and local governments have to front in order to move forward on these energy projects or an energy efficient programs but they have some skin in the game as well don't they not that as a bong correct i mean the credit is the credit rate when it is set by the treasury is targeted so that the bond sells at par so that basically speaking the issuer would have no obligation to pay interest but the issuer is obligated to repay the principal exactly and i think it's based on some rough calculations that we're making here that the states and local governments that choose to participate with these tax credit mon's are going to have to you have to put in involve have for maybe a little bit more than half of the cost of these energy projects that they want to pursue and i think getting back to the accountability issue and they can have all the fun they want far as raising these scenarios and hypotheticals but i think a lot of the opposition we're hearing today mr chairman is opposition for opposition sake and that they didn't think of allowing the states and local governments to play a substantial role that we're asking them to with these tax credit bonds and what greater accountability and people at the local level dealing with their own local governments or state governments making sure that money is not being wasted or not going to line the pockets of maybe someone scrupulous policymakers at the local or state chairman i think most members of this side of the aisle actually think there's a lot of things that are happening at the state and local government that we just want to try to avoid potential abuses in fact i would agree with the gentleman from illinois who i think is a left the room that there are many big city mayors and small town mayor is that are doing some really good things and which leads me to my first question the way that i read the legislation only big city mayor will actually have an opportunity to utilize this program a small town mayor would not is that is my interesting correct under the quote under the the first set of new by the qualified energy conservation the allocations can go to states are or large local governments the qualified residential energy efficiency assistance bonds are a state  thought thank you so if your city or municipality or village or township or county is less than one hundred thousand and you're doing some great innovative energy things you would be  legislation actually does specifically provide that the state may further allocate so the state that had many smaller communities could set its own internal limit of of twenty five thousand and make allocations down to every community with twenty five thousand are set up some other perceive which is different than if you're a city of one hundred five thousand if you're one hundred five thousand there's an automatic mechanism under the one set of bonds so you're treated differently if you're a local government with less than one hundred thousand people that your local government with over one hundred thousand people as as this is designed that direct i think that's a flaw in the bill and i hope that the majority would be open to a  amendment on that because i think it really holds a different level standard to local government officials who are in cities or eunice about these are local governments with less than a hundred thousand other question i have with respect to standards have you seen with respect to federal dollars any states or localities restricting their own ability to use several  dollars you mean from tax exempt bonds organics credit bonds any france anything in my experience in the state when we were pulling down federal money we didn't say to ourselves we're going to make these federal dollars less restrictive than what the federal certain states do limit use to which indebtedness can be undertaken and so that would be a restriction that a state imposes on what would otherwise be allowed by the federal government the federal government would allow a have to claim no no knowledge so i don't want to make it look like i'm saying i just can't i'm just not qualified to answer for one last question as a means of funding just down this road for rural development purposes involved in electricity  production of electricity from renewable resources for the state like iowa use their allocation to complete a construction of a replica of a rainforest for the purposes of  a rain forest the energy use would be from potential solar panels for the use of showing children and their particular state the importance of conserving energy or or the importance of the greenhouse  effect that the potential use or if i may be permitted to quip by the committee it seems that the committee has a memory of some of the debate from the two thousand and three energy legislation where there was some discussion permissable advanced technology and energy conservation expenditures are alternative energy systems are permissible so solar panels would be permissable  somehow these bonds could be manipulated for some unintended nefarious purpose i want to ask you if there are not provisions of the tax code based on some of the legislative changes in the act that in two thousand and three and two thousand and five by the republican majority that possibly could have been subject to manipulation of this bill may correct for example are there section one ninety nine benefits that were extended to the oil industry based on legislation passed in the last several years that may have been manipulated from intended purposes i'm i'm not clear on what what you mean by manipulated and well used once on purpose other than what congress may have intended or what the draft the legislation may have intended i'll give you a specific example where there are provisions section one ninety nine benefits that where extend that to the endless array that provide it what amounted to export subsidies for the domestic production of oil and gas products the general intent of the american jobs create an act and in two thousand and four with the one ninety nine deduction it was largely in any qualifying domestic production as defined in section one ninety nine would qualify for essential a reduced effective rate of tax with the intent that yes some of that production would be would lead  would be used would be would be sold mastic like let me ask you a secondary question under the tax laws it's read now isn't karlie exists is there a potential for certain oil and gas companies to manipulate their extraction income to receive beneficial results in the us foreign tax credit rules if you think you're referring to the provision in the chairman's mark that i described as the foci for a provision then i can well i want to avoid the use of manipulation that's kind of a loaded loaded term i can tell you what the what the provision it is the under present law with on looking at fogy income there's an issue of what is the price of oil when it's extracted if it's extracted in the middle of the desert for example in a saudi arabia or in the middle of the ocean in the north sea there's not an active market price right at the well treasury regulations provide a couple of different methods for assigning a price and hence in income that's extraction income that creates flexibility  it's permissible within the law then for the tax payers to flexibly apply this to their to their benefit the chairman's mark thinks that there would be taking the implication the chairman's mark is that there's too much flexibility and he his mark would provide a more hard and fast determination of price at the extraction point and the chairman i hope that's well mr chairman the point that i would make is obviously if we're going to have a debate today about the possibility of these conservation bonds being used for some purpose that isn't intended it would seem that we have to also look at the possibility and the eventuality that the tax code as it currently exists may do the same thing that there may be elements of the tax code today that are frankly being repealed by this bill that have created certain and senators that maybe not what congress intended and incentives that frankly could have been manipulated to use for some again unintended effects of the oil and gas industry so if there is so much concern by my friends on the other side of the aisle about conservation bonds being put to some unexpected purpose it seems there is room for habs much more room by so what's happened the last several years for concern about the oil and gas industry using particular tax benefits or particular tax breaks for purposes that congress may not have intended and i want to make sure that we didn't leave this debate without that point being made the take the gentleman mr lewis of kentucky would you like to  supports innovative and environmentally friendly ways to use more illinois coal and will give this critical industry an important economic boost senator obama has said coal to liquid fuel technology will create jobs and lessen our dependence on foreign oil leading to a renaissance for illinois coal my question is this as part of the senate energy bill debate mr pardo there has been discussion  adding loan guarantees to colder liquids facilities that would capture some of the carbon the minute in that process the bill permits the proceeds of tax credit bonds to be used to fund projects that capture and sequester carbon dioxide but does not specify that all the carbon would be have to be sequestered accordingly could a state use these bonds to subsidize the construction of a state of the art cold liquids facility that will capture and sequester only some of the carbon dioxide no forgive me for my confusion mr mr lewis of the the chairman the chairman's mark does not require carbon sequestration now it would seem to be within the  you know within within the scope of the energy conservation bond that proceeds could be used for such new technology programs i was getting confused because the finance committee  yesterday marked up some legislation and there was a substantial debate on some requirements in their proposed legislation on carbon sequestration and and if your question is in part to what they're doing as opposed to what the committee is currently doing their provision did did not require one hundred percent capture or seaquest sequestration i  it is over i would just hope when the honeymoon is over that the divorce isn't based on ridiculousness like some of the objections that have been raised here  i think which mr cantor talked about letting local units provide benefits that might be used by felons whether they were in their home  secondary amendment that that can't be true of anybody in a middle income bracket who has a home who is a felon in home detention  think that shows the absurdity of this objection well gentlemen you very briefly i respond to john from michigan you know i think we demonstrate the fact that the draft there is there is and it is so loose as to allow for those extreme instantly let me take back i heard that first of all you have been suggesting moving specific programs into total grant structures that have total looseness to them in terms of local discretion and here you are trying to create the theater of the absurd and you had a week or so you knew these bond programs were being proposed by checked no one came forth on a bipartisan basis to raise any questions and it's pretty clear you have a coordinated effort here to try to to ridicule what is a serious effort to change the priorities now mr lewis raises a suggestion you know have an amendment and we'll talk about it substantively i hope it isn't argued against and i think there are strong arguments against it by following the example of the theater of the absurd i mean you're essentially saying you can't trust local communities to do anything with these bones or you haven't come up with anything except the most far fetched notions as to what they might do with the money and we can't proceed on this basis so what we'll do is to take your absurd amendments and simply dismiss them vote them all down in the absence of any real effort over these last days to sit down if there were some objections similar to them that objections and talk about how these bonds might be used we're talking about a cost to the government of some something like two billion dollars that would generate about three times more than that in terms of addressing serious conservation needs in this country and so what you do in terms of indicating what your priorities are by raising these absurd possibilities that i think fly in the face of any kind of trust in local governments or state governments what you're essentially doing is saying here priorities are to mock instead of to move the ball well janet and it's so clear it's so clear where the gentleman you i will thank you to your point about there's no there's been no serious bipartisan effort to work on this actually at a staff level there was  vote against don't don't raise issues that reflect that you don't trust local communities or state communities and you raise something about snowmobiles in aspen difficult project regarding the implementing the green community programs there's really not a lot of definition so i guess i'd like to ask a couple questions could states use the bond proceeds support during community programs subsidizing the construction of new non greenhouse gas emitting nuclear power plants since i would make the community more green well that's sort of that's i guess that's a tough and i maybe i  regulation notices to tax payers and as has sort of traditionally been the case with tax exempt bond finance and the current law tax credit bond finance  issuers typically rely on their bond counsel for clean opinions before they issue to issue the bond and so the question that you raise since it's obviously the case that nuclear power plant doesn't doesn't your question illustrates that at some point some additional guidance would have to be provided perhaps in terms of what could be meant by a green community i would imagine that bond council might have qualms about saying that a nuclear power plant automatically qualified is as green but in terms of what what the legislation says i guess have to say it's sort of it's it's unclear what a green community would mean and that i would expect in the normal course of events the treasury would try to provide some some guidance which is really really the next question we're very concerned and of anna about  reducing in reducing technologies and activities so if that were deemed to be a qualified activity it would seem that the proceeds of these bonds could be used for that purpose so i can ask for solomon then do you think that would be an appropriate use of the  bombs well the internal revenue service would as mr barr told indicated would have to issue guidance even the form of notice or regulations and what the internal revenue service would try to do first is try to depending on what aisle the regs were written at that point if it's not precluded in the chairman in the chairman's mark it's also not automatically included by saying you know nuclear power plants are our green it's as your question has pointed out sir it's it's a gray area thank you thank  is there any behavior change or incentive or deterrence covered in this bill that couldn't be accomplished with a carbon tax mr senator along if you recall suggests that there wasn't much he couldn't do with the tax code including water run up hill i didn't overlap with the senator but i chairman my friend from virginia mentioned something a while back that i wanted to to talk about i think it's where ever going to be serious in this nation again in our war against terrorism we better get very serious about getting away from our dependence on foreign oil by passing this legislation i think its national security imperative to ensure that we get away from our dependence on foreign oil it makes absolutely no sense to me that this nation is funding both sides of our war against terrorism we are tax dollars go to funding our troops that are in the field fighting against the terrorists and our oil dollars are going to countries that are turning around and using this money to help the terrorists by equipment and fund their attacks on american soldiers and their attempts to kill americans here in the united states of america that is because we have a dependence on foreign oil it is less important to me to worry about the possibility that martha stewart may or may not buy a big screen television then it is the eventuality and very strong possibility that we're going to be paying a hundred dollars a barrel for oil for the obsessive compulsion that we have for foreign oil this is a piece of legislation that provides tax incentives for solar and wind and geothermal and bio mass and hydro and other forms of alternative energy so that this nation can be moving towards energy independence if it were up to me it would be stronger we would be energy independent as a national imperative national security imperative within ten years this piece of legislation moves us in that direction and i am supporting it without any concern whatsoever that martha stewart will have a fifty five inch big screen t v in her living room when she got out of prison and i think it is incomprehensible to me that we should be talking about issues that have a profound effect on this nation's future and the future of our children and our grandchildren by trivializing some of the possible possible unintended consequences that may be in this legislation for me this is a good solid piece of legislation moving us in the right direction and we ought to be in sync speaking with one voice and getting away from our dependence on oil oregon about municipalities an innovative programs perhaps but the strip of all part of this tax credit to me is breathtaking in its audacity quite frankly and my friend from wisconsin talk about  municipalities having a skin in the game not necessarily you know a tax credit bond results in the federal government paying the interest why don't we just do an earmark to the spending process so let me ask a question about this triple will part of this mr barthold first this let's get away from the martha stewart hypothetical to get something that i think is a very realistic hypothetical could an investment bank purchase a few hundred million dollars worth of these tax credit bonds strip the tax credits from the write a repayment right to repayment of the principal the bonds and essentially sell them as two different products mr mr ha occurs in the financial markets today with with taxable taxable bonds the coupons are stripped and sold as an income as a current income stream financial product and the underlying principle repayment obligation is as sold to someone wants to receive income in the future so the same could be done under the legislation with the tax credits the tax credits could be sold to individuals or businesses who want to have a stream of tax credits and someone else could purchase the principal payment piece so let me let me ask mr solomon follow up question are there some tax policy concerns stripping or tradeable tax credits for instance about being able to accurately track whether those claiming tax credits actually are entitled to them are there some compliance problems mr solomon yes that there would be some complexity in compliance problems  with respect to being able to strip a a tax credit off a bond it is not like a financial product lead separate the principle from the interest or is an actual economic strain of income here you'd be separating the tax benefit itself which is soley a tax benefit and be able to transfer that to someone else and then with concerns that we have with respect to the ability to market tax attributes and move them around  to tax payers where it's not appropriate but this is a concern that we would have from the tax policy viewpoint are you aware of any current existing tax credit bond that allows stripping method you know i'm not do you know whether this feature was considered when existing tax credit bonds were added to the code and if so what first of all was that considered if you know the current tax credit bond programs the qs adds in the crabs do not have the ability to strip the tax credit from the from the principle was this issue of stripping considered same for instance with q sabs i do not know whether it was considered during the legislative process i know the issue has come up since the those programs  to exempt well let me give you an example if you had a tax exempt pension fund investing in the principal repayment portion of bonds perhaps as a hedge against maybe riskier investments could we not say effectively they the expect them to be to be the purchaser of this stripped coupon credits because as an example the they have no tax liability and so the tax credit would do do them no good they might be interested other taxable bond or a script taxable bond for what its potential yield is it would depend upon how the market price is out the principal piece and economically i would expect you know the principal piece  to trade essentially equivalently with other you know other similar instruments well i'm not sure that that would be if if you would do that is creating a tax benefit for the exempt organization i mean i'd have to think more about the  you mr chairman and i know you want to get to the the amendments and some the alternatives that will be presented by the other side of the aisle but i want to say in terms of this discussion is that while it is certainly appropriate to get into some of the very specific sort of some of the chairman's mark i feel we're losing sight of what we're doing here and what we're doing i think is really very exotic nif akin to for well for the environment for energy efficiency and we're doing it in a very fiscally responsible way we are trying to redirect six years of policies that have really ignored the enormous innovation and the enormous information that we have about how we can conserve energy how we can be more energy efficient and how we can help reverse global warming and we have been doing it the conversation that we've heard about the concerns that our cities and our states might misuse some of the incentives that we're creating here ignores the fact that while the federal government has been failing to incentivize energy efficiency and conservation and failed to scale up the alternative fuels  renewable fuels that are out there we you know we are we are let our states and our local communities have been doing this one of the specifics i wanted to to mention is that we've talked about our cities and states that have done a remarkable job in trying to move forward on energy efficiency and conservation i represent a city that has not done as much as some of the other cities and i want to say that one of the enormous advantages of some of the way we have redirected dollars tax dollars that have been used for the oil and gas to subsidize the own gas industry we're redirecting those dollars with understand that we're doing that in a very fiscally responsible way to cities that have don't have the dollars to do some  of the programs that some of the other cities have done so while we want to acknowledge five hundred odd cities that have done this in the city of philadelphia this has the opportunities the the by use of these by lots of enormous opportunity to be able to enable them to do some of things they've been done in other cities that have just in fact not been done as much as we'd like whether that's incentivizing private building to be able to be done in a more energy efficient way to incentivize residents be built in a way that's more efficient whether it's to incentivize the use of public transportation open space green space bike paths you name it so many cities have moved ahead on this we're doing so really for too slowly and the opportunity here is to use tax dollars to in fact scale it up and to do it much more quickly and so i want to i want to commend the chairman for putting together that chairman's mark that actually reverses the  policies in a certain way of the last six years and incentivize the use of energy efficiency promote energy efficiency educates the public about how we can be more green and how important that is to bring down the cost of energy to our businesses and our and our individuals and actually is a move that forward in a way that our reliance on foreign fuel so i just want to acknowledge the the chairman's mark i want to thank the witnesses for trying to answer what are not always easy questions because they are in some ways more political than they are substantive and to say that this is moving us forward in a really really clear way i want to thank the chairman for for this and i appreciate some of the all the other side of the aisle recognize that some of the work we're doing here is really important i'm sorry that they're not joining us in just being enormously supportive of this legislation to the different and both sides thank you very thankful that you would like recognize mr right thank you mr chairman picking up on where mr schwartz left off on whether or not we've done much to invest in renewable energy or not i'd like to ask question mr about sold in an area that's a big deal where i come from ethanol just in my hometown of janesville within about twenty miles there's three ethanol plants and there's five more being constructed so this is a huge deal right now and there's obviously a lot of a lot of excitement about this and so it seems to me there's already underway an incredible rush to produce more ethanol i want to ask you a few questions about the provisions in this bill with respect to ethanol in the new tax code section fifty four c in this bill that would allow proceeds of the tax credit bond issuance is to be issued for research projects on ways to increase quote the efficiency of existing technologies for producing alternative fuels and quote could have midwestern state therefore use these federal tax credit bonds to buy their farmers new air geishas systems as part of a research project to determine whether better irrigation regardless of the water energy use can increase the yield on corn designated for ethanol production as as research as geared toward technology proving proving to like irrigation permit would seem to be permitted yes or so after they say a farmer gets to subsidize canal well i should should raise a good good point the water and kinetic hydro kinetic energy provision subsumes the present law provision in section forty five for small irrigation so the already is credit eligible i think in the precise circumstance that you described but yes that could be on top of this mother could you could you could claim a production tax credit under section forty five ok and then this would be in addition to the higher price most economists agree we're getting for our corn crop by virtue of the fifty one cent per gallon tax incentive for producing ethanol correct not in place of but in addition to correct the that's this percent bonus depreciation on that plant in addition under under present law provides that fifty percent bonus yes or and if the farmer uses his corn stover stock to create a cellulosic ethanol plant he would get an additional fifty cents per gallon tax credit under this bill is that correct the chairman's mark gallon they're now getting a guaranteed one dollar twenty six a gallon this bill would add fifty cents a gallon to that is that is that correct mr i just more question on your example when you say that they're guaranteed a dollar twenty six i think it's more the current wholesale price of ethanol is in the range of a dollar twenty to a dollar dollar thirty the credit you can claim for ethanol production under present law just i really did one more quick question i see my red light has been going on your mind has no they did i can't see it from here then i apologize there's a tariff on in addition to this correct  will then recess because they will be a series of votes and then when we come back we will be prepared to entertain amendments with the persuasive chairman thank you so much i think that twenty seven seventy six is well on its way  i like to go back to early january and jan you when we talked about h r six and one of the reasons why we were so vehement about h r six and that that piece of legislation the clean energy act was we started to tighten up the loose ends you want talk about loose on talk about what's loose we talked about what was loose we started to talk about it and that legislation the tax loophole for oil companies the royalty relief reform you're talking about nickels and dimes we're talking about a tremendous amount of dollars that did not produce alternative energy sources whatsoever you want to talk about loose talk about the intangible drilling cause talk about the g the g and g expenses the geological a geophysical which taxpayers in this country add to participate in you want to talk about loose talk about the percentage depletion or the refinery reduction that's loose that's loose by two thousand and twenty five we are going to import over seventy percent of our oil and what we're doing in this legislation along with what we did back in january was to set a new direction  country we're tying up the loose ends in many of the examples that were brought up today are not only incidental they are insulting to the work of the committee so i want everybody to be on notice here that the purpose of this legislation twenty seven seventy six is to tie in what has been a loose ship under many administrations democratic and republican and countering high prices at the gas pump in fact the region of northern california the rural region that i represent suffers from some of the highest gasoline and diesel prices in the entire nation mr chair nations today that number by the way we thought that was an outrageously high number at that time or a percentage today it's about sixty three and a half percent of our oil is imported from foreign nations  this i don't believe is responsible or sustainable from an economic and security standpoint a key component of meeting demand in the united states is our ability to refine the various eighteen different blends required in a different states in parts of our states and our ability to seamlessly transmit feels supplies around the country yet the majorities green bond proposal does not address this critical need for transmission infrastructure or maintenance and expansion of our refinery capacity in fact a green bond proposal in the bill contains some limiting constraints and allocation rules that would prohibit proceeds from being used for such purposes despite optimistic promises and our best efforts renewal field will likely remain small component of our energy supply for diversity of the future this is despite the incentives we've already provided expanded and expanded in the last fourteen years such as section forty five production tax credit for wind solar geothermal open and closed loop bio mass and this section forty eight investment tax credit indeed despite efforts to expand our nation's energy supply base traditional fossil fuels including oil natural gas and coal will continue to supply the vast majority of our national energy needs and yet again the green bonnes in the majority's bill failed to address the critical need for maintenance of existing oil and natural gas transmission lines or of our domestic refinery capacity for this reason my amendment would allow these bond proceeds to be used to build new or expand existing refinery capacity or to build and maintain oil and gas transmission lines i urge my colleagues to vote for this amendment and mr chairman i thank you chairman i would simply like to very briefly speak in favor of the amendment i think the gentleman is correct in changing the focus a little bit to accommodate investment in refineries as many members of the committee  who served with me on the select revenue subcommittee we recognize from the hearings that we participated in that there is terrible pressure on the on the  petroleum that work right now in this country in part because of a shortage of refinery capacity since the late one nine hundred seventy s the level of utilization of refinery capacity in this country has has tightened from seventy eight percent to now a level of ninety two percent utilization and as a result when we have a major refinery offline as we saw with  expand refinery capacity and we realize that there are many that would prefer to take this bill in a slightly different direction i think though what the gentleman is proposing is appropriate as part of a coherent energy policy i salute him for it and i has pulled its head out of the sand to say maybe climate change is a serious problem to entrust to this administration the opportunity to block the many creative and constructive ideas in this proposal  to move us in a new direction to move us towards energy independence would be to subvert the entire purpose of this legislation and i hope that our colleagues will reject mcclary thank you mister chairman well just to briefly respond to mr dog it's concerned this amendment would not allow the administration to block any other proposal as we pointed out this bill has very little in terms of constraints on local governments as far as what they choose to finance with these bonds so this would in no way give the administration more power to block other types of projects what this amendment would do though is give at least some slight modicum of balance to this and energy bill this bill will raise the price of gasoline so if you're concerned about steps or policies administration's been following you're about to step right in line with that this is a clear price raiser at the pump because you're go increase the cost of doing business for oil and gas companies substantially with this bill so this amendment minor as it is what at least allow local governments that might have a refinery in their area the opportunity to use these mines to retool the refinery expand the capacity and generate more supply for this country so i think it's a very well think we could all stipulate here today that we do have a refinery capacity problem in this country today but it's multifaceted it's due to a variety of factors and given the fact that oil companies today are sitting on huge cash reserves realizing record profits at the pump i would submit that it's not for lack of financial reasons or financial incentives that they're refusing to move forward on expanding current refinery capacity or building new refinery capacity and what we're trying to do is make a decision right now in regards to the limited resources that we do have in the committee and what type of technological advancement we're trying to incentivize with these tax credit bonds and that's why i applaud the committee's decision to include language that would commission the national academy of sciences to do a study on the short and long term implications of biofuels production in this country because i think there are also some consequences we need to be aware of in regards to the big push for biofuels production one of which is what's been cited by large oil companies because their reluctance to make long term investment decisions they feel that we're moving into the biofuels area they are fearful they won't realize a significant return on that investment in the  that's just one of many facets that i think we should be asking the national academy to delve into and study in their report and reporting back to us in regards to the consequences of the huge investment bill both private  public as being made in the development of biofuels but also cement the just a few years ago we recovered mammals from one of the largest oil companies in the nation that stated that was part of their business plan not to expand or to build new refinery capacity so they could control that supply and how some might call that market manipulation or taking advantage of consumers at the pump but again i would submit that given the huge cash reserves that's being realized in the oil industry today that's not for lack of financial incentives that's preventing them from being able to move forward in order to upgrade or to expand existing facilities or to build new ones  troubling that we're we're talking here about a long term policy on the part of the industry they haven't had they haven't been making applications for new refineries i think it's i'm trying to remember it's twenty years or it's an amazingly long period of time before they've made application we made under the last hodgepodge of an energy bill we did make it easier for example to access some federal property what we have seen is that the industry instead has been can has been consolidated they they've been shutting down other and refinery activities in the context of hundreds of billions of dollars sloshing around in the oil industry taking few of the scarce dollars that we have under this under this program that we're coming forward seems to me to be decidedly ill advised we have an opportunity to improve energy efficiency to be able to strengthen what's happening locally to be able to deal with alternative energy frankly if we have extra money we ought to be doing directing it towards alternative energy development but to somehow give more money to an industry that has decided not to expand their refining and diverted away from other priorities that would help us deal with energy independence over a longer term i think is ill advised it's unnecessary and i would hope that the amendment would be rejected by their members thank you mr chairman with the sponsor that mimic yield for a question yes in studying the language of your amendment you say building or expanding any qualified refinery would that also include a biofuels plant such as an  it would so actually this amendment actually promotes alternative fuels as well as our traditional fossil fuels is that correct that's correct well you know mr chairman i want to speak in support of my friend wally herger the gentleman from construction they've already begun construction on one we're going to have the largest biodiesel plant in north america three hundred million gallon plant that's currently under construction in seneca illinois so clearly the reason i support mr  amendment is one of the issues that are biofuels plants boys have to address is coming up with the capital to actually construct them so clearly mr berger is carefully thought this through and this amendment those mr brady thank you mr chairman it is that absolutely inaccurate to say that the industry is not pursued more refining capacity in the united states we have three expansions occurring in southeast texas as we speak what is true is that no responsible c e o would pursue a brand new refining plant in a environment in this nation that would lock them down provide absolutely no fair chance to get the permitting and regulatory ok to do that and in an environment where refineries want to refine where they have production capacity and in this country while it is popular to blame this administration or big oil the truth of matter is we need only look at congress's historic locking down of our u s resources within this country along our coasts in alaska making it nearly financially and feasible to pursue a brand new refinery plant so the industry is moving to expand in areas that they can expanding existing refineries making major investments in doing that this this amendment  would allow them to go forward to help again to reduce a real imbalance in our a dependence on foreign oil and supply support to mehmet if there are no other members who care to be heard the question what was her would you like to be heard to close the support of your post thank you mr chairman again i appreciate the comments f those in support the fact is is that again since the early one nine hundred seventy s we have not not seen the investment into the infrastructure to ensure that we have a supply for our nation to help ensure that our prices are lower and that we don't periodic lee go through these periods where we were refineries are down they're not able to produce and therefore supply and demand and we see the spikes in the prices and so i believe again this allows the ability for us to be able to use this bond it does it it doesn't mandate it but it allows it to be able to expand here our capacity refineries fails or oil and gas transmission lines i or j a i vote on what i think is a very commonsense amendment thank you  so the vote occurs on the motion of the gentleman from california all those in favor please signify by saying i and those opposed no the discussion with the ranking minority member that to move our procedures along we would agree to fifteen minutes on each amendment  effect ten minutes to the proponents because they have to open and close and five minutes to the opposition or to the other side on these amendments and if there is no objection to that we could proceed  under that very nine we will try that to see if we can move along and the next  amendment to strike that from the bill i oppose the inclusion in tax law mandatory union driven prevailing wage and benefit law known as david bacon inclusion of davis bank and language will inflate the cost of work done on projects that are connected to all tax credit bonds his former chairman of an education workforce committee subcommittee have studied the punitive affects of davis bacon and make no mistake adding it to this tax bill is a payback to the union bosses for their help in the last election adding labor mandates to the energy bill will not do anything to reduce america's dependence on foreign oil may make the situation worse davis bacon was put in place during the depression to purposely inflight wages on government projects yet it's still being applied today by wages i mean that it al mandates a wide range of compensation including health and pension benefits for any of the work that is funded with tax credit bonds the last time the democrats ran this committee they tried to mandate health benefits and were round defeated in that it damp but to paraphrase president reagan here they go again the build a day would massively expand union pay and benefit mandates upon any business are in mental agencies involved with the tax credit bonds for renewal energy when financing renewable energy projects employers will be required to sign away their rights to pay employees how they see fit they are forced into a wide array of mandatory  mandatory health mandatory pension and mandatory vacation schedules among others for their employees this faustian bargain with tax credit bonds comes at a high price of turning over compensation decisions to union driven scales these mandatory compensation packages very well could mean the difference between these tax credit bond projects being economically viable and being a failure i want to make sure my colleagues understand davis bacon law overrides any contract to a relationship between an employer and its employees there's a huge federal bureaucracy with mandatory paperwork filing schedules which actually withholds payments to contractors in order to directly pay employees for shortfalls in wages or benefits there's no exception for small employers from these huge paperwork and benefit mandates if the department of labor finds davis bacon mandates have not been followed then no federal contract can be awarded to that in the for three years i have no idea how these mandates will interact with the administration of syndicated tax benefits so for instance if a small irrigation hydro power project gets been answering through these bonds it will be required to implement huge pay and benefit packages to the employees at that farm installing the system and running this system the ability to actually implement the buzzy goals of this clean renewable energy projects will be severely hampered by the mandate to go play the benefit packages of the people to in the work and in filing all the paperwork necessary to comply with davis bacon i would expect many of these renewable energy projects projects to be on the brink of viable under the best of circumstances but with the heavy hand of union based wage and benefit packages on the scale i would expect many of the projects will not be successful i thought free enterprise was a hallmark of american freedom not now are eighteen states without prevailing wage mandates including my own state of texas but also mr davis's state of alabama mr meeks state of florida mr pomeroy state of north dakota there are twenty one states with higher contracting threshold that would be tossed aside for this higher federal mandate including mr larson state of connecticut mr van hollen state of maryland ms berkley state of nevada mr berman our state of oregon m state of pennsylvania mr tanner state of tennessee mr macdermot state of washington mr conne state of wisconsin tax credit bond projects in the state should not be hampered with additional mandates for bloated pay and benefits oppose this massive expansion of davis bacon labor mandates into tax law i fear that this may set a precedent for future mandates on other tax credits if it is not that far stretch to mandate davis bacon owned companies taking low income housing credits or the r and d credit we should expect to prevent this expansion now mandating way wage controls is outside the jurisdiction of the ways and means committee a move to strike it from the  i guess we're off to a running start that assault on labor i guess would not be surprising coming from people who never believed in raising the minimum wage that every everybody working in this country for four dollars on are we none of them i don't know how many of you voted for the actual raise an increase in the minimum wage but this is guaranteeing that  a livable wage now the economics of this country somebody's got to talk about it at some point you have to pay workers something or they're not going to buy all the things that make this economy run you can't pay em four dollars an hour and expect them to buy a five hundred thousand dollar house a starter house in seattle today is four hundred dollars four hundred thousand dollars now how does  worker buy a place like that they don't they have to go miles and miles and miles out into the woods to find a place where they can build a house at a cost that they can afford if they're making five six seven dollars an hour and the fact is that these have been negotiated these wages have been negotiated if the people who negotiated the know what they were doing well that's their problem but the fact is that the use of a standard nationally is the only way we get things right in this country the reason why we have the problem with immigration in some parts of this country is because the people there don't seem to want to give the workers any rights at all we have forty five million people in this country most of them working full time who do not have health care benefits labor has organized and gotten themselves that possibility and you're saying what we don't want we don't want to healthcare benefits we want to be working aren't there on a minimum wage job but whatever that whatever the market will bear if they get hurt they have no way to get taken care of except come to the states and get on to medicaid this this whole idea that you can have a vibrant economy and have everybody working for five dollars an hour six dollars i guess it's now seven fifteen in some places is simply doesn't take into the realities of what has made this country what it is we have had good paying jobs in this country and we've lost thousands of them in the manufacturing area and now you want to take them away in the construction area you won't be able to go back to work and for whatever you can get and if you can round up some immigrants and get them up there and people are worried that they're going to get shipped back over the border you can keep the prices down that's not the image we should have for a federal project and it won't be one that comes out of this congress people made a decision in the election of two thousand and six to change the philosophy toward working people in this country since you and i yield back the balance of my time with  restriction for state college and university construction which is you know that's pretty high talk about buying houses and i'd hate to be an independent enterprise trying  wage anyway so you know we have a federal law already on the books to take care of that i think it's important that if we tr evolve energy in the way that we want to do it we need the freedom out there to do it the way the companies that construct and operate do it and with that i recommend we vote to remove this gentleman yes you know i think the gentleman from washington was confusing a lot of rhetoric with the minimum wage w prevailing wage in saginaw michigan in a state that seen six years of job loss prevailing wages between twenty and twenty four dollars an hour depending on the sector whaley above the minimum wage and we're talking about an innovative investment that hopefully the private sector will come forward with to help with the energy crisis so i think the gentleman's amendment is a valid one and one that we should support thank you and you'll no monitoring it all by the labor department that is history we also know that in the past six years that the living wage in america has not increased productivity has increased wages have not increased productivity has increased because more people put in more hours or because more people are going to work this is obscene i think that's the proper work we're asking for a a prevailing wage which is a living wage  it really shouldn't be talked about in the same breath as a minimum wage in all fairness i'm glad that i'm glad we're not and i'm glad we're looking forward and looking to the future and the gentleman is going to remove this we are no longer to accept people on both sides of the aisle on the long run is going to accept the denigrating of the labor movement in this country and they not going to go back to the woods we are definitely not going to go back thank you gentlemen for his contribution to  vote for of a point of order i i and understood that the gentleman from texas said the gentleman's point of order i can anticipate is absolutely correct the chair hoofed up which is never done before and i all roll call votes will be postponed to the end of the markup and we will now proceed with mr english has an amendment thank you thank you mr chairman mr chairman while the staff distributes i'm going to have an amendment at the desk which is amendment number one on my last and in a nutshell it provides for a fifteen year recovery period for property used in the transmission or distribution of electricity mr chairman i'm offering this amendment so as to reduce the tax depreciation recovery period for electricity distribution aspe assets by five years currently there is a twenty year depreciation period and what we're proposing to do is to make it a more competitive fifteen year period  as i think everybody on the panel understands the demand for electricity is at an all time high and the power grid is stressed to the edge of its capacity according to the energy information administration despite continued energy efficiency improvements electricity consumption is it anticipated to increase forty one percent by the year twenty thirty to meet this exploding demand electric companies need to expand and upgrade the nation's electricity infrastructure this of course will of korra choir a significant investment is that and frankly the tax man will fight them every inch of the way according to a recent study by the brattle group which is entitled liar electricity prices increasing an industry wide perspective every cent investment trends are to continue distribution investment will average fourteen billion dollars per year over the next ten years this investment is almost triple the projected amount of annual investment in new transmission capacity investment in electric distribution facilities in wires transformers substations and all traditional utility distribution facilities is desperately needed first and foremost to keep pace with the growing demands of our economy distribution investment also is needed to replace and modernize our nation's aging distribution grid the brat the brattle group report estimates that under invest transmission and distribution systems cost the american economy at least twenty billion dollars a year a figure which is certain to grow if transmission and distribution infrastructure investment does not keep pace with demand mr chairman this is a simple update of the tax code this amendment will bring america's electricity network up to speed so that will it will be able to meet growing consumer needs into the future the deferral of income tax payments resulting from a reduced depreciation recovery period would reduce dramatically the cost of capital and provide lower energy costs mr chairman wherever you are on the political spectrum i think you need to realize that this is the sort of investment that we need to encourage that the sort of investment the tax code  encourage and in the face of future brownouts i think it's very important that this be part of a progressive energy policy for this country i'm grateful to my colleagues for the consideration of this amendment and i hope it would attract support on both sides of the aisle and with that i yield back the balance of my time with the gentleman yield to a question because you certainly i just i was just curious if we had  a sense of what the ballpark cost of this provision would be i don't have a current revenue estimate in and unfortunately i've had difficulty getting one despite the fact that i've been working on this bill for some is it reasonable to assume mister the amendment that's being offered would cost more than seven million dollars mr mcdermott i shouldn't speculate on the cost of that actually going and looking to date and if if we have mr english if we have not responded to a request of yours i apologize and we will we will work on that the future i shouldn't it be an appeal mr mcdermott to be inappropriate for me to to speculate but i can comment generally that there is a lot of ongoing investment can you menu assure us that it won't cost more than seven million of course of course i can't  be considered on the floor it could be just one question and related to that the present present law provides for a fifteen year recovery period for transmission lines of sixty nine killa vote kilovolts or or greater so i assume that the the thrust of mr english is amendment is to remove the voltage limitation and then in addition also permit the same fifteen year recovery for local distribution property in terms of what it would provide a benefit for it would be probably most for local to local distribution so improvement build out of neighborhood hood systems but there to answer your question mr mcdermott there is substantial expenditure in that area by by the private sector on a on a year to year basis but i couldn't make a formal revenue estimate from here able so you can't you cannot  two thousand and five we provided for tax incentives to address the problems we are having we had some brownouts move out of the country and so we're encouraging investment in additional transmission assets as i understand it when you equalize the depreciation treatment for distribution assets so they are the same as transmission assets that is so you know you think about it energy is such an important issue we have the highest energy costs in the world obviously our ability to deliver energy particularly lecture if the as a competitive message directly for manufacturing i know in the district that i represent so i certainly stand in strong support of mr english is amendment and i would rea reaffirm the this was the need for this was reaffirmed by a study recently conducted the by the american council for capital formation that compare that depreciation treatment of energy assets night states with eleven other nations  slower cost recovery during the first five in ten years after the investment compared to the other countries not in the countries and analyze it faster cost recovery than the us so from a competitiveness standpoint our depreciation rules need to be updated and what's the cost of failing to adopt this amendment the economic analysis amendment suggests that today that this longer period of depreciation this slow operate slow ability to obtain a cost recovery puts in place under investment in transmission distribution which costs our economy twenty billion dollars a year think about that twenty billion dollars a year and last if you can close let me just say i believe that we've already made the case for this amendment that is compelling and the benefits to the economy to the do to the power grid and ultimately to our energy policy i think are demonstrably the gentleman from washington raised the question of whether this would you know how this might affect a paygo situation it's worth noting that we're not operating here in this hearing under paygo rules in this markup but i would point out to the gentleman if he is concerned about the cost there are certainly other places in the existing bill where i think there is plenty of good have that could accommodate this very important initiative i don't believe that revenue loss is a serious argument against this amendment what i think we need to recognize is if we don't invest in the power grid if we don't put in place the opportunity to invest in wealth production and distribution that there are going to be substantial consequences to the consumers  energy bill of two thousand and five we made real progress on energy efficiency and encouraged courage homeowners as well as business to invest in greater energy efficiency in their buildings and residences well also included two important provisions that highlighted and often forgotten energy saver again that's energy efficiency in our homes my amendment simply extends the energy efficient new and existing home credits to the year two thousand and ten let's remember that we put this in place in two thousand and five because  was designed to enlist the middle class middle class homeowners as well as those who build new homes in r l for effort for energy independence and to address the issue of climate change and here's why it's important you  today homes account for nearly twenty percent of all of the energy consumed in america on average it costs the average american fifteen hundred dollars a year to heat and cool their homes which amounts to a cost of almost one hundred fifty billion dollars nationwide and energy costs by simply making changes in energy efficiency to their homes consumers and homeowners can save real money the facts tell us that consumers can save ten percent or more on energy bills by simply reducing the number of air leaks in their home this would represent a savings one hundred fifty dollars annually for that homeowner double pane windows with lower mississippi coating can reduce heating costs by thirty four percent cold climates and winners like chicago and of all households upgraded their insulation to meet the international energy conservation code level the nation would experience a permanent reduction of annual electric consumption totaling seven percent of the total consumed and i would note that the harvard school of public health study which noted that sixty five percent of us homes are insulated inadequately and if these homes were insulated properly to meet the international energy conservation code more than seventy six supertankers of crude o natural gas could be saved each year i think what that means for energy independence and through less emissions as we work to address the issue of climate change and energy efficiency in the home helps rant sixty five hundred assman tax saves two hundred forty lives would save one point three billion dollars and health costs again my men and extends to two thousand and ten the energy efficiency home credit for existing homes centrally the way that works is individuals can have a ten percent credit up to five hundred dollars for improving existing homes which means an individuals must spend five thousand dollars to get the five hundred dollars credit for example they can replies to improvements of insulation systems that reduce heat loss or gain exterior windows including skylights exterior doors roofs that meet energy star requirements natural gas propane or oil furnace or hot water boiler improvements and again the current credit expires in the coming year we extend it to two thousand and ten also in my amendment we extend to two thousand and t new homes tax credit or someone who builds a home can qualify for a credit of up to two thousand dollars for building new homes that are fifty percent more if an energy efficient qualifications require that the home must be built in united states homes must be substantially completed after date of enactment they must be certified to meet the energy efficiency savings requirements the credit is a general business business credit again the existing credit expires in the coming year we extend it to thousand  let me give an example of how this new home tax credit has worked since two thousand and five the two thousand and five energy bill this incentive to encourage home builders to abstain and put in new construction more energy efficient heating and cooling systems and make these homes more energy efficient and suggested that as many as ten thousand newly constructed homes were made more energy efficient in the years since the two thousand  energy bill was was enacted into law now think about it these ten thousand homes that are much more energy efficient they have an average expected lifespan of say sixty years imagine the energy that will be saved over the next sixty years ladies and gentlemen i've heard a lot of talk today about energy efficiency and of course we created some really successful provisions that were in a two thousand and five energy bill they had bipartisan support i asked that would do the same in this bill that is that we continue incentives that work good policy that encourages energy efficiency reduces our dependence on imported energy and also helps address the issue of climate change through energy conservation i asked for bipartisan support f thank you in a spirit of trying to work together i would point out that mr weller's amendment the first section does not expire until december thirty first two thousand and eight so so possible for us to extend that and i think that you and i can probably work together on that as we have on legislation to to tweak this second section which expires at the end of this year so we've already worked on some of that together i think this amendment at this point would expand us beyond the seven million dollars left in the budget left in the bill and for that reason i would oppose it with the home builders to create an actual new subdivision of homes that's partly based upon this provision of the law and that subdivision has homes being built that are energy efficient homes green homes anywhere provision that the gentleman from illinois is trying to extend and what's important about extending it now and giving some certainty to to mayors of big cities like the mayor of columbus and the homebuilders is that if there isn't some certainty going into next year to try to expand these types of developments they'll be they'll be stopped they won't be encouraged to to proceed  and develop additional law to do the tional subdivisions with this this provision a lot expiring at the end of a lot of next year so i would hope that the amendment is passed and if not today maybe tomorrow or are following up on the spirit of what as mixed ended by both the last two speakers i am interested in working with you all in a way that we do deal with an extension i have some notions that i want to bring in the next phase of the activity because i think there are other pieces that we can link together for refinement i do want a longer term framework for purposes of energy conservation and development and i'm happy to work with you mr weller to bury others in terms of our having something at the end of the day that we can feel good about that fits within the fiscal parameters that are established and that speaks to larger issues of the development equation and i'm hopeful that we could continue the massaging as this moves forward i'm not prepared to support it today because of the part of what you concerned about part of cost part of it is a larger framework this isn't the last thing we're going to be doing and if we can even work it in through the process depending on what comes back from the senate and what the fiscal footprint is that might happen even before the bills through but certainly it's something i want to revisit and i'm happy to work with the gentleman to make sure that it happens the chairman yes you have two or three minutes left on your side so  miller's got to be in that so ok well i just want to support the amendment and just say that when almost a quarter of our energy is being consumed by holmes this would be one of the easiest ways to move this country in the support for my amendment and you know as pointed out twenty percent of all the energy we consume in america is consumed in our home and as many of us who have had the privilege of being on this committee for a long time we know that the well of certainty about an existing provision of the tax code we know how that will impact long term investment and we know with certainty that this provision expires however we do not know with certainty that there will be another opportunity to extend this provision to cleon something that may become law so ladies and gentlemen if you want to enlist middle class homeowners if you want to list those who build homes for a living in the effort to bring about energy independence to address the issue of climate change which i think there is strong bipartisan support for doing then we should do the right thing and that is we should encourage homeowners and those who build homes to make their existing home more energy efficient and they save in their own pocketbook they get a side benefit and also to encourage home builders to build new homes that are more energy efficient if as i said earlier consumers can just reduce their energy bills by ten percent that means we can save about fifteen billion dollars nationwide in the over appear in the coming year and the money that would have been spent on heating and cooling costs that can be spent on other things again the consumer benefits in the pocketbook and the homebuilder benefits because they have a much higher quality house that's more attractive to a potential buyer so i do want to ask for bipartisan support if you want to demonstrate your commitment to energy under which the federal government would provide a tax credit in lieu of the interest that's otherwise pays to the shareholder by the issuing state or municipality mao and the interest of full disclosure i have a general distaste for tax credit bonds although again in interest of full disclosure i have on occasion voted for some of those but mr barr barthold and i did not have a chance to talk he mentioned q s abse qualified zone academy bonds i note again i think to make the record complete that for every dollar of bond issued for qualified zone academy bonds to build schools there is a forty one cent cost to the taxpayer and i know that when these were first enacted again to use choose abscess as a benchmark that that was back in one thousand nine hundred seven i remember when the previous administration and clinton ministration came before this committee they had to admit that many of these bonds were actually sold under par value putting bad aside the amendment as during the previous colloquy with both mr berthold mr solomon the majority's proposal that would allow the credits to be stripped  away from the right to repayment of principal and traded on the secondary market i find almost none conscionable and so the amendment would prevent this stripping and trading now the reasons for this amendment i think as the witnesses as i listed from them during questioning there is a concern about being able to accurately tracked whether tax credits are entitled there is a compliance issues presumably compliance problems that could worsen the tax gap which i know on your side of the aisle that there is at least support for closing the tax gap  effectively create a secondary market where tax breaks can be bought by wealthy individuals and large corporations i've heard from my friend from new jersey the word obscene as far as tax breaks for wealthy individuals and large corporations and yet that's exactly what sort of market is going to be created if you allow these tax credits to be stripped the gentleman the on the witness stand eg knowledge that there really is no historical precedent for this the closest that i could find that i know at least two members on this committee know where if i could turn the clock back go back on the way back machine so to speak to nine hundred eighty one and the safe harbor provision it was enacted in one thousand nine hundred one and the hue and cry that went up to that safe harbor leasing law the early eighty's that allowed companies to buy and sell depreciation assets it was repealed the next year and i think the chairman of this committee and i think the chairman of the committee in the gentleman from new york actually voted to repeal that safe harbor provision but specifically i would cite the committee again this is the closest that i could find as far as policy back in february twentieth one thousand nine hundred two the washington post talked about the provision that allows the sale of tax breaks the safe harbor lease these are not leases as commonly understood but vehicles for the sale of depreciation deductions and investment tax credits resulting from the purchase a new equipment mounting congressional opposition developed in part after disclosures that prosperous companies were benefiting from the leasing rules one spectacular such report was the occidental occidental petroleum company highly profitable or oil company already paying no federal income tax because of other sections of law quote unquote sold tax breaks o ninety four point eight million dollars worth of equipment a new york times story july third of one thousand nine hundred eighty two the safe harbor provisions of the transaction transaction takes the form of a nominal leasing  arrangement has been the target of much criticism not only from liberals and tax reformers but also from prominent conservatives such as alan greenspan the economist as he was described in this new york times article point being again  is a market for these tradable credits i solve some people salivating in the end the audience section as we debated and discussed this because there is going to be a market and yet at what cost the taxpayer  think that the tax credits we should prohibit tax credits from being claimed by someone other than the holder of the underlying bond and i urge adoption of the amendment to the general i'm from north recognized i thank the chair i have an awful lot of respect for my colleague from missouri and find his comments interesting but not necessarily on point relative to the provision for us a little history to go  this whole clean renewable energy bond feature began when we were unable to get tradeable tax credits for energy efficiency incentives for  nontaxable entities specifically municipal power companies and rural electric co ops so when back to the drawing board in light of the then chairman's objections and others on tax policy reasons about not having tradable tax credits for non tax densities and invented the clean renewable energy bomb as a response to it we do think and the expansion of these funds is going to be a very important way to bring fully into the effort to develop a new level energy sources co ops and minutes for power companies that represent twenty five percent of electricity generation in this country the issue of the issue before us isn't about leasing it's not about of credible investment tax credit at a year before they have the alternative minimum tax it's not about any of those things it's about whether or not these tax exempt bonds are to be treated like other tax exempt bonds of the tax codes and just to verify like to yield just a moment to mr bartle to really drive this point clear to us in the tax code is there are provisions allowing issuers of taxable and tax exempt bonds to strip the interest payments from the bond principle and sell the stream of income separately as that  pomeroy taxable bonds and tax exempt bonds are not prohibited from being stripped there are provisions that do apply when the strips occur for example the original renewable energy bond that doesn't have the same for each of these features these other bonds have what is the market want where is their best opportunity if they can obtain more of a market opportunity that means they can plow more money back into these renewable energy projects i don't think this is by far the most controversial and biggest issue that this legislation presents to us today and i'm a little surprised that my friend is so energized about it i think there's a very good reason with using the rest of our time the state of washington has a lot of public power came to us and said we can't use these bonds as they presently said we need a way to make it possible for us to do the same thing that the private power companies can do and that's where this arose from and as mr pomeroy says about it and has been confirmed here there's nothing new nothing unusual about this  it will be a market and that's how you guys believe in the market and suddenly you don't believe in the market i get confused sometimes i guess at the bends on which market or when the market is but  i would reject the amendment because it will take the public power people out of the game macrae's recognize thank you mr chairman i do not believe that co ops or public power companies would be taken out of the game if we do not allow these tax credits to be stripped that has nothing to do with  governor's or a mayor's ability to say i want to finance this project if it's a co op if it's a public utility the governor can say i want to sell bonds to finance the improvements are more construction or whatever to those projects these could still be used by somebody out in the private sector and says ok i'll buy those bonds and all of a sudden you got the money it has nothing to do with these things that's a totally i mean it's it's irrelevant to this question the question is should we allow a new secondary market in tax benefits and we have had this experience before it was not a pleasant experience there was a lot of concern on both sides of the album particularly i would submit them the majority about economic substance and whether a transaction should have a real economic substance well let me tell you something if you enact this bill you're going to get plenty of transactions in the marketplace that have zero economic substance they're going to be purely tax driven and you're not going to be happy with some of the people we get the tax benefits for doing absolutely nothing dakota especially as as one who has been a strong supporter rule after co ops if i thought that somehow this amendment would hinder their ability to go into the marketplace i would offer it but as the gentleman from louisiana is just stated i  you know i'm not a pretty an individual i don't have a crystal ball except that if if we look at history and the closest version of this in the past and and how the unintended consequences of allowing stripping to occur i think this is a pandora's box that we we need not open the fact is again from previous witnesses this product would likely be held by the richest individuals and companies to hedge against risky investments there's a serious consideration about tax administration it's likely going to expand the tax gap i believe in the market mr chairman i absolutely believe in the market but i also believe on behalf of taxpayers that we need to do something to make sure that they get the best bang for the buck and i really don't think that allowing the stripping and trading along with these with these bonds which again you know put aside my personal disclaimer of not being a fan of tax credit bonds generally they're in law you're right mr palmer they are there but to allow this stripping and trading i think is a slippery slope we need not go down not to be supported by the full committee in two thousand and five this committee in congress overwhelmingly approved the american jobs creation act which we were concerned about the loss of u s manufacturing jobs and investment and so we created a new tier a lower tier of tax for those companies that invest in producing create jobs united states of america today this bill reverses that incentive for american manufacturing jobs and singles out american energy companies and no longer to be eligible for that manufacturing tax credit in effect we tax american energy companies for exploring and creating jobs here in the united states and i remind members that that we have one point eight million american energy jobs they average thirty dollars an hour or more many of them are union workers under the bill today we will now consider american energy workers including oil rig and refinery workers as foreign for tax purposes under this bill companies that employ farmers and software designers and even cartoonists will be eligible for the manufacturing tax credit the companies that employ our refinery in oil rig in energy researchers will be taxed as if it were foreign investment time when some americans are relying on  heat their homes this winter we need to take a step back and clearly understand the consequences of our actions repealing these manufacturing incentives would only serve to stifle domestic production of oil and gas raise gas prices and home heating costs send more jobs overseas and increase our dependence on foreign sources of energy it is important to note the last time we single out the energy industry in america with a windfall profits ta reduction in jobs plummeted it's important to understand that independent oil companies produce eighty two percent of the natural gas and almost seventy percent of the oil in this country and what this amendment does mr chairman is it make sure that repeal of section one ninety nine the manufacturing tax credit is conditioned upon the secretary of treasury treasury and consult consultation with energy labor and commerce fin that no u s jobs would be lost in the energy sector as a result of this repeal so this is a simple straightforward protection of u s manufacturing jobs and i yield back  the gentleman raises an interesting question here this this bill funding for this bill was passed in h r six one of the first bills we put through the congress but this amendment  does i'm not surprised that a guy from texas would come up with a silver bullet but this is a true killer amendment knowledge that you've done a very good job here what you've done here is ceded the authority of the united states house of representatives to the executive branch they will decide if we're going to have any money or not and in my view that's the unconstitutional granting of power our under the constitution and it is a bad amendment urge people to vote against mr mr newman are for morgan thank you it's not a definition it's foreign workers it is it is like other non manufacturing workers what happened when we had one of the reasons why that tax provision in it up being a budget buster costing i think sixty four billion dollars was because we've we patched on all sorts of things that were a part of it so under the gentleman's amendment going where we are making and a reasonable adjustment in terms of interpretation of the tax code on the gentleman's amendment we go back if there's one job in the entire industry that somehow could be claimed as being lost then we blow a hole through the entire package it does not seek to deal with the thousands and thousands i would suggest tens of thousands of jobs that will be created under the provisions of this legislation in terms of the energy efficiency the retrofit the new technologies this opens up economic opportunities across the country and for want of maybe one job that the administration would sort of and i suggested there be no difficulty with this department of treasury identifying a job that may be lost it doesn't speak to balance and i respectfully suggest that the underlying merit of this bill the number of jobs will be created the energy that will be saved and strengthening the american economy is something that would offset that potential adjustment and i think on balance we should proceed and i would strongly urge opposition to the amendment noted jobs are at stake and i for one do not believe that if a worker works for an oil or gas industry at whatever level that he should be treated as a second class worker and by raising taxes on businesses that employ oil and gas producers we are treating them differently than other workers in manufacturing and other sectors since they this legislation is pretty simple says if they tax increase on oil and gas producers which has a negative impact on jobs and costs one worker or more their job that it cannot go into effect and i think that's what this is all about because  one who cares about climate change you want to believe that we need to be working for energy independence as we move as we work towards those goals our goal should not be eliminating people's jobs our goal should be developing new jobs and maintaining the ones that we have in this amendment here course work to maintain those jobs that we have in oil and gas which affects my district as well as many others in this country i support the amendment as had bipartisan support thank you mr chairman the gentleman from texas is recognized t close you have three other three minutes and forty seconds thank you so there is no confidence problem with your congress regularly conditions foreign aid upon serve a case the executive branch has since currently considering a guest worker program certified upon securing the borders facts matter is what we're seeing today i think is one of those here no manufacturing losses see no manufacturing losses at all but two three matter is repeal this bill will have an effect on investment in manufacturing in this country in will affect not just the workers but consumers of energy as well if you believe there will be no job loss of american manufacturing jobs you should support this amendment you're comfortable with that if you like me your concern that every job lost its manufacturing is a concern for america you ought to support it as well all this simply says is jobs matter in america especially manufacturing jobs and i urge your support and i'll finish with this because in algae mr macdermot truth matters some on this committee may be shooting at big oil but they're gunning down your you're talking about a net reduction in just this one sector yes it is us jobs lost in the energy sector is this something that you would feel should be attached on other tax legislation trade legislation related to manufacturing tax credit absolutely you know just generally in terms of tax legislation and trade legislation if there is a loss in any one sector like  manufacturing that we should reject renard rates of other benefits is the question is should we consider costing american workers their jobs when we try to increase taxes on the companies absolutely my specific question and i'm not trying to be argumentative but i just it strikes me that what you're talking about here is at variance with what i've heard you say another trade things that we've worked on together in terms of a net loss in one area may be offset in another and you think that's a good policy to have for trade and tax policy when we get to trade issues i'll be glad to debate this as we're talking specifically about uses of proceeds of the energy conservation bonds under the bill under section two eleven of the proposal the proceeds of the bonds could be used for a variety of designated purposes including public education campaigns to promote energy efficiency that term is not further defined in the bill and i think there's some significant opportunity for abuse in the provision and one of things i might ask is if i could  mr barr hall for a comment on just a couple questions as i pursue this amendment under the proposed new tax code section fifty four c one it is but the proceeds from qualified energy conservation boss could be used for quote could improve could include school programs and materials for school programs so yes and going to stay pay for the former vice president cost of traveling around the country to talk about this  stated as a public education campaign that would lead me to believe that the live earth concert on july seventh which is in new york and all throughout the world would also be permitted under you seem to me that instead of having taxpayers pay for this that we would want people to pay it out of their own proceeds final question is to buy a whole might be as i look at this if we  had say western states with an issue of an referendum funding and in the name of public education for a initiative and referendum education piece let's just say for instance denver seattle  the city had an interest with the proceeds and it went to a state wide consideration new york city for that matter my state that the the education relative to initiative and i'm just not sure what regulations or what lawyers would determine that means it's i think a data file is that there's some gray areas here mr chairman now the amendment has been handed out  simply would strike a portion of this provision that would permit those bond proceeds to be used for quote public education campaigns to promote energy efficient and quote as we've heard today i think there are many of us who have serious concerns about the overall structure of these tax credit bonds to begin with and many of us have concerns about the funding mechanism that's being used to pay for them today and i've cited certain examples that we certainly have seen with the way the legislation is currently proposed in the bill for lead to a number of interpretations by minister pallies and others in the name of public education and i think before we get on the road that we are mr chairman it seems to me that we should eliminate some of the obvious opportunities for abuse like we have here and i the in response to this amendment i i'm not quite sure whether the offer of this amendment understands how these bonds are put together this is not a halliburton truck going down to the treasury and getting hundred dollar bills bound up in plastic and going out to a helicopter and taking it and dumping it in the large cities of this country each one of these bonds is going to have to be sold by the local people and they're going to have to put up half the money so if you believe that local officials do believe mr bloomberg is going to take these bonds and use them for a concert in central park or wherever this all or event is i guess you have a very low opinion of him but i just wanted city council not do it miss i have the time the fact is that this is the responsibility of the local governments as to how they implement a green program in their society putting the possibility of doing some kind of educational campaign season is a very important piece of it the most affective way to save energy the most effective conservation measure is using fluorescent light bulbs now it is hard to get people to do that because when they go to buy a bulb they buy the same thing they've always bought and part of what you're talking about here is using some of this bonding money for an opportunity to educate people to do in their private homes what you will be doing in schools and public buildings the effort in conservation which is the biggest source of  energy independence at this point it's much more than we're going to get from any of these new production sources when and ethanol and all those other things will not be as effective as the conservation efforts that go into this bill and public education part of it is a very reasonable thing to do to get the public involved i can tell you just give you one example in seattle we had a year when we didn't have enough water and they had to do a public education project to get people to stop sprinkling their lawns and to put bricks in the back of their toilets so that they use less water when they flush and they did a lot of conservation was done by a public education program and for us to take that out and to say well we just hope that it'll work without educating the public is simply not good state and local entities to begin with there's going to be substantial public accountability because those of elected officials aren't going to be immune from any political oversight or political pressures from their constituents who may see some of these funds being misspent but you know this congress passed congress's have a numerous occasions talked about and supported legislation on the on the floor about the importance of teaching financial literacy with our students and children in the younger generation now heaven forbid if some public resources might be used in order to do a public education campaign and help people become smarter consumers of the energy that we're consuming in this nation and i think this is going to be especially valuable for low and middle income families who may not be as familiar with these programs and the availability of the programs that we're that we're creating here in this in this energy legislation or have the financial resources to do this on their own and part of the key to this is the gentleman from washington just cited is to get maximum biome from people throughout the country and how to be smarter consumers how to invest in energy efficient homes and appliances and and vehicles in order to get ourselves out of the the paradox that we're in right now and again we've been on record numerous times highlighting the importance of financial literacy programs and apparently that's a worthwhile goal i think energy conservation energy efficiency too is going to be paramount for this nation as we move forward especially for our students to  be familiar with and i think that's where this program can be really beneficial i think the gentleman for one gentleman the balance of the time the gentleman from ohio thank you very much in all of our discussions over the past few weeks one of the things i particularly want d to raise was the whole issue of making sure that low income families have an opportunity to buy into the energy controversy an area many times people believe when you start looking at building solar homes or doing things that preserve homes that they don't have the kind of dollars available to them to be able to do that type of renovation if we were to strike the use of these funds for public education we strike the opportunity to bring all people to a similar level in understanding the importance of conservation and the opportunity to be heard so i am adamantly opposed to any amendment that would in fact strike or prohibit any dollars being used for public education that we don't educate the public then how we educate our constituency how we bring them to a new level and you are also a senior member of this committee so you certainly know tax law in the tax code one of the things my predecessors on this committee would have seen when they wrote tax law on the code a tax exam from time to time maybe not in the state of washington or state of wisconsin or the state of ohio but possibly in forty seven other states there seems to be from time to time where municipalities take great latitude relative to discretion that the congress didn't intend maybe even the treasury department didn't intend in writing the regulations and i just want to point you in the tax exempt private activity bond section of the law restrictions on financing certain facilities just subsection shall not apply to an issue if under subparagraph be any portion of the proceeds of the issue is to be used to provide the following any private or commercial golf course country club massage parlor tennis club skating facility including roller skating skateboard ice skating racquet sports facility including any handball or racquetball court hot tub facility suntan facilities or racetrack and so i wish lee this esteemed body of the ways and means committee from time to time has seen that they need to will do the right thing but we also spend time putting parameters around the area to make sure that we don't see abuses and we've heard from the fact of joint tax that certainly al gore's book is eligible to be paid for in students classrooms by the state if they so compelled to do it and so in closing i think it's just an area that's open to a tremendous amount of abuse at all taxpayers expense and it should be explored in greater detail at the select revenue subcommittee hearing or a sweeping unrestricted language in the bill before we simply have an open invitation to appropriate use of taxpayer dollars so the adopt you gentleman from new york for his remarks and that's the dean of a delegation if you can share with me which public officials you don't have that confidence with maybe i can make certain that that doesn't happen and i'm great state but please put that off the proposal in your mark is designed so that federal government will cover the interest on bonds issued for an environmentally friendly projects including grant and loan programs the goal of this amendment is to make sure that there are safeguards to avoid the use of these bond proceeds to assist wealthy individuals for instance if you're going to have a program to assist with the purchase of say energy star goods with grants or loans this amendment would prohibit the proceeds of these bonds from financing any grants or loans to benefit taxpayers with an adjusted gross income above one hundred twenty five thousand for individuals two hundred fifty thousand dollars for married couples filing jointly in other words under my m m and the proceeds of these bonds cannot go to say someone like martha stewart or for buying an energy star product or anything the point is we don't want to subsidize people buying you know subzero wine refrigerators that have energy star rating let's make sure that this at least goes to people we want them to go to and not subsidize people who can already afford these things i'd like to make one broader point about this larger legislative  this is a small amendment that i think ought to be seriously considered but it goes to one bigger point and that is you know in this market i feel like we're on the appropriations committee today not the ways and means committee you know we're sitting here picking winners and losers in the marketplace based on who we're going to penalize with tax policy and who we're going to subsidize with tax policy and we have seen industrial policy on display in federal policy in america and around the world we saw it with media in japan that didn't go so well we seem symantec we've seen since fuels we have seen our country go down this road of industrial policy time after time after time again and what we find out is inevitably at the end of the day what happens taxpayers waste money the market's faster more rational and it moves in spite of this kind of thing so all all i simply want to make the point is this who are we to be the judge and jury of what is the best technology because if we are simply sitting here today and we are subsidizing today's technology in place and penalize ing other things we are doing so at the expense of tomorrow's breakthroughs in tomorrow's innovations so if we're going to sit here and tax credit this and tax credit that we're basically telling the market that's where you put your money and we're hurting the ability to put capital in innovation to tomorrow's breakthroughs i would rather see us invest into basic research instead of applied research when we invest in basic research we can see the breakthroughs that have really helped advance society whether it be in energy independence or health care and things like this but only go down this this jagged path of applied research we inevitably waste money and the market can allocate these far far more rationally than we can so at the end of the day i would simply say and both parties are responsible for this i'm not saying that republicans are holier than thou on this we've both committed these egregious boondoggles of applied research technologies in the past and not all of them have been egregious boondoggles but as a matter of policy i just think it's far wiser to invest in basic research than applied and not sit here and pick winners and losers in the tax code because at the end of the day i think we want out with a lot more duds than we do winners but this amendment i think which ought to be taken seriously let's not make sure we're subsidizing wealthy people to buy things  because i'm throwing in things like martha stewart or not but the basic issue here is that we have an environmental is that affects us all there's no one rich  or otherwise that is going to escape the effects of global warming and what we're looking for is a plan that makes the most that can be most quickly implemented and if it means people at the top get seventy five dollars for buying a different kind of refrigerator or a different kind of or sure or dryer that simply is missing the point that what we want is the entire public to be out there when you put your amendment with the amendment before by mr reynolds who says he doesn't want to have education you're basically saying well the folks at the top wonder stand what's going on we shouldn't they shouldn't have the opportunity and we don't want to tell the people at the other end of the economic scale what's going on the point is we want the entire public to be involved in this and i think that it's hard for me to listen when i when i think about that two thousand and five tax bill or energy bill if if that wasn't picking winners and losers it was i thank you i will say more but i think the point here is this amendment i understand what you're saying but it is missing the point that we want everybody to be involved in this and we do not want to segment out and say well we won't worry about whether you know many rules i have done when you know this is i'm part of a generation and a group of people who understand and i bought him right off the bat two thousand to two thousand and four but not everybody has the ability to do that and so you want to be able to have everybody in the society do it and for that reason i was a gentleman i appreciate gentlemen yielding and i certainly appreciate my good friend and colleague from wisconsin's concern about this legislation delivering large tax breaks to the most wealthy and the financial breaks the most wealthy in this country but i think you might be misunderstanding the purpose of the tax credit funds and that's allowing states and localities to choose what makes sense for their own area and their own location and if they choose to restrict the allocation of these bans based on means testing whatever they have every opportunity right to do so even under the pen pending legislation they i'm sure that the practical effect of this of members would be that substantial in your or my congressional district in wisconsin as far as these income limits are concerned but others of the country might might be helping out a different situation if you'll yield or should i just take my my closing time to answer that mr chairman whichever you prefer yeah i'll post which ok well i appreciate the gentleman the point look if we're going to do this which i have easily have made a case that i think it's better we invest in basic research not applied research not industrial policy but if we're going to do this  why don't you spread the money farther and more broadly to those who could use it rather than giving it to those who don't need it that's that's basically my point it's a point that i think is one that is taken seriously on the other side of the aisle often on other it's one that i would be taken seriously here there are many communities large cities that this money could get sucked up pretty fast if you let people on park avenue you know subsidize their purchase of energy star fridge raters so yeah in wisconsin you're probably not going to have this problem but in others urban areas you will and that's my point going to pick winners and losers you know give it to the people who can least afford it and not the people who can afford it that's basically my point with that up on the amendment from the gentleman from wisconsin and some of the discussion that we were having earlier because i agree with the remarks of the gentleman from washington that we ought to be promoting conservation and that perhaps conservation is an integral part to a formula for energy independence for this country and i think we can all agree that the tax credit bonds invision this bill should not be the proceeds should not be used to create loan or grant programs for individuals to be able to acquire a quip associated with swimming pools hot tubs flat screen t v s d v d s anything that martha stewart may accept this if there's no gyptian on this site and we hope you get full credit for this is basically the senate bill that is supported by senator obama and what it does it's an investment tax credit and expensing expense twenty percent tax credit for coal to liquid plants including the infrastructure needed to capture transport and sequester carbon capped at two hundred million dollars a plant and limited to ten plants provides a similar provision for expensing these investments but does not allow double dipping twenty and enhances oil natural gas coal bed methane recovery and capture and sequestration credit increasing the tax credit fifty percent from fifteen percent for equipment for the separation delivery and obama and he said in just quoting him the people i meet in town hall meetings back home would rather fill their cars with fuel made from coal reserves in southern illinois than with fuel made from crude reserves in saudi arabia and the people back home  kentucky would would prefer to do that to the coal to liquid fax or this coal equivocation can produce a virtually sulfur free diesel fuel which is cleaner than conventional diesel this process can also produce jet fuel and many other products at the very least this technology could produce approximately two point six million barrels of fuel hundred nine million barrels gallons of gas or fuel per day by twenty twenty five and meet ten percent of the projected us old man but no tax credits are needed because of the enormous capital investments required to start this production and this will protect producers from a stranded investment if the oil market is flooded with cheap foreign oil which sometimes happens u s coal deposits contain more energy than the world's oil reserves equal to one trillion barrels of oil and according to the department of energy the united states has two hundred seventy four billion tons of coal equal to two hundred fifty two hundred fifty years supply him the national security they're interested in the us of us of the secretary of defense recently issued a clean fuels initiative proposal to run all battlefield engines on a costs in the nation and certainly they are represented as i mentioned before and northern rural northern california yet the bill before it contains several major provisions that together will raise taxes on oil and gas sector by approximately fifteen billion dollars over ten years these provisions include repeal of section one ninety nine manufacturing deduction for oil and gas production a lengthening of the depreciation period for a geological and geophysical cause of large integrated oil and gas companies and a restriction on the use of foreign tax credits by companies with foreign oil and gas extraction income it's difficult to understand how imposing these taxes will help improve our energy supply or reduce our dependence on foreign oil simple economics tell us that if you want less a something you tax it many of the factors cause this bike for example we recently learned of unexpected maintenance problems that some oil refineries which have temporarily reduced gasoline meanwhile the demand for gasoline has been steadily increasing at the summer driving season has gotten underway this in balance between supply and demand continues the push prices higher in light of this i'm gravely concerned that the underlying bill would then necessarily aggravate this obliged to man and balance further by increasing the tax burden on our nation boylan gas producers on behalf of my constituents my amendment seeks to require as a condition for a nachman of the offsets that the department of treasury certify that the offsets  reduce the price of gasoline in the united states and we all in fact reduce greenhouse gas emissions by thank you mr chairman may i inquire of the author of the amendment some clarifying information you recognize mr chairman i would i would ask my friend from california what is the how do you determine whether or not gasoline prices will be reduced what is the baseline is it the highest amount that they've been is it what they are you mean by producing a reduction in gasoline prices what i mean is that i'm afraid that that so much of what we have in this bill today is going to actually raise that gap how do you it costs why i think we leave that up the secretary of treasury to measure that i think there's much anytime we're raising taxes i think it's safe to to to conclude at a fifteen billion dollars worth of more taxes that it that's going to end up being paid by the rape a or by the person buying a gallon of gasoline and i think this it would be pretty easily determined by the secretary of treasury and we'll we'll let him determine that we chairman i guess the difficulty i have with this we've seen lots of changes we've seen this committee give tax breaks to the oil company without this companies without necessarily driving down the price of gasoline the mysterious market forces i think some of us are all kind of questioning sometimes why it spikes but the fact is that there is far more profit that has been collected than simply adjustments in tax rate the difficulty i have with this is that we don't know what the what the what the measurement is at the highest prices is it the average prices it's what it's going to be in the future i have real difficulty just turning this over to the department of treasury and losing the many benefits that would be available for communities across the country because of some big standard about whether gasoline prices are going to go up or down in the future well i'd be very happy to work with my good friend from oregon on on whatever method you would like to determine on how we can help determine that they're not going up and hopefully going down by their actions were t footprint in the decision to drill in the past our tax law basically rewarded companies that drilled successfully allowing them to expense those research costs immediately but when a company drilled successfully we actually drew out their expenses making it more expensive it was a perverse tax logic congress change that so that we would actually encourage more research so that they would be more accurate drilling fewer drills and a smaller environmental footprint congress has already taken that incentive away from the five major oil companies under this bill it would take that incentive for additional research away from  independents who drill ninety percent of the wells in america produce eighty percent of the natural gas and much of the oil in this country as well all of that less research less accurate drilling higher costs all translate into think the central question in this legislation as we try as a congress to develop incentive for exploration and development of alternative sources of energy which i think we all would like to do we all do not do it at the expense of what is clearly without question the major source of energy for this country for the foreseeable future but what we're doing in this legislation is poking the oil and gas industry and they are taking away incentives to explore and develop resources of oil and gas and getting that untested alternative sources and in some cases in this legislation already tried and true sources that there's no reason to revive an incentive for but the central question is is this legislation going to drive prices up for gasoline or down and clearly when you increase the cost of doing business which we're going to do in this bill by increasing taxes on the oil and gas industry by some fifteen billion dollars the price is going to go up it's going to be higher than it otherwise would be the major cost of gasoline is the price of oil and the price of oil is determined by the world market and we have increasing demand we have flat supply does the price is going to go up so what we're doing with this bill we're adding to the pressure the upward pressure on the price of oil which will add to the upward pressure on the price of gasoline one think tank has looked at the senate bill which has a similar level of increase taxes on the old and gas industry and determined that as a result of those increased taxes the price of gasoline could actually double over the next ten years that's what the majority here is threatening to do to the american people raise the price of gasoline significantly by ignoring the reality that fossil fuels or the main source of energy for the foreseeable future we should remember that the eleven point four  world trade organization and there was problems then deciding whether or not they should have been the cypriots of the and so we have met with the oil industry and i agree that they're not happy with this but they're satisfied strike that satisfied that that this was a windfall that they got and it was not included in  you know if if we're going to get to energy independence in this country we can't we cannot neglect the oil and coal and use the reserves and resources we have in this country and if we're going to continue to be dependent upon middle eastern oil and venezuelan oil and other sources foreign oil at the tune of i think something like sixty percent of our our oil today comes from from foreign sources then we can discount on having higher gas prices energy prices we can just count on that  if we don't address the fact that we need oil and coal and the energy resources that we have in this country today if nothing else for a band aid to get us to the point where we can use these alternative energy sources  then we're going to up costing the american people a lot of money and energy cost until we can get to a point where where we can can use these alternate sources  wealth of the memmott agree that the oil industry has never been in a better position as a result of the unexpected profits to be able to invest in research and to do those things that we would encourage them to do in terms of the monies that are available i'm not sure if i can speak to that mr chairman i can say that in other areas we've done everything we can to prevent them from from expanding we've not allowed them to do what i consider radical environmental laws by not allowing us to to use their money to drill where we know we have oil in alaska off the california coast off florida the places where we know we have petroleum i'd say we've done absolutely everything we could that prevent that and i think what we're doing in the in the line of adding fifteen billion more to their taxes just continues to make it more difficult for them to be able to lower gasoline prices rather than having continually raise the burger if you believe that we have put impediments with the industry to do those things returning fifteen billion dollars and that allow them to do it would it it by raising your taxes by fifteen billion dollars question you are doing exactly the opposite of that what we should be doing that's other problems that you think we created for the industry but i'm asking do you agree that in terms of profits the industry has never been in better shape to do those things that we're trying to encourage them to do and i don't know if i'm in a position to answer that i'm not saying they're not i'm not saying there are i'm saying there  clear that the conditions are out there that we prevent them in virtually every way we can from going out and bringing more petroleum on so instead of going from twenty three percent that we imported  foreign oil today we're at sixty three percent and i make legislation like we had before it's just compounds that even more i think we're moving in the opposite direction of encouraging our more independence in our country by this legislation and i say that respectfully mr chairman then going in the right direction that you have given record opportunity for avenues in terms of it's equally fair to raise the issue of how much of those profits are they pouring back into investment in exploration and production in our u s oil companies are pouring two to three times as much of their profits to two to three times more than they make in profits back into exploration and production trying to find u s energy sources of energy here in this country and i think as we cut will make it more expensive to get all out the ground to refine it and it costs more every day to answer one of your questions a tax increases proposed will absolutely raise prices gasoline for every american who drives a car door every day runs or carpool or has to drive dr one goal of this bill is to make it too expensive to drive cars and the tax increases of the bill will fulfill al gore's promise to quote eliminate the internal combustion engine by taxing gasoline is a luxury my friends are not placing an explicit number of dollars per gallon tax on the gasoline because they know such a tax would be rejected outright to place a tax of two or three dollars per gallon o gasoline would cause a revolution however our friends are proposing to increase the cost of production to gasoline to the point that the heritage foundation has estimated that prices will rise to six dollars and forty cents a gallon when prices do inevitably rise our friends who support this bill will bring out their populist rants against big oil but the rest of us will help remind voters as to the really reason for price hikes yes gasoline prices are high but no one is happy about having to pay three dollars a gallon for fuel but these tax increases are the wrong policy on any number of fronts bad energy policy bad economic policy bad tax policy but for the environmental activists who don't have to drive a job every day this is super politics we all want to reduce our dependence on foreign oil the alternative fuel industry is developing but it will be years before table to produce more than a sliver of what's needed to run this country even when petroleum industry makes an attempt to branch out into renewable diesel as with co processing of animal fats of people who support this bill will be prematurely cutting back an existing tax credit eighteen months prior take scheduled expiration affectively making this part of their tax increase retroactive we shouldn't support retroactive tax increases i don't think you do in trying to satisfy the environmental activists they have prevented new refineries from being built since capacity damage and taken offline and by the way they spent a lot of their profits rebuilding that stuff creates a choke point in supply yet our colleagues on the other side will emanate the manufacturers deduction for all and gas companies that produce energy in his country this tax increase will raise the price of energy eliminating this deduction for american companies will also make supplies of energy less reliable and more susceptible to price bikes denying the manufacture deduction will raise over eleven billion in energy cost american consumers and we should encourage not discourage american oil production so we really can rely less on foreign oil another the big tax increases in this bill through double taxation double taxation of foreign income from american petroleum companies last time i look you will let us drill  alaska or in our coastal waters and our demand is far outstripping our supply of oil from the lower forty eight the gasoline we put in our cars comes from american auto companies winning contracts to drill for oil in places like africa middle east south america and central europe in order for american auto companies to win these drilling contracts they can't bear the cost of double taxation on their earnings our foreign tax code is an equated at best and  already more expensive to comply with than that of other countries some of our biggest competitors are nationalize all cartels such as a china national offshore oil company that barely faces any taxation billions that american all companies will pay in taxes under this proposal will make them less competitive in the global oil patch and cause our energy to supplies to be less reliable and a lot more says is expensive industry i doubt any of you don't want to ham streetcar hamstring are our defense programs but that's exactly what's going to happen as fuel costs go up already the air force is cutting back on time for pilots because they can't afford to buy the game they are working on alternative fuels but they're not there yet and the fact for them that vast majority of americans who drive to work or heat their homes a bill be a cause for drastic increase in the cost of living post title three of this bill and offer an amendment to strike it  philosophy in this congress a group that never met a tax break they didn't like and they also never met a tax break they wanted to pay for we're moving this country in a different direction now because we've had our fill of the borrow and spend politics that have dominated this congress for the last twelve years our republican colleagues have admitted that some of the provisions at least in this in this act they think are good provisions many of them are provisions that they have joined with us in co sponsoring in individual pieces of legislation if this is amendment were adopted not one penny of this bill would be paid for i understand they don't believe in the pay as you go approach that we have traditionally followed in the state of texas in many other parts of this country but to continue on this borrow and spin tax break borrow from our grandchildren to pay for it and shift the debt to future generations i think is something that america is fed up with and we need to reject this amendment based soley on that but there is more and that is the current comments on this and other amendments particularly the comments of the ranking member on the last amendment that apply here that we were talking the oil and gas industry in the me i represent some families that rely on a tractor and they think they've been getting poked in the eye by the oil and gas industry the people that deliver goods and services to small towns and communities across texas they think they're not getting poked in just one but in oz and they're black and blue for mr exxon and mr conoco phillips running over them and then to hear members of this congress say that if we tax them one dime despite the fact they have the largest profits in the history of the world for an industry of this type that if we tax them one dime they're going to explore even more money from the people that drive the tractors and drive delivery trucks just doesn't make any sense at all these companies for example  can't get their fill of tax breaks and i applaud the chairman for including a provision that has bipartisan support to deal with this problem of renewable diesel where mr conoco phillips says if it weren't making enough money already decided it wanted a dollar tax break per gallon from the taxpayers of this country for putting a smidgen of grease into their petroleum based diesel this one of the pay for is that this amendment would eliminate is that provision to stop that kind of additional abuse so i think there's consistency there is consistency and willing being willing to borrow to finance in a good tax break and there's consistency in having big oil's best friend here yes we need to have an oil and gas industry that is doing what it can to find the reserves but there's a limit to how much we have to pay for that process and i think the people that i represent down in texas are paying too much and they've been poked in the eye once too often and this bill takes the right course and i hope will reject this amendment and every similar gentleman yield yes or how is this bill going to help those people well this bill is going to look instead of taking the view that your party  dick cheney huh well with the little group of people that he's from the oil and gas industry that he didn't want to disclose to the public this tries to take some of the best scientific thinking about how we can use new renewable sources and it recognizes we're on call solve all  problems today but that if we can put if we can build a renewable energy industry as we try to do with the renewable diesel by not letting conoco phillips come in and take all the credit away from the people that want to have a renewable diesel industry if we put our money on solar energy on renewables on energy efficiency if we let our cities and counties and states be the laboratories of democracy to try to find new ways to deal with these problems it will directly help those people won't help them is to keep giving more and more tax breaks to big oil and not asking anything in return and not just the loss of the that this bill rejects and that this amendment would would completely turn on it is the policy and if you really want to help the little people who are paying too much for their fuel sources whether it's gasoline or heating oil in the northeast or diesel for their tractor this simply does not do that it goes in the opposite direction it will raise the prices that they pay with all due respect to the gentleman's political analysis which i think is absolutely correct and that's why you've chosen pay for is because politically it's easy from a policy standpoint i submit and i think the facts bear out it is wrong headed and headed in certainly the wrong direction for the consumers in this country now  members of the minority today your party in conjunction with environmental efforts have restricted the efforts of the all indians all and gas industry in this country to find new sources of oil and add them to the supply in this country we have done so in alaska off the east coast west coast now even in the gulf of mexico the gym and you'll get us policy if what you're concerned about is energy supply so you have not followed what we would like to do and we wish you had i think we would be in much better shape and those little people in your district are below the deal if you had followed our policies is there is there really any environmental policy that this most russians had any control over that it hasn't outsourced to the oil and gas industry or any tax break for the oil and gas industry in the last twelve years that you've looked at that you haven't given it as a gentleman knows the congress passes laws the executive branch executes those laws the executive branch cannot do anything that we don't make lawful am unfortunately we have made on lawful the a robust effort to gain more supply domestic supply of energy in this country and that's again wrong headed policies that make life worse for those little people that you talked about for a chair recognizes a change in policy but it just seems to me that when the republicans it's a troll of the white house the house and the senate that you would have ample opportunity to have a policy for us to see whether or not it works and if indeed the minority has so impeded your ability because of environmental concerns th those impediments will still exist and having the fifteen billion dollars for the store but i don't see in any way how it would allow you to move forward you claim that there's nothing that we can  do to encourage the industry to do better in terms of alternative because of impediments that we've placed in where they can drill so let's face it you must have done something when you in charge and i have to admit that we're trying something different and i think mr that the public is really excited about what we have done it's not political to say that we're picking on the oil industry when they had the tax advantage the price went up so when they received windfall tax incentives the price of oil went up and i'm not saying that what we're doing is t help bring it down but there's no indication that they did better for us they have done the more we give them the more we paid at the pump so we are trying something different and we don't see there was the senate thanks to the filibuster and the requirement for a supermajority that blocked that with democrats in the minority yes but they were effectively blocking minority in the  senate we never could get more than fifty seven or fifty eight votes for that i'm sent so that's what happened with that little bit of policy that we would have liked to have instituted as we were in the majority well certainly the senate leadership understand what you're saying now but the record would indicate that the senate's in the majority responsible and i think that when you say that the whole congress is republican you have to accept what was done and what was not done i think the provisions in this bill are very important for the very reason that mr mcclary is is talking about right now i don't think it's in this nation's best interest to continue to rely on fossil fuels there has got to be a limit to what is under our ground if it's fifty year supply a hundred year supply a hundred and fifty year supply eventuality it's going to run out this is the perfect vehicle for us to start moving in a different direction get away from fossil fuel and move to renewable energy so that our children and our children's children will have a reliable inexpensive supply of energy that we can use to continue the strains of this nation to do anything less than that and continue to give tax breaks to the oil and gas companies and i used to be in house counsel for a gas company in las vegas this is not something that i know nothing about but why would we continue to rely on on an energy source that is becoming increasingly scarce and increasingly more expensive when we have the opportunity now passionate articulate articulation getting away from fossil fuel with a gentle lady join us then an expansion of the nuclear industry no and let me tell you why i now i don't think i need to advertise anybody here my opposition to nuclear energy and if mr porter was here he'd be saying the same but on behalf of the two of us please do not insult my intelligence by suggesting that nuclear energy is clean energy it is a it is a deadly byproduct nuclear waste that is the concern of the people of the state of nevada of the people i represent it is a radioactive substance that has a half shelf life of three hundred thousand years at the nuke yucca mountain is at least twenty years behind schedule and there are no cost estimates and i for someone that is really worried about the cost of things in this country i mean how can we keep supporting the nuclear industry when they they can't even begin to tell us the department of energy cannot even begin to tell us how much the cost of yucca mountain is it's up to aviation a standard at this point there's no e p a radio and standards you know canisters that can be safely for this radioactive waste and they want to bury it in a hole in the middle of the nevada desert where there's groundwater problem seismic activity and volcanic activity no you should be supporting mr porter and i and making sure that nuclear energy is the two is exactly where it belongs in the twentieth century not the twenty first century thank you mr chairman what was that question again with all  presented today really is a mirror to how both sides feel and that doesn't mean everybody needs on both sides of most with the your side of my side over here feel about breaking free from oil and that's really the you know the bottom bottom line the sixty percent of all the oil reserves come from saudi arabia iran iraq kuwait and united arab emirates sixty percent of the reserves and when you place that up against the consumption of fossil fuels in this country there is a tremendous imbalance it has consequences on homeland security fronts it has consequences on the economy and interesting mr chairman between one thousand nine hundred seventy seven and one nine hundred eighty five the last time we implemented strong fuel efficiency standards for cars and trucks during that period of time u s oil consumption dropped seventeen percent and the imports that we needed from other these other countries dropped fifty percent so we have to go in another direction this combined with the law we pas did you did you place anything before us to vote on that double the price of gasoline are you going to play not on us because we we didn't drill in anwar you know a couple of gas a couple  the anwar for another ten years who was responsible for this maybe neither one of us maybe neither want to us you did inject your thoughts you let the folks down the street decide so now we're paying over three chairman and what i'm going to offer now is an amendment that is specifically pitched to the concerns that many of our friends on the other side of the aisle have raised and one should be concern with the chairman's mark i'm offering this amendment with mr weller to restore the section forty five production tax credit to its form in current law now mr chairman as you know the production tax credit is been successful program and spurring the development of renewable electricity including win power facilities anything that would reduce the value of the credit we believe could diminish the amount of renewable electrical generation over time unfortunately we are concerned that the chairman's mark does just that for the first time since enactment of the credit the underlying bill would reduce the amount of credit by limiting the amount of the credit to the equivalent of a thirty five percent investment tax credit the practical effect of this change mr chairman is to remove some of the upside potential of installing a successful wind turbine but not remove the risk of an unsuccessful one by capping the cost of the credit at the lower of two cents per kilowatt hour or the equivalent of a thirty five percent investment tax credit projects that have higher capital costs will get a bigger credit your credit on energy produced such as the current production tax credit rewards for the most efficient projects mr chairman that is exactly what this amendment does and removes the restriction the limitation quote unquote equivalent of the thirty five percent investment tax credit from the production tax credit anything in our view that would reduce the value of the production tax credit at a time when wind power costs are going up would have an adverse impact on our country's ability to diversify from still feels i've talked to mr chairman to many of those who are involved in the wind industry in my district and they're very concerned that cutting back on the credit now would be a terrible mistake now since the  debate in this committee has become a little more partisan may i gently point out that this credit has been extended in its current form by republicans five times and always at the full credit under the republican run congress installed when capacity in the us increased by seven hundred percent by comparison if the chairman's mark stands we would find that at the very first opportunity to extend the credit our friends on the other side of the aisle would be moving to cut the credit back i think that's a policy mistake and i would hope not a political mistake either if republicans had proposed this scaled back of the credit we would have been excoriated by environmental groups i believe that environmental groups should look at what is being done here today objective lee and i hope to take their place with a gentleman yield no i'm making the introduction the gentleman will have plenty of time on his i believe that the chairman's mark represents misguided economics they would propose to remove some of the upside potential of installing a successful wind turbine but do nothing to remove the risk of an unsuccessful one i would like to yield to my colleague mr weller of the balance of my time and i'm grateful for his co sponsorship of the cement i want to thank my colleague for his leadership on this issue and i would note that the english well are amendment strikes the limitation based on investment in reverts back to what we originally adopted as current law as a result of the energy policy act of two thousand and five let's remember we have an incentive in place that's working and encouraging investment and wind energy the result of the two thousand and five energy bill my own district we're seeing very positive results from the energy bill that we passed almost two years ago step in company a biodiesel producer located in joliet illinois has doubled its production of bio diesel fuel because of the changes made in the energy bill transco products inc a small manufacturing facility provides services for many of our edge energy providers has tripled the number of people they employ and they credit the energy bill even a few weeks ago i was at the groundbreaking of a new eleanor that will produce thirty permanent jobs in approximate three hundred million gallons of bio diesel the investors credit the energy bill that's why it's so important to keep good policy in place and and as we've seen with the energy bill of two thousand and five well over  hundreds of millions of dollars and new wind energy investment the district that i represent mclean dear old and lasalle counties american when energy association estimates that for every new megawatt of wind energy fifteen and one thousand or act and indirect jobs are created there's about eight hundred twenty six megawatts of planned when production in various stages in illinois that translates into almost fifteen thousand new direct and indirect jobs in the state i have privilege representing i would note there's other local projects in the works in the south mclean and livingston counties so this type of investment which offers tremendous potential in reducing our dependence on imported energy and of course addressing the issue of climate change we have good policy and i would note in the chairman's mark with all due respect that we reduce the incentive it's scaled back in the chairman's mark and the english well or amendment maintains the current incentive so we put it back in place with this amendment so if you believe we need to reduce our dependence on imported energy and to address the issue of climate change by promoting the use of and encouraging the greater investment in wind energy i ask and urge that you support the english record of the majority on the production tax credit and support of wind since one nine hundred ninety nine they have allowed it to expire on three occasions and have extended it in a little drips and drabs for five others so the growth that they tout has occurred in spite of the tax foundation placed in in put in place by a republican dominated congress and we aim to give this industry the long term f financial footing that they need to really reach their maximum potential nominees are more stake in this than north dakota arguably was the windiest state in the country and that's even when i am in washington d we've got tremendous potential and we're eager for this new industry but we cannot make the most of it with the uncertainty of a on again off again production tax credit in putting this bill to gether we had to make a call do we keep the level as sought by the minority members in this amendment and shorten the continuation of it or do we go for what those long been asked for by the wind energy industry itself a five year extension of the bill is four years but as was indicated we have the extension now through zero seven through zero eight rather as a result of prior legislative policy so this goes on top of that giving us a five year outlook in terms the production tax credit for when the all rate through eight and the new rate thereafter now the new rate is equitable relative to win production as compared to other new renewable technologies that we are tax incentives in the tax code if there is a case to be made for when to have a richer tax incentive than everybody else because they need it or won't happen that case has not been made to me in my office in fact the energy information administration has projected that if the tax credit were extended for five years at the one point five cents per kilowatt hour as opposed to the present right there would be no measurable difference in terms of ultimate wind power brought on line i think it's a very critical question before us we want to fully unsent when we think the best way to do it is to kick out a number of years five years of production tax credit if in order to pay for that we've got to give the rate a haircut and we do if that would not be then enough of a tax incentive to drive the full development of wind production when wind power it would have to revisit that there's been no demonstration no demonstration of that in the arguments of the minority and no demonstrations of it made to this committee indeed the chairman of win association testified that a five year extension could reduce the cost of the industry by approximately eight percent just technology becomes ever more efficient the been off a lot of innovation in this industry and they are therefore able to get more enough thank you and i appreciate the clarity of my friend from north dakota's argument i represent a lot of these industry representatives in  oregon i think we're sort of the energy capital not the wins but the actual companies that are involved with it and the gentleman is spot on what is needed is certainty for the industry which is being provided there's also an issue in terms of moving towards some parity in terms of various energy sources now i'm willing to go back and look at some of the issues a small number of us are interested in that but in the main having a service for five years at two cents per kilowatt hour and having parity for other biomass solar geothermal is starting to move away from picking winners and losers and allowing the marketplace and technology to take place all around the world wind energy is getting more efficiency there they're on the move i respectfully suggest that the approach that is in the chairman's mark moves us in a direction providing the industry incentive even in the playing field giving us a chance to move forward and i think the feedback i've received from the industry is that suggested here that somehow the wind energy industry supports what is in the chairman's mark in fact the feedback that i've gotten from individuals who are involved in the wind energy industry suggest quite the contrary there's a real concern that by cutting the credit now or create you are creating some unintended consequences i believe that the majority has created a lower a more limited credit without realizing the economics of wind energy or the challenges that the industry is facing i believe first of all it's also worth pointing out to the gentleman from north dakota whom i respect and who well knows my longtime advocacy on this issue he needs to know that under this amendment we do extend the credit for four years but at the current rate and i agree i realize we're going to have to make some choices here but i would suggest that investing in the wind energy credit has a choice is a better choice than some of the other provisions included in the chairman's chairman's mark and if we have to cut back maybe we should be looking there and not at the wind energy credit i think it would be a terrible mistake for us to allow this credit to slip and to be reduced and that  extending it for four years would somehow become a mask for extending a deep enough credit that really encourages the investment and i'll yield the balance of my time to mr weller the english management asset my amendment be distributed as we look for ways to become a more energy independent nation i believe we should continue down the path that we laid just a few years ago in the two thousand and five energy bill and the two thousand and five energy bill we took important steps that were steps forward in reducing our dependence on foreign oil by creating policy that increase the use of renewable energy in tandem with increasing our domestic production and increasing energy efficiency and conservation i also believe we need to encourage investment in america and to support us manufacturing my enlisting the u s auto industry as part of our effort for energy independence one of the pass i believe we can further build upon is the hybrid tax credit that we established in the two thousand and five energy bill which has been a very successful effort and in creating a market for hybrids and encouraging consumers to become more cognizant when purchasing a new vehicle the technologies that are there that help with energy independence i would note that the leaders in the hybrid technology happen to be asian auto manufacturers the amendment i am offering here today continues the success story that tax credit is based on legislation that was included in legislation i sponsored known as h r two five five seven the amendment will establish a new tax credit for consumers who purchase a new concept vehicle which u s auto manufacturing manufacturers are leading the way in developing this new technology combines the hybrid and flexible fuel technologies omarion hybrid with eighty five that will be available in the near future for consumers with a maximum tax credit of three thousand five hundred dollars and as this marriage of these technologies that will create a vehicle that will be better be a better steward of our environment will further reduce our dependence on foreign sources of oil the credit itself is loose basically on the hybrid tax credit provides that the tax credit is on the basis of fuel economy ranging for one hundred twenty to two hundred fifty percent this credit would be effective beginning in two thousand and eleven which a notice at the time of the expiration of the existing hybrid tax credit and would sunset after five years in two thousand and sixteen and also keeps in place the cap that is already in place with a hybrid tax credit of sixty thousand with the ability of this vehicle to get up to seven hundred miles to the tank if just five percent of the u s vehicle fleet were powered by hybrids operating on e eighty five  ethanol blended fuels oil imports can be reduced by about one hundred forty million barrels of oil a day let me say that again five percent of vehicles used in america were hybrid flex fuel vehicles or hybrid e eighty five vehicles we can reduce oil imports by one hundred forty million barrels a year also if you care about climate change which i do and i know many others do these vehicles reduce carbon dioxide emissions by about twenty five percent and providing this tax credit we can promote a greater sense of innovation for the future of automobiles and also have a note that providing this incentive we put in place a future market which will encourage greater innovation by us auto manufacturers knowing that that market will be there which they will be able to create this new technology for the mass production of this new technology we're going to create jobs of course revitalize the u s auto industry and i believe it's time that we give the u s automobile industry the upper hand in promoting new technology i hope that my colleagues will join me in support of this environmentally this environmentally friendly as well as pro jobs amendment to promote the use of hybrid flex fuel vehicles and encourage consumers to purchase them and us auto manufacturers to build them thank you mr chairman i ask bipartisan support for my amendment i want to thank the gentleman phase exciting alternative i'm really impressed with the hybrid to flex fuel vehicles unfortunately we did not have the funds in order to be able to promote this but i want to thank the gentleman because i agree with you i think it's a great alternative with just as limited but the amount of money that we could raise as they would like to respond have asked that this legislation be scored in joint taxes not given a scoring on this particular amendment but i do want to point out that within the framework of the bill that you've offered the mark i do believe that the funding would be available to finance th chairman i i think it's time that we reward the production of energy efficient automobiles in america because right now our tax policy actually encourages consumers and rewards them for purchasing japanese automobiles which is a hybrid technology i think it's time that we encourage consumers to take a look at us manufactured hybrid flexible fuel vehicles which be coming on the market shortly and also to take time to buy one which will reduce our dependence on imported oil so i would ask bipartisan support for this amendment thank you have it but we really had a lot of difficult choices to make and i wish that you had been one and the situation is that we don't have money to fund it and we do have that responsibility and outside but we are ready for a vote all in favor that while amendment in a case by saying i oppose it well and then that will be those have it and we will put over to vote put over to vote  fairly well documented so far about my concern about the strip of all tax credits and so i'm not going to go back in as much detail as previously what i would hope to do with this amendment however is that require that fifty percent of the interest on these so called green bonds be repaid directly by the issuing state or municipality the fact is that these new so called green energy bonds proposed in the majority  is a tax credit bond on debt issuance is under this proposal if passed states and localities would receive a significant federal subsidy equal to the entire interest obligation this is much deeper as a subsidy than for traditional tax exempt bonds i've heard expressed and i won't the gentleman from my friend from wisconsin mention skin in the game and i want to do something that he said and then something the gentleman from washington state said that it is true that municipalities or those seeking bonds would have to do a fifty percent up front as far as principal and as i understand  it mr barthold mr solomon either one i'm not asking your question but as i understand it that fifty percent up front is on principal and is for either determining or setting the terms of the bond the intent behind this amendment chairman is simply to again to protect taxpayers by preventing tax credits for being paid on an instrument number one if a local issuer has defaulted we specifically set that out in the amendment and for qualified projects still can at least rein that and i think that requiring fifty percent of interest be repaid directly by that municipality or that issuer will provide the appropriate safeguards and  consequences on our american biodiesel industry we have a provision in the bill to address a loophole called you boning i don't know if that's a korean war for you boning or splash and dash and that's where a foreign bio  diesel producer will come the united states blend a small amount of us diesel in with them claim the tax credit and go off and sell it overseas the provision in the bill closes that loophole which is exactly appropriate but it does that by banning export of u s biodiesel in other markets what we have today is for us biodiesel we have a very undeveloped market it's almost a incubation where supply outstrips demand so while our industry specially small producers who are co opting what we are doing is accessing other developed markets like western europe half their cars run on diesel so we are doing that while our market industry to grow by selling both internally and abroad if we don't make some adjustments in that provision we actually provide access to do u s market for foreign biodiesel but we can access their market i think we will have in our biodiesel guys are very concerned it will have a major impact on their ability to grow and i'm wondering if we can work together before this bill goes you know to the floor to see if we can't find the right language that that helps our industry continue to grow mr brady if not in this though i certainly believe that if we can come to a consensus we can find some way of remedy that but i don't think we can do  my dear friend from new york mr reynolds a has an amendment which i find intriguing because i think it's going to lower the number of people in the political subdivision from one hundred to ten thousand and i like to see how they would be able to be more creative than the largest division the ing a member of the delegation i'm very excited about this  thousand million people sixty two counties five are city boroughs of new york city of buffalo in my home county the second largest in the state in the city of rochester the third largest city in the state or i think well cared for in this legislation as you brought it forward however in my duties in congress i got a chance to travel america as well as having be state wide leader traveling our state there's also smaller counties many of us represent smaller counties both sides of the aisle i've come to notice and one of the things i've seen and having not only to the largest counties of the state in my district i have smaller counties in my district and you madge and i actually have wyoming county where there's actually more registered holstein cows and there are people mr chairman and so there's is really simple it just provides a much dated refinement to the bill's eligibility criteria for local governments that would receive automatic set asides and under section two a lot of the bill large local governments which are defined as any minutes no smaller mid size cities or rural counties but most embarrassing in our own state capitol walden it's less than one hundred thousand people so i find that our state's capital could be caught in this bill and so my hope is that we could just lower to ten thousand saw that everyone would see an opportunity to participate in this program from a population or ten thousand above is certainly not just big cities that are looking for ways to promote better energy conservation this category are very active in wind turbines in our state and that big company headquartered near your district goldman sachs is actually an investor in some of those but my hope is that we would look at this legislation as an amendment that would give us some assistance in helping in the overall structure of the tax credit bonds getting to smaller minister paoli so have goals and concerns to make sure that they are included in the program versus just considering one hundred thousand population what do you call a political subdivision with ten thousand people in new york state well it would depend if you came from the town of concord it's about nine thousand people and that's a township recognized under new york state home law but you could have a county like a mr tanner static where there are a thousand people and there are some ten to twelve thousand i think mr lewis has some people that would have small counties that eligible i know mr dog it does in texas so what i think the the point is that there are many counties in the country that are recognized statute counties of a state that wouldn't be eligible under the this i am curious either of mr reynolds or of staff what the implication is for a town of ten thousand in terms of the size of the bond issue  i am concerned that we reach a point where the costs of managing and issuing the bond actually made dramatically undercut the value of  a program that each relatively modest jurisdiction comes up with so it multiplies dramatically cross the country undercuts what the state could do with a condom of scale ins up rendering about to about depending on the composition of the state could end up rendering it basically unusable for  significant proportion of the of the people who reside there gentleman asked me to not answer the question yet what is the ten thousand person buying what would it what would i haven't had an echo or maybe treasury could say exactly what they supinate under this bill what the cost of legal counsel to issue the bomb but i can tell you i am an expert on tax exempt bonds because i chaired the concord and also the nominated sheaffer account of eight thousand and i can tell you that we chose to issue those windmills in that county that i think you might have in your state and i'll take that said aeration it may be in the spirit of conservation that that county of forty two thousand would like to advance further conservation they wouldn't be able to fall under this bill if i may mr re s i'm just saying i have no doubt that smallman issa palette he's at and some instances can issue debt bonded indebtedness is valuable for them i'm asking if you break it down to be something as small as ten thousand under the provisions of this bill how much would that be well all i want to do is give my friend assurances that within our delegation but divide part spirit that we have enjoyed over the years you can rest assured no matter how this comes out that the delegation will be working with the government to make certain that we accommodate those people that have competitive exciting programs to do this and that was one of the reasons why we had the broad latitude to allow this to happen relying on the expertise and people that came from small towns and villages and the event that i hope that each delegation would try to do because we do that well thank you thank you mr chairman the spirit and i'm a new member of this committee and the spirit of allowing minority to help the majority of the chairman i would tell you that in my district we have over a dozen municipalities that have  less than fifty thousand people that are engaging in some pretty fantastic things with respect to the environment and energy use and it would be a shame that they would not be able to participate but  sensitive than the need because i know my vote isn't as important to you as maybe a member from ohio from the majority party i would encourage you as a chairman to to reach out to charlie wilson or zack space who have no city in their district with over one hundred thousand people but yet would would would i know love to have their local municipalities participate in mr reynolds and then that would do that so i hope that the chairman would would no not today but maybe in the future look at this a little bit more closely to see that there are some smaller communities that don't reach the hundred and one thousand threshold that are doing some exciting things that are certain that that it was kind of this committee and therefore the congress that these political subdivisions that a small be accommodated and we're going to do that in new york and i and we'll know the hour and sleep it is compressed chance mr chairman i have an amendment at the desk and this amendment would provide an alternative double emissions test for refined coal as we all know conventional coal combustion will continue as a primary source of power generation for the forseeable future the current section forty five refined coal provisions were intended to incentivize the development of coal based fuels that will contribute to import environmental goals in reducing emissions coal combustion my amendment would contribute to these goals by providing an alternative test for qualification where emission reductions are achieved that are significantly greater than under the existing requirements in addition my amendment provides an alternative basis for satisfying the increased basis test which has created a regional disparity between types of coal note the alternative double a mission requirement will maximize both overall emission reductions in economic value the increased value requirement creates a regional disparity between low value and high value coals that is western and eastern calls and i think most of you who've been engaged on this issue are very familiar with this controversy the increased value requirement is difficult to satisfy with higher quality coals because the price of the coal feedstock is already significantly higher which leads to on warranted regional differences the double emission test provides an alternative method for satisfying this requirement the policy behind refined coal is to incentivize and reward efforts to reduce emissions or refine coal that satisfies these requirements is a more valuable product where significant reductions in emissions are achieved there is no need for a separate value requirement especially where the consequence is to reward one coal type and exclude another i believe the impact of the fiscal impact of this amendment mr chairman is minimal i think this is a good green amendment and i would ask the committee to consider it amendment mr chairman i understand that the majority wants to tax domestic oil i don't really believe that this is the right thing to do i think it's bad policy for us to  put all of our domestic producers at risk in the world market competition with all of their oil companies and especially what mine and it does is it at least tries to pull out the producers that are strictly just domestic producers of oil so it's the mom and pop oil shops that we have and what parts of kern county in california and also throughout oklahoma and other parts of the united states so i think that this is an important amendment that deserves consideration by this committee to at least not put our domestic mom and pop shops in direct competition with the middle east oil and south american oil and all the other marathon oil some of those people i guess you don't think they should participate but the problem is they take two billion dollars out of the bill so it's a little bit tough to unbelted a bill like that so i would oppose the amendment  matter is independents drill ninety percent of the wells in this country produce eighty two percent of the natural gas and almost seventy percent of the oil many of these are not the major independents but a lot of mid and small size companies where every dollar that goes to research into exploration production comes out of their pocket and it is tough to do i think the whole section one ninety nine by itself is wrong but if we are going to go will be rolled to the end of the hearing the next time i'm in is by mr weller thank you mr chairman i have an amendment the desk an asset to be distributed this amendment expands the research tax credit to promote energy efficient transportation technologies as we continue to look to the u s auto industry to provide the technology advances from which we all benefit we must find reasonable and cost effective approaches to facilitate greater advances  i'm offering will provide a more generous research and experimentation tax credit for advanced technology vehicle research which weighed in providing the added incentive to undertake this expensive and risky research remember it provides a forty percent credit without regard to a base for qualified advance vehicle technology research qualifying vehicles and include fuel cell vehicles lean burn diesel hybrid electric vehicles plug in hybrids  carried back ten years also include the full cost of research and experimentation unlike the current credit will include the fringe benefits those employed in the work all advanced technology vehicle technology would qualify we're not picking winners and losers because we do not know which new technology will best mitt meet the needs of our consumers such an approach simplifies the current research and experimentation credit by removing the base calculation puts us at on a more level field with research and experimentation policies of our compound our competition and that's why this amendment so important because we want this type of research to be done in america because when you do this type of research in advance vehicles in america the odds are the pride resulting product will be produced in america creating u s manufacturing jobs this is a subset of the total research and experimentation community and a subset of their total research and experimentation many members of this committee support consumer incentives for advance vehicles but consumers cannot buy what is not first developed and brought to the marketplace we need to have an investment in research and development to bring these advanced vehicles to market the proposal before us is a proven means of fostering the growth of vance vehicles and many benefits they provide and again we want this advanced technology be developed and manufactured in america we want the jobs to stay here and grow here because there is a multiplier effect and they create high quality jobs creates indirect jobs when it gets down to this amendment works to address a competitiveness issue we're seeing firsthand the hybrid car market what happens if we do not get to the plate first with technology our u s auto manufacturers when manufacturing hybrid cars cars have to purchase freakout have to purchase the hybrid cell batteries from japanese british ears for japanese auto manufacturers this gives them a competitive edge when producing these hybrid vehicles because their batteries are made in japan that initial cost of the batteries that u s manufacturers face when they must buy them from japanese manufacturers drives up the costs that product in the marketplace and again i would note that japan for example is looking to fund research into how to make newer more can cost competitive batteries that's what the question is do we want the u s to be competitive or dependent on foreigners for products or components of future vehicles that's why we need to move forward that's why we need this incentive ladies and gentlemen this committee this type of research deserves bipartisan support and i asked for a bipartisan yes vote in favor of expanding the research tax credits for most energy efficient transportation technology thank you mr chairman so the one secret mission the gentleman from illinois has a good idea in fact we have provisions in the bill that would allow the states to do this kind of research if they choose to do that with the money they have if it's your attempt if it's an attempt to try to help the big three auto producers they have no tax liability so there's no t acknowledging the comments of my friend and colleague from washington is chairing the committee at this moment you mentioned that u s auto manufacturers don't have any tax liability and that's probably because maybe they're not making any money right now well they've been very  very creative right jeff anna coren had her press this incentive is to encourage innovation right now if you look at the hybrid technology who's the leader in the hybrid technology the japanese those vehicles are not made in america and i would believe that by adopting this amendment we provide the incentives for u s auto manufacturers to take the lead and developing new technologies is i noted in them in my opening comments the batteries th auto manufacturers have to purchase to curb to manufacture hybrid vehicles made by american companies come from japan and we need to encourage greater investment in producing this type of technology in america so we create american jobs here brady no thank you mr chairman this amendment would strike i mean a man at the desk would strike section three eleven of the act and would not restrict the types of technologies able to claim the one dollar per gallon tax credit for a nubile diesel production i think it is a mistake to yank the renewable diesel tax credit out from under this fledgling industry it is an important source of renewable fuel and important to america's agriculture which has animal fat to be fork and chicken in the tremendous quantities renewable diesel's one of the most promising on the horizon for nubile fuels the national energy renewable laboratory strong support the co processing technology indorsed by the door recognized by the department of energy and will help lessen our dependence on foreign oil this is the only technology that will produce  quantities just one project in my home state of texas will produce one hundred seventy five million gallons a year of bio diesel almost double what occurred today within two years and this is a clean high octane scenario under this bill where imported gasoline is entering the united states at ports while animal fat from america is being exported to other countries for their renewable diesel it seems to me that the current credit august buyers in two thousand and eight should continue that any policy goal going forward should be technology neutral we have over one hundred thirty patents for this type of technology we should not as congress be picking one winner and a number of losers and i would encourage us as a committee to take a hard look at this issue as it goes forward recognizing the importance of this it seems to me there ought to be room for a new bill diesel for all technologies recognize the importance of this to our missouri delegation at this point i would withdraw the amendment bill but does offer a potential improvement so i'm going to give my friends on the other side of the aisle an opportunity to vote on a green amendment that they should be able to support regardless of their pay go concerns mr chairman one of the most effective incentives we've put into the code is the one for energy efficient commercial buildings and i'm offering an amendment that would create a minimum standard requirement for the energy efficient commercial building tax deduction when used for architectural windows based on the level of energy savings that type of glass will yield the minimum requirement would utilize the light to solar heat gain or l s g ratio for spectrally selective glazing as defined by the department of energy specifically the amendment would limit the eligibility for deduction with respect to any building on the low component to those projects using spectrally selective glazing with at the least an l s t of one point two five by including a minimum alice g ratio to qualify for the deduction this amendment will provide builders with a wide range of products to select while also ensuring that the deduction accomplishes its intended goal of all of significantly reducing greenhouse gas emissions from commercial buildings you know i realize this is very abstract but to give the committee an idea of just how significant a modest increase in the glass alice ga ratio as if i'm building in atlanta with wall windows went from glass with an alice g of one point zero to glass with an alice g ratio of one point eight four the annual electricity costs of that building we calculate would be reduced by nearly seventy five thousand dollars in boston the savings would be over seventy five thousand dollars in houston the savings would be nearly eighty five thousand dollars this amendment will bring greater accountability to the expansion of energy efficient commercial build and or g efficient commercial buildings deduction as contained in the chairman's mark with respect to windows mr chairman i believe this is something that is a genuine enhancement and i would encourage my colleagues on the committee to consider wish to be heard i must say this been a very interesting hearing on the one hand we have people who don't like the bonds and then we have people who want to improve the amendment and has a standard built into it i'm not sure where the standard comes from but it certainly looks like there must be somebody out there who's making this i i had the equipment gentleman yield it's made by the department of energy made by the part of energy well the standard is sent by the department of energy and there are we produce glass in our part of the world there are a number of companies that produce glass specifically aimed at this standard but not all developers use glass to that standard if that clarifies the points or well it's it's nice to know where the standard came from but i'm not sure that this is the only answer for windows i have a i was walking into my building the other day in seattle and i met a guy who was standing there with a sign on his shirt that said like dr and i said what do you do and he said well i'm talking here to the building engineers about putting little gizmos in all the fluorescent lights because if you have a lot of glass in the building and when the sunshine comes in you can actually turn down the energy and i think that there are lots of ways people are going to do things in here but i don't think we need to put in specific standards like this at this point without a hearing exactly what we're doing for that reason i would recommend we not adopt the amendment and that may be a very good i mean maybe a very good technology but i'm not sure in the interest of time i would be delighted to withdraw this amendment thank you without objection the amendment is withdrawn mr weller is recognized thank you mr chairman i have an amendment and asset to be distributed the amendment i am offering would distant reestablish expensing for refueling property under section one seventy nine a the tax code include bio diesel as a fuel defined under that section the expense in every fueling property for clean burning fuel was allowed to expire at the end of two thousand and five when we decided to create the alternative fuel vehicle refuelling property tax credit well i believe the current credit we are we established is being used and is very successful i believe we also need to reestablish section one seventy nine and allow the gas station owners to decide which deduction is a better option for the equipment they're installing and i would note that those are benefit would be tend to be the mom and pop gas station owners the typeset one and the bass majority of gas stations for example are owned by individuals and in many cases it's the only station they own to insure that refueling property owners aren't double dipping under this amendment we coordinate with the alternative fuel vehicle refuelling proper credit in order to make sure the tax payers not taken advantage of both for owners and operators a gas station is making the investment for the installation of alternative refueling property is in many cases risky questions about fuel supplies and shipments teamed with the questions about consumer demand as often eternal owners from installing the pumps and tanks this is evident by the limited amount of eighty five stations currently in operation according to the national ethanol vehicle coalition there are roughly thirteen hundred gas stations that offer e eighty five the united states but the majority of the stations being located in the midwest and the district i represent now a lawyer there are approximately fifteen stations that currently sell eighty five even more limited as number truck stops that offer biodiesel which the truckers love because it's better for the efficiency of their engines i constantly hear from constituents that are either flexible fuel vehicle owners or truck drivers that they want to use the eighty five or biodiesel but their own able to often find the stations they need that offer it or have to drive to far to purchase it the many calls for a massive increase in the use of renewable fuels we also need to make sure that the proper infrastructure in place so that consumers can get the product for this reason i believe we need to reestablish a section one seventy nine a deduction for the expense and a refueling property to encourage the installation of bio diesel as well as f m e eighty five fuel facilities consumers want to use these renewable fuels they're buying the cars and trucks that that consume them but we need to get the pumps and tanks installed at our local gas stations so this fuel is made available to the public i asked for bipartisan support for this amendment this amendment as nicely put on the explanation sheet expired in two thousand and five so apparently when mr thomas was writing the energy bill of two thousand and five didn't think it was worth putting back in  we have provisions in the bill that do encourage this kind of use of the money in the in the bill so i think that this is redundant and we will recommend not adopting the amendment mr chairman may i respond in my closing surely course i would urge and ask bipartisan support for this amendment you think about it section one seventy nine that small business expensing almost eighty percent of the gas stations in america are owned by small small time entrepreneurs mom and pop shops they're the ones that use section one seventy nine and i believe it's time that we reestablish a provision which unless the convenience store owners the small mom and pop shop operators those who likely only own one gas station encouraged and give them the opportunity to put in place and install the infrastructure the tanks and distribution equipment let's give them a choice in which tax provision is in their best interest again this is a small business amendment and i ask bipartisan support all time having expired mr brady's recognized i have an amendment that means you can distribute it so that i could see it and to help this is your amendment to require the secretary of treasury to analyze the economic effects of the legislation if you'd like to go ahead with it bill it sounds like an animist consent would be appropriate in this point since you've done a wonderful job all this says there are two studies in this bill already dealing with various aspects of energy including the sears report requiring  study of the tax code and its carbon footprint species related to that all this amendment is require the secretary treasury the study the economic effect of this act in determine whether this bill creates a loss of u s jobs in the energy sector if there's a decrease in the production of energy produced here in america if there is an increase in fossil fuel imports to america or if there is a higher cost consumers for refined oil or natural gas this amendment simply say ask for a port to make sure that there are not unintended consequences to this bill such as raising imported consulted with a variety of people about this cement and certainly it's good to know the things that you're suggesting here but i'm not sure that we're really willing to put that in the and of the markup the next the moment is by mr english and you want to thank you mr chairman and this is one that i saved for the last of my series because i think it is extremely significant and really breaks new ground in energy policy what i'm proposing to do in this amendment is to create it is amendment number four and as the staff distributes it they will you will see it creates an investment tax credit for in situ oil shale extraction property and allows for the expensing of oil shale extraction equipment this amendment would not only create an  mr chairman generally refers to any set of men or iraq that contain solid bitumen it's materials that are released as petroleum like liquids when the rock is heated the largest known oil shale deposits in the world are in the green river formation which covers portions of colorado utah and wyoming estimates by the rand corporation of the oil shale resource currently in place in this region range from one point five to one point eight trillion barrels trillion barrels while not all resources are recover researchers have told us that they estimate eight hundred billion barrels as a safe estimate of recoverable oil shale in this region to point this amount in perspective my colleagues please note eight hundred billion barrels is more than triple the proven oil reserves of saudi arabia present us demand for petroleum products is about twenty million barrels per day if oil shale could be used to meet a quarter of that demand eight hundred billion barrels would last for more than four hundred years in order to incentivize this technology and the most environmentally friendly way this provision creates a thirty percent investment tax credit for property used in c to i'll sail extraction and it also allows for the expensing of oil shale extraction equipment because in st jude technology does not involve mining or above ground spans shale disposal it offers a method of extraction that does not permanently modify land space topography and is less damaging to the environment it addresses all of the concern or i should say most of the concerns that the environmental community has traditionally had with trying to utilize this resource mr chairman we need need to utilize if we are going to move toward energy independence not only novel technologies but also access to those those petroleum opportunities that we still have here we are going to go through a long and difficult transition to a new economy based on new energy sources as part of that transition i would argue it is essential that we may make use of resources like oil shale we are the saudi arabia of oil shale it is important that this resource be part of our energy policy this incentive creates an opportunity i believe to utilize this resource in the greenest possible way mr chairman i realize this is thinking outside of the box but as someone who has long been impressed with the opportunity that it while shale provides i would ask the committee to consider it this is something that i think has to be part of our energy future and i would ask for bipartisan support on the cement thinking outside the box though there are many aspects of the oil shale that are problematic but he's clearly not thinking out of the hole and his party has dug us and all for the last twelve years huge national debt and it may be important as we believe it is through this legislation to focus on steps that will take us to energy independence and reliance on renewable energy but we can't do that at the cost of the kind of fiscal irresponsibility that we've had for the last few years under republican leadership there are other things that could have been done in this piece of legislation there are other things i would like to have accomplished in this legislation i think that's true of most members of this committee but we realized that we were committed to a pay as you go approach and that is why every dime of this bill is paid for and i hope that will continue to be our approach and to abandon that in a fiscally irresponsible way no matter you know i enjoy the gentleman from texas and i enjoy as commentaries obviously he and i disagree but may i gently suggest that maybe tapping into oil shale is the most important thing that we could do in his energy bill light that his that his side has brought forward today may i gently suggest that there are proven reserves there that this is something that could help us  energy independence at least a better standard of living lower energy costs and a more sustainable transition to the new energy sources let me just say i think that if we have to pay for this little pervasion to stimulate a whole new whole new industry an energy then maybe we can invade their green von proposal and rather than pelting local governments with all kinds of grants to do who knows what we could focus on a real opportunity to utilize domestic reserves i would ask anyone who wants to look beyond the rhetoric to take a look at this issue and join me and supporting what i hope is going to be part of the energy policy of the future i would ask for a favorable vote and i will ask for a extend and expand alternative if you actually mr chairman this is my financial disclosure standards amend the last of my amendments today so i would ask i thank you mr chairman for allowing me to offer this amendment an asset  be distributed i note that this particular amendment doesn't cost a dime but as a potential to save millions as well as save a lot of potential heartache the amendment i'm oftener is very simple what it's trying to achieve and i would describe it as a good government measure but the amendment would require certification by the appropriate federal state local officials that neither they nor their spouses have a financial interest in any project being funded by green bonds nor in the company or companies issuing bonds or a particular project under the a mammoth part of treasury will be the responsible agency this would follow suit similar it's exactly what we as members of congress must do and we request federal funds for projects in our district i believe that what's good for the goose is good for the gander and i see it think it's most appropriate that one federal funds are being used to finance projects at the local state and federal officials involved and supporting this project as well as benefiting the project that they should state that they have no personal financial interest why is this important as this amendments necessary i recently saw in my home state of illinois we saw that the former head of the finance the development excuse  finance development authority get indicted for falsifying official state documents to claim that an investor had applied for funding with the finance authority connection with the purchase of a friend's restaurant and i have a copy of a news article a june one two thousand seven news article mr chairman i ask unanimous consent that this be included in the record without objection is awarded which describes these actions with the establishment of green bonds we need to assure the american taxpayer that their tax dollars are being spent in a proper way and also in the most ethical way as we saw in the case of el noise abuse can occur and i believe we must provide taxpayers protections and this requirement i would note is no different than what we as members of congress must do  request federal funding for projects so again this is no different than what we as individual members of congress must submit today under the house rules for projects that we request federal funding for but extend that same requirement to the state and local officials involved with projects involving the financing migraine monts i believe this deserves bipartisan support and i believe it's in the best interest of taxpayers and i ask for and i vote thank  ethics responsibility on the department of treasury excuse me excuse me mr chairman on my assessment of of their ability to write regulations would you would you like i mean is this the kind of thing that the treasury would like bit a little bit self inforcing in a tax exempt bond world for example if there where there are requirements of of this sort in order for the bond attorney to give a clean opinion that it he would expect he or she would expect  would be a valid tax exempt bond the attorney would probably ask for representation that in fact this requirement were satisfied but i leave it to mr solomon to comment presumably the rules would say that a certification is necessary and as mr barr told indicates it would be a bond councillor doing it from the from the state local government and that was department of treasury ready to determine who  it on audit for example that the service does if this requirement were not not satisfied it would make the bond the bad it bad bonded and second is the administrative aspect of it is on the audit side but we were we would deal with both of those as we would deal with many of the other requirements that would be added by it the new provision requirement would be administered and regulated no differently than any other provisions or any other binding programs that are currently before the treasury committee or any frankly any other tax laws that are before the treasury committee the bottom line is all i'm asking this committee to do is to extend the same requirement that we as members of congress must comply with when we request the use of federal funds for projects in our district we already do this it's no big deal just piece of paper we have to sign certifying that we have no financial or personal interest nor does a member of our immediate family and so from the standpoint and from that standpoint what is wrong with requiring the other public officials at the state local level from having to make the same statement that they will not personally profit or benefit from the project or from the financing as it's arranged by the companies that are selling the bonds so it's a simple requirement it's a good government requirement as we've seen in my home state of illinois bad things happen once in a while corruption occurs and if you believe we need to make sure that the screen bond program which has merits is going to be fully operate in a way that will never embarrass us in the future i  solomon i want to ask you a direct question here are you prepared to write the requirements for determining who the appropriate members of congress that rules state and local officials are to certify that they nor their spouses have a financial interest in any project being funded by the proceeds from this issue are you prepared to do that if legislated we will be required to do that can you do it we would have to try to interpret the words to identify the appropriate persons and to identify the specific certification that would be necessary and along with all the other various requirements and many other requirements that would be enacted with the with the bond provisions so the bond attorneys would have to come and beg you to please get this done so they could sell the bonds when they could they do could they sell bonds without your certification that everyone did not have a vested interest in you know claims of her for second chairman that would you yes yes sort of you know as you said no none of us want these instruments to be abused for the personal gain of any public official so might it be possible for us to consider this with staff after after today's markup so that at the time it reaches the floor conference we could insert some provision that would provide protection to taxpayers against this abuse that mr weller has highlighted sounds like requirement that protects that protects the interests of taxpayers so that officials at the state and local level are required to disclose that they do not have a personal interest nor a member of their family as a personal interest in the project or any of the financing involved i would i would withdraw my memory we have that agreement mr chairman that will be included in the bill this is not the distance isn't the best way to do it but we will agree with the intent to have an enforceable we're going to move on and we caught many votes this weekend we may get a call from the floor and the whole operation then would transfer to a two hour wait with the individual members would be able to go in and record their vote at a time muskerry mr chairman let me just try to explain to to the members what we have in mind we're going to proceed with voting by roll call as as long as we can until we have to go to the floor to begin the series of votes at that time we intend to take six tellers to h two o eight to record votes and you have been hand each member has been handed a list of the amendments if you would take this list with you when we go to the floor assuming we haven't finished all these roll call votes and go into a wait while we're voting on the floor and go to one of the tellers and if you might just take this with you and indicate on this list yes or no and hand it to one of the tellers or you can sit there with the teller and orally  have her record your vote at that time that unless somebody wants to have the drama of sitting here and going one by one i think that's a reasonable proposal and then and then i left out one thing that's right once voting is final on the floor once we've had the last vote on the floor the committee republicans and democrats need to come to h two o wait to record our votes on final passage not for the votes and one final yes that's the last vote that we'll  so what we want to do is see how much we can get done now and  we cannot do that what we will do however is go to the floor and respond in h two zero eight and that's the conclusion of this round of votes and i understand it may be the last we would then r descriptions the descriptions are not that revealing so they're trying to put together another sheet that you can use overnights to a light that will give you more information on each amendment in case any democrats want to vote yes on any of them are