WASHINGTON, D.C. — Today Congressman David Wu introduced two new pieces of legislation designed to promote clean energy and environmental sustainability.

The first bill is modeled on Oregon’s Business Energy Tax Credit, a widely used state tax credit that applies to energy and sustainability projects.  To replicate that success nationally, Congressman Wu introduced the Building Energy Tax Credit (BETC) Act, H.R. 3659, which promotes energy efficient commercial buildings.

“The federal tax code already addresses renewable energy projects, alternative transportation, and residential improvements,” said Congressman Wu.  “However, there’s a gaping hole in our federal support for sustainable commercial buildings.  This tax credit is designed to fill that hole in a way that makes financial and environmental sense.”   

The federal BETC program will award a tax credit of up to 35 percent of the total cost of the project to buildings that exceed the energy efficiency standard used by the Department of Energy by at least 40 percent.  In addition, to protect against fraud and abuse of the credit, the tax credit is capped at $4.00 per square foot.  This cap helps ensure that the funds are supporting the additional costs of more sustainable technologies, without allowing developers to simply inflate the project’s overall cost to claim a larger tax credit.

“This legislation goes a long way toward our national objectives of reducing our carbon emissions and our dependence on sources of energy that are imported or environmentally harmful,” said Mark Edlen, co-founder and managing principal or Gerding Edlen Development Company.  “The environmentally sound building projects supported by this tax credit will enable the creation of thousands of sustainable, family wage green jobs for Americans across our country.”

In order for an individual developer to apply for the federal BETC credit, his or her state department of energy must first develop a plan for allocating the credits that meets with federal approval.  State plans must use a common standard, already used by the U.S. Department of Energy, to calculate energy consumption in commercial buildings.  Once such a plan has been submitted and accepted by the United States Secretary of Energy, it is state energy officials, not federal, who will decide which projects get BETC credits.

State departments of energy have been selected to administer this energy program, rather than the IRS, because many states already have the infrastructure and staffing in place to do so.  States will have the flexibility to augment their existing energy efficiency programs, rather than start from scratch.  However, state tax credit allocation plans will only be approved if they meet the bill's rigorous standards.

"We are very pleased to see a program on the federal level that is modeled after the state of Oregon's successful Business Energy Tax Credit," said Bob Repine, assistant director of the Oregon Department of Energy.  "This new federal program will help us provide greater flexibility, while leveraging additional dollars for important projects that support energy efficiency and renewable energy."

Congressman Wu’s BETC legislation also continues a unique feature of the Oregon tax credit by allowing tax-exempt entities to partner with a taxable business and pass the tax credit through to the business in exchange for a lump-sum payment.  

“With the pass-through option, schools and nonprofits benefit from upfront funds for energy efficiency, and private partners are able to defray their tax liability,” said Wu.  “There are also benefits beyond the immediate financial transaction, as private partners help our most cash-strapped public entities stretch their dollar by reducing everyday energy costs and we all reduce the built environment’s contribution to climate change.  It’s a win-win partnership that has worked for Oregon and will work for America.”

Congressman Wu also introduced the Fuel Cell Tax Parity Act of 2009, H.R. 3660, today with original cosponsor Congresswoman Mary Bono Mack (R-CA) to encourage the use of residential fuel cells.  Residential fuel cells provide families with access to systems that can provide both heat and power from a clean, efficient energy source.  

Currently, our tax code treats residential and commercial fuel cell projects differently by giving a substantially larger production tax credit to commercial uses.  However, other renewable energy sources, including solar, geothermal, and wind projects, are treated the same regardless of whether they are for commercial or residential use.  Congressman Wu’s bill rectifies this disparity by making residential fuel cell installations eligible for the same tax credits as commercial fuel cells.  

“As we try to ensure that America has clean and renewable sources of energy, we need to establish policies to help individuals install these technologies and support industries that are already ahead of the curve,” said Congressman Wu.  “This bill will ensure that families have the opportunity to access the same tax credits that commercial developers get for using renewable power.”

ClearEdge Power, which is a manufacturer of a combined heat and power fuel cell system, has its manufacturing headquarters in Hillsboro, Oregon.  The commercial tax credits currently on the books are already benefiting its clients, including a local Hillsboro fire station and a fast food restaurant in the Portland area.

“By introducing the Fuel Cell Tax Parity Act, Representatives Wu and Bono-Mack have proposed a major step towards creating an even playing field for clean energy technologies in the marketplace,” said Russell Ford, ClearEdge Power president and CEO.  “Until now, the majority of government investment in clean energy has been directed at solar, wind, geothermal, and other familiar technologies.  As documented, there is a gap in these technologies’ capacity to provide reliable, cost-effective distributed power on a broad scale.  That gap must be filled if we as a nation hope to expand the use of clean energy and reduce carbon emissions.  Fuel cells can fill that gap by providing homes and businesses with clean, affordable and reliable power that, dollar for dollar, is more efficient than wind and solar power.”

"The U.S. Fuel Cell Council thanks Congressman Wu and Congresswoman Bono-Mack for introducing this legislation,” said Bud DeFlaviis, Director of Government Affairs, US Fuel Cell Council.  “They understand that if we're serious about energy independence, security, and conservation, fuel cells must be part of the equation.  Small businesses and homeowners will benefit from fuel cells, as they provide users with reliable, base load power that is efficient and clean."