Senator Collins Introduces Energy Assistance Act

Senator Susan Collins has introduced legislation that would make available additional funding to low-income families for weatherization programs, grant dollars for low-income families who do not qualify for energy efficiency tax credits, low interest loans for middle-income consumers, and an extension of tax incentives for renewable energy programs. Senator Collins’ bill, the Energy Assistance Act of 2008, also includes a provision from a bill she introduced previously that would provide for a $500 tax credit to help consumers purchase clean burning wood or wood pellet stoves.

In a speech to the U.S. Senate, Senator Collins said, “As I visit communities around the state of Maine, I hear time and again that the high cost of energy is causing a crisis for many of our citizens… I am concerned that in a difficult economy, investments in energy conservation and alternative energy improvements are simply too costly for many American families and small businesses. With oil prices as high as they are, most families and small businesses are already scrimping and saving to make ends meet, and they do not have the money to finance the gap between the tax credit we provide and the cost of the investment…The legislation I am introducing today calls for additional loan authority to support current federal programs that help families and small businesses finance energy efficiency improvements. It also would provide much-needed grants for low-income individuals who cannot benefit from either tax credits or low-interest loans. These proposals, taken together, would go a long way toward achieving greater energy efficiency and reducing our nation’s dependence on foreign oil.”

A full text of Senator Collins speech on her “Energy Assistance Act” is as follows:

Ms. COLLINS. Mr. President, I rise today to introduce the Energy Assistance Act of 2008, legislation which will assist people who want to invest in energy conservation and alternative energy technologies and help set us on a path toward energy independence.

As I visit communities around the state of Maine, I hear time and again that the high cost of energy is causing a crisis for many of our citizens. Rapidly increasing prices for home heating oil, gasoline and diesel fuel are a huge burden for many families, truckers, and small businesses. High oil prices affect virtually every corner of the economy, in Maine and throughout the country, and are a significant cause of the current economic downturn.

Mr. President, I am concerned that in a difficult economy, investments in energy conservation and alternative energy improvements are simply too costly for many American families and small businesses. For example, under the present code, taxpayers who install energy efficient windows and skylights receive a 10 percent tax credit, up to $200, and taxpayers who install solar water heating systems receive a credit of 30 percent, up to a total of $2000. In both instances, the investment which must be made by the taxpayer far exceeds the credit amount. With oil prices as high as they are, most families and small businesses are already scrimping and saving to make ends meet, and they do not have the money to finance the gap between the tax credit we provide and the cost of the investment. Ironically, the higher oil prices climb, the harder it will be for taxpayers to bridge this gap.

The legislation I am introducing today calls for additional loan authority to support current federal programs that help families and small businesses finance energy efficiency improvements. It also would provide much-needed grants for low-income individuals who cannot benefit from either tax credits or low-interest loans. These proposals, taken together, would go a long way toward achieving greater energy efficiency and reducing our nation’s dependence on foreign oil.

The loan authority I am proposing would expand existing federal programs that make low-interest loans to individuals and small businesses for energy efficiency improvements. This new loan authority would be made available through a new energy assistance revolving loan fund within the Treasury Department. Individuals who make less than 115 percent of the median area income would be able to apply for low-interest loans to cover the difference between the tax credits available for energy efficiency improvements and up to 90 percent of the cost of those improvements. The federal agencies can make these loans directly, or through their lender networks.

USDA, HUD, and other federal agencies already have programs that can make loans of this kind to individuals. Small businesses can seek low-interest loans for energy efficiency improvements under existing loan programs such as the SBA’s 7(a) program. The revolving loan fund called for by my bill will enable these agencies to offer more loans to the individuals and small businesses we have asked them to serve.

It is also important that we provide assistance to low-income individuals who do not have the income to benefit from tax credits, or who cannot afford to finance energy improvements even with low-interest loans. These individuals, especially, are still reeling from last winter’s high energy prices, and it is critically important that they receive assistance before cold weather sets in again. To help those who are most in need, my bill would provide an additional $500 million in funding this year for grants for energy efficiency, weatherization, and renewable energy technology, and would double funding for the Weatherization Assistance Program. These grants will finance investments that will decrease energy prices for these citizens for years to come and are a wise investment.

Mr. President, my legislation also includes several proposals I have long advocated. I have included these proposals so that this bill captures an overall picture of the energy challenges that our nation faces. For example, this bill extends important tax incentives for renewable energy and energy efficiency that have expired, or are about to expire.

These provisions include the renewable energy production tax credit, Clean Renewable Energy Bonds, tax benefits for energy efficient buildings, products and power plants, the tax credit for Plug-In Hybrid vehicles, the exemption from the heavy vehicles excise tax for idling reduction units and advanced insulation, and energy efficiency tax credits for homes.

My bill would also provide a $500 tax credit to help consumers purchase and install new clean burning stoves, as well as efficient, clean wood pellet stoves, similar to a bill I introduced with Senator Crapo earlier this year. This new tax credit reflects the reality that with oil prices soaring, wood is again the fuel of choice for many families throughout the country, just as it was during the height of the oil crisis in the 1970’s.

I urge my colleagues to work together in a bipartisan way so that we can help Americans overcome the challenge of high oil prices and restore and strengthen our nation's economy.