The legislation was introduced by Senate Finance Chairman Max Baucus (D-Mont.) and House Ways and Means Chairman Charles Rangel (D-N.Y.) for consideration by Congress this year. According to the lawmakers, the bill would push forward the development of advanced electricity infrastructure, provide incentives to mitigate carbon emissions, promote the production of alternative energy and the security of the domestic fuel supply, support the use of alternative vehicles, and encourage energy savings and efficiency.

"Our country needs to make a big turn in terms of energy policy, and this tax package will help to steer the ship. This legislation will help America to use more carefully the resources we have today, and to balance our energy incentives toward the fuels of tomorrow," commented Baucus.

"An economically strong, globally competitive future for America just won’t run on the fuels of the past. It’s high time to focus our energy efforts on sources that will be available and affordable for Americans decades from now. And it’s appropriate to pay for these new energy incentives by closing loopholes in our current energy tax policy. I am sure the Senate will have a robust debate on some provisions of this important legislation, but I expect that we will all work together to see it passed," he added.

"This legislation helps ensure that our tax code is a partner in moving our energy policies into the 21st century," claimed Rangel.

"By creating and expanding incentives for the use and production of renewable energy and conservation, we help break our dependence on foreign oil and promote America’s energy independence. Investments in cutting-edge renewable energy technologies will also help keep American manufacturers and producers at the forefront of technological developments internationally," the Ways and Means Chairman argued.

Key provisions in the Clean Renewable Energy and Conservation Tax Act of 2007 include:

• Long-term extensions of tax credits for renewable electricity;
• Tax credits for carbon capture and sequestration demonstration projects;
• Tax credits for production of biofuels, including cellulosic ethanol;
• Tax credit bonds for renewable energy and conservation; and
• Extensions of energy efficiency tax incentives.

The fully-offset package also includes revenue-raising provisions affecting the oil and gas industry. However, the provisions have been designed to prevent any retroactive effect on the industry, and to avoid negative impacts on production that may generate increased consumer prices.

The main oil-and-gas-related provisions repeal the domestic manufacturing incentive for the top five integrated producers, while freezing the deduction at 6% for all others in the sector. The Act also tightens rules governing the payment of taxes by oil and gas producers on foreign-earned income.

The package was developed in close consultation with Senate Energy Committee Chairman Jeff Bingaman, who is also a member of the Finance panel.

The House is expected to vote on the legislation this week.