On November 24, Senate Majority Leader Bill Frist (R-Tenn.) announced there was not enough time prior to the Senate holiday recess to reach a compromise on energy legislation, and final action would be postponed until February.

An attempt on November 21 to shut off debate and to bring the comprehensive energy bill up for a final vote fell two senators short of the 60 needed to end the filibuster. Democrats and six Republicans blocked the vote on the $31 billion, 1,100-page package due to several issues that are unrelated to the provisions of interest to the manufactured housing industry.

The final conference report had been approved by energy conferees on November 17, and was easily passed the next day by the House of Representatives. Energy conferees cut the Senate water submetering accelerated tax depreciation language in order to cut overall costs of the bill and because some conferees believe that such language should be in another tax vehicle, not in the energy bill. Language was included in the conference report that would provide; a $1,000 tax credit for builders of manufactured homes that meet the Energy Star Labeled Home Program requirements; a $1,000 credit by building homes that are 30% more energy efficient than homes built under the 2000 International Energy Conservation Code (IECC), and that credit jumps to $2,000 for homes that are 50% above IECC; and a 20% tax credit (up to $2,000) to consumers for remodeling existing manufactured homes to 30% above IECC.

In an interesting turn of events, and due to the stalemate in the Senate, a new energy bill (S. 2095) was introduced on February 12 which contains the language outlined above, and also contains the water submetering tax depreciation language that is of importance to MHI’s National Communities Council (NCC).

Although cutting costs of the various tax provisions has become more important than ever (without significant cuts many Republican Senators will not vote for the bill), senators heard from their NCC members on the importance of this tax depreciation and decided to include the language despite the overall need to cut costs. NCC members are urged to thank their senators for including the language, and to contact their representatives in the House to urge them to include the water submetering depreciation language in the final energy bill.

Final passage of the energy bill is going to be a complex, but not impossible process since the House wants to negotiate from the conference report that was agreed upon in November. It is critical to the House leadership to include the language that is in the conference report that would protect the dozen makers of a gasoline additive known as MTBE from defective product lawsuits. If you are an NCC member and you have questions, contact Sherri Cabrera at 703-558-0659 or sherri@mfghome.org.