Sens. Joe Manchin, D-W.Va., and Debbie Stabenow, D-Mich., announced the American Jobs in Energy Manufacturing Act last week, which they argue incentivizes companies to produce new products with tax credits.
The bill would modify the advance energy manufacturing tax credit, a 30% investment tax credit approved in the February 2009 stimulus bill aimed at supporting manufacturing facilities that wanted to produce clean energy products. The measure would dedicate $8 billion for investing in manufacturers to build new facilities or retrofit existing properties. Companies would use the sites for building energy-related products, such as energy storage technology, items capable of storing carbon dioxide, and renewable energy equipment.
The $8 billion would be divided between communities impacted by closures in the coal and automobile industries.
“Tax credits to help incentivize a transition to a cleaner energy future should be targeted to drive reinvestment in the communities who are most impacted by this transition,” Manchin said.
Manchin and Stabenow stressed to reporters their experiences regarding changing economic trends and the related impact on states; Manchin mentioned how the coal industry’s decline has cut employment opportunities and reduced municipal resources in West Virginia, while Stabenow talked about the near-collapse of Michigan’s automobile industry during the Great Recession.
“We want to make sure they have a chance to survive,” Manchin said.
Stabenow said federal support during the Great Recession helped Michigan companies embrace new economic opportunities. She introduced the initial $2.3 billion tax credit, which she said allowed companies to build new facilities or expand existing operations in Michigan for manufacturing clean energy products.
“We know that transition to a clean energy economy is a great opportunity for the United States, but our workers and our businesses need support to make that happen,” she said.
Multiple organizations and businesses have already announced their support for the legislation, including the United Mine Workers of America, the Sierra Club, Ford Motor Co. and General Motors Co.
“For a true energy transition in this country to work, there must be well-paying, union jobs available for dislocated workers to move into,” UMWA President Cecil Roberts said in a statement. “This legislation will encourage the creation of those jobs and provide a much-needed ray of hope for dislocated miners and other traditional energy workers, their families and their communities.”
Stabenow, a member of the Senate Finance Committee, noted Committee Chairman Ron Wyden, D-Ore., is “very supportive” of the proposal.
During her Jan. 27 nomination hearing before the Senate Energy and Natural Resources Committee, Energy Secretary Jennifer Granholm backed extending tax credits to areas most impacted by economic changes.
“In West Virginia and other coal states and other fossil fuel states, there is an opportunity for us to specialize in the technologies that reduce carbon emissions, to make those technologies here, to put people to work here, and to be able to look at other ways to diversify as well,” the former Michigan governor said.
The Senate confirmed Granholm’s nomination last month; Manchin, the Energy and Natural Resources Committee chairman, backed the nominee, while Sen. Shelley Moore Capito, R-W.Va., opposed confirmation.
Read More: Manchin backing measure encouraging clean energy manufacturing