Oil Import Reduction Program Letter to the Speaker of the House and the President of the Senate Transmitting Tax Initiative Proposals.

Dear Mr. Speaker: (Dear Mr. President:)

I am pleased to transmit to you the energy tax initiatives of my Oil Import Reduction Program.

On May 7, 1979, I transmitted to the Congress the second National Energy Plan, as required by section 801 of the Department of Energy Organization Act (Public Law 95-91). The initial step in that plan was to direct the phasing out of price controls on domestic crude oil. This was begun on June 1 of this year. By October 1, 1981, all domestic oil will be decontrolled.

The next step was to recommend the imposition of a windfall profits tax on domestic crude oil production and the creation of an Energy Security Trust Fund to utilize the tax revenues generated by the windfall profits tax and increased income tax collection attributable to decontrol. This proposal is presently pending before the Congress.

I now propose several tax incentives to help achieve the goals of the Oil Import Reduction Program.

First, to help achieve the goal of generating 20 percent of the Nation's energy requirements by the use of solar energy by the year 2000, I propose tax credits to encourage the use of solar energy devices in residential and commercial construction. In addition, I propose investment tax credits for solar equipment used for process heat in industrial and agricultural applications.

Second, to further reduce our reliance on imported oil, I propose production incentive tax credits for the production of shale oil and natural gas from unconventional sources in addition to financial assistance which will be provided by the Energy Security Corporation. In addition, I propose to make woodburning stoves eligible for the residential energy credit, and make permanent the excise tax exemption for gasohol.

Finally, as I indicated on July 16, the Administration is moving to decontrol heavy oil and I propose to exempt it from the windfall profits tax.

These tax credits will encourage the development and use of new energy technologies and add significantly to our independence from foreign sources of petroleum.

Sincerely,

JIMMY CARTER