Advocates eye action next week on expired credits

Source: Geof Koss, E&E News reporter • Posted: Wednesday, March 27, 2019

There are signs that long-stalled extensions of an assortment of expired energy tax incentives may start moving in the House as early as next week.

Lobbyists said the Ways and Means Committee may mark up an extenders package, although a spokeswoman for Chairman Richard Neal (D-Mass.) did not respond to a request for comment yesterday.

Still, the rumor sparked pushback last week from the Koch brothers-affiliated political network, which has long opposed the on-again, off-again suite of tax breaks, many of which benefit renewable energy sectors.

“Fifteen months ago, Congress rightly let a set of tax carve-outs for well-connected industries, called tax extenders, to expire,” said Russ Latino, Americans for Prosperity’s vice president of the Economic Opportunity Portfolio.

“Now, some in Congress are pushing to revive these instruments of corporate welfare that benefit the few at the expense of American taxpayers. Bringing these giveaways back is bad tax, fiscal and economic policy,” he said. “What is dead should remain dead.”

Senate tax-writers are ready to move on extending the roughly two dozen breaks, which include incentives for biofuels, efficiency and alternative vehicles.

A bipartisan bill offered last month by Senate Finance Chairman Chuck Grassley (R-Iowa) and ranking member Ron Wyden (D-Ore.) would retroactively extend the breaks for 2018 and keep them on the books until the end of the current year (E&E News PM, Feb. 28).

While that measure went directly on the Senate calendar — a move that allows Majority Leader Mitch McConnell (R-Ky.) to bypass committee and call it for debate at a time of his choosing — Grassley indicated that the House will likely go first to comply with the constitutional requirements for revenue measures.

Whether extenders could be addressed in a Senate floor debate on emergency natural disaster assistance this week — as Grassley has urged — is uncertain (E&E Daily, March 25).

Grassley said yesterday he hadn’t spoken to leaders about the disaster vehicle. Earlier this month, Grassley said he believed the House was “favorable” to extenders but faced questions about cost and legislative vehicles.

“The question is, are they gonna be paid for? Pay-go or not have pay-go?” Grassley told E&E News, referring to pay-as-you-go budgeting rules that would require offsets to prevent the bill from adding to the federal deficit.

The House’s insistence on pay-go compliance is “going to be very tough to deal with,” Grassley continued, arguing that he and Wyden believe that “if you extend existing law, you shouldn’t have to pay for it, just like you extend existing spending, you don’t have to pay for that.”

A second question is what other tax issues could be added to it. “I don’t think you’re going to see extenders go just by itself,” said Grassley, citing the inclusion of retirement savings provisions as one possible combination.

Yesterday, Grassley told E&E News he wasn’t giving up on trying to add extenders to the disaster supplemental. “We only got a couple opportunities to get extenders done,” he said.

‘The right package’

A key House Ways and Means Committee staffer told a renewable energy conference in Washington, D.C., last week that Neal is “committed” to getting the extenders through.

The committee is currently “figuring out what is the sort of adequate, the right package that is satisfactory to both chairmen and can make it through Congress,” the aide, Aruna Kalyanam, the Democratic staff director for the Ways and Means Subcommittee on Select Revenue Measures, said during the American Council on Renewable Energy policy conference.

She confirmed that House Democrats will adhere to pay-go, while suggesting that the House is moving more slowly in part to bring dozens of new members up to speed on the issue.

“We have 60 new House members who have never voted on extenders, so there is an education that needs to happen,” she said. “These new members are super-aware, super-astute, and they read the damn bill. They’re going to go through it and really scrutinize this legislation.”

Kalyanam signaled that efforts to tackle extenders weren’t beings helped by the Koch network, which earlier this month sent what she called a “widely broadcast letter” to members calling for the end of the expired tax breaks.

A further complication is the push by multiple sectors for revisions to existing energy tax breaks for energy storage, carbon capture and sequestration, and the electric vehicles incentives, which technically aren’t expired and raise the possibility of additional costs to the legislation that must be offset.

Senate Minority Leader Chuck Schumer (D-N.Y.) alluded to those breaks last week, when he told Voxthat Republicans would “need to change some tax extenders” because of the Democratic-led House.

Democrats also are eyeing broader changes to the energy tax code, including revisiting the phaseout of key breaks for wind, solar and other renewables (E&E Daily, Feb. 28).

Grassley noted that the current expired state of many of the breaks means developers will be unlikely to take advantage of the incentives by the April 15 tax deadline, and will later have to file amended tax paperwork if the breaks are revived.

Echoing a common complaint, Kalyanam said the need to retroactively extend tax breaks is “terrible policymaking.” She said, “We’ve gotten very good at it, unfortunately.”