Compromise bill would extend energy credits for 2 years

Source: By Geof Koss, E&E News reporter • Posted: Friday, March 1, 2019

The leaders of the Senate Finance Committee today released legislation to extend more than two dozen expired tax breaks for two years.

The bill, offered by Finance Chairman Chuck Grassley (R-Iowa) and ranking member Ron Wyden (D-Ore.), would extend 26 incentives retroactively for 2018 and through the end of the current year.

The bill includes extensions of key energy breaks for efficiency, biofuels and alternative vehicles. It would also extend the oil spill liability trust fund excise tax of 9 cents per barrel of crude oil and the black lung liability trust fund excise tax, both of which expired at the end of 2018.

The black lung tax, which helps provide health care for coal miners with the disease, would be set at $1.10 per ton for coal from underground mines and 55 cents per ton for coal from surface mines, each up to 4.4 percent of the sale price.

The legislation also include tax breaks to help victims of natural disasters, according to a summary.

During a Senate floor speech this afternoon, Grassley wielded a poster bearing an image from the film “Groundhog Day,” in which Bill Murray’s character is forced to relive the same day.

“It’s fitting that I’m taking this step in the same month as Groundhog Day, as the subject of my remarks is something that Congress has had to deal with too many times already,” Grassley said, referencing the on-again, off-again nature of the temporary tax breaks, most of which have been expired since the end of 2017.

Grassley said he has asked Senate Majority Leader Mitch McConnell (R-Ky.) to bypass the Finance Committee and put the bill on the Senate calendar, which allows him to call it for debate at any time.

The chairman called on the House to quickly pass the measure in the coming weeks, noting the approach of tax season.

In a statement, Wyden said it was “past time to kick the addiction to short-term tax policies, but until Congress is able to break this cycle for good, taxpayers deserve certainty about what they’ll owe.”

“It’s important this is a two-year bill covering 2019, and it includes key renewable energy incentives I’m proud to fight for. Filing season for 2018 is already underway, so the Congress should act on this quickly,” Wyden said.

Intense lobbying

While the extenders exercise is often a forum for adding or revising tax breaks in the code, the measure appears to be relatively clean extensions of the current breaks.

In recent months, an assortment of industry sectors and their congressional allies have pressed for changes to credits affecting electric vehicles, carbon capture and sequestration technology, and energy storage, as well as a longer extension and phaseout of a key biodiesel blender’s tax credit favored by Grassley. None of the breaks are included in the new extenders package.

Although the biodiesel phaseout is absent from the measure, Grassley said on the Senate floor that he remains committed to seeing it eventually enacted.

Also absent from the bill are provisions addressing the current phaseout of key wind and solar tax incentives, which Democrats in both chambers this week expressed interest in extending beyond the current schedule.

The decision to skip a committee markup may make it harder for senators to amend the bill on the floor, where McConnell will control the amendment process.

Despite Grassley and Wyden’s desire to move quickly, House Democrats have signaled they plan to move more slowly on extenders.

Rep. Earl Blumenauer (D-Ore.), a senior member of the Ways and Means Committee, said this week that he expects the panel to broadly review the 2017 GOP tax overhaul before taking on specific tax issues like extenders (E&E Daily, Feb. 28).

In his floor speech, Grassley also signaled that House Democrats are insisting that additional tax breaks be offset under pay-as-you-go budgeting rules, which would require spending cuts or revenue increases elsewhere.

While noting that he has supported pay-as-you-go in the past, Grassley said there is a “bipartisan precedent” for treating extension of temporary tax breaks the same as the extension of annual spending — without offsets.

“When you have a tax law that’s been on the books for a couple of decades and it has sunset, why should you have to offset that?” he asked.