Grassley eyes spending bill to carry energy credits

Source: Geof Koss, E&E News reporter • Posted: Thursday, February 7, 2019

The chairman of the Senate Finance Committee is hoping to add extensions to an assortment of energy tax breaks to any spending deal that materializes in the coming weeks.

A continuing resolution or omnibus spending package may be the most viable near-term legislative vehicle for renewing the roughly two dozen tax breaks, Sen. Chuck Grassley (R-Iowa) said yesterday.

“It’s the only way to get it done in the next couple months,” he told E&E News.

Efforts to revive the extenders foundered at the end of the previous Congress, when the then-majority House Republicans punted on a tax package that would have retroactively extended the breaks for 2018 (E&E Daily, Dec. 11, 2018).

Supporters of the extenders — which include incentives for efficiency, biofuels and alternative vehicles refueling stations — have struggled in their quest to win long-term certainty for affected industry sectors. The incentives have repeatedly lapsed, only to be later revived for one or two years.

Last spring, lawmakers extended the credits retroactively for 2017, rendering them once again expired before the ink on the law had even dried. Such retroactive extensions do little to incentivize investment, advocates say.

Sen. Ben Cardin (D-Md.), a member of the Finance Committee, said yesterday there has been “a lot of talk” about reviving energy incentives in recent weeks, with a one-year retroactive extension for 2018 and the remainder of 2019 the most likely scenario.

“I think there’s pretty broad agreement on a basic two-year extension package,” Cardin told E&E News. “We’d like to do more, we’d like to get some permanency, we’d like to get some reform. Where it will pop out, I don’t know.”

Cardin said he would support adding extenders to whatever spending deal surfaces by Feb. 15, when the current CR expires, but said it would likely be an uphill fight.

“I would find it remarkable if that happens,” he said. “It could happen, but normally there’s so many other pent-up issues that it would be hard to separate that out. But it’s timely given they’ve expired. So a lot of us would rather get it done sooner rather than later.”

Biofuel break

In a sign that discussions are picking up, 10 associations representing the biofuels, agricultural and refining sectors sent a letterto congressional leaders yesterday urging an extension of a key biodiesel blenders tax break.

“Unfortunately, the uncertainty caused by the ‘on-again, off-again’ tempo of legislative extensions … has somewhat frustrated our sector’s ability to anticipate the availability of the incentives and make the necessary investments,” wrote the coalition, which includes the Advanced Biofuels Association, National Biodiesel Board and Petroleum Marketers Association of America.

“This severely disrupts access to capital, as well as the ability to hire and expand,” said the letter.

It urged lawmakers to “maintain and extend the biodiesel blenders’ tax credit as soon as possible,” but it was silent on a proposal that surfaced in the closing weeks of the previous Congress that would have extended but phased down the value of the biodiesel break over seven years.

Grassley, who has previously supported the long-term phaseout, said yesterday that the industry letter’s silence on the plan may be an acknowledgement that a shorter revival is probably more realistic.

“I want the phaseout but I want it extended one way or the other, and maybe they’re realizing that the chances of getting a bipartisan compromise on the seven-year phaseout is questionable,” he said.

“If they hold out for that, maybe they get nothing,” said Grassley. “And so it’s kind of a case where you’re going to get 26 extenders or not get any. This is part of a compromise.”

Grassley, however, quickly added that he was “not aware of that trend at this point.”

Finance ranking member Ron Wyden (D-Ore.), who last month expressed optimism on energy tax breaks with Grassley’s ascension to the chairman’s spot, declined yesterday to offer details on the state of play on extenders (E&E Daily, Jan. 22).

“Let me have a chance to talk with my colleagues, and then I’ll have some more to say about it,” he said.