House and Senate to vote on tax reform today, Senate likely to punt on extenders

Source: Geof Koss, E&E News reporter • Posted: Tuesday, December 19, 2017

Energy interest groups are scrambling to see Congress pass legislation extending a host of expired tax breaks before leaving town for the holidays later this week, although key lawmakers signaled yesterday the timing of the push remains in flux.

Clean energy advocates want to see the extenders package, which is expected to surface in the Senate this week, attached to the continuing resolution slated to pass before the current stopgap spending law expires Friday.

However, Senate Majority Whip John Cornyn (R-Texas), who’s also a member of the Finance Committee, said yesterday that extenders would likely have to wait until January.

“I don’t think we’re going to have enough time,” Cornyn told E&E News yesterday. “There’s certainly a commitment to doing them, I just don’t see how we get it done this week.”

January “probably makes more sense,” he added. “I think the House has got to see what they can pass and send it over to us, and then we have to either send it back or work out something in advance.”

Finance Chairman Orrin Hatch (R-Utah) said an extenders bill would “probably” emerge this week. He said the timing was unclear but wouldn’t rule out it hitching a ride on this week’s CR.

“All I can say is it’s likely that we’ll have one because we have cats and dogs that we have to put together and sometimes some pretty important things too,” he said of the annual fight over extending certain breaks.

House Ways and Means Chairman Kevin Brady (R-Texas) was noncommittal on the timing of an extenders push but suggested it would likely have to wait till next year.

“We’re going to have that discussion after we get the tax reform bill done,” Brady told reporters.

A broad coalition — including dozens of groups representing energy, transportation, real estate and agricultural interests — laid out their request yesterday in a letter to congressional leaders that called for a “seamless, multi-year extension of the tax extenders before the end of 2017.”

The groups called for the extension of tax breaks that expired in 2016 affecting “sectors vital to the U.S. economy and support tens of thousands of jobs nationwide.”

The size and scope of an extenders bill remain unclear, but one option that continues to be discussed is simply extending breaks that expired at the end of 2016 through the end of 2018, with 2017 also covered retroactively (E&E Daily, Dec. 15).

Other energy interests continue to weigh in with lawmakers both publicly and privately. Led by the Alliance to Save Energy, a coalition of business and public interest organizations called on Congress to extend three expired efficiency tax breaks “before adjourning in 2017.”

The National Hydropower Association wants to see key expired hydro- and marine-energy incentives extended as well. “It is imperative that Congress act quickly on an extension of the hydropower and marine energy tax credits, and we hope a tax extenders bill with these provisions will be passed and signed into law as soon as possible,” said NHA Deputy Executive Director Jeff Leahey.

Also hanging in the balance are expired biodiesel tax breaks, a suite of “orphaned” renewable sources that were left out of a 2015 tax deal and an extension of a key nuclear production tax break, which Brady noted yesterday was dropped in conference after it passed the House in the broader tax overhaul.

The orphaned renewables were also extended in the House tax bill but were dropped in conference with the Senate, which sought to avoid alienating pro-renewable Republicans in the scramble to get to 50 votes for tax reform.

Wrapping up tax reform

The House is expected to vote later today on the broader tax overhaul unveiled Friday. Cornyn said a Senate vote will follow later tonight but noted it “could creep over into Wednesday morning depending on how much time we have to burn.”

The League of Conservation Voters yesterday mounted a last-ditch appeal to members to oppose the bill, which it said would turn “the pristine and sacred Arctic National Wildlife Refuge into an industrial oil field.”

But with Sens. Mike Lee (R-Utah) and Susan Collins (R-Maine) announcing yesterday they would support the bill, passage seems within reach. Vice President Mike Pence announced yesterday he would delay a trip to the Middle East so he could step in and provide the 51st vote in the event of a tie.

As expected, the final tax overhaul rejected controversial energy provisions in the House. While it contained a compromise to address impacts on renewable investment from new base erosion anti-abuse tax (BEAT) provisions, the fix continues to spark concerns among renewable interests (E&E Daily, Dec. 18).

“Given the complexities of the BEAT, we look forward to working with our congressional allies to modify the provision to allow unused tax credits to be used in future tax years,” Solar Energy Industries Association President and CEO Abigail Ross Hopper said in a statement yesterday.

There’s already talk of a “technical corrections” bill to address issues that are expected to arise from the sweeping overhaul, and Brady said yesterday Republicans aren’t finished legislating on taxes.

“This is not our last tax reform,” he told reporters. “I’m going to recommend that we have some form of tax reconciliation in future budgets because there are still aspects of the tax code I think could be improved.”