Governors' Wind Energy Coalition

House and Senate Republicans are hoping to make headway this week on advancing tax reform, a complicated legislative priority that has taken on new importance amid lackluster progress on the broader GOP agenda.

The Senate Finance Committee this afternoon will begin what is expected to be a several-day markup on its tax package unveiled last week by Chairman Orrin Hatch (R-Utah).

It largely leaves key energy breaks enjoyed by renewables and fossil fuel producers intact, while also lowering corporate rates to 20 percent starting in 2019 (Greenwire, Nov. 10).

The Senate bill is also notable for what’s not in it: extensions of a nuclear production tax credit and incentives for carbon capture and sequestration and biodiesel that enjoy bipartisan support. They could emerge during the markup.

Another bipartisan proposal that could come up is language by Sens. Chris Coons (D-Del.) and Jerry Moran (R-Kan.) that would extend master limited partnership treatment to renewable projects (E&E Daily, Oct. 26).

While amendments addressing these and other energy topics are possible in committee and on the floor, the tight budget constraints the Senate is operating under create “limited room” for additions absent an influx of pay-fors, consultancy ClearView Energy Partners LLC wrote last week.

By contrast, the regional distribution of energy resources and a slim GOP majority in the Senate “seem likely to protect existing energy provisions,” said the firm’s analysis.

There are key differences in the House’s tax reform package, which will come to the floor Thursday following a Rules Committee meeting Wednesday.

As passed by the Ways and Means panel last week, H.R. 1 would extend the nuclear credit, as well as the qualification of “orphaned” renewable energy sources left out of a 2015 tax deal.

But in a move that is drawing fire from renewable sectors, the House bill also would reduce the value of the production tax credit, zero out an investment credit for solar after 2027 and add new construction requirements for renewable facilities. The House bill would also repeal a $7,500 tax credit for electric vehicles (Climatewire, Nov. 7).

Although the EV credit is unchanged in the Senate bill, Sen. Debbie Stabenow (D-Mich.), a Finance Committee member, said last week she will fight to see it restored if the two chambers go to conference.

“It’s critical as the automobile industry moves forward with new platforms, including autonomous vehicles that are based on electric platforms,” she told E&E News last week. “The structure of the marketplace includes the credit in terms of price points for consumers, and so I’m very concerned.”

Republicans can expect little help from Democrats on taxes, especially after a strong Democratic showing in last Tuesday’s elections (E&E Daily, Nov. 9).

“We’ll have to see if Republicans get the message from Tuesday,” Finance ranking member Ron Wyden (D-Ore.) told reporters last week.

“The message on Tuesday was the middle-class people saying, ‘What you Republicans are pushing in Washington isn’t working for us.’ And we’ll see if they’re willing to do an about-face to reflect what happened. As of right now, I don’t see any evidence of it.”

Senate Republicans this weekend touted Joint Committee on Taxation data showing broad middle-class gains under the Senate bill.

And in an appearance on CBS’s “Face the Nation,” Treasury Secretary Steven Mnuchin dismissed the anticipated rush of lobbyists looking to put their imprint on the tax overhaul.

“I haven’t had any lobbyists really involved with us,” Mnuchin said. “We’ve had trade groups that we’ve listened to input. But I’m not concerned about lobbyists at all.”

Larger hurdles in the competing House and Senate bills include the Senate’s elimination of state and local tax (SALT) deductions, differences on the estate tax, and the one-year delay of the corporate reduction.

In an appearance on “Fox News Sunday,” Ways and Means Chairman Kevin Brady (R-Texas) said the House won’t pass the full SALT elimination in the Senate bill.

Senate Minority Leader Chuck Schumer (D-N.Y.) was quick to highlight that point, as the issue will be a sticking point in the House debate in the coming days, especially among New York and New Jersey Republicans.

“The House’s so-called compromise would be saying to the middle class, ‘We’ll only chop off four of your fingers instead of all five,'” Schumer said of the House’s retention of the SALT deduction for property taxes.

Reporter George Cahlink contributed.

Schedule: The Senate Finance markup begins Monday, Nov. 13, at 3 p.m. in 216 Hart.

Schedule: The House Rules markup is Wednesday, Nov. 15, at 12 p.m. in H-313 Capitol.