House passes overhaul, shrugs off angst over renewables

Source: Geof Koss, E&E News reporter • Posted: Friday, November 17, 2017

The House yesterday passed a broad rewrite of the tax code, despite concerns from renewable energy interests over changes to key incentives that critics say renege on a 2015 agreement.

Lawmakers passed the tax overhaul, H.R. 1, by a 227-205 margin, with all Democrats voting “no” and 13 Republicans defecting over changes to the state and local tax (SALT) deductions.

With the exception of North Carolina’s Walter Jones, all of the Republican “no” votes were from New York, New Jersey and California, high-tax states that would be adversely affected.

Minority Leader Nancy Pelosi (D-Calif.) slammed the bill before the vote. “This tax scam won’t create jobs, it won’t raise wages, it will only fill the coffers of donors and the fat cats,” she said, flagging the $1.5 trillion the bill is estimated to add to the deficit. “Oh where, oh where are the deficit hawks? Have you become extinct?”

One notable GOP “no” vote came from Appropriations Chairman Rodney Frelinghuysen of New Jersey, who cited the SALT provisions as well as changes to the mortgage and medical device deductions.

Republicans, who have struggled to notch any major legislative wins this year despite controlling Congress and the White House, were jubilant afterward.

Appearing in the Speaker’s Lobby behind the House chamber, Majority Whip Steve Scalise (R-La.) called it a “big win” and predicted “we’re going to see the economy take off.”

House Ways and Means Chairman Kevin Brady (R-Texas) reiterated that Republicans’ goal remains to get a bill to President Trump by the end of the year.

Energy credits

House passage came over the protests of renewable and clean energy interests, who are upset over changes to the renewable production and investment tax credits.

The bill would retroactively slash the value of the PTC, while adding new requirements for qualifying for the ITC. It would also phase out a solar tax break after 2027 and eliminate a key break for electric vehicles.

However, the House measure does extend the ITC for a handful of sources that were “orphaned” after they were inadvertently left out of the 2015 deal that extended and phased down the PTC and ITC.

The legislation also includes an extension of the nuclear production tax credit, which the struggling industry desperately wants to see become law.

American Energy Alliance President Tom Pyle, a longtime critic of renewable subsidies, hailed the bill’s treatment of renewables and clean energy sources.

“Taxpayers and electricity ratepayers would benefit most from an immediate termination of the PTC, but we applaud the House’s proposal to trim it as an important first step and will fight for its inclusion in any final tax package,” he said in a statement.

“Additionally, this bill will wisely end the $7,500 electric vehicle tax credit,” he said. “This unnecessary handout makes every-day Americans poorer while subsidizing those who can already afford more expensive electric vehicles.”

The Electric Drive Transportation Association criticized the elimination of the EV credit.

“With intense competition from China and other nations, it is critical that this vital incentive be retained to accelerate U.S. job growth and economic competitiveness in electric drive technologies,” said EDTA President Genevieve Cullen in a statement. “The global race for electric vehicles is at a key turn; this is not the time for the U.S. to surrender its lead.”

Environmentalists slammed the bill, saying it would result in deep cuts to domestic spending programs, while opening the door for oil and gas drilling in Alaska’s Arctic National Wildlife Refuge.

“This scam to give billionaires and corporate polluters tax cuts while making American families pay the price with dirtier air, scarred lands, and higher bills is a shameful show of the broken priorities of Congressional Republicans,” said Sierra Club Legislative Director Melinda Pierce in a statement.

“The GOP’s plan manages to raise taxes on the middle class, while creating a path to open up the pristine Arctic Refuge for destructive drilling,” she said.

Senate action

With House passage, the tax focus now turns to the Senate, where the Finance Committee is working its way through amendments on its own bill, which Finance Chairman Orrin Hatch (R-Utah) hopes to finish today.

The Senate bill largely sidesteps changes to energy provisions in the tax code but also omits extensions of the orphaned renewables, the nuclear tax incentive, and breaks for biofuels and carbon capture and sequestration (CCS).

GOP senators are eyeing a separate so-called tax extenders package to resolve those issues after the broader overhaul is finished (E&E News PM, Nov. 15).

A coalition backing CCS breaks said today it will push for inclusion of such provisions in the extenders bill. “Carbon capture legislation has unprecedented bipartisan, bicameral support and deserves congressional action,” said the National Enhanced Oil Recovery Initiative.

Reporters George Cahlink and Kellie Lunney contributed.