Nuclear, CCS amendments among Senate energy offerings to tax overhaul bill

Source: Geof Koss, E&E News reporter • Posted: Tuesday, November 14, 2017


Members of the Finance Committee have heeded that call, filing more than 350 changes to the bill. Amendment debate may begin later today after opening arguments yesterday and comments from the Joint Committee on Taxation this morning.

Sens. Johnny Isakson (R-Ga.), Mike Crapo (R-Idaho) and Tim Scott (R-S.C.) are hoping to bring the Senate bill in line with the measure, H.R. 1, the House will vote on later this week.

That bill contains an extension to a nuclear production tax credit that could help smooth construction of new reactors for Plant Vogtle in eastern Georgia. The Joint Committee on Taxation has assigned the senators’ amendment a $400 million cost over 10 years, which would have to be offset.

Sen. Dean Heller (R-Nev.) has filed an amendment to extend the qualification for the investment tax credit for a host of “orphaned” renewables sources that were left out of a 2015 tax deal that stretched key breaks for wind and solar.

The orphaned sources are also part of the House bill, although that measure would scale back the value of a production tax credit and impose new construction terms for projects. A separate Heller amendment would add geothermal to the ITC extension and include the phaseout schedule for solar that was agreed to in 2015.

Sens. Tom Carper (D-Del.), Bob Casey (D-Pa.) and Sherrod Brown (D-Ohio) have offered their own amendment to add the orphaned sources, although their proposal would also create a new offshore wind tax credit and address waste-to-heat power and alternative fuel incentives.

An amendment, filed by Hatch on behalf of Sen. Roger Wicker (R-Miss.), would allow electrochromic glass — which can switch from clear to dark via controls — to qualify for the business energy investment tax credit in Section 48 of the tax code. That proposal is based on Wicker’s legislation, S. 1054.

There are also competing efforts within the Finance Committee to add tax breaks to boost carbon capture and sequestration through the tax code, an issue that is absent in the House bill.

Hatch has filed an amendment that reflects legislation, S. 1663, offered by Sen. John Hoeven (R-N.D.) that aims to align tax guidelines with U.S. EPA regulations that distinguish between storage locations for trapping CO2 (E&E Daily, Aug. 3).

Sen. Michael Bennet (D-Colo.) has filed a competing amendment that would revise the CCS credit “similar” to the approach in a bill, S. 1535, offered by Sen. Heidi Heitkamp (D-N.D.).

The measure, which enjoys bipartisan support, would add “a new method of financing” CCS through private activity bonds, as proposed by a separate Bennet-backed bill, S. 843.

Bennet’s amendment also aims to soften the planned phaseout of the ITC for solar by creating a new “grid security and modernization” investment tax credit. It would expand qualification for the ITC to energy storage technologies, while allowing rebates from public utilities for the installation of water conservation measures.

In a rare example of bipartisanship on energy in tax talks, Hatch has filed an amendment based on legislation by Sens. Chris Coons (D-Del.) and Jerry Moran (R-Kan.) that would extend master limited partnership tax treatment to renewable, biofuel, energy storage and efficiency efforts. MLPs, currently limited to fossil fuel projects, exempt certain income from corporate tax liability, making them an attractive option for investors (E&E Daily, Oct. 26).

Sen. Ron Wyden (D-Ore.), the ranking member on Finance, has filed an amendment based on his long-standing proposal to scrap all energy tax breaks and create three technology-neutral incentives for electricity, transportation and efficiency.

Wyden last night said Democrats will use the amendment process to highlight what he said are unmet promises from the GOP tax bill.

“We’re going to focus on trying to lay out what happens when you do a multitrillion-dollar bait-and-switch, when you move away from the promises that were made to the middle class, to a multitrillion bait-and-switch where American multinationals would get a lower tax rate from doing business overseas than you would have if they came to the United States,” he said.

Regional issues

The amendment roster also includes plenty of parochial offerings that reflect the policy preferences of senators.

Former Finance Chairman Chuck Grassley (R-Iowa) has filed three amendments addressing expired biodiesel tax allowances. The first would extend the biodiesel fuel credit retroactively for 2017 while phasing down the $1 credit through 2021, when it would expire. For 2018 and future years, the biodiesel blender credit would be converted to a producer credit as envisioned in Grassley’s S. 944.

The second Grassley proposal would extend the incentive through 2018 without the phaseout schedule, while still converting it to a producer credit for the final year. A third Grassley offering would extend an assortment of credits for biofuel and alternative fuel vehicles.

Sen. Rob Portman (R-Ohio) has an amendment to extend and modify the Section 45 credit for refined coal from steel industry fuel. Hatch has similarly filed an amendment that would allow coal facilities an additional 10 years to qualify for an existing refined coal tax credit.

Hatch has an amendment based on legislation, S. 1480, offered by Sen. Angus King (I-Maine) that would allow biomass heating appliances to qualify for energy-efficiency tax breaks.

Sen. Bill Cassidy (R-La.) has an amendment that would “equalize” the tax treatment for liquefied natural gas with the energy equivalence of a gallon of diesel when calculating the Inland Waterways Trust Fund financing rate.

Cassidy has also filed a pair of amendments that aim to allow the use of tax-exempt retirement plans in federally declared disaster areas, while allowing the deduction of casualty losses attributable to the disaster.

Sen. Bob Menendez (D-N.J.) has filed a similar amendment to aid the victims of 2012’s Superstorm Sandy. A second Menendez amendment, proposed with Sen. Bill Nelson (D-Fla.), contains tax breaks to help Americans living in Puerto Rico as they try to recover from this fall’s twin hurricanes.

Menendez is reviving efforts to repeal tax breaks for Big Oil, with savings refunded to “middle-class families” to help pay household energy costs. Sen. Maria Cantwell (D-Wash.) has filed her own amendment that would strike language in the chairman’s mark that would eliminate certain foreign-based oil income from taxation.