The House Ways and Means Committee Wednesday approved a $16 billion tax package chock full of incentives to spur the production of renewable fuels and other clean energy.
The House tax-writing committee's legislation (HR 2776) is half the size of the $32 billion package that was approved by the Senate Finance Committee Tuesday, but then rejected by the full Senate Thursday (see related story). It takes the same approach as the Senate tax committee's bill, stripping the oil and natural gas industry of many benefits to pay for the bulk of the green incentives.
The House committee's measure repeals the Section 199 deduction for income attributable to oil and natural gas. This is expected to result in $11.4 billion in lost tax benefits to the oil and gas industry over the next 10 years, according to the Joint Committee on Taxation.
The measure also makes a clarification to foreign oil and natural gas extraction income, a move that is estimated to raise taxes on the industry by $3.56 billion over the next decade. And it extends the amortization period for geological and geophysical expenditures from five years to seven years for large integrated energy companies, which is expected to raise $103 million to fund renewable fuels.
The bill, which passed out of committee 24-16, is scheduled to come to the House floor after the July 4th recess, and be included in a broader energy package requested by Speaker Nancy Pelosi (D-CA), reported CQ Today.
Rep. Jim McCrery of Louisiana, the ranking Republican on the House committee, opposed the tax package. "This bill will not increase the energy supply of the United States by one drop of gasoline or one watt of electricity," he said.
McCrery noted that the tax bill does three things -- it raises taxes on the domestic energy industry; it extends some alternative energy tax provisions that had already been enacted by Republicans; and it creates $6 billion worth of "green" pork funds to be doled out to states and cities with little oversight and no coordination.
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