The Senate Finance Committee Thursday unveiled an $85 billion draft jobs package that calls for the extension of a number of energy tax breaks that expired at the end of 2009.

The legislation, named the Hiring Incentives to Restore Employment (HIRE) Act, proposes to renew more than 40 energy and nonenergy tax breaks at a projected cost of $31 billion over a 10-year period.

With respect to energy tax breaks, the package would extend until Jan. 1, 2011 the suspension of limitation on percentage depletion for oil and natural gas from marginal wells; a special rule for the sales or dispositions to implement Federal Energy Regulatory Commission or state electricity restructuring policy for qualified electric utilities; excise tax credits and outlay payments for alternative fuel and alternative fuel mixtures; and a credit for electricity produced at certain open-loop biomass facilities.

The House passed a $154 billion jobs package in December. Senate Majority Leader Harry Reid (D-NV) hoped that the Senate would be able to pass the $85 billion jobs bill before leaving for the week-long President’s Day recess, but that was before Washington, DC, was hit with twin paralyzing blizzards. The Senate and House measures differ considerably, which will make reconciling them a major feat.

The Interstate Natural Gas Association of America had called on Senate and House budget writers to extend the temporary 50% expensing (bonus depreciation) allowance, which expired at the end of 2009, in the jobs package being considered by Congress.

Sen. Charles Grassley of Iowa, the ranking Republican on the Senate finance panel, backed an extension of the bonus depreciation for one year so that businesses would be able to deduct half of the value of any property placed in service in 2010. But it wasn’t clear if this was part of the Senate jobs bill.

In his State of the Union address last month, President Obama said “tax provisions such as these [bonus depreciation] are important contributors to job creation that will lead to economic recovery, and thus should be included in any jobs package,” wrote INGAA President Donald F. Santa in a recent letter to Senate Finance Chairman Max Baucus (D-MT) and Rep. Charles B. Rangel (D-NY), chairman of the House Ways and Means Committee.

“Given the abundance of domestic natural gas that will be produced from shale and other unconventional supply basins across the country, the pipeline industry anticipates the need for annual investments of between $6 billion and $10 billion in further infrastructure projects through 2030. An extension of the bonus depreciation allowance for certain eligible property costs is essential to spurring this needed development and creating jobs,” Santa said.

Specifically, INGAA suggests that for pipeline projects authorized by FERC prior to July 1, 2011, the bonus depreciation period should be extended to cover costs incurred up to July 1, 2013, and projects placed in service by Dec. 31, 2013, he said.

“This approach would recognize the value of constructing new pipeline infrastructure, while also acknowledging the lengthy approval process for such projects” at FERC and other federal and state agencies, Santa noted.

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