April 6, 2016
U.S.

Push for energy tax breaks roils Senate debate on FAA bill

By Melanie Zanona and Devin Henry - 04/05/16 | The Hill | thehill.com

Democrats are pushing to attach renewable energy tax breaks to a long-term reauthorization of the Federal Aviation Administration (FAA), roiling the debate over the legislation in the Senate.

Top Republican lawmakers are wary of including the tax breaks, but acknowledge such provisions might be needed to secure enough support for passage.

Sen. Charles Schumer (D-N.Y.) on Tuesday said lawmakers unintentionally left the tax breaks out of a tax extenders package Congress passed last year and that there was agreement among leaders that the provision would be added to the FAA reauthorization bill.

The tax break supports investments in fuel cells, geothermal, biomass, combined heat and power systems and small wind power. The December tax package extended tax credits for wind and solar power, which Republicans traded in exchange for lifting the 40-year-old ban on crude oil exports.

“No one intended to leave them out,” Schumer said at a press conference. “We’re working to get those in now.”

The FAA measure is one of the few pieces of legislation likely to pass the Senate before the fall elections.

Senate Commerce, Science and Transportation Committee Chairman John Thune (R-S.D.) said members are still negotiating over the tax provision and said he hopes to move to other sections of the bill while they work out the finance portion.

“I wouldn’t say all Republicans are on board, (or) all Republicans are opposed,” Thune told reporters on Tuesday. “At this point, that’s still a work in progress.

But Thune, who agreed that the tax breaks were likely left out on accident, acknowledged that “it’s going to be hard to probably get on the bill, a motion to proceed, or to get off the bill, unless we in some fashion address the Democrats’ concern.”

“This is what they’ve always viewed to be their best opportunity to get some of the things that were left out of last year’s extenders bill done,” he added.

Sen. Orrin Hatch (R-Utah), the chairman of the Finance Committee, said Tuesday that “others are working” on the tax issue rather than himself.

“I thought we fixed that earlier this year,” he said, referring to the tax extenders package passed in December. “I just don’t know where that is. I’m against that, but that doesn’t mean that it won’t [happen].”

Dozens of conservative groups – including Heritage Action, Americans for Prosperity, FreedomWorks and the Competitive Enterprise Institute – have blasted plans to include the renewable energy tax breaks on the FAA bill. Over 30 organizations wrote a letter to the Finance Committee on Tuesday expressing their deep opposition to the proposal.

“Congress considered the matter of expiring tax provisions less than 4 months ago,” they wrote. “It should also be noted that Congress extended significantly favorable tax treatment to renewable energy in omnibus appropriation legislation that accompanied the aforementioned tax extender package.”

A flood of amendments is expected to be filed to the FAA bill. Around 100 amendments were submitted during the committee markup.

But it remains to be seen whether Democrats will make their support for the underlying measure contingent upon the inclusion of the tax provisions – and if Republicans will ultimately swallow it.

When pressed on whether it’s a “do or die” issue, Minority Leader Harry Reid (D-Nev.) said that “the answer is yes. We have to have that done.”