By Debra DeHaney-Howard
October 18, 2004

Before adjourning for the November 2nd elections, Congress passed the Corporate Tax Bill (H.R. 4520), which included a number of energy tax provisions. Adopted provisions include:

• extension of the wind and renewable tax credit;
• a phase out of 4.3 cent motor fuel excise taxes on railroads and inland waterway transportation in the general fund from 2005-2009;
• authorization of the issuance of tax-exempt facility bonds for a brownfields demonstration program for qualified green building and sustainable design projects;
• expansion of credit for electricity produced from certain renewables, including geothermal, solar, biomass, landfill gas, trash combustion and refined coal productions; and
• a tax incentive for utilities that form transmission companies in an effort to implement electric restructuring policy

Notably absent were tax incentives for the use of energy efficiency products, including products for new homes and home improvements.

Alaska Gas Pipeline

In a last minute effort to pass the Alaska Pipeline provisions, the Alaskan congressional delegation successfully attached the Alaska Pipeline language from the stalled comprehensive energy bill, H.R.6, to the FY "05 Military Construction Appropriation bill. The provisions include streamlining the court review process for construction, providing $20 million for a worker job training program in Alaska, encouraging the use of U. S. steel in the project, designating the Federal Regulatory Energy Commission (FERC) as the lead agency in the environment review process — which requires one environmental impact study, allowances for expanding the pipeline and placing a ban on a northern route for the line that would have bypassed the Alaska markets. During its Annual Meeting in Boston, the Conference of Mayors adopted policy supporting the construction of the Alaska natural gas pipeline.

Comprehensive Energy Legislation Unlikely This Year

In an effort to pass stalled comprehensive energy legislation, House Energy and Commerce Chairman Joe Barton (TX) attempted to attach H.R. 6, the energy conference report, which was defeated last November, to the Corporate Tax Bill. However, House Ways and Means Chairman Bill Thomas (CA) ruled it as non-germane to the tax bill. While it is unlikely that the stalled energy bill — which includes a provision that grants liability protection to the manufacturers of Methyl Tertiary Butyl Ether (MTBE), a gasoline additive that has contaminated ground water, and also a provision that the Conference of Mayors strongly opposes because it places a massive unfunded mandate on local governments to clean up the contaminated drinking water supplies — will pass in the lame-duck session of the 108th Congress. Barton has indicated that he has not given up on enacting energy legislation this year.