As originally published by E&E News on December 8, 2017
Energy pressures mount on conferees
Geof Koss, E&E News reporter
House and Senate tax conferees are facing renewed pressure to fix provisions in the Senate bill that they say would harm clean energy and fossil fuel development alike.
Citizens for Responsible Energy Solutions yesterday launched a five-figure targeted social media ad campaign aimed at lawmakers and their aides highlighting concerns over base erosion anti-abuse tax (BEAT) and corporate alternative minimum tax (AMT) provisions.
The BEAT language, the group warned top GOP leaders this week, “will undermine tax equity financing, which is the principal mechanism for monetizing credits.”
“Its retroactive application undermines commitments made in good faith by investors and developers, and will dramatically reduce American wind and solar energy investment and job creation.”
Echoing the concerns of other industry groups, the corporate AMT “would nullify the value of tax credits retained in other parts of the tax reform bill that are critical to innovation and economic growth, such as the research and development tax credit,” CRES wrote.
Those concerns were also highlighted by the Business Council for Sustainable Energy, a broad coalition representing efficiency, renewable and natural gas interests, which also outlined fears over the House’s treatment of the wind and investment tax credits, among other energy provisions E&E Daily, Nov. 3).
Sen. Cory Gardner (R-Colo.), who filed an amendment to ameliorate the BEAT provision’s effects on renewable power investment, said yesterday he was unable to get a score on the proposal in time for inclusion in the Senate bill.
“This is not just wind and solar, it’s refined coal, there’s a number of businesses very concerned about this and a number of jobs at stake,” he told E&E News yesterday. “We’ll continue to work with the conferees on it.”
Efforts to fix the BEAT section come as Republicans are weighing whether to raise the corporate rate to 22 percent from 20 percent — a possibility that is meeting with strong pushback from outside conservative groups, such as the Club for Growth.
Sen. John Thune (R-S.D.), a member of leadership who is also a conferee, said hurdles to fixing the BEAT problem involve the cost and competition from other sectors.
“Where do you draw the line?” he asked E&E News yesterday. “Because there’s a lot of folks obviously who would want that treatment.”
House members weighed in yesterday on the AMT, as well. In a letter, 26 GOP members of the Congressional Coal Caucus urged top House and Senate tax writers to repeal the provision to prevent a “devastating” tax increase on coal companies.
Caucus Chairman David McKinley (R-W.Va.) and company argued that “an industry President Trump promised to help” would suffer “far-reaching consequences” if its taxes go up.
Murray Energy Corp. CEO and boisterous Trump supporter Robert Murray recently denounced the Senate tax plan for its impact on his business, which he said will go bankrupt without federal intervention.
“Undoubtedly, the Senate’s so-called ‘tax reform’ will cause even more coal companies to file for bankruptcy and more coal mining families to lose their jobs, healthcare, and retirement security,” he said in a statement.
Meanwhile, Senate Minority Leader Chuck Schumer (D-N.Y.) yesterday named Sens. Ron Wyden (D-Ore.), Bernie Sanders (I-Vt.), Patty Murray (D-Wash.), Energy and Natural Resources ranking member Maria Cantwell (D-Wash.), Debbie Stabenow (D-Mich.) and Bob Menendez (D-N.J.) as Democratic conferees.
Puerto Rico concerns
House Democrats yesterday slammed both the House and Senate tax bills for adding to Puerto Rico’s fiscal woes.
“Congressional Republicans are turning their backs on our fellow citizens,” said Rep. Nydia Velázquez (D-N.Y.), who said the island where she was born is being “treated like a foreign country.”
In a letter to House and Senate GOP leaders, Velázquez and members of the Congressional Hispanic Caucus this week detailed their concerns.
They noted the House bill would impose a 20 percent excise tax on products manufactured in Puerto Rico, threatening 200,000 jobs.
Additionally, the Senate bill would impose a 12.5 percent tax on income derived from intellectual property held in foreign jurisdictions, as the U.S. tax code treats the island, according to the letter.
“The bills remove any existing incentives for multinational companies to invest in Puerto Rico; and therefore disregarding a central tenant of tax reform-encouraging domestic investment and employment,” the members wrote.
“The tax proposals impose excessive tax liabilities on companies that have proven their dedication to investing in their local operations and employees.”
Democrats want a “special exemption [to] be created to recognize the special situation Puerto Rico is in as a United States territory as it relates to international tax reform. Such changes should account for the unique tax structures in the U.S. territories.”
Speaker Paul Ryan (R-Wis.) has previously said that he supports tax breaks to help Puerto Rico recover, but not in the context of broader tax reform.
Minority Whip Steny Hoyer (D-Md.) called it “ironic” that the House was voting yesterday on a two-week continuing resolution to give Republicans more time to complete tax negotiations.
“This Republican tax bill only makes this worse,” he said of Puerto Rico’s recovery.
Reporter Dylan Brown contributed.