By a bipartisan vote of 26-11, the House Ways and Means Committee has approved the Enhanced Energy Infrastructure and Technology Tax Bill of 2005. The bill would include $8 billion worth of tax incentives to reduce the cost of investments in the nation’s energy infrastructure.
¶ Allow electricity transmission assets to be depreciated over 15 years;
¶ Allow oil-and-gas exploration of a portion of the Arctic National Wildlife Refuge (ANWR);
¶ Allow all air pollution control facilities to be depreciated over 5 years;
¶ Allow any taxpayer to deduct contributions to qualified nuclear decommissioning funds;
¶ Allow geophysical costs incurred in domestic oil and gas exploration to be expensed over two years;
¶ Allow small oil refiners (i.e., 75,000 barrels/day) to claim favorable percentage depletion deductions;
¶ Create a (nonrefundable) $2,000 personal tax credit for the purchase of residential solar water heating;
¶ Create a nonrefundable credit for residential fuel cell property and business installation of fuel cell power plants;
¶ Create a nonrefundable personal tax credit of $2,000 for energy-efficient improvements to existing homes;
¶ Reduce the tax rate on qualifing diesel fuel by approximately $.05/gallon to reflect lower Btu content.
¶ Allow personal energy credits created by the bill to offset alternative minimum tax (AMT) liability; and allow credits for oil recovery, business fuel cell, and marginal gas and oil wells to offset AMT liability.
The Administration has expressed support for passage of the House bill, and has expressed particular support for those portions which provide for oil-and-gas exploration of (i) ANWR; (ii) the Outer Continental Shelf; (iii) Federal onshore lands;and (iv) Indian lands. However, the Administration does not support any new taxpayer subsidies for oil-and-gas exploration on account of the $50/barrel current price of oil.
The Administration supports the greater use of nuclear energy, and supports clarification of tax treatment of nuclear decommissioning costs.
In addition, the Administration supports extension of the EPA’s 1998 Clean Air Act attainment date.
The Administration supports tax credits for renewable power sources such as wind and landfill gas, and for hybrid and fuel-cell vehicles.