Aindriu Colgan, Vice President of Governmental Affairs
In November, Democrats released a discussion draft of their green tax bill, the GREEN Act. It’s a sweeping energy tax bill that renews expired energy credits, creates new credits and incentives, and converts the investment tax credit and production tax credit into refundable credits.
The good news is that the legislation left percentage depletion alone. In many minds, repealing percentage depletion is the perfect complement to a bill designed to reduce carbon emissions. While we’re not yet out of the woods, as the committee is planning to add more offsets later, it’s important to acknowledge the impact of NSWA’s September fly-in. Attendees met with Committee staff and several Ways and Means members to educate them on our industry and the role that percentage depletion plays in keeping our industry alive.
The bill does, however, take the first steps toward implementing a carbon tax. It requires the Treasury Secretary to report to Congress on the feasibility of using data from the EPA’s Greenhouse Gas Reporting Requirements to isolate greenhouse gas emissions by taxpayer—with the eye towards implementing a carbon tax in the future. Step one of implementing a carbon tax is to determine who is producing how much carbon. That is what this provision is designed to do.
In terms of next steps, no hearing or markup on the discussion draft has been scheduled. Chairman Thompson has indicated that he wants to give his colleagues and industry advocates time to provide feedback on some of the bill’s new provisions. Additionally, only a few days of legislative work remain this year, during which the House will vote on impeachment, potentially negotiate a 2020 appropriations package, and ratify the US Mexico Canada Free Trade Agreement (USMCA). That leaves little if any room for substantive work on this bill, whether it be a hearing, markup, or floor vote.
That said, the GREEN Act will likely serve as a central political document for the 2020 election and, should a Democrat capture the White House in 2020, a starting point for an aggressive green energy bill during the first 100 days.
The legislation is very unlikely to win support from Senate Republicans, largely due to all the new provisions, like the refundable credits and the carbon tax report. If any parts of this bill do get to the president’s desk this year, it will likely just be straight renewals of expired renewable energy tax incentives—just date changes, no policy changes.