Washington (Platts)--13Dec2007
Leaders of the Senate Finance Committee released a revised amendment of the
$21.8 billion in energy tax provisions on Wednesday. The Senate is expected to
vote on the amendment on Thursday. While provisions for renewable energy
development and electric utilities were revamped, tax credits for coal went
unchanged.
The coal portion of the bill provides $2 billion in tax credits for projects
that demonstrate the potential to capture and sequester carbon dioxide
emissions. Of that amount, $1.5 billion would be used for advanced coal
electricity projects that capture 65% of CO2 and $500 million for
coal-gasification projects that capture 75% of CO2.
The provision would allow companies to write off the costs of CO2 pipelines
that are installed before January 1, 2011, using accelerated depreciation over
a seven-year period as opposed to a 15-year period under the current law.
A provision in the coal package would make the Black Lung Disability Trust
Fund solvent by extending the current excise tax rate beyond 2013. Coal mine
operators pay an excise tax of $1.10/short ton on coal from underground mines
and 55?/st on surface-mined coal. Receipts from the tax are deposited into the
trust fund, which is permitted to borrow from the Treasury's general fund to
make expenditures if tax receipts don't provide enough funding.
After 2013, the excise tax rates drop to 55?/st for underground mines and
25?/st for surface mines. The provision will keep the current excise tax rate
in place until the fund has repaid, with interest all the money borrowed from
the Treasury.
Provisions for export tax refunds
There is a provision that would refund certain coal excise taxes collected
from exporters. Under the provision, a new procedure would be set whereby
certain coal producers and exporters may claim a refund of these excise taxes
that were imposed on coal exported from the US on or after October 1, 1990,
and ending on or before the date of enactment of this provision.
The provision also directs the Secretary of the Treasury to request that the
National Academy of Sciences do a comprehensive review of the tax code to
identify the types of specific tax provisions that have the largest effects on
carbon and other greenhouse gas emissions and to estimate the magnitude of
those effects.
If the Senate approves the bill on Thursday, Majority Leader Harry Reid said
he would bring the energy bill up for a vote without the controversial 15%
renewable electricity standard on regulated utilities.
--Cathy Cash, cathy_cash@platts.com and
--Regina Johnson, regina_johnson@platts.com
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