Sep 26 - McClatchy-Tribune Regional News - David Ivanovich Houston Chronicle Houston Chronicle

The Democratic-led House today approved a $60 billion tax package designed largely to spur investment in renewable energy, and funded in part by assessing higher taxes on oil and gas companies.

But by refusing to go along with a carefully crafted Senate bill, the House has thrown into question whether a final tax package will be approved before lawmakers recess this weekend until after the November elections.

The House voted 257-166 to create $15 billion in new tax incentives for investments in renewable energy, capture of carbon emissions, energy efficiency and conservation.

The bill also extends $42 billion in existing tax provisions, including one that allows taxpayers in Texas and other states without an income tax to itemize their state and local taxes.

"This may be the last chance to get these renewable energy incentives passed into law," said Rep. Edward Markey, D-Mass. "If President Bush and Senate Republicans shoot this package down like they've shot down every other clean energy tax package, there may not be another opportunity."

But earlier in the week, Senate Majority Leader Harry Reid, D-Nev., warned House leaders that it took nine attempts for the Senate to pass a tax package. "If the House doesn't pass this, the full responsibility of it not passing is theirs, not ours," he said.

Like its Senate counterpart, the House plan would pay for part of the tax subsidies by hitting up the oil and gas companies.

The legislation would freeze the tax deduction oil and gas companies receive for their domestic manufacturing operations at 6 percent, while other American manufacturers will see that deduction rise to 9 percent in 2010. That provision will raise $4.9 billion over 10 years.

The legislation would raise another $2.2 billion by tightening the rules applying to oil and gas companies' taxes on income earned overseas.

And the bill would raise $1.7 billion by increasing what producers must pay to the Oil Spill Liability Trust Fund from 5 cents per barrel to 8 cents per barrel starting in 2009 and then 9 cents a barrel in 2017.

Shell Oil Co. President Marvin Odum, meeting with reporters during a visit to Washington, said today that adding to oil companies' tax burden just makes production of oil and gas more expensive.

"When taxes are layered on, you see a reaction," Odum said.

david.ivanovich@chron.com

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