The Senate Finance Committee will begin reviewing energy tax policy in the coming months, and we understand that Senate Majority Leader Harry Reid (D-NV) would like an energy tax bill on the Senate floor before the year is out. Expect Senate Finance Committee Chairman Max Baucus (D-MT) and Senate Energy Committee Chairman Jeff Bingaman (D-NM) to advocate a more moderate and comprehensive approach than the House legislation. There will be an attempt by both to tie energy policy with the effort to reduce greenhouse gas emissions and begin the process of implementing a federal climate change policy.
The staff of the Finance Committee has told us that they will be using legislation from last year, introduced by Sen. Craig Thomas (R-WY), as a starting point for their discussions. The Thomas legislation (S. 2755) focused mainly on tax incentives for oil and gas production and refining. However, it did propose a reduction in the depreciation schedule for gas gathering lines – from the current 7 years to 5 years – as well as allowing tax-exempt financing for the construction of new interstate natural gas transmission pipelines. We’ve asked the INGAA membership to comment on the tax-exempt financing proposal; to date, the comments have been very supportive. INGAA will be meeting with Sen. Thomas’ staff later this week to discuss this idea, as well as including in future energy tax bills the state tax discrimination prohibition that is a priority for INGAA in 2007.