Wind subsidy, conservation fund linked in oil export talks
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WASHINGTON, Dec. 9, 2015 - Democrats are seeking a long-term extension of wind power subsidies and reauthorization of the lapsed Land and Water Conservation Fund in return for ending the ban on oil exports.
Republicans are seeking to use negotiations on a broad year-end tax package to lift the oil export ban as well as to make the popular Section 179 expensing allowance and research and development tax credit.Republicans have suggested the package would likely phase out the production tax credit for wind power over five years, but Democrats are demanding longer extensions of that as well as the tax credit for solar development.
“They're talking about a permanent lift of the export ban. so a number of my colleagues believe we should get a permanent extension of wind and solar. … There is a deal to be had here,” said Sen. Martin Heinrich, D-N.M.
A five-year phaseout of the wind PTC isn't acceptable, he said.
The conservation fund has been around for a long time -- 50 years -- and has always been funded under its budget cap of $900 million. Most of the funding comes from fees paid to the federal government for offshore drilling, and gets distributed in grants and matching funds to state and local governments to buy land to establish parks, or to establish easements that protect forest and wildlife habitat.
House Natural Resources Chairman Rob Bishop, R-Utah, wrote recently that he allowed the fund to expire in part because it had been unfairly used by the federal government to acquire “millions of acres of land with little transparency, scant oversight and minimal local input.”
The negotiations are tied up with broader talks over fiscal 2016 spending legislation, and House Democrats have raised objections about the overall cost of the tax package that is being discussed. Reports have the cost rising as high as $800 billion over 10 years.
“I have serious concerns about the size of the package,” said Nancy Pelosi of California, the leader of the House Democrats. “The fact that they want to put big oil in it now just makes matters worse, so we'll have to see what we can negotiate this with.”
If the talks fail, the likely fallback for lawmakers is a straight extension through 2016 of the expired tax provisions, which include the renewable energy credits as well as the expanded Section 179 allowance, the R&D credit and a 50-percent bonus depreciation provision.
“We're not there yet. We're working on it,” Senate Finance Chairman Orrin Hatch, R-Utah, said of the prospects for a bigger tax measure.
The Finance Committee's ranking Democrat, Ron Wyden of Oregon, said he still believed “that it is possible for Democrats and Republicans to come together on a tax extender package that can spark economic growth, reward hard work of our families and provide a foundation to move onto tax reform.”