Chairman Tiberi and Chairman Boustany Announce JointCongressman Pat Tiberi (R-OH), Chairman of the Subcommittee on Select Revenue Measures, and Congressman Charles Boustany (R-LA), Chairman of the Subcommittee on Oversight, both of the Committee on Ways and Means, today announced that the two Subcommittees will hold a joint hearing on the intersection of energy policy and tax policy, with a focus on the dual priorities of comprehensive tax reform and a sustainable energy policy that addresses our economic, security, and environmental needs. The hearing will take place on Thursday, September 22, 2011, in Room 1100 of the Longworth House Office Building at 9:30 A.M.
Hearing on Energy Tax Policy and Tax Reform
The hearing was originally scheduled for 10:00 A.M. on Wednesday, August 3, 2011, in Room 1100 of the Longworth House Office Building, but was postponed.
In announcing the hearing, Chairman Tiberi said, “Energy security and comprehensive tax reform are two of the most important priorities we can pursue to create jobs and ensure the long-term strength of the U.S. economy. As the committee with jurisdiction over energy tax policy, the Ways and Means Committee should examine whether there sometimes can be tension between these priorities, and how this Committee can design tax policies that achieve our energy security goals while also staying true to the principles of simplicity, fairness, and growth that drive the Committee’s tax reform agenda.”
Chairman Boustany said, “With so much of our energy policy driven by the tax code, comprehensive tax reform needs to consider whether these tax incentives promote a sound energy strategy. This hearing will examine how IRS implements and enforces rules on energy credits, and it will explore the role of the tax code in energy policy.”
As part of the Ways and Means Committee’s tax reform agenda, the Committee and its Subcommittees intend to hold hearings on how comprehensive tax reform would affect particular sectors of the economy. Given the critical economic, security, and environmental considerations surrounding the energy sector, Chairman Camp requested that Chairmen Tiberi and Boustany begin with an inquiry into energy tax policy. The current tax code includes numerous provisions intended to advance various energy policy goals, including provisions dealing with production, efficiency, and conservation, and ranging from transportation fuels to electricity generation.
There are three general views regarding energy tax policy. Some believe that many of these energy tax provisions are an effective and efficient way to advance important public policy goals. Others suggest that the current structure of energy tax incentives picks winners and losers, rather than applying technology-neutral tests that would encourage investment in the most promising technologies. Still others believe that the tax code should not subsidize energy at all, because doing so interferes with the free market and violates tax reform principles such as simplicity, fairness, and economic growth.
The American Recovery and Reinvestment Act of 2009 (P.L. 111-5) included several provisions intended to promote so-called “green” energy. Among these were the Nonbusiness Energy Property Credit, the Residential Energy Efficient Property Credit, and various Plug-in Electric and Alternative Motor Vehicle Credits. The Treasury Inspector General for Tax Administration (TIGTA) subsequently reviewed IRS’s effectiveness in identifying and preventing erroneous claims for these credits during the 2010 tax return filing season. TIGTA issued two reports on its findings, which included millions of dollars in erroneously claimed credits and a lax review process that resulted in credits successfully claimed by children, prisoners, and others who did not qualify.
On April 6, 2011, Rep. John Sullivan (R-OK) introduced H.R. 1380, the New Alternative Transportation to Give Americans Solutions (NAT GAS) Act of 2011. The bill currently has 184 bipartisan cosponsors, although a number of Members of Congress have removed their names as cosponsors. Referred primarily to the Ways and Means Committee, H.R. 1380 includes tax credits related to compressed and liquefied natural gas (CNG and LNG), including credits for the fuels themselves, credits for the purchase and production of vehicles powered by CNG and LNG, and credits for refueling property related to CNG and LNG. Whether such credits represent good energy policy or an intrusion into the free market has been the subject of vigorous debate.
Director, Government Relations
Edison Electric Institute
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