Wyden: House FAA Bill ‘at Risk’ if Energy Tax Credits Aren’t Included

Sen. Ron Wyden said Thursday that Senate Democrats hope to see renewable energy tax credit extensions included in legislation reauthorizing the Federal Aviation Administration, even after the Senate passed a reauthorization bill without those extensions.

The Senate passed an FAA reauthorization bill in April without extensions to tax credits for geothermal, fuel cell, and other alternative sources. But renewable energy advocates haven’t given up on the tax credits. If the House sends a bill back to the Senate without them, it could put negotiations “at risk,” the Oregon Democrat told Morning Consult.

“The longer you wait, the more you put at risk,” Wyden repeated several times, indicating the FAA bill could lose support among Democrats if it doesn’t include the tax extensions.

Recent negotiations have focused on geothermal, fuel cell, combined heat and power systems, and small wind energy. Democrats said those tax credits were meant to be included with the solar and wind power tax credits in the December spending deal last year, but that they were accidentally omitted. This addition, they said, would simply correct a mistake.

Democrats relented in April by allowing the FAA bill to pass the Senate 95-3 without the tax credits. But now that the bill is in the House’s hands, Wyden said including the tax credit extensions would help accelerate the process.

“No one wants to deprive the airports of needed funding,” Wyden said. “Both sides agree that these energy tax extenders were an omission.  And the sooner you correct it, the more likely you are to have jobs,” such as those that result from the increased investment in renewable energy industries.

Even though Senate Democrats gave up on the issue in April, that doesn’t mean the potential inclusion of tax extenders in the FAA bill now is out of their hands. Unless the House passes the same exact bill, lawmakers from the two chambers would have to hash out differences between the two measures, opening the door for further negotiations.

These negotiations could be thrown off if House GOP lawmakers aren’t willing to pass an FAA bill that has support among Democrats on the actual transportation issues. Wyden said he doesn’t know how likely it is that the House will pass an FAA bill, with or without the tax credits, that Senate Democrats support.

Curt Beaulieu, a senior counsel at Bracewell LLP, which represents members of the geothermal and fuel cell industries, told Morning Consult on Thursday it would be a “big hurdle” to get House Republicans to agree to the tax credits.

Beaulieu said nothing has changed from Senate Democrats’ perspective. The negotiations over the tax credits fell apart in April because several lawmakers wanted to add a variety of other provisions under the FAA bill’s tax title that were never part of the agreement on renewable energy tax credits. The tax title became a so-called “Christmas tree,” and the opportunity to push for the energy tax credits passed.

According to Beaulieu, supporters of the tax credits have learned their lesson. If Democrats want to include the energy tax credits in the FAA bill, they need to keep the tax title narrow, only adding perhaps one other provision to sweeten the deal for Republicans, such as a tax credit for carbon-capture and sequestration technology.

“It basically just fell apart,” Beaulieu said. “But it gives fair warning, if you’re going to do something you have to limit it to renewable tax credits and maybe one thing for Republicans.”