Congress Passes Sweeping $1.8 Trillion ‘Taxibus’

In a rare show of bipartisanship, Congress passed both a $1.1 trillion spending package (omnibus) to fund the government through September, and a $650 billion tax extenders package.  The bills – or ‘taxibus’ if you will – were introduced early Wednesday morning, with the House passing the tax extenders on Thursday and the omnibus today. Both bills passed the Senate today and are on their way to President Obama.  What provisions are in it for energy, the environment, and agriculture? 

The 2015 omnibus extends several of the riders in the 2014 ‘cromnibus’ (so named because it blended an omnibus and a continuing resolution), but budgetary caps have increased under the budget deal reached earlier this year. Speaker Ryan claims that there has been a return to ‘regular order,’ though some malcontent House Republicans claim they are going easy on the new Speaker, as they blame former Speaker Boehner for many of their grievances in the 2016 spending package.

 

Energy & Climate Change Riders & Tax Extenders

The big news is the repeal of the decades-old crude oil export ban, which angered many environmental groups and some U.S. refineries that wanted it to stay in place. Some say that lifting the ban is symbolic, as a global gut of oil means U.S. oil cannot compete with OPEC’s output.  It remains to be seen what the effect of lifting the oil ban will have on domestic production. Democrats garnered several items on their wish list in exchange for lifting the ban.

One of the most significant item for the renewables industry is the reinstatement of many renewable tax credits, including the solar and wind tax credits for five years in the tax extenders package. The solar investment tax credit (ITC) is extended at the current rate of 30 percent, with special credit for energy efficiency and solar projects implemented together.  The ITC will be phased down in the final two years. The wind production tax credit (PTC) is also extended for five years, with a three year phase-down to 2022.

Several biomass and biofuels tax credits were extended. Biomass power saw a two-year extension of the Section 45 production tax credit. Advanced cellulosic biofuels received an extension of allowances for second generation biofuel plants, through 2017, and the alternative fuels excise tax credit was extended through 2016. Biodiesel saw a renewal of the $1 per gallon biodiesel blender’s tax credit.  The domestic biodiesel industry has been arguing for changing the blender’s tax credit to a producer’s credit, to give more incentives to domestic production versus foreign imports. 

Democrats also held off several riders, including one that would have killed the administration’s Clean Power Plan, which will require utilities to cut carbon emissions by approximately a third, as well as a rider that would have blocked the administration from contributing to the Green Climate Fund, a linchpin for the successful implementation of the recently concluded Paris climate negotiations.    

 

Agriculture, Nutrition, Forestry Riders

While wildfire suppression dollars to the Department of Interior did increase by $85 million over the ten-year average, there was no fix for the destructive practice of wildfire borrowing.  Wildfire borrowing is when other program funds are re-programmed to fight wildfires.  This year, the Forest Service spent over half of its budget on wildfire funding, hampering the agency’s ability to perform core functions, such as maintaining recreational areas.  Congress missed a huge opportunity to address this issue in the omnibus. 

Despite calls from Republicans to send the controversial Waters of the United States (WOTUS) rule back to the drawing board, no riders on the rule were included in the omnibus.  WOTUS is currently in limbo, with the U.S. Court of Appeals having put a hold on the rule this fall.

Republicans were able to include language that repeals the Country of Origin Labelling (COOL) law for meats.  Earlier this year, the World Trade Organization ruled that requiring country of origin labelling on meats in the United States discriminated against Canadian and Mexican export products.  Democrats argued that nixing COOL was bad for consumers.

In the tax extenders package, a tweak to the definition of charitable organizations now qualifies ‘agricultural research organizations’ that are ‘directly engaged in the continuous active conduct of agricultural research’ as tax exempt. The provision picks up on the Charitable Agricultural Research Act (S.1429), introduced by Senator John Thune (R-SD).

Significantly, the so-called ‘GIPSA rider’ is absent for the first time in several years (GISPA stands for the Grain Inspection Packers and Stockyards Agency).  In the past, this rider has denied livestock farmers from seeking protection under the Packers and Stockyards Act. The rider was, in essence, a gag order on contract growers, farmers who grow livestock and poultry on contract for large companies. The rider prevented them from filing complaints against poultry and meat companies. 

 

 

 

For more information see:

Ryan unveils sweeping $1.8T deal on government funding, taxes, The Hill

Here’s What Made it into Congress’s big spending and tax bills, The Washington Post  

Final Spending, Tax Deal Includes Everything From Cybersecurity to Oil Exports, Morning Consult

Year-End Tax Deal Achieves Long-Sought Goal for GOP Donor Foundation, Morning Consult

Massive Year-End Funding Bill a Mixed Bag but Includes Significant Wins for Sustainable Agriculture, National Sustainable Agriculture Coalition

Congress passes spending bill, tax extenders legislation, Biomass Magazine