# Energy Tax Incentives in the 108th Congress: A Comparison of the House and Senate Versions of H.R. 6 and the Senate Finance Committee Amendment

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## Record

- **Collection:** Congressional research report
- **Document type:** CRS Report
- **Published:** August 19, 2003
- **Citation:** RL32042

## Text

Order Code RL32042

CRS Report for Congress
Received through the CRS Web

Energy Tax Incentives in the 108th Congress:
A Comparison of the House and
Senate Versions of H.R. 6 and the
Senate Finance Committee Amendment

August 19, 2003

Salvatore Lazzari
Specialist in Public Finance
Resources, Science, and Industry Division

Congressional Research Service ˜ The Library of Congress

Energy Tax Incentives in the 108th Congress:
A Comparison of the House and Senate Versions of
H.R. 6 and the Senate Finance Committee Amendment
Summary
The 108th Congress is considering three bills to provide tax incentives to
increase the supply of, and reduce the demand for, fossil fuels and electricity: the
House version of H.R. 6, introduced as H.R. 1531 and approved by the House by a
vote of 247-175 on April 11, 2003; the Senate version of H.R. 6, passed by the
Senate on July 31, which is the same as the energy bill H.R. 4 approved by the Senate
in 2002; and S.Amdt. 1424, a Senate Finance Committee (SFC) amendment to H.R.
6 that is a slightly modified version of S. 1149, the Energy Tax Incentives Act of
2003 approved by the SFC on May 23, 2003.
Each of the three bills provides a ten-year tax cut of about $18 billion, although
the mix of energy tax incentives differs. H.R. 6 as passed by the House provides
about $18.2 billion of energy tax incentives and includes just under $0.1 billion
($100 million) of non-energy tax increases, or offsets. The apportionment of tax
savings in the House-passed H.R. 6 among the three categories — fossil fuels, energy
efficiency, and alternative/renewable fuels — is the same as the House bill in the last
Congress (H.R. 4), but the absolute amounts of dollar cuts are much smaller. The
Senate version of H.R. 6 is the same as the Senate version of H.R. 4, the omnibus
energy measure approved by the Senate in 2002, but on which no conference
agreement was reached. This version of H.R. 6 included about $13.2 billion in
energy tax incentives over ten years, plus an additional $5.1 billion in energy tax cuts
(or revenue losses) due to mandates that would have further reduced energy tax
receipts: the renewable portfolio standard and the renewable fuels standard. S. 1149,
which was approved by the Senate Finance Committee on April 2, 2003, but not
included in the Senate version of H.R. 6, would provide about $19.5 billion in energy
tax cuts, offset by about $5 billion of non-energy tax increases — additional curbs
on corporate tax shelters, limits on corporate and individual expatriates, and an
extension of Internal Revenue Service user fees. Thus the net, ten-year tax cut under
S. 1149 would be just over $14.6 billion.
In general, the House version of H.R. 6 confers a larger tax cut, in both absolute
and relative terms, for fossil fuels production — particularly the oil and gas industry
— and for electricity restructuring (or the production of electricity), and a smaller tax
cut for energy efficiency and renewable/alternative fuels development than the other
two bills. Also, the downstream tax incentives for oil and gas refining, distribution,
and transportation are both absolutely and relatively larger in the House bill than in
either of the other two bills. In contrast, the Senate bills are absolutely and relatively
more generous to renewable and alternative fuels. The Senate bills also include
substantial new tax breaks for investment in clean-coal technologies and for the
generation of electricity from these technologies; the House version of H.R. 6
includes no incentives for clean coal technologies — these were dropped from the
2002 bill. Finally, with regard to ethanol fuel, the House version of H.R. 6 has no
additional incentives for that renewable transportation fuel, while the other two bills
would expand existing tax incentives.

Contents
Brief Summary of the Three Bills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
House Version of H.R. 6 (108th Congress) . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Senate Version of H.R. 6 (108th Congress) . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Senate Version of H.R. 4 (107th Congress) . . . . . . . . . . . . . . . . . . . . . . 2
Summary of S. 1149 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Brief Comparison of the Three Bills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Caveats . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Fossil Fuels Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Oil/Gas Exploration, Development, and Production . . . . . . . . . . . . . . . . . . . 9
Refining and Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Coal Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Electricity Restructuring Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Energy Efficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Business Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Residential Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Transportation Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Renewable and Alternative Fuels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Business Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Residential Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Transportation Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Miscellaneous Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Revenue Offsets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

List of Tables
Table 1. Energy Tax Provisions: Comparison of Ten-Year Estimated
Revenue Loss by Type of Incentive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Table 2. Side-by-Side Comparison of the Provisions in Three Energy Tax Bills
in the 108th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Energy Tax Incentives in the
108th Congress: A Comparison of the
House and Senate Versions of H.R. 6 and
the Senate Finance Committee Amendment
Energy taxes incentives have long been an integral component of this nation’s
energy policy. Efforts to significantly expand existing energy tax subsidies have
been undertaken since the 106th Congress, but controversy over various non-tax
energy policy provisions — corporate average fuel economy standards, the Alaskan
National Wildlife Refuge, etc. — have helped stall the legislation.
At this time, the 108th Congress is considering three bills with energy tax
provisions: the House version of energy policy legislation H.R. 6, the Senate version
of H.R. 6 (which is the same as the Senate’s version of H.R. 4, the energy policy
legislation that died in conference at the end of the 107th Congress), and S.Amdt.
1424, the Senate Finance Committee (SFC) substitute amendment that, with some
minor amendments, is the same as S. 1149, approved by the SFC in April 2003. This
report provides a summary of the energy tax provisions of these three bills, presented
as a side-by-side comparison in Table 2.
Table 2 has six major headings (four with several subheadings) organized
according to topics, rather than by either Senate or House bill section number. Thus,
a tax provision is classified according to whether it is (1) an incentive for fossil fuel
supply (including coal output incentives), (2) an incentive to facilitate electricity
industry restructuring (which is also an energy supply incentive), (3) an incentive to
reduce fossil fuel demand through enhanced energy efficiency, (4) an incentive to
reduce fossil fuel demand through alternative and renewable fuels output, (5) in a
miscellaneous category, which describes energy tax provisions not easily categorized
according to the schema, or (6) in the revenue offsets category, which compares tax
increase provisions in each of the three bills.
The fossil fuels supply category is further subdivided according to whether a
particular provision affects oil/gas exploration and production, refining and
distribution, or coal output. Similarly, the energy efficiency and renewable fuels tax
incentives are further categorized, as closely as possible, according to the energy
consuming sector that would be primarily affected, that is, the business (including
commercial and industry), residential, or transportation sector.

CRS-2

Brief Summary of the Three Bills
Upon returning from its August 2003 recess, a House and Senate conference
committee is to negotiate the differences in energy policy legislation, the House and
Senate versions of H.R. 6. This legislation includes approximately $18 billion of
energy tax incentives over ten years — incentives to both stimulate domestic
production and distribution of fossil fuels, and reduce the demand for these fuels
through energy efficiency and alternative and renewable fuels. In addition, several
Republican and Democratic Senators, including some committee leaders, have
introduced a substitute to the SFC committee bill, a modified (or amended) version
of S. 1149. That bill is to be substituted in conference as S.Amdt. 1424 and S.Amdt.
1431; it also provides for about $18 billion of energy tax cuts over ten years.

House Version of H.R. 6 (108th Congress)
On the House side, on April 3, 2003, the House Ways and Means Committee
(WMC) voted 24-12 for a bill (H.R. 1531) that would provide about $18 billion in
energy tax incentives. These incentives have been incorporated into H.R. 6, the
House’s comprehensive energy policy legislation, which was approved by the House
on April 11, 2003 by a vote of 247-175. This bill is a substantially scaled down
version of the House energy tax bill H.R. 2511 (107th Congress), which was
incorporated into H.R. 4, the House energy bill of the 107th Congress which never
became law.
H.R. 6 provides about $18.2 billion of energy tax incentives and includes just
under $0.1 billion ($100 million) of non-energy tax increases, or offsets. The
apportionment of tax savings in H.R. 6 among the three categories — fossil fuels,
energy efficiency, and alternative/renewable fuels — is the same as in the House bill
in the last Congress, but the absolute amounts of dollar cuts are much smaller.1

Senate Version of H.R. 6 (108th Congress)
As a result of disagreements in the 108th Congress over the Senate’s omnibus
energy bill (S. 14), the Senate leadership decided to resuscitate last year’s energy
policy legislation (the Senate version of H.R. 4), including last year’s energy tax
provisions. This was done in order to break the Senate deadlock and pass an energy
policy reform bill prior to the August recess and avoid a long and contentious floor
debate in the Senate (where there was little progress on the roughly 300
amendments). And so, on July 31, 2003, the Senate approved its version of H.R. 6
by a vote of 84-14. This omnibus energy bill replaces S. 14 and therefore includes
last year’s energy tax provisions as well.
Senate Version of H.R. 4 (107th Congress). The Senate version of H.R.
4 originated on February 26, 2001, when Senator Murkowski introduced S. 389, the
comprehensive energy bill that included significant expansion of tax incentives for

1

The House version of H.R. 4 of the 107th Congress provided about $37 billion of energy
tax cuts.

CRS-3
energy supply, energy efficiency, and alternative fuels. On March 22, 2001, Senator
Bingaman introduced a Democratic version of comprehensive energy policy
legislation comprising two bills: S. 596, the Energy Security Tax and Policy Act of
2001 (essentially the tax component of the comprehensive legislation), and S. 597,
the Comprehensive and Balanced Energy Policy Act of 2001 (the non-tax component
of the legislation). S. 596 was based largely on Senator Bingaman’s energy tax bill
in the 106th Congress (S. 2904).
On December 5, 2001, the Democratic leadership in the Senate introduced S.
1766, a newer version of comprehensive energy legislation, without tax provisions,
which was basically to be a revised version of Senator Bingaman’s bill, S. 597. S.
1766 was replaced by a substitute bill, S. 517, which was largely the same as the
original bill but which included dramatic increases in fuel economy standards. The
Energy Tax Incentives Act was approved by SFC February 13, 2002 and added as an
amendment (S.Amdt. 2917) to S. 517 on the floor. The Senate approved S. 517 on
April 25, 2002 as an amendment in the nature of a substitute to the House counterpart
H.R. 4. The conference committee ended its consideration of H.R. 4 on November
13, 2002, after eight sessions did not reconcile major differences.
The Senate version of H.R. 4 is the measure resuscitated and approved as H.R.
6 by the Senate on July 31, 2003. This version of H.R. 6 includes about $13.2 billion
in energy tax incentives over ten years, plus an additional $5.1 in energy tax cuts (or
revenue losses) due to mandates that would have further reduced energy tax receipts:
the renewable portfolio standard and the renewable fuels standard.2

Summary of S. 1149
The third energy tax bill that may be considered by the House-Senate
Conference this fall is an amended version of S. 1149, which was approved by the
SFC but dropped by the Senate leadership during passage of H.R. 6. This bill
originated on March 11, 2003, when a bipartisan group of four Senate committee
leaders — Senator Grassley, chairman of the Committee on Finance; Senator
Baucus, ranking Democrat of the Committee on Finance; Senator Domenici,
chairman of the Committee on Energy and Natural Resources; and Senator
Bingaman, Energy Committee ranking Democrat — introduced S. 597, the Energy
Tax Incentives Act of 2003. This bill was approved by the Senate Finance
Committee on April 2, 2003, by a vote of 18-2. On May 23, 2003, the Senate
Finance Committee approved the Energy Tax Incentives Act of 2003 (S. 1149),
which superseded S. 597 (S.Rept. 108-54) and was incorporated into S. 14, the
omnibus energy bill.

2

Note that the revenue losses estimated for this bill were $15.5 billion for the eleven-year
period from 2002 to 2012. The corresponding revenue loss including the mandates was
$20.6 ($15.5 + $5.1). However, the reader is cautioned that the revenue losses for the
Senate’s version of H.R. 6 presented in this report were estimated for H.R. 4 in 2002. The
Joint Committee on Taxation has not re-estimated the revenue losses for this bill as of this
writing.

CRS-4
S. 1149 would provide a series of energy tax breaks amounting to about $19.5
billion in cuts. These energy tax reductions would be partially offset through about
$5 billion in tax increases — additional curbs on corporate tax shelters, limits on
corporate and individual expatriates, and an extension of Internal Revenue Service
user fees. Thus the net, ten-year tax cut under S. 1149 would be just over $15.3
billion.
As was just noted, S. 1149 was not adopted by the Senate. As a result of
disagreements over the omnibus energy bill, S. 14, the Senate leadership decided to
resuscitate last year’s energy policy legislation (H.R. 4), in order to break the Senate
deadlock. However, under an agreement between the SFC leadership of both parties,
the SFC bill (S. 1149) will be reintroduced as S.Amdt. 1424 (to be further amended
by S.Amdt. 1431) and substituted for S. 1149 in the forthcoming conference on
omnibus energy policy reform bill H.R. 6, should a conference take place.3
The amendments to the SFC-approved S. 1149 involve (1) an expansion of the
biodiesel tax credit, including an expansion of the rate of credit for agri-biodiesel
from $0.50/gallon to $1.00/gallon; (2) clarification and elaboration with respect to
the tax credit for construction of more energy-efficient new homes; (3) changes —
some increases, some decreases — to the amount of tax credits for different types of
energy-efficient heating and cooling equipment, and insulation property for existing
homes; (4) some minor modifications to the clean coal tax incentives; and (5)
extension of the enhanced oil recovery tax credit to certain oil production facilities
in Alaska.

Brief Comparison of the Three Bills
One way to briefly compare the three bills is to compare revenue losses from the
energy tax incentives and the percentage distribution by type of incentive as
discussed above. This is done in Table 1. The odd-numbered columns, (1) and (3),
show the revenue losses resulting from the House and Senate versions of H.R. 6 over
the ten-year period from FY2003 to FY2012; column (5) shows the ten-year revenue
loss resulting from the SFC amendment over the period 2004-2013. Thus, while the
revenue losses are each estimated over the same time frame, the exact ten-year period
differs among the bills. The percentage distribution of total revenue losses by type
of incentive is shown for each bill in the even-numbered columns.
The total revenue losses are reported in two ways. First, the net energy tax cuts
are in row (12) of Table 1. This shows how the energy tax cuts differ among the
three bills, exclusive of non-energy tax increases (or offsets). The grand total
revenue loss, inclusive of any non-energy tax increases, appears in row (14), which
is row (12) + row (13). Row (14) figures are the same as those reported by the Joint
Committee on Taxation for the two congressional tax-writing committees.

3

Congressional floor statements made by Senators Grassley and Baucus. See Congressional
Record, July 31, 2003.

CRS-5

Table 1. Energy Tax Provisions: Comparison of Ten-Year
Estimated Revenue Loss by Type of Incentive
($ millions; % of total revenue losses)
House H.R. 6

Senate H.R. 6

SFC Amendment

INCENTIVES FOR FOSSIL FUELS SUPPLY
(1)
(2)

(3)

(4)

(5)

(6)

(1) Oil & Gas Production

-$6,485

35.6%

-$3,583

19.5%

-$5,401

28.7%

(2) Oil & Gas Refining and
Distribution

-3,725

20.4%

-1,509

8.2%

-3,391

17.4%

0

0%

-1,907

10.4%

-2,167

11.1%

-10,210

56.0%

-6,999

38.2%

-10,959

56.3%

(3) Coal
(4) Subtotal

ELECTRICITY RESTRUCTURING PROVISIONS
(5) Nuclear

-1,462

8.0%

-1,052

5.7%

-1,000

5.1%

(6) Other

-1,614

8.9%

-499

2.7%

+80

- 0.4%a

(7) Subtotal

-3,066

16.8%

-1,551

8.5%

-920

4.7%

INCENTIVES FOR EFFICIENCY, RENEWABLES, AND ALTERNATIVE FUELS
(8) Energy Efficiency

-1,348

7.4%

-2,147

11.7%

-2,231

11.5%

(9) Renewable Energy &
Alternative Fuels

-3,564

19.6%

-4,433

24.2%

-5,352

27.5%

(10) Subtotal

-4,912

27.0%

-6,610

36.1%

-7,583

38.9%

(11) MISCELLANEOUS

-33

0.2%

-5,138

28.0%

-18

0.1%

(12) NET ENERGY TAX
CUTS: TOTAL

-18,221

100.0%

-18,328

100.0%

-19,480

100%

(13) REVENUE OFFSETS

+83

0

+4,877

-18,138

-18,328

-14,603

(14) GRAND TOTAL

Source: CRS estimates based on Joint Tax Committee reports.
Notes: Note that “grand total” measures the net proposed energy tax cuts defined as gross energy tax cuts less
any energy tax increases, and excluding any non-energy tax increases. See text for important caveats that must
be observed when using this table.
a

Note the negative sign, which indicates revenue losses, and the positive sign, which indicates revenue gains.

CRS-6
Note first the similarities among the three bills. Each reduces energy taxes by
about $18-$19 billion, and the House and Senate versions of H.R. 6 would generate
a nearly identical revenue loss. Also, each bill apportions the tax cuts to the various
energy sectors as discussed above: increased supply incentives for fossil fuels and
coal production (including refining, distribution, and transportation), increased
supply incentives for electricity production and transmission under the rubric of
restructuring provisions, and energy conservation incentives both through the more
efficient consumption of energy and through the substitution of alternative and
renewable fuels.
There are, however, several differences among the three bills.

4

!

First, the mix of tax incentives — the distribution of the total dollars
of cuts among these three broad categories of energy incentives —
differs among the three bills. In general, the House-approved H.R.
6 confers a larger tax cut, in both absolute and relative terms, for
fossil fuels production and for electricity restructuring (or the
production of electricity), and a smaller tax cut for energy efficiency
and renewable/alternative fuels development than the other two bills.
In particular, the House bill is more generous to the oil and gas
industry and much more generous to the electric utility industry than
either Senate bill; in contrast, the Senate bills are absolutely and
relatively more generous to renewable and alternative fuels. Also,
the downstream tax incentives for oil and gas refining, distribution,
and transportation are both absolutely and relatively larger in the
House bill than in either of the other two bills.

!

Second, the House version of H.R. 6 includes no coal incentives
(production and investment incentives for clean coal technologies)
— these were dropped from the 2002 bill.

!

Third, the SFC Amendment (amended version of S. 1149) includes
about $5 billion of non-energy tax increases or offsets (row (13),
column (5) of Table 1), which reduces the net cost of the bill. By
contrast, the House version of H.R. 6 provides only $83 million of
tax increases, and the Senate version of H.R. 6 provides none.4

!

Fourth, as shown in row (11), column (3), the Senate version of H.R.
6 has much larger miscellaneous revenue losses from several energy
tax provisions. The larger of these result from the combined effect
of existing and proposed energy tax incentives with proposed
regulatory incentives for renewable fuels: the renewable portfolio
standard for electricity providers and the renewable fuels mandate.

It should be noted, however, that some of the energy tax incentive provisions raise revenue
over the ten-year period under consideration. These revenue gains may not be shown when
the figures are aggregated as they are in Table 1.

CRS-7
!

Fifth, as between the two Senate bills, the SFC amendment is more
generous to renewable and alternative fuels when only the tax
incentives are compared; however, if the regulatory incentives in
Senate H.R. 6 are taken into account, it is by far more generous than
the SFC amendment.

!

Finally, with regard to ethanol fuel, the House version of H.R. 6 has
no additional incentives for that renewable transportation fuel, while
the other two bills significantly expand existing incentives.

Other notable differences between the three bills are (1) the tax incentives for
electricity restructuring are significantly larger in the House bill (both in absolute
dollar terms and relative to the total tax cut); and (2) the two Senate bills provide
much larger tax incentives for alternative fuel vehicles (including advanced
technology vehicles) and for alternative fuels production than the House bill.

Caveats
Several caveats should be noted. First, the table is primarily a comparison of
the proposed changes to energy tax provisions. While these changes involve
primarily tax cuts, they also include some minor energy tax increases, and some
major non-energy tax increases, as noted earlier. In the latter case, revenue offsets are
clearly shown in column (13) of Table 1. In the former case, however, the revenue
gains are not separately shown, but are subsumed in the losses corresponding to other
provisions. In some of these cases still, there are gains in some years followed by
losses in other and vice versa.
Second, as was noted above, the estimates cover two different ten-year periods:
FY2003-FY2012 for both the House and Senate versions of H.R. 6, and FY2004FY2013 for the SFC amendment.
Third, not all of the provisions fall into neat, separate categories. The §29 tax
credit, for example, promotes both fossil fuels (shale oil, coal, unconventional gases)
and renewable biogases (such as landfill gas), although in Table 1, this item is
categorized as a fossil fuel supply incentive only. This is done because (1) the
available data indicate that the §29 credit primarily benefits unconventional gases
such as coalbed methane, tight sands gas, and, more recently, coal; and (2) there are
insufficient official data to permit estimates of how much of the total projected
revenue loss from the provision accrues to fossil as compared with renewable fuels.
There are other tax incentive provisions where this is true. For example, fuel cells
improve the energy efficiency of electricity generation, but can be powered by a
number of different fuels, including natural gas, hydrogen, and others. It is difficult
to determine, therefore, whether to categorize the tax incentive for residential and
business fuel cells as a fossil fuel incentive, a renewable incentive, or even an energy
efficiency incentive. However, since the Department of Energy funds its fuel cell
research in its energy efficiency budgets, Table 1 categorizes the fuel cell tax

CRS-8
incentives, where the separate figures were available, as an energy efficiency
incentive.5
The total revenue losses are reported in two ways. First the net energy tax cuts
are row (12) of Table 1. This is presented to indicate how the energy tax cuts differ
among the three bills, exclusive of nonenergy tax increases (or offsets). The grand
total revenue loss, inclusive of any nonenergy tax increases, appears in row (14),
which is basically row (12) + row (13). Row (14) figures are the same as those
reported by the Joint Committee on Taxation for the two congressional tax-writing
committees.
Fourth, some of the provisions appear to be miscategorized in the bills. Some
provisions are characterized as conservation incentives when they are in fact supplyoriented incentives. Other provisions are production incentives but are subsumed
under the heading of reliability incentives, rather than production incentives.
Finally, the side-by-side comparison in Table 2 is a summary of complex and
extensive tax code provisions. For brevity, much detail is necessarily omitted.

5

This is only true for the House bill, H.R. 6. The two Senate bills do not provide a
disaggregated revenue loss figure for fuel cells and solar technology, so that it is impossible
to precisely allocate the corresponding revenue loss in terms of energy efficiency and
renewables respectively. Using available information, Table 1 assumes that half of the
revenue loss of this provision accrues as renewable incentives and half accrues as energy
efficiency incentives.

CRS-9

Table 2. Side-by-Side Comparison of the Provisions in Three Energy Tax Bills in the 108th Congress

Fossil Fuels Supply
Oil/Gas Exploration, Development, and Production
Provision

Current Law

House Bill (H.R. 6)

Senate Bill (H.R. 6)

SFC Amendment

MARGINAL OIL AND GAS
WELLS

Independent producers can claim a
higher depletion rate (up to 25%,
rather than the normal 15%) for up
to 15 barrels per day (bpd) of oil (or
the equivalent amount of gas) from
marginal wells (“stripper” oil/gas
and heavy oil). [IRC§613A(c)(6)]

Sec. 43001. A $3 tax credit is
provided per barrel of oil
($0.50/thousand cubic feet
(mcf) of gas from marginal
wells, and for heavy oil). The
credit phases out as oil prices
rise from $15 to $18 per barrel
(and as gas prices rise from
$1.67 to $2.00/thousand cubic
feet.) The credit is limited to 25
bpd or equivalent amount of
gas and to 1,095 barrels per
year or equivalent.

Sec. 2301. This provision is
the same as the House bill
with the exception of 1) the
House bill has no carry
back provision (while the
Senate bill allows the credit
to be carried back up to 10
years), and 2) the House
bill goes into effect on
January 1, 2004, while the
Senate bill goes into effect
on the date the bill is
enacted.

Sec. 501. Same as Senate bill H.R.
6.

ALASKAN NATURAL GAS

No special tax incentive is provided
for natural gas produced from
Alaska’s North Slope.

No provision.

Sec. 2503. The Senate’s
energy tax bill would
provide a credit equal to
the difference between
$3.25/mcf (adjusted for
inflation) and the average
monthly price for such gas
sold in the Alberta,
Canada, market. In effect,
the tax provision would
establish a price floor of
$3.25 for such gas.

Sec. 511. The SFC’s amendment
would create a new tax credit of
$0.52 per million Btu of gas (about
$0.50/mcf) for the production of
natural gas from Alaska’s North
Slope area. The credit would be
phased out for wellhead prices
between $0.83 and $1.35 per
million Btu. Both the credit and
phase-out thresholds would be
adjusted for inflation.

CRS-10
Provision

Current Law

House Bill (H.R. 6)

Senate Bill (H.R. 6)

SFC Amendment

ENHANCED OIL
RECOVERY

A 15% tax credit is provided for the
costs of recovering oil by one of
several selected tertiary recovery
techniques. The credit is part of the
general business credit and is limited
by the minimum tax. No tax credits
are allowed against the minimum
liability. Further, the law states that
the sum of allowable credits must be
less than the difference between the
regular tax and the minimum
liability (it cannot be larger than the
difference between the two).
[IRC§43]

Sec. 43008. The House bill
repeals the minimum tax
limitation on the enhanced oil
recovery credit, thus allowing
more of it to be claimed.

No provision.

Sec. 514. S.Amdt. 1431 amends
the SFC amendment (i.e., S. 1149)
to extend the enhanced oil
recovery tax credit to certain
Alaskan facilities. (The original
SFC-approved bill had no such
provision. This is one of several
provisions added as an amendment
to S. 1149, which is expected be
offered in conference.)

PERCENTAGE
DEPLETION:
a) 100% Net Income
Limitation

The percentage depletion allowance
is limited to 100% of taxable income
from each property, but this
limitation is suspended through
December 31, 2003, for marginal oil
and gas. The Job Creation and
Worker Assistance Act of 2002 (P.L.
107-147), enacted on March 9, 2002,
retroactively extended the
suspension for marginal oil and gas
(which had expired on December 31,
2001) through December 31, 2003.
[IRC§613A(c)(6)(H), A(d)]

Sec. 4302. The suspension for
marginal oil and gas is
extended through December
31, 2006.

Sec. 2306. Same as the
House bill.

Same as the other two bills.

b) 65% Taxable Income
Limitation

The percentage depletion allowance
is also limited to 65% of taxpayer’s
overall taxable income from all
properties. [IRC§613A(c)(6)(H),
A(d)]

Sec. 4302. The 65% limitation
on percentage depletion for oil
and gas is suspended through
December 31, 2006.

No provision.

No provision.

CRS-11
Provision

Current Law

House Bill (H.R. 6)

Senate Bill (H.R. 6)

SFC Amendment

c) Independent Producer
Status

For purposes of percentage
depletion, an independent oil
producer is a) one that, on any given
day, does not refine more than
50,000 barrels of oil, and b) does not
have a retail operation grossing more
than $5 million/year. [IRC§613A(d)]

Sec. 42006. The 50,000 barrel
daily limit is raised to 75,000,
and it applies to the average
over an entire taxable year,
rather than on any day during
the taxable year.

Sec. 2305. This provision is
generally the same as in the
House bill, except that the
limit is raised to 60,000.

Sec. 505. These provisions are the
same as in the Senate’s version of
H.R. 6.

INTANGIBLE DRILLING
COSTS (IDCs)

Oil and gas producers are allowed to
expense, rather than capitalize,
certain intangible drilling and
development costs. With certain
limitations, this deduction is a tax
preference item subject to the
alternative minimum tax.
[IRC§293(c), 57(a)(2)(e)]

Sec.43007. The alternative
minimum tax on IDCs is
repealed through December 31,
2004. Integrated oil companies
are excluded from the repeal.

No provision.

No provision.

GEOLOGIC &
GEOPHYSICAL COSTS
(G&G)

G&G costs for retained properties
must be capitalized (via depletion).
Dry hole costs are expensed.
[IRC§263]

Sec. 43004. G&G costs for
retained properties are
amortizable (deducted evenly)
over 2 years.

Sec. 2307. Same as the
House bill.

Sec. 508. Same as the House and
Senate versions of H.R. 6.

DELAY RENTALS

Under the uniform capitalization
rules, delay rental payments must be
capitalized (via depletion).
[IRC§263,263A

Sec. 43003. Delay rental
payments are deducted evenly
(amortizable) over 2 years.

Sec. 2308. Same as the
House bill.

Sec. 508. Same as the House and
Senate versions of H.R. 6.

CRS-12
Provision

Current Law

House Bill (H.R. 6)

Senate Bill (H.R. 6)

SFC Amendment

§29 CREDIT FOR FUELS
FROM
UNCONVENTIONAL
SOURCES

A $3 tax credit ($1979) is available
for each barrel (or equivalent) of
fuels produced from unconventional
sources or mined from
unconventional locations. For most
fuels, the credit ended in 2002 for
facilities and mines placed in service
by 12-31-92; for biogases, the credit
ends in 2007 for facilities placed in
service by 6-30-98. No credit is
available for facilities placed in
service after these cut-off dates
(which apply to different fuels). The
credit is phased out when oil prices
exceed certain limits (currently
$49.75/barrel). The credit in 2002
was $6.35/barrel of oil equivalent.
Although biogases, such as landfill
gas, have qualified for the credit,
most of the benefits from this tax
credit have accrued to coalbed
methane and to other unconventional
fossil gases. (See CRS Report 97679 E.)
[IRC §29]

Sec. 43005. The House bill
also extends the credit and
placed-in-service dates, and
broadens the types of
qualifying fuels, but these
differ from the Senate bill. For
new projects producing most
types of the preexisting
qualifying fuels, the credit is
extended by 4 years for
facilities placed in service
through 12-31-2006. For
existing “older” facilities, a
lower credit is extended from
2002 to 12-31-2005 to build a
facility (instead of 2004 in the
Senate bill). For any
production that would qualify
for a credit as a result of the
broadening of the provision
under this bill, the quantity of
fuel qualifying for a tax credit
would be limited to 200,000
cubic ft./day of gas or
equivalent.

Sec. 2310. The credit is
extended by 3 years for
new facilities for producing
most of the preexisting
qualifying fuels and
placed-in-service through
12-31-2004. For biofuels
from certain wastes, the
placed-in-service date is
extended to 12-31-2004.
For “older” facilities that
produce coke and other
fuels from lignite, the
placed-in-service date is
extended by 2 years
through 12-31-2004. The
Senate bill also expands the
list of qualifying fuels to
include: refined coal that
meets emissions reduction
targets, heavy oil, and gas
from a coal mine that will
be mined for coal.

Sec. 509. The placed-in-service
date for most fuels is extended to
12-31-2006. The credit is
rebaselined at $3, but without
inflation adjustments. The Senate
bill also expands the list of
qualifying fuels to include: refined
coal that meets emissions
reduction targets, heavy oil, and
gas from a coal mine that will be
mined for coal. For facilities that
produce coke and other fuels from
lignite, the placed-in-service date
is extended by 2 more years
through 12-31-2006, and the credit
is available for 5 years after the
facility is placed in service.

TAX BENEFITS TO
AMERICAN INDIANS

Present tax law provides accelerated
depreciation of business property
located on Indian reservations, and
an employment tax credit for wages
paid to American Indians. Both of
these tax subsidies expire at the end
of 2004.
[IRC§45A, 168(j)]

No provision.

Sec. 2501. The Senate bill
extends both subsidies
through December 31,
2005.

Sec. 701. Same as the Senate
version of H.R. 6.

CRS-13

Refining and Distribution
Provision

Current Law

House Bill (H.R. 6)

Senate Bill (H.R. 6)

SFC Amendment

OIL AND GAS PIPELINES

The recovery period for the
depreciation of oil and gas pipelines is
15 years; for natural gas gathering
lines, it could be either 7 or 15 years,
depending upon whether they are
classified as exploration or
transportation equipment. Recent
court cases reflect the ambiguous tax
treatment.
[IRC§168(e)(3)]

Sec. 42001,42002. This
provision clarifies the
statute concerning
recovery periods by
assigning natural gas
gathering lines a 7-year
recovery period, and
natural gas distribution
lines a 15-year recovery
period.

Sec. 2302, 2311. Same as the
House bill.

Sec. 502, 510, and 512. Same as
the House and Senate bills.

LOW SULFUR DIESEL
FUEL

There are no special tax incentives for
refining of low sulfur diesel fuel.
Investments are recovered through
depreciation, generally over 10 years.
New, stricter Environmental
Protection Agency (EPA) sulfur
standards will go into effect in 2006.
[IRC§168]

Sec.42004, 42005. Small
refiners are permitted to
expense (deduct in the year
incurred), rather than
depreciate, 3/4 of the costs
of complying with the new
EPA sulfur regulations. A
tax credit of $2.10/barrel
of low sulfur diesel fuel is
also provided for small
refiners, limited to 25% of
the capital costs.

Sec. 2303,2304. The Senate
provision is generally the
same as in the House bill.
Both bills reduce the fraction
of expensable costs for
taxpayers refining between
155,000 and 205,000 barrels
per day. A similar limitation
is provided with respect to the
per-barrel tax credit. The
Senate bill would also (unlike
the House bill) allow
cooperatives to pass through
the credits to patrons.

Sec. 503 and 504. Same as the
Senate version of H.R. 6.

EXCISE TAX ON TRAIN
DIESEL

Diesel used in train engines is taxed at
4.4¢/gal., comprising 4.3¢, which
goes into the general fund, and 0.1¢,
which goes into the LUST (Leaking
Underground Storage Tank) trust
fund.
[IRC§4041(a)(d)]

Sec. 41008. The 4.3¢
portion of the tax on train
diesel would be repealed
on 1-1-2004. The 0.1¢
LUST component remains.

No provision.

Sec. 703. Same as the House
version of H.R. 6.

CRS-14
Provision

Current Law

House Bill (H.R. 6)

Senate Bill (H.R. 6)

SFC Amendment

Diesel used in barges is taxed at
24.4¢/gal., comprising 1) 20.1¢ that
goes into the Inland Waterways Trust
Fund, 2) 4.3¢, which goes into the
general fund, and 3) 0.1¢, which goes
into the LUST trust fund.
[IRC§4042]

Sec. 41008. The 4.3¢
portion of the tax on barge
diesel would be repealed
on 1-1-2004. The LUST
tax remains.

No provision.

Sec. 703. Same as the House
version of H.R. 6.

EXCISE TAXES ON
TRANSPORTATION BY AIR

For virtually all domestic flights, the
airlines assess a 7.5% ad-valorem tax
on the ticket price of all commercial
airline passenger tickets, plus a tax
surcharge of $2.75/passenger assessed
on each passenger’s segment of a
domestic flight. Transportation by
helicopter for certain specific uses is
exempt. If a segment is to or from a
rural airport, the domestic segment tax
does not apply. Commercial airlines
that transport property rather than
people are assessed an ad-valorem tax,
known as the cargo waybill tax, of
6.25% of the amount charged for
shipping the property or freight.
[IRC§4261, 4271]

No provision.

Sec. 2507,2508. The list of
exempt uses for purposes of
the passenger ticket tax and
the domestic segment tax, is
expanded to include
transportation by fixed wing
aircraft used for forestry
purposes. The definition of
rural airport for purposes of
the domestic segment tax is
also modified.

No provision.

BLEND OF DIESEL/WATER
EMULSION FUEL

Diesel fuel used in highway vehicles is
generally taxed at 24.4¢/gal.,
comprising the 24.3¢ Highway Trust
Fund (HTF) rate, and the 0.1¢ LUST
trust fund rate. [IRC§4081]

Sec. 41009. The 24.3¢
HTF component of the tax
on emulsified blends of
diesel and water fuels is
reduced to 19.7¢,
reflecting the lower Btu
value of the blended fuel.

No provision.

No provision.

EXCISE TAX ON BARGE
DIESEL

CRS-15
Provision

Current Law

House Bill (H.R. 6)

Senate Bill (H.R. 6)

SFC Amendment

UTILITY PURCHASES OF
NATURAL GAS

State and local governments cannot
use the proceeds from tax-exempt
bonds to profit from arbitrage on
natural gas purchases.
[IRC§148]

Sec. 42010. Public power
utilities are exempt from
the arbitrage restrictions of
the tax-exempt bond rules.

No provision.

Sec. 513. The Senate provision is
the same as in the House bill.

GASOLINE USED ON
FARMS

Gasoline (and diesel) used on farms is
exempt from the motor fuels excise
taxes (as are most other “off-highway”
uses of motor fuels). The gasoline
used in crop-spraying aircraft is
exempt only to the extent it is used
while actually spraying the crops —
gasoline used from the airport to the
farm is not exempt. Further, the
farmer must waive the right to claim
the exemption in order for the
“sprayer” to claim the exemption.
[IRC§6420(c)]

No provision.

Sec 2506. The Senate bill
repeals the waiver
requirement and permits the
aerial consumer of the fuel to
claim the exemption if it is the
purchaser of the gasoline.
Also, the Senate bill treats the
gasoline consumed from the
airport and the farm as onfarm use, thus qualifying for
the exemption.

No provision.

COMMERCIAL POWER
TAKEOFF VEHICLES

No special tax credit is available to
businesses that own refuse collection
trucks or cement mixing trucks. Such
equipment is depreciable property.
Fuel excise taxes are not generally
imposed on off-highway fuel use such
as in construction equipment. But
there is no mechanism for crediting
the excise tax paid by businesses on
that portion of the fuel used by the
trucks to power either the load
compactor or the mixer drum.

No provision

Sec. 2009. Through 2004, a
$250 tax credit is provided for
each refuse truck with a load
compactor and each cement
truck with a mixer drum.
After 2004, the Treasury
Department will issue
regulations that will reduce
the excise taxes on the fuel
used to power the load
compactor or the drum, as the
case may be.

No provision.

CRS-16

Coal Provisions
Provision

Current Law

House Bill (H.R. 6)

Senate Bill (H.R. 6)

SFC Amendment

CLEAN COAL
TECHNOLOGIES

There are no special tax breaks for clean
coal technologies, either for the
investments nor the electricity produced
therefrom. Conventional electricity
generating equipment is generally
depreciable over 15 or 20 years; renewable
generally over 5 years. Pollution control
equipment is amortizable over 5 years
(rather than depreciated over 20 years).
[IRC§169]

No provision.

Sec. 2201, 2211,2212,
2221. Two new tax credits
are created: 1) a variable
tax credit for investments
in selected types of
advanced clean coal
technologies, and 2) a
production tax credit for
electricity generated from
either advanced clean coal
technologies, or existing
coal-fired steam generators
retrofitted with more
energy efficient and cleaner
coal technologies.

Sec. 401, 411,412, 421. Two new
tax credits are created: 1) a 10% tax
credit for investments in selected
types of advanced clean coal
technologies, and 2) a production
tax credit for electricity generated
from either advanced clean coal
technologies, or existing coal-fired
steam generators retrofitted with
more energy efficient and cleaner
coal technologies. Tax-exempt
entities would be allowed to sell,
trade, or assign any of the credits.

CRS-17

Electricity Restructuring Provisions
Provision

Current Law

House Bill (H.R. 6)

Senate Bill (H.R. 6)

SFC Amendment

OPEN ACCESS AND TAXEXEMPT BONDS

Current federal tax provisions
relating to the use of tax-exempt
bonds effectively preclude public
power entities with outstanding
bonds from participating in openaccess restructuring plans because of
the tax code’s private-use
restrictions.
[IRC§103, 141-147]

No provision.

Sec. 2405. This provision
eases somewhat the
restrictions in IRS temporary
regulations with respect to
issuers of tax-exempt bonds
qualifying under the “output
facilities” provisions and
participating in open access
plans.

No provision.

SALE OR DISPOSITION OF
TRANSMISSION ASSETS

Under present tax law, the sale of
electricity transmission or
distribution facilities is generally not
considered to be an involuntary
conversion, thus such sales generally
trigger a tax, which could inhibit procompetitive sales of transmission and
distribution lines and facilities to
independent companies, for example
to create regional transmission
organizations (RTOs). Income is
generally recognized in the year in
which it is constructively received,
unless there is an explicit exception
or the taxpayer uses the accrual
method of accounting. [IRC§451,
1033, 1245, 1250]

Sec. 42007. Gain from the sale or
disposition of transmission assets
before December 31, 2006 is
recognized over 8 years.

Sec. 2404. Generally the
same as in the House bill, but
with fewer restrictions.

Sec. 603. Same as the
Senate version of H.R. 6,
but applies to sales through
December 31, 2007.

RECOVERY PERIOD FOR
TRANSMISSION
PROPERTY UNDER
DEPRECIATION
PROVISIONS

The current law recovery period for
transmission property is generally 20
years.
[IRC §168(e)(3)]

Sec. 42003. Shortens the recovery
period for transmission property
from 20 to 15 years.

Sec. 2404. Gain from the sale
or disposition of transmission
assets is recognized over 8
years.

No provision.

CRS-18
Provision

Current Law

House Bill (H.R. 6)

Senate Bill (H.R. 6)

SFC Amendment

NUCLEAR
DECOMMISSIONING
FUNDS

Deductions into a nuclear
decommissioning fund are limited to
the lesser of the amounts relating to
the cost of service regulations or the
IRS’s ruling amount. Funds may be
transferred tax-free in connection
with a change in ownership of the
nuclear facility to which they relate,
but the transferee generally has to be
a regulated utility eligible to
maintain such a fund. In a
deregulated and restructured
industry, ambiguity regarding the tax
treatment of decommissioning fund
transfers may make such transactions
taxable.
[IRC§468A]

Sec. 42008. In addition to the
amendments made by the Senate
bill, the House provision further
liberalizes the tax treatment of
nuclear decommissioning costs.
Unlike the Senate bill, the House
provision allows a utility to make
contributions into the fund in
excess of the maximum amount
established by the Internal Revenue
Service in certain circumstances.

Sec. 2402. The Senate bill
repeals provisions that limited
the deduction to regulated
utilities, thus liberalizing the
deduction in the context of
utility restructuring and
deregulation. It clarifies that
transfers of funds do not
trigger a tax, and that the
actual decommissioning costs
are deductible when paid
rather than when the actual
decommissioning begins.

Sec. 601. The Senate
substitute amendment is the
same as the Senate’s
version of H.R. 6.

ELECTRIC
COOPERATIVES

In general, cooperatives are exempt
from tax although patrons must pay
tax on any distributed profits as
“patronage dividend.” Rural electric
cooperatives are also exempt from
tax and patrons do not have to report
dividends, provided that no more
than 15% of the cooperative’s
income is from services to
nonmembers.
[IRC§501,512]

Sec. 42009. The provision in the
House bill is generally the same as
the Senate bill, except that it limits
the types of income not counted
against the 15% test.

Sec. 2403, 2406. The income
received by a rural electric
cooperative from any open
access (or nuclear
decommissioning) transaction
with a nonmember, and from
certain other transactions, is
excluded from the 15% test.
Thus, participating in open
access restructuring plans
would not jeopardize
cooperatives’ tax exemption.
Certain gross income from
any electricity to be used to
develop unconventional fuels
is also excluded.

Sec. 602. The Senate’s
substitute amendment is the
same as the Senate’s
version of H.R. 6.

CRS-19

Energy Efficiency
Business Sector
Provision
COMBINED HEAT AND
POWER SYSTEMS

Current Law

House Bill (H.R. 6)

Senate Bill (H.R. 6)

SFC Amendment

No special tax subsidies are
provided to combined heat and
power (cogeneration) systems; the
recovery period for purposes of
depreciation is generally 15 years.

Sec. 41006. Combined heat and
power systems larger than 50
kilowatts (kW) would be treated
as business energy property, thus
qualifying for the 10%
investment tax credit; the
recovery period is increased to
22 years. Property using backpressure steam turbines is also
eligible.

Sec. 2108. Generally the same
as the House bill.

Sec. 308. Generally the same
as the House and Senate bills.

CRS-20
Provision

Current Law

ENERGY EFFICIENCY IN
COMMERCIAL
BUILDINGS

Energy efficiency property that is
installed as part of a structure is
depreciable over 39 years — it has
the same recovery period as the
structure.
[IRC§168(c)]

House Bill (H.R. 6)
No provision.

Senate Bill (H.R. 6)

SFC Amendment

Sec. 2105. Expenditures on
energy efficiency property
made with respect to a
commercial building are tax
deductible (rather than
depreciable), subject to a limit
equal to $2.25 x sq.ft. of the
building. The property must
reduce the building’s annual
energy costs by at least 50% as
compared to a reference
building. Commercial buildings
include residential rental
property. The Senate bill allows
designers of commercial
buildings to claim this
deduction if the energy
efficiency items are installed in
the buildings of nontaxable
entities.

Sec. 305. Same as the Senate
bill.

CRS-21

Residential Sector
Provision

Current Law

House Bill (H.R. 6)

Senate Bill (H.R. 6)

SFC Amendment

ENERGYEFFICIENCY ITEMS
IN EXISTING
HOMES

No special tax treatment is
accorded to homeowners for
purchases of more energy
efficient water heaters,
furnaces, and air conditioners.

Sec. 41004. A tax credit of 20% is
provided for expenditures on energy
efficient improvements (more
heating & cooling units and more
energy efficient envelope
components) retrofitted to existing
homes. The maximum lifetime credit
would be $2,000. Units and
materials must meet Energy
efficiency guidelines, but there is no
criteria for a certified reduction in
energy costs as in the Senate version
of H.R. 6.

Sec. 2103, 2109. Expenditures on
selected types of energy-efficient
heating/cooling technologies
(furnaces, water heaters, AC units,
heat pumps) made either on existing or
new homes are allowed a tax credit
ranging from $75-$250/unit if they
meet certain energy efficiency
guidelines. Other energy-efficiency
improvements to existing homes
qualify for a credit equal to 10% of the
costs ($300 maximum) if a certified
reduction in heating and cooling costs
of at least 30% is achieved.

Sec. 303, 309. Generally the
same as the Senate bill.

ENERGY-EFFICIENT
NEW HOMES

No special tax break is
available to builders who
construct more energy
efficient new homes.

Sec. 41005. A tax credit is provided
to a builder for the costs of energyefficiency property (insulation,
windows/doors, new roofs, and
heating/cooling equipment), which
reduce home energy use by 30%.
The maximum credit is $2,000. The
30% reduction must be below a
comparable reference dwelling must
certified.

Sec 2101 Generally the same as the
House bill, except that the maximum
credit for property that reduces energy
use by 30% is $1,250 ($2,000 for
“50% property.”) Energy efficiency
improvements must also be certified as
meeting certain standards and that
they reduce a home’s heat loss or gain
by the required fractions. Eligible
property includes heating and cooling
equipment.

Sec. 301. Generally the same
as the House and Senate bills,
except that the maximum credit
is $1,000 for “30% property,”
and $2,000 for “50% property.”

CRS-22
Provision

Current Law

House Bill (H.R. 6)

Senate Bill (H.R. 6)

SFC Amendment

HOME APPLIANCES

There is no special tax
incentive for either the
production or purchase of
energy efficient appliances
(although regulations set
standards for energy use
efficiency and labeling).

No provision.

Sec. 2102. Increased production of
more energy-efficient clothes washers
would qualify for $50 tax credit per
washer ($100 for refrigerators.) The
total credit for any manufacturer is
subject to certain limits, including an
annual gross receipts limit, and a
cumulative lifetime credit limit per
manufacturer of $30 million for
washers, and $60 billion for both
appliances.

Sec. 302. Very similar to the
Senate bill, except that the
efficiency standards are stricter
and there is provision for a
$150 tax credit for still more
energy-efficient refrigerators.
The amount depends on the
degree of improvements in
energy efficiency.

ENERGY
MANAGEMENT AND
WATER
SUBMETERING
DEVICES

Current law provides no
special tax incentives for
meters, thermostats, and other
energy management devices
that allow utilities or
consumers to monitor,
control, and thereby possibly
conserve electricity or natural
gas. Such property is
depreciable if used in a
business.

No provision.

Sec. 2106,2107. A tax deduction is
provided to utilities for the cost, up to
$30/unit, of energy management
devices installed in residences or
businesses; the recovery period for
depreciation purposes would be 3
years.

Sec. 306, 307. The three-year
recovery period applies to both
energy management and water
submetering devices — the tax
deduction provision is dropped.

CRS-23

Transportation Sector
Provision
NEW HYBRID
VEHICLES

Current Law

House Bill (H.R. 6)

Senate Bill (H.R. 6)

SFC Amendment

Under current law there is no
tax credit for hybrid vehicles,
but they may qualify for a
deduction of up to $2,000 as
clean-fuel vehicles.
[IRC§179A]

Sec. 41010. No additional tax
incentives for hybrid vehicles, but
existing clean-fuel vehicle tax
deduction phase-out, which begins in
2004 and ends in 2006, is repealed.
Thus, the current tax deduction
would be made permanent.

Sec. 2001, 2010. A tax credit is
provided to purchasers of hybrid
vehicles, ranging from $250-$9,000 for
cars and light trucks, and $4,000$13,000 for heavy trucks. The precise
credit depends upon vehicle weight,
power, and fuel efficiency. For heavy
trucks, the credit is increased further if
they meet emissions performance
standards.

Sec. 201. A base tax credit is
provided to purchasers of
hybrid vehicles, ranging from
$250-$1,000 for cars and light
trucks, and $1,000-$10,000
for heavy trucks. An
additional tax credit ranging
from $500-$3,000 for cars and
light trucks, and from $400$4,000 for heavy duty trucks
is provided depending on
vehicle weight, power, and
fuel-efficiency. The credit is
increased further for early
adoption of extra-fuel
efficient hybrid heavy trucks.

CRS-24

Renewable and Alternative Fuels
Business Sector
Provision

Current Law

House Bill (H.R. 6)

Senate Bill (H.R. 6)

SFC Amendment

ELECTRICITY FROM
RENEWABLE FUELS

Electricity producers may claim a
tax credit of 1.5¢/kWh (in 1992
dollars) for electricity produced
from wind energy, “closed-loop”
biomass, or poultry waste. The
credit for 2003 is 1.8¢/kWh.
Investments have to be made, and
the facility has to commence
production, by December 31, 2003.
A 10% tax credit is provided for
investment in 1) solar and
geothermal equipment used to
generate electricity (including
photovoltaic systems), 2) solar
energy used to heat or cool a
structure, and 3) solar energy used
for process heat. Geothermal
energy reservoirs qualify for a 15%
percentage depletion allowance.
The recovery period for renewable
technologies is 5 years.
[IRC§45,46,48, 613(e)] [IRC§45]

Sec. 41002. The House bill expands
the list of renewables to include
open-loop biomass, landfill gas,
and trash combustion facilities.
Extends placed-in-service deadline
to 12-31-2006. The credit for openloop biomass and landfill gas
applies retroactively but is reduced
to 1.0¢/kWh. instead of 1.5¢, and is
available for 5 years instead of the
normal 10 years.

Sec. 1901-1906. The Senate bill
expands the list of qualifying
renewables to include coal co-fired
with closed-loop biomass, openloop biomass (at 1¢ instead of
1.5¢), swine & bovine waste,
geothermal, solar energy, small
irrigation power facilities,
municipal biosolids, and recycled
sludge. The placed-in-service
deadline is extended by three years
from 12-31-2003 to 12-31-2006
(12-31-2004 for open-loop
biomass, which has 3 years to
receive the credit instead of the
normal 10 years). The Senate
provision also allows 1) lesseeoperators (rather than owners) to
qualify for the tax credit; 2) taxexempt entities to sell or trade any
unused tax credits; and 3) rural
electric coops to use the tax credits
to pay back government subsidized
loans. Other limitations are also
liberalized or repealed.

Sec. 101-106. Very similar to
the Senate bill but generally
a broader expansion of the
tax credit. Raises the credit
rate on new facilities to 1.8¢
(but without inflation
adjustment); defines
agricultural waste nutrients
more broadly than in the
Senate bill; and reduces the
tax credit for open-loop to
1.2¢ rather than 1.0¢.

CRS-25
Provision

Current Law

House Bill (H.R. 6)

Senate Bill (H.R. 6)

SFC Amendment

SMALL ETHANOL
PRODUCER TAX
CREDIT

Present law provides small fuel
ethanol producers (ones that
produce less than 15 million
gallons/year, and have less than 30
mil. gal. in production capacity)
with 10¢/gal. tax credit. Any credit
claimed must be reported as income
subject to tax. Cooperatives are taxexempt and therefore do not benefit
from the producer credit, which
cannot flow through to patrons.
[IRC§40, 87]

No provision.

Sec. 2005. This provision 1) allows
patrons of farmers’ cooperatives to
qualify for the 10¢ small producer
credit; 2) defines a small producer
as one with <60 mil. gal. capacity;
3) exempts the credit from the
passive activity rules; 4) allows the
credit against the alternative
minimum tax; and 5) exempts the
credit from the regular income tax
under IRC§87.

Sec. 205. This provision is
the same as the Senate
version of H.R. 6.

EXCISE TAX
EXEMPTION OR
BLENDER’S TAX
CREDIT FOR FUEL
ETHANOL

In addition to the small ethanol
producers credit, fuel ethanol
benefits from a 5.2¢ excise tax
exemption on 90-10 blends from
the gasoline tax of 18.4¢/gal. and
the diesel tax of 24.4¢/gal. In lieu
of the exemption, an equivalent 52¢
blender’s tax credit is available per
gallon of the pure ethanol.)
Proportionate tax benefits are
available to 5.7% and 7.7% fuel
ethanol blends. The credit is taxable
as gross income and subject to the
alternative minimum tax.[IRC§40,
87 4081]

No provision.

No provision.

Sec. 208. The exemption for
fuel ethanol would be
replaced with a refundable
tax credit of 52¢/gal.
immediately available
against the new higher excise
taxes for all fuel ethanol
blends.

CRS-26
Provision

Current Law

FUEL ETHANOL AND
THE HIGHWAY
TRUST FUND

Present tax law on fuel ethanol
blends results in revenue losses to
the Highway Trust Fund (HTF) of
7.7¢/gal., comprising for 90/10
blends the 5.2¢ exemption, and the
2.5¢ of the 13.2¢ taxable portion
that is allocated into the general
fund. [IRC§4081, 9503 (b)(4)]

ETBE USED TO
PRODUCE GASOHOL

BIODIESEL

House Bill (H.R. 6)

Senate Bill (H.R. 6)

SFC Amendment

No provision.

Sec. 2006. Beginning on 10-12003, the 2.5¢ component of the tax
on fuel ethanol blends will be
allocated into the HTF.

Sec. 208. Same as the Senate
version of H.R. 6.

Under IRS regulations, the ether
ETBE (ethyl tertiary butyl ether)
blended with gasoline qualifies for
the same tax advantages as ethanol
blended with gasoline, but the
blender’s credit on ethanol used to
produce ETBE can be claimed only
by blenders.
[IRC§40,4081]

No provision

Sec. 2007. The Senate bill permits
refiners to claim the blender’s tax
credit as a credit against excise
taxes otherwise due on the ETBE
blended fuel. The bill allows the
transfer of such credit to any
taxpayer with any gasoline excise
tax liability

Sec. 207. The Senate
amendment is the same as
the Senate bill. Both bills
clarify statutes and IRS
regulations.

Under present law, biodiesel has no
special tax break, and, as a
transportation fuel, it is taxed at the
same rate as petroleum diesel: 4.4¢
for trains, and 24.4¢ for barges and
trucks.
[IRC§4041, 4042, 4081]

No provision.

Sec. 2008. The bill provides an
income tax credit for biodiesel
mixtures used as a fuel. The credit
is 1¢ for each 1% of biodiesel made
from virgin vegetable oil and
blended petroleum diesel. The
maximum credit is 20¢/gal. The tax
credit for recycled vegetable oil is
½ the credit for virgin biodiesel.
The excise tax otherwise due on
highway biodiesel is reduced by the
amount of the tax credit.

Sec. 208. The bill provides a
tax credit — in the amount
of 1¢ for each 1% of
biodiesel made from virgin
vegetable oil and blended
with petroleum diesel. The
maximum credit is 20¢/gal.
The tax credit for recycled
vegetable oil is ½ the credit
for virgin biodiesel. In
addition, a new biodiesel
mixture tax credit would be
created in the amount of
$1/gal. of agri- biodiesel in a
1-to-5 blend. The credit is
taken against the excise
taxes.

CRS-27
Provision
BUSINESS USE OF
RENEWABLE
TECHNOLOGIES

Current Law

House Bill (H.R. 6)

Senate Bill (H.R. 6)

SFC Amendment

A 10% tax credit is provided for
investment in solar equipment used
to 1) generate electricity (including
photovoltaic systems), 2) used to
heat or cool a structure, and 3) used
for process heat. Geothermal
energy reservoirs qualify for a 15%
depletion allowance. Electricity
from wind technologies receives
the §45 tax credit. The recovery
period for renewable technologies
is 5 years. Fuel cells do not qualify
for tax subsidies.
[IRC§45,46,48, 613(e)]

Sec. 41003. A 10% tax credit is
provided for investments in
stationary fuel cells, subject to a
maximum credit of $1,000/kW of
capacity.

Sec. 2104. Business investments in
fuel cells would qualify for a 30%
tax credit subject to a limit of
$1,000/kW of capacity; investments
in stationary microturbine power
plants would qualify for a 10% tax
credit and the limit would be
$200/kW of capacity.

Sec. 304. The Senate
amendment is the same as
the Senate bill.

Residential Sector
Provision

Current Law

House Bill (H.R. 6)

Senate Bill (H.R. 6)

SFC Amendment

RENEWABLE ENERGY
TECHNOLOGIES

There are no tax subsidies for
residential applications of solar,
wind, and other renewable energy
technologies. The 1978 energy tax
credits for solar and wind expired
in 1985.

Sec. 41001, 41003. A 10% tax
credit (up to $2,000) is provided
for residential applications of
solar technologies (10% credit to
residential fuel cells, up to
$1,000/kW of capacity).

Sec. 2103. A 15% tax
credit is provided for
residential applications of
solar technologies (30% for
wind, and 20% for fuel
cells subject to a maximum
credit of $1,000 for fuel
cells, and $2,000 for other
technologies).

Sec. 303. A tax credit is provided
for residential applications of
renewable technologies: 15% credit
for solar (including photovoltaics),
and 30% for wind and fuel cells.
The maximum credit is $2,000
except for fuel cells, which are
limited to $1,000/kW of capacity.

CRS-28

Transportation Sector
Provision

Current Law

House Bill (H.R. 6)

Senate Bill (H.R. 6)

SFC Amendment

ALTERNATIVE-FUEL
VEHICLES

The incremental costs of an
alternative fuel vehicle are tax
deductible, up to $2,000 for a
car, and $50,000 for a truck.
This applies to vehicles
powered by LPG, LNG, CNG,
hydrogen, E85 and M85. The
credit phases out beginning in
2004 and ending in 2006.
[IRC§179A]

Sec. 41011. Provides a base tax credit for
fuel cell vehicles ranging from $4,000 to
$40,000 per vehicle depending on the
vehicles weight; provides additional tax
credits depending on fuel efficiency
guidelines. Provides a tax credit for
“advanced lean-burn technology
vehicles,” ranging from a base of $500 to
$3,000 depending on fuel efficiency, and
an additional tax credit depending on fuel
savings. There are no other tax credits
for alternative fuel vehicles. The credits
in the House bill may be carried forward
for up to 20 years.

Sec. 2001. For fuel cell vehicles the
credit is generally the same as the
House bill. But also provides a
40% tax credit for the incremental
costs of an alternative fuel vehicle.
An additional 30% tax credit is
available if the vehicle meets
certain Clean Air Act standards.
The maximum credit would be
$5,000-$40,000, depending on
vehicle weight. The latter credit is
not in the House bill.

Sec. 201. Generally the same
as the Senate bill. Under
both bills, lessors (under
safe harbor leasing rules)
may qualify for the tax
credit, thereby benefitting
state and local governments,
and other tax-exempt
entities.

NEW FUEL CELL
VEHICLES

Fuel cell vehicles may qualify
for the $4,000 electric vehicle
tax credit (discussed below).
[IRC§30]

Sec. 41011. For fuel cell vehicles, the
House provision is generally the same as
the Senate bill, except for differences in
the base (or reference vehicle) fuel
economy for purposes of the additional
tax credit. The House bill also covers
“advanced clean-burn technology
vehicles,” which are not in the Senate
bill. The credits in the House bill for fuel
cell vehicles may be carried forward for
up to 20 years.

Sec. 2001. A tax credit is provided
to purchasers of fuel cell vehicles,
ranging from $4,000-$10,000 for
cars and light trucks (depending
upon vehicle weight, and fuel
efficiency), and $20,000- $40,000
for heavy fuel cell trucks. An
additional credit for cars and light
trucks powered by fuel cells is
provided, ranging from $1,000$4,000 depending on percentage
improvements in fuel efficiency
relative to a reference conventional
vehicle.

Sec. 201. Generally the same
as the Senate bill.

CRS-29
Provision

Current Law

ALTERNATIVE-FUEL
REFUELING
STATIONS

A maximum lifetime tax
deduction, up to $100,000, is
provided for the costs of
alternative fuel refueling
property (excluding
installation costs). This
deduction expires in 2006.
[IRC§179A]

RETAIL SALE OF
ALTERNATIVE
FUELS

Fuel ethanol (and methanol)
qualifies for an excise tax
exemption. Fuel ethanol also
qualifies for blender’s and
production tax credits. CNG
and other alternative fuels are
taxed at lower rates, as
measured against the Btu
equivalence of gasoline.
Electricity used in vehicles is
not taxed. There is a tax
break for the retail sale of
alternative motor fuels.
[IRC§40, 4041, 4081]

House Bill (H.R. 6)

Senate Bill (H.R. 6)

SFC Amendment

No provision.

Sec. 2003,2010. The Senate bill
replaces the current deduction with
a 50% tax credit, through 2007, for
the costs of clean-fuel refueling
equipment (subject to a maximum
tax credit of $30,000). It adds
“residential clean-refueling
property” to qualifying property,
subject to a maximum credit of
$1,000. For hydrogen refueling
stations, the credit is available
through 2011.

Sec. 203. Both the Senate
bill and the Senate
amendment also would
permit businesses that install
refueling equipment on
property owned by taxexempt entities to qualify for
the tax credit.

No provision.

Sec. 2004. A 30¢/gal. tax credit
(rising to 50¢/gal. by 2005) is
provided for the retail sale of an
alternative fuel (CNG, LNG, LPG,
hydrogen, E85, and M85). The
credit is based on the gasoline
equivalent of alternative fuel, rated
at 114,000 Btu/gal. of gasoline.

Sec. 204. This provision is
the same as in the Senate
bill.

CRS-30
Provision

Current Law

House Bill (H.R. 6)

Senate Bill (H.R. 6)

SFC Amendment

ELECTRIC VEHICLES

A 10% tax credit, up to
$4,000, is available for the
costs of an electric vehicle.
The credit phases out from
2004-2006. The Job Creation
and Worker Relief Act of
2002 (P.L. 107-147)
retroactively extended the
phase-out dates from 20022004 to 2004-2006.
[IRC§30]

Sec. 41010. Repeals the phase-out of the
existing tax credit. No additional
incentives are provided.

Sec. 2002. The Senate bill repeals
the existing credit and provides a
new tax credit of between $3,500
and $40,000, depending on vehicle
weight, payload capacity, and
driving range. A smaller tax credit
(10% of costs up to $1,500) is
provided for electric vehicles with a
maximum velocity of between 2025 mph. Leases of electric vehicles
would also qualify for the tax
credit.

Sec. 202. This is generally
the same as in the Senate
bill.

CRS-31

Miscellaneous Provisions
Provision

Current Law

House Bill (H.R. 6)

Senate Bill (H.R. 6)

SFC Amendment

STUDY OF COALBED
METHANE

Coalbed methane is one of the
unconventional fuels that qualifies for
the §29 tax credit. There is no provision
in current law for the study of the effects
of the §29 tax credit on coalbed methane.
CRS has analyzed the economic effects
of the §29 tax credit, including the
effects on coalbed methane, through
1997. See An Economic Analysis of the
§29 Tax Credit for Unconventional
Fuels. CRS Report 97-679E.

No provision.

Sec. 2309. The Secretary of
the Treasury shall study the
effects of the §29 tax credit
on the production of coalbed
methane.

Sec 509. This is the
same as in the Senate
bill.

STUDY OF ELECTRICITY
RESTRUCTURING TAX
ISSUES

No part of current tax law directs the
Treasury Department to study, and report
to the Congress, the tax issues related to
the restructuring of the electric utility
industry.

No provision.

Sec. 2401. The Treasury
Secretary shall undertake a
study of the tax issues
resulting from electricity
industry restructuring,
particularly the effects of
tax-exempt bonds on public
power and on corporate
reorganization.

No provision.

STUDY OF CERTAIN TAX
INCENTIVES

There is no provision in the Internal
Revenue Code directing the General
Accounting Office to study the effects of
the tax incentives for alternative motor
fuels and for energy efficiency.

No provision.

Sec. 2502. GAO is directed
to undertake an analysis of
the effectiveness of the tax
incentives for alternative
motor vehicles and
alternative fuels and energy
efficiency investments
proposed in the bill.

Sec. 702. Same as in the
Senate bill.

CRS-32
Provision

Current Law

House Bill (H.R. 6)

Senate Bill (H.R. 6)

SFC Amendment

DUTY-FREE SALES OF
GASOLINE AND DIESEL

Customs duties are imposed on the
importation of commodities into the
United States. The duty on gasoline and
diesel imports is 52.5¢/barrel
(1.25¢/gal.). Commodities sold in dutyfree shops may be sold duty-free if the
commodity is not entered into the United
States. In some cases, individuals
purchase motor fuel at a duty free
station, drive briefly outside the U.S.,
and then return to the U.S.
[Harmonized tariff schedules of the U.S.;
19 U.S.C. 1555(b)]

No provision.

Sec. 2504. The Senate bill
provides that any gasoline or
diesel sold in duty-free
shops will be considered
entered for consumption,
and therefore subject to
duty.

Sec. 209. This is exactly
the same as in the Senate
bill.

ENERGY CREDITS AND THE
ALTERNATIVE MINIMUM
TAX

Under current law, energy-related
income tax credits, and many of the nonenergy tax credits, are aggregated and
claimed as one general business credit,
which is also subject to several
limitations, including the alternative
minimum tax limitation.
[IRC§38]

Sec. 43006, 43007. These
sections make the minimum tax
limitation inapplicable to
several of the personal and
business energy tax credits
introduced by the bill.

No provision.

No provision.

ENERGY RESEARCH AND
DEVELOPMENT (R&D) TAX
CREDIT

A 20% tax credit is available on the
amount by which a taxpayer’s qualified
research expenses for a taxable year
exceed its base amount for that year. In
lieu of this credit, a taxpayer may claim
an alternative incremental research
credit. The research credit is scheduled to
expire and generally will not apply to
amounts paid or incurred after June 30,
2004. [IRC§41]

No provision.

No provision.

Sec 704. The 20% credit
is available for all
expenditures on
qualified energy research
undertaken by a research
consortium, and not just
those expenses over a
certain base amount. The
June 30, 2004 deadline
is unchanged.

CRS-33
Provision

Current Law

House Bill (H.R. 6)

Senate Bill (H.R. 6)

SFC Amendment

COAL MINER’S HEALTH
BENEFITS FUND

In 1992 the Congress established a health
benefits fund to pay for the medical
expenses of retired miners and their
dependents. Coal operators make annual
contributions for each retired miner
assigned to a particular operator.
[IRC§9704]

Sec. 42011. The proposal
allows assigned coal operators
to be relieved of their liability
to make annual contributions,
provided that the operator’s
parent company prepays the
premiums.

No provision.

No provision.

TAX TREATMENT OF DAIRY
CATTLE

Under present tax law, involuntary
conversions of property or assets — such
as from theft, fire, or actual or threatened
condemnation — are not generally
subject to tax, i.e., any gain or loss is not
recognized, provided that the property is
replaced within a specified period of
time, generally two years.
[IRC§1033]

No provision.

Sec. 2505. The Senate
provision treats the
destruction of dairy cattle
infected with bovine
tuberculosis, as part of
USDA’s eradication
program, as an involuntary
conversion for tax purposes,
thus ensuring that no tax is
triggered, provided that the
cattle are replaced within 4
years. The costs of
disposing of the infected
cattle would be expensed
rather than depreciated.

No provision.

CRS-34

Revenue Offsets
Provision

Current Law

House Bill (H.R. 6)

Senate Bill (H.R. 6)

SFC Amendment

ANTI-TAX SHELTERS
PROVISIONS

Numerous provisions of current tax
law and supporting regulations are
designed to encourage compliance
with the tax laws, and impose
penalties on taxpayers that engage in
transactions and behaviors designed to
abuse the tax laws and evade the
payment of taxes through “tax
shelters.” [IRC§ 6111, 6112,6708
6662A,6700,6707, 6707A, 7525]

No provision.

No provision.

Sec. 801-807. The Senate
amendment creates additional
restrictions on behaviors and
transactions that create illegal
or abusive tax shelters.
Additional penalties are
imposed for violating these new
rules, both on the taxpayer and
the tax-shelter promoters.

TAX TREATMENT OF
FOREIGN
REINCORPORATIONS

The inversion of ownership from a
U.S. corporation with a foreign
subsidiary to a foreign corporation
with a U.S. subsidiary has certain tax
benefits for both the corporation and
its shareholders when the parent
corporation is established in a country
with taxes lower than in the United
States.
[IRC§ 367]

Sec. 44001,44002. The
House provision imposes a
moratorium on corporate
inversion transactions
undertaken between March
4, 2003, and January 1,
2005, and expresses the
sense of the Congress that
this section of the tax code
needs to be reformed.

No provision.

Sec 821. Establishes new tax
consequences for each type of
corporate inversion transaction,
generally denying tax benefits
to such transactions.

EXCISE TAX ON STOCK
COMPENSATION OF
INSIDERS OF INVERTED
REINCORPORATIONS

Shareholders generally are required to
recognize any gain from a stock
inversion transaction, but not for
holders of stock options and other
stock-based compensation. [IRC§83]

No provision.

No provision.

Sec 822. Holders of stock
options and other stock-based
compensation are subject to a
20% excise tax on the value of
certain stock compensation if
the corporation reincorporates
as part of an inversion
transaction.

CRS-35
Provision

Current Law

House Bill (H.R. 6)

Senate Bill (H.R. 6)

SFC Amendment

REINSURANCE AGREEMENTS

In the case of a reinsurance
agreement, the Treasury Secretary has
the authority to make adjustments in
order to more properly reflect income.
In cross border transactions, this
procedure is more difficult.
[IRC§ 845]

No provision.

No provision.

Sec. 823. The Senate provision
clarifies the rules relating to the
Secretary’s authority to make it
easier to adjust reinsurance
agreements in order to more
properly reflect and measure
income.

INDIVIDUAL EXPATRIATION

U.S. citizens are taxed on their
worldwide income; a tax credit is
allowed against foreign taxes.
Expatriates intending on avoiding
U.S. taxes are taxed under an
alternative tax regime if it results in
more tax than under the rules
applicable to nonresidents/noncitizens.
[IRC§877,2107,2501,6039]

No provision.

No provision.

Sec. 833. Tightens existing
rules, and adds new more
stringent rules (including
additional information
requirements) on expatriates
intending on terminating
residency or citizenship for the
purpose of evading U.S. taxes.
Imposes more objective criteria
in making such determinations.

IRS USER FEES

The Internal Revenue Service charges
taxpayers fees for certain services it
renders: letter and revenue rulings,
determination and opinion rulings,
and other similar services. The fee
amount depends upon the type of
ruling and the section of the tax code
it pertains to. The authority for these
fees expires on September 30, 2003.
[§10511, P.L. 100-203]

No provision.

No provision.

Sec. 831. The Senate bill
extends the authority to impose
these fees by 10 more years,
through September 30, 2013. It
also authorizes these fees in tax
statutes, in addition to
regulations.

TAXABLE VACCINES

Several vaccines routinely
administered to children are subject to
a manufacturer’s excise tax at the rate
of 75¢/dose. Revenues are deposited
into the Vaccine Injury Compensation
Trust Fund. [IRC§4132]

No provision

No provision.

Sec. 842. The Senate
amendment expands the list of
taxable vaccines to hepatitis A.

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/crs%3ARL32042. Public record. Not legal advice.