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 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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CRS Report for Congress
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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.

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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.

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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.

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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
-3,725
20.4%
-1,509
8.2%
-3,391
17.4%
Distribution
(3) Coal
0
0%
-1,907
10.4%
-2,167
11.1%
(4) Subtotal
-10,210
56.0%
-6,999
38.2%
-10,959
56.3%
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 &
-3,564
19.6%
-4,433
24.2%
-5,352
27.5%
Alternative Fuels
(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
-18,221
100.0%
-18,328
100.0%
-19,480
100%
CUTS: TOTAL
(13) REVENUE OFFSETS
+83
0
+4,877
(14) GRAND TOTAL
-18,138
-18,328
-14,603
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.

! 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.
4 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.

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! 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 FY2004-
FY2013 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 supply-
oriented 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.

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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
Independent producers can claim a
Sec. 43001. A $3 tax credit is
Sec. 2301. This provision is
Sec. 501. Same as Senate bill H.R.
WELLS
higher depletion rate (up to 25%,
provided per barrel of oil
the same as the House bill
6.
rather than the normal 15%) for up
($0.50/thousand cubic feet
with the exception of 1) the
to 15 barrels per day (bpd) of oil (or
(mcf) of gas from marginal
House bill has no carry
the equivalent amount of gas) from
wells, and for heavy oil). The
back provision (while the
marginal wells (“stripper” oil/gas
credit phases out as oil prices
Senate bill allows the credit
and heavy oil). [IRC§613A(c)(6)]
rise from $15 to $18 per barrel
to be carried back up to 10
(and as gas prices rise from
years), and 2) the House
$1.67 to $2.00/thousand cubic
bill goes into effect on
feet.) The credit is limited to 25
January 1, 2004, while the
bpd or equivalent amount of
Senate bill goes into effect
gas and to 1,095 barrels per
on the date the bill is
year or equivalent.
enacted.
ALASKAN NATURAL GAS
No special tax incentive is provided
No provision.
Sec. 2503. The Senate’s
Sec. 511. The SFC’s amendment
for natural gas produced from
energy tax bill would
would create a new tax credit of
Alaska’s North Slope.
provide a credit equal to
$0.52 per million Btu of gas (about
the difference between
$0.50/mcf) for the production of
$3.25/mcf (adjusted for
natural gas from Alaska’s North
inflation) and the average
Slope area. The credit would be
monthly price for such gas
phased out for wellhead prices
sold in the Alberta,
between $0.83 and $1.35 per
Canada, market. In effect,
million Btu. Both the credit and
the tax provision would
phase-out thresholds would be
establish a price floor of
adjusted for inflation.
$3.25 for such gas.

CRS-10
Provision
Current Law
House Bill (H.R. 6)
Senate Bill (H.R. 6)
SFC Amendment
ENHANCED OIL
A 15% tax credit is provided for the
Sec. 43008. The House bill
No provision.
Sec. 514. S.Amdt. 1431 amends
RECOVERY
costs of recovering oil by one of
repeals the minimum tax
the SFC amendment (i.e., S. 1149)
several selected tertiary recovery
limitation on the enhanced oil
to extend the enhanced oil
techniques. The credit is part of the
recovery credit, thus allowing
recovery tax credit to certain
general business credit and is limited
more of it to be claimed.
Alaskan facilities. (The original
by the minimum tax. No tax credits
SFC-approved bill had no such
are allowed against the minimum
provision. This is one of several
liability. Further, the law states that
provisions added as an amendment
the sum of allowable credits must be
to S. 1149, which is expected be
less than the difference between the
offered in conference.)
regular tax and the minimum
liability (it cannot be larger than the
difference between the two).
[IRC§43]
PERCENTAGE
The percentage depletion allowance
Sec. 4302. The suspension for
Sec. 2306. Same as the
Same as the other two bills.
DEPLETION:
is limited to 100% of taxable income
marginal oil and gas is
House bill.
a) 100% Net Income
from each property, but this
extended through December
Limitation
limitation is suspended through
31, 2006.
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)]
b) 65% Taxable Income
The percentage depletion allowance
Sec. 4302. The 65% limitation
No provision.
No provision.
Limitation
is also limited to 65% of taxpayer’s
on percentage depletion for oil
overall taxable income from all
and gas is suspended through
properties. [IRC§613A(c)(6)(H),
December 31, 2006.
A(d)]

CRS-11
Provision
Current Law
House Bill (H.R. 6)
Senate Bill (H.R. 6)
SFC Amendment
c) Independent Producer
For purposes of percentage
Sec. 42006. The 50,000 barrel
Sec. 2305. This provision is
Sec. 505. These provisions are the
Status
depletion, an independent oil
daily limit is raised to 75,000,
generally the same as in the
same as in the Senate’s version of
producer is a) one that, on any given
and it applies to the average
House bill, except that the
H.R. 6.
day, does not refine more than
over an entire taxable year,
limit is raised to 60,000.
50,000 barrels of oil, and b) does not
rather than on any day during
have a retail operation grossing more
the taxable year.
than $5 million/year. [IRC§613A(d)]
INTANGIBLE DRILLING
Oil and gas producers are allowed to
Sec.43007. The alternative
No provision.
No provision.
COSTS (IDCs)
expense, rather than capitalize,
minimum tax on IDCs is
certain intangible drilling and
repealed through December 31,
development costs. With certain
2004. Integrated oil companies
limitations, this deduction is a tax
are excluded from the repeal.
preference item subject to the
alternative minimum tax.
[IRC§293(c), 57(a)(2)(e)]
GEOLOGIC &
G&G costs for retained properties
Sec. 43004. G&G costs for
Sec. 2307. Same as the
Sec. 508. Same as the House and
GEOPHYSICAL COSTS
must be capitalized (via depletion).
retained properties are
House bill.
Senate versions of H.R. 6.
(G&G)
Dry hole costs are expensed.
amortizable (deducted evenly)
[IRC§263]
over 2 years.
DELAY RENTALS
Under the uniform capitalization
Sec. 43003. Delay rental
Sec. 2308. Same as the
Sec. 508. Same as the House and
rules, delay rental payments must be
payments are deducted evenly
House bill.
Senate versions of H.R. 6.
capitalized (via depletion).
(amortizable) over 2 years.
[IRC§263,263A

CRS-12
Provision
Current Law
House Bill (H.R. 6)
Senate Bill (H.R. 6)
SFC Amendment
§29 CREDIT FOR FUELS
A $3 tax credit ($1979) is available
Sec. 43005. The House bill
Sec. 2310. The credit is
Sec. 509. The placed-in-service
FROM
for each barrel (or equivalent) of
also extends the credit and
extended by 3 years for
date for most fuels is extended to
UNCONVENTIONAL
fuels produced from unconventional
placed-in-service dates, and
new facilities for producing
12-31-2006. The credit is
SOURCES
sources or mined from
broadens the types of
most of the preexisting
rebaselined at $3, but without
unconventional locations. For most
qualifying fuels, but these
qualifying fuels and
inflation adjustments. The Senate
fuels, the credit ended in 2002 for
differ from the Senate bill. For
placed-in-service through
bill also expands the list of
facilities and mines placed in service
new projects producing most
12-31-2004. For biofuels
qualifying fuels to include: refined
by 12-31-92; for biogases, the credit
types of the preexisting
from certain wastes, the
coal that meets emissions
ends in 2007 for facilities placed in
qualifying fuels, the credit is
placed-in-service date is
reduction targets, heavy oil, and
service by 6-30-98. No credit is
extended by 4 years for
extended to 12-31-2004.
gas from a coal mine that will be
available for facilities placed in
facilities placed in service
For “older” facilities that
mined for coal. For facilities that
service after these cut-off dates
through 12-31-2006. For
produce coke and other
produce coke and other fuels from
(which apply to different fuels). The
existing “older” facilities, a
fuels from lignite, the
lignite, the placed-in-service date
credit is phased out when oil prices
lower credit is extended from
placed-in-service date is
is extended by 2 more years
exceed certain limits (currently
2002 to 12-31-2005 to build a
extended by 2 years
through 12-31-2006, and the credit
$49.75/barrel). The credit in 2002
facility (instead of 2004 in the
through 12-31-2004. The
is available for 5 years after the
was $6.35/barrel of oil equivalent.
Senate bill). For any
Senate bill also expands the
facility is placed in service.
Although biogases, such as landfill
production that would qualify
list of qualifying fuels to
gas, have qualified for the credit,
for a credit as a result of the
include: refined coal that
most of the benefits from this tax
broadening of the provision
meets emissions reduction
credit have accrued to coalbed
under this bill, the quantity of
targets, heavy oil, and gas
methane and to other unconventional
fuel qualifying for a tax credit
from a coal mine that will
fossil gases. (See CRS Report 97-
would be limited to 200,000
be mined for coal.
679 E.)
cubic ft./day of gas or
[IRC §29]
equivalent.
TAX BENEFITS TO
Present tax law provides accelerated
No provision.
Sec. 2501. The Senate bill
Sec. 701. Same as the Senate
AMERICAN INDIANS
depreciation of business property
extends both subsidies
version of H.R. 6.
located on Indian reservations, and
through December 31,
an employment tax credit for wages
2005.
paid to American Indians. Both of
these tax subsidies expire at the end
of 2004.
[IRC§45A, 168(j)]

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
Sec. 42001,42002. This
Sec. 2302, 2311. Same as the
Sec. 502, 510, and 512. Same as
depreciation of oil and gas pipelines is
provision clarifies the
House bill.
the House and Senate bills.
15 years; for natural gas gathering
statute concerning
lines, it could be either 7 or 15 years,
recovery periods by
depending upon whether they are
assigning natural gas
classified as exploration or
gathering lines a 7-year
transportation equipment. Recent
recovery period, and
court cases reflect the ambiguous tax
natural gas distribution
treatment.
lines a 15-year recovery
[IRC§168(e)(3)]
period.
LOW SULFUR DIESEL
There are no special tax incentives for
Sec.42004, 42005. Small
Sec. 2303,2304. The Senate
Sec. 503 and 504. Same as the
FUEL
refining of low sulfur diesel fuel.
refiners are permitted to
provision is generally the
Senate version of H.R. 6.
Investments are recovered through
expense (deduct in the year
same as in the House bill.
depreciation, generally over 10 years.
incurred), rather than
Both bills reduce the fraction
New, stricter Environmental
depreciate, 3/4 of the costs
of expensable costs for
Protection Agency (EPA) sulfur
of complying with the new
taxpayers refining between
standards will go into effect in 2006.
EPA sulfur regulations. A
155,000 and 205,000 barrels
[IRC§168]
tax credit of $2.10/barrel
per day. A similar limitation
of low sulfur diesel fuel is
is provided with respect to the
also provided for small
per-barrel tax credit. The
refiners, limited to 25% of
Senate bill would also (unlike
the capital costs.
the House bill) allow
cooperatives to pass through
the credits to patrons.
EXCISE TAX ON TRAIN
Diesel used in train engines is taxed at
Sec. 41008. The 4.3¢
No provision.
Sec. 703. Same as the House
DIESEL
4.4¢/gal., comprising 4.3¢, which
portion of the tax on train
version of H.R. 6.
goes into the general fund, and 0.1¢,
diesel would be repealed
which goes into the LUST (Leaking
on 1-1-2004. The 0.1¢
Underground Storage Tank) trust
LUST component remains.
fund.
[IRC§4041(a)(d)]

CRS-14
Provision
Current Law
House Bill (H.R. 6)
Senate Bill (H.R. 6)
SFC Amendment
Diesel used in barges is taxed at
Sec. 41008. The 4.3¢
No provision.
Sec. 703. Same as the House
24.4¢/gal., comprising 1) 20.1¢ that
portion of the tax on barge
version of H.R. 6.
goes into the Inland Waterways Trust
diesel would be repealed
Fund, 2) 4.3¢, which goes into the
on 1-1-2004. The LUST
EXCISE TAX ON BARGE
general fund, and 3) 0.1¢, which goes
tax remains.
DIESEL
into the LUST trust fund.
[IRC§4042]
EXCISE TAXES ON
For virtually all domestic flights, the
No provision.
Sec. 2507,2508. The list of
No provision.
TRANSPORTATION BY AIR
airlines assess a 7.5% ad-valorem tax
exempt uses for purposes of
on the ticket price of all commercial
the passenger ticket tax and
airline passenger tickets, plus a tax
the domestic segment tax, is
surcharge of $2.75/passenger assessed
expanded to include
on each passenger’s segment of a
transportation by fixed wing
domestic flight. Transportation by
aircraft used for forestry
helicopter for certain specific uses is
purposes. The definition of
exempt. If a segment is to or from a
rural airport for purposes of
rural airport, the domestic segment tax
the domestic segment tax is
does not apply. Commercial airlines
also modified.
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]
BLEND OF DIESEL/WATER
Diesel fuel used in highway vehicles is
Sec. 41009. The 24.3¢
No provision.
No provision.
EMULSION FUEL
generally taxed at 24.4¢/gal.,
HTF component of the tax
comprising the 24.3¢ Highway Trust
on emulsified blends of
Fund (HTF) rate, and the 0.1¢ LUST
diesel and water fuels is
trust fund rate. [IRC§4081]
reduced to 19.7¢,
reflecting the lower Btu
value of the blended fuel.

CRS-15
Provision
Current Law
House Bill (H.R. 6)
Senate Bill (H.R. 6)
SFC Amendment
UTILITY PURCHASES OF
State and local governments cannot
Sec. 42010. Public power
No provision.
Sec. 513. The Senate provision is
NATURAL GAS
use the proceeds from tax-exempt
utilities are exempt from
the same as in the House bill.
bonds to profit from arbitrage on
the arbitrage restrictions of
natural gas purchases.
the tax-exempt bond rules.
[IRC§148]
GASOLINE USED ON
Gasoline (and diesel) used on farms is
No provision.
Sec 2506. The Senate bill
No provision.
FARMS
exempt from the motor fuels excise
repeals the waiver
taxes (as are most other “off-highway”
requirement and permits the
uses of motor fuels). The gasoline
aerial consumer of the fuel to
used in crop-spraying aircraft is
claim the exemption if it is the
exempt only to the extent it is used
purchaser of the gasoline.
while actually spraying the crops —
Also, the Senate bill treats the
gasoline used from the airport to the
gasoline consumed from the
farm is not exempt. Further, the
airport and the farm as on-
farmer must waive the right to claim
farm use, thus qualifying for
the exemption in order for the
the exemption.
“sprayer” to claim the exemption.
[IRC§6420(c)]
COMMERCIAL POWER
No special tax credit is available to
No provision
Sec. 2009. Through 2004, a
No provision.
TAKEOFF VEHICLES
businesses that own refuse collection
$250 tax credit is provided for
trucks or cement mixing trucks. Such
each refuse truck with a load
equipment is depreciable property.
compactor and each cement
Fuel excise taxes are not generally
truck with a mixer drum.
imposed on off-highway fuel use such
After 2004, the Treasury
as in construction equipment. But
Department will issue
there is no mechanism for crediting
regulations that will reduce
the excise tax paid by businesses on
the excise taxes on the fuel
that portion of the fuel used by the
used to power the load
trucks to power either the load
compactor or the drum, as the
compactor or the mixer drum.
case may be.

CRS-16
Coal Provisions
Provision
Current Law
House Bill (H.R. 6)
Senate Bill (H.R. 6)
SFC Amendment
CLEAN COAL
There are no special tax breaks for clean
No provision.
Sec. 2201, 2211,2212,
Sec. 401, 411,412, 421. Two new
TECHNOLOGIES
coal technologies, either for the
2221. Two new tax credits
tax credits are created: 1) a 10% tax
investments nor the electricity produced
are created: 1) a variable
credit for investments in selected
therefrom. Conventional electricity
tax credit for investments
types of advanced clean coal
generating equipment is generally
in selected types of
technologies, and 2) a production
depreciable over 15 or 20 years; renewable
advanced clean coal
tax credit for electricity generated
generally over 5 years. Pollution control
technologies, and 2) a
from either advanced clean coal
equipment is amortizable over 5 years
production tax credit for
technologies, or existing coal-fired
(rather than depreciated over 20 years).
electricity generated from
steam generators retrofitted with
[IRC§169]
either advanced clean coal
more energy efficient and cleaner
technologies, or existing
coal technologies. Tax-exempt
coal-fired steam generators
entities would be allowed to sell,
retrofitted with more
trade, or assign any of the credits.
energy efficient and cleaner
coal technologies.

CRS-17
Electricity Restructuring Provisions
Provision
Current Law
House Bill (H.R. 6)
Senate Bill (H.R. 6)
SFC Amendment
OPEN ACCESS AND TAX-
Current federal tax provisions
No provision.
Sec. 2405. This provision
No provision.
EXEMPT BONDS
relating to the use of tax-exempt
eases somewhat the
bonds effectively preclude public
restrictions in IRS temporary
power entities with outstanding
regulations with respect to
bonds from participating in open-
issuers of tax-exempt bonds
access restructuring plans because of
qualifying under the “output
the tax code’s private-use
facilities” provisions and
restrictions.
participating in open access
[IRC§103, 141-147]
plans.
SALE OR DISPOSITION OF
Under present tax law, the sale of
Sec. 42007. Gain from the sale or
Sec. 2404. Generally the
Sec. 603. Same as the
TRANSMISSION ASSETS
electricity transmission or
disposition of transmission assets
same as in the House bill, but
Senate version of H.R. 6,
distribution facilities is generally not
before December 31, 2006 is
with fewer restrictions.
but applies to sales through
considered to be an involuntary
recognized over 8 years.
December 31, 2007.
conversion, thus such sales generally
trigger a tax, which could inhibit pro-
competitive 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]
RECOVERY PERIOD FOR
The current law recovery period for
Sec. 42003. Shortens the recovery
Sec. 2404. Gain from the sale
No provision.
TRANSMISSION
transmission property is generally 20
period for transmission property
or disposition of transmission
PROPERTY UNDER
years.
from 20 to 15 years.
assets is recognized over 8
DEPRECIATION
[IRC §168(e)(3)]
years.
PROVISIONS

CRS-18
Provision
Current Law
House Bill (H.R. 6)
Senate Bill (H.R. 6)
SFC Amendment
NUCLEAR
Deductions into a nuclear
Sec. 42008. In addition to the
Sec. 2402. The Senate bill
Sec. 601. The Senate
DECOMMISSIONING
decommissioning fund are limited to
amendments made by the Senate
repeals provisions that limited
substitute amendment is the
FUNDS
the lesser of the amounts relating to
bill, the House provision further
the deduction to regulated
same as the Senate’s
the cost of service regulations or the
liberalizes the tax treatment of
utilities, thus liberalizing the
version of H.R. 6.
IRS’s ruling amount. Funds may be
nuclear decommissioning costs.
deduction in the context of
transferred tax-free in connection
Unlike the Senate bill, the House
utility restructuring and
with a change in ownership of the
provision allows a utility to make
deregulation. It clarifies that
nuclear facility to which they relate,
contributions into the fund in
transfers of funds do not
but the transferee generally has to be
excess of the maximum amount
trigger a tax, and that the
a regulated utility eligible to
established by the Internal Revenue
actual decommissioning costs
maintain such a fund. In a
Service in certain circumstances.
are deductible when paid
deregulated and restructured
rather than when the actual
industry, ambiguity regarding the tax
decommissioning begins.
treatment of decommissioning fund
transfers may make such transactions
taxable.
[IRC§468A]
ELECTRIC
In general, cooperatives are exempt
Sec. 42009. The provision in the
Sec. 2403, 2406. The income
Sec. 602. The Senate’s
COOPERATIVES
from tax although patrons must pay
House bill is generally the same as
received by a rural electric
substitute amendment is the
tax on any distributed profits as
the Senate bill, except that it limits
cooperative from any open
same as the Senate’s
“patronage dividend.” Rural electric
the types of income not counted
access (or nuclear
version of H.R. 6.
cooperatives are also exempt from
against the 15% test.
decommissioning) transaction
tax and patrons do not have to report
with a nonmember, and from
dividends, provided that no more
certain other transactions, is
than 15% of the cooperative’s
excluded from the 15% test.
income is from services to
Thus, participating in open
nonmembers.
access restructuring plans
[IRC§501,512]
would not jeopardize
cooperatives’ tax exemption.
Certain gross income from
any electricity to be used to
develop unconventional fuels
is also excluded.

CRS-19
Energy Efficiency
Business Sector
Provision
Current Law
House Bill (H.R. 6)
Senate Bill (H.R. 6)
SFC Amendment
COMBINED HEAT AND
No special tax subsidies are
Sec. 41006. Combined heat and
Sec. 2108. Generally the same
Sec. 308. Generally the same
POWER SYSTEMS
provided to combined heat and
power systems larger than 50
as the House bill.
as the House and Senate bills.
power (cogeneration) systems; the
kilowatts (kW) would be treated
recovery period for purposes of
as business energy property, thus
depreciation is generally 15 years.
qualifying for the 10%
investment tax credit; the
recovery period is increased to
22 years. Property using back-
pressure steam turbines is also
eligible.

CRS-20
Provision
Current Law
House Bill (H.R. 6)
Senate Bill (H.R. 6)
SFC Amendment
ENERGY EFFICIENCY IN
Energy efficiency property that is
No provision.
Sec. 2105. Expenditures on
Sec. 305. Same as the Senate
COMMERCIAL
installed as part of a structure is
energy efficiency property
bill.
BUILDINGS
depreciable over 39 years — it has
made with respect to a
the same recovery period as the
commercial building are tax
structure.
deductible (rather than
[IRC§168(c)]
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.

CRS-21
Residential Sector
Provision
Current Law
House Bill (H.R. 6)
Senate Bill (H.R. 6)
SFC Amendment
ENERGY-
No special tax treatment is
Sec. 41004. A tax credit of 20% is
Sec. 2103, 2109. Expenditures on
Sec. 303, 309. Generally the
EFFICIENCY ITEMS
accorded to homeowners for
provided for expenditures on energy
selected types of energy-efficient
same as the Senate bill.
IN EXISTING
purchases of more energy
efficient improvements (more
heating/cooling technologies
HOMES
efficient water heaters,
heating & cooling units and more
(furnaces, water heaters, AC units,
furnaces, and air conditioners.
energy efficient envelope
heat pumps) made either on existing or
components) retrofitted to existing
new homes are allowed a tax credit
homes. The maximum lifetime credit
ranging from $75-$250/unit if they
would be $2,000. Units and
meet certain energy efficiency
materials must meet Energy
guidelines. Other energy-efficiency
efficiency guidelines, but there is no
improvements to existing homes
criteria for a certified reduction in
qualify for a credit equal to 10% of the
energy costs as in the Senate version
costs ($300 maximum) if a certified
of H.R. 6.
reduction in heating and cooling costs
of at least 30% is achieved.
ENERGY-EFFICIENT
No special tax break is
Sec. 41005. A tax credit is provided
Sec 2101 Generally the same as the
Sec. 301. Generally the same
NEW HOMES
available to builders who
to a builder for the costs of energy-
House bill, except that the maximum
as the House and Senate bills,
construct more energy
efficiency property (insulation,
credit for property that reduces energy
except that the maximum credit
efficient new homes.
windows/doors, new roofs, and
use by 30% is $1,250 ($2,000 for
is $1,000 for “30% property,”
heating/cooling equipment), which
“50% property.”) Energy efficiency
and $2,000 for “50% property.”
reduce home energy use by 30%.
improvements must also be certified as
The maximum credit is $2,000. The
meeting certain standards and that
30% reduction must be below a
they reduce a home’s heat loss or gain
comparable reference dwelling must
by the required fractions. Eligible
certified.
property includes heating and cooling
equipment.

CRS-22
Provision
Current Law
House Bill (H.R. 6)
Senate Bill (H.R. 6)
SFC Amendment
HOME APPLIANCES
There is no special tax
No provision.
Sec. 2102. Increased production of
Sec. 302. Very similar to the
incentive for either the
more energy-efficient clothes washers
Senate bill, except that the
production or purchase of
would qualify for $50 tax credit per
efficiency standards are stricter
energy efficient appliances
washer ($100 for refrigerators.) The
and there is provision for a
(although regulations set
total credit for any manufacturer is
$150 tax credit for still more
standards for energy use
subject to certain limits, including an
energy-efficient refrigerators.
efficiency and labeling).
annual gross receipts limit, and a
The amount depends on the
cumulative lifetime credit limit per
degree of improvements in
manufacturer of $30 million for
energy efficiency.
washers, and $60 billion for both
appliances.
ENERGY
Current law provides no
No provision.
Sec. 2106,2107. A tax deduction is
Sec. 306, 307. The three-year
MANAGEMENT AND
special tax incentives for
provided to utilities for the cost, up to
recovery period applies to both
WATER
meters, thermostats, and other
$30/unit, of energy management
energy management and water
SUBMETERING
energy management devices
devices installed in residences or
submetering devices — the tax
DEVICES
that allow utilities or
businesses; the recovery period for
deduction provision is dropped.
consumers to monitor,
depreciation purposes would be 3
control, and thereby possibly
years.
conserve electricity or natural
gas. Such property is
depreciable if used in a
business.

CRS-23
Transportation Sector
Provision
Current Law
House Bill (H.R. 6)
Senate Bill (H.R. 6)
SFC Amendment
NEW HYBRID
Under current law there is no
Sec. 41010. No additional tax
Sec. 2001, 2010. A tax credit is
Sec. 201. A base tax credit is
VEHICLES
tax credit for hybrid vehicles,
incentives for hybrid vehicles, but
provided to purchasers of hybrid
provided to purchasers of
but they may qualify for a
existing clean-fuel vehicle tax
vehicles, ranging from $250-$9,000 for
hybrid vehicles, ranging from
deduction of up to $2,000 as
deduction phase-out, which begins in
cars and light trucks, and $4,000-
$250-$1,000 for cars and light
clean-fuel vehicles.
2004 and ends in 2006, is repealed.
$13,000 for heavy trucks. The precise
trucks, and $1,000-$10,000
[IRC§179A]
Thus, the current tax deduction
credit depends upon vehicle weight,
for heavy trucks. An
would be made permanent.
power, and fuel efficiency. For heavy
additional tax credit ranging
trucks, the credit is increased further if
from $500-$3,000 for cars and
they meet emissions performance
light trucks, and from $400-
standards.
$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
Electricity producers may claim a
Sec. 41002. The House bill expands
Sec. 1901-1906. The Senate bill
Sec. 101-106. Very similar to
RENEWABLE FUELS
tax credit of 1.5¢/kWh (in 1992
the list of renewables to include
expands the list of qualifying
the Senate bill but generally
dollars) for electricity produced
open-loop biomass, landfill gas,
renewables to include coal co-fired
a broader expansion of the
from wind energy, “closed-loop”
and trash combustion facilities.
with closed-loop biomass, open-
tax credit. Raises the credit
biomass, or poultry waste. The
Extends placed-in-service deadline
loop biomass (at 1¢ instead of
rate on new facilities to 1.8¢
credit for 2003 is 1.8¢/kWh.
to 12-31-2006. The credit for open-
1.5¢), swine & bovine waste,
(but without inflation
Investments have to be made, and
loop biomass and landfill gas
geothermal, solar energy, small
adjustment); defines
the facility has to commence
applies retroactively but is reduced
irrigation power facilities,
agricultural waste nutrients
production, by December 31, 2003.
to 1.0¢/kWh. instead of 1.5¢, and is
municipal biosolids, and recycled
more broadly than in the
A 10% tax credit is provided for
available for 5 years instead of the
sludge. The placed-in-service
Senate bill; and reduces the
investment in 1) solar and
normal 10 years.
deadline is extended by three years
tax credit for open-loop to
geothermal equipment used to
from 12-31-2003 to 12-31-2006
1.2¢ rather than 1.0¢.
generate electricity (including
(12-31-2004 for open-loop
photovoltaic systems), 2) solar
biomass, which has 3 years to
energy used to heat or cool a
receive the credit instead of the
structure, and 3) solar energy used
normal 10 years). The Senate
for process heat. Geothermal
provision also allows 1) lessee-
energy reservoirs qualify for a 15%
operators (rather than owners) to
percentage depletion allowance.
qualify for the tax credit; 2) tax-
The recovery period for renewable
exempt entities to sell or trade any
technologies is 5 years.
unused tax credits; and 3) rural
[IRC§45,46,48, 613(e)] [IRC§45]
electric coops to use the tax credits
to pay back government subsidized
loans. Other limitations are also
liberalized or repealed.

CRS-25
Provision
Current Law
House Bill (H.R. 6)
Senate Bill (H.R. 6)
SFC Amendment
SMALL ETHANOL
Present law provides small fuel
No provision.
Sec. 2005. This provision 1) allows
Sec. 205. This provision is
PRODUCER TAX
ethanol producers (ones that
patrons of farmers’ cooperatives to
the same as the Senate
CREDIT
produce less than 15 million
qualify for the 10¢ small producer
version of H.R. 6.
gallons/year, and have less than 30
credit; 2) defines a small producer
mil. gal. in production capacity)
as one with <60 mil. gal. capacity;
with 10¢/gal. tax credit. Any credit
3) exempts the credit from the
claimed must be reported as income
passive activity rules; 4) allows the
subject to tax. Cooperatives are tax-
credit against the alternative
exempt and therefore do not benefit
minimum tax; and 5) exempts the
from the producer credit, which
credit from the regular income tax
cannot flow through to patrons.
under IRC§87.
[IRC§40, 87]
EXCISE TAX
In addition to the small ethanol
No provision.
No provision.
Sec. 208. The exemption for
EXEMPTION OR
producers credit, fuel ethanol
fuel ethanol would be
BLENDER’S TAX
benefits from a 5.2¢ excise tax
replaced with a refundable
CREDIT FOR FUEL
exemption on 90-10 blends from
tax credit of 52¢/gal.
ETHANOL
the gasoline tax of 18.4¢/gal. and
immediately available
the diesel tax of 24.4¢/gal. In lieu
against the new higher excise
of the exemption, an equivalent 52¢
taxes for all fuel ethanol
blender’s tax credit is available per
blends.
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]

CRS-26
Provision
Current Law
House Bill (H.R. 6)
Senate Bill (H.R. 6)
SFC Amendment
FUEL ETHANOL AND
Present tax law on fuel ethanol
No provision.
Sec. 2006. Beginning on 10-1-
Sec. 208. Same as the Senate
THE HIGHWAY
blends results in revenue losses to
2003, the 2.5¢ component of the tax
version of H.R. 6.
TRUST FUND
the Highway Trust Fund (HTF) of
on fuel ethanol blends will be
7.7¢/gal., comprising for 90/10
allocated into the HTF.
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
Under IRS regulations, the ether
No provision
Sec. 2007. The Senate bill permits
Sec. 207. The Senate
PRODUCE GASOHOL
ETBE (ethyl tertiary butyl ether)
refiners to claim the blender’s tax
amendment is the same as
blended with gasoline qualifies for
credit as a credit against excise
the Senate bill. Both bills
the same tax advantages as ethanol
taxes otherwise due on the ETBE
clarify statutes and IRS
blended with gasoline, but the
blended fuel. The bill allows the
regulations.
blender’s credit on ethanol used to
transfer of such credit to any
produce ETBE can be claimed only
taxpayer with any gasoline excise
by blenders.
tax liability
[IRC§40,4081]
BIODIESEL
Under present law, biodiesel has no
No provision.
Sec. 2008. The bill provides an
Sec. 208. The bill provides a
special tax break, and, as a
income tax credit for biodiesel
tax credit — in the amount
transportation fuel, it is taxed at the
mixtures used as a fuel. The credit
of 1¢ for each 1% of
same rate as petroleum diesel: 4.4¢
is 1¢ for each 1% of biodiesel made
biodiesel made from virgin
for trains, and 24.4¢ for barges and
from virgin vegetable oil and
vegetable oil and blended
trucks.
blended petroleum diesel. The
with petroleum diesel. The
[IRC§4041, 4042, 4081]
maximum credit is 20¢/gal. The tax
maximum credit is 20¢/gal.
credit for recycled vegetable oil is
The tax credit for recycled
½ the credit for virgin biodiesel.
vegetable oil is ½ the credit
The excise tax otherwise due on
for virgin biodiesel. In
highway biodiesel is reduced by the
addition, a new biodiesel
amount of the tax credit.
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
Current Law
House Bill (H.R. 6)
Senate Bill (H.R. 6)
SFC Amendment
BUSINESS USE OF
A 10% tax credit is provided for
Sec. 41003. A 10% tax credit is
Sec. 2104. Business investments in
Sec. 304. The Senate
RENEWABLE
investment in solar equipment used
provided for investments in
fuel cells would qualify for a 30%
amendment is the same as
TECHNOLOGIES
to 1) generate electricity (including
stationary fuel cells, subject to a
tax credit subject to a limit of
the Senate bill.
photovoltaic systems), 2) used to
maximum credit of $1,000/kW of
$1,000/kW of capacity; investments
heat or cool a structure, and 3) used
capacity.
in stationary microturbine power
for process heat. Geothermal
plants would qualify for a 10% tax
energy reservoirs qualify for a 15%
credit and the limit would be
depletion allowance. Electricity
$200/kW of capacity.
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)]
Residential Sector
Provision
Current Law
House Bill (H.R. 6)
Senate Bill (H.R. 6)
SFC Amendment
RENEWABLE ENERGY
There are no tax subsidies for
Sec. 41001, 41003. A 10% tax
Sec. 2103. A 15% tax
Sec. 303. A tax credit is provided
TECHNOLOGIES
residential applications of solar,
credit (up to $2,000) is provided
credit is provided for
for residential applications of
wind, and other renewable energy
for residential applications of
residential applications of
renewable technologies: 15% credit
technologies. The 1978 energy tax
solar technologies (10% credit to
solar technologies (30% for
for solar (including photovoltaics),
credits for solar and wind expired
residential fuel cells, up to
wind, and 20% for fuel
and 30% for wind and fuel cells.
in 1985.
$1,000/kW of capacity).
cells subject to a maximum
The maximum credit is $2,000
credit of $1,000 for fuel
except for fuel cells, which are
cells, and $2,000 for other
limited to $1,000/kW of capacity.
technologies).

CRS-28
Transportation Sector
Provision
Current Law
House Bill (H.R. 6)
Senate Bill (H.R. 6)
SFC Amendment
ALTERNATIVE-FUEL
The incremental costs of an
Sec. 41011. Provides a base tax credit for
Sec. 2001. For fuel cell vehicles the
Sec. 201. Generally the same
VEHICLES
alternative fuel vehicle are tax
fuel cell vehicles ranging from $4,000 to
credit is generally the same as the
as the Senate bill. Under
deductible, up to $2,000 for a
$40,000 per vehicle depending on the
House bill. But also provides a
both bills, lessors (under
car, and $50,000 for a truck.
vehicles weight; provides additional tax
40% tax credit for the incremental
safe harbor leasing rules)
This applies to vehicles
credits depending on fuel efficiency
costs of an alternative fuel vehicle.
may qualify for the tax
powered by LPG, LNG, CNG,
guidelines. Provides a tax credit for
An additional 30% tax credit is
credit, thereby benefitting
hydrogen, E85 and M85. The
“advanced lean-burn technology
available if the vehicle meets
state and local governments,
credit phases out beginning in
vehicles,” ranging from a base of $500 to
certain Clean Air Act standards.
and other tax-exempt
2004 and ending in 2006.
$3,000 depending on fuel efficiency, and
The maximum credit would be
entities.
[IRC§179A]
an additional tax credit depending on fuel
$5,000-$40,000, depending on
savings. There are no other tax credits
vehicle weight. The latter credit is
for alternative fuel vehicles. The credits
not in the House bill.
in the House bill may be carried forward
for up to 20 years.
NEW FUEL CELL
Fuel cell vehicles may qualify
Sec. 41011. For fuel cell vehicles, the
Sec. 2001. A tax credit is provided
Sec. 201. Generally the same
VEHICLES
for the $4,000 electric vehicle
House provision is generally the same as
to purchasers of fuel cell vehicles,
as the Senate bill.
tax credit (discussed below).
the Senate bill, except for differences in
ranging from $4,000-$10,000 for
[IRC§30]
the base (or reference vehicle) fuel
cars and light trucks (depending
economy for purposes of the additional
upon vehicle weight, and fuel
tax credit. The House bill also covers
efficiency), and $20,000- $40,000
“advanced clean-burn technology
for heavy fuel cell trucks. An
vehicles,” which are not in the Senate
additional credit for cars and light
bill. The credits in the House bill for fuel
trucks powered by fuel cells is
cell vehicles may be carried forward for
provided, ranging from $1,000-
up to 20 years.
$4,000 depending on percentage
improvements in fuel efficiency
relative to a reference conventional
vehicle.

CRS-29
Provision
Current Law
House Bill (H.R. 6)
Senate Bill (H.R. 6)
SFC Amendment
ALTERNATIVE-FUEL
A maximum lifetime tax
No provision.
Sec. 2003,2010. The Senate bill
Sec. 203. Both the Senate
REFUELING
deduction, up to $100,000, is
replaces the current deduction with
bill and the Senate
STATIONS
provided for the costs of
a 50% tax credit, through 2007, for
amendment also would
alternative fuel refueling
the costs of clean-fuel refueling
permit businesses that install
property (excluding
equipment (subject to a maximum
refueling equipment on
installation costs). This
tax credit of $30,000). It adds
property owned by tax-
deduction expires in 2006.
“residential clean-refueling
exempt entities to qualify for
[IRC§179A]
property” to qualifying property,
the tax credit.
subject to a maximum credit of
$1,000. For hydrogen refueling
stations, the credit is available
through 2011.
RETAIL SALE OF
Fuel ethanol (and methanol)
No provision.
Sec. 2004. A 30¢/gal. tax credit
Sec. 204. This provision is
ALTERNATIVE
qualifies for an excise tax
(rising to 50¢/gal. by 2005) is
the same as in the Senate
FUELS
exemption. Fuel ethanol also
provided for the retail sale of an
bill.
qualifies for blender’s and
alternative fuel (CNG, LNG, LPG,
production tax credits. CNG
hydrogen, E85, and M85). The
and other alternative fuels are
credit is based on the gasoline
taxed at lower rates, as
equivalent of alternative fuel, rated
measured against the Btu
at 114,000 Btu/gal. of gasoline.
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]

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
Sec. 41010. Repeals the phase-out of the
Sec. 2002. The Senate bill repeals
Sec. 202. This is generally
$4,000, is available for the
existing tax credit. No additional
the existing credit and provides a
the same as in the Senate
costs of an electric vehicle.
incentives are provided.
new tax credit of between $3,500
bill.
The credit phases out from
and $40,000, depending on vehicle
2004-2006. The Job Creation
weight, payload capacity, and
and Worker Relief Act of
driving range. A smaller tax credit
2002 (P.L. 107-147)
(10% of costs up to $1,500) is
retroactively extended the
provided for electric vehicles with a
phase-out dates from 2002-
maximum velocity of between 20-
2004 to 2004-2006.
25 mph. Leases of electric vehicles
[IRC§30]
would also qualify for the tax
credit.

CRS-31
Miscellaneous Provisions
Provision
Current Law
House Bill (H.R. 6)
Senate Bill (H.R. 6)
SFC Amendment
STUDY OF COALBED
Coalbed methane is one of the
No provision.
Sec. 2309. The Secretary of
Sec 509. This is the
METHANE
unconventional fuels that qualifies for
the Treasury shall study the
same as in the Senate
the §29 tax credit. There is no provision
effects of the §29 tax credit
bill.
in current law for the study of the effects
on the production of coalbed
of the §29 tax credit on coalbed methane.
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.
STUDY OF ELECTRICITY
No part of current tax law directs the
No provision.
Sec. 2401. The Treasury
No provision.
RESTRUCTURING TAX
Treasury Department to study, and report
Secretary shall undertake a
ISSUES
to the Congress, the tax issues related to
study of the tax issues
the restructuring of the electric utility
resulting from electricity
industry.
industry restructuring,
particularly the effects of
tax-exempt bonds on public
power and on corporate
reorganization.
STUDY OF CERTAIN TAX
There is no provision in the Internal
No provision.
Sec. 2502. GAO is directed
Sec. 702. Same as in the
INCENTIVES
Revenue Code directing the General
to undertake an analysis of
Senate bill.
Accounting Office to study the effects of
the effectiveness of the tax
the tax incentives for alternative motor
incentives for alternative
fuels and for energy efficiency.
motor vehicles and
alternative fuels and energy
efficiency investments
proposed in the bill.

CRS-32
Provision
Current Law
House Bill (H.R. 6)
Senate Bill (H.R. 6)
SFC Amendment
DUTY-FREE SALES OF
Customs duties are imposed on the
No provision.
Sec. 2504. The Senate bill
Sec. 209. This is exactly
GASOLINE AND DIESEL
importation of commodities into the
provides that any gasoline or
the same as in the Senate
United States. The duty on gasoline and
diesel sold in duty-free
bill.
diesel imports is 52.5¢/barrel
shops will be considered
(1.25¢/gal.). Commodities sold in duty-
entered for consumption,
free shops may be sold duty-free if the
and therefore subject to
commodity is not entered into the United
duty.
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)]
ENERGY CREDITS AND THE
Under current law, energy-related
Sec. 43006, 43007. These
No provision.
No provision.
ALTERNATIVE MINIMUM
income tax credits, and many of the non-
sections make the minimum tax
TAX
energy tax credits, are aggregated and
limitation inapplicable to
claimed as one general business credit,
several of the personal and
which is also subject to several
business energy tax credits
limitations, including the alternative
introduced by the bill.
minimum tax limitation.
[IRC§38]
ENERGY RESEARCH AND
A 20% tax credit is available on the
No provision.
No provision.
Sec 704. The 20% credit
DEVELOPMENT (R&D) TAX
amount by which a taxpayer’s qualified
is available for all
CREDIT
research expenses for a taxable year
expenditures on
exceed its base amount for that year. In
qualified energy research
lieu of this credit, a taxpayer may claim
undertaken by a research
an alternative incremental research
consortium, and not just
credit. The research credit is scheduled to
those expenses over a
expire and generally will not apply to
certain base amount. The
amounts paid or incurred after June 30,
June 30, 2004 deadline
2004. [IRC§41]
is unchanged.

CRS-33
Provision
Current Law
House Bill (H.R. 6)
Senate Bill (H.R. 6)
SFC Amendment
COAL MINER’S HEALTH
In 1992 the Congress established a health
Sec. 42011. The proposal
No provision.
No provision.
BENEFITS FUND
benefits fund to pay for the medical
allows assigned coal operators
expenses of retired miners and their
to be relieved of their liability
dependents. Coal operators make annual
to make annual contributions,
contributions for each retired miner
provided that the operator’s
assigned to a particular operator.
parent company prepays the
[IRC§9704]
premiums.
TAX TREATMENT OF DAIRY
Under present tax law, involuntary
No provision.
Sec. 2505. The Senate
No provision.
CATTLE
conversions of property or assets — such
provision treats the
as from theft, fire, or actual or threatened
destruction of dairy cattle
condemnation — are not generally
infected with bovine
subject to tax, i.e., any gain or loss is not
tuberculosis, as part of
recognized, provided that the property is
USDA’s eradication
replaced within a specified period of
program, as an involuntary
time, generally two years.
conversion for tax purposes,
[IRC§1033]
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.

CRS-34
Revenue Offsets
Provision
Current Law
House Bill (H.R. 6)
Senate Bill (H.R. 6)
SFC Amendment
ANTI-TAX SHELTERS
Numerous provisions of current tax
No provision.
No provision.
Sec. 801-807. The Senate
PROVISIONS
law and supporting regulations are
amendment creates additional
designed to encourage compliance
restrictions on behaviors and
with the tax laws, and impose
transactions that create illegal
penalties on taxpayers that engage in
or abusive tax shelters.
transactions and behaviors designed to
Additional penalties are
abuse the tax laws and evade the
imposed for violating these new
payment of taxes through “tax
rules, both on the taxpayer and
shelters.” [IRC§ 6111, 6112,6708
the tax-shelter promoters.
6662A,6700,6707, 6707A, 7525]
TAX TREATMENT OF
The inversion of ownership from a
Sec. 44001,44002. The
No provision.
Sec 821. Establishes new tax
FOREIGN
U.S. corporation with a foreign
House provision imposes a
consequences for each type of
REINCORPORATIONS
subsidiary to a foreign corporation
moratorium on corporate
corporate inversion transaction,
with a U.S. subsidiary has certain tax
inversion transactions
generally denying tax benefits
benefits for both the corporation and
undertaken between March
to such transactions.
its shareholders when the parent
4, 2003, and January 1,
corporation is established in a country
2005, and expresses the
with taxes lower than in the United
sense of the Congress that
States.
this section of the tax code
[IRC§ 367]
needs to be reformed.
EXCISE TAX ON STOCK
Shareholders generally are required to
No provision.
No provision.
Sec 822. Holders of stock
COMPENSATION OF
recognize any gain from a stock
options and other stock-based
INSIDERS OF INVERTED
inversion transaction, but not for
compensation are subject to a
REINCORPORATIONS
holders of stock options and other
20% excise tax on the value of
stock-based compensation. [IRC§83]
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
No provision.
No provision.
Sec. 823. The Senate provision
agreement, the Treasury Secretary has
clarifies the rules relating to the
the authority to make adjustments in
Secretary’s authority to make it
order to more properly reflect income.
easier to adjust reinsurance
In cross border transactions, this
agreements in order to more
procedure is more difficult.
properly reflect and measure
[IRC§ 845]
income.
INDIVIDUAL EXPATRIATION
U.S. citizens are taxed on their
No provision.
No provision.
Sec. 833. Tightens existing
worldwide income; a tax credit is
rules, and adds new more
allowed against foreign taxes.
stringent rules (including
Expatriates intending on avoiding
additional information
U.S. taxes are taxed under an
requirements) on expatriates
alternative tax regime if it results in
intending on terminating
more tax than under the rules
residency or citizenship for the
applicable to nonresidents/noncitizens.
purpose of evading U.S. taxes.
[IRC§877,2107,2501,6039]
Imposes more objective criteria
in making such determinations.
IRS USER FEES
The Internal Revenue Service charges
No provision.
No provision.
Sec. 831. The Senate bill
taxpayers fees for certain services it
extends the authority to impose
renders: letter and revenue rulings,
these fees by 10 more years,
determination and opinion rulings,
through September 30, 2013. It
and other similar services. The fee
also authorizes these fees in tax
amount depends upon the type of
statutes, in addition to
ruling and the section of the tax code
regulations.
it pertains to. The authority for these
fees expires on September 30, 2003.
[§10511, P.L. 100-203]
TAXABLE VACCINES
Several vaccines routinely
No provision
No provision.
Sec. 842. The Senate
administered to children are subject to
amendment expands the list of
a manufacturer’s excise tax at the rate
taxable vaccines to hepatitis A.
of 75¢/dose. Revenues are deposited
into the Vaccine Injury Compensation
Trust Fund. [IRC§4132]