Final tax bill drops propane incentives

November 1, 2004 By    

In a flurry of last-minute negotiations before Congress broke for the election season, tax breaks to encourage propane use were dropped from the final tax bill.

 Charles Pekow
Charles Pekow

Congress approved the American Job Creation Act of 2004 without billions of dollars in special tax incentives, but House conferees insisted on dropping provisions in Senate drafts designed to spur propane use. Deleted provisions include a deduction for buying clean-fuel autos, credits for buying hybrid and clean-fuel vehicles, and a 50 percent credit for installing clean-fuel vehicle refueling stations.

Conferees also nixed a Senate provision that would have provided tax credits for using LPG as an automotive fuel for two years, and another that would have given contractors tax credits for building energy-efficient homes.

Congress also deleted credits for making energy-efficient washing machines and refrigerators. Gone also is a Senate-passed tax credit for buying energy-efficient propane furnaces, water heaters, fans and heating systems; and others for installing energy-saving facilities in businesses and energy management devices in homes.

Same thing with the Senate proposal for credits for energy improvements in homes.

But the fight to extend the auto tax credit continues. Rep. Dutch Ruppensberger (D-MD) and Sen. Barbara Mikulski (D-MD) introduced the Common Sense Automobile Efficiency Act of 2004, referred to the House Ways & Means and Senate Finance committees, which would repeal the phase-out of the Deduction for Clean Fuel-Vehicles, keeping the deduction indefinitely at $4,000 for fuel-cell vehicles.

Congress also went home to campaign for re-election having punted other crucial decisions. It hasn’t passed most appropriations bills for 2005, which began Oct. 1. Instead, it passed a temporary funding bill keeping energy and transportation programs funded at last year’s levels through Nov. 20. It will have to take up yearlong funding for transportation and energy assistance when it returns.

Congress postponed work on long-term reauthorization of the Transportation Equity Act and passed another temporary surface transportation law lasting through May. TEA-21 expired more than a year ago but Congress hasn’t been able to agree on a replacement.

Meanwhile, the Senate Science Committee approved the Surface Transportation Research & Development Act, which would start a $75 million-a-year Future Strategic Highway Research Program at the National Research Council. The project would study ways to minimize disruptions when highways get renovated, reducing crashes and delays, etc. The bill now goes to the Transportation Committee.

Finally, Sen. Jim Jeffords (I-VT) introduced a reauthorization bill that would increase funding for LIHEAP to $3.4 billion through 2010.

Briefly Speaking

  • Hurricane-damaged pipelines

The Research & Special Programs Administration issued an advisory bulletin warning of possible pipeline damage caused by Hurricane Ivan in the Gulf of Mexico and adjacent waters.

The storm damaged lines in several Gulf states. Operators should warn commercial boaters that submerged pipelines might become unprotected and check for possible damage.

In light of two death-causing accidents, RSPA also issued an advisory bulletin warning pipeline operators to guard against unexpected separation of temporary de-watering pipes during de-watering procedures.

RSPA also announced that a new rule modifying pressure limits on certain pipelines took effect Oct. 8. It proposed to codify its interpretation of who is covered by hazmat transit regulations.

The agency is taking comments through Nov. 23. See the Sept. 24 Federal Register.

  • Inventory cushion building

September set a record for the biggest build in propane inventories, Energy Information Administration reported. The month saw an increase of 8.6 million barrels, almost twice the 34-year-old record of 4.6 million. Since April, more than 40 million barrels have been added, compared with the average build of 35.1 million over the last five years. Therefore, “the propane industry has begun to build a small but important cushion prior to the start of the next heating season,” EIA said.

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