The lead Republican negotiators working on an omnibus energy bill have put off a final compromise version of the legislation for several days because tax provisions remain unresolved. One of those provisions is believed to be the tax treatment of ethanol fuel, a congressional aide says.

Senate energy committee Chairman Pete Domenici (R-N.M.) and House Energy and Commerce Committee Chairman W.J. "Billy" Tauzin (R-La.) said on Oct. 20 they intend to hold a conference meeting early the week of Oct. 27. In a statement, they said, "Even though they continue to make good progress, House and Senate tax writers need additional time to complete their portion of the energy conference report." They also note that the House is taking a recess of several days, after their Oct. 21 session.


Domenici and Tauzin added, "We are absolutely confident of putting a comprehensive energy bill on the President's desk this year which will promote conservation, reduce America's growing dependence on foreign oil and create new jobs."

One of the remaining tax issues is how to deal with ethanol fuels, or gasohol, says Bill Wicker, spokesman for Senate energy committee Democrats. At present, gasohol is taxed at 5.2 cents per gallon less than gasoline or diesel fuel, and as use of ethanol fuel rises, it reduces the amount of potential revenue flowing into the Highway Trust Fund for road building. Senate leaders have been pushing for a provision in the omnibus energy bill that would triple the use of ethanol. To protect the trust fund from that hit--estimated at an additional $2 billion a year--the Senate Finance Committee has approved a tax credit equal to the gasoline-gasohol tax spread for refiners who blend ethanol into motor fuels.


David Bauer, vice president for government relations with the American Road & Transportation Builders Association, says that leaders of the Senate Finance and House and Senate transportation committees are pushing to include the ethanol tax credit in the energy package. But he adds, "It is no secret that Ways and Means Committee Chairman [Bill] Thomas would not prefer it be done on the energy bill."

Bauer says, "The senate is hard core" in its support of the ethanol credit. "This is not something that they will allow to be left out of the energy bill."

(Photos courtesy of offices of Sen. Pete Domenici and Rep. Billy Tauzin)