The Senate Finance Committee has approved an energy tax package that would provide a boost to struggling independent oil and gas producers as well as some tax breaks for conservation.
The measures, including a tax write-off for employers who subsidize the use of mass transit by workers, are similar to provisions in a wide-ranging energy bill approved by the House last month.The tax legislation will have to be incorporated into a broader energy bill that the Senate already has approved and then be consolidated with the House version.
The tax changes are designed to spur domestic oil and gas production, stimulate the development of renewable energy sources such as solar, promote the use of mass transit and ride-sharing by commuters and encourage the purchase of alternative fuel vehicles.
The lawmakers agreed to provide independent oil and gas producers with nearly $1.1 billion in relief over five years from the alternative minimum tax, which was enacted in 1986 to keep corporations from escaping income tax payments in some years.
The independent producers had lobbied heavily this year for tax relief, arguing that the added tax burden imposed in 1986 has contributed to the industry's decline, with a record low number of drilling rigs now in operation.
The committee rejected an attempt by Sen. Bill Bradley, D-N.J., to scuttle the relief for the independents. "If we're going to spend $1.1 billion I'd rather have it for child care than . . . for the oil and gas industry," said Bradley.