Letter to the Honorable MItch McConnell, Majority Leader of the U.S. Senate and the Honorable Harry Reid, Minority Leader of the U.S. Senate - Call Against Attaching Tax Credit Extensions to FAA Bill

Letter

Dear Leader McConnell and Leader Reid:

We urge you to resist the temptation to clutter this important legislation with tax extensions aimed at placating a few special interests.

Despite concerns and after months of negotiation, Congress approved the extension of more than $600 billion in expiring tax provisions, including renewable energy provisions such as the solar Investment Tax Credit (ITC) and the wind Production Tax Credit (PTC). In December, a deliberate decision was made to omit certain credits like those for fuel cells, small wind turbines, and combined heat and power.

This latest effort to hastily extend market-distorting tax policies is imprudent. Congress not only lacks critical information necessary to determine whether these credits are effective, but the information it does have suggests that some programs lack proper oversight. For example, in its May 2015 report examining federal support for the electricity generation projects, the Government Accountability Office (GAO) found that because the Internal Revenue Service does not collect project-level data for the ITC and PTC, "Congress cannot evaluate their effectiveness as it considers whether to reauthorize or extend them." What's more, in November, the Treasury Department revealed that as FY2015 claimants of the closely related Section 1603 cash grants, which can be received in lieu of the tax credits, have overstated the cost basis of their property or otherwise sought ineligible costs to the tune of $1.3 billion.

It is past time to let these technologies stand on their own. We ask that you resist the efforts to add these tax extenders to the FAA reauthorization bill currently on the floor.