Congress Kills Landfill Gas Tax Provision

A provision in the Taxpayer Refund Act of 1999 that would have provided a tax credit for new landfill gas (LFG) projects passed the U.S. Senate this summer but later ran out of steam in the U.S. House of Representatives.

John Skinner, CEO of the Solid Waste Association of North America (SWANA), Silver Spring, Md., says his organization had been lobbying Congress to include LFG tax provisions since the previous tax credit expired in June 1998. About 200 LFG projects took advantage of tax breaks under the old code, and approximately 400 more could come to fruition with a new tax credit, he says.

The provision, Section 45 of Senate Bill 1429, would have "provided economic incentive for these plants to be built," Skinner says. "Most could not [be built] without this tax credit."

LFG projects require a landfill to build a plant onsite to burn LFG into energy, which is one of several ways to dispense of the gas.

SWANA worked with Sen. John Chafee, R-R.I., chairman of the environment and public works committee, and Sen. William Roth, R-Del., chairman of the finance committee, to include LFG in the Senate version of the tax bill. But the House did not include LFG as one of the tax credits in its bill. When senators and House members held a conference in August to reconcile the two tax bills, "there was some resistance on the House side and [LFG] did not survive," says Jim Courtney, Roth's press secretary.

Although he does not know why it did not pass, Courtney says it is common for environmental bills to stall on the House side.

"Recent history shows that the Senate is generally known to be 'greener,'" he says. "Pro-energy initiatives usually come about on the Senate side, and then it's just a matter of surviving conference."

The only tax provision for energy projects that survived conference was for facilities using wind to produce electricity, Courtney says. Others that failed included poultry waste and open- and closed-loop biomass facilities.

At press time, President Bill Clinton was expected to veto the Taxpayer Refund Act in October, which means SWANA may have another chance to establish LFG tax credits, Skinner says.

"We'll work with the White House, the U.S. Department of Energy and the U.S. Environmental Protection Agency (EPA)," he says. "There needs to be legislation passed to impact upon next year's budget, and it has to occur very soon."

Roth shares SWANA's interest in providing LFG tax credits, Courtney says.

"Sen. Roth is always looking for creative ways to meet the growing energy need, and LFG tax credits is one of them," he says.