FOR IMMEDIATE RELEASE: April 2, 2007
CONTACT: Geoff Embler or Jamie Loftus
Sen. Hutchison Calls for IRS to Finalize Regulations for Refinery Expansion
Regulations would free producers to move ahead with capacity upgrades
WASHINGTON -- Senator Kay Bailey Hutchison (R-TX), Chairman of the Republican Policy Committee, today sent a letter to Treasury Secretary Henry Paulson urging him to finalize Internal Revenue Service regulations for expansion of U.S. refinery capacity.
The text of the letter follows:
April 2, 2007
The Honorable Henry M. Paulson
Secretary
U.S. Department of the Treasury
1500 Pennsylvania Avenue, N.W.
Washington, D.C. 20220
Dear Secretary Paulson:
I am contacting you concerning a pending regulation relevant to Section 179c of the U.S. Internal Revenue Code. This change, contained in the Energy Policy Act of 2005, allows a refinery to deduct 50 percent of costs relating to refinery expansion if such expansion increases capacity by at least five percent.
As you know, the Energy Policy Act became law on August 8, 2005. This Act includes a provision critical to promoting investment in our nation’s downstream refining industry. I supported this provision because it will encourage U.S. refineries to expand capacity, particularly at a time when burdensome regulations make it almost impossible to build new refineries.
Unfortunately, companies do not yet have the regulations from the IRS to implement this deduction – some 20 months after the President signed this provision into law. Companies are prepared to invest billions in projects that take years to plan, engineer and design, but without this guidance, refineries are unable to determine future investments in additional capacity. The lack of a final regulation for this provision is hampering company decisions to proceed in expanding capacity to provide needed products to our U.S. market.
Increasing domestic refining capacity is vital to our domestic energy security. Provisions like the one included in the Energy Policy Act are key to spurring this much needed investment.
I look forward to your support in completing this regulation as soon as possible so our companies can begin expanding capacity and relieving fuel prices.
Sincerely,
Kay Bailey Hutchison
CC: Mark W. Everson, Commissioner, Internal Revenue Service
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