After several long weeks of negotiations on end-of-year obligations, congressional negotiators reached agreements on both a government funding bill that pays for the federal government through the remainder of FY16 as well as a package of tax extenders that includes the permanent extension of several prominent credits that have historically been addressed every year or two. To allow for time for both chambers to pass these bills, Congress is expected to take up and pass a short-term continuing resolution to fund the government through December 22. The House is expected to take up and pass the bills this week, followed by the Senate.
The other key aspect of these negotiations was the inclusion of a variety of policy riders. Included in the government funding bill was the repeal of the decades-old ban on exporting crude oil. A number of policy riders aimed at addressing refugees, Planned Parenthood, campaign finance and other issues were not included in either of the final bills. Attempts to include language blocking the EPA’s Waters of the United States rule were also denied and did not make the final deal.
Brief highlights of some of the more prominent provisions of both bills follow.
FY16 Omnibus Appropriations Bill
- Provides a total of $1.149 trillion in base and Global War on Terror (GWOT)/Overseas Contingency Operations (OCO) funding for the operations of the federal government
- Repeals the Country of Origin Labeling program which had been the subject of potential counter-tariffs from Canada and Mexico
- Extends the Wind Production Tax Credit through 2019, with a phase-out of the credit beginning in 2016
- Extends the Solar Investment Tax Credit through 2021, with a phase-out of the credit beginning in beginning in 2019. The provision is also modified to allow for the credit to apply when the project commences construction and not when it becomes operational
Tax Extenders Package
- Extension of the biodiesel and renewable diesel blender tax credits through 2016
- Extension through 2019 of 50 percent bonus depreciation (with modification)
- Permanent extension of (partial list):
- State and local sales tax deductions
- Research and development (R&D) tax credit
- Increased expensing limitations and treatment of certain property as Section 179 property (with modification) to allow for a one-year write-off of $500,000 for small businesses (i.e. farms)