Energy Tax Act of 1978

(Conference report filed in House, H. Rept. 95-1773)

Energy Tax Act - =Title I: Residential Energy Credit= - Amends the Internal Revenue Code to allow an income tax credit to an individual for an amount equal to the sum of: (1) 15 percent of the energy conservation expenditures up to a maximum of $2,000; and (2) 30 percent of qualified renewable energy source expenditures for solar, wind, and geothermal energy equipment as does not exceed $2,000 plus 20 percent of such expenditures as exceeds $2,000 but does not exceed $10,000. Provides for a credit carryover to the extent that such credit exceeds the taxpayer's tax liability.

=Title II: Transportation= - Imposes a gas guzzler excise tax on the sale by a manufacturer of each automobile that falls below a specified gasoline efficiency standard for each model year. Imposes such tax on automobiles weighing less than 6,000 pounds. Imposes a tax equal to $200 for an automobile efficiency rating of 14 to 15 miles per gallon in 1980 which is increased to $1,800 in 1985. Imposes such tax at a maximum rate equal to $550 in 1980 for efficiency ratings below 13 miles per gallon and increased to $3,850 in 1986 for efficiency ratings of less than 12.5 miles per gallon. Exempts certain vehicles from the tax.

Provides that no tax shall be imposed on the sale of any gasoline: (1) in a mixture with alcohol, if at least ten percent of the mixture is alcohol; or (2) for use in producing a mixture at least ten percent of which is alcohol. Applies to sales or use from January 1, 1979, to September 30, 1984.

Directs the Secretary of Energy, in consultation with the Secretary of the Treasury and the Secretary of Transportation, to submit annual reports through 1984 to the Congress on the use of alcohol in fuel.

Denies the refund or credit of excise taxes on gasoline if such gasoline is used by a person for non-business, off-highway purposes or for motorboats. Retains a $.02 a gallon tax reduction for gas used in commercial fishing vessels or for business use.

Repeals the ten percent excise tax on all buses and the eight percent excise tax on bus parts and accessories.

Repeals the excise taxes on tires, inner tubes, tread rubber, gasoline, other motor fuels, and lubricating oil sold for use with intercity, local, and school buses.

Revises the investment tax credit with respect to commuter vans to make the applicable percentage 100 percent for vans with a useful life of at least three years.

Excludes from the gross income of an employee the value of transportation furnished by an employer to and from the employee's place of employment in a commuter van.

=Title III: Changes in Business Investment Credit to Encourage Conservation of, or Conversion from, Oil and Gas or to Encourage New Energy Technology= - Allows a ten percent tax credit to offset tax liability for each of the following qualified investments placed in service between October 1, 1978, and January 1, 1983: (1) alternative energy property such as nuclear, geothermal, and solar power equipment; (2) specially defined energy property which reduces the amount of energy consumed; and (3) energy property such as recycling equipment, shale oil equipment, and equipment for producing natural gas from geopressured brine.

=Title IV: Miscellaneous Provisions= - Provides for a depletion deduction for geothermal resources located in the United States beginning at 22 percent on October 1, 1978, and decreasing to 15 percent after 1983. Provides for a ten percent depletion deduction for natural gas produced from geopressured brine from wells drilled from October 1, 1978, to December 30, 1983.

Grants the option to deduct as expenses intangible drilling and development costs in the case of wells drilled in the United States, for any geothermal deposit.

Continues and extends the minimum tax provisions for excess intangible drilling costs of individuals which are applicable to oil and gas production income to include income from geothermal resources and natural gas produced from geopressured brine. Extends the recapture provisions for oil and gas property to include geothermal wells. Extends the risk limitation of losses which may be deducted for exploiting oil and gas to include geothermal resources.

Exempts new lubricating oil from the $.06 per gallon excise tax if it is combined with rerefined oil and the new oil makes up 55 percent or less of the mixture.