Renewable Energy Tax Credits News Briefs - August 2015

Saturday, August 1, 2015

The Master Limited Partnership Parity Act (S. 1656 and H.R. 2883) was reintroduced June 24 in both the U.S. Senate and House of Representatives. The bill would amend the Internal Revenue Code of 1986 to extend publicly traded partnerships’ ownership structure to energy power generation projects and transportation fuels. The act would allow renewable energy investors to form master limited partnerships (MLPs), which combine the funding advantages of corporations with the tax advantages of partnerships. The law currently allows the MLP structure only to investors in fossil-fuel-based energy projects. The text of both S. 1656 and H.R. 2883 are available at www.energytaxcredits.com.

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The Internal Revenue Service (IRS) Office of the Chief Counsel (OCC) released Chief Counsel Advice (CCA) 201524024 June 12. The CCA discusses the applicability of Revenue Procedure (Rev. Proc.) 2007-65 to Section 48 Energy Credit Partnership. The CCA states that solar partnerships allocating Section 48 renewable energy investment tax credits (ITCs) among their partners cannot rely on Rev. Proc. 2007-65 safe harbor. The memorandum explains that Rev. Proc. 2007-65 provides a safe harbor only for partners or partnerships with Section 45 wind energy production tax credits (PTCs). The IRS noted the two credits operate differently and that the amount of Section 45’s PTC varies over time based on the amount of energy the partnership produces. CCA 201524024 is available at www.energytaxcredits.com.

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On June 23, the Government Accountability Office (GAO) announced in a report, “BLM Has Limited Assurance That Wind and Solar Projects Are Adequately Bonded,” that the Department of the Interior’s Bureau of Land Management (BLM) has limited assurance that wind and solar projects are adequately bonded. BLM has different policies for the bonding of wind and solar projects on federal land. However, BLM issued a proposed rule that would establish consistent requirements for bonding wind and solar projects. GAO found that BLM does not consistently adhere to its policies calling for periodic review of wind and solar bond amounts to verify their adequacy. GAO also noted that with limited assurance for the bonds, the federal government is potentially at financial risk. GAO found about one-third of the wind and solar rights of way were under bonded by as much as $15 million. The report is available at www.gao.gov.

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Louisiana H.B. 779 was signed into law June 19. The bill repeals the state tax credit for thermal systems. H.B. 779 also lowers the maximum sales credit to the lower of $2 per kilowatt, 50 percent of the cost of the system or $10,000 per system. In addition, for leased renewable energy systems, fiscal year 2015 outstanding claims are limited to $19 million. Leased and purchased systems are capped at $10 million per fiscal year for 2016 and 2017 and $5 million during 2018 for claims filed before Jan. 1, 2018. H.B. 779 is available at www.energytaxcredits.com.

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On June 10, the Solar Energy Industries Association (SEIA) released comments in support of the progress of the Capital Solar Challenge and plans from the federal government to develop more than 10 megawatts (MW) of new solar facilities in the nation’s capital. The U.S. Navy and General Services Administration (GSA) are adding the 10 MW of solar energy to the Capital Solar Challenge. The challenge was designed to improve sustainability and reduce harmful carbon emissions. The White House plans to reach a goal of 30 percent renewable energy use by 2025. Rhone Resch, president and chief executive officer of SEIA, said in a press release that the SEIA applauds President Barack Obama and his administration for their continued commitment to sustainability and America’s clean energy future. He added that this program, along with other initiatives nationwide, will help the federal government save more than $18 billion over the next 10 years in energy costs. According to the White House, greenhouse gas (GHG) emissions from all federal facilities have been reduced by more than 17 percent since 2008.

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