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A bipartisan group of legislators introduced in both houses of Congress a bill to encourage innovation in the clean energy to help rapidly scale and diversify new technologies. The Energy Sector Innovation Credit (ESIC) Act would create an investment tax credit (ITC) of up to 40% and a production tax credit (PTC) of up to 60% for low-market-penetration technologies. The credit could be applied to generation, storage, carbon capture and hydrogen production. The credit would phase out as technologies mature and Congress could take up new technology recommendations from the Department of Energy every five years.
New Jersey Gov. Phil Murphy signed legislation that shifts tax credits to the state wind energy program and makes changes to the state historic tax credit (HTC) and brownfield program concerning prevailing wage requirements. A. 5939 moves $350 million in tax credits originally intended for the New Jersey Emerge Program and the New Jersey Aspire Program to the wind energy tax incentive and provides that if less than the annual limitation of credits under those programs is awarded, the uncommitted credits be made available to qualified offshore wind projects. The HTC and brownfield program change requires that prevailing wage requirements also apply to building services work under those incentives.
The Internal Revenue Service (IRS) today released a ruling clarifying several issues related to Internal Revenue Code (IRC) Section 45Q carbon capture tax credits. Revenue Ruling 2021-13 determines that acid gas removal at an industrial facility is a component of carbon capture equipment within the meaning of the IRC 45Q credit; that an investor in components of capture equipment at an industrial facility doesn’t need to own every component in a single-process train to receive the credit, but must own at least one component; that under IRC Section 45Q, the placed-in-service date of a single-process train of carbon capture equipment is the date it is placed in condition or a state of readiness and availability for the capture, processing and preparation of carbon oxide for transport for disposal, injection or use; and the original placed-in-service date of a single-process train for IRC Section 45Q has no effect on the placed-in-service date of the existing acid gas removal unit for depreciation under IRC Sections 167 and 168.
The Internal Revenue Service (IRS) posted a notice Tuesday clarifying the beginning-of-construction requirement for both the renewable energy production tax credit (PTC) and investment tax credit (ITC) for energy properties in response to delays caused by the COVID-19 global pandemic. In an effort to assure that renewable energy endeavors can safely meet the continuity safe harbor requirements, Notice 2021-41 extends the safe harbor deadline for property that began construction in 2016 through 2020. Initiatives launched under the physical work test or the 5% safe harbor between 2016 and 2019 can satisfy requirements if they are placed in service by the end of a calendar year that is no more than six calendar years after the calendar year in which construction began; projects that began construction in 2020 must be placed in service within five years to satisfy the requirement.
Four senators led by Sen. Jon Ossoff, D-Georgia, introduced Monday the Solar Energy Manufacturing for America (SEMA) Act in an effort to spark domestic solar manufacturing, speed the transition to clean energy and propel America toward greater energy independence. The bill introduced by Ossoff along with Sens. Raphael Warnock, D-Georgia, Michael Bennet, D-Colorado, and Debbie Stabenow, D-Michigan, would provide tax credits to manufacturers throughout the solar manufacturing supply chain, including polysilicon production to photovoltaic cells to fully assembled solar modules
The Iowa Department of Revenue clarified its tax guidance Monday to better define its wait list and expiration dates for the Iowa Solar Energy System Tax Credit. For residential installations completed after Dec. 31, 2021, the credit expires and is unavailable. Those on the wait list in 2021 who are not awarded credits before the deadline are not allowed to carry them forward for construction that begins on or after Jan. 1, 2022.
The White House today released a summary, fact sheet and Greenbook on President Joe Biden’s proposed $6 trillion budget for fiscal year 2022. Of this amount, the Biden administration requests $1.67 trillion in discretionary spending, $754 billion for defense and $913 billion for nondefense, the first such request where nondefense exceeded defense in recent history.
Sen. Tom Carper, D-Delaware, introduced legislation to create tax credits to encourage the development of clean hydrogen energy. The Clean H2 Production Act would create an investment tax credit (ITC) and production tax credit (PTC) for production of hydrogen that uses methods that are at least 50% cleaner than traditional hydrogen production methods.
A bipartisan group of members introduced legislation in the House of Representatives to increase carbon capture tax credits for industrial facilities and power plants. The Coordinated Action to Capture Harmful (CATCH) Emissions Act (H.R. 3538) would increase the federal Internal Revenue Code (IRC) Section 45Q tax credit values for carbon capture from industrial facilities and power plants. The legislation would increase the credit level to $85 per metric ton for industrial and power generation facilities seeking to store captured carbon dioxide in saline geologic formations and to $60 per metric ton for storage in oil and gas fields and for the beneficial use of captured carbon to manufacture low and zero-carbon fuels, chemicals, building products, advanced materials and other products.
U.S. Sens. Michael Bennet, D-Colorado, and Rob Portman, R-Ohio, Wednesday introduced legislation to allow the use of private activity bonds (PABs) for power plants and industrial facilities to purchase and install carbon capture and storage equipment and for direct air capture projects. The Carbon Capture Improvement Act (S. 1829) would also allow the existing Internal Revenue Code (IRC) Section 45Q tax credit for carbon sequestration to be used by facilities for industrial emissions.
Legislation introduced in both houses of Congress would create an additional renewable energy investment tax credit (ITC) for battery storage and renewable electricity that displaces electricity generated by “peaker” plants (which come online during times of high demand and release harmful emissions) in disadvantaged communities. The Promoting Energy Alternatives is Key to Emission Reductions (PEAKER) Act of 2021 would provide financial incentives to more rapidly deploy clean energy and battery storage to replace aging power plants in those disadvantaged communities.
The Office of the Comptroller of the Currency (OCC) today announced that it will reconsider its final rule to modernize the agency’s regulations for the Community Reinvestment Act (CRA) and will not implement much of the evaluation criteria in the May 2020 rule. The announcement, in OCC Bulletin 2021-24, says the OCC will continue to implement certain provisions that had a compliance date of Oct. 1, 2020. OCC issued the final rule after stakeholders provided more than 7,500 comments–most of them in opposition to the final rule.
Reps. Earl Blumenauer, D-Oregon, and Mike Levin, D-California, introduced legislation this week that would allow taxpayers the option to take renewable energy tax credits as a direct payment rather than a credit. The Renewable Energy Investment Act (H.R. 3180) would make the investment tax credit (ITC), production tax credit (PTC) eligible for an irrevocable election to receive as a direct payment.
Ohio’s two U.S. senators introduced legislation to make linear generators eligible for the federal renewable energy investment tax credit. Sens. Sherrod Brown, D-Ohio, and Rob Portman, R-Ohio, introduced the Clean Energy Production Parity Act (S. 1485). Linear generation is a form of onsite power generation that can produce fuel from a variety of sources that include fossil fuels, natural gas, biomass, solar or wind. Linear generation does not meet the existing definition for qualified fuel cell property.
Sens. Edward Markey, D-Massachusetts, Roger Wicker, R-Mississippi, and Michael Bennet, D-Colorado, introduced legislation to make electrochromic glass eligible for federal renewable energy investment tax credit (ITC). The Dynamic Glass Act would qualify for the ITC the glass in properties that begin construction between the enactment of the bill and Jan. 1, 2024.
Sen. John Hoeven, R-North Dakota, and Sen. Ron Wyden, D-Oregon, this week reintroduced the Move America Act to bring billions of dollars to grow and repair infrastructure through an expansion of private activity bonds and the creation of an infrastructure tax credit. S. 1403 would allocate Move America Bonds to states, based on population size. The legislation would allow smaller states the ability to trade in some or all of their bond allocation for federal tax credits at a 25% exchange rate
The Iowa Department of Revenue adopted amendments to the state’s solar energy system tax credits, effective May 26. The rules pertain to the relationship between Iowa’s solar energy system tax credit and federal energy credits. They also include a table of Iowa tax credit rates based on the solar property involved, the calendar year that construction starts and when the property is placed in service.
Sen. Ron Wyden, D-Ore., and 24 Democratic senators introduced legislation to consolidate current energy tax incentives into emissions-based incentives that would be available to all energy technologies that meet emissions reduction goals. The Clean Energy for America Act would create a production tax credit of up to 2.5 cents per kilowatt hour or an investment tax credit of up to 30% for any new zero-emissions facility.
The U.S. Department of Treasury today released the Made in America Tax Plan report, providing additional details on the infrastructure plan announced March 31 by President Joe Biden’s administration. The description includes a statement that there would be “a marked increase in the resources available through the low-income housing tax credit [LIHTC] and other housing incentives,” but the report focuses on renewable energy provisions.
The Biden administration today released a fact sheet on its $2.25 trillion infrastructure proposal.
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