Late on November 16, 2017, Senate Finance Committee (“SFC”) Chair Orrin Hatch released amendments to the Senate Republicans’ tax reform proposal. Similar to the original version and the first amendment (released late on November 14, 2017), the amended proposal does not include provisions concerning the PTC or the ITC. In addition, the Enhanced Oil Recovery Credit, the Credit for Producing Oil and Gas from Marginal Wells, and the New Markets Tax Credit would all remain intact. Also similar to the prior version, the SFC proposal does not address expired energy credits for qualified fuel cell and small wind energy property, qualified microturbine property, or production from advanced nuclear power facilities. Recently, however, Senator Chuck Grassley announced publicly that Senate Republicans would address certain of those expired energy credits in a separate “extenders bill” apart from the “Tax Cuts and Jobs Act” at the end of the year.
The Senate Finance Committee approved its long-awaited tax extenders package on April 3, 2014. The Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act, which the Committee approved by voice vote, would extend dozens of temporary tax incentives that expired at the end of last year or are set to expire at the end of this year. Moreover, the package includes numerous energy tax incentives that lapsed at the end of last year.
The EXPIRE Act would extend the following energy tax provisions:
- * Production tax credit and investment tax credit with respect to facilities producing electricity from certain renewable sources (e.g., wind) (Sections 45 and 48)
- * Deduction for energy efficient commercial building property (Section 179D)
- * Credit for residential energy efficient property (Section 25C)
- Alternative fuel refueling property credit (Section 30C)
- Credit for electric motorcycles and three-wheeled vehicles (Section 30D)
- Second generation biofuel producer credit (Section 40)
- Special depreciation allowance for second generation biofuel plant property (Section 168(l))
- Tax credits for biodiesel and renewable diesel (Section 40A)
- Credit for the production of Indian coal (Section 45(e)(10))
- Credit for energy efficient new homes (Section 45L)
- Alternative fuel and alternative fuel mixture credit (Sections 6426 and 6427(e))
- Credit for new qualified fuel cell motor vehicles (Section 30B) (expires in 2014)
* Provision was not included in Senator Ron Wyden’s (D-OR) “Chairman’s mark” but was added to the package before the Committee’s mark-up.
That said, the EXPIRE Act is, for the most part, a “clean” extenders package, meaning that the proposal mostly changes termination dates and includes few changes to underlying policy. As a result, certain modifications sought by the renewable energy industry were not included. For example, the proposal would not expand Master Limited Partnerships (MLPs) along the lines of Senator Chris Coons’ Master Limited Partnerships Parity Act (S. 795). Additionally, the EXPIRE Act would not impose a “commence construction” requirement (as opposed to a “placed in service” requirement) with respect to solar projects under the investment tax credit under Section 48. Finally, it would not extend the credit for energy efficient appliances under Section 45M.
K&L Gates hosted Chairman Wyden for a breakfast meeting on April 8. Wyden stated that he is working with Senate leadership on a strategy that would bring the EXPIRE Act to the Senate floor. Some staff indicate that floor action could occur as early as the next congressional work period, during the weeks of April 28 or May 5. Meanwhile, the House Ways and Means Committee may also consider energy tax incentives soon as part of its planned series of hearings on tax extenders.
We will provide more updates as this debate unfolds over the coming months.
|In late 2013, the Senate Finance Committee released a tax reform staff discussion draft on energy (the “energy draft”) as part of a series of tax reform proposals. According to Committee staff, the energy draft “proposes a dramatically simpler set of long-term energy tax incentives that are technology-neutral and promote cleaner energy that is made in the United States.” Although the departure of former Chairman Max Baucus (D-MT) from the U.S. Senate has thrown the fate of energy tax reform into doubt, there is ample reason to believe that his energy draft has hydrogen left in the fuel cell. This alert describes the energy draft and offers insights on the possible next steps for the proposal.To read the full alert, click here. Additional Resources: With so many different pieces to tax reform, it is easy to lose track of various proposals and materials. To access the most relevant tax reform information from the House Ways and Means Committee, Senate Finance Committee, the Administration, and others, please visit our Tax Reform Resources page.
February 25, 2014Authors: Mary Burke Baker Government Affairs Advisor firstname.lastname@example.org +1.202.778.9223 Cindy L. O’Malley Government Affairs Counselor email@example.com +1.202.661.6228 Nicholas A. Leibham Partner firstname.lastname@example.org +1.202.778.9284 Karishma Shah Page Associate email@example.com +1.202.778.9128 Ryan J. Severson Associate firstname.lastname@example.org +1.202.778.9251 Andrés Gil Associate email@example.com +1.202.778.9226 David A. Walker Government Affairs Specialist firstname.lastname@example.org +1.202.778.9346
This Policy Insight is presented as part of the Global Government Solutions® initiative.