The U.S. House Ways and Means Subcommittee on Select Revenue Measures today released a discussion draft of an energy bill—the Growing Renewable Energy and Efficiency Now (GREEN) Act.
According to a subcommittee release, the draft legislation is “a comprehensive approach to tackling climate change by using the tax code to extend and expand renewable energy use and reduce greenhouse gas emissions.”
Subcommittee Chairman Mike Thompson (D-CA) said that the legislation proposes to “…build on existing tax incentives that promote renewable energy and increase efficiency and create new models for technology and activity to reduce our carbon footprint.”
According to the subcommittee, the legislation would extend current renewable energy tax incentives; would create new models to increase the use of green energy while reducing greenhouse gas emissions, and would:
The discussion draft includes a mix of existing energy incentives and new provisions. Notably, the proposal would extend both the wind and solar tax credits and convert them to refundable tax credits. Specifically, the section 45 production tax credit (PTC) and the section 48 investment tax credit (ITC) would become refundable up to 85% of the value of the tax credit.
The refundability of the PTC and ITC would make those credits more valuable to energy project developers who often lack sufficient tax liability to use the credits to offset current tax.
This conversion of the PTC and ITC into refundable credits echoes the Section 1603 cash grant program that was enacted in the American Recovery and Reinvestment Act in 2009. That program was heavily used by renewable energy developers and paid out more than $26 billion in cash grants during the duration of the program.
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.