Guest Post: American Jobs Bill – Extended Energy Provisions

As a cleantech tax update FYI, the American Jobs bill that has been passed by the House contains the following extended energy provisions:

Extended Energy Provisions

Unless otherwise indicated, the bill would retroactively reinstate and extend for one year (that is, through 2010) all of the following energy tax breaks and would change the rules for the energy efficient appliance credit and the energy efficient windows credit, as noted below.

… The new energy efficient home credit. ( Code Sec. 45L(g))

… The $1.00 per gallon production tax credit for biodiesel, the small agri-biodiesel producer credit of 10¢ per gallon, and the $1.00 per gallon production tax credit for diesel fuel created from biomass. ( Code Sec. 40A )

… The alternative motor vehicle credit for so-called heavy hybrids (i.e., hybrid motor vehicles that are not passenger automobiles or light trucks). ( Code Sec. 30B(k) )

… The $0.50 per gallon alternative fuel tax credit for liquid fuels derived from biomass, compressed or liquefied biogas, natural gas and propane. The credit would not be extended for any liquid fuel derived from a pulp or paper manufacturing process. ( Code Sec. 6426 , Code Sec. 6427 )

… For sales before Jan. 1, 2011, the deferral over an eight-year period of gain on sales of transmission property by vertically integrated electric utilities to FERC-approved independent transmission companies. ( Code Sec. 451(i) )

… The $2.83 per barrel-of-oil equivalent tax credit for steel industry fuel (placed in service through 2010). In determining the credit amount, the credit period would be the first two years from the date that the facility is placed in service. Steel industry fuel is clarified as including fuel produced through a process of distributing liquefied coal waste sludge on a blend of coal and petroleum coke, or on other coke feedstock. ( Code Sec. 45 )

… The $3.36 credit per barrel-of-oil equivalent of coke or coke gas production tax credit (placed-in-service date through 2010). ( Code Sec. 45K(g)(1) )

… The credit period under the production tax credit for electricity produced at open-loop biomass facilities that were placed in service prior to Jan. 1, 2005 would be extended from five years to six years. In the sixth year, the credit would be reduced by 20%. ( Code Sec. 45(b)(4)(B) )

… For any tax year that includes the last day of calendar year 2009 or calendar year 2010, manufacturers of energy-efficient appliances could elect to receive a direct payment in lieu of the Code Sec. 45M energy-efficient appliance tax credit. The direct payment would be equal to 85% of the tax credit that would otherwise have been allowed. (Act Sec. 210)

… Exterior windows, doors, and skylights placed in service 90 days after the enactment date, would have to meet the recently updated Energy Star requirements to qualify for the Code Sec. 25C nonbusiness energy property credit. A transition rule would apply. ( Code Sec. 25C(c)(4) )

If you’re curious about the oil spill tax ramifications, it looks like there’s also some info about that:

… The oil spill tax would be increased from 8 cents per barrel to 34 cents per barrel through Dec. 31, 2020, the maximum amount that may be paid from the Oil Spill Liability Trust Fund with respect to any single incident would be increased from $1 billion to $5 billion, and the limit on natural resource damage assessments and claims in connection with any single incident would be increased from $500 million to $2.5 billion. The increase in financing rate would be effective beginning the first quarter that is more than 60 days after the enactment date. The increase in the limit on expenditures related to a single incident would be effective for expenses made after the enactment date, and the extension of the tax from Dec. 31, 2017 to Dec. 31, 2020 would be effective on the enactment date. ( Code Sec. 4611 , Code Sec. 9509 )

Feel free to let us know if you or anyone on your committee has any questions about these updates.

Sharon Kely
Habif, Arogeti & Wynne
Five Concourse Parkway, Suite 1000, Atlanta, Georgia 30328
Ph:  (770) 353-7157
sharon.kelly@hawcpa.com
visit us at http://www.hawcpa.com

Sharon Kelly


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