First Treasury Grants in Lieu of ITC Awarded
Treasury Secretary Tim Geithner and Energy Secretary Steven Chu announced the first awards of cash grants in lieu of the investment tax credit (ITC) today. The total award value was over $502 million. Recipients include projects in Colorado, Connecticut, Maine, Minnesota, New York, Oregon, Pennsylvania and Texas. Click here for a detailed list of the awards announced today. Additional awards will be announced in the coming weeks.
For more information on this program and the application process, please see the Stoel Rives Energy Law Alert: Treasury Issues Guidance on Applications for Grants in Lieu of the ITC and PTC.
On the Senate Side, Alternatives to the House's Proposed Renewable Energy Incentives
On Friday, January 23, the Chairman of the Senate Finance Committee released his version of the economic stimulus bill. Like its House counterpart (H.R. 598), the proposal by Chairman Max Baucus ("Chairman’s Mark") is called the American Recovery and Reinvestment Tax Act of 2009. The Chairman’s Mark is scheduled to be considered in the Finance Committee on Tuesday, January 27.
As with H.R. 598, the Chairman's Mark would extend the production tax credit ("PTC") sunset date, permit taxpayers to elect to claim the investment tax credit ("ITC") in lieu of the PTC for certain projects, and extend bonus depreciation through 2009. Importantly, however, the Chairman’s Mark does not include the provision in the House bill that would enable taxpayers to receive cash grants in lieu of the ITC for certain projects. Without this grant provision, questions have been raised as to whether the Chairman's proposal would accomplish the legislative purpose of promoting investment in renewable energy development. Other provisions of note in the Chairman's Mark are modifications to the general business credit and a new 30% credit for investment in certain property used in a "qualified advanced energy manufacturing project."
Click here for a detailed summary of the Chairman's Mark. To view our recent Energy Law Alert on the House bill, click here.
House Bill Could Boost Incentives for Renewable Energy Projects
As part of an $825 billion stimulus plan to help revitalize the economy, the American Recovery and Reinvestment Tax Act of 2009 (H.R. 598) was recently introduced in the House of Representatives. The Bill aims to shore up tax incentives and offer new grants that would facilitate the development of renewable energy projects. Highlights of the proposed legislation include an extension of the production tax credit (“PTC”) sunset date, an election between the PTC and the investment tax credit, project grants in lieu of tax credits for certain projects, and an extension of bonus depreciation through 2009.
Check out our recent client alert for more information on HR 598 and its implications for project financing. The House Ways and Means Committee began its markup of the Bill on Thursday, January 22. We will report further developments as the Bill progresses. If you’d like to receive Stoel Rives Energy Law Alerts, click here.
