Overview
Title
To amend the Internal Revenue Code of 1986 to disallow the production tax credit and investment tax credit for offshore wind facilities placed in service in the inland navigable waters of the United States or the coastal waters of the United States.
ELI5 AI
In 2025, a new rule could stop giving special money help to people who build windmills in the water near the United States, making it harder for them to make clean energy there. This might make fewer people want to make windmills in those water places.
Summary AI
H. R. 1462 proposes changes to the Internal Revenue Code of 1986 to stop giving tax incentives like the production tax credit and investment tax credit to offshore wind facilities located in the inland navigable waters or coastal waters of the United States. Specifically, it amends sections of the Code to redefine which facilities qualify for these tax credits, excluding certain offshore wind facilities. These changes would take effect for energy produced and property placed in service after December 31, 2025.
Published
Keywords AI
Sources
Bill Statistics
Size
Language
Complexity
AnalysisAI
Summary of the Bill
House Bill 1462, introduced in the 119th Congress, proposes to amend the Internal Revenue Code of 1986. The bill aims to disallow the production tax credit and investment tax credit for offshore wind facilities located in the inland navigable waters or coastal waters of the United States. The motivation behind this amendment is not explicitly stated in the bill; however, it specifically targets these offshore projects while leaving land-based wind projects unaffected. The changes will apply to energy produced and property placed in service after December 31, 2025.
Significant Issues
One of the main issues raised by this bill is its potential to deter investment in renewable energy within specific geographic locations. By disallowing tax credits, the financial attractiveness of building offshore wind facilities in these coastal and navigable waters may diminish, possibly hindering the growth of renewable energy in areas where it might be most needed.
There is also an element of ambiguity in the bill concerning the terms "inland navigable waters of the United States" and "coastal waters of the United States." The lack of precise definitions could lead to legal disputes, creating uncertainty for investors and stakeholders who require clarity to make informed business decisions.
Furthermore, the complex legal language used to define "qualified facilities" may prove difficult for stakeholders, including developers and legal advisors, to interpret, potentially leading to compliance challenges.
Broad Impacts on the Public
Broadly, the bill could influence energy policy in the United States by discouraging the development of offshore wind projects in specific waters. This could potentially slow down the overall transition toward renewable energy sources at a time when environmental goals call for significant increases in clean energy production. By not offering tax incentives for offshore projects, energy developers might opt to invest in other areas or in land-based projects which might not be as efficient or viable in certain regions.
Impact on Specific Stakeholders
The bill could negatively impact regions and communities that rely on offshore wind facilities for their economic development. These areas might face economic disparities if the growth of offshore wind projects is stunted, potentially affecting local employment, investment, and regional development.
On the other hand, land-based wind projects might find themselves at a competitive advantage, as they continue to benefit from existing tax incentives, potentially receiving a larger share of investment due to the financial shift away from offshore projects.
In conclusion, while the bill strategically aims to revise tax policies in the renewable energy sector, it could potentially slow the momentum of offshore wind projects and create economic and legal challenges for various stakeholders as they navigate these new regulations.
Issues
The amendment disallows the production tax credit and investment tax credit for offshore wind facilities located in 'inland navigable waters of the United States' or 'coastal waters of the United States', which may discourage investment in renewable energy development in those areas. This could have significant implications for energy policy and environmental goals. [Section 1]
The terms 'inland navigable waters of the United States' and 'coastal waters of the United States' may lack clarity and could lead to legal disputes over their interpretation. This introduces uncertainty for stakeholders looking to invest in offshore wind projects. [Section 1]
The language specifying exclusions for 'qualified facility' is complex and might require simplification for better understanding and compliance by stakeholders, including project developers and legal advisors. [Section 1(c)]
The amendment may disproportionately impact regions that rely on offshore wind facilities for economic development, potentially leading to economic disparities across different geographic areas. This could affect local economies and employment opportunities in regions that are currently benefiting from offshore wind projects. [Section 1]
There is a potential risk that the amendment might favor land-based wind projects over offshore projects without a clear environmental or economic justification, which could skew the renewable energy landscape and priorities. [Section 1]
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Disallowance of investment tax credit and clean electricity production credit for certain offshore wind facilities Read Opens in new tab
Summary AI
The section disallows certain tax credits for offshore wind facilities that are located in the inland navigable waters or coastal waters of the United States. These changes will take effect for energy produced and property placed in service after December 31, 2025.