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Senate Democratic Bill Would Expand Clean Energy Tax Incentives

April 22, 2021

Would Add New Federal Labor Requirements to Getting Tax Credits

On April 21, Senate Finance Committee Chairman Ron Wyden (D-Ore.), along with 24 Democratic colleagues, introduced legislation that would significantly rewrite the federal tax code’s incentives for energy and clean production, create significant new incentives for renewable energy production, and add notable new labor provisions. The bill would require projects above residential size that receive tax credits to comply with federal labor requirements, including registered apprenticeship requirements that AGC opposes.

In current law, renewable energy tax incentives are technology specific (e.g. the production tax credit for wind, solar, or biomass), and this Clean Energy for America Act would consolidate these incentives into a “technologically neutral” incentive that would escalate based on the reduction in greenhouse gas emissions.  The bill also creates new incentives for home energy efficiency, would make changes to the Section 179D commercial buildings energy efficiency deduction, and create new incentives for the purchase of electric vehicles. 

To pay for these new incentives, the legislation would repeal a number of tax provisions used by fossil fuel producers and manufacturers, such as deduction for intangible drilling costs, and eliminating the Section 199A deduction for publicly traded partnerships.

A section-by-section summary of the legislation can be found here.  This legislation could be incorporated into infrastructure legislation meeting the framework put forth in the Biden infrastructure proposal.

For further information, please contact Matthew Turkstra at (202) 547-4733, or matthew.turkstra@agc.org.

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