This article comes from Chadbourne’s Project Finance NewsWire of August 2017, authored by Keith Martin
The Trump administration says it wants to a corporate tax bill on the president’s desk by late November. However, talks among the “big six” — Treasury Secretary Steve Mnuchin, White House economic adviser Gary Cohen, Senate leader Mitch McConnell (R-Kentucky), House Speaker Paul Ryan (R-Wisconsin), and the chairmen of the Senate and House tax committees, Orrin Hatch (R-Utah) and Kevin Brady (R-Texas), aimed at producing a common tax plan that could pass Congress quickly in the fall produced only a five-paragraph statement at the end of July that was short on detail, including where to set the corporate tax rate.
Congress is in recess until early September and, when it returns, it will have to increase the federal debt ceiling and pass a budget and as many as 13 appropriations bills or an omnibus “continuing resolution” allowing the federal government to remain open past September 30 when the federal fiscal year ends.
Various groups are angling to tee up tax credits to be addressed as part of any tax bill.
The House voted in June to allow new nuclear power plants completed after 2020 to qualify for production tax credits on their electricity output and to allow the credits to be more easily transferred. They are $18 a megawatt hour and run for eight years after a project is first put in service. The credits can be claimed on only the first 6,000 megawatts of nuclear capacity built nationwide. Developers must apply for an allocation. The IRS required applications to be submitted by January 2014.
The House bill would require the Internal Revenue Service to allocate all the remaining capacity first to any new nuclear power plants that are put in service by 2020 and then to any such plants built after 2020.
It would also allow any municipal or other government utility or electric cooperative to transfer tax credits to which it is entitled to any partner in the project, equipment vendor, construction contractor or supplier of nuclear fuel rods.
Offshore wind companies want Congress to allow a 30% investment tax credit on offshore wind farms on which construction starts by December 2025. “Offshore” for this purpose includes a project in the Great Lakes and other “inland navigable waters.”
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