It has been a busy week for trade groups representing the solar and wind energy, following on the discovery late last week that the tax reform bill in the U.S. Senate contains a provision which, if enacted, could remove the incentive for multi-national corporations to invest tax equity in either type of project.
And there is no time to spare. The bill is expected to be voted on by the weekend – possibly as soon as today – after the Senate Budgetary Committee forced the bill out of committee 12-11 on a party-line vote on Tuesday. Late last night, the Senate voted 52-48 to move ahead with debate on the bill.
Among those who voted to move the bill forward and against Democratic amendments in committee is Senator Chuck Grassley (R-Iowa), who has been an outspoken champion of the wind industry and of the Production Tax Credit (PTC), whose monetization is threatened by the Base-Erosion Anti-Abuse Tax (BEAT) provision.
However, according to Solar Energy Industries Association (SEIA), Grassley agreed to work on this part of the legislation with Senator Maria Cantwell (D-Washington), who attempted to get exemptions for low-income housing tax credits as well as the Investment Tax Credit (ITC) and PTC while the bill was in the Finance Committee.
Grassley’s office had not yet responded to pv magazine questions by press time. However, SEIA and American Council on Renewable Energy (ACORE) both report that they are mobilizing members to lobby their Senators – especially Republicans – to get an exemption for solar in this portion of the bill.
“We are asking all our members who have presence here in Washingtonto contact their Senators and to explain to them why this is a problem and needs to be fixed,” SEIA VP of Federal Affairs Christopher Mansour told pv magazine.
Mansour says that this result of the BEAT provision, intended to avoid tax exasion by multinational corporations, is likely an accident. “The people who drafted it may not realize that it could have these kind of interactions, in some cases negative kinds of interactions,” he explained.
Mansour says that due to the compressed schedule and limited debate on amendments, the most likely route for an exemption for the ITC and PTC under BEAT to be filed is through what are called “manager’s amendments”. These involve a number of amendments that will be presented by Senate Finance Committee Chair Orrin Hatch to be voted on as a bundle.
For more information on the BEAT provision, please see this interview with Keith Martin of law firm Norton Rose Fulbright.