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.
- Bill Number
- H.R. 1462
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2025-02-21: Referred to the House Committee on Ways and Means.
- Last Updated
- 2025-05-09T14:20:57Z
AI-Generated Summary
Purpose
This bill aims to modify the U.S. tax code to eliminate certain federal tax incentives for offshore wind energy projects located in specific U.S. waters, specifically targeting facilities in inland navigable waters (such as rivers and lakes used for interstate commerce) or coastal waters (areas near the shoreline extending to the outer limits of state jurisdiction).
Key Provisions
- Investment Tax Credit (ITC) Amendment: Removes a specific provision (subparagraph (F) under Section 48(a)(5) of the Internal Revenue Code) that previously allowed the ITC—a tax credit for investments in renewable energy equipment—for offshore wind facilities in the specified waters.
- Renewable Electricity Production Tax Credit (PTC) Amendment: Updates Section 45(d)(1) to exclude offshore wind facilities in inland navigable or coastal waters from eligibility for the PTC, which provides credits based on the amount of electricity produced from renewable sources.
- Clean Electricity Production Tax Credit Amendment: Adds a new exclusion under Section 45Y(b)(1) defining "disqualified offshore wind facilities" as those in inland navigable or coastal waters, making them ineligible for this credit, which supports clean energy production.
- Effective Date: The changes apply to energy produced and property placed in service after December 31, 2025, meaning projects starting or completing before this date could still qualify for the credits.
Significant Changes to Existing Law
- Previously, the tax code allowed offshore wind projects in U.S. waters to access ITC and PTC benefits to encourage renewable energy development. This bill eliminates those benefits for projects in inland navigable and coastal waters, narrowing the scope of incentives to potentially only deeper offshore areas beyond coastal zones.
- It introduces a targeted disqualification for the newer Clean Electricity PTC, which was established under the Inflation Reduction Act of 2022 to promote low-emission electricity generation.
Potential Impacts
- On Government Agencies: The U.S. Department of the Treasury and Internal Revenue Service would enforce the changes through updated tax guidance and audits, potentially reducing federal spending on tax credits (as the government forgoes less revenue). It could also affect coordination with the Department of Energy on renewable energy goals.
- On Citizens and Economy: Coastal communities and states reliant on wind energy jobs (e.g., in manufacturing, construction, and operations) may face slowed project development, leading to fewer economic opportunities and higher energy costs if alternatives are not pursued. Broader U.S. energy transition to renewables could be delayed in near-shore areas.
- On International Relations: Minimal direct impact, though it might signal a U.S. policy shift away from aggressive offshore wind expansion, potentially affecting partnerships with countries like those in Europe leading in wind technology or trade in related equipment.
Main Stakeholders Affected
- Renewable Energy Developers and Companies: Offshore wind firms (e.g., those planning projects in U.S. coastal areas) lose key financial incentives, increasing project costs and risks.
- Taxpayers and Investors: General taxpayers benefit from reduced federal tax expenditures, but investors in wind projects may see lower returns or abandon near-shore developments.
- Coastal States and Communities: Regions like the Northeast and Mid-Atlantic U.S. (with active offshore wind leases) could experience economic and environmental effects, including potential delays in reducing fossil fuel reliance.
- Environmental and Energy Advocacy Groups: Pro-renewable organizations may oppose the bill for hindering clean energy goals, while fossil fuel interests might support it.
Notable Legal, Constitutional, or Political Implications
- Legal: The amendments are straightforward tax code changes under Congress's authority to regulate federal taxation (Article I, Section 8 of the U.S. Constitution), with no apparent challenges to due process or equal protection. However, it could lead to litigation from affected developers claiming retroactive impacts on ongoing projects.
- Constitutional: No major issues, as it involves fiscal policy rather than fundamental rights.
- Political: This could intensify debates over U.S. energy policy, particularly the balance between renewable incentives and concerns like coastal impacts (e.g., fishing, navigation, or aesthetics). As an introduced bill in the House Committee on Ways and Means, it reflects partisan divides on climate and tax priorities, potentially influencing broader legislation like farm bills or energy acts.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (3)
Rep. Gooden, Lance [R-TX-5], Rep. Gill, Brandon [R-TX-26], Rep. Hageman, Harriet M. [R-WY-At Large]
Recent Actions
- 2025-02-21: Referred to the House Committee on Ways and Means.
- 2025-02-21: Introduced in House
- 2025-02-21: Introduced in House
Bill Versions
- 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. — issued 2025-02-21 — PDF (3 pages)