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July 28, 2022

Details on the Senate Budget Agreement

Senator Manchin and Leader Schumer have announced an agreement on tax, energy and prescription drug price legislation. Because they are using the “budget reconciliation” process the legislation can move forward if 50 Senators support it. The House is expected to return in mid-August if the Senate can pass the bill next week.

Here is a one-page summary of the agreement. In addition to IRS funding to close the tax gap, the agreement includes a 15% minimum tax on publicly-traded corporations with over $1 billion in profits. That provision is summarized as follows:

15% CORPORATE MINIMUM TAX

The current statutory corporate tax rate is 21%. However, some 200 or more large corporations use tax loopholes to avoid paying that rate and actually pay below 15%. The corporate alternative minimum tax (AMT) proposal would impose a 15 percent minimum tax on adjusted financial statement income for corporations with profits in excess of $1 billion. Corporations would generally be eligible to claim net operating losses and tax credits against the AMT, and would be eligible to claim a tax credit against the regular corporate tax for AMT paid in prior years, to the extent the regular tax liability in any year exceeds 15 percent of the corporation’s adjusted financial statement income. This provision would be effective for taxable years beginning after December 31, 2022.

The energy and climate change title of the agreement includes the following provisions:

$60 billion for clean energy manufacturing, including production tax credits to accelerate U.S. manufacturing of solar panels, wind turbines, batteries, and critical minerals processing that are estimated to invest $30 billion. Existing nuclear power plants receive a production tax credit.

$10 billion investment tax credit to build clean technology manufacturing facilities, like facilities that make electric vehicles, wind turbines and solar panels.

Tax credits for clean sources of electricity and energy storage and roughly $30 billion in targeted grant and loan programs for states and electric utilities to accelerate the transition to clean electricity.
A mandate for offshore oil and gas lease sales in Gulf of Mexico and coast of Alaska.

With respect to infrastructure permitting, the bill provides funding for hiring new staff, support for environmental studies, technical assistance, and promoting community engagement.  There are no provisions to streamline the environmental review or permitting process, although the deal announced yesterday includes a commitment from Democratic leadership to advance legislation on permitting reform later this year.

The agreement also includes the following spending provisions of interest to A/E firms:

Transportation

$3 billion is provided for competitive grants – including $1.11 billion specifically directed to economically disadvantaged or underserved communities – to improve walkability, safety, and affordable transportation access.  Eligible projects include the removal, remediation, or replacement of a surface transportation facility for which high speeds, grade separation, or other design factors create an obstacle to connectivity within a community, or which is source of air pollution, noise, stormwater, or other burden; and, to build or improve complete streets, multiuse trails, regional greenways, or active transportation networks.

Federal Buildings

$250 million for the General Services Administration to convert federal facilities to high-performance green buildings, and $975 million to GSA for emerging technologies and related sustainability and environmental programs.

We will continue to review and analyze the bill and circulate any relevant updates.  Please share your feedback and let us know if you have any questions on the agreement. 

 


All comments to blog posts will be moderated by ACEC staff.

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Date

July 28, 2022

Category

Uncategorized

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