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Senate Finance Committee Chair Introduces Reform Legislation for 45L

Apr 27, 2021


The chairman of the Senate Finance Committee Ron Wyden (D-OR) recently introduced the “Clean Energy for America Act”.  The proposed legislation addresses several federal energy tax incentives ranging from “Clean Electricity Production and Investment Credits” to “Repeal of Tax Incentives for Fossil Fuels”.

The Senate Finance Committee has the jurisdiction over taxes for the U.S. Senate.  That this legislation is introduced by the committee’s chairman is significant.

The proposed legislation includes a total restructuring of the 45L federal tax credit for energy-efficient homes.  Key provisions regarding 45L include:

• The tax credit does not have an expiration date.  The bill provides an increase of the credit over time to adjust for inflation.

• There are two tiers for the credit:

º Homes labeled by the EPA ENERGY STAR Homes Program.  The credit for meeting ENERGY STAR would be $2,500.

º Homes labeled by the DOE Zero Energy Ready  Homes Program.  The credit for meeting Zero Energy Ready Homes Program would be $5,000.

• Certification for the tax credit would be provided by “a third party which is accredited by a certification program approved by the Treasury Secretary, in consultation with the Secretary of Energy, and in accordance to any applicable rules under the Energy Star or Zero Energy Ready Home programs.”

A problematic provision of the bill for builders is the requirement that builders receiving the credit “shall ensure that any laborers and mechanics employed by such contractor and subcontractors in the construction of such dwelling unit shall be paid wages at rates not less than the prevailing rates for construction of a similar character in the locality as determined by the Secretary of Labor, in accordance with subchapter IV of chapter 31 of title 40, United States Code.”

To download the entire bill go to Clean Energy for America Act. The provisions on the 45L tax credit are in Section 301 beginning on page 93.

RESNET will track this legislation and other bills introduced in this Congress aimed at increasing the energy efficiency of homes.  To learn how you can have your voice heard in Congress go to RESNET’s webpage on RESNET Advocacy.