Media Coverage: Greg Jenner on Effects of (Hasty) Tax Reform on Renewables Industry

Back to Legal Insights
Back to Legal Insights

Tax attorney and 1986 Bush-era tax reform participant Greg Jenner has been quoted in a number of publications recently on the implications of tax reform on the renewables industry and also on the drawbacks of the haste with which Congress is pushing to get a bill passed. Versions of the “Tax Cuts and Job Act” were recently passed by the U.S. House of Representatives and U.S. Senate, and their differences must be reconciled before the bill can go to President Trump for his signature.

Following is a summary of recent media coverage of these topics for which Jenner has been a source:

'Holy crap': Experts find tax plan riddled with glitches

Politico reported on how the speed with which Republicans are trying to move their tax bill through Congress is resulting in the legislation having many bugs, loopholes and other potential problems, some of which could be “easily gamed,” as well as building in unintended results that will need to be addressed further down the road.

“The more you read, the more you go, ‘Holy crap, what’s this?'” Jenner said. “We will be dealing with unintended consequences for months to come because the bill is moving too fast.”

Published by Politico, December 6, 2017. The full article can be found here.

Tax Bill’s Swift Passage May Create Legal Quandaries

Law360 reported how the effort to push a bill quickly through the House and Senate is causing uncertainty for businesses in their approaches to such areas as treatment of intellectual property, offshore profits and pass-through enterprises. The uncertainty won’t end for businesses upon the bill being signed into law, as experts expect a slew of “technical corrections” to be necessary to clarify complex, but hastily-drafted, provisions.

“They are basically putting in a whole new system, and they are doing it so quickly,” Jenner said. “When you take such wholesale changes, like they’re doing to the international provisions, with the sophistication of taxpayers and the mobility of capital throughout the world, we’re going to be tinkering around with this for years and years to come.”

Published by Law360, December 3, 2017. The full article can be found here.

Senate Passes Tax Bill With Harmful Renewables Provision

Solar Industry reported how an obscure provision left in the Senate GOP version of the tax bill could have “devastating” impacts on the renewable energy industry. Called the Base Erosion Anti-Abuse Tax (BEAT) provision, it would affect multi-national companies and undermine their use of the solar industry’s investment tax credit (ITC) and wind industry’s production tax credit (PTC), according to a letter sent to the Senate by a coalition of clean energy organizations.

“Many tax equity investors could be subject to this provision (the number and which ones are unclear),” Jenner said. “If a potential tax equity investor were subject to BEAT, it would have no incentive to invest in renewable energy projects because it couldn’t use either the ITC or PTC against its BEAT liability. This could significantly reduce the amount of tax equity available for renewables.”

Published by Solar Industry, December 4, 2017. The full article can be found here.

Can President Trump And Congress Slow Down The New Energy Economy?

Forbes reported on how the two versions of the tax bill both share a commitment to allowing traditional energy industries such as oil and natural gas to keep their current tax advantages, while also reducing or removing some of the tax benefits given to the renewables sector.

"The Senate bill in particular could be devastating to renewables,” Jenner said. “In its mad rush to pass a bill before year end, the Senate has included provisions that could be a dagger pointed at the heart of the industry.”

Published by Forbes, December 4, 2017. The full article can be found here.

Senate Doubles Down on Tax Provisions That Would Harm Renewable Energy

Greentech Media provided a useful summary of the changes in the Senate version of the tax bill that would have an effect on the renewables industry. As well as adding the BEAT provision, legislators added back into the bill the alternative minimum tax (AMT), a provision that may hurt project developers’ ability to obtain financing from investors, although Jenner and others don’t expect it to still be in the final version of the bill.

“With all these last-minute changes, they needed to come up with a revenue source,” Jenner said. “They plugged the gap by restoring the corporate AMT, but I don’t think they ever intended for that provision to survive conference.”

Published by Greentech Media, December 4, 2017. The full article can be found here.

A hand grenade: Gregory Jenner on potential effects of tax reform for solar and wind

In an interview in pv magazine, Jenner went into greater detail about how the BEAT and other provisions in the Senate tax bill could affect the wind and solar industries’ ability to obtain financing.

Asked what he anticipated during the process of reconciling the Senate bill with the House bill, Jenner said: “I expect a mad rush to get it done, without a lot of thought or a lot of analysis. At this point it is a runaway train. I don’t know whether or not they are going to announce these things ahead of time, or word will leak out. It is hard to know. But it is going to happen fast.”

Published by pv magazine December 4, 2017. The full article can be found here.

U.S. Tax Bill Could Cut Clean Energy Bets By These Big Banks

BloombergMarkets reports that the Senate version of the tax bill, while maintaining important credits for wind and solar farms, imposes a minimum tax on foreign transactions of big banks and other large investors that may act to erode the value of the credits, in turn hurting the availability of tax equity financing and leaving renewable energy companies short on investors.

“Your neighborhood bank won’t be able to fill the gap,” Jenner said. “They don’t have the infrastructure like a JPMorgan, a US Bank or a Goldman.”

Published by BloombergMarkets December 4, 2017. The full article can be found here.

Renewable Cos. Eye Damage Control As Tax Plan Advances

Law360 reported on the how the two versions of the tax bill will impact the renewables industry. The House bill will reduce the benefits of the ITC and PTC. The Senate bill doesn’t directly affect the ITC and PTC, but adds the BEAT provision and leaves the AMT in place, as discussed above.

The inclusion of the AMT worries those in the wind industry because corporations, which would have to pay the AMT, would only be able apply the PTC to their tax bills for the first four years after a project is placed in service. (Currently, the PTC is in effect for 10 years after a project is brought online.) This will have a chilling effect on investment in new projects, according to Jenner.

“For purposes of the AMT ... all of a sudden, they've created a situation where the PTCs are worthless after four years,” he said. “There are deals out there where investors say, 'We're not going to fund under these provisions.' They have stopped these deals cold.”

Published by Law360, December 4, 2017. The full article can be found here.

SolarWakeup Live! Video: Tax Reform Bill Explained by DC Lawyers from Stoel Rives and Mintz Levin

Host Yann Brandt interviewed Greg Jenner and Audrey Louison from Mintz Levin for a segment on SolarWakeup Live! The three discuss how the corporate AMT, a lower corporate tax rate and the BEAT provision will affect the solar industry.

Posted by SolarWakeup, December 6, 2017. The video can be found here.

Subscribe to our news & alerts

Key Contributors

See all contributors See less contributors
×
Saved Pages

Use the arrows to arrange content.  Download pages as a .pdf file or share links via email..

{{ item.Title }} {{ item.AttorneyPosition }}, {{ item.AttorneyLocation }} , C. {{ item.AttorneyCell }} , P. {{ item.AttorneyPhone }} , F. {{ item.AttorneyFax }} {{ item.TypeText }} Remove
You have no pages saved
            {{ state | json }}