Treasury Department Issues Guidance on Application Procedure for Grants in Lieu of Tax Credits for Specified Energy Property
Written by Charles H. Purcell (Seattle), Eric E. Freedman (Seattle), Dirk Michels (Palo Alto), Darcie L. Christopher (Seattle)
On February 17, 2009, President Obama signed the American Recovery and Reinvestment Act of 2009 (the "2009 Recovery Act"). Section 1603 of the 2009 Recovery Act generally provides that certain taxpayers may, in lieu of claiming any available federal investment tax credit or production tax credit, apply to the Secretary of the Treasury ("Treasury") for a cash grant when they place "specified energy property" in service.
"Specified energy property" generally includes wind facilities, closed- and open-loop biomass facilities, geothermal facilities, landfill gas facilities, trash facilities, certain hydropower facilities, marine and hydrokinetic renewable energy facilities, solar energy property, geothermal energy property, qualified fuel cell property, qualified microturbine property, combined heat and power system property, and geothermal heat pump property. The grant reimburses the taxpayer for a portion - from 10% to 30% - of the cost of such facilities. Although Treasury officials expect to make grants totaling approximately $3 billion under the grant program, Treasury is not limited in the amount of grants it may disburse to qualified applicants.
