H.R.2187 - 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. (119th Congress)
Summary
H.R.2187 aims 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 or coastal waters of the United States. The bill targets sections 48(a)(5), 45(d)(1), 45Y(b)(1), and 48E(b)(3) of the code. It effectively removes tax incentives for offshore wind projects located in these specific areas.
The bill was introduced in the House of Representatives on March 18, 2025, and referred to the Committee on Ways and Means. The proposed changes would apply to energy produced and property placed in service after December 31, 2025.
The bill is sponsored by Mr. Fallon, Mr. Gooden, Ms. Hageman, and Mr. Gill of Texas.
Expected Effects
If enacted, H.R.2187 would likely reduce or eliminate the financial attractiveness of developing offshore wind facilities in inland navigable and coastal waters of the US. This could lead to a decrease in the number of such projects.
This could shift investment towards wind energy projects located further offshore or towards other renewable energy sources. It may also impact the overall deployment of renewable energy infrastructure.
The change could also affect energy production and potentially increase costs for consumers.
Potential Benefits
- Could potentially reduce visual impact on coastal areas by discouraging near-shore wind farms.
- May incentivize development of wind farms in deeper waters, potentially reducing impacts on near-shore ecosystems.
- Could lead to a more diversified energy portfolio if investments shift to other renewable sources.
- Could reduce potential conflicts with traditional maritime activities in navigable waters.
- May decrease the tax burden if the credits are deemed wasteful or ineffective.
Most Benefited Areas:
Potential Disadvantages
- Could slow down the development of offshore wind energy, hindering progress towards renewable energy goals.
- May increase the cost of offshore wind energy projects if developers are forced to use more expensive locations or technologies.
- Could lead to job losses in the offshore wind industry, particularly in coastal regions.
- May reduce the overall energy supply, potentially increasing reliance on fossil fuels.
- Could negatively impact states with ambitious offshore wind energy targets.
Constitutional Alignment
The bill appears to fall under the purview of Congress's power to tax and regulate commerce, as outlined in Article I, Section 8 of the Constitution. Specifically, Congress has the power to lay and collect taxes, duties, imposts, and excises, and to regulate commerce with foreign nations, and among the several states.
The bill does not appear to infringe upon any specific individual rights or liberties protected by the Bill of Rights. However, the impact on interstate commerce and energy policy could be subject to debate regarding the balance of power between the federal government and the states.
There is no explicit constitutional provision directly addressing energy policy or tax credits for renewable energy. Therefore, the constitutionality of the bill likely hinges on whether it is a reasonable exercise of Congress's enumerated powers.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).