H.R.2872 - Repair Expenditures Support Infrastructure, Labor Investment, Energy Needs, and Creates Equity Act of 2025; RESILIENCE Act of 2025 (119th Congress)
Summary
H.R. 2872, also known as the RESILIENCE Act of 2025, proposes an amendment to the Internal Revenue Code of 1986. The bill aims to modify the calculation of adjusted financial statement income by allowing deductions for repair and maintenance expenses related to public utility property. This adjustment would specifically target expenses incurred for property described in section 168(i)(10) of the code and accounted for as depreciation on the taxpayer's financial statement.
The bill intends to incentivize the upkeep and improvement of public utility infrastructure. It achieves this by providing a tax benefit for companies investing in the repair and maintenance of their assets.
The changes introduced by this bill would apply to taxable years beginning after December 31, 2024.
Expected Effects
The primary effect of this bill would be to reduce the taxable income of public utility companies that invest in the repair and maintenance of their infrastructure. This could lead to increased investment in these areas, potentially improving the reliability and efficiency of public utilities.
Additionally, the bill may influence how public utility companies account for repair and maintenance expenses. This could lead to changes in financial reporting practices.
Ultimately, the goal is to encourage investment in critical infrastructure by reducing the tax burden associated with these expenditures.
Potential Benefits
- Infrastructure Improvement: Encourages investment in maintaining and upgrading public utility infrastructure.
- Tax Relief for Utilities: Provides tax deductions for repair and maintenance expenses, potentially freeing up capital for further investment.
- Economic Stimulus: Could stimulate economic activity in the repair and maintenance sectors.
- Modernization of Utility Assets: Incentivizes utilities to modernize their assets, leading to greater efficiency and reliability.
- Potential Ratepayer Benefits: Improved infrastructure could lead to more reliable service and potentially lower rates for consumers in the long term.
Potential Disadvantages
- Potential for Tax Avoidance: The deduction could be exploited for tax avoidance purposes if not carefully regulated.
- Complexity in Tax Code: Adds complexity to the tax code, potentially increasing compliance costs for businesses.
- Revenue Loss for Government: Reduces government tax revenue, which could impact other programs.
- Potential for Uneven Distribution of Benefits: The benefits may disproportionately favor larger utility companies.
- Dependency on Financial Statement Accounting: Ties tax benefits to financial statement accounting, which may not always reflect economic reality.
Constitutional Alignment
The bill appears to align with the general welfare clause of the Constitution (Preamble), as it aims to improve infrastructure and public services. Congress has the power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States (Article I, Section 8, Clause 1).
The bill's focus on infrastructure improvements can be seen as promoting the general welfare. However, the specific details of the tax deductions and their potential impact on different groups would need to be carefully considered to ensure fairness and avoid any potential violations of the equal protection principles.
There are no immediate conflicts with specific constitutional rights or limitations apparent in the bill's text.
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).