S.448 - Credit Incentives for Resilient Critical Utility Infrastructure and Transformers Act; CIRCUIT Act (119th Congress)
Summary
S.448, the CIRCUIT Act, aims to amend the Internal Revenue Code of 1986 to expand the advanced manufacturing production credit under Section 45X to include distribution transformers. This bill introduces a 10% tax credit for the production costs of distribution transformers. The bill defines 'distribution transformer' by referencing the Energy Policy and Conservation Act.
Expected Effects
The primary effect of this bill would be to incentivize the domestic production of distribution transformers through tax credits. This could lead to increased investment in manufacturing facilities and potentially lower costs for utilities and consumers. The effective date is set 90 days after enactment.
Potential Benefits
- Increased domestic manufacturing of distribution transformers.
- Potential reduction in the cost of distribution transformers due to the tax credit.
- Job creation in the manufacturing sector.
- Enhanced grid resilience through increased availability of domestically produced transformers.
- Reduced reliance on foreign suppliers for critical infrastructure components.
Potential Disadvantages
- Potential for increased government debt due to the tax credits.
- Possible market distortion if the tax credit disproportionately favors certain manufacturers.
- Complexity in administering and verifying the eligibility for the tax credit.
- The cost of the tax credit may outweigh the benefits if not carefully managed.
- Dependence on government subsidies can stifle innovation in the long run.
Constitutional Alignment
The bill aligns with the Constitution's Article I, Section 8, which grants Congress 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. By incentivizing the production of critical infrastructure components, the bill can be argued to promote the general welfare and potentially enhance national security by reducing reliance on foreign suppliers. The bill does not appear to infringe upon any specific constitutional limitations or individual rights.
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).