HR-310-119
Referred to the House Committee on Ways and Means.
Sponsored by Scott Perry (R-PA)
What it does
This bill would repeal more than a dozen federal business tax credits related to energy production and manufacturing. Credits eliminated would include those for wind and solar electricity production, clean electricity from zero-emission facilities, nuclear power production, carbon capture and sequestration, clean hydrogen production, advanced manufacturing of energy components (including solar and wind parts), semiconductor manufacturing, and various energy investment credits. The repeals would apply to both legacy credits (for facilities built before 2025) and newer credits (for facilities placed in service in 2025 or after).
Who benefits
Fossil fuel energy producers who compete with subsidized renewable energy and would face a more level playing field. Taxpayers who oppose federal subsidies for specific industries on principle. Deficit-reduction advocates, as repealing these credits would increase federal revenue. Traditional energy workers in coal, oil, and natural gas whose industries do not receive equivalent credits. Legislators and constituencies who prefer market-driven energy pricing without government intervention through the tax code.
Who is hurt
Renewable energy companies (wind, solar, clean hydrogen) that have built business models around these credits. Nuclear power plant operators, including both legacy plants and new advanced nuclear facilities. Semiconductor manufacturers benefiting from the advanced manufacturing investment credit. Workers employed in renewable energy and clean manufacturing sectors, which the Department of Energy estimated at over 3 million jobs as of 2023. Investors and project financiers who have committed capital based on the existence of these credits. Rural landowners and communities that host wind and solar projects and receive lease payments. Utilities and electricity consumers in regions where renewables have lowered electricity costs. Companies that have entered long-term contracts or begun construction in reliance on these credits.
Supporters argue
Supporters argue that these credits represent hundreds of billions of dollars in federal spending that distorts energy markets by artificially favoring certain technologies over others, and that the free market — not the tax code — should determine which energy sources succeed. They contend that many of these credits, particularly those created or expanded by the Inflation Reduction Act of 2022, have ballooned far beyond initial cost estimates, with the University of Pennsylvania's Penn Wharton Budget Model projecting the IRA's energy credits could cost over $1 trillion over a decade. They further argue that mature industries like wind and solar no longer need government support to compete and that eliminating these credits would reduce the federal deficit and restore neutrality across energy sources.
Opponents argue
Opponents argue that abruptly repealing these credits would strand billions of dollars in private investment already committed in reliance on existing law, destabilizing energy markets and eliminating jobs in one of the fastest-growing sectors of the U.S. economy. They contend that the credits serve national security and economic competitiveness goals — particularly the semiconductor manufacturing credit — by reducing dependence on foreign supply chains, and that eliminating the nuclear production credits could accelerate plant closures and reduce grid reliability. They further argue that the credits have driven a measurable buildout of domestic manufacturing capacity, with the American Clean Power Association reporting over $300 billion in announced private investment since 2022, investment that would be placed at risk by retroactive or near-term repeal.
Constitutional context
Tax legislation must originate in the House under the Origination Clause (Art. I, §7, cl. 1), and this bill was introduced in the House and referred to the Ways and Means Committee, satisfying that requirement. The Taxing and Spending Clause (Art. I, §8, cl. 1) gives Congress broad authority to modify or repeal existing tax credits. No significant constitutional tension is raised by repealing existing statutory credits, though the Due Process Clause (5th Amendment) could be implicated if any repeal is applied retroactively to tax years already closed.
Checks and balances
Congress would reduce its own prior tax expenditure commitments; the Executive Branch (IRS/Treasury) would implement the repeals through updated guidance; courts could review any retroactivity challenges under the Due Process Clause, though prospective repeal of tax credits faces a low bar for constitutional challenge.
Historical precedent
The Tax Reform Act of 1986 eliminated or curtailed numerous energy tax credits as part of a broad base-broadening effort, and was followed by significant contraction in certain energy sectors, particularly wind, that had grown in reliance on those credits.