Section 1603 of the American Recovery and Reinvestment Tax Act (ARRTA) was a green energy subsidy program created by Congress and signed into law as a part of the 2009 stimulus package. The program was a system of cash grants that was implemented by the U.S. Treasury Department's "Payments for Specified Energy Projects in Lieu of Tax Credits."

Purpose

The purpose of payments made from the Section 1603 program were to reimburse grant recipients for a portion of the cost they incurred to install certain types of energy systems at business locations. Payments were made after the energy systems were installed.

Qualifying energy systems

The types of energy systems that qualified for the program were

biomass Biomass is plant-based material used as a fuel for heat or electricity production. It can be in the form of wood, wood residues, energy crops, agricultural residues, and waste from industry, farms, and households. Some people use the terms bi ...

, combined heat and power,

fuel cell A fuel cell is an electrochemical cell that converts the chemical energy of a fuel (often hydrogen) and an oxidizing agent (often oxygen) into electricity through a pair of redox reactions. Fuel cells are different from most batteries in requ ...

s, geothermal, incremental hydropower,

landfill gas Landfill gas is a mix of different gases created by the action of microorganisms within a landfill as they decompose organic waste, including for example, food waste and paper waste. Landfill gas is approximately forty to sixty percent methane, ...

, marine hydrokinetic, microturbine,

municipal solid waste Municipal solid waste (MSW), commonly known as trash or garbage in the United States and rubbish in Britain, is a waste type consisting of everyday items that are discarded by the public. "Garbage" can also refer specifically to food waste, ...

solar Solar may refer to: Astronomy * Of or relating to the Sun ** Solar telescope, a special purpose telescope used to observe the Sun ** A device that utilizes solar energy (e.g. "solar panels") ** Solar calendar, a calendar whose dates indicate t ...

and

wind Wind is the natural movement of air or other gases relative to a planet's surface. Winds occur on a range of scales, from thunderstorm flows lasting tens of minutes, to local breezes generated by heating of land surfaces and lasting a few hou ...

Funding and status

As of April 2016, the program funded 104,733 projects. Total cumulative funding for the program stood at $24.9 billion. The Treasury Department no longer accepts applications. The program started in 2009 and ended in 2012. However, Congress has continued to investigate the program as recently as June 2016.

Congressional oversight and issues

Primary oversight activity over the program has occurred at the Senate Finance Committee. On June 9, 2016, Chairman Senator

Orrin Hatch Orrin Grant Hatch (March 22, 1934 – April 23, 2022) was an American attorney and politician who served as a United States senator from Utah from 1977 to 2019. Hatch's 42-year Senate tenure made him the longest-serving Republican U.S. senator ...

requested from Department of Treasury, the

Internal Revenue Service The Internal Revenue Service (IRS) is the revenue service for the United States federal government, which is responsible for collecting U.S. federal taxes and administering the Internal Revenue Code, the main body of the federal statutory ta ...

(IRS) and the

Treasury Inspector General for Tax Administration The Treasury Inspector General for Tax Administration (TIGTA) is an office in the United States Federal government. It was established in January 1999 in accordance with the Internal Revenue Service Restructuring and Reform Act of 1998 (RRA 98) t ...

(TIGTA) details about how companies use Section 1603 grants and tax credits. In March 2016, Hatch asked the IRS and Treasury Department to demonstrate that the agencies use safeguards and coordinate with each other when reviewing applications for Section 1603 grants. In 2013, an investigation by TIGTA found that the IRS did not have a system to track the accounts of taxpayers receiving Section 1603 grants. As a consequence, grant recipients could amend back tax returns to claim a tax credit in addition to receiving the grant.

Notes

References

{{reflist

External links

List of awards
(automatically downloadable PDF)
Payments for Specified Energy Property In Lieu of Tax Credits under the American Recovery And Reinvestment Act Of 2009; Terms And Conditions
(U.S. Treasury Department) Energy in the United States