Dear Ms. Neubauer:
Lane Powell PC represents developers of projects that involve the recovery of combustible gas from the biodegradation of municipal solid waste (“Biogas”) for the purpose of producing electricity. In the course of developing Biogas projects, the developers must make numerous business decisions relating to the geographical location and ownership of various large pieces of equipment, including generating equipment. Each project will qualify for the investment tax credit (“ITC”) under section 481 and the grant under ARRA section 1603 (the “1603 Grant”) if the various components of the project are owned by a single person and located at a single site. However, locating all project components at a single site may require the developers to incur substantial avoidable costs and may significantly increase the amount of federal subsidy for any given amount of electricity produced from Biogas generated by the project.
The purpose of this letter is to seek administrative clarification that the term “qualified facility,” as used in section 48 and ARRA section 1603, is properly interpreted in a manner that permits Biogas projects to qualify for the ITC and the 1603 Grant without unnecessary restrictions on the siting and ownership of project components.
Please see full letter below for more information.
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