Credit Incentives for Resilient Critical Utility Infrastructure and Transformers Act; CIRCUIT Act
Summary
H.R. 4128, the Credit Incentives for Resilient Critical Utility Infrastructure and Transformers Act (CIRCUIT Act), aims to amend the Internal Revenue Code of 1986. The amendment expands the advanced manufacturing production credit under Section 45X to include distribution transformers. This bill intends to incentivize the domestic production of these critical components of the electrical grid.
Expected Effects
The CIRCUIT Act will likely increase domestic manufacturing of distribution transformers by providing a tax credit. This could lead to lower costs for utilities and potentially improve the resilience of the electrical grid. The effective date is set 90 days after enactment, allowing time for manufacturers to adjust.
Potential Benefits
- Increased domestic production of distribution transformers.
- Potential reduction in costs for utility companies.
- Enhanced resilience of critical utility infrastructure.
- Job creation in the manufacturing sector.
- Support for advanced manufacturing within the United States.
Potential Disadvantages
- Potential increased tax burden on other sectors or taxpayers to offset the credit.
- Possible market distortion due to government subsidies.
- Risk of inefficient allocation of resources if the credit is not well-targeted.
- Administrative costs associated with implementing and monitoring the tax credit.
- The 90-day delay might cause short-term uncertainty in the transformer market.
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 aims to promote the general welfare. The bill does not appear to infringe upon any specific constitutional limitations.
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).