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This bill would stop certain federal tax credits from going to solar energy projects built on prime farmland or unique farmland. In simple terms, it aims to keep valuable farm land in agricultural use by making solar projects on that land ineligible for key energy tax benefits. The change would affect both the tax credit for energy property and the credit for producing clean electricity. It would apply only to new projects that are put into service after the bill becomes law.
- Solar projects on prime farmland or unique farmland would no longer qualify for the federal energy investment credit.
- Solar facilities on that land would also be blocked from the clean electricity production credit.
- The bill uses the Agriculture Department’s definitions of “prime farmland” and “unique farmland.”
- The new rule would apply only to property placed in service after the date the law is enacted.
Official Summaries
Protect Agriculture, Nutrients, and Essential Lands from Solar Act or the PANELS Act
This bill excludes expenses for solar property placed in service on prime or unique farmland from the energy investment tax credit. The bill also excludes solar facilities placed on prime or unique farmland from the clean electricity production tax credit.
Under current law, businesses may be able to claim an energy investment tax credit for qualified solar property placed into service before January 1, 2025. This bill excludes expenses for solar property placed into service on prime or unique farmland (e.g., land with the best combination of physical and chemical characteristics for the production of food and other related uses) from the energy investment tax credit.
Further, under current law, a business may also be able to claim the clean electricity production tax credit for the production of electricity using a qualified facility that has no greenhouse gas emissions. The amount of the tax credit is based on the amount of electricity produced and sold by a qualified facility placed into service in 2025 or after. This bill modifies the definition of qualified facility to exclude solar facilities placed on prime or unique farmland.
Current Full Text
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1237 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 1237
To amend the Internal Revenue Code of 1986 to deny the energy credit to
property located on prime or unique farmland, as defined by the
Secretary of Agriculture in part 657 of title 7, Code of Federal
Regulations, if such property is used for generating solar energy.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 12, 2025
Mr. Bost (for himself and Mr. Finstad) introduced the following bill;
which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to deny the energy credit to
property located on prime or unique farmland, as defined by the
Secretary of Agriculture in part 657 of title 7, Code of Federal
Regulations, if such property is used for generating solar energy.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Protect Agriculture, Nutrients, and
Essential Lands from Solar Act'' or the ``PANELS Act''.
SEC. 2. CREDITS AMENDED TO EXCLUDE PROPERTY LOCATED ON PRIME OR UNIQUE
FARMLAND.
(a) Energy Credit.--
(1) Energy property.--Section 48(a)(3) of the Internal
Revenue Code of 1986 is amended by striking the period at the
end and inserting ``, or property which is located on prime
farmland or unique farmland if such property is used for
generating solar energy.''
(2) Qualified property.--Section 48(a)(5)(D) of such Code
is amended--
(A) in clause (iii), by striking ``and'' at the
end,
(B) in clause (iv), by striking the period at the
end and inserting ``, and'', and
(C) by adding at the end the following new clause:
``(v) which, in the case of property used
for the purpose of generating solar energy, is
not located on prime farmland or unique
farmland.''.
(3) Definitions added.--Section 48(c) of such Code is
amended by adding at the end the following new paragraph:
``(9) Prime farmland; unique farmland.--The terms `prime
farmland' and `unique farmland' have the meaning given such
terms in part 657 of title 7, Code of Federal Regulations.''.
(4) Qualified solar and wind facility.--Section 48(e)(2)(A)
of such Code is amended--
(A) in clause (ii), by striking ``and'' at the end,
(B) in clause (iii), by striking the period at the
end and inserting ``, and'', and
(C) by adding at the end the following new clause:
``(iv) which, in the case of a facility
used for generating solar energy, is not
located on prime farmland or unique
farmland.''.
(b) Clean Electricity Production Credit.--Section 45Y(b)(1) is
amended--
(1) in subparagraph (A), by striking ``subparagraphs (B),
(C), and (D),'' and inserting ``subparagraphs (B), (C), (D),
and (E)'', and
(2) by adding at the end the following new subparagraph:
``(E) Prime farmland and unique farmland
excluded.--The term `qualified facility' shall not
include any facility used for generating solar energy
if such facility is located on prime farmland or unique
farmland (as such terms are defined in section
48(c)(9)).''.
(c) Effective Date.--The amendments made by this section shall
apply to property placed in service after the date of the enactment of
this Act.
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