Number
240859
Version
SUBSTITUTE 1
Reference
221233, 221725
Sponsor
ALD. BROSTOFF
Title
Substitute resolution authorizing the appropriate City officials to apply for elective pay tax credits on eligible clean energy projects, retain outside counsel, and waive certain conflicts.
Analysis
The federal Inflation Reduction Act extended and expanded tax credits for qualifying clean energy projects, including but not limited to solar energy projects and electric vehicles. Additionally, the new law allows tax-exempt entities, including local governments, to receive direct payments from the federal government for qualifying projects under provisions commonly referred to as “direct pay” or “elective pay.” This resolution authorizes the Department of Administration-Environmental Collaboration Office to apply for elective pay tax credits on eligible projects. Awarded tax credits will be deposited in a newly established Contribution Account that can be sub-allocated to City Departments that installed clean energy projects or made purchases eligible for elective pay tax credits and worked with the Department of Administration-Environmental Collaboration Office to provide necessary project details and documentation to apply for those tax credits. This resolution further authorizes the City Attorney to retain Lawyers for Good Government, Inc. to provide free legal advice in relation to the City’s elective pay tax credit filing, to retain local counsel or co-counsel as necessary, also at no cost to the City, and to waive legal conflicts those firms may have in matters that are unrelated to the elective pay tax credit filing.
Body
Whereas, The City’s Climate and Equity Plan calls for a 45 percent reduction in community greenhouse gas emissions by 2030 and achieving net-zero community greenhouse gas emissions by 2050, while using the Inflation Reduction Act provisions for financing the strategies outlined in the Plan; and
Whereas, The federal Inflation Reduction Act has major provisions that expand eligibility for federal tax credits for clean energy projects including solar energy, electric vehicles, electric vehicle charging infrastructure, geothermal energy, and more; and
Whereas, The new law allows local government to receive direct payments from the federal government for qualifying projects under provisions commonly referred to as “direct pay” or “elective pay;” and
Whereas, It is in the best interest of the City financially to maximize federal funding for City priorities due to local fiscal constraints; and
Whereas,The City of Milwaukee has a small number of projects completed in 2023 that appear to be eligible for elective pay, additional electric vehicle charging and electric vehicle purchases in 2024 that will be eligible for elective pay, and geothermal and solar projects at MLK Jr. Library to be completed in 2025 that should be eligible for elective pay; and
Whereas, City staff are fiscally evaluating 2025 projects in light of possible elective pay tax credits; and;
Whereas, There is a need to centrally aggregate all eligible projects across City departments and coordinate the filing for federal elective pay tax credits by November 15, 2024 for projects completed in 2023; now, therefore, be it
Resolved, By the Common Council of the City of Milwaukee, that the Department of Administration-Environmental Collaboration Office is authorized to identify tax-credit eligible projects and annually file for tax credits; and, be it
Further Resolved, That the Department of Administration-Environmental Collaboration Office is authorized to file pre-application forms, including applications for low-income community bonus credits; and, be it
Further Resolved, That upon receipt of any federal elective pay tax credits, the Comptroller shall establish a new Contribution Account entitled “Federal Elective Pay Tax Credits” and deposit funds received into that Contribution Account; and, be it
Further Resolved, That the Funds deposited in the Federal Elective Pay Tax Credits Contribution Account shall be sub-allocated to the appropriate City Departments that installed clean energy projects or made purchases eligible for elective pay tax credits; and, be it
Further Resolved, That the City Attorney is authorized to:
1. Retain Lawyers for Good Government, Inc. to provide free legal advice in relation to the City’s elective pay tax credit filing;
2. Authorize Lawyers for Good Government, Inc. to retain local counsel or co-counsel as the City Attorney determines necessary, also at no cost to the City; and
3. Waive legal conflicts those firms may have in matters that are unrelated to the City’s elective pay tax credit filing.
Requestor
Department of Administration - Environmental Collaboration Office
Drafter
LRB180266-1
Pamela Ritger/Jeff Osterman
10/21/2024