On Dec. 18, Senate Finance Committee Chairman Max Baucus, D-Mont., released a discussion draft of legislation that aims to reform U.S. energy tax incentives. The proposed energy tax incentives are a simpler set of incentives to promote cleaner energy that are designed to be technology-neutral and more predictable.

Currently, there are 42 different energy tax incentives, including 16 for clean energy, alternative vehicles and renewable fuels. Of these, over half are temporary and expire every year or two, creating considerable uncertainty for investors and developers seeking to utilize these incentives. Although taxpayers would welcome the greater predictability offered by the Baucus proposal, there are many aspects that may not be viewed favorably, including the elimination of many existing incentives.

Originally published in Law360, New York on January 14, 2014.