Energy & Infrastructure Insight - Issue 4

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S H E A R M A N & S T E R L I N G L L P | 3 1 placement to finance the acquisition of approximately 375 miles of rate-regulated electric transmission lines in Texas, (ii) bank lenders on the financing of the construction and expansion of an up to 490 MW/1,525 MWh portfolio of three battery energy storage projects located in California and (iii) bank lenders on the financing of the design, engineering and construction of three data centers located in Loudoun County, Virginia, that are leased to a subsidiary of, Inc. All of the above are on top of spending initiatives of $1.4 trillion on a range of other job creation and social welfare initiatives. MADE IN AMERICA TAX PLAN In connection with the release of the AJP, the Biden administration also released its Made in America Tax Plan which administration officials suggest would offset the full cost of the AJP over 15 years.3 Notably, the plan's proposals do not focus on increasing charges payable by infrastructure users, such as an increase in federal excise tax on gasoline or the introduction of a "vehicle miles- traveled" fee to account for the increase in hybrid and electric vehicles. Instead, it relies on a set of modifications to the tax code, including an increase of the corporate tax rate from 21 percent to 28 percent and changes to the tax treatment of income of multinational corporations. Paul Epstein Partner New York T +1 212 848 5266 1. The White House, Fact Sheet: The American Jobs Plan, March 31, 2021. 2. The White House, Fact Sheet: The American Families Plan, April 28, 2021. 3. The White House, Background Press Call by a Senior Administration Official on the President's American Jobs Plan, March 30, 2021. 4. Senate Committee on Environment and Public Works, The Republican Roadmap: A Framework to Improve the Nation's Infrastructure, April 22, 2021. Dave Ullman Associate New York T +1 212 848 5131 LEGISLATIVE OUTLOOK Discussions have begun among the Democratic and Republican parties on approaches to potential legislation. On April 22, a group of Republican Senators, including the Ranking Member of the Committee on Environment and Public Works, which handles infrastructure matters, released in response to the AJP a two-page framework to spend $568 billion over five years on infrastructure programs and initiatives (the "Roadmap").4 The Roadmap differs from the AJP in several key ways. First, whereas the AJP proposes numerous investments that supplement existing surface transportation program spending, the spending proposed by the Roadmap includes amounts already programmed for reauthorization. Second, in contrast to the AJP's wide-ranging scope, the Roadmap's scope is limited to traditional transportation and water infrastructure spending, with the addition of a substantial new investment in broadband development. Finally, unlike the AJP and the Made in America Tax Plan, the Roadmap does not include a detailed revenue proposal designed to offset the cost of new infrastructure investments. The AJP and the Roadmap present contrasting visions for infrastructure spending but do not include proposed legislative text. Accordingly, the plans will be subject to extensive negotiation among, and substantial revisions by, House and Senate leadership and relevant congressional committees. We expect the final legislative text to differ significantly from both plans and will provide further updates as legislative proposals take shape.

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