[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7388 Introduced in House (IH)]
<DOC>
117th CONGRESS
2d Session
H. R. 7388
To amend the Internal Revenue Code of 1986 to provide a manufacturing
investment tax credit and a production tax credit for manufacturing
facilities that produce offshore wind turbine components.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 4, 2022
Mr. Pascrell (for himself, Mr. Norcross, Mr. Scott of Virginia, Mrs.
Luria, and Mr. McEachin) 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 provide a manufacturing
investment tax credit and a production tax credit for manufacturing
facilities that produce offshore wind turbine components.
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 ``Offshore Wind American Manufacturing
Act of 2022''.
SEC. 2. OFFSHORE WIND MANUFACTURING CREDIT.
(a) In General.--Subpart C of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 is amended by inserting after
section 36B the following new section:
``SEC. 36C. OFFSHORE WIND MANUFACTURING CREDIT.
``(a) Allowance of Credit.--There shall be allowed as a credit
against the tax imposed by this subtitle for any taxable year an amount
equal to the sum of--
``(1) the offshore wind manufacturing investment credit,
and
``(2) the offshore wind manufacturing production credit.
``(b) Credit Amounts.--For purposes of this section--
``(1) Manufacturing investment credit.--
``(A) In general.--The offshore wind manufacturing
investment credit for any taxable year is an amount
equal to 30 percent of the qualified investment for
such taxable year.
``(B) Qualified investment.--
``(i) In general.--The qualified investment
for any taxable year is the basis of any
advanced offshore wind manufacturing property
placed in service in the United States by the
taxpayer during such taxable year.
``(ii) Limitation.--In the case of property
which is leased by the taxpayer as described in
subparagraph (C)(iii)(II), the qualified
investment shall not exceed the payments made
by the taxpayer under the lease, except to the
extent the taxpayer incurs expenses with
respect to such property which are not covered
by the lease.
``(C) Advanced offshore wind manufacturing
property.--The term `advanced offshore wind
manufacturing property' means property--
``(i) which is used predominantly to
manufacture, meaningfully assemble, or process
any qualified offshore wind component,
``(ii) with respect to which depreciation
(or amortization in lieu of depreciation) is
allowable, and
``(iii) which--
``(I) is constructed,
reconstructed, or erected by the
taxpayer, or
``(II) which is leased or acquired
by the taxpayer, if the original use of
such property commences with the
taxpayer.
``(2) Manufacturing production credit.--
``(A) In general.--The offshore wind manufacturing
production credit is an amount equal to the applicable
rate with respect to any qualified offshore wind
component, related vessel, qualified cable, or
qualified steel which--
``(i) is produced by the taxpayer at a
qualified manufacturing facility, and
``(ii) during the taxable year--
``(I) is sold by the taxpayer to--
``(aa) an unrelated person,
or
``(bb) a related person for
the use of such person in their
trade or business (with the
exception of any trade or
business related to resale of
such offshore wind component
without any subsequent
modification, assembly, or
integration into a project), or
``(II) if not sold, is placed in
service or operation by the taxpayer or
any other person.
``(B) Applicable rate.--The applicable rate is--
``(i) with respect to any qualified
offshore wind component other than a
substation, the total rated capacity (expressed
on a per watt basis) of the completed offshore
wind turbine for which the component is
designed, multiplied by--
``(I) in the case of any blade or
drive train, 2 cents,
``(II) in the case of any tower, 3
cents,
``(III) in the case of any
foundation, 4 cents, and
``(IV) in the case of any nacelle,
5 cents,
``(ii) with respect to any substation, 2
cents per watt of total rated capacity,
``(iii) with respect to any related vessel,
an amount equal to 10 percent of the sale price
of such vessel,
``(iv) with respect to any qualified cable,
an amount equal to the product of--
``(I) 30 cents multiplied by the
total rated capacity (expressed on a
per kilowatt basis) of such cable,
multiplied by
``(II) the number of kilometers of
such cable placed in service, and
``(v) with respect to any qualified steel,
an amount equal to 10 percent of the sale price
of such steel.
``(C) Qualified manufacturing facility.--The term
`qualified manufacturing facility' means any new or
existing facility--
``(i) which is located in the United
States, and
``(ii) which manufactures or meaningfully
assembles qualified offshore wind components,
related vessels, qualified cables, or qualified
steel.
``(D) Production and sale must be in trade or
business.--Any qualified offshore wind component,
related vessel, qualified cable, or qualified steel,
produced and sold by the taxpayer shall be taken into
account under subparagraph (A)(ii)(I) only if the
production and sale described in subparagraph (A) is in
a trade or business of the taxpayer.
``(c) Definitions.--For purposes of this section--
``(1) Qualified offshore wind component.--
``(A) In general.--The term `qualified offshore
wind component' means any blade, tower, nacelle, drive
train, foundation, or substation.
``(B) Definitions.--
``(i) Blade.--The term `blade' means an
airfoil-shaped blade which is responsible for
converting offshore wind energy to low speed
rotational energy.
``(ii) Tower.--The term `tower' means a
tubular steel, concrete, or steel lattice which
supports the structure of an offshore wind
turbine, and the transition piece which
connects the tower to the foundation.
``(iii) Nacelle.--The term `nacelle' means
the assembly of the drive train and other
tower-top components of an offshore wind
turbine (other than the blade) within their
cover housing.
``(iv) Drive train.--The term `drive train'
means the component which is housed in the
nacelle and converts the low-speed, high-torque
rotation of the rotor to electrical energy.
``(v) Foundation.--The term `foundation'
means the component which secures an offshore
wind tower and above-water turbine components
to the sea floor, including--
``(I) fixed-bottom foundations such
as monopiles, jackets, or gravity-based
foundations, or
``(II) floating platforms and
associated mooring systems.
``(vi) Substation.--The term `substation'
means a structure which is dedicated to the
transmission of energy generated by offshore
wind.
``(2) Related vessel.--The term `related vessel' means any
vessel which is purpose-built or retrofitted for purposes of
the development, transport, installation, operation, or
maintenance of offshore wind components and offshore wind
turbines.
``(3) Qualified cable.--The term `qualified cable' means--
``(A) any export cable with a total rated capacity
of not less than 132 kilovolts, and
``(B) any interarray cable with a total rated
capacity of not less than 66 kilovolts.
``(4) Qualified steel.--The term `qualified steel' means
steel which is used in the tower or foundation with respect to
an offshore wind turbine.
``(d) Special Rules.--For purposes of this section--
``(1) Secretary.--Any reference to the Secretary means the
Secretary in consultation with the Secretary of Energy, except
that the Secretary shall have the authority to implement
regulations and other guidance under this section.
``(2) Certain rules made applicable for investment
credit.--For purposes of the offshore wind manufacturing
investment credit determined under subsection (b)(1), rules
similar to the rules of subsections (a) and (c) of section 50
shall apply.
``(3) Coordination with general investment credit.--No
credit shall be allowed under section 48C with respect to any
facility taken into account for purposes of the credit under
subsection (b)(2), or any facility with respect to which any
qualified investment is taken into account for purposes of the
credit under subsection (b)(1). The credit under this section
shall be allowed without regard to whether any qualified
investment (as defined in section 48C(b)) with respect to a
facility has been taken into account for purposes of section
48C in any preceding taxable year.
``(4) Labor conditions with respect to offshore wind
manufacturing investment credit.--
``(A) In general.--In the case of any advanced
offshore wind manufacturing property which does not
satisfy the requirements of subparagraphs (B) and (C),
as determined by the Secretary, the amount of the
credit determined under subsection (b)(1) shall be 6
percent of such amount (as determined without regard to
this subparagraph).
``(B) Prevailing wage requirements.--
``(i) In general.--The taxpayer shall
ensure that any laborers and mechanics employed
by contractors or subcontractors in--
``(I) the construction,
reconstruction, or erection of any
advanced offshore wind manufacturing
property, and
``(II) for the 10-year period
beginning on the date such property is
originally placed in service, any
alteration or repair of such property,
shall be paid wages at rates not less than
those prevailing on work of a character similar
in the locality as determined by the Secretary
of Labor in accordance with subchapter IV of
chapter 31 of title 40, United States Code.
``(ii) Correction and penalty related to
failure to satisfy wage requirements.--In the
case of any taxpayer which fails to satisfy the
requirements of clause (i), such taxpayer shall
be deemed to have satisfied such requirement
for any year if, with respect to any laborer or
mechanic who was paid wages at a rate below the
rate described in such clause for any period
during such year, such taxpayer--
``(I) makes payment to such laborer
or mechanic in an amount equal to the
sum of--
``(aa) an amount equal to
the difference between the
amount of wages paid to such
laborer or mechanic during such
period and the amount of wages
required to be paid to such
laborer or mechanic pursuant to
such clause during such period,
multiplied by 3, and
``(bb) interest on the
amount determined under item
(aa) at the underpayment rate
established under section 6621
for the period described in
such item, and
``(II) makes payment to the
Secretary of a penalty in an amount
equal to the product of--
``(aa) $5,000, multiplied
by
``(bb) the total number of
laborers and mechanics who were
paid wages at a rate below the
rate described in clause (i)
for any period during such
year.
``(C) Apprenticeship requirements.--
``(i) Apprentice labor hours.--
``(I) Percentage of total labor
hours.--Each contractor and
subcontractor engaged in the
performance of construction,
reconstruction, or erection of any
advanced offshore wind manufacturing
property, shall, subject to subclause
(III), ensure that not less than the
applicable percentage of the total
labor hours of such work be performed
by qualified apprentices.
``(II) Applicable percentage.--For
purposes of subclause (I), the
applicable percentage shall be
determined separately with respect to
each contractor and subcontractor in
accordance with the following table:
------------------------------------------------------------------------
The
``In the case of any advanced offshore wind manufacturing applicable
property the construction, reconstruction, or erection of percentage
which, begins: is:
------------------------------------------------------------------------
Before January 1, 2023..................................... 10%
After December 31, 2022, and before January 1, 2024........ 12%
After December 31, 2023.................................... 15%.
------------------------------------------------------------------------
``(III) Apprentice to journeyworker
ratio.--The requirements of subclause
(I) shall be subject to any applicable
requirements for apprentice-to-
journeyworker ratios of the Department
of Labor or the applicable State
apprenticeship agency recognized by the
Office of Apprenticeship, pursuant to
the Act of August 16, 1937 (commonly
known as the National Apprenticeship
Act) (50 Stat. 664, chapter 663; 29
U.S.C. 50 et seq.).
``(ii) Apprentice diversity.--Each
contractor and subcontractor engaged in the
performance of construction, reconstruction, or
erection of any advanced offshore wind
manufacturing property shall have a plan to
hire, retain, and increase participation of
apprentices from underrepresented groups to the
greatest extent possible.
``(iii) Exception.--Clause (i) shall not
apply in the case of a taxpayer who
demonstrates--
``(I) a lack of availability of
qualified apprentices in the geographic
area of the construction, alteration,
or repair work, and
``(II) a good faith effort to
comply with the requirements of such
clause.
``(iv) Penalties.--In the case of any
failure to satisfy the requirements of clause
(i) (except as provided in clause (iii)) with
respect to any construction, reconstruction, or
erection of any advanced offshore wind
manufacturing property, the taxpayer shall make
payment to the Secretary of an amount equal
to--
``(I) $500, multiplied by
``(II) the total labor hours for
which such requirements were not
satisfied by any contractor of
subcontractor.
``(v) Definitions.--For purposes of this
subparagraph--
``(I) Good faith effort.--The term
`good faith effort' means that the
taxpayer has requested qualified
apprentices from a registered
apprenticeship program, as defined in
section 3131(e)(3)(B), and such request
has been denied. The preceding sentence
shall not apply if such denial is the
result of a refusal by the contractors
or subcontractors engaged in the
performance of construction,
reconstruction, or erection of any
advanced offshore wind manufacturing
property to comply with the established
standards and requirements of such
apprenticeship program.
``(II) Labor hours.--The term
`labor hours' means the total number of
hours devoted to the performance of
construction, reconstruction, or
erection work by employees of the
contractor or subcontractor. Such term
does not include any hours worked by--
``(aa) foremen,
``(bb) superintendents,
``(cc) owners, or
``(dd) persons employed in
a bona fide executive,
administrative, or professional
capacity (within the meaning of
such terms as used in part 541
of title 29, Code of Federal
Regulations).
``(III) Qualified apprentice.--The
term `qualified apprentice' means an
employee participating in an
apprenticeship program registered with
the Office of Apprenticeship of the
Employment Training Administration of
the Department of Labor or a State
apprenticeship agency recognized by the
Office of Apprenticeship pursuant to
the Act of August 16, 1937 (commonly
known as the National Apprenticeship
Act) (50 Stat. 664, chapter 663; 29
U.S.C. 50 et seq.).
``(5) Labor standard with respect to offshore wind
manufacturing production credit.--
``(A) In general.--In the case of any qualified
manufacturing facility which satisfies the requirements
of subparagraph (B), as determined by the Secretary,
the amount of the credit determined under subsection
(b)(2) shall be increased by 10 percent of the amount
of such credit determined without regard to this
subparagraph.
``(B) Labor requirements.--A qualified
manufacturing facility satisfies the requirements of
this subparagraph if all employees providing production
or maintenance services at such facility are
represented for the purposes of collective bargaining
under section 9 of the National Labor Relations Act (29
U.S.C. 159).
``(e) Registration.--
``(1) In general.--No credit shall be allowed under this
section unless the taxpayer registers with the Secretary, at
such time, in such form and manner, and subject to such terms
and conditions, as the Secretary may by regulations prescribe.
Such regulations shall include a provision that each taxpayer
must submit a declaration made under the penalties of perjury
certifying compliance with the requirements under paragraphs
(4) and (5) of subsection (d).
``(2) Registration in event of change in ownership.--Under
regulations prescribed by the Secretary, the taxpayer (other
than a corporation the stock of which is regularly traded on an
established securities market) shall be required to re-register
under this subsection if after a transaction (or series of
related transactions) more than 50 percent of ownership
interests in, or assets of, the taxpayer are held by persons
other than persons (or persons related thereto) who held more
than 50 percent of such interests or assets before the
transaction (or series of related transactions).
``(3) Denial, revocation, or suspension of registration.--
Rules similar to the rules of section 4222(c) shall apply to
registration under this section.
``(4) Information reporting.--The Secretary may require--
``(A) information reporting by any person
registered under this subsection, and
``(B) information reporting by such other persons
as the Secretary deems necessary to carry out this
section.
``(f) Termination.--
``(1) Offshore wind manufacturing investment tax credit.--
``(A) In general.--Except as provided in
subparagraph (B), in the case of any qualified
investment with respect to advanced offshore wind
manufacturing property which is placed in service after
December 31, 2028, the amount of the credit determined
under subsection (b)(1) (without regard to this
subsection) shall be reduced by--
``(i) in the case of property placed in
service in calendar year 2029, 30 percent,
``(ii) in the case of property placed in
service in calendar year 2030, 65 percent, and
``(iii) in the case of property placed in
service after December 31, 2030, 100 percent.
``(B) Certain progress expenditure rules made
applicable.--Rules similar to the rules of subsections
(c)(4) and (d) of section 46 (as in effect on the day
before the date of the enactment of the Revenue
Reconciliation Act of 1990) shall apply for purposes of
subparagraph (A).
``(2) Offshore wind manufacturing production tax credit.--
No credit shall be allowed under subsection (b)(2) in the case
of any qualified offshore wind component, related vessel,
qualified cable, or qualified steel, first sold or placed in
service after December 31, 2030.''.
(b) Clerical Amendment.--The table of sections for subpart C of
part IV of subchapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by inserting after the item relating to section 36B the
following new item:
``Sec. 36C. Offshore wind manufacturing credit.''.
(c) Conforming Amendment.--Paragraph (2) of section 1324(b) of
title 31, United States Code, is amended by inserting ``, 36C'' after
``36B''.
(d) Effective Date.--The amendments made by this section shall
apply to--
(1) any qualified investment (as defined in section
36C(b)(1)(B) of the Internal Revenue Code of 1986, as added by
this section) with respect to property placed in service
beginning after August 1, 2021, and
(2) qualified offshore wind components, related vessels,
qualified cables, or qualified steel (within the meaning of
section 36C of such Code, as so added) first sold or placed in
service after August 1, 2021.
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