[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 799 Introduced in Senate (IS)]
<DOC>
117th CONGRESS
1st Session
S. 799
To require the Secretary of Energy to establish programs for carbon
dioxide capture, transport, utilization, and storage, and for other
purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 17 (legislative day, March 16), 2021
Mr. Coons (for himself, Mr. Cassidy, Ms. Smith, Mr. Hoeven, Mr.
Whitehouse, Mrs. Capito, Ms. Duckworth, Mr. Braun, Mr. Tester, Ms.
Murkowski, and Mr. Manchin) introduced the following bill; which was
read twice and referred to the Committee on Energy and Natural
Resources
_______________________________________________________________________
A BILL
To require the Secretary of Energy to establish programs for carbon
dioxide capture, transport, utilization, and storage, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Storing
CO<INF>2</INF> And Lowering Emissions Act'' or the ``SCALE Act''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
TITLE I--UTILIZATION OF CARBON OXIDES
Sec. 101. Carbon utilization program.
TITLE II--TRANSPORTATION OF CAPTURED CARBON
Sec. 201. Carbon capture technology program.
Sec. 202. Carbon dioxide transportation infrastructure finance and
innovation.
TITLE III--GEOLOGIC STORAGE OF CAPTURED CARBON
Sec. 301. Carbon storage validation and testing.
Sec. 302. Secure geologic storage permitting.
SEC. 2. FINDINGS.
Congress finds that--
(1) the industrial sector is integral to the economy of the
United States--
(A) providing millions of jobs and essential
products; and
(B) demonstrating global leadership in
manufacturing and innovation;
(2) carbon capture and storage technologies are necessary
for reducing hard-to-abate emissions from the industrial
sector, which emits nearly 25 percent of carbon dioxide
emissions in the United States;
(3) carbon removal and storage technologies, including
direct air capture, must be deployed at large-scale in the
coming decades to remove carbon dioxide directly from the
atmosphere;
(4) large-scale deployment of carbon capture, removal,
utilization, transport, and storage--
(A) is critical for achieving mid-century climate
goals; and
(B) will drive regional economic development,
technological innovation, and high-wage employment;
(5) carbon capture, removal, and utilization technologies
require a backbone system of shared carbon dioxide transport
and storage infrastructure to enable large-scale deployment,
realize economies of scale, and create an interconnected carbon
management market;
(6) carbon dioxide transport infrastructure and permanent
geological storage are proven and safe technologies with
existing Federal and State regulatory frameworks;
(7) carbon dioxide transport and storage infrastructure
share similar barriers to deployment previously faced by other
types of critical national infrastructure, such as high capital
costs and chicken-and-egg challenges, that require Federal and
State support, in combination with private investment, to be
overcome; and
(8) each State should take into consideration, with respect
to new carbon dioxide transportation infrastructure--
(A) qualifying the infrastructure as pollution
control devices under applicable laws (including
regulations) of the State; and
(B) establishing a waiver of ad valorem and
property taxes for the infrastructure for a period of
not less than 10 years.
TITLE I--UTILIZATION OF CARBON OXIDES
SEC. 101. CARBON UTILIZATION PROGRAM.
Section 969A of the Energy Policy Act of 2005 (42 U.S.C. 16298a) is
amended--
(1) in subsection (a)--
(A) by redesignating paragraphs (3) and (4) as
paragraphs (4) and (5), respectively; and
(B) by inserting after paragraph (2) the following:
``(3) to develop or obtain, in coordination with other
applicable Federal agencies and standard-setting organizations,
standards and certifications, as appropriate, to facilitate the
commercialization of the products and technologies described in
paragraph (2);'';
(2) in subsection (b)--
(A) by redesignating paragraph (2) as paragraph
(3);
(B) by inserting after paragraph (1) the following:
``(2) Grant program.--
``(A) In general.--Not later than 1 year after the
date of enactment of the Storing CO<INF>2</INF> And
Lowering Emissions Act, the Secretary shall establish a
program to provide grants to eligible entities to use
in accordance with subparagraph (D).
``(B) Eligible entities.--To be eligible to receive
a grant under this paragraph, an entity shall be--
``(i) a State;
``(ii) a unit of local government; or
``(iii) a public utility or agency.
``(C) Applications.--Eligible entities desiring a
grant under this paragraph shall submit to the
Secretary an application at such time, in such manner,
and containing such information as the Secretary
determines to be appropriate.
``(D) Use of funds.--An eligible entity shall use a
grant received under this paragraph to procure and use
commercial or industrial products that--
``(i) use or are derived from anthropogenic
carbon oxides; and
``(ii) demonstrate significant net
reductions in lifecycle greenhouse gas
emissions compared to incumbent technologies,
processes, and products.''; and
(C) in paragraph (3) (as so redesignated), by
striking ``paragraph (1)'' and inserting ``this
subsection''; and
(3) in subsection (d), by striking paragraphs (1) through
(5) and inserting the following:
``(1) $64,000,000 for fiscal year 2021;
``(2) $65,250,000 for fiscal year 2022;
``(3) $66,562,500 for fiscal year 2023;
``(4) $67,940,625 for fiscal year 2024; and
``(5) $69,387,656 for fiscal year 2025.''.
TITLE II--TRANSPORTATION OF CAPTURED CARBON
SEC. 201. CARBON CAPTURE TECHNOLOGY PROGRAM.
Section 962 of the Energy Policy Act of 2005 (42 U.S.C. 16292) is
amended--
(1) in subsection (b)(2)--
(A) in subparagraph (C), by striking ``and'' at the
end;
(B) in subparagraph (D), by striking ``program.''
and inserting ``program for carbon capture
technologies; and''; and
(C) by adding at the end the following:
``(E) a front-end engineering and design program
for carbon dioxide transport infrastructure necessary
to enable deployment of carbon capture, utilization,
and storage technologies.''; and
(2) in subsection (d)(1)--
(A) in subparagraph (C)(ii), by striking ``and'' at
the end;
(B) in subparagraph (D), by striking the period at
the end and inserting ``; and''; and
(C) by adding at the end the following:
``(E) for activities under the front-end
engineering and design program described in subsection
(b)(2)(E), $20,000,000 for each of fiscal years 2022
through 2025.''.
SEC. 202. CARBON DIOXIDE TRANSPORTATION INFRASTRUCTURE FINANCE AND
INNOVATION.
(a) In General.--Title IX of the Energy Policy Act of 2005 (42
U.S.C. 16181 et seq.) is amended by adding at the end the following:
``Subtitle J--Carbon Dioxide Transportation Infrastructure Finance and
Innovation
``SEC. 999A. DEFINITIONS.
``In this subtitle:
``(1) CIFIA program.--The term `CIFIA program' means the
carbon dioxide transportation infrastructure finance and
innovation program established under section 999B(a).
``(2) Common carrier.--The term `common carrier' means a
transportation infrastructure operator or owner that--
``(A) publishes a publicly available tariff
containing the just and reasonable rates, terms, and
conditions of nondiscriminatory service; and
``(B) holds itself out to provide transportation
services to the public for a fee.
``(3) Contingent commitment.--The term `contingent
commitment' means a commitment to obligate funds from future
available budget authority that is--
``(A) contingent on those funds being made
available in law at a future date; and
``(B) not an obligation of the Federal Government.
``(4) Eligible project costs.--The term `eligible project
costs' means amounts substantially all of which are paid by, or
for the account of, an obligor in connection with a project,
including--
``(A) the cost of--
``(i) development-phase activities,
including planning, feasibility analysis,
revenue forecasting, environmental review,
permitting, preliminary engineering and design
work, and other preconstruction activities;
``(ii) construction, reconstruction,
rehabilitation, replacement, and acquisition of
real property (including land relating to the
project and improvements to land),
environmental mitigation, construction
contingencies, and acquisition and installation
of equipment (including labor); and
``(iii) capitalized interest necessary to
meet market requirements, reasonably required
reserve funds, capital issuance expenses, and
other carrying costs during construction; and
``(B) transaction costs associated with financing
the project, including--
``(i) the cost of legal counsel and
technical consultants; and
``(ii) any subsidy amount paid in
accordance with section 999B(c)(3)(B)(ii) or
section 999C(b)(6)(B)(ii).
``(5) Federal credit instrument.--The term `Federal credit
instrument' means a secured loan or loan guarantee authorized
to be provided under the CIFIA program with respect to a
project.
``(6) Lender.--The term `lender' means any non-Federal
qualified institutional buyer (as defined in section
230.144A(a) of title 17, Code of Federal Regulations (or a
successor regulation), commonly known as Rule 144A(a) of the
Securities and Exchange Commission and issued under the
Securities Act of 1933 (15 U.S.C. 77a et seq.)), including--
``(A) a qualified retirement plan (as defined in
section 4974(c) of the Internal Revenue Code of 1986)
that is a qualified institutional buyer; and
``(B) a governmental plan (as defined in section
414(d) of the Internal Revenue Code of 1986) that is a
qualified institutional buyer.
``(7) Letter of interest.--The term `letter of interest'
means a letter submitted by a potential applicant prior to an
application for credit assistance in a format prescribed by the
Secretary on the website of the CIFIA program that--
``(A) describes the project and the location,
purpose, and cost of the project;
``(B) outlines the proposed financial plan,
including the requested credit and grant assistance and
the proposed obligor;
``(C) provides a status of environmental review;
and
``(D) provides information regarding satisfaction
of other eligibility requirements of the CIFIA program.
``(8) Loan guarantee.--The term `loan guarantee' means any
guarantee or other pledge by the Secretary to pay all or part
of the principal of, and interest on, a loan or other debt
obligation issued by an obligor and funded by a lender.
``(9) Master credit agreement.--The term `master credit
agreement' means a conditional agreement that--
``(A) is for the purpose of extending credit
assistance for--
``(i) a project of high priority under
section 999B(c)(3)(A); or
``(ii) a project covered under section
999B(c)(3)(B);
``(B) does not provide for a current obligation of
Federal funds; and
``(C) would--
``(i) make a contingent commitment of a
Federal credit instrument or grant at a future
date, subject to--
``(I) the availability of future
funds being made available to carry out
the CIFIA program; and
``(II) the satisfaction of all
conditions for the provision of credit
assistance under the CIFIA program,
including section 999C(b);
``(ii) establish the maximum amounts and
general terms and conditions of the Federal
credit instruments or grants;
``(iii) identify the 1 or more revenue
sources that will secure the repayment of the
Federal credit instruments;
``(iv) provide for the obligation of funds
for the Federal credit instruments or grants
after all requirements have been met for the
projects subject to the agreement, including--
``(I) compliance with all
applicable requirements specified under
the CIFIA program, including sections
999B(d) and 999C(b)(1); and
``(II) the availability of funds to
carry out the CIFIA program; and
``(v) require that contingent commitments
shall result in a financial close and
obligation of credit or grant assistance by not
later than 4 years after the date of entry into
the agreement or release of the commitment, as
applicable, unless otherwise extended by the
Secretary.
``(10) Obligor.--The term `obligor' means a corporation,
partnership, joint venture, trust, governmental entity, agency,
or instrumentality, or other entity that is primarily liable
for payment of the principal of, or interest on, a Federal
credit instrument.
``(11) Produced in the united states.--The term `produced
in the United States', with respect to iron and steel, means
that all manufacturing processes for the iron and steel,
including the application of any coating, occurs within the
United States.
``(12) Project.--The term `project' means a project for
common carrier carbon dioxide transportation infrastructure or
associated equipment, including pipeline, shipping, rail, or
other transportation infrastructure and associated equipment,
that will transport or handle carbon dioxide captured from
anthropogenic sources or ambient air, as the Secretary
determines to be appropriate.
``(13) Project obligation.--The term `project obligation'
means any note, bond, debenture, or other debt obligation
issued by an obligor in connection with the financing of a
project, other than a Federal credit instrument.
``(14) Secured loan.--The term `secured loan' means a
direct loan or other debt obligation issued by an obligor and
funded by the Secretary in connection with the financing of a
project under section 999C.
``(15) Subsidy amount.--The term `subsidy amount' means the
amount of budget authority sufficient to cover the estimated
long-term cost to the Federal Government of a Federal credit
instrument--
``(A) calculated on a net present value basis; and
``(B) excluding administrative costs and any
incidental effects on governmental receipts or outlays
in accordance with the Federal Credit Reform Act of
1990 (2 U.S.C. 661 et seq.).
``(16) Substantial completion.--The term `substantial
completion', with respect to a project, means the date--
``(A) on which the project commences transportation
of carbon dioxide; or
``(B) of a comparable event to the event described
in subparagraph (A), as determined by the Secretary and
specified in the project credit agreement.
``SEC. 999B. DETERMINATION OF ELIGIBILITY AND PROJECT SELECTION.
``(a) Establishment of Program.--The Secretary shall establish and
carry out a carbon dioxide transportation infrastructure finance and
innovation program, under which the Secretary shall provide for
eligible projects in accordance with this subtitle--
``(1) a Federal credit instrument under section 999C;
``(2) a grant under section 999D; or
``(3) both a Federal credit instrument and a grant.
``(b) Eligibility.--
``(1) In general.--A project shall be eligible to receive a
Federal credit instrument or a grant under the CIFIA program
if--
``(A) the entity proposing to carry out the project
submits a letter of interest prior to submission of an
application under paragraph (3) for the project; and
``(B) the project meets the criteria described in
this subsection.
``(2) Creditworthiness.--
``(A) In general.--Each project and obligor that
receives a Federal credit instrument or a grant under
the CIFIA program shall be creditworthy, such that
there exists a reasonable prospect of repayment of the
principal and interest on the Federal credit
instrument, as determined by the Secretary under
subparagraph (B).
``(B) Reasonable prospect of repayment.--The
Secretary shall base a determination of whether there
is a reasonable prospect of repayment under
subparagraph (A) on a comprehensive evaluation of
whether the obligor has a reasonable prospect of
repaying the Federal credit instrument for the eligible
project, including evaluation of--
``(i) the strength of the contractual terms
of an eligible project (if available for the
applicable market segment);
``(ii) the forecast of noncontractual cash
flows supported by market projections from
reputable sources, as determined by the
Secretary, and cash sweeps or other structural
enhancements;
``(iii) the projected financial strength of
the obligor--
``(I) at the time of loan close;
and
``(II) throughout the loan term,
including after the project is
completed;
``(iv) the financial strength of the
investors and strategic partners of the
obligor, if applicable; and
``(v) other financial metrics and analyses
that are relied on by the private lending
community and nationally recognized credit
rating agencies, as determined appropriate by
the Secretary.
``(3) Applications.--To be eligible for assistance under
the CIFIA program, an obligor shall submit to the Secretary a
project application at such time, in such manner, and
containing such information as the Secretary determines to be
appropriate.
``(4) Eligible project costs.--A project under the CIFIA
program shall have eligible project costs that are reasonably
anticipated to equal or exceed $100,000,000.
``(5) Revenue sources.--The applicable Federal credit
instrument shall be repayable, in whole or in part, from--
``(A) user fees;
``(B) payments owing to the obligor under a public-
private partnership; or
``(C) other revenue sources that also secure or
fund the project obligations.
``(6) Obligor will be identified later.--A State, local
government, agency, or instrumentality of a State or local
government, or a public authority, may submit to the Secretary
an application under paragraph (3), under which a private party
to a public-private partnership will be--
``(A) the obligor; and
``(B) identified at a later date through completion
of a procurement and selection of the private party.
``(7) Beneficial effects.--The Secretary shall determine
that financial assistance for each project under the CIFIA
program will--
``(A) attract public or private investment for the
project;
``(B) enable the project to proceed at an earlier
date than the project would otherwise be able to
proceed or reduce the lifecycle costs (including debt
service costs) of the project; or
``(C) enable the transportation of carbon dioxide
captured from anthropogenic sources or ambient air.
``(8) Project readiness.--To be eligible for assistance
under the CIFIA program, the applicant shall demonstrate a
reasonable expectation that the contracting process for
construction of the project can commence by not later than 90
days after the date on which a Federal credit instrument or
grant is obligated for the project under the CIFIA program.
``(c) Selection Among Eligible Projects.--
``(1) Establishment of application process.--The Secretary
shall establish an application process under which projects
that are eligible to receive assistance under subsection (b)
may--
``(A) receive credit assistance on terms acceptable
to the Secretary, if adequate funds are available
(including any funds provided on behalf of an eligible
project under paragraph (3)(B)(ii)) to cover the
subsidy amount associated with the Federal credit
instrument; and
``(B) receive grants under section 999D if--
``(i) adequate funds are available to cover
the amount of the grant; and
``(ii) the Secretary determines that the
project is eligible under subsection (b) of
that section.
``(2) Priority.--In selecting projects to receive credit
assistance under subsection (b), the Secretary shall give
priority to projects that--
``(A) are large-capacity, common carrier
infrastructure;
``(B) have demonstrated demand for use of the
infrastructure by associated projects that capture
carbon dioxide from anthropogenic sources or ambient
air;
``(C) enable geographical diversity in associated
projects that capture carbon dioxide from anthropogenic
sources or ambient air, with the goal of enabling
projects in all major carbon dioxide-emitting regions
of the United States; and
``(D) are sited within, or adjacent to, existing
pipeline or other linear infrastructure corridors, in a
manner that minimizes environmental disturbance and
other siting concerns.
``(3) Master credit agreements.--
``(A) Priority projects.--The Secretary may enter
into a master credit agreement for a project that the
Secretary determines--
``(i) will likely be eligible for credit
assistance under subsection (b), on obtaining--
``(I) additional commitments from
associated carbon capture projects to
use the project; or
``(II) all necessary permits and
approvals; and
``(ii) is a project of high priority, as
determined in accordance with the criteria
described in paragraph (2).
``(B) Adequate funding not available.--If the
Secretary fully obligates funding to eligible projects
for a fiscal year and adequate funding is not available
to fund a Federal credit instrument, a project sponsor
(including a unit of State or local government) of an
eligible project may elect--
``(i)(I) to enter into a master credit
agreement in lieu of the Federal credit
instrument; and
``(II) to wait to execute a Federal credit
instrument until the fiscal year for which
additional funds are available to receive
credit assistance; or
``(ii) if the lack of adequate funding is
solely with respect to amounts available for
the subsidy amount, to pay the subsidy amount
to fund the Federal credit instrument.
``(d) Federal Requirements.--
``(1) In general.--Nothing in this subtitle supersedes the
applicability of any other requirement under Federal law
(including regulations).
``(2) NEPA.--Federal credit assistance may only be provided
under this subtitle for a project that has received an
environmental categorical exclusion, a finding of no
significant impact, or a record of decision under the National
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.).
``(e) Use of American Iron, Steel, and Manufactured Goods.--
``(1) In general.--Except as provided in paragraph (2), no
Federal credit instrument or grant provided under the CIFIA
program shall be made available for a project unless all iron,
steel, and manufactured goods used in the project are produced
in the United States.
``(2) Exceptions.--Paragraph (1) shall not apply in any
case or category of cases with respect to which the Secretary
determines that--
``(A) the application would be inconsistent with
the public interest;
``(B) iron, steel, or a relevant manufactured good
is not produced in the United States in sufficient and
reasonably available quantity, or of a satisfactory
quality; or
``(C) the inclusion of iron, steel, or a
manufactured good produced in the United States will
increase the cost of the overall project by more than
25 percent.
``(3) Waivers.--If the Secretary receives a request for a
waiver under this subsection, the Secretary shall--
``(A) make available to the public a copy of the
request, together with any information available to the
Secretary concerning the request--
``(i) on an informal basis; and
``(ii) by electronic means, including on
the official public website of the Department;
``(B) allow for informal public comment relating to
the request for not fewer than 15 days before making a
determination with respect to the request; and
``(C) approve or disapprove the request by not
later than the date that is 120 days after the date of
receipt of the request.
``(4) Applicability.--This subsection shall be applied in
accordance with any applicable obligations of the United States
under international agreements.
``(f) Prevailing Rate of Wage.--
``(1) In general.--The Secretary shall ensure that each
laborer and mechanic employed by a contractor or subcontractor
for a project financed, in whole or in part, by a Federal
credit instrument or grant provided under the CIFIA program
shall be paid wages at rates not less than those prevailing on
the same type of work on similar construction projects in the
applicable locality, as determined by the Secretary of Labor
under subchapter IV of chapter 31 of part A of subtitle II of
title 40, United States Code (commonly referred to as the
`Davis-Bacon Act').
``(2) Authority of secretary of labor.--With respect to the
labor standards described in paragraph (1), the Secretary of
Labor shall have the authority and functions described in
Reorganization Plan Numbered 14 of 1950 (64 Stat. 1267; 5
U.S.C. App.) and section 3145 of title 40, United States Code.
``(g) Application Processing Procedures.--
``(1) Notice of complete application.--Not later than 30
days after the date of receipt of an application under this
section, the Secretary shall provide to the applicant a written
notice describing whether--
``(A) the application is complete; or
``(B) additional information or materials are
needed to complete the application.
``(2) Approval or denial of application.--Not later than 60
days after the date of issuance of a written notice under
paragraph (1), the Secretary shall provide to the applicant a
written notice informing the applicant whether the Secretary
has approved or disapproved the application.
``(h) Development-Phase Activities.--Any Federal credit instrument
provided under the CIFIA program may be used to finance up to 100
percent of the cost of development-phase activities, as described in
section 999A(4)(A).
``SEC. 999C. SECURED LOANS.
``(a) Agreements.--
``(1) In general.--Subject to paragraph (2), the Secretary
may enter into agreements with 1 or more obligors to make
secured loans, the proceeds of which shall be used--
``(A) to finance eligible project costs of any
project selected under section 999B;
``(B) to refinance interim construction financing
of eligible project costs of any project selected under
section 999B; or
``(C) to refinance long-term project obligations or
Federal credit instruments, if the refinancing provides
additional funding capacity for the completion,
enhancement, or expansion of any project that--
``(i) is selected under section 999B; or
``(ii) otherwise meets the requirements of
that section.
``(2) Risk assessment.--Before entering into an agreement
under this subsection, the Secretary, in consultation with the
Director of the Office of Management and Budget, shall
determine an appropriate credit subsidy amount for each secured
loan, taking into account all relevant factors, including the
creditworthiness factors under section 999B(b)(2).
``(b) Terms and Limitations.--
``(1) In general.--A secured loan under this section with
respect to a project shall be on such terms and conditions and
contain such covenants, representations, warranties, and
requirements (including requirements for audits) as the
Secretary determines to be appropriate.
``(2) Maximum amount.--The amount of a secured loan under
this section shall not exceed an amount equal to 80 percent of
the reasonably anticipated eligible project costs.
``(3) Payment.--A secured loan under this section shall be
payable, in whole or in part, from--
``(A) user fees;
``(B) payments owing to the obligor under a public-
private partnership; or
``(C) other revenue sources that also secure or
fund the project obligations.
``(4) Interest rate.--
``(A) In general.--Except as provided in
subparagraph (B), the interest rate on a secured loan
under this section shall be not less than the yield on
United States Treasury securities of a similar maturity
to the maturity of the secured loan on the date of
execution of the loan agreement.
``(B) Limited buydowns.--
``(i) In general.--Subject to clause (ii),
the Secretary may lower the interest rate of a
secured loan under this section if the interest
rate has increased between the period--
``(I) beginning on, as applicable--
``(aa) the date on which an
application acceptable to the
Secretary is submitted for the
applicable project; or
``(bb) the date on which
the Secretary entered into a
master credit agreement for the
applicable project; and
``(II) ending on the date on which
the Secretary executes the Federal
credit instrument for the applicable
project.
``(ii) Limitation.--The interest rate of a
secured loan may not be lowered pursuant to
clause (i) by more than the lower of--
``(I) 1\1/2\ percentage points (150
basis points); and
``(II) an amount equal to the
amount of the increase in the interest
rate described in that clause.
``(5) Maturity date.--The final maturity date of the
secured loan shall be the earlier of--
``(A) the date that is 35 years after the date of
substantial completion of the project; and
``(B) if the useful life of the capital asset being
financed is of a lesser period, the date that is the
end of the useful life of the asset.
``(6) Nonsubordination.--
``(A) In general.--Except as provided in
subparagraph (B), the secured loan shall not be
subordinated to the claims of any holder of project
obligations in the event of bankruptcy, insolvency, or
liquidation of the obligor.
``(B) Preexisting indenture.--
``(i) In general.--The Secretary shall
waive the requirement under subparagraph (A)
for a public agency borrower that is financing
ongoing capital programs and has outstanding
senior bonds under a preexisting indenture,
if--
``(I) the secured loan is rated in
the A category or higher; and
``(II) the secured loan is secured
and payable from pledged revenues not
affected by project performance, such
as a tax-backed revenue pledge or a
system-backed pledge of project
revenues.
``(ii) Limitation.--If the Secretary waives
the nonsubordination requirement under this
subparagraph--
``(I) the maximum credit subsidy
amount to be paid by the Federal
Government shall be not more than 10
percent of the principal amount of the
secured loan; and
``(II) the obligor shall be
responsible for paying the remainder of
the subsidy amount, if any.
``(7) Fees.--The Secretary may collect a fee on or after
the date of the financial close of a Federal credit instrument
under this section in an amount equal to not more than
$1,000,000 to cover all or a portion of the costs to the
Federal Government of providing the Federal credit instrument.
``(8) Maximum federal involvement.--The total Federal
assistance provided for a project under the CIFIA program,
including any grant provided under section 999D, shall not
exceed an amount equal to 80 percent of the eligible project
costs.
``(c) Repayment.--
``(1) Schedule.--The Secretary shall establish a repayment
schedule for each secured loan under this section based on--
``(A) the projected cash flow from project revenues
and other repayment sources; and
``(B) the useful life of the project.
``(2) Commencement.--Scheduled loan repayments of principal
or interest on a secured loan under this section shall commence
not later than 5 years after the date of substantial completion
of the project.
``(3) Deferred payments.--
``(A) In general.--If, at any time after the date
of substantial completion of a project, the project is
unable to generate sufficient revenues in excess of
reasonable and necessary operating expenses to pay the
scheduled loan repayments of principal and interest on
the secured loan, the Secretary may, subject to
subparagraph (C), allow the obligor to add unpaid
principal and interest to the outstanding balance of
the secured loan.
``(B) Interest.--Any payment deferred under
subparagraph (A) shall--
``(i) continue to accrue interest in
accordance with subsection (b)(4) until fully
repaid; and
``(ii) be scheduled to be amortized over
the remaining term of the loan.
``(C) Criteria.--
``(i) In general.--Any payment deferral
under subparagraph (A) shall be contingent on
the project meeting criteria established by the
Secretary.
``(ii) Repayment standards.--The criteria
established pursuant to clause (i) shall
include standards for the reasonable prospect
of repayment.
``(4) Prepayment.--
``(A) Use of excess revenues.--Any excess revenues
that remain after satisfying scheduled debt service
requirements on the project obligations and secured
loan and all deposit requirements under the terms of
any trust agreement, bond resolution, or similar
agreement securing project obligations may be applied
annually to prepay the secured loan, without penalty.
``(B) Use of proceeds of refinancing.--A secured
loan may be prepaid at any time without penalty from
the proceeds of refinancing from non-Federal funding
sources.
``(d) Sale of Secured Loans.--
``(1) In general.--Subject to paragraph (2), as soon as
practicable after substantial completion of a project and after
notifying the obligor, the Secretary may sell to another entity
or reoffer into the capital markets a secured loan for the
project if the Secretary determines that the sale or reoffering
can be made on favorable terms.
``(2) Consent of obligor.--In making a sale or reoffering
under paragraph (1), the Secretary may not change any original
term or condition of the secured loan without the written
consent of the obligor.
``(e) Loan Guarantees.--
``(1) In general.--The Secretary may provide a loan
guarantee to a lender in lieu of making a secured loan under
this section if the Secretary determines that the budgetary
cost of the loan guarantee is substantially the same as, or
less than, that of a secured loan.
``(2) Terms.--The terms of a loan guarantee under paragraph
(1) shall be consistent with the terms required under this
section for a secured loan, except that the rate on the
guaranteed loan and any prepayment features shall be negotiated
between the obligor and the lender, with the consent of the
Secretary.
``SEC. 999D. FUTURE GROWTH GRANTS.
``(a) Establishment.--The Secretary may provide grants to pay a
portion of the cost differential, with respect to any projected future
increase in demand for carbon dioxide transportation by an
infrastructure project described in subsection (b), between--
``(1) the cost of constructing the infrastructure asset
with the capacity to transport an increased flow rate of carbon
dioxide, as made practicable under the project; and
``(2) the cost of constructing the infrastructure asset
with the capacity to transport carbon dioxide at the flow rate
initially required, based on commitments for the use of the
asset.
``(b) Eligibility.--To be eligible to receive a grant under this
section, an entity shall--
``(1) be eligible to receive credit assistance under the
CIFIA program;
``(2) carry out, or propose to carry out, a project for
large-capacity, common carrier infrastructure with a probable
future increase in demand for carbon dioxide transportation;
and
``(3) submit to the Secretary an application at such time,
in such manner, and containing such information as the
Secretary determines to be appropriate.
``(c) Use of Funds.--A grant provided under this section may be
used only to pay the costs of any additional flow rate capacity of a
carbon dioxide transportation infrastructure asset that the project
sponsor demonstrates to the satisfaction of the Secretary can
reasonably be expected to be used during the 20-year period beginning
on the date of substantial completion of the project described in
subsection (b)(2).
``(d) Maximum Amount.--The amount of a grant provided under this
section may not exceed an amount equal to 80 percent of the cost of the
additional capacity described in subsection (a).
``SEC. 999E. PROGRAM ADMINISTRATION.
``(a) Requirement.--The Secretary shall establish a uniform system
to service the Federal credit instruments provided under the CIFIA
program.
``(b) Fees.--The Secretary may collect fees on or after the date of
the financial close of a Federal credit instrument provided under the
CIFIA program, contingent on authority being provided in appropriations
Acts, at a level that is sufficient to cover--
``(1) the costs of services of expert firms retained
pursuant to subsection (d); and
``(2) all or a portion of the costs to the Federal
Government of servicing the Federal credit instruments.
``(c) Servicer.--
``(1) In general.--The Secretary may appoint a financial
entity to assist the Secretary in servicing the Federal credit
instruments.
``(2) Duties.--A servicer appointed under paragraph (1)
shall act as the agent for the Secretary.
``(3) Fee.--A servicer appointed under paragraph (1) shall
receive a servicing fee, subject to approval by the Secretary.
``(d) Assistance From Expert Firms.--The Secretary may retain the
services of expert firms, including counsel, in the field of municipal
and project finance to assist in the underwriting and servicing of
Federal credit instruments.
``(e) Expedited Processing.--The Secretary shall implement
procedures and measures to economize the time and cost involved in
obtaining approval and the issuance of credit assistance under the
CIFIA program.
``SEC. 999F. STATE AND LOCAL PERMITS.
``The provision of credit assistance under the CIFIA program with
respect to a project shall not--
``(1) relieve any recipient of the assistance of any
project obligation to obtain any required State or local permit
or approval with respect to the project;
``(2) limit the right of any unit of State or local
government to approve or regulate any rate of return on private
equity invested in the project; or
``(3) otherwise supersede any State or local law (including
any regulation) applicable to the construction or operation of
the project.
``SEC. 999G. REGULATIONS.
``The Secretary may promulgate such regulations as the Secretary
determines to be appropriate to carry out the CIFIA program.
``SEC. 999H. FUNDING.
``(a) Funding.--
``(1) In general.--There are authorized to be appropriated
to the Secretary to carry out this subtitle, to remain
available until expended--
``(A) $600,000,000 for each of fiscal years 2022
and 2023; and
``(B) $300,000,000 for each of fiscal years 2024
through 2026.
``(2) Spending and borrowing authority.--Spending and
borrowing authority for a fiscal year to enter into Federal
credit instruments shall be promptly apportioned to the
Secretary on a fiscal-year basis.
``(3) Reestimates.--If the subsidy amount of a Federal
credit instrument is reestimated, the cost increase or decrease
of the reestimate shall be borne by, or benefit, the general
fund of the Treasury, consistent with section 504(f) of the
Congressional Budget Act of 1974 (2 U.S.C. 661c(f)).
``(4) Administrative costs.--Of the amounts made available
to carry out the CIFIA program, the Secretary may use not more
than $9,000,000 (as indexed for United States dollar inflation
from the date of enactment of the Storing CO<INF>2</INF> And
Lowering Emissions Act (as measured by the Consumer Price
Index)) each fiscal year for the administration of the CIFIA
program.
``(b) Contract Authority.--
``(1) In general.--Notwithstanding any other provision of
law, execution of a term sheet by the Secretary of a Federal
credit instrument that uses amounts made available under the
CIFIA program shall impose on the United States a contractual
obligation to fund the Federal credit investment.
``(2) Availability.--Amounts made available to carry out
the CIFIA program for a fiscal year shall be available for
obligation on October 1 of the fiscal year.''.
(b) Technical Amendments.--The table of contents for the Energy
Policy Act of 2005 (Public Law 109-58; 119 Stat. 600) is amended--
(1) in the item relating to section 917, by striking
``Efficiency'';
(2) by striking the items relating to subtitle J of title
IX (relating to ultra-deepwater and unconventional natural gas
and other petroleum resources) and inserting the following:
``Subtitle J--Carbon Dioxide Transportation Infrastructure Finance and
Innovation
``Sec. 999A. Definitions.
``Sec. 999B. Determination of eligibility and project selection.
``Sec. 999C. Secured loans.
``Sec. 999D. Future growth grants.
``Sec. 999E. Program administration.
``Sec. 999F. State and local permits.
``Sec. 999G. Regulations.
``Sec. 999H. Funding.'';
and
(3) by striking the item relating to section 969B and
inserting the following:
``Sec. 969B. High efficiency turbines.''.
TITLE III--GEOLOGIC STORAGE OF CAPTURED CARBON
SEC. 301. CARBON STORAGE VALIDATION AND TESTING.
Section 963 of the Energy Policy Act of 2005 (42 U.S.C. 16293) is
amended--
(1) in subsection (a)(1)(B), by striking ``over a 10-year
period'';
(2) in subsection (b)--
(A) in paragraph (1), by striking ``and
demonstration'' and inserting ``demonstration, and
commercialization''; and
(B) in paragraph (2)--
(i) in subparagraph (G), by striking
``and'' at the end;
(ii) in subparagraph (H), by striking the
period at the end and inserting ``; and''; and
(iii) by adding at the end the following:
``(I) evaluating the quantity,
location, and timing of geologic carbon
storage deployment that may be needed,
and developing strategies and resources
to enable the deployment.'';
(3) by redesignating subsections (e) through (g) as
subsections (f) through (h), respectively;
(4) by inserting after subsection (d) the following:
``(e) Large-Scale Carbon Storage Commercialization Program.--
``(1) In general.--The Secretary shall establish a
commercialization program under which the Secretary shall
provide funding for the development of new or expanded
commercial large-scale carbon sequestration projects and
associated carbon dioxide transport infrastructure, including
funding for the feasibility, site characterization, permitting,
and construction stages of project development.
``(2) Applications; selection.--
``(A) In general.--To be eligible to enter into an
agreement with the Secretary for funding under
paragraph (1), an entity shall submit to the Secretary
an application at such time, in such manner, and
containing such information as the Secretary determines
to be appropriate.
``(B) Application process.--The Secretary shall
establish an application process that, to the maximum
extent practicable--
``(i) is open to projects at any stage of
development described in paragraph (1); and
``(ii) facilitates expeditious development
of projects described in that paragraph.
``(C) Project selection.--In selecting projects for
funding under paragraph (1), the Secretary shall give
priority to--
``(i) projects with substantial carbon
dioxide storage capacity; or
``(ii) projects that will store carbon
dioxide from multiple carbon capture
facilities.'';
(5) in subsection (f) (as so redesignated), in paragraph
(1), by inserting ``with respect to the research, development,
demonstration program components described in subsections (b)
through (d)'' before ``give preference''; and
(6) in subsection (h) (as so redesignated)--
(A) in paragraph (5), by striking the period at the
end and inserting ``; and'';
(B) by redesignating paragraphs (1) through (5) as
subparagraphs (A) through (E), respectively, and
indenting appropriately;
(C) by inserting before subparagraph (A) (as so
redesignated) the following:
``(1) for activities under the research, development,
demonstration program components described in subsections (b)
through (d)--''; and
(D) by adding at the end the following:
``(2) for activities under the commercialization program
component described in subsection (e), to remain available
until expended, $500,000,000 for each of fiscal years 2022
through 2026.''.
SEC. 302. SECURE GEOLOGIC STORAGE PERMITTING.
(a) Definitions.--In this section:
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Environmental Protection Agency.
(2) Class vi well.--The term ``Class VI well'' means a well
described in section 144.6(f) of title 40, Code of Federal
Regulations (or successor regulations).
(b) Geologic Sequestration Permitting.--For the permitting of Class
VI wells by the Administrator for the injection of carbon dioxide for
the purpose of geologic sequestration in accordance with the
requirements of the Safe Drinking Water Act (42 U.S.C. 300f et seq.)
and the final rule of the Administrator entitled ``Federal Requirements
Under the Underground Injection Control (UIC) Program for Carbon
Dioxide (CO<INF>2</INF>) Geologic Sequestration (GS) Wells'' (75 Fed.
Reg. 77230 (December 10, 2010)), there is authorized to be appropriated
for each of fiscal years 2022 through 2026, $5,000,000.
(c) State Permitting Program Grants.--
(1) Establishment.--The Administrator shall award grants to
States that, pursuant to section 1422 of the Safe Drinking
Water Act (42 U.S.C. 300h-1), receive the approval of the
Administrator for a State underground injection control program
for permitting Class VI wells for the injection of carbon
dioxide.
(2) Use of funds.--A State that receives a grant under
paragraph (1) shall use the amounts received under the grant to
defray the expenses of the State related to the establishment
and operation of a State underground injection control program
described in paragraph (1).
(3) Authorization of appropriations.--There is authorized
to be appropriated to carry out this subsection, for the period
of fiscal years 2022 through 2026, $50,000,000.
<all>