[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 986 Introduced in Senate (IS)]
<DOC>
117th CONGRESS
1st Session
S. 986
To amend the Internal Revenue Code of 1986 to provide for a 5-year
extension of the carbon oxide sequestration credit, and for other
purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 25, 2021
Ms. Smith (for herself, Mrs. Capito, Mr. Whitehouse, Mr. Cramer, Mr.
Schatz, Mr. Hoeven, Mr. Manchin, Mr. Barrasso, Mr. Coons, Mr. Grassley,
Mr. Lujan, Ms. Ernst, Mr. Durbin, and Ms. Klobuchar) introduced the
following bill; which was read twice and referred to the Committee on
Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide for a 5-year
extension of the carbon oxide sequestration credit, 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.
This Act may be cited as the ``Carbon Capture, Utilization, and
Storage Tax Credit Amendments Act of 2021''.
SEC. 2. EXTENSION OF CREDIT FOR CARBON OXIDE SEQUESTRATION.
Section 45Q(d)(1) of the Internal Revenue Code of 1986 is amended
by striking ``January 1, 2026'' and inserting ``January 1, 2031''.
SEC. 3. ELECTIVE PAYMENT FOR CARBON OXIDE SEQUESTRATION AND QUALIFYING
ADVANCED COAL PROJECTS.
(a) In General.--Subchapter B of chapter 65 of the Internal Revenue
Code of 1986 is amended by adding at the end the following new section:
``SEC. 6431. ELECTIVE PAYMENT FOR CARBON OXIDE SEQUESTRATION AND
QUALIFYING ADVANCED COAL PROJECTS.
``(a) Energy Property.--In the case of a taxpayer making an
election (at such time and in such manner as the Secretary may provide)
under this section with respect to any portion of--
``(1) a carbon oxide sequestration credit which would
(without regard to this section) be determined under section
45Q with respect to such taxpayer, or
``(2) a qualifying advanced coal project credit which would
(without regard to this section) be determined under section
48A with respect to such taxpayer,
such taxpayer shall be treated as making a payment against the tax
imposed by subtitle A for the taxable year equal to the amount of such
portion.
``(b) Timing.--The payment described in subsection (a) shall be
treated as made on the later of the due date of the return of tax for
such taxable year or the date on which such return is filed.
``(c) Exclusion From Gross Income.--Gross income of the taxpayer
shall be determined without regard to this section.
``(d) Denial of Double Benefit.--Solely for purposes of section 38,
in the case of a taxpayer making an election under this section, the
carbon oxide sequestration credit determined under section 45Q or the
qualifying advanced coal project credit determined under section 48A
shall be reduced by the amount of the portion of such credit with
respect to which the taxpayer makes such election.
``(e) Special Rules.--In the case of a taxpayer making an election
under this section with respect to the qualifying advanced coal project
credit determined under section 48A, the credit subject to such an
election shall be determined notwithstanding--
``(1) section 50(b)(3), and
``(2) in the case of any entity described in section
50(b)(4)(A)(i), section 50(b)(4).''.
(b) Special Rule for Proceeds of Transfers for Mutual or
Cooperative Electric Companies.--Section 501(c)(12)(I) of the Internal
Revenue Code of 1986 is amended by inserting ``or 6431(a)'' after
``section 45J(e)(1)''.
(c) Clerical Amendment.--The table of sections for subchapter B of
chapter 65 of such Code is amended by adding at the end the following
new item:
``Sec. 6431. Elective payment for carbon oxide sequestration and
qualifying advanced coal projects.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of enactment of this
Act.
SEC. 4. ALLOWANCE OF CERTAIN CARBON SEQUESTRATION CREDITS AGAINST THE
BASE EROSION MINIMUM TAX.
(a) In General.--Section 59A(b)(1)(B)(ii) of the Internal Revenue
Code of 1986 is amended by striking ``plus'' and the end of subclause
(I), by redesignating subclause (II) as subclause (IV), and by
inserting after subclause (I) the following new subclauses:
``(II) the credit allowed under
section 38 for the taxable year which
is properly allocable to the carbon
dioxide sequestration credit determined
under section 45Q(a),
``(III) the credit allowed under
section 38 for the taxable year which
is properly allocable to the investment
credit determined under section 46, but
only to the extent properly allocable
to the qualifying advanced coal project
credit determined under section 48A,
plus''.
(b) Application to Taxable Years Beginning After 2025.--
Subparagraph (B) of section 59A(b)(2) of the Internal Revenue Code of
1986 is amended to read as follows:
``(B) by applying subparagraph (B)(ii) thereof
without regard to subclauses (I) and (IV).''.
(c) Effective Date.--The amendments made by this section shall
apply to base erosion payments (as defined in section 59A(d) of the
Internal Revenue Code of 1986) paid or incurred in taxable years
beginning after December 31, 2017.
SEC. 5. MODIFICATIONS OF QUALIFYING ADVANCED COAL PROJECT CREDIT.
(a) Sequestration Requirement for Certain Equipment.--Section
48A(e)(1)(G) of the Internal Revenue Code of 1986 is amended by
inserting ``and 60 percent in the case of an application for a
reallocation of credits under subsection (d)(4) with respect to an
electrical generating unit in existence on October 3, 2008'' after
``under subsection (d)(4)''.
(b) Nameplate Generating Capacity Requirement.--Section
48A(e)(1)(C) of such Code is amended by striking ``400 megawatts'' and
inserting ``200 megawatts''.
(c) Advanced Coal-Based Generation Technology Requirements.--
(1) In general.--Section 48A(f)(1) of such Code is amended
by striking ``generation technology if--'' and all that follows
through ``the unit is designed'' and inserting ``generation
technology if the unit is designed''.
(2) Conforming amendments.--Section 48A(f) of such Code is
amended--
(A) by striking all that precedes ``the purpose of
this section'' and inserting the following:
``(f) Advanced Coal-Based Generation Technology.--For'',
(B) by striking ``in subparagraph (B)'' in the
second sentence and inserting ``in this subsection'',
and
(C) by striking paragraphs (2) and (3).
(d) Performance Requirements in Case of Best Available Control
Technology.--Section 48A(f) of such Code, as amended by this Act, is
amended by adding at the end the following: ``In the case of a retrofit
of a unit which has undergone a best available control technology
analysis after August 8, 2005, with respect to the removal or emissions
of any pollutant which is SO<INF>2</INF> or NO<INF>x</INF>, the removal
or emissions design level with respect to such pollutant shall be the
level determined in such analysis.''.
(e) Clarification of Reallocation Authority.--Section 48A(d)(4) of
the Internal Revenue Code of 1986 is amended--
(1) in subparagraph (A)--
(A) by striking ``Not later than 6 years after the
date of enactment of this section, the'' and inserting
``The'', and
(B) by inserting ``and every 6 months thereafter
until all credits available under this section have
been allowed'' after ``the date which is 6 years after
the date of enactment of this section'',
(2) in subparagraph (B)--
(A) by striking ``may reallocate credits available
under clauses (i) and (ii) of paragraph (3)(B)'' and
inserting ``shall reallocate credits remaining
available under paragraph (3)'',
(B) by striking ``or'' at the end of clause (i),
and
(C) by striking clause (ii) and inserting the
following:
``(ii) any applicant for certification
which submitted an accepted application has
subsequently failed to satisfy the requirements
under paragraph (2)(D), or
``(iii) any certification made pursuant to
paragraph (2) has been revoked pursuant to
paragraph (2)(E).'', and
(3) in subparagraph (C)--
(A) by striking ``clause (i) or (ii) of paragraph
(3)(B)'' and inserting ``paragraph (3)'',
(B) by striking ``is authorized to'' and inserting
``shall'', and
(C) by striking ``an additional program'' and
inserting ``additional programs''.
(f) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to allocations and
reallocations after the date of the enactment of this Act.
(2) Reallocation.--The amendments made by subsection (e)
shall apply to credits remaining available under section
48A(d)(3) of the Internal Revenue Code of 1986 on the date of
the enactment of this Act.
SEC. 6. ENHANCEMENT OF CARBON OXIDE SEQUESTRATION CREDIT FOR DIRECT AIR
CAPTURE FACILITIES.
(a) In General.--Section 45Q of the Internal Revenue Code of 1986
is amended--
(1) in subsection (b)(1)--
(A) in subparagraph (A), by striking ``The
applicable dollar amount'' and inserting ``Subject to
subparagraph (B), the applicable dollar amount'', and
(B) by striking subparagraph (B) and inserting the
following:
``(B) Special rule for direct air capture
facilities.--
``(i) In general.--Subject to clause (ii),
for any taxable year beginning in a calendar
year after 2021, in the case of any qualified
facility described in subsection (d)(2)(C), the
applicable dollar amount shall be an amount
equal to--
``(I) for purposes of paragraph (3)
of subsection (a), an amount equal to
the product of $120 and the inflation
adjustment factor for such calendar
year determined under section
43(b)(3)(B) for such calendar year,
determined by substituting `2020' for
`1990', and
``(II) for purposes of paragraph
(4) of such subsection, an amount equal
to the product of $75 and the inflation
adjustment factor for such calendar
year determined under section
43(b)(3)(B) for such calendar year,
determined by substituting `2020' for
`1990'.
``(ii) Use in enhanced oil or natural gas
recovery project.--For any taxable year
beginning in a calendar year after 2030, this
subparagraph shall not apply with respect to
any qualified carbon oxide which is used by the
taxpayer in a manner described in subsection
(a)(4)(B)(i).
``(C) Rounding.--The applicable dollar amount
determined under subparagraph (A) or (B) shall be
rounded to the nearest cent.'', and
(2) in subsection (d)(2)--
(A) in subparagraph (B), by striking ``or'' at the
end, and
(B) by striking subparagraph (C) and inserting the
following:
``(C) in the case of a direct air capture facility,
not less than 10,000 metric tons of qualified carbon
oxide during the taxable year, or
``(D) in the case of any facility not described in
subparagraph (A), (B), or (C), not less than 100,000
metric tons of qualified carbon oxide during the
taxable year.''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2021.
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