[Pages S4014-S4018]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

  SA 2583. Mr. CURTIS submitted an amendment intended to be proposed to 
amendment SA 2360 proposed by Mr. Thune (for Mr. Graham) to the bill 
H.R. 1, to provide for reconciliation pursuant to title II of H. Con. 
Res. 14; which was ordered to lie on the table; as follows:

       Strike section 70512 and insert the following:

     SEC. 70512. TERMINATION AND RESTRICTIONS ON CLEAN ELECTRICITY 
                   PRODUCTION CREDIT.

       (a) Termination for Wind and Solar Facilities.--Section 
     45Y(d) is amended--
       (1) in paragraph (1), by striking ``The amount of'' and 
     inserting ``Subject to paragraph (4), the amount of'', and
       (2) by striking paragraph (3) and inserting the following 
     new paragraphs:
       ``(3) Applicable year.--For purposes of this subsection, 
     the term `applicable year' means calendar year 2032.
       ``(4) Termination for wind and solar facilities.--
       ``(A) In general.--This section shall not apply with 
     respect to any applicable facility placed in service after 
     December 31, 2027.
       ``(B) Applicable facility.--For purposes of this paragraph, 
     the term `applicable facility' means a qualified facility 
     which--
       ``(i) uses wind to produce electricity (within the meaning 
     of such term as used in section 45(d)(1), as determined 
     without regard to any requirement under such section with 
     respect to the date on which construction of property 
     begins), or
       ``(ii) uses solar energy to produce electricity (within the 
     meaning of such term as used in section 45(d)(4), as 
     determined without regard to any requirement under such 
     section with respect to the date on which construction of 
     property begins).''.
       (b) Restrictions Relating to Prohibited Foreign Entities.--
     Section 45Y is amended--
       (1) in subsection (b)(1), by adding at the end the 
     following new subparagraph:
       ``(E) Material assistance from prohibited foreign 
     entities.--The term `qualified facility' shall not include 
     any facility for which construction begins after December 31, 
     2025 (or, in the case of an applicable facility, as defined 
     in subsection (d)(4)(B), after June 16, 2025), if the 
     construction of such facility includes any material 
     assistance from a prohibited foreign entity (as defined in 
     section 7701(a)(52)).'', and
       (2) in subsection (g), by adding at the end the following 
     new paragraph:
       ``(13) Restrictions relating to prohibited foreign 
     entities.--
       ``(A) In general.--No credit shall be determined under 
     subsection (a) for any taxable year if the taxpayer is--
       ``(i) a specified foreign entity (as defined in section 
     7701(a)(51)(B)), or
       ``(ii) a foreign-influenced entity (as defined in section 
     7701(a)(51)(D), without regard to clause (i)(II) thereof).
       ``(B) Effective control.--In the case of a taxpayer for 
     which section 7701(a)(51)(D)(i)(II) is determined to apply 
     for any taxable year, no credit shall be determined under 
     subsection (a) for such taxable year if such determination 
     relates to a qualified facility described in subsection 
     (b)(1).''.
       (c) Definitions Relating to Prohibited Foreign Entities.--
     Section 7701(a) is amended by adding at the end the following 
     new paragraphs:
       ``(51) Prohibited foreign entity.--
       ``(A) In general.--
       ``(i) Definition.--The term `prohibited foreign entity' 
     means a specified foreign entity or a foreign-influenced 
     entity.
       ``(ii) Determination.--

       ``(I) In general.--Subject to subclause (II), for any 
     taxable year, the determination as to whether an entity is a 
     specified foreign entity or foreign-influenced entity shall 
     be made as of the last day of such taxable year.
       ``(II) Initial taxable year.--For purposes of the first 
     taxable year beginning after the date of enactment of this 
     paragraph, the determination as to whether an entity is a 
     specified foreign entity described in clauses (i) through 
     (iv) of subparagraph (B) shall be made as of the first day of 
     such taxable year.

       ``(B) Specified foreign entity.--For purposes of this 
     paragraph, the term `specified foreign entity' means--
       ``(i) a foreign entity of concern described in subparagraph 
     (A), (B), (D), or (E) of section 9901(8) of the William M. 
     (Mac) Thornberry National Defense Authorization Act for 
     Fiscal Year 2021 (Public Law 116-283; 15 U.S.C. 4651),
       ``(ii) an entity identified as a Chinese military company 
     operating in the United States in accordance with section 
     1260H of the William M. (Mac) Thornberry National Defense 
     Authorization Act for Fiscal Year 2021 (Public Law 116-283; 
     10 U.S.C. 113 note),
       ``(iii) an entity included on a list required by clause 
     (i), (ii), (iv), or (v) of section 2(d)(2)(B) of Public Law 
     117-78 (135 Stat. 1527),
       ``(iv) an entity specified under section 154(b) of the 
     National Defense Authorization Act for Fiscal Year 2024 
     (Public Law 118-31; 10 U.S.C. note prec. 4651), or
       ``(v) a foreign-controlled entity.
       ``(C) Foreign-controlled entity.--For purposes of 
     subparagraph (B), the term `foreign-controlled entity' 
     means--
       ``(i) the government (including any level of government 
     below the national level) of a covered nation,
       ``(ii) an agency or instrumentality of a government 
     described in clause (i),
       ``(iii) a person who is a citizen or national of a covered 
     nation, provided that such person is not an individual who is 
     a citizen, national, or lawful permanent resident of the 
     United States,
       ``(iv) an entity or a qualified business unit (as defined 
     in section 989(a)) incorporated or organized under the laws 
     of, or having its principal place of business in, a covered 
     nation, or
       ``(v) an entity (including subsidiary entities) controlled 
     (as determined under subparagraph (G)) by an entity described 
     in clause (i), (ii), (iii), or (iv).
       ``(D) Foreign-influenced entity.--
       ``(i) In general.--For purposes of subparagraph (A), the 
     term `foreign-influenced entity' means an entity--

       ``(I) with respect to which, during the taxable year--

       ``(aa) a specified foreign entity has the direct authority 
     to appoint a covered officer of such entity,
       ``(bb) a single specified foreign entity owns at least 25 
     percent of such entity,
       ``(cc) one or more specified foreign entities own in the 
     aggregate at least 40 percent of such entity, or
       ``(dd) at least 15 percent of the debt of such entity has 
     been issued, in the aggregate, to 1 or more specified foreign 
     entities, or

       ``(II) which, during the previous taxable year, made a 
     payment to a specified foreign entity pursuant to a contract, 
     agreement, or other arrangement which entitles such specified 
     foreign entity (or an entity related to such specified 
     foreign entity) to exercise effective control over--

       ``(aa) any qualified facility or energy storage technology 
     of the taxpayer (or any person related to the taxpayer), or
       ``(bb) with respect to any eligible component produced by 
     the taxpayer (or any person related to the taxpayer)--
       ``(AA) the extraction, processing, or recycling of any 
     applicable critical mineral, or
       ``(BB) the production of an eligible component which is not 
     an applicable critical mineral.
       ``(ii) Effective control.--

       ``(I) In general.--

       ``(aa) General rule.--Subject to subclause (II), for 
     purposes of clause (i)(II), the term `effective control' 
     means 1 or more agreements or arrangements similar to those 
     described in subclauses (II) and (III) which provide 1 or 
     more contractual counterparties of a taxpayer with specific 
     authority over key aspects of the production of eligible 
     components, energy generation in a qualified facility, or 
     energy storage which are not included in the measures of 
     control through authority, ownership, or debt held which are 
     described in clause (i)(I).
       ``(bb) Guidance.--The Secretary shall issue such guidance 
     as is necessary to carry out the purposes of this clause, 
     including the establishment of rules to prevent entities from 
     evading, circumventing, or abusing the application of the 
     restrictions described subparagraph (C) and subclauses (II) 
     and (III) of this clause through a contract, agreement, or 
     other arrangement.

       ``(II) Application of rules prior to issuance of 
     guidance.--During any period prior to the date that the 
     guidance described

[[Page S4015]]

     in subclause (I)(bb) is issued by the Secretary, for purposes 
     of clause (i)(II), the term `effective control' means the 
     unrestricted contractual right of a contractual counterparty 
     to--

       ``(aa) determine the quantity or timing of production of an 
     eligible component produced by the taxpayer,
       ``(bb) determine the amount or timing of activities related 
     to the production of electricity undertaken at a qualified 
     facility of the taxpayer or the storage of electrical energy 
     in energy storage technology of the taxpayer,
       ``(cc) determine which entity may purchase or use the 
     output of a production unit of the taxpayer that produces 
     eligible components,
       ``(dd) determine which entity may purchase or use the 
     output of a qualified facility of the taxpayer,
       ``(ee) restrict access to data critical to production or 
     storage of energy undertaken at a qualified facility of the 
     taxpayer, or to the site of production or any part of a 
     qualified facility or energy storage technology of the 
     taxpayer, to the personnel or agents of such contractual 
     counterparty, or
       ``(ff) on an exclusive basis, maintain, repair, or operate 
     any plant or equipment which is necessary to the production 
     by the taxpayer of eligible components or electricity.

       ``(III) Licensing and other agreements.--

       ``(aa) In general.--In addition to subclause (II), for 
     purposes of clause (i)(II), the term `effective control' 
     means, with respect to a licensing agreement for the 
     provision of intellectual property or any other contract, 
     agreement, or other arrangement entered into with a 
     contractual counterparty which is related to such licensing 
     agreement and to a qualified facility, energy storage 
     technology, or the production of an eligible component, any 
     of the following:
       ``(AA) A contractual right retained by the contractual 
     counterparty to specify or otherwise direct 1 or more sources 
     of components, subcomponents, or applicable critical minerals 
     utilized in a qualified facility, energy storage technology, 
     or in the production of an eligible component.
       ``(BB) A contractual right retained by the contractual 
     counterparty to direct the operation of any qualified 
     facility, any energy storage technology, or any production 
     unit that produces an eligible component.
       ``(CC) A contractual right retained by the contractual 
     counterparty to limit the taxpayer's utilization of 
     intellectual property related to the operation of a qualified 
     facility or energy storage technology, or in the production 
     of an eligible component.
       ``(DD) A contractual right retained by the contractual 
     counterparty to receive royalties under the licensing 
     agreement or any similar agreement (or payments under any 
     related agreement) beyond the 10th year of the agreement 
     (including modifications or extensions thereof).
       ``(EE) A contractual right retained by the contractual 
     counterparty to direct or otherwise require the taxpayer to 
     enter into an agreement for the provision of services for a 
     duration longer than 2 years (including any modifications or 
     extensions thereof).
       ``(FF) Such contract, agreement, or other arrangement does 
     not provide the licensee with all the technical data, 
     information, and know-how necessary to enable the licensee to 
     produce the eligible component or components subject to the 
     contract, agreement, or other arrangement without further 
     involvement from the contractual counterparty or a specified 
     foreign entity.
       ``(GG) Such contract, agreement, or other arrangement was 
     entered into (or modified) on or after June 16, 2025.
       ``(bb) Exception.--
       ``(AA) In general.--Item (aa) shall not apply in the case 
     of a bona fide purchase or sale of intellectual property.
       ``(BB) Bona fide purchase or sale.--For purposes of item 
     (aa), any purchase or sale of intellectual property where the 
     agreement provides that ownership of the intellectual 
     property reverts to the contractual counterparty after a 
     period of time shall not be considered a bona-fide purchase 
     or sale.

       ``(IV) Persons related to the taxpayer.--For purposes of 
     subclauses (I), (II), and (III), the term `taxpayer' shall 
     include any person related to the taxpayer.
       ``(V) Contractual counterparty.--For purposes of this 
     clause, the term `contractual counterparty' means an entity 
     with which the taxpayer has entered into a contract, 
     agreement, or other arrangement.

       ``(iii) Guidance.--Not later than December 31, 2026, the 
     Secretary shall issue such guidance as is necessary to carry 
     out the purposes of this subparagraph, including 
     establishment of rules to prevent entities from evading, 
     circumventing, or abusing the application of the restrictions 
     against impermissible technology licensing arrangements with 
     specified foreign entities, such as through temporary 
     transfers of intellectual property, retention by a specified 
     foreign entity of a reversionary interest in transferred 
     intellectual property, or otherwise.
       ``(E) Publicly traded entities.--
       ``(i) In general.--

       ``(I) Nonapplication of certain foreign-controlled entity 
     rules.--Subparagraph (C)(v) shall not apply in the case of 
     any entity the securities of which are regularly traded on--

       ``(aa) a national securities exchange which is registered 
     with the Securities and Exchange Commission,
       ``(bb) the national market system established pursuant to 
     section 11A of the Securities and Exchange Act of 1934, or
       ``(cc) any other exchange or other market which the 
     Secretary has determined in guidance issued under section 
     1296(e)(1)(A)(ii) has rules adequate to carry out the 
     purposes of part VI of subchapter P of chapter 1 of subtitle 
     A.

       ``(II) Nonapplication of certain foreign-influenced entity 
     rules.--Subparagraph (D)(i)(I) shall not apply in the case of 
     any entity--

       ``(aa) the securities of which are regularly traded in a 
     manner described in subclause (I), or
       ``(bb) for which not less than 80 percent of the equity 
     securities of such entity are owned directly or indirectly by 
     an entity which is described in item (aa).

       ``(III) Exclusion of exchanges or markets in covered 
     nations.--Subclause (I)(cc) shall not apply with respect to 
     any exchange or market which--

       ``(aa) is incorporated or organized under the laws of a 
     covered nation, or
       ``(bb) has its principal place of business in a covered 
     nation.
       ``(ii) Additional foreign-controlled entity requirements 
     for publicly traded companies.--In the case of an entity 
     described in clause (i)(I), such entity shall be deemed to be 
     a foreign-controlled entity under subparagraph (C)(v) if such 
     entity is controlled (as determined under subparagraph (G)) 
     by--

       ``(I) 1 or more specified foreign entities (as determined 
     without regard to subparagraph (B)(v)) that are each required 
     to report their beneficial ownership pursuant to a rule 
     described in clause (iii)(I)(bb), or
       ``(II) 1 or more foreign-controlled entities (as determined 
     without regard to subparagraph (C)(v)) that are each required 
     to report their beneficial ownership pursuant to a rule 
     described in such clause.

       ``(iii) Additional foreign-influenced entity requirements 
     for publicly traded companies.--In the case of an entity 
     described in clause (i)(II), such entity shall be deemed to 
     be a foreign-influenced entity under subparagraph (D)(i)(I) 
     if--

       ``(I) during the taxable year--

       ``(aa) a specified foreign entity has the authority to 
     appoint a covered officer of such entity,
       ``(bb) a single specified foreign entity required to report 
     its beneficial ownership under Rule 13d-3 of the Securities 
     and Exchange Act of 1934 (or, in the case of an exchange or 
     market described in clause (i)(I)(cc), an equivalent rule) 
     owns not less than 25 percent of such entity, or
       ``(cc) 1 or more specified foreign entities that are each 
     required to report their beneficial ownership under Rule 13d-
     3 of the Securities and Exchange Act of 1934 own, in the 
     aggregate, not less than 40 percent of such entity, or

       ``(II) such entity has issued debt, as part of an original 
     issuance, in excess of 15 percent of its publicly-traded debt 
     to 1 or more specified foreign entities.

       ``(F) Covered officer.--For purposes of this paragraph, the 
     term `covered officer' means, with respect to an entity--
       ``(i) a member of the board of directors, board of 
     supervisors, or equivalent governing body,
       ``(ii) an executive-level officer, including the president, 
     chief executive officer, chief operating officer, chief 
     financial officer, general counsel, or senior vice president, 
     or
       ``(iii) an individual having powers or responsibilities 
     similar to those of officers or members described in clause 
     (i) or (ii).
       ``(G) Determination of control.--For purposes of 
     subparagraph (C)(v), the term `control' means--
       ``(i) in the case of a corporation, ownership (by vote or 
     value) of more than 50 percent of the stock in such 
     corporation,
       ``(ii) in the case of a partnership, ownership of more than 
     50 percent of the profits interests or capital interests in 
     such partnership, or
       ``(iii) in any other case, ownership of more than 50 
     percent of the beneficial interests in the entity.
       ``(H) Determination of ownership.--For purposes of this 
     section, section 318(a)(2) shall apply for purposes of 
     determining ownership of stock in a corporation. Similar 
     principles shall apply for purposes of determining ownership 
     of interests in any other entity.
       ``(I) Other definitions.--For purposes of this paragraph--
       ``(i) Applicable critical mineral.--The term `applicable 
     critical mineral' has the same meaning given such term under 
     section 45X(c)(6).
       ``(ii) Covered nation.--The term `covered nation' has the 
     same meaning given such term under section 4872(f)(2) of 
     title 10, United States Code.
       ``(iii) Eligible component.--The term `eligible component' 
     has the same meaning given such term under section 45X(c)(1).
       ``(iv) Energy storage technology.--The term `energy storage 
     technology' has the same meaning given such term under 
     section 48E(c)(2).
       ``(v) Qualified facility.--The term `qualified facility' 
     means--

       ``(I) a qualified facility, as defined in section 
     45Y(b)(1), and
       ``(II) a qualified facility, as defined in section 
     48E(b)(3).

       ``(vi) Related.--The term `related' shall have the same 
     meaning given such term under sections 267(b) and 707(b).
       ``(J) Beginning of construction.--For purposes of applying 
     any provision under this

[[Page S4016]]

     paragraph, the beginning of construction with respect to any 
     property shall be determined pursuant to rules similar to the 
     rules under Internal Revenue Service Notice 2013-29 and 
     Internal Revenue Service Notice 2018-59 (as well as any 
     subsequently issued guidance clarifying, modifying, or 
     updating either such Notice), as in effect on January 1, 
     2025.
       ``(K) Regulations and guidance.--The Secretary may 
     prescribe such regulations and guidance as may be necessary 
     or appropriate to carry out the provisions of this paragraph, 
     including rules to prevent the circumvention of any rules or 
     restrictions with respect to prohibited foreign entities.
       ``(52) Material assistance from a prohibited foreign 
     entity.--
       ``(A) In general.--The term `material assistance from a 
     prohibited foreign entity' means--
       ``(i) with respect to any qualified facility or energy 
     storage technology, a material assistance cost ratio which is 
     less than the threshold percentage applicable under 
     subparagraph (B), or
       ``(ii) with respect to any facility which produces eligible 
     components, a material assistance cost ratio which is less 
     than the threshold percentage applicable under subparagraph 
     (C).
       ``(B) Threshold percentage for qualified facilities and 
     energy storage technology.--For purposes of subparagraph 
     (A)(i), the threshold percentage shall be--
       ``(i) in the case of a qualified facility the construction 
     of which begins--

       ``(I) after June 16, 2025, and before January 1, 2026, 37.5 
     percent,
       ``(II) during calendar year 2026, 40 percent,
       ``(III) during calendar year 2027, 45 percent,
       ``(IV) during calendar year 2028, 50 percent,
       ``(V) during calendar year 2029, 55 percent, and
       ``(VI) after December 31, 2029, 60 percent, and

       ``(ii) in the case of energy storage technology the 
     construction of which begins--

       ``(I) during calendar year 2026, 55 percent,
       ``(II) during calendar year 2027, 60 percent,
       ``(III) during calendar year 2028, 65 percent,
       ``(IV) during calendar year 2029, 70 percent, and
       ``(V) after December 31, 2029, 75 percent.

       ``(C) Threshold percentage for eligible components.--
       ``(i) In general.--For purposes of subparagraph (A)(ii), 
     the threshold percentage shall be--

       ``(I) in the case of any solar energy component (as such 
     term is defined in section 45X(c)(3)(A)) which is sold--

       ``(aa) during calendar year 2026, 50 percent,
       ``(bb) during calendar year 2027, 60 percent,
       ``(cc) during calendar year 2028, 70 percent,
       ``(dd) during calendar year 2029, 80 percent, and
       ``(ee) after December 31, 2029, 85 percent,

       ``(II) in the case of any wind energy component (as such 
     term is defined in section 45X(c)(4)(A)) which is sold--

       ``(aa) during calendar year 2026, 85 percent, and
       ``(bb) during calendar year 2027, 90 percent,

       ``(III) in the case of any inverter described in 
     subparagraphs (B) through (G) of section 45X(c)(2) which is 
     sold--

       ``(aa) during calendar year 2026, 50 percent,
       ``(bb) during calendar year 2027, 55 percent,
       ``(cc) during calendar year 2028, 60 percent,
       ``(dd) during calendar year 2029, 65 percent, and
       ``(ee) after December 31, 2029, 70 percent,

       ``(IV) in the case of any qualifying battery component (as 
     such term is defined in section 45X(c)(5)(A)) which is sold--

       ``(aa) during calendar year 2026, 60 percent,
       ``(bb) during calendar year 2027, 65 percent,
       ``(cc) during calendar year 2028, 70 percent,
       ``(dd) during calendar year 2029, 80 percent, and
       ``(ee) after December 31, 2029, 85 percent, and

       ``(V) subject to clause (ii), in the case of any applicable 
     critical mineral (as such term is defined in section 
     45X(c)(6)) which is sold--

       ``(aa) after December 31, 2025, and before January 1, 2030, 
     0 percent,
       ``(bb) during calendar year 2030, 25 percent,
       ``(cc) during calendar year 2031, 30 percent,
       ``(dd) during calendar year 2032, 40 percent, and
       ``(ee) after December 31, 2032, 50 percent.
       ``(ii) Adjusted threshold percentage for applicable 
     critical minerals.--Not later than December 31, 2027, the 
     Secretary shall issue threshold percentages for each of the 
     applicable critical minerals described in section 45X(c)(6)), 
     which shall--

       ``(I) apply in lieu of the threshold percentage determined 
     under clause (i)(V) for each calendar year, and
       ``(II) equal or exceed the threshold percentage which would 
     otherwise apply with respect to such applicable critical 
     mineral under such clause for such calendar year, taking into 
     account--

       ``(aa) domestic geographic availability,
       ``(bb) supply chain constraints,
       ``(cc) domestic processing capacity needs, and
       ``(dd) national security concerns.
       ``(D) Material assistance cost ratio.--
       ``(i) Qualified facilities and energy storage technology.--
     For purposes of subparagraph (A)(i), the term `material 
     assistance cost ratio' means the amount (expressed as a 
     percentage) equal to the quotient of--

       ``(I) an amount equal to--

       ``(aa) the total direct costs to the taxpayer attributable 
     to all manufactured products (including components) which are 
     incorporated into the qualified facility or energy storage 
     technology upon completion of construction, minus
       ``(bb) the total direct costs to the taxpayer attributable 
     to all manufactured products (including components) which 
     are--
       ``(AA) incorporated into the qualified facility or energy 
     storage technology upon completion of construction, and
       ``(BB) mined, produced, or manufactured by a prohibited 
     foreign entity, divided by

       ``(II) the amount described in subclause (I)(aa).

       ``(ii) Eligible components.--For purposes of subparagraph 
     (A)(ii), the term `material assistance cost ratio' means the 
     amount (expressed as a percentage) equal to the quotient of--

       ``(I) an amount equal to--

       ``(aa) with respect to an eligible component, the total 
     direct material costs that are paid or incurred (within the 
     meaning of section 461 and any regulations issued under 
     section 263A) by the taxpayer for production of such eligible 
     component, minus
       ``(bb) with respect to an eligible component, the total 
     direct material costs that are paid or incurred (within the 
     meaning of section 461 and any regulations issued under 
     section 263A) by the taxpayer for production of such eligible 
     component that are attributable to a prohibited foreign 
     entity, divided by

       ``(II) the amount described in subclause (I)(aa).

       ``(iii) Safe harbor tables.--

       ``(I) In general.--Not later than December 31, 2026, the 
     Secretary shall issue safe harbor tables (and such other 
     guidance as deemed necessary) to--

       ``(aa) identify the percentage of total direct costs of any 
     manufactured product which is attributable to a prohibited 
     foreign entity,
       ``(bb) identify the percentage of total direct material 
     costs of any eligible component which is attributable to a 
     prohibited foreign entity, and
       ``(cc) provide all rules necessary to determine the 
     appropriate amount of a taxpayer's material assistance from a 
     prohibited foreign entity within the meaning of this 
     paragraph or as such term is used in section 5000E-1.

       ``(II) Safe harbors prior to issuance.--For purposes of 
     this paragraph, prior to the date on which the Secretary 
     issues the safe harbor tables described in subclause (I), and 
     for construction of a qualified facility or energy storage 
     technology which begins on or before the date which is 60 
     days after the date of issuance of such tables, a taxpayer 
     may--

       ``(aa) use the tables included in Internal Revenue Service 
     Notice 2025-08 to establish the percentage of the total 
     direct costs of any listed eligible component and any 
     manufactured product, and
       ``(bb) rely on a certification by the supplier of the 
     manufactured product, eligible component, or constituent 
     element, material, or subcomponent of an eligible component--
       ``(AA) of the total direct costs or the total direct 
     material costs, as applicable, of such product or component 
     that was not produced or manufactured by a prohibited foreign 
     entity, or
       ``(BB) that such product or component was not produced or 
     manufactured by a prohibited foreign entity.

       ``(III) Exception.--Notwithstanding subclauses (I) and 
     (II)--

       ``(aa) if the taxpayer knows (or has reason to know) that a 
     manufactured product or eligible component was produced or 
     manufactured by a prohibited foreign entity, the taxpayer 
     shall treat all direct costs with respect to such 
     manufactured product, or all direct material costs with 
     respect to such eligible component, as attributable to a 
     prohibited foreign entity, and
       ``(bb) if the taxpayer knows (or has reason to know) that 
     the certification referred to in subclause (II)(bb) 
     pertaining to a manufactured product or eligible component is 
     inaccurate, the taxpayer may not rely on such certification.

       ``(IV) Certification requirement.--In a manner consistent 
     with Treasury Regulation section 1.45X-4(c)(4)(i) (as in 
     effect on the date of enactment of this paragraph), the 
     certification referred to in subclause (II)(bb) shall--

       ``(aa) include--
       ``(AA) the supplier's employer identification number, or
       ``(BB) any such similar identification number issued by a 
     foreign government,
       ``(bb) be signed under penalties of perjury,
       ``(cc) be retained by the supplier and the taxpayer for a 
     period of not less than 6 years and shall be provided to the 
     Secretary upon request, and
       ``(dd) be from the supplier from which the taxpayer 
     purchased any manufactured product, eligible component, or 
     constituent elements, materials, or subcomponents of an 
     eligible component, stating either--
       ``(AA) that such property was not produced or manufactured 
     by a prohibited foreign entity and that the supplier is not 
     aware that any prior supplier in the chain of production of 
     that property is a prohibited foreign entity,
       ``(BB) for purposes of section 45X, the total direct 
     material costs for each component, constituent element, 
     material, or subcomponent that were not produced or 
     manufactured by a prohibited foreign entity, or

[[Page S4017]]

       ``(CC) for purposes of section 45Y or section 48E, the 
     total direct costs attributable to all manufactured products 
     that were not produced or manufactured by a prohibited 
     foreign entity.
       ``(iv) Existing contract.--Upon the election of the 
     taxpayer (in such form and manner as the Secretary shall 
     designate), in the case of any manufactured product, eligible 
     component, or constituent element, material, or subcomponent 
     of an eligible component which is--

       ``(I) acquired by the taxpayer, or manufactured or 
     assembled by or for the taxpayer, pursuant to a binding 
     written contract which was entered into prior to June 16, 
     2025, and
       ``(II)(aa) placed into service before January 1, 2030 (or, 
     in the case of an applicable facility, as defined in section 
     45Y(d)(4)(B), before January 1, 2028), or
       ``(bb) in the case of a constituent element, material, or 
     subcomponent, used in a product sold before January 1, 2030,

     the cost to the taxpayer with respect to such product, 
     component, element, material, or subcomponent shall not be 
     included for purposes of determining the material assistance 
     cost ratio under this subparagraph.
       ``(v) Anti-circumvention rules.--The Secretary shall 
     prescribe such regulations and guidance as may be necessary 
     or appropriate to prevent circumvention of the rules under 
     this subparagraph, including prevention of--

       ``(I) any abuse of the exception provided under clause (iv) 
     through the stockpiling of any manufactured product, eligible 
     component, or constituent element, material, or subcomponent 
     of an eligible component during any period prior to the 
     application of the requirements under this paragraph, or
       ``(II) any evasion with respect to the requirements of this 
     subparagraph where the facts and circumstances demonstrate 
     that the beginning of construction of a qualified facility or 
     energy storage technology has not in fact occurred.

       ``(E) Other definitions.--For purposes of this paragraph--
       ``(i) Eligible component.--The term `eligible component' 
     means--

       ``(I) any property described in section 45X(c)(1), or
       ``(II) any component which is identified by the Secretary 
     pursuant to regulations or guidance issued under subparagraph 
     (G).

       ``(ii) Energy storage technology.--The term `energy storage 
     technology' has the same meaning given such term under 
     section 48E(c)(2).
       ``(iii) Manufactured product.--The term `manufactured 
     product' means--

       ``(I) a manufactured product which is a component of a 
     qualified facility, as described in section 45Y(g)(11)(B) and 
     any guidance issued thereunder, or
       ``(II) any product which is identified by the Secretary 
     pursuant to regulations or guidance issued under subparagraph 
     (G).

       ``(iv) Qualified facility.--The term `qualified facility' 
     means--

       ``(I) a qualified facility, as defined in section 
     45Y(b)(1),
       ``(II) a qualified facility, as defined in section 
     48E(b)(3), and
       ``(III) any qualified interconnection property (as defined 
     in section 48E(b)(4)) which is part of the qualified 
     investment with respect to a qualified facility (as described 
     in section 48E(b)(1)).

       ``(F) Beginning of construction.--Rules similar to the 
     rules under paragraph (51)(J) shall apply for purposes of 
     this paragraph.
       ``(G) Regulations and guidance.--The Secretary may 
     prescribe such regulations and guidance as may be necessary 
     or appropriate to carry out the provisions of this paragraph, 
     including--
       ``(i) identification of components or products for purposes 
     of clauses (i) and (iii) of subparagraph (E), and
       ``(ii) for purposes of subparagraph (A)(ii), rules to 
     address facilities which produce more than one eligible 
     component.''.
       (d) Denial of Credit for Certain Wind and Solar Leasing 
     Arrangements.--Section 45Y is amended by adding at the end 
     the following new subsection:
       ``(h) Denial of Credit for Wind and Solar Leasing 
     Arrangements.--No credit shall be determined under this 
     section with respect to any production of electricity during 
     the taxable year with respect to property described in 
     paragraph (1) or (4) of section 25D(d) (as applied by 
     substituting `lessee' for `taxpayer') if the taxpayer rents 
     or leases such property to a third party during such taxable 
     year.''.
       (e) Emissions Rates Tables.--Section 45Y(b)(2)(C) is 
     amended by adding at the end the following new clause:
       ``(iii) Existing studies.--For purposes of clause (i), in 
     determining greenhouse gas emissions rates for types or 
     categories of facilities for the purpose of determining 
     whether a facility satisfies the requirements under paragraph 
     (1), the Secretary shall consider studies published on or 
     before the date of enactment of this clause which demonstrate 
     a net lifecycle greenhouse gas emissions rate which is not 
     greater than zero using widely accepted lifecycle assessment 
     concepts, such as concepts described in standards developed 
     by the International Organization for Standardization.''.
       (f) Nuclear Energy Communities.--
       (1) In general.--Section 45(b)(11) is amended--
       (A) in subparagraph (B)--
       (i) in clause (ii)(II), by striking ``or'' at the end,
       (ii) in clause (iii)(II), by striking the period at the end 
     and inserting ``, or'', and
       (iii) by adding at the end the following new clause:
       ``(iv) for purposes of any qualified facility which is an 
     advanced nuclear facility, a metropolitan statistical area 
     which has (or, at any time during the period beginning after 
     December 31, 2009, had) 0.17 percent or greater direct 
     employment related to the advancement of nuclear power, 
     including employment related to--

       ``(I) an advanced nuclear facility,
       ``(II) advanced nuclear power research and development,
       ``(III) nuclear fuel cycle research, development, or 
     production, including mining, enrichment, manufacture, 
     storage, disposal, or recycling of nuclear fuel, and
       ``(IV) the manufacturing or assembly of components used in 
     an advanced nuclear facility.'', and

       (B) by adding at the end the following new subparagraph:
       ``(C) Advanced nuclear facilities.--
       ``(i) In general.--Subject to clause (ii), for purposes of 
     subparagraph (B)(iv), the term `advanced nuclear facility' 
     means any nuclear facility the reactor design for which is 
     approved in the manner described in section 45J(d)(2).
       ``(ii) Special rule.--For purposes of clause (i), a 
     facility shall be deemed to have a reactor design which is 
     approved in the manner described in section 45J(d)(2) if the 
     Nuclear Regulatory Commission has authorized construction and 
     issued a site-specific construction permit or combined 
     license with respect to such facility.''.
       (2) Nonapplication for clean electricity investment 
     credit.--Section 48E(a)(3)(A)(i) is amended by inserting ``, 
     as applied without regard to clause (iv) thereof'' after 
     ``section 45(b)(11)(B)''.
       (g) Conforming Amendments.--
       (1) Paragraph (1) of section 48D(c) is amended to read as 
     follows:
       ``(1) is not a specified foreign entity (as defined in 
     section 7701(a)(51)(B)), and''.
       (2) Section 45Y(b)(1) is amended--
       (A) by redesignating subparagraph (D) as subparagraph (E), 
     and
       (B) by inserting after subparagraph (C) the following new 
     subparagraph:
       ``(D) Determination of capacity.--For purposes of 
     subparagraph (C), additions of capacity of a facility shall 
     be determined in any reasonable manner, including based on--
       ``(i) determinations by, or reports to, the Federal Energy 
     Regulatory Commission (including interconnection agreements), 
     the Nuclear Regulatory Commission, or any similar entity, 
     reflecting additions of capacity,
       ``(ii) determinations or reports reflecting additions of 
     capacity made by an independent professional engineer,
       ``(iii) reports to, or issued by, regional transmission 
     organizations or independent system operators reflecting 
     additions of capacity, or
       ``(iv) any other method or manner provided by the 
     Secretary.''.
       (h) Prohibition on Transfer of Credits to Specified Foreign 
     Entities.--Section 6418(g) is amended by adding at the end 
     the following new paragraph:
       ``(5) Prohibition on transfer of credits to specified 
     foreign entities.--With respect to any eligible credit 
     described in clause (iii), (iv), (vi), (vii), (viii), or (xi) 
     of subsection (f)(1)(A), an eligible taxpayer may not elect 
     to transfer any portion of such credit to a taxpayer that is 
     a specified foreign entity (as defined in section 
     7701(a)(51)(B)).''.
       (i) Extension of Period of Limitations for Errors Relating 
     to Determining of Material Assistance From a Prohibited 
     Foreign Entity.--Section 6501 is amended--
       (1) by redesignating subsection (o) as subsection (p), and
       (2) by inserting after subsection (n) the following new 
     subsection:
       ``(o) Material Assistance From a Prohibited Foreign 
     Entity.--In the case of a deficiency attributable to an error 
     with respect to the determination under section 7701(a)(52) 
     for any taxable year, such deficiency may be assessed at any 
     time within 6 years after the return for such year was 
     filed.''.
       (j) Imposition of Accuracy-related Penalties.--
       (1) In general.--Section 6662 is amended by adding at the 
     end the following new subsection:
       ``(m) Substantial Understatement of Income Tax Due to 
     Disallowance of Applicable Energy Credits.--
       ``(1) In general.--In the case of a taxpayer for which 
     there is a disallowance of an applicable energy credit for 
     any taxable year, for purposes of determining whether there 
     is a substantial understatement of income tax for such 
     taxable year, subsection (d)(1) shall be applied--
       ``(A) in subparagraphs (A) and (B), by substituting `1 
     percent' for `10 percent' each place it appears, and
       ``(B) without regard to subparagraph (C).
       ``(2) Disallowance of an applicable energy credit.--For 
     purposes of this subsection, the term `disallowance of an 
     applicable energy credit' means the disallowance of a credit 
     under section 45X, 45Y, or 48E by reason of overstating the 
     material assistance cost ratio (as determined under section 
     7701(a)(52)) with respect to any qualified facility, energy 
     storage technology, or facility which produces eligible 
     components.''.

[[Page S4018]]

       (2) Conforming amendment.--Section 6417(d)(6) is amended by 
     adding at the end the following new subparagraph:
       ``(D) Disallowance of an applicable energy credit.--In the 
     case of an applicable entity which made an election under 
     subsection (a) with respect to an applicable credit for which 
     there is a disallowance described in section 6662(m)(2), 
     subparagraph (A) shall apply with respect to any excessive 
     payment resulting from such disallowance.''.
       (k) Penalty for Substantial Misstatements on Certification 
     Provided by Supplier.--
       (1) In general.--Part I of subchapter B of chapter 68 is 
     amended by inserting after section 6695A the following new 
     section:

     ``SEC. 6695B. PENALTY FOR SUBSTANTIAL MISSTATEMENTS ON 
                   CERTIFICATION PROVIDED BY SUPPLIER.

       ``(a) Imposition of Penalty.--If--
       ``(1) a person--
       ``(A) provides a certification described in clause 
     (iii)(II)(bb) of section 7701(a)(52)(D) with respect to any 
     manufactured product, eligible component, or constituent 
     element, material, or subcomponent of an eligible component, 
     and
       ``(B) knows, or reasonably should have known, that the 
     certification would be used in connection with a 
     determination under such section,
       ``(2) such certification is inaccurate or false with 
     respect to--
       ``(A) whether such property was produced or manufactured by 
     a prohibited foreign entity, or
       ``(B) the total direct costs or total direct material costs 
     of such property that was not produced or manufactured by a 
     prohibited foreign entity that were provided on such 
     certification, and
       ``(3) the inaccuracy or falsity described in paragraph (2) 
     resulted in the disallowance of an applicable energy credit 
     (as defined in section 6662(m)(2)) and an understatement of 
     income tax (within the meaning of section 6662(d)(2)) for the 
     taxable year in an amount which exceeds the lesser of--
       ``(A) 5 percent of the tax required to be shown on the 
     return for the taxable year, or
       ``(B) $100,000,
     then such person shall pay a penalty in the amount determined 
     under subsection (b).
       ``(b) Amount of Penalty.--The amount of the penalty imposed 
     under subsection (a) on any person with respect to a 
     certification shall be equal to the greater of--
       ``(1) 10 percent of the amount of the underpayment (as 
     defined in section 6664(a)) solely attributable to the 
     inaccuracy or falsity described in subsection (a)(2), or
       ``(2) $5,000.
       ``(c) Exception.--No penalty shall be imposed under 
     subsection (a) if the person establishes to the satisfaction 
     of the Secretary that any inaccuracy or falsity described in 
     subsection (a)(2) is due to a reasonable cause and not 
     willful neglect.
       ``(d) Definitions.--Any term used in this section which is 
     also used in section 7701(a)(52) shall have the meaning given 
     such term in such section.''.
       (2) Clerical amendments.--
       (A) Section 6696 is amended--
       (i) in the heading, by striking ``and 6695a'' and inserting 
     ``6695a, and 6695b'',
       (ii) in subsections (a), (b), and (e), by striking ``and 
     6695A'' each place it appears and inserting ``6695A, and 
     6695B'',
       (iii) in subsection (c), by striking ``or 6695A'' and 
     inserting ``6695A, or 6695B'', and
       (iv) in subsection (d)--

       (I) in paragraph (1), by inserting ``(or, in the case of 
     any penalty under section 6695B, 6 years)'' after ``assessed 
     within 3 years'', and
       (II) in paragraph (2), by inserting ``(or, in the case of 
     any claim for refund of an overpayment of any penalty 
     assessed under section 6695B, 6 years)'' after ``filed within 
     3 years''.

       (B) The table of sections for part I of subchapter B of 
     chapter 68 is amended by inserting after item relating to 
     section 6695A the following new item:

``Sec. 6695B. Penalty for substantial misstatements on certification 
              provided by supplier.''.
       (l) Excise Tax on Facilities That Receive Material 
     Assistance From Prohibited Foreign Entities.--
       (1) In general.--Subtitle D is amended by adding at the end 
     the following new chapter:

  ``CHAPTER 50B--MATERIAL ASSISTANCE FROM PROHIBITED FOREIGN ENTITIES

``Sec. 5000E-1. Imposition of tax.

     ``SEC. 5000E-1. IMPOSITION OF TAX.

       ``(a) In General.--In the case of an applicable facility 
     for which there is a material assistance cost ratio 
     violation, a tax is hereby imposed for the taxable year in 
     which such facility is placed in service in the amount 
     determined under subsection (d) with respect to such 
     facility.
       ``(b) Applicable Facility.--For purposes of this section, 
     the term `applicable facility' means a facility owned by the 
     taxpayer--
       ``(1) which--
       ``(A) uses wind to produce electricity (within the meaning 
     of such term as used in section 45(d)(1), as determined 
     without regard to any requirement under such section with 
     respect to the date on which construction of property 
     begins), or
       ``(B) uses solar energy to produce electricity (within the 
     meaning of such term as used in section 45(d)(4), as 
     determined without regard to any requirement under such 
     section with respect to the date on which construction of 
     property begins), and
       ``(2) either--
       ``(A) the construction of which begins after the date of 
     the enactment of this section and before January 1, 2028, and 
     which is placed in service after December 31, 2027, or
       ``(B) the construction of which begins after December 31, 
     2027, and before January 1, 2036.
       ``(c) Material Assistance Cost Ratio Violation.--For 
     purposes of this section, the term `material assistance cost 
     ratio violation' means, with respect to an applicable 
     facility, that the construction of such facility includes any 
     material assistance from a prohibited foreign entity (as 
     defined in section 7701(a)(52)).
       ``(d) Amount of Tax.--
       ``(1) In general.--The amount determined under this 
     subsection with respect to any applicable facility shall be 
     equal to the applicable percentage of the amount equal to the 
     product of--
       ``(A) the amount (expressed in percentage points) by which 
     the threshold percentage (as determined under section 
     7701(a)(52)(B)(i)) exceeds the material assistance cost ratio 
     (as determined under section 7701(a)(52)(D)(i)), multiplied 
     by
       ``(B) the total direct costs to the taxpayer attributable 
     to all manufactured products (including components) which are 
     incorporated into the applicable facility upon completion of 
     construction (as determined under section 
     7701(a)(52)(D)(i)(I)).
       ``(2) Applicable percentage.--For purposes of paragraph 
     (1), the applicable percentage shall be--
       ``(A) in the case of a facility described in subparagraph 
     (A) of subsection (b)(1), 30 percent, or
       ``(B) in the case of a facility described in subparagraph 
     (B) of such subsection, 50 percent.
       ``(e) Rule of Application.--For purposes of this section, 
     with respect to the application of section 7701(a)(52) or any 
     provision thereof, such section shall be applied by 
     substituting `applicable facility' for `qualified facility' 
     each place it appears.
       ``(f) Regulations and Guidance.--The Secretary may 
     prescribe such regulations and guidance as may be necessary 
     or appropriate to carry out the provisions of this section, 
     including--
       ``(1) identifying an applicable facility of the taxpayer,
       ``(2) determining a material assistance cost ratio 
     violation of the taxpayer, and
       ``(3) application of the rules to specific fact patterns in 
     a manner that is consistent with the purposes of this 
     section.''.
       (2) Clerical amendment.--The table of chapters for subtitle 
     D is amended by inserting after the item relating to chapter 
     50A the following new item:

 ``Chapter 50B--Material Assistance From Prohibited Foreign Entities''.

       (m) Effective Dates.--
       (1) In general.--Except as provided in paragraphs (2), (3), 
     (4), and (5), the amendments made by this section shall apply 
     to taxable years beginning after the date of enactment of 
     this Act.
       (2) Material assistance from prohibited foreign entities.--
     The amendments made by subsection (b)(1) shall apply to 
     facilities for which construction begins after June 16, 2025.
       (3) Excise tax on facilities that receive material 
     assistance from prohibited foreign entities.--The amendments 
     made by subsection (l) shall apply to facilities for which 
     construction begins after June 16, 2025.
       (4) Penalty for substantial misstatements on certification 
     provided by supplier.--The amendments made by subsection (k) 
     shall apply to certifications provided after December 31, 
     2025.
       (5) Termination for wind and solar facilities.--The 
     amendments made by subsection (a) shall apply to facilities 
     the construction of which begins after the date of enactment 
     of this Act.
                                 ______