Offshore wind manufacturing credit

(a)

In general

Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code is amended by inserting after section 36B the following new section:

36C.

Offshore wind manufacturing credit

(a)

Allowance of credit

There shall be allowed as a credit against the tax imposed by this subtitle for any taxable year an amount equal to the sum of—(1)the offshore wind manufacturing investment credit, and(2)the offshore wind manufacturing production credit.(b)

Credit amounts

For purposes of this section—(1)

Manufacturing investment credit

(A)

In general

The offshore wind manufacturing investment credit for any taxable year is an amount equal to 30 percent of the qualified investment for such taxable year.(B)

Qualified investment

The qualified investment for any taxable year is the basis of any advanced offshore wind manufacturing property placed in service in the United States by the taxpayer during such taxable year.(C)

Advanced offshore wind manufacturing property

The term advanced offshore wind manufacturing property means property—(i)which is used predominantly to manufacture or process any qualified offshore wind component,(ii)which respect to which depreciation (or amortization in lieu of depreciation) is allowable, and(iii)which—(I)is constructed, reconstructed, or erected by the taxpayer, or(II)which is acquired by the taxpayer, if the original use of such property commences with the taxpayer.(2)

Manufacturing production credit

(A)

In general

The offshore wind manufacturing production credit is an amount equal to the applicable rate with respect to any qualified offshore wind component or related vessel which—(i)is produced by the taxpayer at a qualified manufacturing facility, and(ii)during the taxable year—(I)is sold by the taxpayer to—(aa)an unrelated person, or(bb)a related person for the use of such person in their trade or business (with the exception of any trade or business related to resale of such offshore wind component without any subsequent modification, assembly, or integration into a project), or(II)if not sold, is placed in service or operation by the taxpayer or any other person.(B)

Applicable rate

The applicable rate is—(i)with respect to any qualified offshore wind component, the total rated capacity (expressed on a per direct current watt basis) of the completed offshore wind turbine for which the component is designed, multiplied by—(I)in the case of any blade, gearbox, generator, or foundation (or dedicated subcomponent described in subsection (c)(1)(A)(ii) thereof), 2 cents,(II)in the case of any tower (or such a dedicated subcomponent thereof), 3 cents, and(III)in the case of any nacelle (or such a dedicated subcomponent thereof), 5 cents, and(ii)with respect to any related vessel, an amount equal to 10 percent of the sale price of such vessel.(C)

Qualified manufacturing facility

The term qualified manufacturing facility means any new or existing facility—(i)which is located in the United States, and(ii)which manufactures or assembles qualified offshore wind components, subcomponents, and related vessels. (D)

Production and sale must be in trade or business

Any qualified offshore wind component produced and sold by the taxpayer shall be taken into account under subparagraph (A)(ii)(I) only if the production and sale described in subparagraph (A) is in a trade or business of the taxpayer.(c)

Definitions

For purposes of this section—(1)

Qualified offshore wind component

(A)

In general

The term qualified offshore wind component means—(i)any blade, tower, nacelle, generator, gearbox, or foundation, and(ii)any dedicated subcomponent necessary to the production, construction, and operation of any such property.(B)

Definitions

(i)

Blade

The term blade means an airfoil-shaped blade which is responsible for converting offshore wind energy to low speed rotational energy.(ii)

Tower

The term tower means a tubular steel, concrete, or steel lattice which supports the structure of an offshore wind turbine.(iii)

Nacelle

The term nacelle means the assembly of the cover housing for drive train and other tower-top components of an offshore wind turbine. (iv)

Generator

The term generator means the component which is housed in the nacelle and converts the mechanical energy from the rotor to electrical energy.(v)

Gearbox

The term gearbox means the component housed in the nacelle which converts the low-speed, high-torque rotation of the rotor for input into the generator.(vi)

Foundation

The term foundation means the component which secures an offshore wind tower and above-water turbine components to the sea floor using offshore wind monopiles, jackets, gravity-based foundations, fixed, or floating platforms.(2)

Related vessel

The term related vessel means any vessel which is purpose-built or retrofitted for purposes of the transport, installation, or maintenance of offshore wind components and offshore wind turbines.(d)

Special rules

For purposes of this section—(1)

Secretary

Any reference to the Secretary means the Secretary in consultation with the Secretary of Energy.(2)

Labor conditions

Any property shall be treated as advanced offshore wind manufacturing property, and any facility shall be treated as a qualified manufacturing facility, only if all laborers and mechanics employed by all contractors and subcontractors in the manufacture of such property or at such facility are paid wages at rates not less than the prevailing rates for work of a similar character in the locality as determined by the Secretary of Labor, in accordance with sections 3141 through 3144, 3146, and 3147 of title 40, United States Code.(3)

Certain rules made applicable for investment credit

For purposes of the offshore wind manufacturing investment credit determined under subsection (b)(1), rules similar to the rules of subsections (a) and (c) of section 50 shall apply.(4)

Coordination with general investment credit

No credit shall be allowed under section 48C with respect to any facility taken into account for purposes of the credit under subsection (b)(2), or any facility with respect to which any qualified investment is taken into account for purposes of the credit under subsection (b)(1). The credit under this section shall be allowed without regard to whether any qualified investment (as defined in section 48C(b)) with respect to a facility has been taken into account for purposes of section 48C in any preceding taxable year. (e)

Registration

(1)

In general

No credit shall be allowed under this section unless the taxpayer registers with the Secretary, at such time, in such form and manner, and subject to such terms and conditions, as the Secretary may by regulations prescribe. Such registration shall include a demonstration of compliance with the requirements of subsection (d)(2).(2)

Registration in event of change in ownership

Under regulations prescribed by the Secretary, the taxpayer (other than a corporation the stock of which is regularly traded on an established securities market) shall be required to re-register under this subsection if after a transaction (or series of related transactions) more than 50 percent of ownership interests in, or assets of, the taxpayer are held by persons other than persons (or persons related thereto) who held more than 50 percent of such interests or assets before the transaction (or series of related transactions).(3)

Denial, revocation, or suspension of registration

Rules similar to the rules of section 4222(c) shall apply to registration under this section.(4)

Information reporting

The Secretary may require—(A)information reporting by any person registered under this subsection, and(B)information reporting by such other persons as the Secretary deems necessary to carry out this section. (f)

Termination

(1)

Offshore wind manufacturing investment tax credit

(A)

In general

Except as provided in subparagraph (B), in the case of any qualified investment with respect to advanced offshore wind manufacturing property which is placed in service after December 31, 2028, the amount of the credit determined under subsection (b)(1) (without regard to this subsection) shall be reduced by—(i)in the case of property placed in service in calendar year 2029, 30 percent,(ii)in the case of property placed in service in calendar year 2030, 65 percent, and(iii)in the case of property placed in service after December 31, 2030, 100 percent.(B)

Certain progress expenditure rules made applicable

Rules similar to the rules of subsections (c)(4) and (d) of section 46 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) shall apply for purposes of subparagraph (A). (2)

Offshore wind manufacturing production tax credit

No credit shall be allowed under subsection (b)(2) in the case of any qualified offshore wind component first sold or placed in service after December 31, 2030.

(b)

Clerical amendment

The table of sections for subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code is amended by inserting after the item relating to section 36B the following new item:

Sec. 36C. Offshore wind manufacturing credit.

(c)

Conforming amendment

Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting , 36C after 36B.(d)

Effective date

The amendments made by this section shall apply to—(1)any qualified investment (as defined in section 36C(b)(1)(B) of the Internal Revenue Code of 1986, as added by this section) with respect to property placed in service beginning after August 1, 2021, and(2)qualified offshore wind components (as defined in section 36C(c)(1) of such Code, as so added) first sold or placed in service after August 1, 2021.