Credit for production of energy from deep water offshore wind

(a)

Production credit

(1)

In general

Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

45R.

Credit for production for deep water offshore wind

(a)

General rule

For purposes of section 38, the deep water offshore wind production credit of any taxpayer for any taxable year is equal to the product of— (1)3.04 cents, multiplied by (2)the kilowatt hours of electricity— (A)produced by the taxpayer at a deep water offshore wind facility during the 10-year period beginning on the date the facility was originally placed in service, and (B)sold by the taxpayer to an unrelated person during the taxable year. (b)

National limitation

(1)

In general

The amount of credit which would (but for this subsection) be allowed with respect to any facility for any taxable year shall not exceed the amount which bears the same ratio to such amount of credit as— (A)the national megawatt capacity limitation allocated to the facility, bears to (B)the total megawatt nameplate capacity of such facility. (2)

Amount of national limitation

The aggregate amount of national megawatt capacity limitation allocated by the Secretary under paragraph (3) shall not exceed 6,000 megawatts. (3)

Allocation of limitation

The Secretary shall allocate the national megawatt capacity limitation in the following manner: (A)The Secretary shall allocate the first 5,000 megawatts of the national megawatt capacity limitation to facilities by giving priority to facilities which will be placed in service at the earliest date. (B)The Secretary shall allocate the remaining megawatts of the national megawatt capacity limitation by taking into account the technology of the facility. (4)

Regulations

Not later than 6 months after the date of the enactment of this section, the Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this subsection. Such regulations shall provide a certification process under which the Secretary, after consultation with the Secretary of Energy, shall approve and allocate the national megawatt capacity limitation. (c)

Deep water offshore wind facility

For purposes of this section— (1)

In general

The term deep water offshore wind facility means any facility which— (A)is owned by the taxpayer, (B)uses wind to produce electricity, (C)operates in 60 meters or more of water, (D)is located within the internal or territorial waters of the United States, and (E)is placed in service after the date of the enactment of this section and before January 1, 2030. (2)

Exceptions

Such term shall not include any facility if— (A)a credit has been allowed to such facility under section 45 for such taxable year or any prior taxable year, (B)a credit has been allowed with respect to such facility under section 46 by reason of section 48(a) for such taxable or any preceding taxable year, or (C)a grant has been made with respect to such facility under section 1603 of the American Recovery and Reinvestment Act of 2009. (d)

Other rules to apply

Rules similar to the rules of paragraphs (1), (3), (4), and (5) of section 45(e) shall apply for purposes of this section. (e)

Inflation adjustment

(1)

In general

In the case of any calendar year after 2010, the 3.04 cent amount in subsection (a)(1) shall be adjusted by multiplying such amount by the inflation adjustment factor for the calendar year in which the sale occurs. If any amount as increased under the preceding sentence is not a multiple of 0.01 cent, such amount shall be rounded to the nearest multiple of 0.01 cent. (2)

Inflation adjustment factor

For purposes of paragraph (1), the term inflation adjustment factor has the meaning given such term under section 45(e)(2)(B), except that calendar year 2010 shall be substituted for calendar year 1992.

(2)

Credit made part of general business credit

Section 38(b) of the Internal Revenue Code of 1986 is amended— (A)by striking plus at the end of paragraph (34), (B)by striking the period at the end of paragraph (35) and inserting , plus, and (C)by adding at the end the following new paragraph:

(36)the deep water offshore wind production credit determined under section 45R(a).

(3)

Coordination with other benefits

(A)

Section 45 production credit

Section 45(e) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

(12)

Coordination with deep water offshore wind credit

No credit shall be allowed under subsection (a) with respect to any qualified facility described in subsection (d)(1) if a credit has been allowed to such facility under section 45J for such taxable year or any prior taxable year.

(B)

Investment credit

Subsections (B) and (C) of section 48(d)(5)(B) of such Code are each amended by inserting or section 45R after section 45. (C)

Grants

Section 48(d)(1) of such Code is amended by striking or section 45 and inserting , section 45, or section 45R. (4)

Clerical amendment

The table of sections for subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following:

Sec. 45R. Credit for production for deep water offshore wind.

(b)

Option To elect investment credit in lieu of production credit

Section 48(a)(5)(C)(i) of the Internal Revenue Code of 1986 is amended by inserting , or any deep water offshore wind facility (within the meaning of section 45R) if such facility is placed in service before 2030 before the period at the end. (c)

Effective date

The amendments made by this section shall apply to facilities placed in service after the date of the enactment of this Act.