1.Modifications to carbon
dioxide sequestration credit
(a)Allocation and
certification of credit
(1)Subsection (e) of
section 45Q of the Internal Revenue Code of 1986 is amended to read as
follows:
(e)
(1)No credit shall be allowed under subsection (a) with
respect to qualified carbon dioxide captured by carbon capture equipment at a
qualified facility for the amount of qualified carbon dioxide captured by such
carbon capture equipment in excess of—
(A)the portion of
the national limitation allocated with respect to such carbon capture equipment
under subsection (f), over
(B)the amount of
qualified carbon dioxide captured by such carbon capture equipment during
periods after July 31, 2013.
(2)For purposes of paragraph (1)(A), the national
limitation is the excess of—
(A)75,000,000 metric
tons of qualified carbon dioxide, over
(B)the number of
metric tons of qualified carbon dioxide captured before August 1, 2013, for
which a credit under subsection (a) was
allowed.
.
(2)Allocation and
certificationSection 45Q of such Code is amended by adding at
the end the following new subsection:
(f)Allocation for
and certification of carbon capture projects
(1)Establishment
of proceduresNot later than July 1, 2013, the Secretary shall
establish, by regulation, processes and procedures—
(A)for allocating
the national limitation under subsection (e)(2) to projects for placing carbon
capture equipment in service at qualified facilities, and
(B)for certifying
projects for which an allocation has been made under subparagraph (A).
(2)
(A)Each
applicant for an allocation under this subsection shall submit an application
to the Secretary under such terms and conditions as are established by the
Secretary in regulations.
(B)The
Secretary shall rank applications received under subparagraph (A) in the
following order:
(i)Applicants with
applications received by the Secretary on an earlier date shall be given higher
priority than applicants with applications received on a later date. For
purposes of this clause, any application received before the date that is 30
days after the procedures and processes described in paragraph (1) are
established shall be considered to have been received on such date.
(ii)In the case of
applications received on the same date, those applicants concurrently applying
for certification shall be given higher priority.
(iii)In the case of
applications received on the same date and concurrently applying for
certification, those projects with the earlier date by which construction
commenced shall be given higher priority.
(C)Subject to subparagraph (D), the Secretary shall
allocate tonnage to each applicant—
(i)based on the
amount requested on the application, and
(ii)in order of the
rank of the application under subparagraph (B),
until
the amount of tonnage available under this section is exhausted. Projects for
which no or a partial allocation is made shall retain their ranking and shall
be eligible to receive an allocation of tonnage previously allocated that is
forfeited or recaptured.(D)The
Secretary may not allocate to any project more than the lesser of—
(i)the number of
metric tons of qualified carbon dioxide projected to be captured at the
qualified facility under the project during the 10-year period beginning on the
date on which such project is placed in service,
(ii)the number of
metric tons of qualified carbon dioxide projected to be captured at the
qualified facility under the project—
(I)which are subject
to a written, binding contract for disposal in secure geological storage
(whether or not used as a tertiary injectant), or
(II)for which there
is a plan for such disposal by the applicant, or
(iii)15,000,000
metric tons of qualified carbon dioxide.
(E)Reduction for
prior creditsThe amount of any allocation under subparagraph (C)
to any project shall be reduced by the number of metric tons of carbon dioxide
captured by the carbon capture equipment with respect to such project before
August 1, 2013, for which a credit was allowed under subsection (a).
(3)
(A)No credit shall be allowed under subsection (a) with
respect to any project for using carbon capture equipment to capture qualified
carbon dioxide at a qualified facility before the date on which such project is
certified under this paragraph.
(B)Application for
certificationEach project which is allocated a portion of the
national limitation shall submit an application for certification to the
Secretary containing such information as the Secretary may require. Such
application shall be submitted—
(i)not later
than—
(I)6 months after
the date on which such project receives an allocation, and
(II)30 days after
the later of the date on which the regulations, processes, and procedures are
established under paragraph (1) or the construction start date, and
(ii)not earlier than
the construction start date.
For
purposes of this subparagraph, the term construction start date
means the earlier of the first date on which physical work on the project of a
significant nature is undertaken or the date by which 5 percent or more of the
total cost of the project has been spent.(C)Revocation of
certification
(i)Materially
inaccurate representationsThe Secretary may revoke a
certification under this paragraph if the Secretary determines that an
applicant has made a materially inaccurate representation with respect to the
project.
(ii)Failure to
timely place equipment in serviceA certification under this
paragraph shall be revoked in any case in which carbon capture equipment with
respect to the project is not placed in service—
(I)before the date
which is 5 years after the date on which the allocation was issued, in the case
of a new industrial facility, or
(II)before the date
which is 3 years after the date on which the allocation was issued, in the case
of a modification of an existing industrial facility.
(D)In
any case—
(i)in which a
certification is revoked under subparagraph (C), or
(ii)in which a
taxpayer to whom an allocation is made under paragraph (2) fails to obtain
certification for a project under this paragraph,
the
amount of national limitation which was allocated to such project under
paragraph (2) shall be reallocated under such rules as established by the
Secretary under regulations.(4)
(A)The Secretary shall, within 30 days of making any
allocation, certification, revocation, or change in the ranking of projects,
publicly disclose the amount of such allocation, a description of the project
for which such allocation, certification, or revocation was made, and the
change in the ranking of projects, as the case may be.
(B)The Secretary shall issue an annual report summarizing
credits allocated and available for
allocation.
.
(3)
(A)Paragraph (2) of
section 45Q(c) of such Code is amended by inserting which is part of a
project which is certified under subsection (f)(3)
after carbon
capture equipment
.
(B)Paragraph (3) of
section 45Q(c) of such Code is amended by striking which
and
inserting at which such carbon capture equipment
.
(b)10-Year credit
limitationSection 45Q(a) of the Internal Revenue Code of 1986 is
amended—
(1)in paragraph
(1)(A), by inserting during the 10-year period beginning on the later of
the date on which the carbon capture equipment described in subsection (c)(1)
is placed in service or the date on which the project with respect to such
carbon capture equipment was certified under subsection (f)(3)
after
qualified facility
, and
(2)in paragraph
(2)(A), by inserting during the 10-year period beginning on the later of
the date on which the carbon capture equipment described in subsection (c)(1)
is placed in service or the date on which the project with respect to such
carbon capture equipment was certified under subsection (f)(3)
after
qualified facility
.
(c)Definition of
carbon capture equipmentSection 45Q(d) of the Internal Revenue
Code of 1986 is amended by adding at the end the following new
paragraph:
(8)The term carbon capture equipment means
equipment to capture and pressurize qualified carbon
dioxide.
.
(d)Credit allowed
to taxpayer performing carbon capture
(1)Paragraph (5) of section 45Q(d) of the Internal Revenue
Code of 1986 is amended to read as follows:
(5)Person to whom
credit is allowable
(A)Except as provided in subparagraph (B) or in regulations
prescribed by the Secretary, any credit under this section shall be allowed to
the taxpayer who—
(i)captures the
qualified carbon dioxide, and
(ii)through contract
or otherwise, disposes of the qualified carbon dioxide in a manner meeting the
requirements of paragraph (1)(B) or (2)(C) of subsection (a), as the case may
be.
(B)Election to
allow credit to person disposing carbon dioxideIf the person
described in subparagraph (A) makes an election under this subparagraph in such
manner as the Secretary may prescribe by regulations, the credit under this
section—
(i)shall be
allowable to the person that disposes of qualified carbon dioxide in a manner
meeting the requirements of paragraph (1)(B) or (2)(C) of subsection (a), as
the case may be, and
(ii)shall not be
allowable to the person described in subparagraph
(A).
.
(2)
(A)Section 45Q(a) of
such Code is amended by striking by the taxpayer
each place it
appears in paragraph (1)(B), (2)(B), and (2)(C).
(B)Section 45Q(c) of
such Code, as amended by subsection (a), is amended by striking paragraph (1)
and redesignating paragraphs (2) and (3) as paragraphs (1) and (2),
respectively.
(e)Rules relating
to credit recaptureParagraph (6) of section 45Q(d) of the
Internal Revenue Code of 1986 is amended by adding at the end the following new
sentence: Notwithstanding section 7805(b), any regulation issued
pursuant to this paragraph shall apply only with respect to qualified carbon
dioxide captured or disposed of after the date on which such regulation is
filed with the Federal Register.
.
(f)The amendments made by this section shall apply to carbon
dioxide captured after July 31, 2013.