[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 2256 Introduced in Senate (IS)]
<DOC>
115th CONGRESS
1st Session
S. 2256
To amend the Internal Revenue Code of 1986 to extend expiring
provisions, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
December 20, 2017
Mr. Hatch (for himself, Mr. Grassley, Mr. Crapo, Mr. Roberts, Mr.
Thune, and Mr. Isakson) 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 extend expiring
provisions, 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, ETC.
(a) Short Title.--This Act may be cited as the ``Tax Extender Act
of 2017''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
TITLE I--TAX RELIEF FOR FAMILIES AND INDIVIDUALS
SEC. 101. EXTENSION OF EXCLUSION FROM GROSS INCOME OF DISCHARGE OF
QUALIFIED PRINCIPAL RESIDENCE INDEBTEDNESS.
(a) In General.--Section 108(a)(1)(E) is amended by striking
``January 1, 2017'' each place it appears and inserting ``January 1,
2019''.
(b) Effective Date.--The amendments made by this section shall
apply to discharges of indebtedness after December 31, 2016.
SEC. 102. EXTENSION OF MORTGAGE INSURANCE PREMIUMS TREATED AS QUALIFIED
RESIDENCE INTEREST.
(a) In General.--Subclause (I) of section 163(h)(3)(E)(iv) is
amended by striking ``December 31, 2016'' and inserting ``December 31,
2018''.
(b) Effective Date.--The amendment made by this section shall apply
to amounts paid or accrued after December 31, 2016.
SEC. 103. EXTENSION OF ABOVE-THE-LINE DEDUCTION FOR QUALIFIED TUITION
AND RELATED EXPENSES.
(a) In General.--Section 222(e) is amended by striking ``December
31, 2016'' and inserting ``December 31, 2018''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2016.
TITLE II--INCENTIVES FOR GROWTH, JOBS, INVESTMENT, AND INNOVATION
SEC. 201. EXTENSION OF INDIAN EMPLOYMENT TAX CREDIT.
(a) In General.--Section 45A(f) is amended by striking ``December
31, 2016'' and inserting ``December 31, 2018''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2016.
SEC. 202. EXTENSION OF RAILROAD TRACK MAINTENANCE CREDIT.
(a) In General.--Section 45G(f) is amended by striking ``January 1,
2017'' and inserting ``January 1, 2019''.
(b) Effective Date.--The amendment made by this section shall apply
to expenditures paid or incurred in taxable years beginning after
December 31, 2016.
SEC. 203. EXTENSION OF MINE RESCUE TEAM TRAINING CREDIT.
(a) In General.--Section 45N(e) is amended by striking ``December
31, 2016'' and inserting ``December 31, 2018''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2016.
SEC. 204. EXTENSION OF QUALIFIED ZONE ACADEMY BONDS.
(a) In General.--Section 54E(c)(1) is amended by striking ``and
2016'' and inserting ``2016, and 2017''.
(b) Effective Date.--The amendment made by this section shall apply
to obligations issued after December 31, 2016.
SEC. 205. EXTENSION OF CLASSIFICATION OF CERTAIN RACE HORSES AS 3-YEAR
PROPERTY.
(a) In General.--Section 168(e)(3)(A)(i) is amended--
(1) by striking ``January 1, 2017'' in subclause (I) and
inserting ``January 1, 2019'', and
(2) by striking ``December 31, 2016'' in subclause (II) and
inserting ``December 31, 2018''.
(b) Effective Date.--The amendments made by this section shall
apply to property placed in service after December 31, 2016.
SEC. 206. EXTENSION OF 7-YEAR RECOVERY PERIOD FOR MOTORSPORTS
ENTERTAINMENT COMPLEXES.
(a) In General.--Section 168(i)(15)(D) is amended by striking
``December 31, 2016'' and inserting ``December 31, 2018''.
(b) Effective Date.--The amendment made by this section shall apply
to property placed in service after December 31, 2016.
SEC. 207. EXTENSION OF ACCELERATED DEPRECIATION FOR BUSINESS PROPERTY
ON AN INDIAN RESERVATION.
(a) In General.--Section 168(j)(9) is amended by striking
``December 31, 2016'' and inserting ``December 31, 2018''.
(b) Effective Date.--The amendment made by this section shall apply
to property placed in service after December 31, 2016.
SEC. 208. EXTENSION OF ELECTION TO EXPENSE MINE SAFETY EQUIPMENT.
(a) In General.--Section 179E(g) is amended by striking ``December
31, 2016'' and inserting ``December 31, 2018''.
(b) Effective Date.--The amendment made by this section shall apply
to property placed in service after December 31, 2016.
SEC. 209. EXTENSION OF SPECIAL EXPENSING RULES FOR CERTAIN PRODUCTIONS.
(a) In General.--Section 181(g) is amended by striking ``December
31, 2016'' and inserting ``December 31, 2017''.
(b) Effective Date.--The amendment made by this section shall apply
to productions commencing after December 31, 2016.
SEC. 210. EXTENSION OF DEDUCTION ALLOWABLE WITH RESPECT TO INCOME
ATTRIBUTABLE TO DOMESTIC PRODUCTION ACTIVITIES IN PUERTO
RICO.
(a) In General.--Section 199(d)(8)(C) is amended--
(1) by striking ``first 11 taxable years'' and inserting
``first 12 taxable years'', and
(2) by striking ``January 1, 2017'' and inserting ``January
1, 2018''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2016.
SEC. 211. EXTENSION OF SPECIAL RULE RELATING TO QUALIFIED TIMBER GAIN.
(a) In General.--Section 1201(b) is amended by striking ``2016''
and inserting ``2016 or 2017''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2016.
SEC. 212. EXTENSION OF EMPOWERMENT ZONE TAX INCENTIVES.
(a) In General.--
(1) Extension.--Section 1391(d)(1)(A)(i) is amended by
striking ``December 31, 2016'' and inserting ``December 31,
2018''.
(2) Treatment of certain termination dates specified in
nominations.--In the case of a designation of an empowerment
zone the nomination for which included a termination date which
is contemporaneous with the date specified in subparagraph
(A)(i) of section 1391(d)(1) of the Internal Revenue Code of
1986 (as in effect before the enactment of this Act),
subparagraph (B) of such section shall not apply with respect
to such designation if, after the date of the enactment of this
section, the entity which made such nomination amends the
nomination to provide for a new termination date in such manner
as the Secretary of the Treasury (or the Secretary's designee)
may provide.
(b) Effective Date.--The amendment made by subsection (a)(1) shall
apply to taxable years beginning after December 31, 2016.
SEC. 213. EXTENSION OF TEMPORARY INCREASE IN LIMIT ON COVER OVER OF RUM
EXCISE TAXES TO PUERTO RICO AND THE VIRGIN ISLANDS.
(a) In General.--Section 7652(f)(1) is amended by striking
``January 1, 2017'' and inserting ``January 1, 2019''.
(b) Effective Date.--The amendment made by this section shall apply
to distilled spirits brought into the United States after December 31,
2016.
SEC. 214. EXTENSION OF AMERICAN SAMOA ECONOMIC DEVELOPMENT CREDIT.
(a) In General.--Section 119(d) of division A of the Tax Relief and
Health Care Act of 2006 is amended--
(1) by striking ``January 1, 2017'' each place it appears
and inserting ``January 1, 2018'',
(2) by striking ``first 11 taxable years'' in paragraph (1)
and inserting ``first 12 taxable years'', and
(3) by striking ``first 5 taxable years'' in paragraph (2)
and inserting ``first 6 taxable years''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2016.
TITLE III--INCENTIVES FOR ENERGY PRODUCTION AND CONSERVATION
SEC. 301. EXTENSION OF CREDIT FOR NONBUSINESS ENERGY PROPERTY.
(a) In General.--Section 25C(g)(2) is amended by striking
``December 31, 2016'' and inserting ``December 31, 2018''.
(b) Effective Date.--The amendment made by this section shall apply
to property placed in service after December 31, 2016.
SEC. 302. EXTENSION AND MODIFICATION OF CREDIT FOR RESIDENTIAL ENERGY
PROPERTY.
(a) In General.--Section 25D(h) is amended by striking ``December
31, 2016'' and all that follows and inserting ``December 31, 2021.''.
(b) Phaseout.--
(1) In general.--Section 25D(a) is amended by striking
``the sum of--'' and all that follows and inserting ``the sum
of the applicable percentages of--
``(1) the qualified solar electric property expenditures,
``(2) the qualified solar water heating property
expenditures,
``(3) the qualified fuel cell property expenditures,
``(4) the qualified small wind energy property
expenditures, and
``(5) the qualified geothermal heat pump property
expenditures,
made by the taxpayer during such year.''.
(2) Conforming amendment.--Section 25D(g) is amended by
striking ``paragraphs (1) and (2) of''.
(c) Effective Date.--The amendment made by this section shall apply
to property placed in service after December 31, 2016.
SEC. 303. EXTENSION OF CREDIT FOR NEW QUALIFIED FUEL CELL MOTOR
VEHICLES.
(a) In General.--Section 30B(k)(1) is amended by striking
``December 31, 2016'' and inserting ``December 31, 2018''.
(b) Effective Date.--The amendment made by this section shall apply
to property purchased after December 31, 2016.
SEC. 304. EXTENSION OF CREDIT FOR ALTERNATIVE FUEL VEHICLE REFUELING
PROPERTY.
(a) In General.--Section 30C(g) is amended by striking ``December
31, 2016'' and inserting ``December 31, 2018''.
(b) Effective Date.--The amendment made by this section shall apply
to property placed in service after December 31, 2016.
SEC. 305. EXTENSION OF CREDIT FOR 2-WHEELED PLUG-IN ELECTRIC VEHICLES.
(a) In General.--Section 30D(g)(3)(E)(ii) is amended by striking
``January 1, 2017'' and inserting ``January 1, 2019''.
(b) Effective Date.--The amendment made by this section shall apply
to vehicles acquired after December 31, 2016.
SEC. 306. EXTENSION OF SECOND GENERATION BIOFUEL PRODUCER CREDIT.
(a) In General.--Section 40(b)(6)(J)(i) is amended by striking
``January 1, 2017'' and inserting ``January 1, 2019''.
(b) Effective Date.--The amendment made by this section shall apply
to qualified second generation biofuel production after December 31,
2016.
SEC. 307. EXTENSION OF BIODIESEL AND RENEWABLE DIESEL INCENTIVES.
(a) Income Tax Credit.--
(1) In general.--Subsection (g) of section 40A is amended
by striking ``December 31, 2016'' and inserting ``December 31,
2018''.
(2) Effective date.--The amendment made by this subsection
shall apply to fuel sold or used after December 31, 2016.
(b) Excise Tax Incentives.--
(1) In general.--Section 6426(c)(6) is amended by striking
``December 31, 2016'' and inserting ``December 31, 2018''.
(2) Payments.--Section 6427(e)(6)(B) is amended by striking
``December 31, 2016'' and inserting ``December 31, 2018''.
(3) Effective date.--The amendments made by this subsection
shall apply to fuel sold or used after December 31, 2016.
(4) Special rule for 2017.--Notwithstanding any other
provision of law, in the case of any biodiesel mixture credit
properly determined under section 6426(c) of the Internal
Revenue Code of 1986 for the period beginning on January 1,
2017, and ending on December 31, 2017, such credit shall be
allowed, and any refund or payment attributable to such credit
(including any payment under section 6427(e) of such Code)
shall be made, only in such manner as the Secretary of the
Treasury (or the Secretary's delegate) shall provide. Such
Secretary shall issue guidance within 30 days after the date of
the enactment of this Act providing for a one-time submission
of claims covering periods described in the preceding sentence.
Such guidance shall provide for a 180-day period for the
submission of such claims (in such manner as prescribed by such
Secretary) to begin not later than 30 days after such guidance
is issued. Such claims shall be paid by such Secretary not
later than 60 days after receipt. If such Secretary has not
paid pursuant to a claim filed under this subsection within 60
days after the date of the filing of such claim, the claim
shall be paid with interest from such date determined by using
the overpayment rate and method under section 6621 of such
Code.
SEC. 308. EXTENSION OF PRODUCTION CREDIT FOR INDIAN COAL FACILITIES.
(a) In General.--Section 45(e)(10)(A) is amended by striking ``11-
year period'' each place it appears and inserting ``13-year period''.
(b) Effective Date.--The amendment made by this section shall apply
to coal produced after December 31, 2016.
SEC. 309. EXTENSION OF CREDITS WITH RESPECT TO FACILITIES PRODUCING
ENERGY FROM CERTAIN RENEWABLE RESOURCES.
(a) In General.--The following provisions of section 45(d) are each
amended by striking ``January 1, 2017'' each place it appears and
inserting ``January 1, 2019'':
(1) Paragraph (2)(A).
(2) Paragraph (3)(A).
(3) Paragraph (4)(B).
(4) Paragraph (6).
(5) Paragraph (7).
(6) Paragraph (9).
(7) Paragraph (11)(B).
(b) Extension of Election To Treat Qualified Facilities as Energy
Property.--Section 48(a)(5)(C)(ii) is amended by striking ``January 1,
2017'' and inserting ``January 1, 2019''.
(c) Effective Date.--The amendments made by this section shall take
effect on January 1, 2017.
SEC. 310. EXTENSION OF CREDIT FOR ENERGY-EFFICIENT NEW HOMES.
(a) In General.--Section 45L(g) is amended by striking ``December
31, 2016'' and inserting ``December 31, 2018''.
(b) Effective Date.--The amendment made by this section shall apply
to homes acquired after December 31, 2016.
SEC. 311. EXTENSION AND PHASEOUT OF ENERGY CREDIT.
(a) Credit Percentage for Geothermal Energy Property.--Section
48(a)(2)(A)(i)(II) is amended by striking ``paragraph (3)(A)(i)'' and
inserting ``clause (i) or (iii) of paragraph (3)(A)''.
(b) Extension of Solar and Thermal Energy Property.--Section
48(a)(3)(A) is amended--
(1) by striking ``periods ending before January 1, 2017''
in clause (ii) and inserting ``property the construction of
which begins before January 1, 2022'', and
(2) by striking ``periods ending before January 1, 2017''
in clause (vii) and inserting ``property the construction of
which begins before January 1, 2022''.
(c) Phaseout of 30-Percent Credit Rate for Geothermal Energy
Property.--Section 48(a)(6) is amended--
(1) by inserting ``and geothermal'' after ``solar'' in the
heading,
(2) by striking ``paragraph (3)(A)(i)'' in subparagraph (A)
and inserting ``clause (i) or (iii) of paragraph (3)(A)'', and
(3) by striking ``property energy property described in
paragraph (3)(A)(i)'' in subparagraph (B) and inserting
``energy property described in clause (i) or (iii) of paragraph
(3)(A)''.
(d) Phaseout of 30-Percent Credit Rate for Fiber-Optic Solar,
Qualified Fuel Cell, and Qualified Small Wind Energy Property.--
(1) In general.--Section 48(a) is amended by adding at the
end the following new paragraph:
``(7) Phaseout for fiber-optic solar, qualified fuel cell,
and qualified small wind energy property.--
``(A) In general.--In the case of any qualified
fuel cell property, qualified small wind property, or
energy property described in paragraph (3)(A)(ii), the
energy percentage determined under paragraph (2) shall
be equal to--
``(i) in the case of any property the
construction of which begins after December 31,
2019, and before January 1, 2021, 26 percent,
and
``(ii) in the case of any property the
construction of which begins after December 31,
2020, and before January 1, 2022, 22 percent.
``(B) Placed in service deadline.--In the case of
any energy property described in subparagraph (A) which
is not placed in service before January 1, 2024, the
energy percentage determined under paragraph (2) shall
be equal to 0 percent.''.
(2) Conforming amendment.--Section 48(a)(2)(A) is amended
by striking ``paragraph (6)'' and inserting ``paragraphs (6)
and (7)''.
(3) Clarification relating to phaseout for wind
facilities.--Section 48(a)(5)(E) is amended by inserting
``which is treated as energy property by reason of this
paragraph'' after ``using wind to produce electricity''.
(e) Extension of Qualified Fuel Cell Property.--Section 48(c)(1)(D)
is amended by striking ``for any period after December 31, 2016'' and
inserting ``the construction of which does not begin before January 1,
2022''.
(f) Extension of Qualified Microturbine Property.--Section
48(c)(2)(D) is amended by striking ``for any period after December 31,
2016'' and inserting ``the construction of which does not begin before
January 1, 2022''.
(g) Extension of Combined Heat and Power System Property.--Section
48(c)(3)(A)(iv) is amended by striking ``which is placed in service
before January 1, 2017'' and inserting ``the construction of which
begins before January 1, 2022''.
(h) Extension of Qualified Small Wind Energy Property.--Section
48(c)(4)(C) is amended by striking ``for any period after December 31,
2016'' and inserting ``the construction of which does not begin before
January 1, 2022''.
(i) Effective Date.--The amendments made by this section shall take
effect on January 1, 2017.
SEC. 312. EXTENSION OF SPECIAL ALLOWANCE FOR SECOND GENERATION BIOFUEL
PLANT PROPERTY.
(a) In General.--Section 168(l)(2)(D) is amended by striking
``January 1, 2017'' and inserting ``January 1, 2019''.
(b) Effective Date.--The amendment made by this section shall apply
to property placed in service after December 31, 2016.
SEC. 313. EXTENSION OF ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.
(a) In General.--Section 179D(h) is amended by striking ``December
31, 2016'' and inserting ``December 31, 2018''.
(b) Effective Date.--The amendment made by this section shall apply
to property placed in service after December 31, 2016.
SEC. 314. EXTENSION OF SPECIAL RULE FOR SALES OR DISPOSITIONS TO
IMPLEMENT FERC OR STATE ELECTRIC RESTRUCTURING POLICY FOR
QUALIFIED ELECTRIC UTILITIES.
(a) In General.--Section 451(i)(3) is amended by striking ``January
1, 2017'' and inserting ``January 1, 2019''.
(b) Effective Date.--The amendment made by this section shall apply
to dispositions after December 31, 2016.
SEC. 315. EXTENSION OF EXCISE TAX CREDITS RELATING TO ALTERNATIVE
FUELS.
(a) Extension of Alternative Fuels Excise Tax Credits.--
(1) In general.--Sections 6426(d)(5) and 6426(e)(3) are
each amended by striking ``December 31, 2016'' and inserting
``December 31, 2018''.
(2) Outlay payments for alternative fuels.--Section
6427(e)(6)(C) is amended by striking ``December 31, 2016'' and
inserting ``December 31, 2018''.
(3) Effective date.--The amendments made by this subsection
shall apply to fuel sold or used after December 31, 2016.
(b) Special Rule for 2017.--Notwithstanding any other provision of
law, in the case of any alternative fuel credit properly determined
under section 6426(d) of the Internal Revenue Code of 1986 for the
period beginning on January 1, 2017, and ending on December 31, 2017,
such credit shall be allowed, and any refund or payment attributable to
such credit (including any payment under section 6427(e) of such Code)
shall be made, only in such manner as the Secretary of the Treasury (or
the Secretary's delegate) shall provide. Such Secretary shall issue
guidance within 30 days after the date of the enactment of this Act
providing for a one-time submission of claims covering periods
described in the preceding sentence. Such guidance shall provide for a
180-day period for the submission of such claims (in such manner as
prescribed by such Secretary) to begin not later than 30 days after
such guidance is issued. Such claims shall be paid by such Secretary
not later than 60 days after receipt. If such Secretary has not paid
pursuant to a claim filed under this subsection within 60 days after
the date of the filing of such claim, the claim shall be paid with
interest from such date determined by using the overpayment rate and
method under section 6621 of such Code.
SEC. 316. EXTENSION OF OIL SPILL LIABILITY TRUST FUND FINANCING RATE.
(a) In General.--Section 4611(f)(2) is amended by striking
``December 31, 2017'' and inserting ``December 31, 2018''.
(b) Effective Date.--The amendment made by this section shall apply
on and after January 1, 2018.
TITLE IV--MODIFICATIONS OF ENERGY INCENTIVES
SEC. 401. MODIFICATIONS OF CREDIT FOR PRODUCTION FROM ADVANCED NUCLEAR
POWER FACILITIES.
(a) Treatment of Unutilized Limitation Amounts.--Section 45J(b) is
amended--
(1) by inserting ``or any amendment to'' after ``enactment
of'' in paragraph (4), and
(2) by adding at the end the following new paragraph:
``(5) Allocation of unutilized limitation.--
``(A) In general.--Any unutilized national megawatt
capacity limitation shall be allocated by the Secretary
under paragraph (3) as rapidly as is practicable after
December 31, 2020--
``(i) first to facilities placed in service
on or before such date to the extent that such
facilities did not receive an allocation equal
to their full nameplate capacity, and
``(ii) then to facilities placed in service
after such date in the order in which such
facilities are placed in service.
``(B) Unutilized national megawatt capacity
limitation.--The term `unutilized national megawatt
capacity limitation' means the excess (if any) of--
``(i) 6,000 megawatts, over
``(ii) the aggregate amount of national
megawatt capacity limitation allocated by the
Secretary before January 1, 2021, reduced by
any amount of such limitation which was
allocated to a facility which was not placed in
service before such date.
``(C) Coordination with other provisions.--In the
case of any unutilized national megawatt capacity
limitation allocated by the Secretary pursuant to this
paragraph--
``(i) such allocation shall be treated for
purposes of this section in the same manner as
an allocation of national megawatt capacity
limitation, and
``(ii) subsection (d)(1)(B) shall not apply
to any facility which receives such
allocation.''.
(b) Transfer of Credit by Certain Public Entities.--
(1) In general.--Section 45J is amended--
(A) by redesignating subsection (e) as subsection
(f), and
(B) by inserting after subsection (d) the following
new subsection:
``(e) Transfer of Credit by Certain Public Entities.--
``(1) In general.--If, with respect to a credit under
subsection (a) for any taxable year--
``(A) a qualified public entity would be the
taxpayer (but for this paragraph), and
``(B) such entity elects the application of this
paragraph for such taxable year with respect to all (or
any portion specified in such election) of such credit,
the eligible project partner specified in such election, and
not the qualified public entity, shall be treated as the
taxpayer for purposes of this title with respect to such credit
(or such portion thereof).
``(2) Definitions.--For purposes of this subsection--
``(A) Qualified public entity.--The term `qualified
public entity' means--
``(i) a Federal, State, or local government
entity, or any political subdivision, agency,
or instrumentality thereof,
``(ii) a mutual or cooperative electric
company described in section 501(c)(12) or
1381(a)(2), or
``(iii) a not-for-profit electric utility
which had or has received a loan or loan
guarantee under the Rural Electrification Act
of 1936.
``(B) Eligible project partner.--The term `eligible
project partner' means any person who--
``(i) is responsible for, or participates
in, the design or construction of the advanced
nuclear power facility to which the credit
under subsection (a) relates,
``(ii) participates in the provision of the
nuclear steam supply system to such facility,
``(iii) participates in the provision of
nuclear fuel to such facility,
``(iv) is a financial institution providing
financing for the construction or operation of
such facility, or
``(v) has an ownership interest in such
facility.
``(3) Special rules.--
``(A) Application to partnerships.--In the case of
a credit under subsection (a) which is determined at
the partnership level--
``(i) for purposes of paragraph (1)(A), a
qualified public entity shall be treated as the
taxpayer with respect to such entity's
distributive share of such credit, and
``(ii) the term `eligible project partner'
shall include any partner of the partnership.
``(B) Taxable year in which credit taken into
account.--In the case of any credit (or portion
thereof) with respect to which an election is made
under paragraph (1), such credit shall be taken into
account in the first taxable year of the eligible
project partner ending with, or after, the qualified
public entity's taxable year with respect to which the
credit was determined.
``(C) Treatment of transfer under private use
rules.--For purposes of section 141(b)(1), any benefit
derived by an eligible project partner in connection
with an election under this subsection shall not be
taken into account as a private business use.''.
(2) Special rule for proceeds of transfers for mutual or
cooperative electric companies.--Section 501(c)(12) is amended
by adding at the end the following new subparagraph:
``(I) In the case of a mutual or cooperative
electric company described in this paragraph or an
organization described in section 1381(a)(2), income
received or accrued in connection with an election
under section 45J(e)(1) shall be treated as an amount
collected from members for the sole purpose of meeting
losses and expenses.''.
(c) Effective Dates.--
(1) Treatment of unutilized limitation amounts.--The
amendment made by subsection (a) shall take effect on the date
of the enactment of this Act.
(2) Transfer of credit by certain public entities.--The
amendments made by subsection (b) shall apply to taxable years
beginning after the date of the enactment of this Act.
SEC. 402. ENHANCEMENT OF CARBON DIOXIDE SEQUESTRATION CREDIT.
(a) In General.--Section 45Q is amended to read as follows:
``SEC. 45Q. CREDIT FOR CARBON OXIDE SEQUESTRATION.
``(a) General Rule.--For purposes of section 38, the carbon oxide
sequestration credit for any taxable year is an amount equal to the sum
of--
``(1) $20 per metric ton of qualified carbon oxide which
is--
``(A) captured by the taxpayer using carbon capture
equipment which is originally placed in service at a
qualified facility before the date of the enactment of
the Tax Extender Act of 2017, and
``(B) disposed of by the taxpayer in secure
geological storage and not used by the taxpayer as
described in paragraph (2)(B),
``(2) $10 per metric ton of qualified carbon oxide which
is--
``(A) captured by the taxpayer using carbon capture
equipment which is originally placed in service at a
qualified facility before the date of the enactment of
the Tax Extender Act of 2017, and
``(B)(i) used by the taxpayer as a tertiary
injectant in a qualified enhanced oil or natural gas
recovery project and disposed of by the taxpayer in
secure geological storage, or
``(ii) utilized by the taxpayer in a manner
described in subsection (f)(5),
``(3) the applicable dollar amount per metric ton of
qualified carbon oxide which is--
``(A) captured by the taxpayer using carbon capture
equipment which is originally placed in service at a
qualified facility on or after the date of the
enactment of the Tax Extender Act of 2017, during the
12-year period beginning on the date the equipment was
originally placed in service, and
``(B) disposed of by the taxpayer in secure
geological storage and not used by the taxpayer as
described in paragraph (4)(B), and
``(4) the applicable dollar amount per metric ton of
qualified carbon oxide which is--
``(A) captured by the taxpayer using carbon capture
equipment which is originally placed in service at a
qualified facility on or after the date of the
enactment of the Tax Extender Act of 2017, during the
12-year period beginning on the date the equipment was
originally placed in service, and
``(B)(i) used by the taxpayer as a tertiary
injectant in a qualified enhanced oil or natural gas
recovery project and disposed of by the taxpayer in
secure geological storage, or
``(ii) utilized by the taxpayer in a manner
described in subsection (f)(5).
``(b) Applicable Dollar Amount; Additional Equipment; Election.--
``(1) Applicable dollar amount.--
``(A) In general.--For purposes of this section,
the applicable dollar amount shall be an amount equal
to--
``(i) for any taxable year beginning in a
calendar year after 2016 and ending before
2027--
``(I) for purposes of paragraph (3)
of subsection (a), the dollar amount
established by linear interpolation
between $22.66 and $50 for each
calendar year during such period, and
``(II) for purposes of paragraph
(4) of such subsection, the dollar
amount established by linear
interpolation between $12.83 and $35
for each calendar year during such
period, and
``(ii) for any taxable year beginning in a
calendar year after 2026--
``(I) for purposes of paragraph (3)
of subsection (a), an amount equal to
the product of $50 and the inflation
adjustment factor for such calendar
year determined under section
43(b)(3)(B) for such calendar year,
determined by substituting `2025' for
`1990', and
``(II) for purposes of paragraph
(4) of such subsection, an amount equal
to the product of $35 and the inflation
adjustment factor for such calendar
year determined under section
43(b)(3)(B) for such calendar year,
determined by substituting `2025' for
`1990'.
``(B) Rounding.--The applicable dollar amount
determined under subparagraph (A) shall be rounded to
the nearest cent.
``(2) Installation of additional carbon capture equipment
on existing qualified facility.--In the case of a qualified
facility placed in service before the date of the enactment of
the Tax Extender Act of 2017, for which additional carbon
capture equipment is placed in service on or after the date of
the enactment of such Act, the amount of qualified carbon oxide
which is captured by the taxpayer shall be equal to--
``(A) for purposes of paragraphs (1)(A) and (2)(A)
of subsection (a), the lesser of--
``(i) the total amount of qualified carbon
oxide captured at such facility for the taxable
year, or
``(ii) the total amount of the carbon
dioxide capture capacity of the carbon capture
equipment in service at such facility on the
day before the date of the enactment of the Tax
Extender Act of 2017, and
``(B) for purposes of paragraphs (3)(A) and (4)(A)
of such subsection, an amount (not less than zero)
equal to the excess of--
``(i) the amount described in clause (i) of
subparagraph (A), over
``(ii) the amount described in clause (ii)
of such subparagraph.
``(3) Election.--For purposes of determining the carbon
oxide sequestration credit under this section, a taxpayer may
elect to have the dollar amounts applicable under paragraph (1)
or (2) of subsection (a) apply in lieu of the dollar amounts
applicable under paragraph (3) or (4) of such subsection for
each metric ton of qualified carbon oxide which is captured by
the taxpayer using carbon capture equipment which is originally
placed in service at a qualified facility on or after the date
of the enactment of the Tax Extender Act of 2017.
``(c) Qualified Carbon Oxide.--For purposes of this section--
``(1) In general.--The term `qualified carbon oxide'
means--
``(A) any carbon dioxide which--
``(i) is captured from an industrial source
by carbon capture equipment which is originally
placed in service before the date of the
enactment of the Tax Extender Act of 2017,
``(ii) would otherwise be released into the
atmosphere as industrial emission of greenhouse
gas or lead to such release, and
``(iii) is measured at the source of
capture and verified at the point of disposal,
injection, or utilization,
``(B) any carbon dioxide or other carbon oxide
which--
``(i) is captured from an industrial source
by carbon capture equipment which is originally
placed in service on or after the date of the
enactment of the Tax Extender Act of 2017,
``(ii) would otherwise be released into the
atmosphere as industrial emission of greenhouse
gas or lead to such release, and
``(iii) is measured at the source of
capture and verified at the point of disposal,
injection, or utilization, or
``(C) in the case of a direct air capture facility,
any carbon dioxide which--
``(i) is captured directly from the ambient
air, and
``(ii) is measured at the source of capture
and verified at the point of disposal,
injection, or utilization.
``(2) Recycled carbon oxide.--The term `qualified carbon
oxide' includes the initial deposit of captured carbon oxide
used as a tertiary injectant. Such term does not include carbon
oxide that is recaptured, recycled, and re-injected as part of
the enhanced oil and natural gas recovery process.
``(d) Qualified Facility.--For purposes of this section, the term
`qualified facility' means any industrial facility or direct air
capture facility--
``(1) the construction of which begins before January 1,
2024, and--
``(A) construction of carbon capture equipment
begins before such date, or
``(B) the original planning and design for such
facility includes installation of carbon capture
equipment, and
``(2) which captures--
``(A) in the case of a facility which emits not
more than 500,000 metric tons of carbon oxide into the
atmosphere during the taxable year, not less than
25,000 metric tons of qualified carbon oxide during the
taxable year which is utilized in a manner described in
subsection (f)(5),
``(B) in the case of an electricity generating
facility which is not described in subparagraph (A),
not less than 500,000 metric tons of qualified carbon
oxide during the taxable year, or
``(C) in the case of a direct air capture facility
or any facility not described in subparagraph (A) or
(B), not less than 100,000 metric tons of qualified
carbon oxide during the taxable year.
``(e) Definitions.--For purposes of this section--
``(1) Direct air capture facility.--
``(A) In general.--Subject to subparagraph (B), the
term `direct air capture facility' means any facility
which uses carbon capture equipment to capture carbon
dioxide directly from the ambient air.
``(B) Exception.--The term `direct air capture
facility' shall not include any facility which captures
carbon dioxide--
``(i) which is deliberately released from
naturally occurring subsurface springs, or
``(ii) using natural photosynthesis.
``(2) Qualified enhanced oil or natural gas recovery
project.--The term `qualified enhanced oil or natural gas
recovery project' has the meaning given the term `qualified
enhanced oil recovery project' by section 43(c)(2),
determined--
``(A) by substituting `crude oil or natural gas'
for `crude oil' in subparagraph (A)(i) thereof, and
``(B) without regard to subparagraph (A)(iii)
thereof.
``(3) Tertiary injectant.--The term `tertiary injectant'
has the same meaning as when used within section 193(b)(1).
``(f) Special Rules.--
``(1) Only qualified carbon oxide captured and disposed of
or used within the united states taken into account.--The
credit under this section shall apply only with respect to
qualified carbon oxide the capture and disposal, use, or
utilization of which is within--
``(A) the United States (within the meaning of
section 638(1)), or
``(B) a possession of the United States (within the
meaning of section 638(2)).
``(2) Secure geological storage.--
``(A) In general.--Not later than December 31,
2018, the Secretary, in consultation with the
Administrator of the Environmental Protection Agency,
the Secretary of Energy, and the Secretary of the
Interior, shall establish regulations for determining
adequate security measures for the geological storage
of carbon dioxide under subsection (a) such that the
carbon dioxide does not escape into the atmosphere.
Such term shall include storage at deep saline
formations, oil and gas reservoirs, and unmineable coal
seams under such conditions as the Secretary may
determine under such regulations.
``(B) Requirements.--The regulations established
pursuant to subparagraph (A) shall provide that--
``(i) for purposes of paragraph (1)(B) or
(3)(B) of subsection (a), carbon dioxide shall
be considered disposed of in secure geological
storage if such carbon dioxide is stored in
compliance with rules promulgated by the
Environmental Protection Agency under subpart
RR of part 98 of title 40, Code of Federal
Regulations (as in effect on the date of the
enactment of this paragraph), under the Clean
Air Act (42 U.S.C. 7401 et seq.) and rules
under the Safe Drinking Water Act (42 U.S.C.
300f et seq.) which are applicable to carbon
dioxide disposed of in secure geological
storage and not used as a tertiary injectant in
a qualified enhanced oil or natural gas
recovery project, and
``(ii) for purposes of paragraph (2)(B)(i)
or (4)(B)(i) of subsection (a), carbon dioxide
shall be considered disposed of in secure
geological storage if such carbon dioxide is
stored in compliance with rules promulgated by
the Environmental Protection Agency which are
applicable to carbon dioxide used as a tertiary
injectant in a qualified enhanced oil or
natural gas recovery project under--
``(I) subpart UU of part 98 of
title 40, Code of Federal Regulations
(as in effect on the date of the
enactment of this paragraph), under the
Clean Air Act, and
``(II) subpart C of part 146 of
title 40, Code of Federal Regulations
(as in effect on the date of the
enactment of this paragraph), under the
Safe Drinking Water Act, to the extent
such rules are applicable to Class II
wells.
``(3) Credit attributable to taxpayer.--
``(A) In general.--Except as provided in
subparagraph (B) or in any regulations prescribed by
the Secretary, any credit under this section shall be
attributable to--
``(i) in the case of qualified carbon oxide
captured using carbon capture equipment which
is originally placed in service at a qualified
facility before the date of the enactment of
the Tax Extender Act of 2017, the person that
captures and physically or contractually
ensures the disposal, utilization, or use as a
tertiary injectant of such qualified carbon
oxide, and
``(ii) in the case of qualified carbon
oxide captured using carbon capture equipment
which is originally placed in service at a
qualified facility on or after the date of the
enactment of the Tax Extender Act of 2017, the
person that owns the carbon capture equipment
and physically or contractually ensures the
capture and disposal, utilization, or use as a
tertiary injectant of such qualified carbon
oxide.
``(B) Election.--If the person described in
subparagraph (A) makes an election under this
subparagraph in such time and manner as the Secretary
may prescribe by regulations, the credit under this
section--
``(i) shall be allowable to the person that
disposes of the qualified carbon oxide,
utilizes the qualified carbon oxide, or uses
the qualified carbon oxide as a tertiary
injectant, and
``(ii) shall not be allowable to the person
described in subparagraph (A).
``(4) Recapture.--The Secretary shall, by regulations,
provide for recapturing the benefit of any credit allowable
under subsection (a) with respect to any qualified carbon oxide
which ceases to be captured, disposed of, or used as a tertiary
injectant in a manner consistent with the requirements of this
section.
``(5) Utilization of qualified carbon oxide.--
``(A) In general.--For purposes of this section,
utilization of qualified carbon oxide means--
``(i) the fixation of such qualified carbon
oxide through photosynthesis or chemosynthesis,
such as through the growing of algae or
bacteria,
``(ii) the chemical conversion of such
qualified carbon oxide to a material or
chemical compound in which such qualified
carbon oxide is securely stored, or
``(iii) the use of such qualified carbon
oxide for any other purpose for which a
commercial market exists (with the exception of
use as a tertiary injectant in a qualified
enhanced oil or natural gas recovery project),
as determined by the Secretary.
``(B) Measurement.--
``(i) In general.--For purposes of
determining the amount of qualified carbon
oxide utilized by the taxpayer under paragraph
(2)(B)(ii) or (4)(B)(ii) of subsection (a),
such amount shall be equal to the metric tons
of qualified carbon oxide which the taxpayer
demonstrates, based upon an analysis of
lifecycle greenhouse gas emissions and subject
to such requirements as the Secretary, in
consultation with the Secretary of Energy and
the Administrator of the Environmental
Protection Agency, determines appropriate,
were--
``(I) captured and permanently
isolated from the atmosphere, or
``(II) displaced from being emitted
into the atmosphere,
through use of a process described in
subparagraph (A).
``(ii) Lifecycle greenhouse gas
emissions.--For purposes of clause (i), the
term `lifecycle greenhouse gas emissions' has
the same meaning given such term under
subparagraph (H) of section 211(o)(1) of the
Clean Air Act (42 U.S.C. 7545(o)(1)), as in
effect on the date of the enactment of the Tax
Extender Act of 2017, except that `product'
shall be substituted for `fuel' each place it
appears in such subparagraph.
``(6) Election for applicable facilities.--
``(A) In general.--For purposes of this section, in
the case of an applicable facility, for any taxable
year in which such facility captures not less than
500,000 metric tons of qualified carbon oxide during
the taxable year, the person described in paragraph
(3)(A)(ii) may elect to have such facility, and any
carbon capture equipment placed in service at such
facility, deemed as having been placed in service on
the date of the enactment of the Tax Extender Act of
2017.
``(B) Applicable facility.--For purposes of this
paragraph, the term `applicable facility' means a
qualified facility--
``(i) which was placed in service before
the date of the enactment of the Tax Extender
Act of 2017, and
``(ii) for which no taxpayer claimed a
credit under this section in regards to such
facility for any taxable year ending before the
date of the enactment of such Act.
``(7) Inflation adjustment.--In the case of any taxable
year beginning in a calendar year after 2009, there shall be
substituted for each dollar amount contained in paragraphs (1)
and (2) of subsection (a) an amount equal to the product of--
``(A) such dollar amount, multiplied by
``(B) the inflation adjustment factor for such
calendar year determined under section 43(b)(3)(B) for
such calendar year, determined by substituting `2008'
for `1990'.
``(g) Application of Section for Certain Carbon Capture
Equipment.--In the case of any carbon capture equipment placed in
service before the date of the enactment of the Tax Extender Act of
2017, the credit under this section shall apply with respect to
qualified carbon oxide captured using such equipment before the end of
the calendar year in which the Secretary, in consultation with the
Administrator of the Environmental Protection Agency, certifies that,
during the period beginning after October 3, 2008, a total of
75,000,000 metric tons of qualified carbon oxide have been taken into
account in accordance with--
``(1) subsection (a) of this section, as in effect on the
day before the date of the enactment of the Tax Extender Act of
2017, and
``(2) paragraphs (1) and (2) of subsection (a) of this
section.
``(h) Regulations.--The Secretary may prescribe such regulations
and other guidance as may be necessary or appropriate to carry out this
section, including regulations or other guidance to--
``(1) ensure proper allocation under subsection (a) for
qualified carbon oxide captured by a taxpayer during the
taxable year ending after the date of the enactment of the Tax
Extender Act of 2017, and
``(2) determine whether a facility satisfies the
requirements under subsection (d)(1) during such taxable
year.''.
(b) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
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