[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 3778 Introduced in Senate (IS)]

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119th CONGRESS
  2d Session
                                S. 3778

 To amend the Internal Revenue Code of 1986 to expand the carbon oxide 
    sequestration credit to include solid or liquid carbon capture 
                              facilities.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            February 4, 2026

  Mr. Sheehy (for himself and Ms. Cantwell) 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 expand the carbon oxide 
    sequestration credit to include solid or liquid carbon capture 
                              facilities.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Carbon Resource Innovation Act''.

SEC. 2. EXPANSION OF CARBON OXIDE SEQUESTRATION CREDIT TO INCLUDE SOLID 
              OR LIQUID CARBON CAPTURE FACILITIES.

    (a) In General.--Section 45Q of the Internal Revenue Code of 1986 
is amended--
            (1) in subsection (c)(1)--
                    (A) in subparagraph (B)(iii), by striking ``or'' at 
                the end,
                    (B) in subparagraph (C)(ii), by striking the period 
                at the end and inserting ``, or'', and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(D) in the case of a solid or liquid carbon 
                capture facility, any carbon which--
                            ``(i) is captured in liquid or solid form 
                        by carbon capture equipment,
                            ``(ii) if not captured, would be expected 
                        to--
                                    ``(I) be released into the 
                                atmosphere by natural processes as an 
                                emission of greenhouse gas, or
                                    ``(II) lead to such release through 
                                a comparison system (as such term is 
                                used in Treasury Regulation section 
                                1.45Q-4(c)(2)), and
                            ``(iii) is measured at the source of 
                        capture and verified at the point of disposal, 
                        injection, or utilization.'',
            (2) in subsection (d)--
                    (A) in the matter preceding paragraph (1), by 
                striking ``or direct air capture facility'' and 
                inserting ``, direct air capture facility, or solid or 
                liquid carbon capture facility'', and
                    (B) in paragraph (2)--
                            (i) in subparagraph (B)(ii), by striking 
                        ``or'' at the end,
                            (ii) by redesignating subparagraph (C) as 
                        subparagraph (D), and
                            (iii) by inserting after subparagraph (B) 
                        the following new subparagraph:
                    ``(C) in the case of a solid or liquid carbon 
                capture facility, captures not less than 1,000 metric 
                tons of qualified carbon oxide during the taxable year, 
                or'',
            (3) in subsection (e)--
                    (A) by redesignating paragraph (5) as paragraph 
                (6), and
                    (B) by inserting after paragraph (4) the following 
                new paragraph:
            ``(5) Solid or liquid carbon capture facility.--
                    ``(A) In general.--The term `solid or liquid carbon 
                capture facility' means any facility which uses carbon 
                capture equipment to capture carbon in solid or liquid 
                form that would otherwise be released into the 
                atmosphere as a carbon oxide, including a facility 
                which results in a net reduction of carbon when 
                compared to a comparison system (as described in 
                Treasury Regulation section 1.45Q-4(c)(2)).
                    ``(B) Other terms.--With respect to a facility 
                described in subparagraph (A)--
                            ``(i) the term `capture' means, with 
                        respect to carbon, the process which enables 
                        disposal, injection, or utilization of such 
                        carbon, and
                            ``(ii) the term `carbon capture equipment' 
                        means any equipment used at such facility.'', 
                        and
            (4) in subsection (f)--
                    (A) in paragraph (2), by inserting ``, and in the 
                case of solid or liquid carbon capture facilities, 
                shall also include underground storage chambers under 
                such conditions that the carbon does not escape into 
                the atmosphere'' after ``under such regulations'', and
                    (B) by adding at the end the following new 
                paragraph:
            ``(11) Carbon captured by solid or liquid carbon capture 
        facility.--For purposes of this section, the amount of carbon 
        which is captured by the taxpayer at a solid or liquid carbon 
        capture facility shall be equal to the carbon dioxide 
        equivalent of the metric tons of carbon which are measured at 
        the source of capture and verified at the point of disposal, 
        injection, or utilization.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to carbon captured after the date of enactment of this Act.
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