[Congressional Record Volume 171, Number 112 (Saturday, June 28, 2025)]
[Senate]
[Pages S4014-S4018]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SA 2583. Mr. CURTIS submitted an amendment intended to be proposed to
amendment SA 2360 proposed by Mr. Thune (for Mr. Graham) to the bill
H.R. 1, to provide for reconciliation pursuant to title II of H. Con.
Res. 14; which was ordered to lie on the table; as follows:
Strike section 70512 and insert the following:
SEC. 70512. TERMINATION AND RESTRICTIONS ON CLEAN ELECTRICITY
PRODUCTION CREDIT.
(a) Termination for Wind and Solar Facilities.--Section
45Y(d) is amended--
(1) in paragraph (1), by striking ``The amount of'' and
inserting ``Subject to paragraph (4), the amount of'', and
(2) by striking paragraph (3) and inserting the following
new paragraphs:
``(3) Applicable year.--For purposes of this subsection,
the term `applicable year' means calendar year 2032.
``(4) Termination for wind and solar facilities.--
``(A) In general.--This section shall not apply with
respect to any applicable facility placed in service after
December 31, 2027.
``(B) Applicable facility.--For purposes of this paragraph,
the term `applicable facility' means a qualified facility
which--
``(i) uses wind to produce electricity (within the meaning
of such term as used in section 45(d)(1), as determined
without regard to any requirement under such section with
respect to the date on which construction of property
begins), or
``(ii) uses solar energy to produce electricity (within the
meaning of such term as used in section 45(d)(4), as
determined without regard to any requirement under such
section with respect to the date on which construction of
property begins).''.
(b) Restrictions Relating to Prohibited Foreign Entities.--
Section 45Y is amended--
(1) in subsection (b)(1), by adding at the end the
following new subparagraph:
``(E) Material assistance from prohibited foreign
entities.--The term `qualified facility' shall not include
any facility for which construction begins after December 31,
2025 (or, in the case of an applicable facility, as defined
in subsection (d)(4)(B), after June 16, 2025), if the
construction of such facility includes any material
assistance from a prohibited foreign entity (as defined in
section 7701(a)(52)).'', and
(2) in subsection (g), by adding at the end the following
new paragraph:
``(13) Restrictions relating to prohibited foreign
entities.--
``(A) In general.--No credit shall be determined under
subsection (a) for any taxable year if the taxpayer is--
``(i) a specified foreign entity (as defined in section
7701(a)(51)(B)), or
``(ii) a foreign-influenced entity (as defined in section
7701(a)(51)(D), without regard to clause (i)(II) thereof).
``(B) Effective control.--In the case of a taxpayer for
which section 7701(a)(51)(D)(i)(II) is determined to apply
for any taxable year, no credit shall be determined under
subsection (a) for such taxable year if such determination
relates to a qualified facility described in subsection
(b)(1).''.
(c) Definitions Relating to Prohibited Foreign Entities.--
Section 7701(a) is amended by adding at the end the following
new paragraphs:
``(51) Prohibited foreign entity.--
``(A) In general.--
``(i) Definition.--The term `prohibited foreign entity'
means a specified foreign entity or a foreign-influenced
entity.
``(ii) Determination.--
``(I) In general.--Subject to subclause (II), for any
taxable year, the determination as to whether an entity is a
specified foreign entity or foreign-influenced entity shall
be made as of the last day of such taxable year.
``(II) Initial taxable year.--For purposes of the first
taxable year beginning after the date of enactment of this
paragraph, the determination as to whether an entity is a
specified foreign entity described in clauses (i) through
(iv) of subparagraph (B) shall be made as of the first day of
such taxable year.
``(B) Specified foreign entity.--For purposes of this
paragraph, the term `specified foreign entity' means--
``(i) a foreign entity of concern described in subparagraph
(A), (B), (D), or (E) of section 9901(8) of the William M.
(Mac) Thornberry National Defense Authorization Act for
Fiscal Year 2021 (Public Law 116-283; 15 U.S.C. 4651),
``(ii) an entity identified as a Chinese military company
operating in the United States in accordance with section
1260H of the William M. (Mac) Thornberry National Defense
Authorization Act for Fiscal Year 2021 (Public Law 116-283;
10 U.S.C. 113 note),
``(iii) an entity included on a list required by clause
(i), (ii), (iv), or (v) of section 2(d)(2)(B) of Public Law
117-78 (135 Stat. 1527),
``(iv) an entity specified under section 154(b) of the
National Defense Authorization Act for Fiscal Year 2024
(Public Law 118-31; 10 U.S.C. note prec. 4651), or
``(v) a foreign-controlled entity.
``(C) Foreign-controlled entity.--For purposes of
subparagraph (B), the term `foreign-controlled entity'
means--
``(i) the government (including any level of government
below the national level) of a covered nation,
``(ii) an agency or instrumentality of a government
described in clause (i),
``(iii) a person who is a citizen or national of a covered
nation, provided that such person is not an individual who is
a citizen, national, or lawful permanent resident of the
United States,
``(iv) an entity or a qualified business unit (as defined
in section 989(a)) incorporated or organized under the laws
of, or having its principal place of business in, a covered
nation, or
``(v) an entity (including subsidiary entities) controlled
(as determined under subparagraph (G)) by an entity described
in clause (i), (ii), (iii), or (iv).
``(D) Foreign-influenced entity.--
``(i) In general.--For purposes of subparagraph (A), the
term `foreign-influenced entity' means an entity--
``(I) with respect to which, during the taxable year--
``(aa) a specified foreign entity has the direct authority
to appoint a covered officer of such entity,
``(bb) a single specified foreign entity owns at least 25
percent of such entity,
``(cc) one or more specified foreign entities own in the
aggregate at least 40 percent of such entity, or
``(dd) at least 15 percent of the debt of such entity has
been issued, in the aggregate, to 1 or more specified foreign
entities, or
``(II) which, during the previous taxable year, made a
payment to a specified foreign entity pursuant to a contract,
agreement, or other arrangement which entitles such specified
foreign entity (or an entity related to such specified
foreign entity) to exercise effective control over--
``(aa) any qualified facility or energy storage technology
of the taxpayer (or any person related to the taxpayer), or
``(bb) with respect to any eligible component produced by
the taxpayer (or any person related to the taxpayer)--
``(AA) the extraction, processing, or recycling of any
applicable critical mineral, or
``(BB) the production of an eligible component which is not
an applicable critical mineral.
``(ii) Effective control.--
``(I) In general.--
``(aa) General rule.--Subject to subclause (II), for
purposes of clause (i)(II), the term `effective control'
means 1 or more agreements or arrangements similar to those
described in subclauses (II) and (III) which provide 1 or
more contractual counterparties of a taxpayer with specific
authority over key aspects of the production of eligible
components, energy generation in a qualified facility, or
energy storage which are not included in the measures of
control through authority, ownership, or debt held which are
described in clause (i)(I).
``(bb) Guidance.--The Secretary shall issue such guidance
as is necessary to carry out the purposes of this clause,
including the establishment of rules to prevent entities from
evading, circumventing, or abusing the application of the
restrictions described subparagraph (C) and subclauses (II)
and (III) of this clause through a contract, agreement, or
other arrangement.
``(II) Application of rules prior to issuance of
guidance.--During any period prior to the date that the
guidance described
[[Page S4015]]
in subclause (I)(bb) is issued by the Secretary, for purposes
of clause (i)(II), the term `effective control' means the
unrestricted contractual right of a contractual counterparty
to--
``(aa) determine the quantity or timing of production of an
eligible component produced by the taxpayer,
``(bb) determine the amount or timing of activities related
to the production of electricity undertaken at a qualified
facility of the taxpayer or the storage of electrical energy
in energy storage technology of the taxpayer,
``(cc) determine which entity may purchase or use the
output of a production unit of the taxpayer that produces
eligible components,
``(dd) determine which entity may purchase or use the
output of a qualified facility of the taxpayer,
``(ee) restrict access to data critical to production or
storage of energy undertaken at a qualified facility of the
taxpayer, or to the site of production or any part of a
qualified facility or energy storage technology of the
taxpayer, to the personnel or agents of such contractual
counterparty, or
``(ff) on an exclusive basis, maintain, repair, or operate
any plant or equipment which is necessary to the production
by the taxpayer of eligible components or electricity.
``(III) Licensing and other agreements.--
``(aa) In general.--In addition to subclause (II), for
purposes of clause (i)(II), the term `effective control'
means, with respect to a licensing agreement for the
provision of intellectual property or any other contract,
agreement, or other arrangement entered into with a
contractual counterparty which is related to such licensing
agreement and to a qualified facility, energy storage
technology, or the production of an eligible component, any
of the following:
``(AA) A contractual right retained by the contractual
counterparty to specify or otherwise direct 1 or more sources
of components, subcomponents, or applicable critical minerals
utilized in a qualified facility, energy storage technology,
or in the production of an eligible component.
``(BB) A contractual right retained by the contractual
counterparty to direct the operation of any qualified
facility, any energy storage technology, or any production
unit that produces an eligible component.
``(CC) A contractual right retained by the contractual
counterparty to limit the taxpayer's utilization of
intellectual property related to the operation of a qualified
facility or energy storage technology, or in the production
of an eligible component.
``(DD) A contractual right retained by the contractual
counterparty to receive royalties under the licensing
agreement or any similar agreement (or payments under any
related agreement) beyond the 10th year of the agreement
(including modifications or extensions thereof).
``(EE) A contractual right retained by the contractual
counterparty to direct or otherwise require the taxpayer to
enter into an agreement for the provision of services for a
duration longer than 2 years (including any modifications or
extensions thereof).
``(FF) Such contract, agreement, or other arrangement does
not provide the licensee with all the technical data,
information, and know-how necessary to enable the licensee to
produce the eligible component or components subject to the
contract, agreement, or other arrangement without further
involvement from the contractual counterparty or a specified
foreign entity.
``(GG) Such contract, agreement, or other arrangement was
entered into (or modified) on or after June 16, 2025.
``(bb) Exception.--
``(AA) In general.--Item (aa) shall not apply in the case
of a bona fide purchase or sale of intellectual property.
``(BB) Bona fide purchase or sale.--For purposes of item
(aa), any purchase or sale of intellectual property where the
agreement provides that ownership of the intellectual
property reverts to the contractual counterparty after a
period of time shall not be considered a bona-fide purchase
or sale.
``(IV) Persons related to the taxpayer.--For purposes of
subclauses (I), (II), and (III), the term `taxpayer' shall
include any person related to the taxpayer.
``(V) Contractual counterparty.--For purposes of this
clause, the term `contractual counterparty' means an entity
with which the taxpayer has entered into a contract,
agreement, or other arrangement.
``(iii) Guidance.--Not later than December 31, 2026, the
Secretary shall issue such guidance as is necessary to carry
out the purposes of this subparagraph, including
establishment of rules to prevent entities from evading,
circumventing, or abusing the application of the restrictions
against impermissible technology licensing arrangements with
specified foreign entities, such as through temporary
transfers of intellectual property, retention by a specified
foreign entity of a reversionary interest in transferred
intellectual property, or otherwise.
``(E) Publicly traded entities.--
``(i) In general.--
``(I) Nonapplication of certain foreign-controlled entity
rules.--Subparagraph (C)(v) shall not apply in the case of
any entity the securities of which are regularly traded on--
``(aa) a national securities exchange which is registered
with the Securities and Exchange Commission,
``(bb) the national market system established pursuant to
section 11A of the Securities and Exchange Act of 1934, or
``(cc) any other exchange or other market which the
Secretary has determined in guidance issued under section
1296(e)(1)(A)(ii) has rules adequate to carry out the
purposes of part VI of subchapter P of chapter 1 of subtitle
A.
``(II) Nonapplication of certain foreign-influenced entity
rules.--Subparagraph (D)(i)(I) shall not apply in the case of
any entity--
``(aa) the securities of which are regularly traded in a
manner described in subclause (I), or
``(bb) for which not less than 80 percent of the equity
securities of such entity are owned directly or indirectly by
an entity which is described in item (aa).
``(III) Exclusion of exchanges or markets in covered
nations.--Subclause (I)(cc) shall not apply with respect to
any exchange or market which--
``(aa) is incorporated or organized under the laws of a
covered nation, or
``(bb) has its principal place of business in a covered
nation.
``(ii) Additional foreign-controlled entity requirements
for publicly traded companies.--In the case of an entity
described in clause (i)(I), such entity shall be deemed to be
a foreign-controlled entity under subparagraph (C)(v) if such
entity is controlled (as determined under subparagraph (G))
by--
``(I) 1 or more specified foreign entities (as determined
without regard to subparagraph (B)(v)) that are each required
to report their beneficial ownership pursuant to a rule
described in clause (iii)(I)(bb), or
``(II) 1 or more foreign-controlled entities (as determined
without regard to subparagraph (C)(v)) that are each required
to report their beneficial ownership pursuant to a rule
described in such clause.
``(iii) Additional foreign-influenced entity requirements
for publicly traded companies.--In the case of an entity
described in clause (i)(II), such entity shall be deemed to
be a foreign-influenced entity under subparagraph (D)(i)(I)
if--
``(I) during the taxable year--
``(aa) a specified foreign entity has the authority to
appoint a covered officer of such entity,
``(bb) a single specified foreign entity required to report
its beneficial ownership under Rule 13d-3 of the Securities
and Exchange Act of 1934 (or, in the case of an exchange or
market described in clause (i)(I)(cc), an equivalent rule)
owns not less than 25 percent of such entity, or
``(cc) 1 or more specified foreign entities that are each
required to report their beneficial ownership under Rule 13d-
3 of the Securities and Exchange Act of 1934 own, in the
aggregate, not less than 40 percent of such entity, or
``(II) such entity has issued debt, as part of an original
issuance, in excess of 15 percent of its publicly-traded debt
to 1 or more specified foreign entities.
``(F) Covered officer.--For purposes of this paragraph, the
term `covered officer' means, with respect to an entity--
``(i) a member of the board of directors, board of
supervisors, or equivalent governing body,
``(ii) an executive-level officer, including the president,
chief executive officer, chief operating officer, chief
financial officer, general counsel, or senior vice president,
or
``(iii) an individual having powers or responsibilities
similar to those of officers or members described in clause
(i) or (ii).
``(G) Determination of control.--For purposes of
subparagraph (C)(v), the term `control' means--
``(i) in the case of a corporation, ownership (by vote or
value) of more than 50 percent of the stock in such
corporation,
``(ii) in the case of a partnership, ownership of more than
50 percent of the profits interests or capital interests in
such partnership, or
``(iii) in any other case, ownership of more than 50
percent of the beneficial interests in the entity.
``(H) Determination of ownership.--For purposes of this
section, section 318(a)(2) shall apply for purposes of
determining ownership of stock in a corporation. Similar
principles shall apply for purposes of determining ownership
of interests in any other entity.
``(I) Other definitions.--For purposes of this paragraph--
``(i) Applicable critical mineral.--The term `applicable
critical mineral' has the same meaning given such term under
section 45X(c)(6).
``(ii) Covered nation.--The term `covered nation' has the
same meaning given such term under section 4872(f)(2) of
title 10, United States Code.
``(iii) Eligible component.--The term `eligible component'
has the same meaning given such term under section 45X(c)(1).
``(iv) Energy storage technology.--The term `energy storage
technology' has the same meaning given such term under
section 48E(c)(2).
``(v) Qualified facility.--The term `qualified facility'
means--
``(I) a qualified facility, as defined in section
45Y(b)(1), and
``(II) a qualified facility, as defined in section
48E(b)(3).
``(vi) Related.--The term `related' shall have the same
meaning given such term under sections 267(b) and 707(b).
``(J) Beginning of construction.--For purposes of applying
any provision under this
[[Page S4016]]
paragraph, the beginning of construction with respect to any
property shall be determined pursuant to rules similar to the
rules under Internal Revenue Service Notice 2013-29 and
Internal Revenue Service Notice 2018-59 (as well as any
subsequently issued guidance clarifying, modifying, or
updating either such Notice), as in effect on January 1,
2025.
``(K) Regulations and guidance.--The Secretary may
prescribe such regulations and guidance as may be necessary
or appropriate to carry out the provisions of this paragraph,
including rules to prevent the circumvention of any rules or
restrictions with respect to prohibited foreign entities.
``(52) Material assistance from a prohibited foreign
entity.--
``(A) In general.--The term `material assistance from a
prohibited foreign entity' means--
``(i) with respect to any qualified facility or energy
storage technology, a material assistance cost ratio which is
less than the threshold percentage applicable under
subparagraph (B), or
``(ii) with respect to any facility which produces eligible
components, a material assistance cost ratio which is less
than the threshold percentage applicable under subparagraph
(C).
``(B) Threshold percentage for qualified facilities and
energy storage technology.--For purposes of subparagraph
(A)(i), the threshold percentage shall be--
``(i) in the case of a qualified facility the construction
of which begins--
``(I) after June 16, 2025, and before January 1, 2026, 37.5
percent,
``(II) during calendar year 2026, 40 percent,
``(III) during calendar year 2027, 45 percent,
``(IV) during calendar year 2028, 50 percent,
``(V) during calendar year 2029, 55 percent, and
``(VI) after December 31, 2029, 60 percent, and
``(ii) in the case of energy storage technology the
construction of which begins--
``(I) during calendar year 2026, 55 percent,
``(II) during calendar year 2027, 60 percent,
``(III) during calendar year 2028, 65 percent,
``(IV) during calendar year 2029, 70 percent, and
``(V) after December 31, 2029, 75 percent.
``(C) Threshold percentage for eligible components.--
``(i) In general.--For purposes of subparagraph (A)(ii),
the threshold percentage shall be--
``(I) in the case of any solar energy component (as such
term is defined in section 45X(c)(3)(A)) which is sold--
``(aa) during calendar year 2026, 50 percent,
``(bb) during calendar year 2027, 60 percent,
``(cc) during calendar year 2028, 70 percent,
``(dd) during calendar year 2029, 80 percent, and
``(ee) after December 31, 2029, 85 percent,
``(II) in the case of any wind energy component (as such
term is defined in section 45X(c)(4)(A)) which is sold--
``(aa) during calendar year 2026, 85 percent, and
``(bb) during calendar year 2027, 90 percent,
``(III) in the case of any inverter described in
subparagraphs (B) through (G) of section 45X(c)(2) which is
sold--
``(aa) during calendar year 2026, 50 percent,
``(bb) during calendar year 2027, 55 percent,
``(cc) during calendar year 2028, 60 percent,
``(dd) during calendar year 2029, 65 percent, and
``(ee) after December 31, 2029, 70 percent,
``(IV) in the case of any qualifying battery component (as
such term is defined in section 45X(c)(5)(A)) which is sold--
``(aa) during calendar year 2026, 60 percent,
``(bb) during calendar year 2027, 65 percent,
``(cc) during calendar year 2028, 70 percent,
``(dd) during calendar year 2029, 80 percent, and
``(ee) after December 31, 2029, 85 percent, and
``(V) subject to clause (ii), in the case of any applicable
critical mineral (as such term is defined in section
45X(c)(6)) which is sold--
``(aa) after December 31, 2025, and before January 1, 2030,
0 percent,
``(bb) during calendar year 2030, 25 percent,
``(cc) during calendar year 2031, 30 percent,
``(dd) during calendar year 2032, 40 percent, and
``(ee) after December 31, 2032, 50 percent.
``(ii) Adjusted threshold percentage for applicable
critical minerals.--Not later than December 31, 2027, the
Secretary shall issue threshold percentages for each of the
applicable critical minerals described in section 45X(c)(6)),
which shall--
``(I) apply in lieu of the threshold percentage determined
under clause (i)(V) for each calendar year, and
``(II) equal or exceed the threshold percentage which would
otherwise apply with respect to such applicable critical
mineral under such clause for such calendar year, taking into
account--
``(aa) domestic geographic availability,
``(bb) supply chain constraints,
``(cc) domestic processing capacity needs, and
``(dd) national security concerns.
``(D) Material assistance cost ratio.--
``(i) Qualified facilities and energy storage technology.--
For purposes of subparagraph (A)(i), the term `material
assistance cost ratio' means the amount (expressed as a
percentage) equal to the quotient of--
``(I) an amount equal to--
``(aa) the total direct costs to the taxpayer attributable
to all manufactured products (including components) which are
incorporated into the qualified facility or energy storage
technology upon completion of construction, minus
``(bb) the total direct costs to the taxpayer attributable
to all manufactured products (including components) which
are--
``(AA) incorporated into the qualified facility or energy
storage technology upon completion of construction, and
``(BB) mined, produced, or manufactured by a prohibited
foreign entity, divided by
``(II) the amount described in subclause (I)(aa).
``(ii) Eligible components.--For purposes of subparagraph
(A)(ii), the term `material assistance cost ratio' means the
amount (expressed as a percentage) equal to the quotient of--
``(I) an amount equal to--
``(aa) with respect to an eligible component, the total
direct material costs that are paid or incurred (within the
meaning of section 461 and any regulations issued under
section 263A) by the taxpayer for production of such eligible
component, minus
``(bb) with respect to an eligible component, the total
direct material costs that are paid or incurred (within the
meaning of section 461 and any regulations issued under
section 263A) by the taxpayer for production of such eligible
component that are attributable to a prohibited foreign
entity, divided by
``(II) the amount described in subclause (I)(aa).
``(iii) Safe harbor tables.--
``(I) In general.--Not later than December 31, 2026, the
Secretary shall issue safe harbor tables (and such other
guidance as deemed necessary) to--
``(aa) identify the percentage of total direct costs of any
manufactured product which is attributable to a prohibited
foreign entity,
``(bb) identify the percentage of total direct material
costs of any eligible component which is attributable to a
prohibited foreign entity, and
``(cc) provide all rules necessary to determine the
appropriate amount of a taxpayer's material assistance from a
prohibited foreign entity within the meaning of this
paragraph or as such term is used in section 5000E-1.
``(II) Safe harbors prior to issuance.--For purposes of
this paragraph, prior to the date on which the Secretary
issues the safe harbor tables described in subclause (I), and
for construction of a qualified facility or energy storage
technology which begins on or before the date which is 60
days after the date of issuance of such tables, a taxpayer
may--
``(aa) use the tables included in Internal Revenue Service
Notice 2025-08 to establish the percentage of the total
direct costs of any listed eligible component and any
manufactured product, and
``(bb) rely on a certification by the supplier of the
manufactured product, eligible component, or constituent
element, material, or subcomponent of an eligible component--
``(AA) of the total direct costs or the total direct
material costs, as applicable, of such product or component
that was not produced or manufactured by a prohibited foreign
entity, or
``(BB) that such product or component was not produced or
manufactured by a prohibited foreign entity.
``(III) Exception.--Notwithstanding subclauses (I) and
(II)--
``(aa) if the taxpayer knows (or has reason to know) that a
manufactured product or eligible component was produced or
manufactured by a prohibited foreign entity, the taxpayer
shall treat all direct costs with respect to such
manufactured product, or all direct material costs with
respect to such eligible component, as attributable to a
prohibited foreign entity, and
``(bb) if the taxpayer knows (or has reason to know) that
the certification referred to in subclause (II)(bb)
pertaining to a manufactured product or eligible component is
inaccurate, the taxpayer may not rely on such certification.
``(IV) Certification requirement.--In a manner consistent
with Treasury Regulation section 1.45X-4(c)(4)(i) (as in
effect on the date of enactment of this paragraph), the
certification referred to in subclause (II)(bb) shall--
``(aa) include--
``(AA) the supplier's employer identification number, or
``(BB) any such similar identification number issued by a
foreign government,
``(bb) be signed under penalties of perjury,
``(cc) be retained by the supplier and the taxpayer for a
period of not less than 6 years and shall be provided to the
Secretary upon request, and
``(dd) be from the supplier from which the taxpayer
purchased any manufactured product, eligible component, or
constituent elements, materials, or subcomponents of an
eligible component, stating either--
``(AA) that such property was not produced or manufactured
by a prohibited foreign entity and that the supplier is not
aware that any prior supplier in the chain of production of
that property is a prohibited foreign entity,
``(BB) for purposes of section 45X, the total direct
material costs for each component, constituent element,
material, or subcomponent that were not produced or
manufactured by a prohibited foreign entity, or
[[Page S4017]]
``(CC) for purposes of section 45Y or section 48E, the
total direct costs attributable to all manufactured products
that were not produced or manufactured by a prohibited
foreign entity.
``(iv) Existing contract.--Upon the election of the
taxpayer (in such form and manner as the Secretary shall
designate), in the case of any manufactured product, eligible
component, or constituent element, material, or subcomponent
of an eligible component which is--
``(I) acquired by the taxpayer, or manufactured or
assembled by or for the taxpayer, pursuant to a binding
written contract which was entered into prior to June 16,
2025, and
``(II)(aa) placed into service before January 1, 2030 (or,
in the case of an applicable facility, as defined in section
45Y(d)(4)(B), before January 1, 2028), or
``(bb) in the case of a constituent element, material, or
subcomponent, used in a product sold before January 1, 2030,
the cost to the taxpayer with respect to such product,
component, element, material, or subcomponent shall not be
included for purposes of determining the material assistance
cost ratio under this subparagraph.
``(v) Anti-circumvention rules.--The Secretary shall
prescribe such regulations and guidance as may be necessary
or appropriate to prevent circumvention of the rules under
this subparagraph, including prevention of--
``(I) any abuse of the exception provided under clause (iv)
through the stockpiling of any manufactured product, eligible
component, or constituent element, material, or subcomponent
of an eligible component during any period prior to the
application of the requirements under this paragraph, or
``(II) any evasion with respect to the requirements of this
subparagraph where the facts and circumstances demonstrate
that the beginning of construction of a qualified facility or
energy storage technology has not in fact occurred.
``(E) Other definitions.--For purposes of this paragraph--
``(i) Eligible component.--The term `eligible component'
means--
``(I) any property described in section 45X(c)(1), or
``(II) any component which is identified by the Secretary
pursuant to regulations or guidance issued under subparagraph
(G).
``(ii) Energy storage technology.--The term `energy storage
technology' has the same meaning given such term under
section 48E(c)(2).
``(iii) Manufactured product.--The term `manufactured
product' means--
``(I) a manufactured product which is a component of a
qualified facility, as described in section 45Y(g)(11)(B) and
any guidance issued thereunder, or
``(II) any product which is identified by the Secretary
pursuant to regulations or guidance issued under subparagraph
(G).
``(iv) Qualified facility.--The term `qualified facility'
means--
``(I) a qualified facility, as defined in section
45Y(b)(1),
``(II) a qualified facility, as defined in section
48E(b)(3), and
``(III) any qualified interconnection property (as defined
in section 48E(b)(4)) which is part of the qualified
investment with respect to a qualified facility (as described
in section 48E(b)(1)).
``(F) Beginning of construction.--Rules similar to the
rules under paragraph (51)(J) shall apply for purposes of
this paragraph.
``(G) Regulations and guidance.--The Secretary may
prescribe such regulations and guidance as may be necessary
or appropriate to carry out the provisions of this paragraph,
including--
``(i) identification of components or products for purposes
of clauses (i) and (iii) of subparagraph (E), and
``(ii) for purposes of subparagraph (A)(ii), rules to
address facilities which produce more than one eligible
component.''.
(d) Denial of Credit for Certain Wind and Solar Leasing
Arrangements.--Section 45Y is amended by adding at the end
the following new subsection:
``(h) Denial of Credit for Wind and Solar Leasing
Arrangements.--No credit shall be determined under this
section with respect to any production of electricity during
the taxable year with respect to property described in
paragraph (1) or (4) of section 25D(d) (as applied by
substituting `lessee' for `taxpayer') if the taxpayer rents
or leases such property to a third party during such taxable
year.''.
(e) Emissions Rates Tables.--Section 45Y(b)(2)(C) is
amended by adding at the end the following new clause:
``(iii) Existing studies.--For purposes of clause (i), in
determining greenhouse gas emissions rates for types or
categories of facilities for the purpose of determining
whether a facility satisfies the requirements under paragraph
(1), the Secretary shall consider studies published on or
before the date of enactment of this clause which demonstrate
a net lifecycle greenhouse gas emissions rate which is not
greater than zero using widely accepted lifecycle assessment
concepts, such as concepts described in standards developed
by the International Organization for Standardization.''.
(f) Nuclear Energy Communities.--
(1) In general.--Section 45(b)(11) is amended--
(A) in subparagraph (B)--
(i) in clause (ii)(II), by striking ``or'' at the end,
(ii) in clause (iii)(II), by striking the period at the end
and inserting ``, or'', and
(iii) by adding at the end the following new clause:
``(iv) for purposes of any qualified facility which is an
advanced nuclear facility, a metropolitan statistical area
which has (or, at any time during the period beginning after
December 31, 2009, had) 0.17 percent or greater direct
employment related to the advancement of nuclear power,
including employment related to--
``(I) an advanced nuclear facility,
``(II) advanced nuclear power research and development,
``(III) nuclear fuel cycle research, development, or
production, including mining, enrichment, manufacture,
storage, disposal, or recycling of nuclear fuel, and
``(IV) the manufacturing or assembly of components used in
an advanced nuclear facility.'', and
(B) by adding at the end the following new subparagraph:
``(C) Advanced nuclear facilities.--
``(i) In general.--Subject to clause (ii), for purposes of
subparagraph (B)(iv), the term `advanced nuclear facility'
means any nuclear facility the reactor design for which is
approved in the manner described in section 45J(d)(2).
``(ii) Special rule.--For purposes of clause (i), a
facility shall be deemed to have a reactor design which is
approved in the manner described in section 45J(d)(2) if the
Nuclear Regulatory Commission has authorized construction and
issued a site-specific construction permit or combined
license with respect to such facility.''.
(2) Nonapplication for clean electricity investment
credit.--Section 48E(a)(3)(A)(i) is amended by inserting ``,
as applied without regard to clause (iv) thereof'' after
``section 45(b)(11)(B)''.
(g) Conforming Amendments.--
(1) Paragraph (1) of section 48D(c) is amended to read as
follows:
``(1) is not a specified foreign entity (as defined in
section 7701(a)(51)(B)), and''.
(2) Section 45Y(b)(1) is amended--
(A) by redesignating subparagraph (D) as subparagraph (E),
and
(B) by inserting after subparagraph (C) the following new
subparagraph:
``(D) Determination of capacity.--For purposes of
subparagraph (C), additions of capacity of a facility shall
be determined in any reasonable manner, including based on--
``(i) determinations by, or reports to, the Federal Energy
Regulatory Commission (including interconnection agreements),
the Nuclear Regulatory Commission, or any similar entity,
reflecting additions of capacity,
``(ii) determinations or reports reflecting additions of
capacity made by an independent professional engineer,
``(iii) reports to, or issued by, regional transmission
organizations or independent system operators reflecting
additions of capacity, or
``(iv) any other method or manner provided by the
Secretary.''.
(h) Prohibition on Transfer of Credits to Specified Foreign
Entities.--Section 6418(g) is amended by adding at the end
the following new paragraph:
``(5) Prohibition on transfer of credits to specified
foreign entities.--With respect to any eligible credit
described in clause (iii), (iv), (vi), (vii), (viii), or (xi)
of subsection (f)(1)(A), an eligible taxpayer may not elect
to transfer any portion of such credit to a taxpayer that is
a specified foreign entity (as defined in section
7701(a)(51)(B)).''.
(i) Extension of Period of Limitations for Errors Relating
to Determining of Material Assistance From a Prohibited
Foreign Entity.--Section 6501 is amended--
(1) by redesignating subsection (o) as subsection (p), and
(2) by inserting after subsection (n) the following new
subsection:
``(o) Material Assistance From a Prohibited Foreign
Entity.--In the case of a deficiency attributable to an error
with respect to the determination under section 7701(a)(52)
for any taxable year, such deficiency may be assessed at any
time within 6 years after the return for such year was
filed.''.
(j) Imposition of Accuracy-related Penalties.--
(1) In general.--Section 6662 is amended by adding at the
end the following new subsection:
``(m) Substantial Understatement of Income Tax Due to
Disallowance of Applicable Energy Credits.--
``(1) In general.--In the case of a taxpayer for which
there is a disallowance of an applicable energy credit for
any taxable year, for purposes of determining whether there
is a substantial understatement of income tax for such
taxable year, subsection (d)(1) shall be applied--
``(A) in subparagraphs (A) and (B), by substituting `1
percent' for `10 percent' each place it appears, and
``(B) without regard to subparagraph (C).
``(2) Disallowance of an applicable energy credit.--For
purposes of this subsection, the term `disallowance of an
applicable energy credit' means the disallowance of a credit
under section 45X, 45Y, or 48E by reason of overstating the
material assistance cost ratio (as determined under section
7701(a)(52)) with respect to any qualified facility, energy
storage technology, or facility which produces eligible
components.''.
[[Page S4018]]
(2) Conforming amendment.--Section 6417(d)(6) is amended by
adding at the end the following new subparagraph:
``(D) Disallowance of an applicable energy credit.--In the
case of an applicable entity which made an election under
subsection (a) with respect to an applicable credit for which
there is a disallowance described in section 6662(m)(2),
subparagraph (A) shall apply with respect to any excessive
payment resulting from such disallowance.''.
(k) Penalty for Substantial Misstatements on Certification
Provided by Supplier.--
(1) In general.--Part I of subchapter B of chapter 68 is
amended by inserting after section 6695A the following new
section:
``SEC. 6695B. PENALTY FOR SUBSTANTIAL MISSTATEMENTS ON
CERTIFICATION PROVIDED BY SUPPLIER.
``(a) Imposition of Penalty.--If--
``(1) a person--
``(A) provides a certification described in clause
(iii)(II)(bb) of section 7701(a)(52)(D) with respect to any
manufactured product, eligible component, or constituent
element, material, or subcomponent of an eligible component,
and
``(B) knows, or reasonably should have known, that the
certification would be used in connection with a
determination under such section,
``(2) such certification is inaccurate or false with
respect to--
``(A) whether such property was produced or manufactured by
a prohibited foreign entity, or
``(B) the total direct costs or total direct material costs
of such property that was not produced or manufactured by a
prohibited foreign entity that were provided on such
certification, and
``(3) the inaccuracy or falsity described in paragraph (2)
resulted in the disallowance of an applicable energy credit
(as defined in section 6662(m)(2)) and an understatement of
income tax (within the meaning of section 6662(d)(2)) for the
taxable year in an amount which exceeds the lesser of--
``(A) 5 percent of the tax required to be shown on the
return for the taxable year, or
``(B) $100,000,
then such person shall pay a penalty in the amount determined
under subsection (b).
``(b) Amount of Penalty.--The amount of the penalty imposed
under subsection (a) on any person with respect to a
certification shall be equal to the greater of--
``(1) 10 percent of the amount of the underpayment (as
defined in section 6664(a)) solely attributable to the
inaccuracy or falsity described in subsection (a)(2), or
``(2) $5,000.
``(c) Exception.--No penalty shall be imposed under
subsection (a) if the person establishes to the satisfaction
of the Secretary that any inaccuracy or falsity described in
subsection (a)(2) is due to a reasonable cause and not
willful neglect.
``(d) Definitions.--Any term used in this section which is
also used in section 7701(a)(52) shall have the meaning given
such term in such section.''.
(2) Clerical amendments.--
(A) Section 6696 is amended--
(i) in the heading, by striking ``and 6695a'' and inserting
``6695a, and 6695b'',
(ii) in subsections (a), (b), and (e), by striking ``and
6695A'' each place it appears and inserting ``6695A, and
6695B'',
(iii) in subsection (c), by striking ``or 6695A'' and
inserting ``6695A, or 6695B'', and
(iv) in subsection (d)--
(I) in paragraph (1), by inserting ``(or, in the case of
any penalty under section 6695B, 6 years)'' after ``assessed
within 3 years'', and
(II) in paragraph (2), by inserting ``(or, in the case of
any claim for refund of an overpayment of any penalty
assessed under section 6695B, 6 years)'' after ``filed within
3 years''.
(B) The table of sections for part I of subchapter B of
chapter 68 is amended by inserting after item relating to
section 6695A the following new item:
``Sec. 6695B. Penalty for substantial misstatements on certification
provided by supplier.''.
(l) Excise Tax on Facilities That Receive Material
Assistance From Prohibited Foreign Entities.--
(1) In general.--Subtitle D is amended by adding at the end
the following new chapter:
``CHAPTER 50B--MATERIAL ASSISTANCE FROM PROHIBITED FOREIGN ENTITIES
``Sec. 5000E-1. Imposition of tax.
``SEC. 5000E-1. IMPOSITION OF TAX.
``(a) In General.--In the case of an applicable facility
for which there is a material assistance cost ratio
violation, a tax is hereby imposed for the taxable year in
which such facility is placed in service in the amount
determined under subsection (d) with respect to such
facility.
``(b) Applicable Facility.--For purposes of this section,
the term `applicable facility' means a facility owned by the
taxpayer--
``(1) which--
``(A) uses wind to produce electricity (within the meaning
of such term as used in section 45(d)(1), as determined
without regard to any requirement under such section with
respect to the date on which construction of property
begins), or
``(B) uses solar energy to produce electricity (within the
meaning of such term as used in section 45(d)(4), as
determined without regard to any requirement under such
section with respect to the date on which construction of
property begins), and
``(2) either--
``(A) the construction of which begins after the date of
the enactment of this section and before January 1, 2028, and
which is placed in service after December 31, 2027, or
``(B) the construction of which begins after December 31,
2027, and before January 1, 2036.
``(c) Material Assistance Cost Ratio Violation.--For
purposes of this section, the term `material assistance cost
ratio violation' means, with respect to an applicable
facility, that the construction of such facility includes any
material assistance from a prohibited foreign entity (as
defined in section 7701(a)(52)).
``(d) Amount of Tax.--
``(1) In general.--The amount determined under this
subsection with respect to any applicable facility shall be
equal to the applicable percentage of the amount equal to the
product of--
``(A) the amount (expressed in percentage points) by which
the threshold percentage (as determined under section
7701(a)(52)(B)(i)) exceeds the material assistance cost ratio
(as determined under section 7701(a)(52)(D)(i)), multiplied
by
``(B) the total direct costs to the taxpayer attributable
to all manufactured products (including components) which are
incorporated into the applicable facility upon completion of
construction (as determined under section
7701(a)(52)(D)(i)(I)).
``(2) Applicable percentage.--For purposes of paragraph
(1), the applicable percentage shall be--
``(A) in the case of a facility described in subparagraph
(A) of subsection (b)(1), 30 percent, or
``(B) in the case of a facility described in subparagraph
(B) of such subsection, 50 percent.
``(e) Rule of Application.--For purposes of this section,
with respect to the application of section 7701(a)(52) or any
provision thereof, such section shall be applied by
substituting `applicable facility' for `qualified facility'
each place it appears.
``(f) Regulations and Guidance.--The Secretary may
prescribe such regulations and guidance as may be necessary
or appropriate to carry out the provisions of this section,
including--
``(1) identifying an applicable facility of the taxpayer,
``(2) determining a material assistance cost ratio
violation of the taxpayer, and
``(3) application of the rules to specific fact patterns in
a manner that is consistent with the purposes of this
section.''.
(2) Clerical amendment.--The table of chapters for subtitle
D is amended by inserting after the item relating to chapter
50A the following new item:
``Chapter 50B--Material Assistance From Prohibited Foreign Entities''.
(m) Effective Dates.--
(1) In general.--Except as provided in paragraphs (2), (3),
(4), and (5), the amendments made by this section shall apply
to taxable years beginning after the date of enactment of
this Act.
(2) Material assistance from prohibited foreign entities.--
The amendments made by subsection (b)(1) shall apply to
facilities for which construction begins after June 16, 2025.
(3) Excise tax on facilities that receive material
assistance from prohibited foreign entities.--The amendments
made by subsection (l) shall apply to facilities for which
construction begins after June 16, 2025.
(4) Penalty for substantial misstatements on certification
provided by supplier.--The amendments made by subsection (k)
shall apply to certifications provided after December 31,
2025.
(5) Termination for wind and solar facilities.--The
amendments made by subsection (a) shall apply to facilities
the construction of which begins after the date of enactment
of this Act.
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