EXTENSION AND MODIFICATION OF CREDIT FOR CARBON OXIDE SEQUESTRATION.

SEC. 13104. EXTENSION AND MODIFICATION OF CREDIT FOR CARBON OXIDE SEQUESTRATION.(a) Modification of Carbon Oxide Capture Requirements.—(1) In general.—Section 45Q(d) is amended to read as follows:“(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, 2033, and either—“(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—“(A) in the case of a direct air capture facility, captures not less than 1,000 metric tons of qualified carbon oxide during the taxable year, “(B) in the case of an electricity generating facility—“(i) captures not less than 18,750 metric tons of qualified carbon oxide during the taxable year, and “(ii) with respect to any carbon capture equipment for the applicable electric generating unit at such facility, has a capture design capacity of not less than 75 percent of the baseline carbon oxide production of such unit, or “(C) in the case of any other facility, captures not less than 12,500 metric tons of qualified carbon oxide during the taxable year.” . (2) Definitions.—(A) In general.—Section 45Q(e) is amended—(i) by redesignating paragraphs (1) through (3) as paragraphs (3) through (5), respectively, and (ii) by inserting after “For purposes of this section—” the following new paragraphs:136 STAT. 1925 “(1) Applicable electric generating unit.—The term ‘applicable electric generating unit’ means the principal electric generating unit for which the carbon capture equipment is originally planned and designed. “(2) Baseline carbon oxide production.—“(A) In general.—The term ‘baseline carbon oxide production’ means either of the following:“(i) In the case of an applicable electric generating unit which was originally placed in service more than 1 year prior to the date on which construction of the carbon capture equipment begins, the average annual carbon oxide production, by mass, from such unit during—“(I) in the case of an applicable electric generating unit which was originally placed in service more than 1 year prior to the date on which construction of the carbon capture equipment begins and on or after the date which is 3 years prior to the date on which construction of such equipment begins, the period beginning on the date such unit was placed in service and ending on the date on which construction of such equipment began, and “(II) in the case of an applicable electric generating unit which was originally placed in service more than 3 years prior to the date on which construction of the carbon capture equipment begins, the 3 years with the highest annual carbon oxide production during the 12-year period preceding the date on which construction of such equipment began. “(ii) In the case of an applicable electric generating unit which—“(I) as of the date on which construction of the carbon capture equipment begins, is not yet placed in service, or “(II) was placed in service during the 1-year period prior to the date on which construction of the carbon capture equipment begins, the designed annual carbon oxide production, by mass, as determined based on an assumed capacity factor of 60 percent. “(B) Capacity factor.—The term ‘capacity factor’ means the ratio (expressed as a percentage) of the actual electric output from the applicable electric generating unit to the potential electric output from such unit.” . (B) Conforming amendment.—Section 142(o)(1)(B) is amended by striking “section 45Q(e)(1)” and inserting “section 45Q(e)(3)”. (b) Modified Applicable Dollar Amount.—Section 45Q(b)(1)(A) is amended—(1) in clause (i)—(A) in subclause (I), by striking “the dollar amount” and all that follows through “such period” and inserting “$17”, and136 STAT. 1926 (B) in subclause (II), by striking “the dollar amount” and all that follows through “such period” and inserting “$12”, and (2) in clause (ii)—(A) in subclause (I), by striking “$50” and inserting “$17”, and (B) in subclause (II), by striking “$35” and inserting “$12”. (c) Determination of Applicable Dollar Amount.—(1) In general.—Section 45Q(b)(1), as amended by the preceding provisions of this Act, is amended—(A) by redesignating subparagraph (B) as subparagraph (D), and (B) by inserting after subparagraph (A) the following new subparagraphs:“(B) Special rule for direct air capture facilities.—In the case of any qualified facility described in subsection (d)(2)(A) which is placed in service after December 31, 2022, the applicable dollar amount shall be an amount equal to the applicable dollar amount otherwise determined with respect to such qualified facility under subparagraph (A), except that such subparagraph shall be applied—“(i) by substituting ‘$36’ for ‘$17’ each place it appears, and “(ii) by substituting ‘$26’ for ‘$12’ each place it appears. “(C) Applicable dollar amount for additional carbon capture equipment.—In the case of any qualified facility which is placed in service before January 1, 2023, if any additional carbon capture equipment is installed at such facility and such equipment is placed in service after December 31, 2022, the applicable dollar amount shall be an amount equal to the applicable dollar amount otherwise determined under this paragraph, except that subparagraph (B) shall be applied—“(i) by substituting ‘before January 1, 2023’ for ‘after December 31, 2022’, and “(ii) by substituting ‘the additional carbon capture equipment installed at such qualified facility’ for ‘such qualified facility’.” . (2) Conforming amendments.—(A) Section 45Q(b)(1)(A) is amended by striking “The applicable dollar amount” and inserting “Except as provided in subparagraph (B) or (C), the applicable dollar amount”. (B) Section 45Q(b)(1)(D), as redesignated by paragraph (1)(A), is amended by striking “subparagraph (A)” and inserting “subparagraph (A), (B), or (C)”. (d) Wage and Apprenticeship Requirements.—Section 45Q is amended by redesignating subsection (h) as subsection (i) and inserting after subsection (g) following new subsection:“(h) Increased Credit Amount for Qualified Facilities and Carbon Capture Equipment.—“(1) In general.—In the case of any qualified facility or any carbon capture equipment which satisfy the requirements of paragraph (2), the amount of the credit determined under 136 STAT. 1927 subsection (a) shall be equal to such amount (determined without regard to this sentence) multiplied by 5. “(2) Requirements.—The requirements described in this paragraph are that—“(A) with respect to any qualified facility the construction of which begins on or after the date that is 60 days after the Secretary publishes guidance with respect to the requirements of paragraphs (3)(A) and (4), as well as any carbon capture equipment placed in service at such facility—“(i) subject to subparagraph (B) of paragraph (3), the taxpayer satisfies the requirements under subparagraph (A) of such paragraph with respect to such facility and equipment, and “(ii) the taxpayer satisfies the requirements under paragraph (4) with respect to the construction of such facility and equipment, “(B) with respect to any carbon capture equipment the construction of which begins on or after the date that is 60 days after the Secretary publishes guidance with respect to the requirements of paragraphs (3)(A) and (4), and which is installed at a qualified facility the construction of which began prior to such date—“(i) subject to subparagraph (B) of paragraph (3), the taxpayer satisfies the requirements under subparagraph (A) of such paragraph with respect to such equipment, and “(ii) the taxpayer satisfies the requirements under paragraph (4) with respect to the construction of such equipment, or “(C) the construction of carbon capture equipment begins prior to the date that is 60 days after the Secretary publishes guidance with respect to the requirements of paragraphs (3)(A) and (4), and such equipment is installed at a qualified facility the construction of which begins prior to such date. “(3) Prevailing wage requirements.—“(A) In general.—The requirements described in this subparagraph with respect to any qualified facility and any carbon capture equipment placed in service at such facility are that the taxpayer shall ensure that any laborers and mechanics employed by the taxpayer or any contractor or subcontractor in—“(i) the construction of such facility or equipment, and “(ii) with respect to any taxable year, for any portion of such taxable year which is within the period described in paragraph (3)(A) or (4)(A) of subsection (a), the alteration or repair of such facility or such equipment, shall be paid wages at rates not less than the prevailing rates for construction, alteration, or repair of a similar character in the locality in which such facility and equipment are located as most recently determined by the Secretary of Labor, in accordance with subchapter IV of chapter 31 of title 40, United States Code. For purposes 136 STAT. 1928 of determining an increased credit amount under paragraph (1) for a taxable year, the requirement under clause (ii) of this subparagraph is applied to such taxable year in which the alteration or repair of qualified facility occurs. “(B) Correction and penalty related to failure to satisfy wage requirements.—Rules similar to the rules of section 45(b)(7)(B) shall apply. “(4) Apprenticeship requirements.—Rules similar to the rules of section 45(b)(8) shall apply. “(5) Regulations and guidance.—The Secretary shall issue such regulations or other guidance as the Secretary determines necessary to carry out the purposes of this subsection, including regulations or other guidance which provides for requirements for recordkeeping or information reporting for purposes of administering the requirements of this subsection.” . (e) Credit Reduced for Tax-exempt Bonds.—Section 45Q(f) is amended—(1) by striking the second paragraph (3), as added at the end of such section by section 80402(e) of the Infrastructure Investment and Jobs Act (Public Law 117-58), and (2) by adding at the end the following new paragraph:“(8) Credit reduced for tax-exempt bonds.—Rules similar to the rule under section 45(b)(3) shall apply for purposes of this section.” . (f) Application of Section for Certain Carbon Capture Equipment.—Section 45Q(g) is amended by inserting “the earlier of January 1, 2023, and” before “the end of the calendar year”. (g) Election.—Section 45Q(f), as amended by subsection (e), is amended by adding at the end the following new paragraph:“(9) Election.—For purposes of paragraphs (3) and (4) of subsection (a), a person described in paragraph (3)(A)(ii) may elect, at such time and in such manner as the Secretary may prescribe, to have the 12–year period begin on the first day of the first taxable year in which a credit under this section is claimed with respect to carbon capture equipment which is originally placed in service at a qualified facility on or after the date of the enactment of the Bipartisan Budget Act of 2018 (after application of paragraph (6), where applicable) if—“(A) no taxpayer claimed a credit under this section with respect to such carbon capture equipment for any prior taxable year, “(B) the qualified facility at which such carbon capture equipment is placed in service is located in an area affected by a federally-declared disaster (as defined by section 165(i)(5)(A)) after the carbon capture equipment is originally placed in service, and “(C) such federally-declared disaster results in a cessation of the operation of the qualified facility or the carbon capture equipment after such equipment is originally placed in service.” . (h) Regulations for Baseline Carbon Oxide Production.—Subsection (i) of section 45Q, as redesignated by subsection (d), is amended—(1) in paragraph (1), by striking “and”, (2) in paragraph (2), by striking the period at the end and inserting “, and”, and136 STAT. 1929 (3) by adding at the end the following new paragraph:“(3) for purposes of subsection (d)(2)(B)(ii), adjust the baseline carbon oxide production with respect to any applicable electric generating unit at any electricity generating facility if, after the date on which the carbon capture equipment is placed in service, modifications which are chargeable to capital account are made to such unit which result in a significant increase or decrease in carbon oxide production.” . (i) Effective Dates.—(1) In general.—Except as provided in paragraphs (2), (3), and (4), the amendments made by this section shall apply to facilities or equipment placed in service after December 31, 2022. (2) Modification of carbon oxide capture requirements.—The amendments made by subsection (a) shall apply to facilities or equipment the construction of which begins after the date of enactment of this Act. (3) Application of section for certain carbon capture equipment.—The amendments made by subsection (f) shall take effect on the date of enactment of this Act. (4) Election.—The amendments made by subsection (g) shall apply to carbon oxide captured and disposed of after December 31, 2021.