Amends the Internal Revenue Code, with respect to the tax credit for carbon dioxide sequestration, to: (1) establish a national limitation for such credit based upon metric tons of qualified carbon dioxide (defined as carbon dioxide captured from an industrial source that would otherwise be released into the atmosphere as industrial emission of greenhouse gas and that is measured at the source of capture and verified at the point of disposal or injection); (2) direct the Secretary of the Treasury to establish processes and procedures for allocating the national limitation and for certifying projects for which an allocation has been made; (3) impose a 10-year limitation period for such credit; (4) identify the primary taxpayer eligible to claim such credit as the taxpayer who captures the qualified carbon dioxide and disposes, through contract or otherwise, of the qualified carbon dioxide in a specified manner; and (5) provide for the transferability of such credit.
[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 3581 Introduced in Senate (IS)]
112th CONGRESS
2d Session
S. 3581
To amend the Internal Revenue Code of 1986 to modify the credit for
carbon dioxide sequestration.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
September 20, 2012
Mr. Conrad (for himself, Mr. Enzi, and Mr. Rockefeller) 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 modify the credit for
carbon dioxide sequestration.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. MODIFICATIONS TO CARBON DIOXIDE SEQUESTRATION CREDIT.
(a) Allocation and Certification of Credit.--
(1) In general.--Subsection (e) of section 45Q of the
Internal Revenue Code of 1986 is amended to read as follows:
``(e) Limitation.--
``(1) Allocation limitation.--No credit shall be allowed
under subsection (a) with respect to qualified carbon dioxide
captured by carbon capture equipment at a qualified facility
for the amount of qualified carbon dioxide captured by such
carbon capture equipment in excess of--
``(A) the portion of the national limitation
allocated with respect to such carbon capture equipment
under subsection (f), over
``(B) the amount of qualified carbon dioxide
captured by such carbon capture equipment during
periods after July 31, 2013.
``(2) National limitation.--For purposes of paragraph
(1)(A), the national limitation is the excess of--
``(A) 75,000,000 metric tons of qualified carbon
dioxide, over
``(B) the number of metric tons of qualified carbon
dioxide captured before August 1, 2013, for which a
credit under subsection (a) was allowed.''.
(2) Allocation and certification.--Section 45Q of such Code
is amended by adding at the end the following new subsection:
``(f) Allocation for and Certification of Carbon Capture
Projects.--
``(1) Establishment of procedures.--Not later than July 1,
2013, the Secretary shall establish, by regulation, processes
and procedures--
``(A) for allocating the national limitation under
subsection (e)(2) to projects for placing carbon
capture equipment in service at qualified facilities,
and
``(B) for certifying projects for which an
allocation has been made under subparagraph (A).
``(2) Allocations.--
``(A) Application.--Each applicant for an
allocation under this subsection shall submit an
application to the Secretary under such terms and
conditions as are established by the Secretary in
regulations.
``(B) Priority.--The Secretary shall rank
applications received under subparagraph (A) in the
following order:
``(i) Applicants with applications received
by the Secretary on an earlier date shall be
given higher priority than applicants with
applications received on a later date. For
purposes of this clause, any application
received before the date that is 30 days after
the procedures and processes described in
paragraph (1) are established shall be
considered to have been received on such date.
``(ii) In the case of applications received
on the same date, those applicants concurrently
applying for certification shall be given
higher priority.
``(iii) In the case of applications
received on the same date and concurrently
applying for certification, those projects with
the earlier date by which construction
commenced shall be given higher priority.
``(C) Allocation to applicants.--Subject to
subparagraph (D), the Secretary shall allocate tonnage
to each applicant--
``(i) based on the amount requested on the
application, and
``(ii) in order of the rank of the
application under subparagraph (B),
until the amount of tonnage available under this
section is exhausted. Projects for which no or a
partial allocation is made shall retain their ranking
and shall be eligible to receive an allocation of
tonnage previously allocated that is forfeited or
recaptured.
``(D) Limitation.--The Secretary may not allocate
to any project more than the lesser of--
``(i) the number of metric tons of
qualified carbon dioxide projected to be
captured at the qualified facility under the
project during the 10-year period beginning on
the date on which such project is placed in
service,
``(ii) the number of metric tons of
qualified carbon dioxide projected to be
captured at the qualified facility under the
project--
``(I) which are subject to a
written, binding contract for disposal
in secure geological storage (whether
or not used as a tertiary injectant),
or
``(II) for which there is a plan
for such disposal by the applicant, or
``(iii) 15,000,000 metric tons of qualified
carbon dioxide.
``(E) Reduction for prior credits.--The amount of
any allocation under subparagraph (C) to any project
shall be reduced by the number of metric tons of carbon
dioxide captured by the carbon capture equipment with
respect to such project before August 1, 2013, for
which a credit was allowed under subsection (a).
``(3) Certification.--
``(A) In general.--No credit shall be allowed under
subsection (a) with respect to any project for using
carbon capture equipment to capture qualified carbon
dioxide at a qualified facility before the date on
which such project is certified under this paragraph.
``(B) Application for certification.--Each project
which is allocated a portion of the national limitation
shall submit an application for certification to the
Secretary containing such information as the Secretary
may require. Such application shall be submitted--
``(i) not later than--
``(I) 6 months after the date on
which such project receives an
allocation, and
``(II) 30 days after the later of
the date on which the regulations,
processes, and procedures are
established under paragraph (1) or the
construction start date, and
``(ii) not earlier than the construction
start date.
For purposes of this subparagraph, the term
`construction start date' means the earlier of the
first date on which physical work on the project of a
significant nature is undertaken or the date by which 5
percent or more of the total cost of the project has
been spent.
``(C) Revocation of certification.--
``(i) Materially inaccurate
representations.--The Secretary may revoke a
certification under this paragraph if the
Secretary determines that an applicant has made
a materially inaccurate representation with
respect to the project.
``(ii) Failure to timely place equipment in
service.--A certification under this paragraph
shall be revoked in any case in which carbon
capture equipment with respect to the project
is not placed in service--
``(I) before the date which is 5
years after the date on which the
allocation was issued, in the case of a
new industrial facility, or
``(II) before the date which is 3
years after the date on which the
allocation was issued, in the case of a
modification of an existing industrial
facility.
``(D) Reallocation.--In any case--
``(i) in which a certification is revoked
under subparagraph (C), or
``(ii) in which a taxpayer to whom an
allocation is made under paragraph (2) fails to
obtain certification for a project under this
paragraph,
the amount of national limitation which was allocated
to such project under paragraph (2) shall be
reallocated under such rules as established by the
Secretary under regulations.
``(4) Public disclosure.--
``(A) In general.--The Secretary shall, within 30
days of making any allocation, certification,
revocation, or change in the ranking of projects,
publicly disclose the amount of such allocation, a
description of the project for which such allocation,
certification, or revocation was made, and the change
in the ranking of projects, as the case may be.
``(B) Annual report.--The Secretary shall issue an
annual report summarizing credits allocated and
available for allocation.''.
(3) Conforming amendments.--
(A) Paragraph (2) of section 45Q(c) of such Code is
amended by inserting ``which is part of a project which
is certified under subsection (f)(3)'' after ``carbon
capture equipment''.
(B) Paragraph (3) of section 45Q(c) of such Code is
amended by striking ``which'' and inserting ``at which
such carbon capture equipment''.
(b) 10-Year Credit Limitation.--Section 45Q(a) of the Internal
Revenue Code of 1986 is amended--
(1) in paragraph (1)(A), by inserting ``during the 10-year
period beginning on the later of the date on which the carbon
capture equipment described in subsection (c)(1) is placed in
service or the date on which the project with respect to such
carbon capture equipment was certified under subsection
(f)(3)'' after ``qualified facility'', and
(2) in paragraph (2)(A), by inserting ``during the 10-year
period beginning on the later of the date on which the carbon
capture equipment described in subsection (c)(1) is placed in
service or the date on which the project with respect to such
carbon capture equipment was certified under subsection
(f)(3)'' after ``qualified facility''.
(c) Definition of Carbon Capture Equipment.--Section 45Q(d) of the
Internal Revenue Code of 1986 is amended by adding at the end the
following new paragraph:
``(8) Carbon capture equipment.--The term `carbon capture
equipment' means equipment to capture and pressurize qualified
carbon dioxide.''.
(d) Credit Allowed to Taxpayer Performing Carbon Capture.--
(1) In general.--Paragraph (5) of section 45Q(d) of the
Internal Revenue Code of 1986 is amended to read as follows:
``(5) Person to whom credit is allowable.--
``(A) In general.--Except as provided in
subparagraph (B) or in regulations prescribed by the
Secretary, any credit under this section shall be
allowed to the taxpayer who--
``(i) captures the qualified carbon
dioxide, and
``(ii) through contract or otherwise,
disposes of the qualified carbon dioxide in a
manner meeting the requirements of paragraph
(1)(B) or (2)(C) of subsection (a), as the case
may be.
``(B) Election to allow credit to person disposing
carbon dioxide.--If the person described in
subparagraph (A) makes an election under this
subparagraph in such manner as the Secretary may
prescribe by regulations, the credit under this
section--
``(i) shall be allowable to the person that
disposes of qualified carbon dioxide in a
manner meeting the requirements of paragraph
(1)(B) or (2)(C) of subsection (a), as the case
may be, and
``(ii) shall not be allowable to the person
described in subparagraph (A).''.
(2) Conforming amendments.--
(A) Section 45Q(a) of such Code is amended by
striking ``by the taxpayer'' each place it appears in
paragraph (1)(B), (2)(B), and (2)(C).
(B) Section 45Q(c) of such Code, as amended by
subsection (a), is amended by striking paragraph (1)
and redesignating paragraphs (2) and (3) as paragraphs
(1) and (2), respectively.
(e) Rules Relating to Credit Recapture.--Paragraph (6) of section
45Q(d) of the Internal Revenue Code of 1986 is amended by adding at the
end the following new sentence: ``Notwithstanding section 7805(b), any
regulation issued pursuant to this paragraph shall apply only with
respect to qualified carbon dioxide captured or disposed of after the
date on which such regulation is filed with the Federal Register.''.
(f) Effective Date.--The amendments made by this section shall
apply to carbon dioxide captured after July 31, 2013.
<all>
Introduced in Senate
Read twice and referred to the Committee on Finance.
Llama 3.2 · runs locally in your browser
Ask anything about this bill. The AI reads the full text to answer.
Enter to send · Shift+Enter for new line