Furthering carbon capture, Utilization, Technology, Underground storage, and Reduced Emissions Act or the FUTURE Act
This bill amends the Internal Revenue Code to extend and modify the tax credit for carbon dioxide sequestration. The bill modifies the credit to apply it to carbon oxide sequestration. (Carbon oxide refers to any of the three oxides of carbon: carbon dioxide, carbon monoxide, and carbon suboxide.)
The bill also:
[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 1535 Introduced in Senate (IS)]
<DOC>
115th CONGRESS
1st Session
S. 1535
To amend the Internal Revenue Code of 1986 to improve, expand, and
extend the credit for carbon dioxide sequestration.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 12, 2017
Ms. Heitkamp (for herself, Mrs. Capito, Mr. Whitehouse, Mr. Barrasso,
Mr. Kaine, Mr. Graham, Mr. Schatz, Mr. Blunt, Mr. Booker, Mr. Portman,
Mr. Tester, Mr. Cochran, Mr. Casey, Ms. Klobuchar, Mr. Durbin, Mr.
Franken, Mr. Brown, Mr. Warner, Mr. Donnelly, Mr. Manchin, Ms.
Duckworth, Mr. Peters, Mr. Coons, Mr. Bennet, and Mr. King) 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 improve, expand, and
extend 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. SHORT TITLE.
This Act may be cited as the ``Furthering carbon capture,
Utilization, Technology, Underground storage, and Reduced Emissions
Act'' or the ``FUTURE Act''.
SEC. 2. ENHANCEMENT OF CARBON DIOXIDE SEQUESTRATION CREDIT.
(a) In General.--Section 45Q of the Internal Revenue Code of 1986
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 FUTURE Act, 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 FUTURE Act, 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 (as determined under
subsection (b)(1)) 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 FUTURE Act, 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 (as determined under
subsection (b)(1)) 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 FUTURE Act, 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.--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 FUTURE Act, 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
FUTURE Act, 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 FUTURE Act.
``(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 FUTURE Act,
``(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 FUTURE Act,
``(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), by
substituting `crude oil or natural gas' for `crude oil' in
subparagraph (A)(i) 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.--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
qualified carbon oxide under subsection (a) such that the
qualified carbon oxide does not escape into the atmosphere.
Such term shall include storage at deep saline formations, oil
and gas reservoirs, and unminable coal seams under such
conditions as the Secretary may determine under such
regulations.
``(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 FUTURE Act, 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 FUTURE Act, 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
FUTURE Act, 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 FUTURE Act.
``(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 FUTURE Act,
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 FUTURE Act, 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 FUTURE Act, 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
FUTURE Act, 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.
<all>
Introduced in Senate
Read twice and referred to the Committee on Finance.
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