Renewable Chemicals Act of 2024
This bill allows a new tax credit for the production of renewable chemicals. Specifically, it allows a credit for u p to 15% of the sales price of each pound of a renewable chemical. A renewable chemical is any chemical that is produced in the United States from renewable biomass and is not less than 95% biobased content.
The bill also allows a 30% tax credit for investment in renewable chemical production facilities.
[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 4931 Introduced in Senate (IS)]
<DOC>
118th CONGRESS
2d Session
S. 4931
To amend the Internal Revenue Code of 1986 to provide credits for the
production of renewable chemicals and investments in renewable chemical
production facilities, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
August 1, 2024
Mr. Brown (for himself and Mr. Ricketts) 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 provide credits for the
production of renewable chemicals and investments in renewable chemical
production facilities, and for other purposes.
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 ``Renewable Chemicals Act of 2024''.
SEC. 2. CREDITS FOR PRODUCTION OF RENEWABLE CHEMICALS AND INVESTMENTS
IN RENEWABLE CHEMICAL PRODUCTION FACILITIES.
(a) Production of Renewable Chemicals.--
(1) In general.--Subpart D of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 is amended by
adding at the end the following new section:
``SEC. 45BB. CREDIT FOR PRODUCTION OF RENEWABLE CHEMICALS.
``(a) In General.--For purposes of section 38, the production
credit for renewable chemicals for any taxable year is an amount
(determined separately for each renewable chemical) equal to--
``(1) 15 percent of the sales price of each pound of a
renewable chemical--
``(A) produced--
``(i) by the taxpayer, or
``(ii) for the taxpayer by a contract
manufacturer under a binding written agreement,
and
``(B) sold for its fair market value at retail by
the taxpayer during the taxable year, reduced by
``(2) a percentage equal to so much of the percentage of
the renewable chemical as is not biobased content.
``(b) Limitation.--The amount of the credit determined under
subsection (a) with respect to a renewable chemical sold during any
taxable year shall not exceed the credit amount allocated for purposes
of this section by the Secretary to the taxpayer with respect to such
chemical for such taxable year under section 48F.
``(c) Definitions.--For purposes of this section--
``(1) Renewable chemical.--The term `renewable chemical'
means any chemical which--
``(A) is produced in the United States (or in a
territory or possession of the United States) from
renewable biomass which is produced in the United
States (or in a territory or possession of the United
States),
``(B) is not less than 95 percent biobased content,
``(C) is not sold or used for the production of any
food, feed, fuel, or pharmaceuticals,
``(D) is approved to use the USDA Certified
Biobased Product label under section 9002(b) of the
Farm Security and Rural Investment Act of 2002 (7
U.S.C. 8102(b)), and
``(E) is a chemical intermediate (as such term is
defined in section 3201.109 of title 7, Code of Federal
Regulations (or successor regulations)).
``(2) Biobased content.--The term `biobased content' means,
with respect to any renewable chemical, the biobased content of
the total mass of organic carbon in such chemical (expressed as
a percentage), determined by testing representative samples
using the American Society for Testing and Materials (ASTM)
D6866.
``(3) Renewable biomass.--The term `renewable biomass' has
the meaning given such term in section 9001(13) of the Farm
Security and Rural Investment Act of 2002 (7 U.S.C. 8101(13)).
``(d) National Limitation on Credits for Renewable Chemicals.--See
section 48F(e) for rules relating to national limitation on credits
under this section.
``(e) Coordination With Investment Credit for Renewable Chemical
Production Facilities.--See section 48F(f) for rules coordinating
section 48F with this section.
``(f) Termination.--Notwithstanding any other provision of this
section or section 48F, the Secretary may not allocate any credit
amount under this section to any taxable year which begins more than 5
years after the date of the enactment of this section.''.
(2) Credit to be part of general business credit.--
Subsection (b) of section 38 of such Code is amended by
striking ``plus'' at the end of paragraph (40), by striking the
period at the end of paragraph (41) and inserting ``, plus'',
and by adding at the end the following new paragraph:
``(42) the renewable chemicals production credit determined
under section 45BB(a).''.
(b) Investment Credit in Lieu of Production Credit.--
(1) In general.--Section 46 of the Internal Revenue Code of
1986 is amended by striking ``and'' at the end of paragraph
(6), by striking the period at the end of paragraph (7) and
inserting ``, and'', and by adding at the end the following new
paragraph:
``(8) the renewable chemical production facilities
credit.''.
(2) Renewable chemical production facilities credit.--
Subpart E of part IV of subchapter A of chapter 1 of such Code
is amended by inserting after section 48E the following:
``SEC. 48F. INVESTMENT CREDIT FOR RENEWABLE CHEMICAL PRODUCTION
FACILITIES.
``(a) In General.--For purposes of section 46, the renewable
chemical production facilities credit for any taxable year is an amount
equal to 30 percent of the basis of any eligible property which is a
part of a renewable chemical production facility placed in service by
the taxpayer during such taxable year.
``(b) Limitation.--The amount of the credit determined under
subsection (a) with respect to a renewable chemical production facility
of the taxpayer during any taxable year shall not exceed the credit
amount allocated for purposes of this section by the Secretary to the
taxpayer for such taxable year under subsection (e).
``(c) Renewable Chemical Production Facility.--For purposes of this
section--
``(1) In general.--The term `renewable chemical production
facility' means a facility--
``(A) which is owned by the taxpayer,
``(B) which is originally placed in service after
the date of the enactment of this section and before
the first day of the taxable year which begins 6 years
after the date of the enactment of this section,
``(C) with respect to which--
``(i) no credit has been allowed under
section 45BB for chemicals produced at such
facility in any previous taxable year, and
``(ii) the taxpayer makes an irrevocable
election to have this section apply, and
``(D) which is primarily used to produce renewable
chemicals.
``(2) Eligible property.--The term `eligible property'
means any property--
``(A) which is--
``(i) tangible personal property, or
``(ii) other tangible property (not
including a building or its structural
components),
but only if such property is used as an integral part
of the renewable chemical production facility, and
``(B) with respect to which depreciation (or
amortization in lieu of depreciation) is allowable.
``(3) Renewable chemical.--The term `renewable chemical'
has the meaning given such term by section 45BB(c)(1).
``(d) Certain Qualified Progress Expenditures Rules Made
Applicable.--Rules similar to the rules of subsections (c)(4) and (d)
of section 46 (as in effect on the day before the enactment of the
Revenue Reconciliation Act of 1990) shall apply for purposes of this
section.
``(e) National Limitation on Credits for Renewable Chemicals.--
``(1) In general.--Not later than 180 days after the date
of the enactment of this section, the Secretary, in
consultation with the Secretary of Agriculture, shall establish
a program to allocate credit amounts under this section and
section 45BB to taxpayers who produce renewable chemicals for
taxable years ending after the date of the enactment of this
section.
``(2) Limitations.--
``(A) Aggregate limitation.--The total amount of
credits that may be allocated under such program shall
not exceed $500,000,000.
``(B) Taxpayer limitation.--The amount of credits
that may be allocated to any taxpayer under such
program shall not exceed $25,000,000. For purposes of
the preceding sentence, all persons treated as a single
employer under subsection (a) or (b) of section 52, or
subsection (m) or (o) of section 414, shall be treated
as one taxpayer.
``(3) Selection criteria.--In determining to which
taxpayers to make allocations of the credit amount under such
program, the Secretary shall take into consideration--
``(A) the number of jobs created and maintained
(directly and indirectly) in the United States
(including territories and possessions of the United
States) as a result of such allocation during the
credit period and thereafter,
``(B) the degree to which the production of the
renewable chemical demonstrates reduced dependence on
imported feedstocks, petroleum, non-renewable
resources, or other fossil fuels,
``(C) the technological innovation involved in the
production method of the renewable chemical,
``(D) the energy efficiency and reduction in
lifecycle greenhouse gases of the renewable chemical or
of the production method of the renewable chemical,
``(E) whether there is a reasonable expectation of
commercial viability,
``(F) whether the renewable chemical has an
established market, and
``(G) whether the renewable chemical is currently
being produced in commercial quantities.
``(4) Review and reallocation.--
``(A) Review.--Not later than 6 years after the
date of the enactment of this section, the Secretary
shall review the credits allocated under this section.
``(B) Reallocation.--If the Secretary determines
that unused credits are available for reallocation
after the review described in subparagraph (A), the
Secretary is authorized to conduct an additional
program for applications for certification.
``(5) Disclosure of allocations.--The Secretary shall, upon
making an allocation of credit amount under this section,
publicly disclose the identity of the taxpayer and the amount
of the credit with respect to such taxpayer.
``(f) Coordination With Production Credit for Renewable
Chemicals.--If a taxpayer makes an election under subsection
(c)(1)(C)(ii) with respect to a renewable chemical production facility,
a credit shall not be allowed under section 45BB for any renewable
chemical produced by such facility.
``(g) Regulations.--The Secretary shall issue such regulations or
other guidance as may be necessary to carry out this section and
section 45BB.
``(h) Termination.--The Secretary may not allocate any credit
amount under this section to any taxable year which begins more than 5
years after the date of the enactment of this section.''.
(c) Credits Allowable Against Alternative Minimum Tax.--
Subparagraph (B) of section 38(c)(4) of the Internal Revenue Code of
1986 is amended by redesignating clauses (x) through (xii) as clauses
(xii) through (xiv), respectively, and by inserting after clause (ix)
the following new clauses:
``(x) the credit determined under section
45BB,
``(xi) the credit determined under section
46 to the extent that such credit is
attributable to the renewable chemical
production facilities credit under section
48F,''.
(d) Clerical Amendments.--
(1) The table of sections for subpart D of part IV of
subchapter A of chapter 1 of the Internal Revenue Code of 1986
is amended by adding at the end the following new item:
``Sec. 45BB. Credit for production of renewable chemicals.''.
(2) The table of sections for subpart E of part IV of
subchapter A of chapter 1 of such Code is amended by adding at
the end the following new item:
``Sec. 48F. Investment credit for renewable chemical production
facilities.''.
(e) Effective Dates.--The amendments made by this section shall
apply to renewable chemicals produced and renewable chemical production
facilities placed in service after the date of the enactment of this
Act, in taxable years ending after such date.
<all>
Introduced in Senate
Read twice and referred to the Committee on Finance.
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