Clean Energy for America Act

II 117TH CONGRESS 1ST SESSION S. 1298 To amend the Internal Revenue Code of 1986 to provide tax incentives for increased investment in clean energy. IN THE SENATE OF THE UNITED STATES APRIL 22, 2021 Mr. WYDEN (for himself, Ms. STABENOW, Mr. SCHUMER, Ms. CANTWELL, Mr. CARPER, Mr. CARDIN, Mr. BENNET, Mr. WHITEHOUSE, Ms. HASSAN, Ms. CORTEZ MASTO, Mrs. FEINSTEIN, Mr. DURBIN, Ms. KLOBUCHAR, Mrs. SHAHEEN, Mrs. GILLIBRAND, Mr. BLUMENTHAL, Mr. SCHATZ, Ms. HIRONO, Mr. HEINRICH, Mr. KAINE, Mr. BOOKER, Mr. VAN HOLLEN, Ms. SMITH, Ms. BALDWIN, Ms. ROSEN, Mr. LEAHY, Mr. KING, and Mr. MURPHY) 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 tax incentives for increased investment in clean energy. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE; ETC. 3 (a) SHORT TITLE.—This Act may be cited as the 4 ‘‘Clean Energy for America Act’’. 5 (b) AMENDMENT OF 1986 CODE.—Except as other- 6 wise expressly provided, whenever in this Act an amend- 7 VerDate Sep 11 2014 23:11 May 27, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1298.IS S1298 pbinns on DSKJLVW7X2PROD with BILLS 2 •S 1298 IS ment or repeal is expressed in terms of an amendment 1 to, or repeal of, a section or other provision, the reference 2 shall be considered to be made to a section or other provi- 3 sion of the Internal Revenue Code of 1986. 4 (c) TABLE OF CONTENTS.—The table of contents of 5 this Act is as follows: 6 Sec. 1. Short title; etc. TITLE I—INCENTIVES FOR CLEAN ELECTRICITY Sec. 101. Clean electricity production credit. Sec. 102. Clean electricity investment credit. Sec. 103. Extensions, modifications, and terminations of various energy provi- sions. TITLE II—INCENTIVES FOR CLEAN TRANSPORTATION Sec. 201. Clean fuel production credit. Sec. 202. Transportation electrification. Sec. 203. Temporary extensions of existing fuel incentives. TITLE III—INCENTIVES FOR ENERGY EFFICIENCY Sec. 301. Credit for new energy efficient residential buildings. Sec. 302. Energy efficient home improvement credit. Sec. 303. Enhancement of energy efficient commercial buildings deduction. Sec. 304. Enhancement of energy credit for geothermal heat pumps. TITLE IV—CLEAN ELECTRICITY AND FUEL BONDS Sec. 401. Clean energy bonds. TITLE V—TERMINATION OF CERTAIN FOSSIL FUEL PROVISIONS Sec. 501 Termination of provisions relating to oil, gas, and other materials. TITLE VI—WORKFORCE DEVELOPMENT REQUIREMENTS Sec. 601. Use of qualified apprentices. VerDate Sep 11 2014 23:11 May 27, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6211 E:\BILLS\S1298.IS S1298 pbinns on DSKJLVW7X2PROD with BILLS 3 •S 1298 IS TITLE I—INCENTIVES FOR 1 CLEAN ELECTRICITY 2 SEC. 101. CLEAN ELECTRICITY PRODUCTION CREDIT. 3 (a) IN GENERAL.—Subpart D of part IV of sub- 4 chapter A of chapter 1 is amended by adding at the end 5 the following new section: 6 ‘‘SEC. 45U. CLEAN ELECTRICITY PRODUCTION CREDIT. 7 ‘‘(a) AMOUNT OF CREDIT.—For purposes of section 8 38, the clean electricity production credit for any taxable 9 year is an amount equal to the product of— 10 ‘‘(1) 1.5 cents, multiplied by 11 ‘‘(2) the kilowatt hours of electricity— 12 ‘‘(A) produced by the taxpayer at a quali- 13 fied facility, and 14 ‘‘(B)(i) sold by the taxpayer to an unre- 15 lated person during the taxable year, or 16 ‘‘(ii) in the case of a qualified facility 17 which is equipped with a metering device which 18 is owned and operated by an unrelated person, 19 sold, consumed, or stored by the taxpayer dur- 20 ing the taxable year. 21 ‘‘(b) QUALIFIED FACILITY.— 22 ‘‘(1) IN GENERAL.— 23 VerDate Sep 11 2014 23:11 May 27, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1298.IS S1298 pbinns on DSKJLVW7X2PROD with BILLS 4 •S 1298 IS ‘‘(A) DEFINITION.—Subject to subpara- 1 graphs (B), (C), and (D), the term ‘qualified 2 facility’ means a facility— 3 ‘‘(i) which is used for the generation 4 of electricity, 5 ‘‘(ii) which is originally placed in serv- 6 ice after December 31, 2022, 7 ‘‘(iii) for which the greenhouse gas 8 emissions rate (as determined under para- 9 graph (2)) is not greater than zero, and 10 ‘‘(iv) in the case of any facility with a 11 total nameplate capacity equal to or great- 12 er than 1 megawatt, which— 13 ‘‘(I) satisfies the requirements 14 under paragraph (3), and 15 ‘‘(II) with respect to the con- 16 struction of such facility, satisfies the 17 requirements under section 601 of the 18 Clean Energy for America Act. 19 ‘‘(B) 10-YEAR PRODUCTION CREDIT.—For 20 purposes of this section, a facility shall only be 21 treated as a qualified facility during the 10-year 22 period beginning on the date the facility was 23 originally placed in service. 24 VerDate Sep 11 2014 23:11 May 27, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1298.IS S1298 pbinns on DSKJLVW7X2PROD with BILLS 5 •S 1298 IS ‘‘(C) EXPANSION OF FACILITY; INCRE- 1 MENTAL PRODUCTION.—A qualified facility 2 shall include either of the following in connec- 3 tion with a facility described in subparagraph 4 (A)(i) that was placed in service before January 5 1, 2023, but only to the extent of the increased 6 amount of electricity produced at the facility by 7 reason of the following: 8 ‘‘(i) A new unit placed in service after 9 December 31, 2022. 10 ‘‘(ii) Any efficiency improvements or 11 additions of capacity placed in service after 12 December 31, 2022. 13 ‘‘(D) COORDINATION WITH OTHER CRED- 14 ITS.—The term ‘qualified facility’ shall not in- 15 clude any facility for which a credit determined 16 under section 45, 45J, 48, or 48D is allowed 17 under section 38 for the taxable year or any 18 prior taxable year. 19 ‘‘(2) GREENHOUSE GAS EMISSIONS RATE.— 20 ‘‘(A) IN GENERAL.—For purposes of this 21 section, the term ‘greenhouse gas emissions 22 rate’ means the amount of greenhouse gases 23 emitted into the atmosphere by a facility in the 24 VerDate Sep 11 2014 23:11 May 27, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1298.IS S1298 pbinns on DSKJLVW7X2PROD with BILLS 6 •S 1298 IS production of electricity, expressed as grams of 1 CO2e per KWh. 2 ‘‘(B) FUEL COMBUSTION AND GASIFI- 3 CATION.—In the case of a facility which pro- 4 duces electricity through combustion or gasifi- 5 cation, the greenhouse gas emissions rate for 6 such facility shall be equal to the net rate of 7 greenhouse gases emitted into the atmosphere 8 by such facility (taking into account lifecycle 9 greenhouse gas emissions, as described in sec- 10 tion 211(o)(1)(H) of the Clean Air Act (42 11 U.S.C. 7545(o)(1)(H))) in the production of 12 electricity, expressed as grams of CO2e per 13 KWh. 14 ‘‘(C) ESTABLISHMENT OF EMISSIONS 15 RATES FOR FACILITIES.— 16 ‘‘(i) IN GENERAL.—The Secretary, in 17 consultation with the Administrator of the 18 Environmental Protection Agency, shall es- 19 tablish greenhouse gas emissions rates for 20 types or categories of facilities, which a 21 taxpayer shall use for purposes of this sec- 22 tion. 23 ‘‘(ii) PUBLISHING EMISSIONS 24 RATES.—The Secretary shall publish a 25 VerDate Sep 11 2014 23:11 May 27, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1298.IS S1298 pbinns on DSKJLVW7X2PROD with BILLS 7 •S 1298 IS table that sets forth the greenhouse gas 1 emissions rates for similar types or cat- 2 egories of facilities. 3 ‘‘(iii) PROVISIONAL EMISSIONS 4 RATE.— 5 ‘‘(I) IN GENERAL.—In the case 6 of any facility for which an emissions 7 rate has not been established by the 8 Secretary, a taxpayer which owns 9 such facility may file a petition with 10 the Secretary for determination of the 11 emissions rate with respect to such fa- 12 cility. 13 ‘‘(II) ESTABLISHMENT OF PROVI- 14 SIONAL AND FINAL EMISSIONS 15 RATE.—In the case of a facility for 16 which a petition described in sub- 17 clause (I) has been filed, the Sec- 18 retary, in consultation with the Ad- 19 ministrator of the Environmental Pro- 20 tection Agency, shall— 21 ‘‘(aa) not later than 12 22 months after the date on which 23 the petition was filed, provide a 24 provisional emissions rate for 25 VerDate Sep 11 2014 23:11 May 27, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1298.IS S1298 pbinns on DSKJLVW7X2PROD with BILLS 8 •S 1298 IS such facility which a taxpayer 1 shall use for purposes of this sec- 2 tion, and 3 ‘‘(bb) not later than 24 4 months after the date on which 5 the petition was filed, establish 6 the emissions rate for such facil- 7 ity. 8 ‘‘(D) CARBON CAPTURE AND SEQUESTRA- 9 TION EQUIPMENT.—For purposes of this sub- 10 section, the amount of greenhouse gases emit- 11 ted into the atmosphere by a facility in the pro- 12 duction of electricity shall not include any quali- 13 fied carbon dioxide that is captured by the tax- 14 payer and— 15 ‘‘(i) pursuant to any regulations es- 16 tablished under paragraph (2) of section 17 45Q(f), disposed of by the taxpayer in se- 18 cure geological storage, or 19 ‘‘(ii) utilized by the taxpayer in a 20 manner described in paragraph (5) of such 21 section. 22 ‘‘(3) WAGE REQUIREMENTS.—The requirements 23 described in this paragraph with respect to any facil- 24 ity are that the taxpayer shall ensure that any labor- 25 VerDate Sep 11 2014 23:11 May 27, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1298.IS S1298 pbinns on DSKJLVW7X2PROD with BILLS 9 •S 1298 IS ers and mechanics employed by contractors and sub- 1 contractors in— 2 ‘‘(A) the construction of such facility, or 3 ‘‘(B) for any year during the period de- 4 scribed in paragraph (1)(B), the alteration or 5 repair of such facility, 6 shall be paid wages at rates not less than the pre- 7 vailing rates for construction, alteration, or repair of 8 a similar character in the locality as determined by 9 the Secretary of Labor, in accordance with sub- 10 chapter IV of chapter 31 of title 40, United States 11 Code. 12 ‘‘(c) INFLATION ADJUSTMENT.— 13 ‘‘(1) IN GENERAL.—In the case of a calendar 14 year beginning after 2021, the 1.5 cent amount in 15 paragraph (1) of subsection (a) shall be adjusted by 16 multiplying such amount by the inflation adjustment 17 factor for the calendar year in which the sale or use 18 of the electricity occurs. If any amount as increased 19 under the preceding sentence is not a multiple of 0.1 20 cent, such amount shall be rounded to the nearest 21 multiple of 0.1 cent. 22 ‘‘(2) ANNUAL COMPUTATION.—The Secretary 23 shall, not later than April 1 of each calendar year, 24 determine and publish in the Federal Register the 25 VerDate Sep 11 2014 23:11 May 27, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1298.IS S1298 pbinns on DSKJLVW7X2PROD with BILLS 10 •S 1298 IS inflation adjustment factor for such calendar year in 1 accordance with this subsection. 2 ‘‘(3) INFLATION ADJUSTMENT FACTOR.—The 3 term ‘inflation adjustment factor’ means, with re- 4 spect to a calendar year, a fraction the numerator 5 of which is the GDP implicit price deflator for the 6 preceding calendar year and the denominator of 7 which is the GDP implicit price deflator for the cal- 8 endar year 1992. The term ‘GDP implicit price 9 deflator’ means the most recent revision of the im- 10 plicit price deflator for the gross domestic product 11 as computed and published by the Department of 12 Commerce before March 15 of the calendar year. 13 ‘‘(d) CREDIT PHASE-OUT.— 14 ‘‘(1) IN GENERAL.—If the Secretary, in con- 15 sultation with the Secretary of Energy and the Ad- 16 ministrator of the Environmental Protection Agency, 17 determines that the annual greenhouse gas emis- 18 sions from the production of electricity in the United 19 States are equal to or less than 25 percent of the 20 annual greenhouse gas emissions from the produc- 21 tion of electricity in the United States for calendar 22 year 2021, the amount of the clean electricity pro- 23 duction credit under subsection (a) for any qualified 24 facility the construction of which begins during a 25 VerDate Sep 11 2014 23:11 May 27, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S1298.IS S1298 pbinns on DSKJLVW7X2PROD with BILLS 11 •S 1298 IS calendar year described in paragraph (2) shall be 1 equal to the product of— 2 ‘‘(A) the amount of the credit determined 3 under subsection (a) without regard to this sub- 4 section, multiplied by 5 ‘‘(B) the phase-out percentage under para- 6 graph (2). 7 ‘‘(2) PHASE-OUT PERCENTAGE.—The phase-out 8 percentage under this paragraph is equal to— 9 ‘‘(A) for a facility the construction of 10 which begins during the first calendar year fol- 11 lowing the calendar year in which the deter- 12 mination described in paragraph (1) is made, 13 100 percent, 14 ‘‘(B) for a facility the construction of 15 which begins during the second calendar year 16 following such determination year, 75 percent, 17 ‘‘(C) for a facility the construction of 18 which begins during the third calendar year fol- 19 lowing such determination year, 50 percent, and 20 ‘‘(D) for a facility placed in service during 21 any calendar year subsequent to the year de- 22 scribed in subparagraph (C), 0 percent. 23 ‘‘(e) DEFINITIONS.—In this section: 24 VerDate Sep 11 2014 23:11 May 27, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S1298.IS S1298 pbinns on DSKJLVW7X2PROD with BILLS 12 •S 1298 IS ‘‘(1) CO2e PER KWh.—The term ‘CO2e per 1 KWh’ means, with respect to any greenhouse gas, 2 the equivalent carbon dioxide (as determined based 3 on global warming potential) per kilowatt hour of 4 electricity produced. 5 ‘‘(2) GREENHOUSE GAS.—The term ‘greenhouse 6 gas’ has the same meaning given such term under 7 section 211(o)(1)(G) of the Clean Air Act (42 8 U.S.C. 7545(o)(1)(G)), as in effect on the date of 9 the enactment of this section. 10 ‘‘(3) QUALIFIED CARBON DIOXIDE.—The term 11 ‘qualified carbon dioxide’ means carbon dioxide cap- 12 tured from an industrial source which— 13 ‘‘(A) would otherwise be released into the 14 atmosphere as industrial emission of green- 15 house gas, 16 ‘‘(B) is measured at the source of capture 17 and verified at the point of disposal or utiliza- 18 tion, and 19 ‘‘(C) is captured and disposed or utilized 20 within the United States (within the meaning of 21 section 638(1)) or a possession of the United 22 States (within the meaning of section 638(2)). 23 ‘‘(f) FINAL GUIDANCE.—Not later than January 1, 24 2023, the Secretary, in consultation with the Adminis- 25 VerDate Sep 11 2014 23:11 May 27, 2021 Jkt 019200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S1298.IS S1298 pbinns on DSKJLVW7X2PROD with BILLS 13 •S 1298 IS trator of the Environmental Pro [Text truncated for display. 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