Clean Energy for America Act

II 116TH CONGRESS 1ST SESSION S. 1288 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 MAY 2, 2019 Mr. WYDEN (for himself, Mr. SCHUMER, Ms. STABENOW, Ms. CANTWELL, Mr. MENENDEZ, 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. KING, Mr. KAINE, Mr. BOOK- ER, Mr. VAN HOLLEN, Ms. SMITH, and Mr. PETERS) introduced the fol- lowing bill; which was read twice and referred to the Committee on Fi- nance 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 00:42 May 10, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1288.IS S1288 pamtmann on DSKBFK8HB2PROD with BILLS 2 •S 1288 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—CLEAN ENERGY TAX CREDITS Sec. 101. Clean energy production credit. Sec. 102. Clean energy investment credit. Sec. 103. Extensions, modifications, and terminations of various energy provi- sions. TITLE II—CLEAN FUEL TAX CREDITS Sec. 201. Clean fuel production credit. Sec. 202. Temporary extension of existing fuel and transportation incentives. TITLE III—ENERGY EFFICIENCY INCENTIVES Sec. 301. Credit for new energy efficient residential buildings. Sec. 302. Heating and air conditioning replacement credit. Sec. 303. Energy efficiency credit for existing residential buildings. Sec. 304. Deduction for new energy efficient commercial buildings. Sec. 305. Energy efficiency deduction for existing commercial buildings. Sec. 306. Temporary extension of existing energy efficiency incentives. TITLE IV—CLEAN ELECTRICITY AND FUEL BONDS Sec. 401. Clean energy bonds. TITLE I—CLEAN ENERGY TAX 7 CREDITS 8 SEC. 101. CLEAN ENERGY PRODUCTION CREDIT. 9 (a) IN GENERAL.—Subpart D of part IV of sub- 10 chapter A of chapter 1 is amended by adding at the end 11 the following new section: 12 ‘‘SEC. 45T. CLEAN ENERGY PRODUCTION CREDIT. 13 ‘‘(a) AMOUNT OF CREDIT.— 14 VerDate Sep 11 2014 00:42 May 10, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1288.IS S1288 pamtmann on DSKBFK8HB2PROD with BILLS 3 •S 1288 IS ‘‘(1) IN GENERAL.—For purposes of section 38, 1 the clean energy production credit for any taxable 2 year is an amount equal to the sum of— 3 ‘‘(A) an amount equal to the product of— 4 ‘‘(i) the applicable credit rate (as de- 5 termined under paragraph (2)), multiplied 6 by 7 ‘‘(ii) the kilowatt hours of elec- 8 tricity— 9 ‘‘(I) produced by the taxpayer at 10 a qualified facility, and 11 ‘‘(II)(aa) sold by the taxpayer to 12 an unrelated person during the tax- 13 able year, or 14 ‘‘(bb) in the case of a qualified 15 facility which is equipped with a me- 16 tering device which is owned and op- 17 erated by an unrelated person, sold, 18 consumed, or stored by the taxpayer 19 during the taxable year, plus 20 ‘‘(B) the qualified carbon capture and se- 21 questration amount determined under sub- 22 section (c). 23 ‘‘(2) APPLICABLE CREDIT RATE.— 24 ‘‘(A) IN GENERAL.— 25 VerDate Sep 11 2014 00:42 May 10, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1288.IS S1288 pamtmann on DSKBFK8HB2PROD with BILLS 4 •S 1288 IS ‘‘(i) MAXIMUM CREDIT RATE.—Except 1 as provided in clause (ii), the applicable 2 credit rate is 1.5 cents. 3 ‘‘(ii) REDUCTION OF CREDIT BASED 4 ON GREENHOUSE GAS EMISSION RATE.— 5 The applicable credit rate shall be reduced 6 (but not below zero) by an amount which 7 bears the same ratio to the amount in ef- 8 fect under clause (i) as the greenhouse gas 9 emissions rate for the qualified facility 10 bears to 300 grams of CO2e per KWh. 11 ‘‘(B) ROUNDING.—If any amount deter- 12 mined under subparagraph (A)(ii) is not a mul- 13 tiple of 0.1 cent, such amount shall be rounded 14 to the nearest multiple of 0.1 cent. 15 ‘‘(b) GREENHOUSE GAS EMISSIONS RATE.— 16 ‘‘(1) IN GENERAL.—For purposes of this sec- 17 tion, the term ‘greenhouse gas emissions rate’ means 18 the amount of greenhouse gases emitted into the at- 19 mosphere by a qualified facility in the production of 20 electricity, expressed as grams of CO2e per KWh. 21 ‘‘(2) NON-FOSSIL FUEL COMBUSTION AND GAS- 22 IFICATION.—In the case of a qualified facility which 23 produces electricity through combustion or gasifi- 24 cation of a non-fossil fuel, the greenhouse gas emis- 25 VerDate Sep 11 2014 00:42 May 10, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1288.IS S1288 pamtmann on DSKBFK8HB2PROD with BILLS 5 •S 1288 IS sions rate for such facility shall be equal to the net 1 rate of greenhouse gases emitted into the atmos- 2 phere by such facility (taking into account the 3 amount of lifecycle greenhouse gas emissions, as de- 4 scribed in section 211(o)(1)(H) of the Clean Air Act 5 (42 U.S.C. 7545(o)(1)(H))) in the production of 6 electricity, expressed as grams of CO2e per KWh. 7 ‘‘(3) ESTABLISHMENT OF SAFE HARBOR FOR 8 QUALIFIED FACILITIES.— 9 ‘‘(A) IN GENERAL.—The Secretary, in con- 10 sultation with the Administrator of the Envi- 11 ronmental Protection Agency, shall establish 12 safe-harbor greenhouse gas emissions rates for 13 types or categories of qualified facilities, which 14 a taxpayer may elect to use for purposes of this 15 section. 16 ‘‘(B) ROUNDING.—In establishing the safe- 17 harbor greenhouse gas emissions rates for 18 qualified facilities, the Secretary may round 19 such rates to the nearest multiple of 30 grams 20 of CO2e per KWh (or, in the case of a green- 21 house gas emissions rate which is less than 15 22 grams of CO2e per KWh, by rounding such rate 23 to zero). 24 VerDate Sep 11 2014 00:42 May 10, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1288.IS S1288 pamtmann on DSKBFK8HB2PROD with BILLS 6 •S 1288 IS ‘‘(C) PUBLISHING SAFE HARBOR EMIS- 1 SIONS RATES.—The Secretary, in consultation 2 with the Administrator of the Environmental 3 Protection Agency, shall publish a table that 4 sets forth the safe-harbor greenhouse gas emis- 5 sions rates for similar types or categories of 6 qualified facilities. 7 ‘‘(4) CARBON CAPTURE AND SEQUESTRATION 8 EQUIPMENT.—For purposes of this subsection, the 9 amount of greenhouse gases emitted into the atmos- 10 phere by a qualified facility in the production of 11 electricity shall not include any qualified carbon di- 12 oxide (as defined in section 48D(c)(3)(A)) that is 13 captured by the taxpayer and— 14 ‘‘(A) pursuant to any regulations estab- 15 lished under paragraph (2) of section 45Q(f), 16 disposed of by the taxpayer in secure geological 17 storage, or 18 ‘‘(B) utilized by the taxpayer in a manner 19 described in paragraph (5) of such section. 20 ‘‘(c) QUALIFIED CARBON CAPTURE AND SEQUESTRA- 21 TION AMOUNT.— 22 ‘‘(1) IN GENERAL.—For purposes of subsection 23 (a)(1)(B), the qualified carbon capture and seques- 24 VerDate Sep 11 2014 00:42 May 10, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1288.IS S1288 pamtmann on DSKBFK8HB2PROD with BILLS 7 •S 1288 IS tration amount for any taxable year shall be an 1 amount equal to the product of— 2 ‘‘(A) the applicable credit rate (as deter- 3 mined under subsection (a)(2), determined 4 without regard to subparagraph (A)(ii) thereof), 5 multiplied by 6 ‘‘(B) an amount equal to the product of— 7 ‘‘(i) the kilowatt hours of electricity 8 produced and sold, consumed, or stored (as 9 determined under clause (ii) of subsection 10 (a)(1)(A)) for such taxable year by any fa- 11 cility placed in service before January 1, 12 2021, multiplied by 13 ‘‘(ii) an amount equal to the quotient 14 of— 15 ‘‘(I) the metric tons of qualified 16 carbon dioxide captured by the tax- 17 payer during such taxable year using 18 qualified carbon capture and seques- 19 tration equipment installed at such fa- 20 cility and— 21 ‘‘(aa) pursuant to any regu- 22 lations established under para- 23 graph (2) of section 45Q(f), dis- 24 VerDate Sep 11 2014 00:42 May 10, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1288.IS S1288 pamtmann on DSKBFK8HB2PROD with BILLS 8 •S 1288 IS posed of by the taxpayer in se- 1 cure geological storage, or 2 ‘‘(bb) utilized by the tax- 3 payer in a manner described in 4 paragraph (5) of such section, di- 5 vided by 6 ‘‘(II) an amount equal to the 7 sum of— 8 ‘‘(aa) the amount deter- 9 mined under subclause (I), plus 10 ‘‘(bb) the metric tons of car- 11 bon dioxide emitted into the at- 12 mosphere by such facility during 13 such taxable year. 14 ‘‘(2) DEFINITIONS.—In this subsection: 15 ‘‘(A) QUALIFIED CARBON CAPTURE AND 16 SEQUESTRATION EQUIPMENT.—The term 17 ‘qualified carbon capture and sequestration 18 equipment’ means property described under 19 paragraph (2) of section 48D(c) (without re- 20 gard to subparagraph (F) of such paragraph) 21 with respect to which no credit has been al- 22 lowed under section 45Q. 23 ‘‘(B) QUALIFIED CARBON DIOXIDE.—The 24 term ‘qualified carbon dioxide’ has the same 25 VerDate Sep 11 2014 00:42 May 10, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1288.IS S1288 pamtmann on DSKBFK8HB2PROD with BILLS 9 •S 1288 IS meaning given such term under paragraph (3) 1 of section 48D(c). 2 ‘‘(d) INFLATION ADJUSTMENT.— 3 ‘‘(1) IN GENERAL.—In the case of a calendar 4 year beginning after 2020, the 1.5 cent amount in 5 clause (i) of subsection (a)(2)(A) shall be adjusted 6 by multiplying such amount by the inflation adjust- 7 ment factor for the calendar year in which the sale 8 or use of the electricity occurs. If any amount as in- 9 creased under the preceding sentence is not a mul- 10 tiple of 0.1 cent, such amount shall be rounded to 11 the nearest multiple of 0.1 cent. 12 ‘‘(2) ANNUAL COMPUTATION.—The Secretary 13 shall, not later than April 1 of each calendar year, 14 determine and publish in the Federal Register the 15 inflation adjustment factor for such calendar year in 16 accordance with this subsection. 17 ‘‘(3) INFLATION ADJUSTMENT FACTOR.—The 18 term ‘inflation adjustment factor’ means, with re- 19 spect to a calendar year, a fraction the numerator 20 of which is the GDP implicit price deflator for the 21 preceding calendar year and the denominator of 22 which is the GDP implicit price deflator for the cal- 23 endar year 1992. The term ‘GDP implicit price 24 deflator’ means the most recent revision of the im- 25 VerDate Sep 11 2014 00:42 May 10, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1288.IS S1288 pamtmann on DSKBFK8HB2PROD with BILLS 10 •S 1288 IS plicit price deflator for the gross domestic product 1 as computed and published by the Department of 2 Commerce before March 15 of the calendar year. 3 ‘‘(e) CREDIT PHASE-OUT.— 4 ‘‘(1) IN GENERAL.—If the Secretary, in con- 5 sultation with the Secretary of Energy and the Ad- 6 ministrator of the Environmental Protection Agency, 7 determines that the annual greenhouse gas emis- 8 sions from electrical production in the United States 9 are equal to or less than 50 percent of the annual 10 greenhouse gas emissions from electrical production 11 in the United States for calendar year 2019, the 12 amount of the clean energy production credit under 13 subsection (a) for any qualified facility placed in 14 service during a calendar year described in para- 15 graph (2) shall be equal to the product of— 16 ‘‘(A) the amount of the credit determined 17 under subsection (a) without regard to this sub- 18 section, multiplied by 19 ‘‘(B) the phase-out percentage under para- 20 graph (2). 21 ‘‘(2) PHASE-OUT PERCENTAGE.—The phase-out 22 percentage under this paragraph is equal to— 23 ‘‘(A) for a facility placed in service during 24 the first calendar year following the calendar 25 VerDate Sep 11 2014 00:42 May 10, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S1288.IS S1288 pamtmann on DSKBFK8HB2PROD with BILLS 11 •S 1288 IS year in which the determination described in 1 paragraph (1) is made, 75 percent, 2 ‘‘(B) for a facility placed in service during 3 the second calendar year following such deter- 4 mination year, 50 percent, 5 ‘‘(C) for a facility placed in service during 6 the third calendar year following such deter- 7 mination year, 25 percent, and 8 ‘‘(D) for a facility placed in service during 9 any calendar year subsequent to the year de- 10 scribed in subparagraph (C), 0 percent. 11 ‘‘(f) DEFINITIONS.—In this section: 12 ‘‘(1) CO2e PER KWh.—The term ‘CO2e per 13 KWh’ means, with respect to any greenhouse gas, 14 the equivalent carbon dioxide (as determined based 15 on relative global warming potential) per kilowatt 16 hour of electricity produced. 17 ‘‘(2) GREENHOUSE GAS.—The term ‘greenhouse 18 gas’ has the same meaning given such term under 19 section 211(o)(1)(G) of the Clean Air Act (42 20 U.S.C. 7545(o)(1)(G)), as in effect on the date of 21 the enactment of this section. 22 ‘‘(3) QUALIFIED FACILITY.— 23 VerDate Sep 11 2014 00:42 May 10, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S1288.IS S1288 pamtmann on DSKBFK8HB2PROD with BILLS 12 •S 1288 IS ‘‘(A) IN GENERAL.—Subject to subpara- 1 graphs (B) and (C), the term ‘qualified facility’ 2 means a facility which is— 3 ‘‘(i) used for the generation of elec- 4 tricity, and 5 ‘‘(ii) originally placed in service after 6 December 31, 2020. 7 ‘‘(B) 10-YEAR PRODUCTION CREDIT.—For 8 purposes of this section, a facility shall only be 9 treated as a qualified facility during the 10-year 10 period beginning on the date the facility was 11 originally placed in service. 12 ‘‘(C) EXPANSION OF FACILITY; INCRE- 13 MENTAL PRODUCTION.—A qualified facility 14 shall include either of the following in connec- 15 tion with a facility described in subparagraph 16 (A)(i) that was placed in service before January 17 1, 2021, but only to the extent of the increased 18 amount of electricity produced at the facility by 19 reason of the following: 20 ‘‘(i) A new unit placed in service after 21 December 31, 2020. 22 ‘‘(ii) Any efficiency improvements or 23 additions of capacity pl [Text truncated for display. 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