45Q Carbon Capture, Utilization, and Storage Tax Credit Amendments Act of 2020

II 116TH CONGRESS 2D SESSION S. 4966 To amend the Internal Revenue Code of 1986 to provide for a 5-year extension of the carbon oxide sequestration credit, and for other purposes. IN THE SENATE OF THE UNITED STATES DECEMBER 7, 2020 Mrs. CAPITO (for herself, Mr. WHITEHOUSE, Mr. BARRASSO, Mr. CRAMER, Mr. HOEVEN, Ms. SMITH, and Mr. MANCHIN) 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 for a 5-year extension of the carbon oxide sequestration credit, and for other purposes. 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. 3 This Act may be cited as the ‘‘45Q Carbon Capture, 4 Utilization, and Storage Tax Credit Amendments Act of 5 2020’’. 6 VerDate Sep 11 2014 03:07 Dec 12, 2020 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S4966.IS S4966 pbinns on DSKJLVW7X2PROD with BILLS 2 •S 4966 IS SEC. 2. EXTENSION OF CREDIT FOR CARBON OXIDE SE- 1 QUESTRATION. 2 Section 45Q(d)(1) of the Internal Revenue Code of 3 1986 is amended by striking ‘‘January 1, 2024’’ and in- 4 serting ‘‘January 1, 2029’’. 5 SEC. 3. ELECTIVE PAYMENT FOR CARBON OXIDE SEQUES- 6 TRATION AND QUALIFYING ADVANCED COAL 7 PROJECTS. 8 (a) IN GENERAL.—Subchapter B of chapter 65 of the 9 Internal Revenue Code of 1986 is amended by adding at 10 the end the following new section: 11 ‘‘SEC. 6431. ELECTIVE PAYMENT FOR CARBON OXIDE SE- 12 QUESTRATION AND QUALIFYING ADVANCED 13 COAL PROJECTS. 14 ‘‘(a) ENERGY PROPERTY.—In the case of a taxpayer 15 making an election (at such time and in such manner as 16 the Secretary may provide) under this section with respect 17 to any portion of— 18 ‘‘(1) a carbon oxide sequestration credit which 19 would (without regard to this section) be determined 20 under section 45Q with respect to such taxpayer, or 21 ‘‘(2) a qualifying advanced coal project credit 22 which would (without regard to this section) be de- 23 termined under section 48A with respect to such 24 taxpayer, 25 VerDate Sep 11 2014 03:07 Dec 12, 2020 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S4966.IS S4966 pbinns on DSKJLVW7X2PROD with BILLS 3 •S 4966 IS such taxpayer shall be treated as making a payment 1 against the tax imposed by subtitle A for the taxable year 2 equal to the amount of such portion. 3 ‘‘(b) TIMING.—The payment described in subsection 4 (a) shall be treated as made on the later of the due date 5 of the return of tax for such taxable year or the date on 6 which such return is filed. 7 ‘‘(c) EXCLUSION FROM GROSS INCOME.—Gross in- 8 come of the taxpayer shall be determined without regard 9 to this section. 10 ‘‘(d) DENIAL OF DOUBLE BENEFIT.—Solely for pur- 11 poses of section 38, in the case of a taxpayer making an 12 election under this section, the carbon oxide sequestration 13 credit determined under section 45Q or the qualifying ad- 14 vanced coal project credit determined under section 48A 15 shall be reduced by the amount of the portion of such 16 credit with respect to which the taxpayer makes such elec- 17 tion. 18 ‘‘(e) SPECIAL RULES.—In the case of a taxpayer 19 making an election under this section with respect to the 20 qualifying advanced coal project credit determined under 21 section 48A, the credit subject to such an election shall 22 be determined notwithstanding— 23 ‘‘(1) section 50(b)(3), and 24 VerDate Sep 11 2014 03:07 Dec 12, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S4966.IS S4966 pbinns on DSKJLVW7X2PROD with BILLS 4 •S 4966 IS ‘‘(2) in the case of any entity described in sec- 1 tion 50(b)(4)(A)(i), section 50(b)(4).’’. 2 (b) SPECIAL RULE FOR PROCEEDS OF TRANSFERS 3 FOR MUTUAL OR COOPERATIVE ELECTRIC COMPANIES.— 4 Section 501(c)(12)(I) of the Internal Revenue Code of 5 1986 is amended by inserting ‘‘or 6431(a)’’ after ‘‘section 6 45J(e)(1)’’. 7 (c) CLERICAL AMENDMENT.—The table of sections 8 for subchapter B of chapter 65 of such Code is amended 9 by adding at the end the following new item: 10 ‘‘Sec. 6431. Elective payment for carbon oxide sequestration and qualifying ad- vanced coal projects.’’. (d) EFFECTIVE DATE.—The amendments made by 11 this section shall apply to property originally placed in 12 service after the date of the enactment of this Act. 13 SEC. 4. ALLOWANCE OF CERTAIN CARBON SEQUESTRATION 14 CREDITS AGAINST THE BASE EROSION MIN- 15 IMUM TAX. 16 (a) IN GENERAL.—Section 59A(b)(1)(B)(ii) of the 17 Internal Revenue Code of 1986 is amended by striking 18 ‘‘plus’’ and the end of subclause (I), by redesignating sub- 19 clause (II) as subclause (IV), and by inserting after sub- 20 clause (I) the following new subclauses: 21 ‘‘(II) the credit allowed under 22 section 38 for the taxable year which 23 is properly allocable to the carbon di- 24 VerDate Sep 11 2014 03:07 Dec 12, 2020 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S4966.IS S4966 pbinns on DSKJLVW7X2PROD with BILLS 5 •S 4966 IS oxide sequestration credit determined 1 under section 45Q(a), 2 ‘‘(III) the credit allowed under 3 section 38 for the taxable year which 4 is properly allocable to the investment 5 credit determined under section 46, 6 but only to the extent properly allo- 7 cable to the qualifying advanced coal 8 project credit determined under sec- 9 tion 48A, plus’’. 10 (b) APPLICATION TO TAXABLE YEARS BEGINNING 11 AFTER 2025.—Subparagraph (B) of section 59A(b)(2) of 12 the Internal Revenue Code of 1986 is amended to read 13 as follows: 14 ‘‘(B) by applying subparagraph (B)(ii) 15 thereof without regard to subclauses (I) and 16 (IV).’’. 17 (c) EFFECTIVE DATE.—The amendments made by 18 this section shall apply to base erosion payments (as de- 19 fined in section 59A(d) of the Internal Revenue Code of 20 1986) paid or incurred in taxable years beginning after 21 December 31, 2017. 22 Æ VerDate Sep 11 2014 03:07 Dec 12, 2020 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\S4966.IS S4966 pbinns on DSKJLVW7X2PROD with BILLS