ERN22335 9K1

S.L.C.

AMENDMENT NO.llll

Calendar No.lll

Purpose: In the nature of a substitute.
IN THE SENATE OF THE UNITED STATES—117th Cong., 1st Sess.

H. R. 5376
To provide for reconciliation pursuant to title II of S. Con.
Res. 14.
Referred to the Committee on llllllllll andordered to be printed
Ordered to lie on the table and to be printed
AMENDMENT IN THE NATURE OF A SUBSTITUTE intended
to be proposed by lllllll
Viz:
1Strike all after the enacting clause and insert the fol-

2 lowing:
3
4

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘Inflation Reduction

5 Act of 2022’’.
6
7
8
9
10

TITLE I—COMMITTEE ON
FINANCE
Subtitle A—Deficit Reduction
SEC. 10001. AMENDMENT OF 1986 CODE.

Except as otherwise expressly provided, whenever in

11 this subtitle an amendment or repeal is expressed in terms
12 of an amendment to, or repeal of, a section or other provi-

ERN22335 9K1

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2
1 sion, the reference shall be considered to be made to a
2 section or other provision of the Internal Revenue Code3 of 1986.
4
5
6
7

PART 1—CORPORATE TAX REFORM
SEC. 10101. CORPORATE ALTERNATIVE MINIMUM TAX.

(a) IMPOSITION OF TAX.—(1) IN GENERAL.—Paragraph (2) of section

855(b) is amended to read as follows:9‘‘(2) CORPORATIONS.—

10‘‘(A) APPLICABLE CORPORATIONS.—In the11case of an applicable corporation, the tentative

12

minimum tax for the taxable year shall be the13

excess of—

14‘‘(i) 15 percent of the adjusted finan-

15

cial statement income for the taxable year16

(as determined under section 56A), over‘‘(ii) the corporate AMT foreign tax

1718

credit for the taxable year.

19‘‘(B) OTHER CORPORATIONS.—In the case20of any corporation which is not an applicable21

corporation, the tentative minimum tax for the

22

taxable year shall be zero.’’.

23(2) APPLICABLE CORPORATION.—Section 59 is24amended by adding at the end the following new

25

subsection:

ERN22335 9K1

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31‘‘(k) APPLICABLE CORPORATION.—For purposes of

2 this part—3‘‘(1) APPLICABLE CORPORATION DEFINED.—

4‘‘(A) IN GENERAL.—The term ‘applicable5

corporation’ means, with respect to any taxable

6

year, any corporation (other than an S corpora-

7tion, a regulated investment company, or a real8

estate investment trust) which meets the aver-9

age annual adjusted financial statement income

10

test of subparagraph (B) for one or more tax-

11

able years which—‘‘(i) are prior to such taxable year,

12
13

and

14

‘‘(ii) end after December 31, 2021.

15‘‘(B) AVERAGE ANNUAL ADJUSTED FINAN-

16

CIAL STATEMENT INCOME TEST.—For purposes

17of this subsection—

18‘‘(i) a corporation meets the average

19annual adjusted financial statement income

20

test for a taxable year if the average an-21nual adjusted financial statement income

22

of such corporation for the 3-taxable-year

23

period ending with such taxable year ex-24

ceeds $1,000,000,000, andERN22335 9K1

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4
1‘‘(ii) in the case of a corporation de-2

scribed in paragraph (2), such corporation

3

meets the average annual adjusted finan-

4

cial statement income test for a taxable

5

year if—6‘‘(I) the corporation meets the re-7quirements of clause (i) for such tax-

8

able year (determined after the appli-

9

cation of paragraph (2)), and10‘‘(II) the average annual adjusted

11

financial statement income of such

12

corporation (determined without re-13

gard to the application of paragraph14(2)) for the 3-taxable-year-period end-

15

ing

16

$100,000,000 or more.

with

such

taxable

year

is

17

‘‘(C) EXCEPTION.—Notwithstanding sub-18

paragraph (A), the term ‘applicable corporation’19

shall not include any corporation which other-20

wise meets the requirements of subparagraph

21(A) if—22‘‘(i) such corporation—‘‘(I) has a change in ownership,

23
24

or

ERN22335 9K1

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5
1‘‘(II) has a specified number (to2

be determined by the Secretary and3which shall, as appropriate, take into4

account the facts and circumstances

5of the taxpayer) of consecutive taxable

6

years, including the most recent tax-

7

able year, in which the corporation

8

does not meet the average annual ad-

9justed financial statement income test10of subparagraph (B), and11‘‘(ii) the Secretary determines that it

12

would not be appropriate to continue to13

treat such corporation as an applicable cor-

14

poration.

15

The preceding sentence shall not apply to any

16

corporation if, after the Secretary makes the17

determination described in clause (ii), such cor-18

poration meets the average annual adjusted fi-

19nancial statement income test of subparagraph

20(B) for any taxable year beginning after the

21

first taxable year for which such determination

22

applies.

23‘‘(D) SPECIAL RULES FOR DETERMINING

24

APPLICABLE CORPORATION STATUS.—Solely for25

purposes of determining whether a corporation

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6
1

is an applicable corporation under paragraph2(1), all adjusted financial statement income of3

persons treated as a single employer with such4

corporation under subsection (a) or (b) of sec-

5

tion 52 shall be treated as adjusted financial

6

statement of income of such corporation, and7

adjusted financial statement income of such8

corporation shall be determined without regard

9

to paragraphs (2)(D)(i) and (11) of section

10

56A(c).

11‘‘(E) OTHER SPECIAL RULES.—

12‘‘(i) CORPORATIONSIN

EXISTENCE

13

FOR LESS THAN 3 YEARS.—If the corpora-

14

tion was in existence for less than 3-tax-

15

able years, subparagraph (B) shall be ap-

16

plied on the basis of the period during

17

which such corporation was in existence.

18‘‘(ii) SHORTTAXABLE YEARS.—Ad-

19

justed financial statement income for any

20

taxable year of less than 12 months shall21

be annualized by multiplying the adjusted

22

financial statement income for the short23

period by 12 and dividing the result by the24

number of months in the short period.

ERN22335 9K1

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7‘‘(iii)1

TREATMENTOF

PREDE-

2

CESSORS.—Any reference in this subpara-

3graph to a corporation shall include a ref-4

erence to any predecessor of such corpora-

5

tion.

6
7

‘‘(2) SPECIAL RULE FOR FOREIGN-PARENTEDCORPORATIONS.—

8‘‘(A) IN GENERAL.—Solely for purposes of

9determining whether a corporation meets the10average annual adjusted financial statement in-

11

come test under paragraph (1)(B)(ii)(I), in the12case of any corporation which for any taxable

13

year is a member of an international financial

14

reporting group the common parent of which is15

a foreign corporation, such corporation shall in-16

clude in the adjusted financial statement in-

17

come of such corporation for such taxable year18

the adjusted financial statement income of all

19

foreign members of such group. Solely for pur-20

poses of this subparagraph, adjusted financial

21

statement income shall be determined without

22

regard to paragraphs (2)(D)(i), (3), (4), and23(11) of section 56A(c).

2425‘‘(B) INTERNATIONAL FINANCIAL REPORTING GROUP.—For

purposes of subparagraphERN22335 9K1

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81(A), the term ‘international financial reporting2

group’ shall have the meaning given such term3by section 163(n)(3).

4‘‘(C) COMMON PARENT.—For purposes of5

subparagraph (A), the term ‘common parent’

6

has the meaning given such term under section

7

163(n)(5).

8‘‘(3) REGULATIONSOR OTHER GUIDANCE.—

9The Secretary shall provide regulations or other10

guidance for the purposes of carrying out this sub-11

section, including regulations or other guidance—

12‘‘(A) providing a simplified method for de-

13

termining whether a corporation meets the re-14

quirements of paragraph (1), and

15‘‘’(B) addressing the application of this16

subsection to a corporation that experiences a17change in ownership.’’.

18(3) REDUCTION FOR BASE EROSION AND ANTI-

19

ABUSE TAX.—Section 55(a)(2) is amended by insert-20

ing ‘‘plus, in the case of an applicable corporation,21

the tax imposed by section 59A’’ before the period

22

at the end.

23(4) CONFORMING AMENDMENTS.—ERN22335 9K1

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91(A) Section 55(a) is amended by striking

2‘‘In the case of a taxpayer other than a cor-3

poration, there’’ and inserting ‘‘There’’.

4(B)(i) Section 55(b)(1) is amended—5(I) by striking so much as precedes

6

subparagraph (A) and inserting the fol-7

lowing:89‘‘(1) NONCORPORATE TAXPAYERS.—In the caseof a taxpayer other than a corporation—’’, and(II) by adding at the end the fol-

1011

lowing new subparagraph:12‘‘(D) ALTERNATIVE MINIMUM TAXABLE IN-

13

COME.—The term ‘alternative minimum taxable

14

income’ means the taxable income of the tax-

15

payer for the taxable year—

16‘‘(i) determined with the adjustments

17

provided in section 56 and section 58, and18‘‘(ii) increased by the amount of the19

items of tax preference described in section

20

57.

21

If a taxpayer is subject to the regular tax, such

22

taxpayer shall be subject to the tax imposed by23

this section (and, if the regular tax is deter-

24

mined by reference to an amount other than25

taxable income, such amount shall be treated as

ERN22335 9K1

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10
1

the taxable income of such taxpayer for pur-2

poses of the preceding sentence).’’.
(ii) Section 860E(a)(4) is amended by

3
4

striking‘‘55(b)(2)’’5‘‘55(b)(1)(D)’’.

andinserting(iii) Section 897(a)(2)(A)(i) is amended by

6
7

striking‘‘55(b)(2)’’8‘‘55(b)(1)(D)’’.

andinserting

9(C) Section 11(d) is amended by striking

10‘‘the tax imposed by subsection (a)’’ and insert-11

ing ‘‘the taxes imposed by subsection (a) and12

section 55’’.
(D) Section 12 is amended by adding at

13
14

the end the following new paragraph:15‘‘(5) For alternative minimum tax, see section

16
17
18
19
20
21

55.’’.
(E) Section 882(a)(1) is amended by inserting ‘‘, 55,’’ after ‘‘section 11’’.
(F) Section 6425(c)(1)(A) is amended toread as follows:‘‘(A) the sum of—22‘‘(i) the tax imposed by section 11 or

23

subchapter L of chapter 1, whichever is24

applicable, plus

ERN22335 9K1

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11‘‘(ii) the tax imposed by section 55,

1
2
3

plus
‘‘(iii) the tax imposed by section 59A,

4

over’’.

5(G) Section 6655(e)(2) is amended by in-

6serting ‘‘, adjusted financial statement income

7(as defined in section 56A),’’ before ‘‘and modi-

8

fied taxable income’’ each place it appears in

9

subparagraphs (A)(i) and (B)(i).

10(H) Section 6655(g)(1)(A) is amended by

11

redesignating clauses (ii) and (iii) as clauses

12(iii) and (iv), respectively, and by inserting

13

after clause (i) the following new clause:

14
15‘‘(ii) the tax imposed by section 55,’’.
(b) ADJUSTED FINANCIAL STATEMENT INCOME.—

16(1) IN GENERAL.—Part VI of subchapter A of

17

chapter 1 is amended by inserting after section 56

18

the following new section:

19
20‘‘SEC. 56A. ADJUSTED FINANCIAL STATEMENT INCOME.

‘‘(a) IN GENERAL.—For purposes of this part, the21 term ‘adjusted financial statement income’ means, with re22 spect to any corporation for any taxable year, the net in23 come or loss of the taxpayer set forth on the taxpayer’s
24 applicable financial statement for such taxable year, ad25 justed as provided in this section.

ERN22335 9K1

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121‘‘(b) APPLICABLE FINANCIAL STATEMENT.—For

2 purposes of this section, the term ‘applicable financial
3 statement’ means, with respect to any taxable year, an ap4 plicable financial statement (as defined in section
5 451(b)(3) or as specified by the Secretary in regulations
6 or other guidance) which covers such taxable year.
78‘‘(c) GENERAL ADJUSTMENTS.—‘‘(1) STATEMENTS COVERING DIFFERENT TAXYEARS.—Appropriate

adjustments shall be

9

ABLE

10

made in adjusted financial statement income in any

11case in which an applicable financial statement cov-

12

ers a period other than the taxable year.

13
14
15

‘‘(2) SPECIAL

RULES

FOR

RELATEDENTI-

TIES.—‘‘(A) CONSOLIDATEDFINANCIALSTATE-

16

MENTS.—If the financial results of a taxpayer

17

are reported on the applicable financial state-

18

ment for a group of entities, rules similar to the19rules of section 451(b)(5) shall apply.

20‘‘(B) CONSOLIDATEDRETURNS.—Except

21

as provided in regulations prescribed by the22

Secretary, if the taxpayer is part of an affili-

23

ated group of corporations filing a consolidated

24

return for any taxable year, adjusted financial

25

statement income for such group for such tax-

ERN22335 9K1

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13
1

able year shall take into account items on the2group’s applicable financial statement which are3

properly allocable to members of such group.
‘‘(C) TREATMENT

4OF

DIVIDENDS

AND

5OTHER AMOUNTS.—In the case of any corpora-

6tion which is not included on a consolidated re-7

turn with the taxpayer, adjusted financial state-

8

ment income of the taxpayer with respect to

9such other corporation shall be determined by10

only taking into account the dividends received

11

from such other corporation (reduced to the ex-

12tent provided by the Secretary in regulations or

13

other guidance) and other amounts which are

14

includible in gross income or deductible as a

15

loss under this chapter (other than amounts re-16

quired to be included under sections 951 and

17

951A or such other amounts as provided by the18

Secretary) with respect to such other corpora-

19

tion.

20
21

‘‘(D) TREATMENT OF PARTNERSHIPS.—‘‘(i) IN

GENERAL.—Except

as pro-22

vided by the Secretary, if the taxpayer is23

a partner in a partnership, adjusted finan-

24

cial statement income of the taxpayer shall25

be adjusted to only take into account theERN22335 9K1

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14
1

taxpayer’s distributive share of adjusted fi-

2nancial statement income of such partner-

3

ship.

4

‘‘(ii) ADJUSTEDFINANCIALSTATE-PARTNERSHIPS.—For

5

MENT

6

the purposes of this part, the adjusted fi-

7nancial statement income of a partnership

8

shall be the partnership’s net income or

9loss set forth on such partnership’s appli-

10

cable financial statement (adjusted under11

rules similar to the rules of this section).

12‘‘(3) ADJUSTMENTS TO TAKE INTO ACCOUNT13

INCOMEOF

CERTAIN ITEMS OF FOREIGN INCOME.—

14‘‘(A) IN GENERAL.—If, for any taxable

15

year, a taxpayer is a United States shareholder

16

of one or more controlled foreign corporations,17

the adjusted financial statement income of such18

taxpayer shall be adjusted to take into account19

such taxpayer’s pro rata share (determined20

under rules similar to the rules under section

21

951(a)(2)) of items taken into account in com-22

puting the net income or loss set forth on the23

applicable financial statement (as adjusted

24

under rules similar to those that apply in deter-25

mining adjusted financial statement income) of

ERN22335 9K1

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15
1

each such controlled foreign corporation with2

respect to which such taxpayer is a United

3

States shareholder.

4‘‘(B) NEGATIVEADJUSTMENTS.—Inany

5case in which the adjustment determined under6

subparagraph (A) would result in a negative ad-

7justment for such taxable year—

8‘‘(i) no adjustment shall be made9

under this paragraph for such taxable

10

year, and11‘‘(ii) the amount of the adjustment

12

determined under this paragraph for the13

succeeding taxable year (determined with-14

out regard to this paragraph) shall be re-15

duced by an amount equal to the negative

16

adjustment for such taxable year.

17‘‘(4) EFFECTIVELY CONNECTED INCOME.—In18

the case of a foreign corporation, to determine ad-19justed financial statement income, the principles of20

section 882 shall apply.

21‘‘(5) ADJUSTMENTS FOR CERTAIN TAXES.—Ad-22

justed financial statement income shall be appro-

23

priately adjusted to disregard any Federal income

24

taxes, or income, war profits, or excess profits taxes

25(within the meaning of section 901) with respect toERN22335 9K1

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161

a foreign country or possession of the United States,2

which are taken into account on the taxpayer’s ap-

3

plicable financial statement. To the extent provided

4by the Secretary, the preceding sentence shall not

5

apply to income, war profits, or excess profits taxes

6(within the meaning of section 901) that are im-7

posed by a foreign country or possession of the

8

United States and taken into account on the tax-

9

payer’s applicable financial statement if the taxpayer

10

does not choose to have the benefits of subpart A of

11part III of subchapter N for the taxable year. The

12

Secretary shall prescribe such regulations or other13

guidance as may be necessary and appropriate to

14

provide for the proper treatment of current and de-15

ferred taxes for purposes of this paragraph, includ-16

ing the time at which such taxes are properly taken

17

into account.

18‘‘(6) ADJUSTMENTWITH

RESPECT

TO

DIS-

19

REGARDED ENTITIES.—Adjusted financial statement

20

income shall be adjusted to take into account any

21

adjusted financial statement income of a disregarded

22

entity owned by the taxpayer.

23‘‘(7) SPECIAL RULE FOR COOPERATIVES.—In24

the case of a cooperative to which section 1381 ap-

25

plies, the adjusted financial statement income (deter-

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171

mined without regard to this paragraph) shall be re-2

duced by the amounts referred to in section 1382(b)3(relating to patronage dividends and per-unit retain

4

allocations) to the extent such amounts were not5otherwise taken into account in determining ad-

6justed financial statement income.

7‘‘(8) RULESFOR ALASKA NATIVE CORPORA-

8TIONS.—Adjusted

financial statement income shall9

be appropriately adjusted to allow—

10‘‘(A) cost recovery and depletion attrib-

11

utable to property the basis of which is deter-

12

mined under section 21(c) of the Alaska Native

13

Claims Settlement Act (43 U.S.C. 1620(c)),

14

and

15

‘‘(B) deductions for amounts payable made16

pursuant to section 7(i) or section 7(j) of such17

Act (43 U.S.C. 1606(i) and 1606(j)) only at

18such time as the deductions are allowed for tax

19

purposes.

20‘‘(9) AMOUNTS ATTRIBUTABLE TO ELECTIONS

21

FOR DIRECT PAYMENT OF CERTAIN CREDITS.—Ad-22

justed financial statement income shall be appro-

23

priately adjusted to disregard any amount treated as24

a payment against the tax imposed by subtitle A

25

pursuant to an election under section 6417, to theERN22335 9K1

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18
1

extent such amount was not otherwise taken into ac-

2

count under paragraph (5).

3‘‘(10) CONSISTENT TREATMENT OF MORTGAGE

4SERVICING INCOME OF TAXPAYER OTHER THAN A

5REGULATED INVESTMENT COMPANY.—

6‘‘(A) IN

GENERAL.—Adjusted

financial

7

statement income shall be adjusted so as not to8include any item of income in connection with9a mortgage servicing contract any earlier than10

when such income is included in gross income

11

under any other provision of this chapter.

12‘‘(B) RULESFORAMOUNTSNOTREP-

COMPENSATION.—

13

RESENTING

14

The Secretary shall provide regulations to pre-15

vent the avoidance of taxes imposed by this16

chapter with respect to amounts not rep-17

resenting reasonable compensation (as deter-

18

mined by the Secretary) with respect to a mort-

19

gage servicing contract.

20‘‘(11) ADJUSTMENT

21

FINED BENEFIT PENSIONS.—REASONABLE

WITH RESPECT TO DE-

22‘‘(A) IN GENERAL.—Except as otherwise

23

provided in rules prescribed by the Secretary in24

regulations or other guidance, adjusted finan-

25

cial statement income shall be—ERN22335 9K1

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191‘‘(i) adjusted to disregard any amount2

of income, cost, or expense that would oth-3

erwise be included on the applicable finan-

4

cial statement in connection with any cov-

5

ered benefit plan,

6‘‘(ii) increased by any amount of in-

7

come in connection with any such covered8

benefit plan that is included in the gross9

income of the corporation under any other10

provision of this chapter, and11‘‘(iii) reduced by deductions allowed

12

under any other provision of this chapter

13with respect to any such covered benefit

14

plan.

15

‘‘(B) COVERED BENEFIT PLAN.—For pur-16

poses of this paragraph, the term ‘covered ben-17

efit plan’ means—18‘‘(i) a defined benefit plan (other than19

a multiemployer plan described in section

20

414(f)) if the trust which is part of such21

plan is an employees’ trust described in

22

section 401(a) which is exempt from tax

23

under section 501(a),2425‘‘(ii) any qualified foreign plan (as defined in section 404A(e)), orERN22335 9K1

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20
1‘‘(iii) any other defined benefit plan2

which provides post-employment benefits

3other than pension benefits.

4‘‘(12) TAX-EXEMPT ENTITIES.—In the case of

5an organization subject to tax under section 511, ad-6justed financial statement income shall be appro-

7

priately adjusted to only take into account any ad-

8justed financial statement income—9‘‘(A) of an unrelated trade or business (as10defined in section 513) of such organization, or

11‘‘(B) derived from debt-financed property

12(as defined in section 514) to the extent that13

income from such property is treated as unre-

14

lated business taxable income.

15‘‘(13) SECRETARIAL

AUTHORITYTO

ADJUST16

ITEMS.—The17

other guidance to provide for such adjustments to18

adjusted financial statement income as the Secretary19

determines necessary to carry out the purposes of20

this section, including adjustments—

21
22

Secretary shall issue regulations or‘‘(A) to prevent the omission or duplicationof any item, and23‘‘(B) to carry out the principles of part II24

of subchapter C of this chapter (relating to cor-25

porate liquidations), part III of subchapter C of

ERN22335 9K1

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21
1

this chapter (relating to corporate organizations

2and reorganizations), and part II of subchapter

3

K of this chapter (relating to partnership con-4

tributions and distributions).

5‘‘(d) DEDUCTION FOR FINANCIAL STATEMENT NET

6 OPERATING LOSS.—
7‘‘(1) IN GENERAL.—Adjusted financial state-

8

ment income (determined after application of sub-9

section (c) and without regard to this subsection)

10

shall be reduced by an amount equal to the lesser

11

of—

12

‘‘(A) the aggregate amount of financial

13

statement net operating loss carryovers to the14

taxable year, or

15‘‘(B) 80 percent of adjusted financial

16

statement income computed without regard to17

the deduction allowable under this subsection.

18‘‘(2) FINANCIAL STATEMENT NET OPERATING

19

LOSS CARRYOVER.—A financial statement net oper-

20

ating loss for any taxable year shall be a financial

21

statement net operating loss carryover to each tax-

22

able year following the taxable year of the loss. The

23

portion of such loss which shall be carried to subse-

24

quent taxable years shall be the amount of such loss

ERN22335 9K1

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221

remaining (if any) after the application of paragraph2(1).
‘‘(3) FINANCIAL STATEMENT NET OPERATING

3
4

LOSS DEFINED.—For

purposes of this subsection,5

the term ‘financial statement net operating loss’

6

means the amount of the net loss (if any) set forth

7on the corporation’s applicable financial statement

8(determined after application of subsection (c) and9

without regard to this subsection) for taxable years

10

ending after December 31, 2019.

11‘‘(e) REGULATIONS AND OTHER GUIDANCE.—The12 Secretary shall provide for such regulations and other13 guidance as necessary to carry out the purposes of this
14 section, including regulations and other guidance relating
15 to the effect of the rules of this section on partnerships
16 with income taken into account by an applicable corpora17 tion.’’.
18(2) CLERICAL AMENDMENT.—The table of sec-

19

tions for part VI of subchapter A of chapter 1 is20

amended by inserting after the item relating to sec-

21

tion 56 the following new item:‘‘Sec. 56A. Adjusted financial statement income.’’.

22(c) CORPORATE AMT FOREIGN TAX CREDIT.—Sec-

23 tion 59, as amended by this section, is amended by adding
24 at the end the following new subsection:25‘‘(l) CORPORATE AMT FOREIGN TAX CREDIT.—ERN22335 9K1

S.L.C.

231‘‘(1) IN GENERAL.—For purposes of this part,2

if an applicable corporation chooses to have the ben-3

efits of subpart A of part III of subchapter N for4

any taxable year, the corporate AMT foreign tax

5credit for the taxable year of the applicable corpora-

6tion is an amount equal to sum of—7‘‘(A) the lesser of—8‘‘(i) the aggregate of the applicable9

corporation’s pro rata share (as deter-

10

mined under section 56A(c)(3)) of the11amount of income, war profits, and excess

12

profits taxes (within the meaning of sec-

13

tion 901) imposed by any foreign country

14

or possession of the United States which

15

are—

16

‘‘(I) taken into account on the17applicable financial statement of each18

controlled foreign corporation with re-19

spect to which the applicable corpora-

20

tion is a United States shareholder,

21

and

22

‘‘(II) paid or accrued (for Fed-23

eral income tax purposes) by each24such controlled foreign corporation, orERN22335 9K1

S.L.C.

24
1‘‘(ii) the product of the amount of the2

adjustment under section 56A(c)(3) and

3

the

4

55(b)(2)(A)(i), and5‘‘(B) in the case of an applicable corpora-

6tion that is a domestic corporation, the amount7

of income, war profits, and excess profits taxes

8(within the meaning of section 901) imposed by9any foreign country or possession of the United

10

States to the extent such taxes are—percentage

specifiedinsection11‘‘(i) taken into account on the applica-

12

ble corporation’s applicable financial state-

13ment, and14‘‘(ii) paid or accrued (for Federal in-

15

come tax purposes) by the applicable cor-16

poration.

17‘‘(2) CARRYOVER OF EXCESS TAX PAID.—For18

any taxable year for which an applicable corporation

19

chooses to have the benefits of subpart A of part III

20

of subchapter N, the excess of the amount described21

in paragraph (1)(A)(i) over the amount described in

22paragraph (1)(A)(ii) shall increase the amount de-23

scribed in paragraph (1)(A)(i) in any of the first 5

24

succeeding taxable years to the extent not taken into

25

account in a prior taxable year.

ERN22335 9K1

S.L.C.

25‘‘(3) REGULATIONS

1

OR OTHER GUIDANCE.—

2

The Secretary shall provide for such regulations or3other guidance as is necessary to carry out the pur-4

poses of this subsection.’’.

5(d) TREATMENT OF GENERAL BUSINESS CREDIT.—

6 Section 38(c)(6)(E) is amended to read as follows:‘‘(E) CORPORATIONS.—In the case of a7

corporation—89‘‘(i) the first sentence of paragraph

10(1) shall be applied by substituting ‘25

11

percent of the taxpayer’s net income tax as

12exceeds $25,000’ for ‘the greater of’ and13

all that follows,14‘‘(ii) paragraph (2)(A) shall be applied

15

without regard to clause (ii)(I) thereof,

16

and

17

‘‘(iii) paragraph (4)(A) shall be ap-

18

plied without regard to clause (ii)(I) there-

19of.’’.

2021(e) CREDIT FOR PRIOR YEAR MINIMUM TAX LIABILITY.—(1) IN GENERAL.—Section 53(e) is amended to22
23read as follows:

24

‘‘(e)

25

APPLICATIONTOAPPLICABLETIONS.—In the case of a corporation—

CORPORA-ERN22335 9K1

S.L.C.

26
1‘‘(1) subsection (b)(1) shall be applied by sub-2

stituting ‘the net minimum tax for all prior taxable

3

years beginning after 2022’ for ‘the adjusted net

4minimum tax imposed for all prior taxable years be-

5ginning after 1986’, and6‘‘(2) the amount determined under subsection

7(c)(1) shall be increased by the amount of tax im-

8

posed under section 59A for the taxable year.’’.

9
10

(2)

CONFORMINGAMENDMENTS.—Section

53(d) is amended—

11(A) in paragraph (2), by striking ‘‘, except

12that in the case’’ and all that follows through13‘‘treated as zero’’, and(B) by striking paragraph (3).

1415(f) EFFECTIVE DATE.—The amendments made by

16 this section shall apply to taxable years beginning after
17 December 31, 2022.
18

PART 2—CLOSING THE CARRIED INTEREST

19

LOOPHOLE

20

SEC. 10201. MODIFICATION OF RULES FOR PARTNERSHIP

21

INTERESTS HELD IN CONNECTION WITH THE

22

PERFORMANCE OF SERVICES.

23(a) IN GENERAL.—Section 1061 is amended by strik-

24 ing subsections (a) and (b) and inserting the following new
25 subsections:ERN22335 9K1

S.L.C.

271‘‘(a) IN GENERAL.—If one or more applicable part-2 nership interests are held by a taxpayer at any time during
3 the taxable year, the taxpayer’s net applicable partnership
4 gain for such taxable year shall be treated as short-term
5 capital gain.
6‘‘(b) NET APPLICABLE PARTNERSHIP GAIN.—For

7 purposes of this section—89‘‘(1) IN GENERAL.—The term ‘net applicablepartnership gain’ means—

10‘‘(A) the taxpayer’s net long-term capital

11

gain determined by only taking into account12

gains and losses with respect to one or more ap-

13

plicable partnership interests described in sub-14

section (a), and

15‘‘(B) any other amounts which are—16‘‘(i) includible in the gross income of17

the taxpayer with respect to one or more

18

such applicable partnership interests, and19‘‘(ii) treated as capital gain or subject

20

to tax at the rate applicable to capital

21

gain.

22

‘‘(2) HOLDING PERIOD EXCEPTION.—

23‘‘(A) IN GENERAL.—Net applicable part-24

nership gain shall be determined without regard

ERN22335 9K1

S.L.C.

28
1

to any amount which is realized after the date2

that is 5 years after the latest of:3‘‘(i) The date on which the taxpayer

4

acquired substantially all of the applicable5

partnership interest with respect to which

6

the amount is realized.

7‘‘(ii) The date on which the partner-

8

ship in which such applicable partnership9interest is held acquired substantially all of

10

the assets held by such partnership.

11‘‘(iii) If the partnership described in

12clause (i) owns, directly or indirectly, inter-13

ests in one or more other partnerships, the14dates determined by applying rules similar

15

to the rules in clauses (i) and (ii) in the16case of each such other partnership.

17‘‘(B) SHORTER HOLDING PERIOD IN CERCIRCUMSTANCES.—Subparagraph

(A)

18

TAIN

19

shall be applied by substituting ‘3 years’ for ‘5

20

years’ in the case of—21‘‘(i) a taxpayer (other than a trust or

22

estate) with an adjusted gross income (de-23

termined without regard to sections 911,24

931 and 933) of less than $400,000, andERN22335 9K1

S.L.C.

29
1‘‘(ii) any income with respect to any

2applicable partnership interest that is at-3

tributable to a real property trade or busi-

4

ness

5

469(c)(7)(C).

withinthemeaningofsection6‘‘(iii) The Secretary is directed to pro-7

vide guidance regarding determination of8

the amount described in subsection (a) as

9applied in paragraph (1) hereof, and any

10necessary and appropriate reporting by any

11partnership to carry out the purposes of

12this section. —13‘‘(3) SECTION 83 TO NOT APPLY.—This section

14

shall be applied without regard to section 83 and15

any election in effect under section 83(b).

16‘‘(4) SPECIAL RULE.—To the extent provided

17

by the Secretary, subsection (a) shall not apply to

18

income or gain attributable to any asset not held for19

portfolio investment on behalf of third party inves-20

tors.’’.

21(b) MODIFICATIONS RELATED TO DEFINITION OF

22 APPLICABLE PARTNERSHIP INTEREST.—Section 1061(c)23 is amended—ERN22335 9K1

S.L.C.

30
1(1) in paragraph (1), by striking ‘‘to such other2

entity’’ and inserting ‘‘with respect to a trade or3business that is not an applicable trade or business’’,4(2) in paragraph (3), by striking ‘‘an interest in

5

a partnership to the extent of the partnership’s pro-6

portionate interest in any of the foregoing’’ and in-

7

serting ‘‘except as otherwise provided by the Sec-8

retary, an interest in a partnership if such partner-

9

ship has a direct or indirect interest in any of the10

foregoing’’, and

11(3) in paragraph (4)—12(A) by striking ‘‘The term’’ and inserting

13‘‘Except as otherwise provided by the Secretary,

14

the term’’, and(B) in subparagraph (A), by striking ‘‘cor-

15
16

poration’’ and inserting ‘‘C corporation’’.

17(c) RECOGNITION OF GAIN ON TRANSFERS OF AP-

18

PLICABLE

PARTNERSHIP INTERESTSTOUNRELATED

19 PARTIES.—Section 1061(d) is amended to read as follows:20‘‘(d) TRANSFER OF APPLICABLE PARTNERSHIP IN-

21

TEREST.—If a taxpayer transfers any applicable partner-

22 ship interest, gain shall be recognized notwithstanding any
23 other provision of this subtitle.’’.

ERN22335 9K1

S.L.C.

31
1(d) REGULATIONS.—Section 1061(e) is amended by

2 striking the period at the end and inserting the following:
3 ‘‘, including regulations or other guidance to—4‘‘(1) to prevent the avoidance of the purposes of5this section, including through the distribution of

6

property by a partnership and through carry waiv-

7ers, and8‘‘(2) to provide for the application of this sec-

9tion to financial instruments, contracts or interests

10

in entities other than partnerships to the extent nec-

11

essary or appropriate to carry out the purposes of

12this section.’’.

13(e) EFFECTIVE DATE.—The amendments made by

14 this section shall apply to taxable years beginning after
15 December 31, 2022.
16 PART 3—FUNDING THE INTERNAL REVENUE
17

SERVICE AND IMPROVING TAXPAYER COM-18

PLIANCE19

SEC. 10301. ENHANCEMENT OF INTERNAL REVENUE SERV-20

ICE RESOURCES.

21(a) APPROPRIATIONS.—

22(1) IN GENERAL.—The following sums are ap-

23

propriated, out of any money in the Treasury not24otherwise appropriated, for the fiscal year ending

25

September 30, 2022:

ERN22335 9K1

S.L.C.

32
1(A) INTERNAL REVENUE SERVICE.—

2(i) IN GENERAL.—

3(I) TAXPAYERSERVICES.—For

4

necessary expenses of the Internal

5

Revenue Service to provide taxpayer

6

services, including pre-filing assistance7

and education, filing and account8

services, taxpayer advocacy services,9

and other services as authorized by 5

10

U.S.C. 3109, at such rates as may be

11determined12$3,181,500,000, to remain available

13

until September 30, 2031: Provided,

14

That these amounts shall be in addi-

15

tion to amounts otherwise available

16

for such purposes.

by

the

Commissioner,

17(II) ENFORCEMENT.—For nec-

18

essary expenses for tax enforcement

19

activities of the Internal Revenue

20

Service to determine and collect owed

21

taxes, to provide legal and litigation

22

support, to conduct criminal investiga-

23

tions (including investigative tech-24

nology), to provide digital asset moni-25

toring and compliance activities, toERN22335 9K1

S.L.C.

33
1

enforce criminal statutes related to2violations of internal revenue laws and3other financial crimes, to purchase4and hire passenger motor vehicles (315

U.S.C. 1343(b)), and to provide other6

services as authorized by 5 U.S.C.

7

3109, at such rates as may be deter-

8

mined

9

$45,637,400,000, to remain available

10

until September 30, 2031: Provided,

11

That these amounts shall be in addi-

12tion to amounts otherwise available

13

for such purposes.

14

by

the

Commissioner,(III) OPERATIONSSUPPORT.—

15

For necessary expenses of the Inter-16

nal Revenue Service to support tax-

17

payer services and enforcement pro-18

grams, including rent payments; fa-

19

cilities

20

physical security; headquarters and21other IRS-wide administration activi-

22

ties; research and statistics of income;23

telecommunications; information tech-24

nology development, enhancement, op-25

erations, maintenance, and security;

services;

printing;

postage;ERN22335 9K1

S.L.C.

34
1

the hire of passenger motor vehicles

2(31 U.S.C. 1343(b)); the operations of3

the Internal Revenue Service Over-4sight Board; and other services as au-

5thorized by 5 U.S.C. 3109, at such

6

rates as may be determined by the7

Commissioner, $25,326,400,000, to8remain available until September 30,

92031: Provided, That these amounts

10

shall be in addition to amounts other-11

wise available for such purposes.

12(IV) BUSINESSSYSTEMS

MOD-

13

ERNIZATION.—For necessary expenses

14of the Internal Revenue Service’s

15

business systems modernization pro-

16

gram, including development of call-17

back technology and other technology

18

to provide a more personalized cus-

19

tomer service but not including the20

operation and maintenance of legacy

21

systems, $4,750,700,000, to remain

22

available until September 30, 2031:

23

Provided, That these amounts shall be

24

in addition to amounts otherwise

25

available for such purposes.

ERN22335 9K1

S.L.C.

351(ii) TASK FORCE TO DESIGN AN IRS-

2

RUN FREE ‘‘DIRECT EFILE’’ TAX RETURN

3SYSTEM.—For

4Internal Revenue Service to deliver to Con-5

gress, within nine months following the6date of the enactment of this Act, a report7

on (I) the cost (including options for dif-8

ferential coverage based on taxpayer ad-

9justed gross income and return complexity)

10of developing and running a free direct11

efile tax return system, including costs to12build and administer each release, with a13

focus on multi-lingual and mobile-friendly

14

features and safeguards for taxpayer data;

15(II) taxpayer opinions, expectations, and16level of trust, based on surveys, for such a17

free direct efile system; and (III) the opin-

18

ions of an independent third-party on the19

overall feasibility, approach, schedule, cost,

20organizational design, and Internal Rev-

21

enue Service capacity to deliver such a di-22

rect efile tax return system, $15,000,000,

23

to remain available until September 30,

24

2023: Provided, That these amounts shallnecessary expenses of theERN22335 9K1

S.L.C.

36
1

be in addition to amounts otherwise avail-2

able for such purposes.

3(B) TREASURY INSPECTOR GENERAL FOR

4

TAX ADMINISTRATION.—For necessary expenses

5of the Treasury Inspector General for Tax Ad-

6ministration in carrying out the Inspector Gen-7

eral Act of 1978, as amended, including pur-8

chase and hire of passenger motor vehicles (319

U.S.C. 1343(b)); and services authorized by 5

10

U.S.C. 3109, at such rates as may be deter-

11

mined by the Inspector General for Tax Admin-

12

istration, $403,000,000, to remain available

13

until September 30, 2031: Provided, That these14

amounts shall be in addition to amounts other-15

wise available for such purposes.

16(C) OFFICE OF TAX POLICY.—For nec-

17

essary expenses of the Office of Tax Policy of18

the Department of the Treasury to carry out

19functions related to promulgating regulations

20

under the Internal Revenue Code of 1986,

21$104,533,803, to remain available until Sep-

22

tember 30, 2031: Provided, That these amounts

23

shall be in addition to amounts otherwise avail-24

able for such purposes.

ERN22335 9K1

S.L.C.

37(D) UNITED

1STATES TAX COURT.—For2

necessary expenses of the United States Tax

3

Court, including contract reporting and other4

services as authorized by 5 U.S.C. 3109;

5$153,000,000, to remain available until Sep-

6

tember 30, 2031: Provided, That these amounts

7

shall be in addition to amounts otherwise avail-8

able for such purposes.
(E)

9

TREASURY

DEPARTMENTAL

OF-

10

FICES.—For necessary expenses of the Depart-

11

mental Offices of the Department of the Treas-

12

ury to provide for oversight and implementation

13

support for actions by the Internal Revenue

14

Service to implement this Act and the amend-

15

ments made by this Act, $50,000,000, to re-16

main available until September 30, 2031: Pro-17

vided, That these amounts shall be in addition18

to amounts otherwise available for such pur-19

poses.

20(2) MULTI-YEAR OPERATIONAL PLAN.—(A) IN21

GENERAL.—Notlater than 622months after the date of the enactment of this23

Act, the Commissioner of Internal Revenue

24

shall submit to Congress a plan detailing how

25

the

funds

appropriatedunderparagraphERN22335 9K1

S.L.C.

38
1(1)(A)(i) will be spent over the ten-year period

2ending with fiscal year 2031.

3(B) QUARTERLY UPDATES.—

4(i) IN GENERAL.—Not later than the5last day of each calendar quarter beginning

6

during the applicable period, the Commis-

7

sioner of Internal Revenue shall submit to8

Congress a report on the plan established9

under subparagraph (A), including—

10(I) any updates to the plan;

11(II) progress made in imple-

12
13

menting the plan; and
(III)

any

changes

in

cir-

14

cumstances or challenges in imple-

15

menting the plan.

16(ii) APPLICABLE PERIOD.—For pur-17

poses of clause (i), the applicable period is18

the period beginning 1 year after the date19

the report under subparagraph (A) is due

20and ending on September 30, 2031.

21(C) REDUCTION IN APPROPRIATION.—

22(i) IN GENERAL.—In the case of any

23

failure to submit a plan required under24

subparagraph (A) or a report required

25

under subparagraph (B) by the requiredERN22335 9K1

S.L.C.

39
1

date, the amounts made available under2

paragraph (1)(A)(i) shall be reduced by

3$100,000 for each day after such required

4

date that report has not been submitted to5

Congress.

6(ii) REQUIRED DATE.—For purposes

7

of clause (i), the required date is the date

8that is 60 days after the date the plan or

9report is required to be submitted under10

subparagraph (A) or (B), as the case may

11

be.

12

(3) NOTAXINCREASESON

CERTAIN

TAX-

13

PAYERS.—Nothing in this subsection is intended to14

increase taxes on any taxpayer with a taxable in-15

come below $400,000.

16(b) PERSONNEL FLEXIBILITIES.—The Secretary of

17 the Treasury (or the Secretary’s delegate) may use the
18 funds made available under subsection (a)(1)(A), subject
19 to such policies as the Secretary (or the Secretary’s dele20 gate) may establish, to take such personnel actions as the
21 Secretary (or the Secretary’s delegate) determines nec22 essary to administer the Internal Revenue Code of 1986,
23 including—24(1) utilizing direct hire authority to recruit and25

appoint qualified applicants, without regard to any

ERN22335 9K1

S.L.C.

40
1

notice or preference requirements, directly to posi-

2

tions in the competitive service;3(2) in addition to the authority under section

47812(1) of the Internal Revenue Code of 1986, ap-

5

pointing not more than 200 individuals to positions

6in the Internal Revenue Service under streamlined

7

critical pay authority, except that—

8(A) the authority to offer streamlined crit-

9

ical pay under this paragraph shall expire on

10

September 30, 2031; and11(B) the positions for which streamlined

12

critical pay is authorized under this paragraph13

may include positions critical to the purposes

14

described in subclauses (I), (II), and (III) of

15

subsection (a)(1)(A)(i); and16(3) appointing not more than 300 individuals to17positions in the Internal Revenue Service for18

which—

19(A) the rate of basic pay may be estab-

20

lished by the Secretary of the Treasury (or the21

Secretary’s delegate) at a rate that does not ex-22

ceed the salary set in accordance with section

23

104 of title 3, United States Code; and24(B) the total annual compensation paid to25

an employee in such a position, including allow-

ERN22335 9K1

S.L.C.

41
1

ances, differentials, bonuses, awards, and simi-

2

lar cash payments, may not exceed the max-

3

imum amount of total annual compensation

4

payable at the salary set in accordance with5

section 104 of title 3, United States Code.

6
7

Subtitle B—Prescription Drug
Pricing Reform

8PART 1—LOWERING PRICES THROUGH DRUG

9PRICE NEGOTIATION

10SEC. 11001. PROVIDING FOR LOWER PRICES FOR CERTAIN

11

HIGH-PRICED SINGLE SOURCE DRUGS.

12(a) PROGRAM TO LOWER PRICES FOR CERTAIN

13 HIGH-PRICED SINGLE SOURCE DRUGS.—Title XI of the
14 Social Security Act is amended by adding after section
15 1184 (42 U.S.C. 1320e–3) the following new part:16 ‘‘PART E—PRICE NEGOTIATION PROGRAM TO
17

LOWER PRICES FOR CERTAIN HIGH-PRICED

18

SINGLE SOURCE DRUGS

19
20‘‘SEC. 1191. ESTABLISHMENT OF PROGRAM.

‘‘(a) IN GENERAL.—The Secretary shall establish a

21 Drug Price Negotiation Program (in this part referred to
22 as the ‘program’). Under the program, with respect to23 each price applicability period, the Secretary shall—
2425‘‘(1) publish a list of selected drugs in accordance with section 1192;

ERN22335 9K1

S.L.C.

421‘‘(2) enter into agreements with manufacturers

2of selected drugs with respect to such period, in ac-

3

cordance with section 1193;

4‘‘(3) negotiate and, if applicable, renegotiate

5maximum fair prices for such selected drugs, in ac-

6

cordance with section 1194;7‘‘(4) carry out the publication and administra-

8

tive duties and compliance monitoring in accordance

9with sections 1195 and 1196.

10‘‘(b) DEFINITIONS RELATING TO TIMING.—For pur-

11 poses of this part:
12‘‘(1) INITIAL PRICE APPLICABILITY YEAR.—The

13

term ‘initial price applicability year’ means a year

14

(beginning with 2026).

15‘‘(2) PRICE APPLICABILITY PERIOD.—The term

16

‘price applicability period’ means, with respect to a17

qualifying single source drug, the period beginning

18

with the first initial price applicability year with re-19

spect to which such drug is a selected drug and end-

20

ing with the last year during which the drug is a se-21

lected drug.

22‘‘(3) SELECTED DRUG PUBLICATION DATE.—23

The term ‘selected drug publication date’ means,

24with respect to each initial price applicability year,

ERN22335 9K1

S.L.C.

43
1

February 1 of the year that begins 2 years prior to2such year.

3‘‘(4) NEGOTIATION PERIOD.—The term ‘nego-4

tiation period’ means, with respect to an initial price5

applicability year with respect to a selected drug, the6period—7‘‘(A) beginning on the sooner of—8‘‘(i) the date on which the manufac-

9turer of the drug and the Secretary enter

10

into an agreement under section 1193 with

11

respect to such drug; or12‘‘(ii) February 28 following the se-13

lected drug publication date with respect to

14such selected drug; and

15‘‘(B) ending on November 1 of the year

16

that begins 2 years prior to the initial price ap-

17plicability year.

18‘‘(c) OTHER DEFINITIONS.—For purposes of this19 part:20‘‘(1) MAXIMUM

FAIR PRICE ELIGIBLE INDI-

21

VIDUAL.—The term ‘maximum fair price eligible in-22

dividual’ means, with respect to a selected drug—

23‘‘(A) in the case such drug is dispensed to24

the individual at a pharmacy, by a mail order

25

service, or by another dispenser, an individualERN22335 9K1

S.L.C.

441

who is enrolled under a prescription drug plan2

under part D of title XVIII or an MA–PD plan3

under part C of such title if coverage is pro-4

vided under such plan for such selected drug;

5

and

6

‘‘(B) in the case such drug is furnished or7administered to the individual by a hospital,

8

physician, or other provider of services or sup-9

plier, an individual who is enrolled under part10

B of title XVIII, including an individual who is

11

enrolled under an MA plan under part C of

12such title, if such selected drug is covered under

13

such part.

14‘‘(2) MAXIMUM FAIR PRICE.—The term ‘max-

15

imum fair price’ means, with respect to a year dur-

16

ing a price applicability period and with respect to17

a selected drug (as defined in section 1192(c)) with18

respect to such period, the price negotiated pursuant

19

to section 1194, and updated pursuant to section

20

1195(b), as applicable, for such drug and year.

21‘‘(3) REFERENCE PRODUCT.—The term ‘ref-22

erence product’ has the meaning given such term in

23

section 351(i) of the Public Health Service Act.

24‘‘(4) UNIT.—The term ‘unit’ means, with re-25

spect to a drug or biological product, the lowest

ERN22335 9K1

S.L.C.

45
1

identifiable amount (such as a capsule or tablet, mil-2

ligram of molecules, or grams) of the drug or bio-

3

logical product that is dispensed or furnished. The

4determination of a unit, with respect to a drug or

5

biological product, pursuant to this paragraph shall6

not be subject to administrative or judicial review.

7‘‘(5) TOTAL EXPENDITURES.—The term ‘total

8

expenditures’ includes, in the case of expenditures

9with respect to part D of title XVIII, the total gross10

covered prescription drug costs (as defined in section

11

1860D–15(b)(3)). The term ‘total expenditures’ ex-

12

cludes, in the case of expenditures with respect to13part B of such title, expenditures for a drug or bio-

14

logical product that are bundled or packaged into15

the payment for another service.

16‘‘(d) TIMING FOR INITIAL PRICE APPLICABILITY

17 YEAR 2026.—Notwithstanding the provisions of this part,18 in the case of initial price applicability year 2026, the fol19 lowing rules shall apply for purposes of implementing the
20 program:
21‘‘(1) Subsection (b)(3) shall be applied by sub-22

stituting ‘September 1, 2023’ for ‘, with respect to23each initial price applicability year, February 1 of24

the year that begins 2 years prior to such year’.

25‘‘(2) Subsection (b)(4) shall be applied—ERN22335 9K1

S.L.C.

46
1‘‘(A) in subparagraph (A)(ii), by sub-2

stituting ‘October 1, 2023’ for ‘February 28

3following the selected drug publication date4

with respect to such selected drug’; and5‘‘(B) in subparagraph (B), by substituting

6‘August 1, 2024’ for ‘November 1 of the year

7

that begins 2 years prior to the initial price ap-

8plicability year’.

9‘‘(3) Section 1192 shall be applied—

10‘‘(A) in subsection (b)(1)(A), by sub-11

stituting ‘during the period beginning on June12

1, 2022, and ending on May 31, 2023’ for ‘dur-

13

ing the most recent period of 12 months prior14

to the selected drug publication date (but end-

15

ing not later than October 31 of the year prior16

to the year of such drug publication date), with17

respect to such year’;18‘‘(B) in subsection (d)(1)(A), by sub-19

stituting ‘during the period beginning on June20

1, 2022, and ending on May 31, 2023’ for ‘dur-

21

ing the most recent period for which data are22

available of at least 12 months prior to the se-23

lected drug publication date (but ending no24

later than October 31 of the year prior to theERN22335 9K1

S.L.C.

47
1

year of such drug publication date), with re-2spect to such year’; and3‘‘(C) in subsection (e)(3)(B), by sub-4

stituting ‘during the period beginning on June5

1, 2022, and ending on May 31, 2023’ for ‘dur-

6

ing the most recent period for which data are

7

available of at least 12 months prior to the se-8lected drug publication date (but ending no9later than October 31 of the year prior to the10year of such drug publication date), with re-11

spect to such year’.

12‘‘(4) Section 1193(a) shall be applied by sub-13

stituting ‘October 1, 2023’ for ‘February 28 fol-14

lowing the selected drug publication date with re-15

spect to such selected drug ’.

16‘‘(5) Section 1194(b)(2) shall be applied—

17‘‘(A) in subparagraph (A), by substituting

18‘October 2, 2023’ for ‘March 1 of the year of19

the selected drug publication date, with respect

20

to the selected drug’;21‘‘(B) in subparagraph (B), by substituting

22‘February 1, 2024’ for ‘the June 1 following

23

the selected drug publication date’; and24‘‘(C) in subparagraph (E), by substituting

25‘August 1, 2024’ for ‘the first day of November

ERN22335 9K1

S.L.C.

48
1

following the selected drug publication date,2

with respect to the initial price applicability

3

year ’.

4‘‘(6) Section 1195(a) shall be applied—

5‘‘(A) in paragraph (1), by substituting

6‘September 1, 2024’ for ‘November 30 of the7year that is 2 years prior to such initial price8

applicability year’; and9‘‘(B) in paragraph (2), by substituting

10‘March 1, 2025’ for ‘March 1 of the year prior11

to such initial price applicability year’.

12‘‘SEC. 1192. SELECTION OF NEGOTIATION-ELIGIBLE DRUGS

13
14

AS SELECTED DRUGS.

‘‘(a) IN GENERAL.—Not later than the selected drug

15 publication date with respect to an initial price applica16 bility year, in accordance with subsection (b), the Sec17 retary shall select and publish a list of—18‘‘(1) with respect to the initial price applica-

19

bility year 2026, 10 negotiation-eligible drugs de-20

scribed in subparagraph (A) of subsection (d)(1),21

but not subparagraph (B) of such subsection, with22

respect to such year (or, all (if such number is less23

than 10) such negotiation-eligible drugs with respect

24

to such year);ERN22335 9K1

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49
1‘‘(2) with respect to the initial price applica-2

bility year 2027, 15 negotiation-eligible drugs de-3

scribed in subparagraph (A) of subsection (d)(1),

4

but not subparagraph (B) of such subsection, with5

respect to such year (or, all (if such number is less6than 15) such negotiation-eligible drugs with respect

7

to such year);8‘‘(3) with respect to the initial price applica-

9

bility year 2028, 15 negotiation-eligible drugs de-10

scribed in subparagraph (A) or (B) of subsection

11(d)(1) with respect to such year (or, all (if such

12

number is less than 15) such negotiation-eligible

13

drugs with respect to such year); and

14‘‘(4) with respect to the initial price applica-

15

bility year 2029 or a subsequent year, 20 negotia-

16

tion-eligible drugs described in subparagraph (A) or

17(B) of subsection (d)(1), with respect to such year

18

(or, all (if such number is less than 20) such nego-

19

tiation-eligible drugs with respect to such year); and20 Subject to subsection (c)(2) and section 1194(f)(5), each
21 drug published on the list pursuant to the previous sen22 tence shall be subject to the negotiation process under sec23 tion 1194 for the negotiation period with respect to such
24 initial price applicability year (and the renegotiation proc-

ERN22335 9K1

S.L.C.

50
1 ess under such section as applicable for any subsequent
2 year during the applicable price applicability period).
3‘‘(b) SELECTION OF DRUGS.—

4‘‘(1) IN GENERAL.—In carrying out subsection

5(a)(1), subject to paragraph (2), the Secretary shall,

6

with respect to an initial price applicability year, do

7

the following:

8‘‘(A) Rank negotiation-eligible drugs de-9

scribed in subsection (d)(1) according to the10

total expenditures for such drugs under parts B

11

and D of title XVIII, as determined by the Sec-12

retary, during the most recent period of 12

13months prior to the selected drug publication

14

date (but ending not later than October 31 of15

the year prior to the year of such drug publica-

16

tion date), with respect to such year, for which

17data are available, with the negotiation-eligible18

drugs with the highest total expenditures being

19

ranked the highest.

20‘‘(B) Select from such ranked drugs with21

respect to such year the negotiation-eligible

22

drugs with the highest such rankings.

23‘‘(2) HIGH SPEND PART D DRUGS FOR 2026 AND

24

2027.—With respect to the initial price applicability

25year 2026 and with respect to the initial price appli-

ERN22335 9K1

S.L.C.

511

cability year 2027, the Secretary shall apply para-

2graph (1) as if the reference to ‘negotiation-eligible3

drugs described in subsection (d)(1)’ were a ref-4

erence to ‘negotiation-eligible drugs described in sub-5

section (d)(1)(A)’ and as if the reference to ‘total ex-6penditures for such drugs under parts B and D of7

title XVIII’ were a reference to ‘total expenditures8

for such drugs under part D of title XVIII’.

9‘‘(c) SELECTED DRUG.—

10‘‘(1) IN GENERAL.—For purposes of this part,11

in accordance with subsection (e)(2) and subject to12paragraph (2), each negotiation-eligible drug in-13

cluded on the list published under subsection (a)14with respect to an initial price applicability year

15

shall be referred to as a ‘selected drug’ with respect

16

to such year and each subsequent year beginning be-17

fore the first year that begins at least 9 months

18

after the date on which the Secretary determines at

19

least one drug or biological product—

2021‘‘(A) is approved or licensed (as applicable)—

22‘‘(i) under section 505(j) of the Fed-23

eral Food, Drug, and Cosmetic Act using

24

such drug as the listed drug; orERN22335 9K1

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52
1‘‘(ii) under section 351(k) of the Pub-2

lic Health Service Act using such drug as

3

the reference product; and4‘‘(B) is marketed pursuant to such ap-

5

proval or licensure.

6

‘‘(2)

7

CLARIFICATION.—A

negotiation-eligible

drug—

8

‘‘(A) that is included on the list published9

under subsection (a) with respect to an initial

10

price applicability year; and11‘‘(B) for which the Secretary makes a de-12

termination described in paragraph (1) before

13

or during the negotiation period with respect to

14such initial price applicability year;

15

shall not be subject to the negotiation process under16

section 1194 with respect to such negotiation period17

and shall continue to be considered a selected drug

18

under this part with respect to the number of nego-

19

tiation-eligible drugs published on the list under sub-20

section (a) with respect to such initial price applica-

21

bility year.

22‘‘(d) NEGOTIATION-ELIGIBLE DRUG.—

23‘‘(1) IN GENERAL.—For purposes of this part,24

subject to paragraph (2), the term ‘negotiation-eligi-

25

ble drug’ means, with respect to the selected drug

ERN22335 9K1

S.L.C.

53
1

publication date with respect to an initial price ap-

2

plicability year, a qualifying single source drug, as

3

defined in subsection (e), that is described in either

4of the following subparagraphs (or, with respect to5

the initial price applicability year 2026 or 2027, that6

is described in subparagraph (A)):7‘‘(A) PART D HIGH SPEND DRUGS.—The8

qualifying single source drug is, determined in9

accordance with subsection (e)(2), among the10

50 qualifying single source drugs with the high-11

est total expenditures under part D of title

12

XVIII, as determined by the Secretary in ac-

13

cordance with paragraph (3), during the most

14

recent period for which data are available of at

15

least 12 months prior to the selected drug pub-16

lication date (but ending no later than October17

31 of the year prior to the year of such drug

18

publication date), with respect to such year.

19‘‘(B) PART B HIGH SPEND DRUGS.—The20

qualifying single source drug is, determined in21

accordance with subsection (e)(2), among the22

50 qualifying single source drugs with the high-23

est total expenditures under part B of title

24

XVIII, as determined by the Secretary in ac-

ERN22335 9K1

S.L.C.

541

cordance with paragraph (3), during such most2

recent period, as described in clause (i).

3

‘‘(2)

4

DRUGS.—

EXCEPTION

FOR

SMALL

BIOTECH

5‘‘(A) IN GENERAL.—Subject to subpara-

6graph (C), the term ‘negotiation-eligible drug’

7

shall not include, with respect to the initial

8

price applicability years 2026, 2027, and 2028,

9a qualifying single source drug that meets ei-

10ther of the following:

11‘‘(i) PART D DRUGS.—The total ex-

12penditures for the qualifying single source

13

drug under part D of title XVIII, as deter-

14

mined by the Secretary in accordance with

15

paragraph (3)(B), during 2021—

16‘‘(I) are equal to or less than 1

17percent of the total expenditures

18

under such part D, as so determined,

19

for all covered part D drugs (as de-20

fined in section 1860D–2(e)) during

21

such year; and22‘‘(II) are equal to at least 80 per-23

cent of the total expenditures under

24

such part D, as so determined, for all

25

covered part D drugs for which theERN22335 9K1

S.L.C.

55
1

manufacturer of the drug has an

2

agreement in effect under section

3

1860D–14A during such year.

4‘‘(ii) PART B DRUGS.—The total ex-5penditures for the qualifying single source

6

drug under part B of title XVIII, as deter-

7

mined by the Secretary in accordance with

8

paragraph (3)(B), during 2021—

9‘‘(I) are equal to or less than 1

10percent of the total expenditures

11

under such part B, as so determined,

12

for all qualifying single source drugs

13

covered under such part B during

14

such year; and15‘‘(II) are equal to at least 80 per-16

cent of the total expenditures under17

such part B, as so determined, for all

18

qualifying single source drugs of the19

manufacturer that are covered under

20

such part B during such year.

21
22
23

‘‘(B) CLARIFICATIONS RELATING TO MANUFACTURERS.—‘‘(i) AGGREGATION

RULE.—All

per-

24

sons treated as a single employer under25

subsection (a) or (b) of section 52 of theERN22335 9K1

S.L.C.

56
1

Internal Revenue Code of 1986 shall be2treated as one manufacturer for purposes

3of this paragraph.

4‘‘(ii) LIMITATION.—A drug shall not5

be considered to be a qualifying single

6source drug described in clause (i) or (ii)7of subparagraph (A) if the manufacturer

8of such drug is acquired after 2021 by an-

9other manufacturer that does not meet the10

definition of a specified manufacturer

11

under section 1860D–14C(g)(4)(B)(ii), ef-

12fective at the beginning of the plan year

13

immediately following such acquisition or,

14

in the case of an acquisition before 2025,15

effective January 1, 2025.

16‘‘(C) DRUGS

17

BIOTECH DRUGS.—The18

considered a qualifying single source drug de-19

scribed in subparagraph (A):NOT INCLUDED AS SMALL

following shall not be20‘‘(i) A vaccine that is licensed under21

section 351 of the Public Health Service

22

Act and is marketed pursuant to such sec-

23

tion.

ERN22335 9K1

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57
1‘‘(ii) A new formulation, such as an

2extended release formulation, of a quali-

3fying single source drug.

4‘‘(3) CLARIFICATIONS AND DETERMINATIONS.—

5‘‘(A) PREVIOUSLY SELECTED DRUGS AND

6

SMALL BIOTECH DRUGS EXCLUDED.—In apply-7

ing subparagraphs (A) and (B) of paragraph

8(1), the Secretary shall not consider or count—9‘‘(i) drugs that are already selected10

drugs; and11‘‘(ii) for initial price applicability

12years 2026, 2027, and 2028, qualifying

13

single source drugs described in paragraph

14(2)(A).

15‘‘(B) USE

OF

DATA.—In

determining

16

whether a qualifying single source drug satisfies

17

any of the criteria described in paragraph (1)18or (2), the Secretary shall use data that is ag-

19gregated across dosage forms and strengths of20

the drug, including new formulations of the21

drug, such as an extended release formulation,

22

and not based on the specific formulation or

23

package size or package type of the drug.

24‘‘(e) QUALIFYING SINGLE SOURCE DRUG.—

ERN22335 9K1

S.L.C.

581‘‘(1) IN GENERAL.—For purposes of this part,2

the term ‘qualifying single source drug’ means, with3

respect to an initial price applicability year, subject

4

to paragraphs (2) and (3), a covered part D drug

5

(as defined in section 1860D–2(e)) that is described6

in any of the following or a drug or biological prod-7

uct covered under part B of title XVIII that is de-8

scribed in any of the following:

9‘‘(A) DRUG PRODUCTS.—A drug—

10‘‘(i) that is approved under section

11505(c) of the Federal Food, Drug, and12

Cosmetic Act and is marketed pursuant to13such approval;

14‘‘(ii) for which, as of the selected drug

15

publication date with respect to such initial

16

price applicability year, at least 7 years

17

will have elapsed since the date of such ap-

18

proval; and19‘‘(iii) that is not the listed drug for20

any drug that is approved and marketed

21

under section 505(j) of such Act.

22‘‘(B) BIOLOGICAL PRODUCTS.—A biologi-

23

cal product—24‘‘(i) that is licensed under section

25

351(a) of the Public Health Service Act

ERN22335 9K1

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59
1

and is marketed under section 351 of such

2

Act;

3

‘‘(ii) for which, as of the selected drug

4

publication date with respect to such initial

5

price applicability year, at least 11 years

6

will have elapsed since the date of such li-

7censure; and8‘‘(iii) that is not the reference product9

for any biological product that is licensed

10

and marketed under section 351(k) of such

11

Act.

12
13

‘‘(2) TREATMENTOF AUTHORIZED GENERICDRUGS.—

14‘‘(A) IN GENERAL.—In the case of a quali-

15

fying single source drug described in subpara-

16

graph (A) or (B) of paragraph (1) that is the17listed drug (as such term is used in section

18505(j) of the Federal Food, Drug, and Cos-

19

metic Act) or a product described in clause (ii)20of subparagraph (B), with respect to an author-

21

ized generic drug, in applying the provisions of

22

this part, such authorized generic drug and23such listed drug or such product shall be treat-24

ed as the same qualifying single source drug.

ERN22335 9K1

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60
1‘‘(B) AUTHORIZEDGENERICDRUG

2FINED.—For3

term ‘authorized generic drug’ means—DE-purposes of this paragraph, the4‘‘(i) in the case of a drug, an author-

5

ized generic drug (as such term is defined6

in section 505(t)(3) of the Federal Food,

7

Drug, and Cosmetic Act); and89‘‘(ii) in the case of a biological product, a product that—‘‘(I) has been licensed under sec-

10
11tion 351(a) of such Act; and12‘‘(II) is marketed, sold, or dis-

13

tributed directly or indirectly to retail

14class of trade under a different label-

15

ing, packaging (other than repack-16

aging as the reference product in blis-

17

ter packs, unit doses, or similar pack-18

aging for use in institutions), product19

code, labeler code, trade name, or

20

trade mark than the reference prod-

21

uct.

22

‘‘(3) EXCLUSIONS.—In this part, the term

23

‘qualifying single source drug’ does not include any

24of the following:ERN22335 9K1

S.L.C.

611‘‘(A) CERTAIN ORPHAN DRUGS.—A drug

2that is designated as a drug for only one rare3

disease or condition under section 526 of the

4

Federal Food, Drug, and Cosmetic Act and for5which the only approved indication (or indica-

6

tions) is for such disease or condition.

7‘‘(B) LOW SPEND MEDICARE DRUGS.—A

8

drug or biological product with respect to which

9

the total expenditures under parts B and D of

10

title XVIII, as determined by the Secretary,11

during the most recent period for which data

12

are available of at least 12 months prior to the13

selected drug publication date (but ending no

14

later than October 31 of the year prior to the15

year of such drug publication date), with re-16

spect to such year, is less than—

17
18

‘‘(i)

with

respect

to2021,$200,000,000; or

19‘‘(ii) with respect to a subsequent

20

year, the dollar amount specified in this21

subparagraph for the previous year in-22

creased by the annual percentage increase23

in the consumer price index for all urban

24

consumers (all items; United States city

ERN22335 9K1

S.L.C.

621

average) for the 12-month period ending2with September of such previous year.

3‘‘(C) PLASMA-DERIVED PRODUCTS.—A bio-

4

logical product that is derived from human5

whole blood or plasma.

6‘‘(f) NO ADMINISTRATIVE OR JUDICIAL REVIEW.—

7 The determination of negotiation-eligible drugs under sub8 section (d), the determination of qualifying single source
9 drugs under subsection (e), and the selection of drugs
10 under this section are not subject to administrative or ju11 dicial review.
12
13‘‘SEC. 1193. MANUFACTURER AGREEMENTS.

‘‘(a)

IN

GENERAL.—For

purposesofsection

14 1191(a)(2), the Secretary shall enter into agreements with
15 manufacturers of selected drugs with respect to a price16 applicability period, by not later than February 28 fol17 lowing the selected drug publication date with respect to18 such selected drug, under which—19‘‘(1) during the negotiation period for the initial

20

price applicability year for the selected drug, the21

Secretary and the manufacturer, in accordance with22

section 1194, negotiate to determine (and, by not23

later than the last date of such period, agree to) a

24

maximum fair price for such selected drug of theERN22335 9K1

S.L.C.

631

manufacturer in order for the manufacturer to pro-2

vide access to such price—

3‘‘(A) to maximum fair price eligible indi-

4

viduals who with respect to such drug are de-5

scribed6

1191(c)(1) and are dispensed such drug (and to7

pharmacies, mail order services, and other dis-8

pensers, with respect to such maximum fair9

price eligible individuals who are dispensed such

10

drugs) during, subject to paragraph (2), the11

price applicability period; andin

subparagraph

(A)

of

section12‘‘(B) to hospitals, physicians, and other13

providers of services and suppliers with respect

14

to maximum fair price eligible individuals who

15with respect to such drug are described in sub-16

paragraph (B) of such section and are fur-

17

nished or administered such drug during, sub-18

ject to paragraph (2), the price applicability pe-

19

riod;

20

‘‘(2) the Secretary and the manufacturer shall,21

in accordance with section 1194, renegotiate (and,22

by not later than the last date of such period, agree

23to) the maximum fair price for such drug, in order24

for the manufacturer to provide access to such max-

25

imum fair price (as so renegotiated)—ERN22335 9K1

S.L.C.

64
1‘‘(A) to maximum fair price eligible indi-2

viduals who with respect to such drug are de-3

scribed4

1191(c)(1) and are dispensed such drug (and to5

pharmacies, mail order services, and other dis-6

pensers, with respect to such maximum fair7

price eligible individuals who are dispensed such

8

drugs) during any year during the price appli-

9

cability period (beginning after such renegoti-

10

ation) with respect to such selected drug; and11‘‘(B) to hospitals, physicians, and other12

providers of services and suppliers with respect

13

to maximum fair price eligible individuals who

14with respect to such drug are described in sub-15

paragraph (B) of such section and are fur-

16

nished or administered such drug during any

17year described in subparagraph (A);18‘‘(3) subject to subsection (d), access to the19

maximum fair price (including as renegotiated pur-20

suant to paragraph (2)), with respect to such a se-21

lected drug, shall be provided by the manufacturer

22

to—

in

subparagraph

(A)

of

section23‘‘(A) maximum fair price eligible individ-

24

uals, who with respect to such drug are de-25

scribedinsubparagraph

(A)

of

sectionERN22335 9K1

S.L.C.

65
11191(c)(1), at the pharmacy, mail order service,2or other dispenser at the point-of-sale of such3

drug (and shall be provided by the manufac-

4

turer to the pharmacy, mail order service, or5other dispenser, with respect to such maximum

6

fair price eligible individuals who are dispensed

7

such drugs), as described in paragraph (1)(A)8or (2)(A), as applicable; and9‘‘(B) hospitals, physicians, and other pro-10

viders of services and suppliers with respect to11maximum fair price eligible individuals who

12with respect to such drug are described in sub-13

paragraph (B) of such section and are fur-

14

nished or administered such drug, as described15

in paragraph (1)(B) or (2)(B), as applicable;

16‘‘(4) the manufacturer submits to the Sec-17

retary, in a form and manner specified by the Sec-18

retary, for the negotiation period for the price appli-

19

cability period (and, if applicable, before any period

20

of renegotiation pursuant to section 1194(f)) with21

respect to such drug—

22‘‘(A) information on the non-Federal aver-23

age manufacturer price (as defined in section

248126(h)(5) of title 38, United States Code) for25

the drug for the applicable year or period; andERN22335 9K1

S.L.C.

66
1‘‘(B) information that the Secretary re-2quires to carry out the negotiation (or renegoti-

3

ation process) under this part; and4‘‘(5) the manufacturer complies with require-

5

ments determined by the Secretary to be necessary

6for purposes of administering the program and mon-7

itoring compliance with the program.

8‘‘(b) AGREEMENT IN EFFECT UNTIL DRUG IS NO

9 LONGER A SELECTED DRUG.—An agreement entered into
10 under this section shall be effective, with respect to a se11 lected drug, until such drug is no longer considered a se12 lected drug under section 1192(c).
13‘‘(c) CONFIDENTIALITY OF INFORMATION.—Informa-

14 tion submitted to the Secretary under this part by a man15 ufacturer of a selected drug that is proprietary informa16 tion of such manufacturer (as determined by the Sec17 retary) shall be used only by the Secretary or disclosed
18 to and used by the Comptroller General of the United
19 States for purposes of carrying out this part.
20

‘‘(d)

NONDUPLICATION

WITH

340B

CEILING

21 PRICE.—Under an agreement entered into under this sec22 tion, the manufacturer of a selected drug shall not be re23 quired to provide access to the maximum fair price under
24 subsection (a)(3), with respect to such selected drug and
25 maximum fair price eligible individuals who are eligible toERN22335 9K1

S.L.C.

67
1 be furnished, administered, or dispensed such selected
2 drug at a covered entity described in section 340B(a)(4)3 of the Public Health Service Act, to such covered entity
4 if such selected drug is subject to an agreement described
5 in section 340B(a)(1) of such Act and the ceiling price
6 (defined in section 340B(a)(1) of such Act) is lower than
7 the maximum fair price for such selected drug, except that
8 the manufacturer shall provide for the maximum fair price9 to such covered entity with respect to maximum fair price
10 eligible individuals who are eligible to be furnished, admin11 istered, or dispensed such selected drug at such entity at
12 such ceiling price in a nonduplicated amount to the ceiling
13 price if the maximum fair price is below the ceiling price
14 for such selected drug.
15
16‘‘SEC. 1194. NEGOTIATION AND RENEGOTIATION PROCESS.

‘‘(a) IN GENERAL.—For purposes of this part, under

17 an agreement under section 1193 between the Secretary
18 and a manufacturer of a selected drug (or selected drugs),
19 with respect to the period for which such agreement is
20 in effect and in accordance with subsections (b), (c), and21 (d), the Secretary and the manufacturer—
22‘‘(1) shall during the negotiation period with re-23

spect to such drug, in accordance with this section,

24

negotiate a maximum fair price for such drug for25

the purpose described in section 1193(a)(1); andERN22335 9K1

S.L.C.

681‘‘(2) renegotiate, in accordance with the process2

specified pursuant to subsection (f), such maximum

3

fair price for such drug for the purpose described in

4section 1193(a)(2) if such drug is a renegotiation-el-5igible drug under such subsection.

6‘‘(b) NEGOTIATION PROCESS REQUIREMENTS.—

7‘‘(1) METHODOLOGY AND PROCESS.—The Sec-8

retary shall develop and use a consistent method-

9

ology and process, in accordance with paragraph (2),10for negotiations under subsection (a) that aims to11achieve the lowest maximum fair price for each se-12lected drug.

13‘‘(2) SPECIFIC

ELEMENTSOFNEGOTIATION

14PROCESS.—As part of the negotiation process under

15

this section, with respect to a selected drug and the16negotiation period with respect to the initial price17

applicability year with respect to such drug, the fol-18

lowing shall apply:

19‘‘(A) SUBMISSION OF INFORMATION.—Not

20

later than March 1 of the year of the selected21

drug publication date, with respect to the se-22lected drug, the manufacturer of the drug shall23

submit to the Secretary, in accordance with sec-

24

tion 1193(a)(4), the information described in25such section.

ERN22335 9K1

S.L.C.

691‘‘(B) INITIAL OFFER BY SECRETARY.—Not

2

later than the June 1 following the selected3drug publication date, the Secretary shall pro-4

vide the manufacturer of a selected drug with5

a written initial offer that contains the Sec-6

retary’s proposal for the maximum fair price of7

the drug and a list of the factors described in

8

section 1194(e) that were used in developing

9

such offer.

10‘‘(C) RESPONSE TO INITIAL OFFER.—

11‘‘(i) IN GENERAL.—Not later than 30

12days after the date of receipt of an initial

13

offer under subparagraph (B), the manu-

14

facturer shall either accept such offer or

15

propose a counteroffer to such offer.

16‘‘(ii)

COUNTEROFFER

17

MENTS.—If

18

counteroffer, such counteroffer—

REQUIRE-a manufacturer proposes a19‘‘(I) shall be in writing; and20‘‘(II) shall be justified based on21

the factors described in subsection (e).

22‘‘(D) RESPONSETOCOUNTEROFFER.—

23

After receiving a counteroffer under subpara-

24

graph (C), the Secretary shall respond in writ-25

ing to such counteroffer.

ERN22335 9K1

S.L.C.

701‘‘(E) DEADLINE.—All negotiations between

2

the Secretary and the manufacturer of the se-3lected drug shall end prior to the first day of4

November following the selected drug publica-

5tion date, with respect to the initial price appli-

6

cability year.

7‘‘(F) LIMITATIONS ON OFFER AMOUNT.—

8

In negotiating the maximum fair price of a se-9lected drug, with respect to an initial price ap-

10

plicability year for the selected drug, and, as

11

applicable, in renegotiating the maximum fair12

price for such drug, with respect to a subse-

13

quent year during the price applicability period

14

for such drug, the Secretary shall not offer (or15agree to a counteroffer for) a maximum fair16

price for the selected drug that—17‘‘(i) exceeds the ceiling determined18

under subsection (c) for the selected drug

19

and year; or20‘‘(ii) as applicable, is less than the21floor determined under subsection (d) for22

the selected drug and year.

23‘‘(G) TREATMENT OF DETERMINATION.—

24

The determination of a maximum fair priceERN22335 9K1

S.L.C.

711

under this section is not subject to administra-

2

tive or judicial review.

345‘‘(c) CEILING FOR MAXIMUM FAIR PRICE.—‘‘(1) GENERAL CEILING.—‘‘(A) IN

GENERAL.—The

maximum fair6

price negotiated under this section for a se-7

lected drug, with respect to the first year of the8

price applicability period with respect to such

9

drug, shall not exceed the lower of the amount10

under subparagraph (B) or the amount under11

subparagraph (C).

1213‘‘(B) SUBPARAGRAPH (B)AMOUNT.—An

amount equal to the following:

14‘‘(i) COVERED PART D DRUG.—In the15case of a covered part D drug (as defined16

in section 1860D–2(e)), the sum of the17plan specific enrollment weighted amounts

18

for each prescription drug plan or MA–PD

19plan (as determined under paragraph (2)).

20‘‘(ii) PART B DRUG OR BIOLOGICAL.—

21

In the case of a drug or biological product22

covered under part B of title XVIII, the23payment

24

1847A(b)(4) for the drug or biological25

product for the year prior to the year ofamountunder

sectionERN22335 9K1

S.L.C.

72
1

the selected drug publication date with re-2spect to the initial price applicability year3

for the drug or biological product.

4‘‘(C) SUBPARAGRAPH (C)AMOUNT.—An

5amount equal to the applicable percent de-

6

scribed in paragraph (3), with respect to such

7

drug, of the following:

8‘‘(i) INITIALPRICEAPPLICABILITY

9YEAR 2026.—In the case of a selected drug

10with respect to which such initial price ap-

11

plicability year is 2026, the average non-12

Federal average manufacturer price for13

such drug for 2021 (or, in the case that14

there is not an average non-Federal aver-15

age manufacturer price available for such

16

drug for 2021, for the first full year fol-17

lowing the market entry for such drug), in-18

creased by the percentage increase in the19

consumer price index for all urban con-20

sumers (all items; United States city aver-

21age) from September 2021 (or December

22

of such first full year following the market

23

entry), as applicable, to September of the24

year prior to the year of the selected drug

ERN22335 9K1

S.L.C.

73
1

publication date with respect to such initial2

price applicability year.

3‘‘(ii) INITIALPRICEAPPLICABILITY

4

YEAR 2027 AND SUBSEQUENT YEARS.—In5

the case of a selected drug with respect to6which such initial price applicability year is

72027 or a subsequent year, the lower of—8‘‘(I) the average non-Federal av-

9erage manufacturer price for such

10

drug for 2021 (or, in the case that11

there is not an average non-Federal

12

average manufacturer price available

13

for such drug for 2021, for the first

14

full year following the market entry

15

for such drug), increased by the per-16

centage increase in the consumer price17

index for all urban consumers (all18

items; United States city average)

19

from September 2021 (or December

20

of such first full year following the21market entry), as applicable, to Sep-

22

tember of the year prior to the year of23

the selected drug publication date24

with respect to such initial price appli-

25

cability year; orERN22335 9K1

S.L.C.

74
1‘‘(II) the average non-Federal av-

2erage manufacturer price for such3

drug for the year prior to the selected4drug publication date with respect to5such initial price applicability year.

6‘‘(2) PLAN SPECIFIC ENROLLMENT WEIGHTED

7

AMOUNT.—For purposes of paragraph (1)(B)(i), the8plan specific enrollment weighted amount for a pre-9

scription drug plan or an MA–PD plan with respect

10

to a covered Part D drug is an amount equal to the11

product of—12‘‘(A) the negotiated price of the drug

13

under such plan under part D of title XVIII,

14

net of all price concessions received by such

15

plan or pharmacy benefit managers on behalf of16

such plan, for the most recent year for which

17data is available; and18‘‘(B) a fraction—

19‘‘(i) the numerator of which is the20

total number of individuals enrolled in

21such plan in such year; and22‘‘(ii) the denominator of which is the23

total number of individuals enrolled in a

24

prescription drug plan or an MA–PD plan25

in such year.

ERN22335 9K1

S.L.C.

751‘‘(3) APPLICABLE PERCENT DESCRIBED.—For2

purposes of this subsection, the applicable percent

3

described in this paragraph is the following:

4‘‘(A) SHORT-MONOPOLY DRUGS AND VAC-

5

CINES.—With respect to a selected drug (other6

than an extended-monopoly drug and a long-7

monopoly drug), 75 percent.

8

‘‘(B)

EXTENDED-MONOPOLYDRUGS.—

9

With respect to an extended-monopoly drug, 65

10percent.

11‘‘(C) LONG-MONOPOLY DRUGS.—With re-

12spect to a long-monopoly drug, 40 percent.

13‘‘(4) EXTENDED-MONOPOLY DRUG DEFINED.—

14‘‘(A) IN GENERAL.—In this part, subject

15

to subparagraph (B), the term ‘extended-mo-

16

nopoly drug’ means, with respect to an initial

17

price applicability year, a selected drug for18

which at least 12 years, but fewer than 16

19years, have elapsed since the date of approval

20of such drug under section 505(c) of the Fed-21

eral Food, Drug, and Cosmetic Act or since the22date of licensure of such drug under section

23

351(a) of the Public Health Service Act, as ap-

24

plicable.

ERN22335 9K1

S.L.C.

761‘‘(B) EXCLUSIONS.—The term ‘extended-2

monopoly drug’ shall not include any of the fol-3

lowing:4‘‘(i) A vaccine that is licensed under5

section 351 of the Public Health Service

6

Act and marketed pursuant to such sec-

7

tion.

8

‘‘(ii) A selected drug for which a man-9

ufacturer had an agreement under this10part with the Secretary with respect to an

11

initial price applicability year that is before

12

2030.

13

‘‘(C) CLARIFICATION.—Nothing in sub-14

paragraph (B)(ii) shall limit the transition of a15

selected drug described in paragraph (3)(A) to16

a long-monopoly drug if the selected drug meets17

the definition of a long-monopoly drug.

18‘‘(5) LONG-MONOPOLY DRUG DEFINED.—

19‘‘(A) IN GENERAL.—In this part, subject

20

to subparagraph (B), the term ‘long-monopoly

21

drug’ means, with respect to an initial price ap-

22

plicability year, a selected drug for which at

23

least 16 years have elapsed since the date of24

approval of such drug under section 505(c) of

25

the Federal Food, Drug, and Cosmetic Act orERN22335 9K1

S.L.C.

771

since the date of licensure of such drug under2

section 351(a) of the Public Health Service Act,3

as applicable.

4‘‘(B) EXCLUSION.—The term ‘long-monop-

5

oly drug’ shall not include a vaccine that is li-

6censed under section 351 of the Public Health7

Service Act and marketed pursuant to such sec-

8

tion.

9

‘‘(6) AVERAGE NON-FEDERAL AVERAGE MANU-

10FACTURER PRICE.—In this part, the term ‘average

11

non-Federal average manufacturer price’ means the12average of the non-Federal average manufacturer

13

price (as defined in section 8126(h)(5) of title 38,

14

United States Code) for the 4 calendar quarters of15

the year involved.

16‘‘(d) TEMPORARY FLOORFORSMALL BIOTECH

17 DRUGS.—In the case of a selected drug that is a quali18 fying single source drug described in section 1192(d)(2)19 and with respect to which the first initial price applica20 bility year of the price applicability period with respect to21 such drug is 2029 or 2030, the maximum fair price nego22 tiated under this section for such drug for such initial
23 price applicability year may not be less than 66 percent
24 of the average non-Federal average manufacturer price for25 such drug (as defined in subsection (c)(6)) for 2021 (or,

ERN22335 9K1

S.L.C.

78
1 in the case that there is not an average non-Federal aver2 age manufacturer price available for such drug for 2021,
3 for the first full year following the market entry for such
4 drug), increased by the percentage increase in the con5 sumer price index for all urban consumers (all items;
6 United States city average) from September 2021 (or De7 cember of such first full year following the market entry),
8 as applicable, to September of the year prior to the se9 lected drug publication date with respect to the initial
10 price applicability year.
11‘‘(e) FACTORS.—For purposes of negotiating the

12 maximum fair price of a selected drug under this part with
13 the manufacturer of the drug, the Secretary shall consider
14 the following factors (and, with respect to extended-mo15 nopoly drugs and long-monopoly drugs, shall not, except
16 in making a determination of a material change under
17 subsection (f)(2)(D), consider factors other than those de18 scribed in subparagraphs (B) and (C) of paragraph (1)):
19

‘‘(1)

MANUFACTURER-SPECIFIC

INFORMA-

20

TION.—The

21

such selected drug, including as submitted by the22

manufacturer:

following information, with respect to23‘‘(A) Research and development costs of24

the manufacturer for the drug and the extent toERN22335 9K1

S.L.C.

79
1

which the manufacturer has recouped research2and development costs.

3‘‘(B) Market data for the drug.

4‘‘(C) Unit costs of production and distribu-

5tion of the drug.

6‘‘(D) Prior Federal financial support for7

novel therapeutic discovery and development

8

with respect to the drug.

910‘‘(E) Data on patents and on existing andpending exclusivity for the drug.

11‘‘(F) National sales data for the drug.

12‘‘(G) Information on clinical trials for the

13

drug.

14

‘‘(2) INFORMATION ON ALTERNATIVE TREAT-

15

MENTS.—The following information, with respect to16such selected drug and therapeutic alternatives to17such drug:

18‘‘(A) The extent to which such drug rep-19

resents a therapeutic advance as compared to20

existing therapeutic alternatives and, to the ex-21tent such information is available, the costs of

22such existing therapeutic alternatives.

23‘‘(B) Approval by the Food and Drug Ad-

24

ministration of such drug and therapeutic alter-

25

natives of such drug.

ERN22335 9K1

S.L.C.

801‘‘(C) Comparative effectiveness of such2

drug and therapeutic alternatives to such drug,

3taking into consideration the effects of such4

drug and therapeutic alternatives of such drug5

on specific populations, such as individuals with6

disabilities, the elderly, the terminally ill, chil-7

dren, and other patient populations.

8‘‘(D) The extent to which such drug and9therapeutic alternatives to such drug address

10

unmet medical needs for a condition for which

11

treatment or diagnosis is not addressed ade-

12quately by available therapy.

13

In considering information described in subpara-

14

graph (C), the Secretary shall not use evidence or

15findings from comparative clinical effectiveness re-16

search in a manner that treats extending the life of17

an elderly, disabled, or terminally ill individual as of18

lower value than extending the life of an individual

19

who is younger, nondisabled, or not terminally ill.

20‘‘(f) RENEGOTIATION PROCESS.—

21‘‘(1) IN GENERAL.—In the case of a renegoti-

22

ation-eligible drug (as defined in paragraph (2)) that23

is selected under paragraph (3), the Secretary shall24

provide for a process of renegotiation (for years (be-25ginning with 2028) during the price applicability pe-ERN22335 9K1

S.L.C.

811

riod, with respect to such drug) of the maximum fair2

price for such drug consistent with paragraph (4).

3

‘‘(2)

RENEGOTIATION-ELIGIBLE

DRUG

DE-

4

FINED.—In this section, the term ‘renegotiation-eli-

5gible drug’ means a selected drug that is any of the6

following:

7‘‘(A) ADDITION OF NEW INDICATION.—A

8

selected drug for which a new indication is9

added to the drug.

10‘‘(B) CHANGE

11

TENDED-MONOPOLY

12

that—

13
14

OF

STATUS

DRUG.—A

TO

AN

EX-

selected drug‘‘(i) is not an extended-monopoly or along-monopoly drug; and15‘‘(ii) for which there is a change in16

status to that of an extended-monopoly

17

drug.

18

‘‘(C) CHANGE OF STATUS TO A LONG-MO-

19

NOPOLY DRUG.—A selected drug that—20‘‘(i) is not a long-monopoly drug; and21‘‘(ii) for which there is a change in

22

status to that of a long-monopoly drug.

23‘‘(D) MATERIAL

CHANGES.—A

selected24

drug for which the Secretary determines there25

has been a material change of any of the fac-

ERN22335 9K1

S.L.C.

82
1

tors described in paragraph (1) or (2) of sub-2

section (e).

3‘‘(3) SELECTION OF DRUGS FOR RENEGOTI-

4ATION.—Each year the Secretary shall select among5

renegotiation-eligible drugs for renegotiation as fol-

6

lows:

7

‘‘(A) ALL EXTENDED-MONOPOLY NEGOTIA-

8

TION-ELIGIBLE

9select all renegotiation-eligible drugs described10

in paragraph (2)(B).

11

DRUGS.—The

Secretary shall‘‘(B) ALL LONG-MONOPOLY NEGOTIATION-

12

ELIGIBLE DRUGS.—The

Secretary shall select13

all renegotiation-eligible drugs described in

14paragraph (2)(C).

15‘‘(C) REMAINING DRUGS.—Among the re-16

maining renegotiation-eligible drugs described17

in subparagraphs (A) and (D) of paragraph (2),18

the Secretary shall select renegotiation-eligible

19

drugs for which the Secretary expects renegoti-

20

ation is likely to result in a significant change

21

in the maximum fair price otherwise negotiated.

22‘‘(4) RENEGOTIATION PROCESS.—The Secretary

23

shall specify the process for renegotiation of max-

24

imum fair prices with the manufacturer of a renego-25

tiation-eligible drug selected for renegotiation underERN22335 9K1

S.L.C.

831

this subsection. Such process shall, to the extent

2

practicable, be consistent with the methodology and3process established under subsection (b) and in ac-

4

cordance with subsections (c) and (d), and for pur-5

poses of applying subsections (c) and (d), the ref-6

erence to the first initial price applicability year of7

the price applicability period with respect to such

8

drug shall be treated as the first initial price appli-

9

cability year of such period for which the maximum

10

fair price established pursuant to such renegotiation

11

applies, including for applying subsection (c)(3)(B)

12

in the case of renegotiation-eligible drugs described13

in paragraph (3)(A) of this subsection and sub-14

section (c)(3)(C) in the case of renegotiation-eligible

15

drugs described in paragraph (3)(B) of this sub-16

section.

17‘‘(5) CLARIFICATION.—A renegotiation-eligible

18

drug for which the Secretary makes a determination

19

described in section 1192(c)(1) before or during the20

period of renegotiation shall not be subject to the re-21

negotiation process under this section.

22‘‘(6) NOADMINISTRATIVE OR JUDICIAL RE-

23

VIEW.—The

determination of renegotiation-eligible

24

drugs under paragraph (2) and the selection of re-ERN22335 9K1

S.L.C.

841

negotiation-eligible drugs under paragraph (3) are2

not subject to administrative or judicial review.

3‘‘(g) LIMITATION.—

4‘‘(1) IN GENERAL.—In no case shall the max-

5

imum fair price negotiated under this section for a6

selected drug that is a qualifying single source drug

7

described in section 1192(e)(1) apply before—

8‘‘(A) in the case the selected drug is a9qualifying single source drug described in sub-10

paragraph (A) of section 1192(e)(1), the date

11

that is 9 years after the day on which the drug

12

was approved under section 505(c) of the Fed-13eral Food, Drug, and Cosmetic Act; and

14‘‘(B) in the case the selected drug is a15

qualifying single source drug described in sub-16

paragraph (B) of section 1192(e)(1), the date

17

that is 13 years after the day on which the18

drug was licensed under section 351(a) of the19

Public Health Service Act.

20‘‘(2) CLARIFICATION.—The maximum fair price21

for a selected drug described in subparagraph (A) or

22(B) of paragraph (1) shall take effect no later than23

the first day of the first calendar quarter that begins

24

after the date described in subparagraph (A) or (B),25

as applicable.

ERN22335 9K1

S.L.C.

85
1
2‘‘SEC. 1195. PUBLICATION OF MAXIMUM FAIR PRICES.

‘‘(a) IN GENERAL.—With respect to an initial price3 applicability year and a selected drug with respect to such
4 year—5‘‘(1) not later than November 30 of the year

6

that is 2 years prior to such initial price applicability

7year, the Secretary shall publish the maximum fair8

price for such drug negotiated with the manufac-

9turer of such drug under this part; and

10‘‘(2) not later than March 1 of the year prior11

to such initial price applicability year, the Secretary

12

shall publish, subject to section 1193(c), the expla-

13

nation for the maximum fair price with respect to

14

the factors as applied under section 1194(e) for such

15

drug described in paragraph (1).

16‘‘(b) UPDATES.—

17

‘‘(1)

SUBSEQUENTYEARMAXIMUM

FAIR

18PRICES.—For a selected drug, for each year subse-

19

quent to the first initial price applicability year of20

the price applicability period with respect to such

21

drug, with respect to which an agreement for such

22

drug is in effect under section 1193, not later than23

November 30 of the year that is 2 years prior to24such subsequent year, the Secretary shall publish

25

the maximum fair price applicable to such drug and26

year, which shall be—ERN22335 9K1

S.L.C.

861‘‘(A) subject to subparagraph (B), the2amount equal to the maximum fair price pub-3

lished for such drug for the previous year, in-4

creased by the annual percentage increase in5

the consumer price index for all urban con-6

sumers (all items; United States city average)

7

for the 12-month period ending with September

8of such previous year; or

9‘‘(B) in the case the maximum fair price10

for such drug was renegotiated, for the first11

year for which such price as so renegotiated ap-

12plies, such renegotiated maximum fair price.

13‘‘(2) PRICES NEGOTIATED AFTER DEADLINE.—

14

In the case of a selected drug with respect to an ini-

15

tial price applicability year for which the maximum

16

fair price is determined under this part after the17date of publication under this section, the Secretary

18

shall publish such maximum fair price by not later19

than 30 days after the date such maximum price is20

so determined.

21
22
23

‘‘SEC. 1196. ADMINISTRATIVE DUTIES AND COMPLIANCEMONITORING.

‘‘(a) ADMINISTRATIVE DUTIES.—For purposes of

24 section 1191(a)(4), the administrative duties described in
25 this section are the following:ERN22335 9K1

S.L.C.

871‘‘(1) The establishment of procedures to ensure

2

that the maximum fair price for a selected drug is3

applied before—

4‘‘(A) any coverage or financial assistance5

under other health benefit plans or programs

6

that provide coverage or financial assistance for7

the purchase or provision of prescription drug

8

coverage on behalf of maximum fair price eligi-

9

ble individuals; and

10‘‘(B) any other discounts.

11‘‘(2) The establishment of procedures to com-12

pute and apply the maximum fair price across dif-13

ferent strengths and dosage forms of a selected drug

14

and not based on the specific formulation or package

15

size or package type of such drug.

16‘‘(3) The establishment of procedures to carry17

out the provisions of this part, as applicable, with18

respect to—19‘‘(A) maximum fair price eligible individ-20

uals who are enrolled under a prescription drug

21

plan under part D of title XVIII or an MA–PD

22

plan under part C of such title; and23‘‘(B) maximum fair price eligible individ-

24

uals who are enrolled under part B of suchERN22335 9K1

S.L.C.

88
1

title, including who are enrolled under an MA

2plan under part C of such title.

3‘‘(4) The establishment of a negotiation process4

and renegotiation process in accordance with section

5

1194.

6

‘‘(5) The establishment of a process for manu-

7

facturers to submit information described in section

81194(b)(2)(A).

9‘‘(6) The sharing with the Secretary of the10

Treasury of such information as is necessary to de-11termine the tax imposed by section 4192 of the In-

12

ternal Revenue Code of 1986 (relating to enforce-

13

ment of this part).

14‘‘(7) The establishment of procedures for pur-15

poses of applying section 1192(d)(2)(B).

16‘‘(b) COMPLIANCE MONITORING.—The Secretary

17 shall monitor compliance by a manufacturer with the
18 terms of an agreement under section 1193 and establish
19 a mechanism through which violations of such terms shall
20 be reported.
21‘‘SEC. 1197. CIVIL MONETARY PENALTIES.

22‘‘(a) VIOLATIONS RELATING TO OFFERING OF MAX-

23

IMUM FAIR PRICE.—Any manufacturer of a selected drug

24 that has entered into an agreement under section 1193,
25 with respect to a year during the price applicability period

ERN22335 9K1

S.L.C.

89
1 with respect to such drug, that does not provide access
2 to a price that is not more than the maximum fair price3 (or a lesser price) for such drug for such year—4‘‘(1) to a maximum fair price eligible individual5

who with respect to such drug is described in sub-6

paragraph (A) of section 1191(c)(1) and who is dis-7

pensed such drug during such year (and to phar-8

macies, mail order services, and other dispensers,9with respect to such maximum fair price eligible in-10

dividuals who are dispensed such drugs); or

11‘‘(2) to a hospital, physician, or other provider

12of services or supplier with respect to maximum fair13

price eligible individuals who with respect to such

14

drug is described in subparagraph (B) of such sec-

15

tion and is furnished or administered such drug by

16

such hospital, physician, or provider or supplier dur-17

ing such year;

18 shall be subject to a civil monetary penalty equal to ten
19 times the amount equal to the product of the number of
20 units of such drug so furnished, dispensed, or adminis21 tered during such year and the difference between the
22 price for such drug made available for such year by such
23 manufacturer with respect to such individual or hospital,
24 physician, provider of services, or supplier and the max25 imum fair price for such drug for such year.

ERN22335 9K1

S.L.C.

901‘‘(b) VIOLATIONS OF CERTAIN TERMS OF AGREE-

2

MENT.—Any manufacturer of a selected drug that has en-

3 tered into an agreement under section 1193, with respect
4 to a year during the price applicability period with respect
5 to such drug, that is in violation of a requirement imposed
6 pursuant to section 1193(a)(5), including the requirement
7 to submit information pursuant to section 1193(a)(4),
8 shall be subject to a civil monetary penalty equal to
9 $1,000,000 for each day of such violation.
10‘‘(c) FALSE INFORMATION.—Any manufacturer that

11 knowingly provides false information pursuant to section
12 1196(a)(7) shall be subject to a civil monetary penalty
13 equal to $100,000,000 for each item of such false informa14 tion.
15‘‘(d) APPLICATION.—The provisions of section 1128A

16 (other than subsections (a) and (b)) shall apply to a civil
17 monetary penalty under this section in the same manner
18 as such provisions apply to a penalty or proceeding under
19 section 1128A(a).’’.
20(b) APPLICATION OF MAXIMUM FAIR PRICES AND

21 CONFORMING AMENDMENTS.—
22(1) UNDER MEDICARE.—

23(A) APPLICATION TO PAYMENTS UNDER

24

PART B.—Section 1847A(b)(1)(B) of the Social

25

Security Act (42 U.S.C. 1395w–3a(b)(1)(B)) isERN22335 9K1

S.L.C.

911

amended by inserting ‘‘or in the case of such a2drug or biological product that is a selected3drug (as referred to in section 1192(c)), with4

respect to a price applicability period (as de-5

fined in section 1191(b)(2)), 106 percent of the

6

maximum fair price (as defined in section

7

1191(c)(2)) applicable for such drug and a year

8

during such period’’ after ‘‘paragraph (4)’’.

9(B) APPLICATION UNDER MA OF COST-10SHARING FOR PART B DRUGS BASED OFF OF

11

NEGOTIATED

12

1852(a)(1)(B)(iv) of the Social Security Act

13(42 U.S.C. 1395w–22(a)(1)(B)(iv)) is amend-

14

ed—

15
16
17
18

PRICE.—Section(i) by redesignating subclause (VII) as
subclause (VIII); and(ii) by inserting after subclause (VI)the following subclause:

19‘‘(VII) A drug or biological prod-20

uct that is a selected drug (as referred21

to in section 1192(c)).’’.

22(C) EXCEPTION TO PART D NON-INTER-

23

FERENCE.—Section 1860D–11(i) of the Social

24

Security Act (42 U.S.C. 1395w–111(i)) is25

amended—ERN22335 9K1

S.L.C.

92(i) in paragraph (1), by striking

12‘‘and’’ at the end;

3(ii) in paragraph (2), by striking the4

period at the end and inserting ‘‘, except

5

as

6

4(b)(3)(l); and’’; andundersection

1860D–(iii) by adding at the end the fol-

7
8

providedlowing new paragraph:9‘‘(3) may not institute a price structure for the10

reimbursement of covered part D drugs, except as

11

provided under part E of title XI.’’.

12(D) APPLICATION AS NEGOTIATED PRICE

13

UNDER PART D.—Section 1860D–2(d)(1) of the

14

Social15102(d)(1)) is amended—

Security

Act(42

U.S.C.

1395w–

16(i) in subparagraph (B), by inserting17‘‘, subject to subparagraph (D),’’ after

18‘‘negotiated prices’’; and19(ii) by adding at the end the following

20

new subparagraph:21‘‘(D) APPLICATIONOFMAXIMUM

FAIR

22PRICE FOR SELECTED DRUGS.—In applying this23

section, in the case of a covered part D drug

24that is a selected drug (as referred to in section

25

1192(c)), with respect to a price applicability

ERN22335 9K1

S.L.C.

931

period (as defined in section 1191(b)(2)), the2negotiated prices used for payment (as de-3

scribed in this subsection) shall be no greater

4

than the maximum fair price (as defined in sec-

5

tion 1191(c)(2)) for such drug and for each6

year during such period plus any dispensing

7

fees for such drug.’’.

8(E) COVERAGE OF SELECTED DRUGS.—

9

Section 1860D–4(b)(3) of the Social Security

10

Act (42 U.S.C. 1395w–104(b)(3)) is amended

11

by adding at the end the following new sub-12

paragraph:

13
14
15

‘‘(I) REQUIRED INCLUSION OF SELECTEDDRUGS.—‘‘(i) IN

GENERAL.—For2026 and16

each subsequent year, the PDP sponsor of-17

fering a prescription drug plan shall in-18

clude each covered part D drug that is a19

selected drug under section 1192 for which

20

an agreement for such drug is in effect21

under section 1193 with respect to the

22

year.

23

‘‘(ii)

CLARIFICATION.—Nothingin24clause (i) shall be construed as prohibiting

25

a PDP sponsor from removing such a se-

ERN22335 9K1

S.L.C.

941

lected drug from a formulary if such re-2

moval would be permitted under section

3423.120(b)(5)(iv) of title 42, Code of Fed-4eral Regulations (or any successor regula-5tion).’’.

6(F) INFORMATIONFROMPRESCRIPTION

7DRUG PLANS AND MA–PD PLANS REQUIRED.—

8(i) PRESCRIPTION DRUG PLANS.—Sec-

9tion 1860D–12(b) of the Social Security

10

Act (42 U.S.C. 1395w–112(b)) is amended

11

by adding at the end the following new

12paragraph:13‘‘(8) PROVISION OF INFORMATION RELATED TO

14

MAXIMUM FAIR PRICES.—Each contract entered into

15

with a PDP sponsor under this part with respect to16

a prescription drug plan offered by such sponsor

17

shall require the sponsor to provide information to18

the Secretary as requested by the Secretary in ac-

19

cordance with section 1194(g).’’.

20

(ii)

MA–PD

PLANS.—Section21

1857(f)(3) of the Social Security Act (4222

U.S.C. 1395w–27(f)(3)) is amended by23

adding at the end the following new sub-24

paragraph:ERN22335 9K1

S.L.C.

95‘‘(E) PROVISION

1OF

INFORMATIONRE-

PRICES.—Section

2

LATED

3

1860D–12(b)(8).’’.

4

(2)

5

PRICES

6

1927(c)(1)(C) of the Social Security Act (42 U.S.C.

7

1396r–8(c)(1)(C)) is amended—

TO

DRUG

MAXIMUM

PRICE

INCLUDEDIN

FAIR

NEGOTIATIONBESTPROGRAM

PRICE.—Section

8(A) in clause (i)(VI), by striking ‘‘any

9prices charged’’ and inserting ‘‘subject to clause

10(ii)(V), any prices charged’’; and11(B) in clause (ii)—(i) in subclause (III), by striking ‘‘;

12
13and’’ at the end;

14(ii) in subclause (IV), by striking the15

period at the end and inserting ‘‘; and’’;

16

and

17
18

(iii) by adding at the end the following new subclause:

19‘‘(V) in the case of a rebate pe-

20

riod and a covered outpatient drug

21

that is a selected drug (as referred to22

in section 1192(c)) during such rebate

23

period, shall be inclusive of the max-

24

imum fair price (as defined in section

ERN22335 9K1

S.L.C.

96
1

1191(c)(2)) for such drug with re-2spect to such period.’’.

3(3) MAXIMUM FAIR PRICES EXCLUDED FROMPRICE.—Section

4

AVERAGE5

1927(k)(1)(B)(i) of the Social Security Act (426

U.S.C. 1396r–8(k)(1)(B)(i)) is amended—

7
8
9
10
11
12

MANUFACTURER(A) in subclause (IV) by striking ‘‘; and’’at the end;(B) in subclause (V) by striking the period
at the end and inserting ‘‘; and’’; and(C) by adding at the end the following new
subclause:

13‘‘(VI) any reduction in price paid

14

during the rebate period to the manu-

15

facturer for a drug by reason of appli-

16

cation of part E of title XI.’’.

17(c) IMPLEMENTATION FOR 2026 THROUGH 2028.—

18 The Secretary of Health and Human Services shall imple19 ment this section, including the amendments made by this
20 section, for 2026, 2027, and 2028 by program instruction
21 or other forms of program guidance.

ERN22335 9K1

S.L.C.

97
1

SEC. 11002. SPECIAL RULE TO DELAY SELECTION AND NE-

2

GOTIATION OF BIOLOGICS FOR BIOSIMILAR

3

MARKET ENTRY.

4(a) IN GENERAL.—Part E of title XI of the Social

5 Security Act, as added by section 11001, is amended—
6(1) in section 1192—

7(A) in subsection (a), in the flush matter

8

following paragraph (2), by inserting ‘‘and sub-9

section (b)(3)’’ after ‘‘the previous sentence’’;(B) in subsection (b)—10(i) in paragraph (1), by adding at the1112

end the following new subparagraph:13‘‘(C) In the case of a biological product for

14

which the inclusion of the biological product as15

a selected drug on a list published under sub-16

section (a) has been delayed under subsection

17(f)(2), remove such biological product from the18

rankings under subparagraph (A) before mak-19

ing the selections under subparagraph (B).’’;

20

and

21
22

(ii) by adding at the end the following
new paragraph:23‘‘(3) INCLUSION

24

PRODUCTS.—Pursuant25

and (C)(i) of subsection (f)(2), the Secretary shall26

select and include on the list published under sub-OF

DELAYEDBIOLOGICAL

to subparagraphs (B)(ii)(I)ERN22335 9K1

S.L.C.

981

section (a) the biological products described in such2

subparagraphs. Such biological products shall count3

towards the required number of drugs to be selected4

under subsection (a)(1).’’;(C) by redesignating subsection (f) as sub-5
6section (g);(D) by inserting after subsection (e) the

7
8
9
10

following new subsection:‘‘(f) SPECIAL RULE TO DELAY SELECTION AND NEGOTIATIONOFBIOLOGICSFORBIOSIMILAR MARKET

11 ENTRY.—
12‘‘(1) APPLICATION.—

13‘‘(A) IN GENERAL.—Subject to subpara-

14

graph (B), in the case of a biological product

15

that would (but for this subsection) be an ex-

16tended-monopoly drug (as defined in section

171194(c)(4)) included as a selected drug on the18

list published under subsection (a) with respect

19

to an initial price applicability year, the rules

20

described in paragraph (2) shall apply if the21

Secretary determines that there is a high likeli-

22hood (as described in paragraph (3)) that a bio-

23

similar biological product (for which such bio-

24

logical product will be the reference product)25

will be licensed and marketed under section

ERN22335 9K1

S.L.C.

991351(k) of the Public Health Service Act before2

the date that is 2 years after the selected drug

3

publication date with respect to such initial

4

price applicability year.

567‘‘(B) REQUEST REQUIRED.—‘‘(i) IN

GENERAL.—The

Secretaryshall not provide for a delay under—

8‘‘(I) paragraph (2)(A) unless a9request is made for such a delay by a10

manufacturer of a biosimilar biological11

product prior to the selected drug

12

publication date for the list published13

under subsection (a) with respect to

14

the initial price applicability year for

15

which the biological product would

16

have been included as a selected drug

17

on such list but for subparagraph

18(2)(A); or19‘‘(II) paragraph (2)(B)(iii) unless

20

a request is made for such a delay by

21such a manufacturer prior to the se-22lected drug publication date for the23

list published under subsection (a)24with respect to the initial price appli-

25

cability year that is 1 year after theERN22335 9K1

S.L.C.

100
1

initial price applicability year for2

which the biological product described3

in subsection (a) would have been in-

4

cluded as a selected drug on such list

5

but for paragraph (2)(A).

6‘‘(ii)

7

MENTS.—

8

INFORMATION‘‘(I) IN

AND

DOCU-

GENERAL.—A

request9

made under clause (i) shall be sub-10

mitted to the Secretary by such man-11

ufacturer at a time and in a form and12manner specified by the Secretary,

13

and contain—

14‘‘(aa) information and docu-

15

ments necessary for the Sec-16

retary to make determinations

17

under this subsection, as speci-

18

fied by the Secretary; and19‘‘(bb) all agreements related20

to the biosimilar biological prod-21

uct filed with the Federal Trade

22

Commission or the Assistant At-

23

torney General pursuant to sub-24

sections (a) and (c) of section

25

1112 of the Medicare Prescrip-

ERN22335 9K1

S.L.C.

101
1

tion Drug, Improvement, and2

Modernization Act of 2003.

3‘‘(II) ADDITIONAL INFORMATIONDOCUMENTS.—Afterthe Sec-

4

AND

5

retary has reviewed the request and6materials submitted under subclause

7(I), the manufacturer shall submit

8

any additional information and docu-

9ments requested by the Secretary nec-

10

essary to make determinations under

11

this subsection.

12‘‘(C) AGGREGATION RULE.—

13‘‘(i) IN GENERAL.—All persons treat-14

ed as a single employer under subsection

15(a) or (b) of section 52 of the Internal

16

Revenue Code of 1986, or in a partnership,

17

shall be treated as one manufacturer for

18

purposes of paragraph (2)(D)(iv).

19‘‘(ii)PARTNERSHIP

DEFINED.—In

20

clause (i), the term ‘partnership’ means a

21

syndicate, group, pool, joint venture, or

22other organization through or by means of

23

which any business, financial operation, or24venture is carried on by the manufacturer

ERN22335 9K1

S.L.C.

102
1of the biological product and the manufac-

2

turer of the biosimilar biological product.

3‘‘(2) RULES DESCRIBED.—The rules described4

in this paragraph are the following:

5‘‘(A) DELAYED SELECTION AND NEGOTIA-

6

TION FOR 1 YEAR.—If a determination of high7

likelihood is made under paragraph (3), the8Secretary shall delay the inclusion of the bio-

9

logical product as a selected drug on the list

10

published under subsection (a) until such list is

11

published with respect to the initial price appli-

12

cability year that is 1 year after the initial price13

applicability year for which the biological prod-14

uct would have been included as a selected drug

15

on such list.

16
17
18

‘‘(B) IF NOT LICENSED AND MARKETED
DURING THE INITIAL DELAY.—‘‘(i) IN

GENERAL.—If,during the19time period between the selected drug pub-20

lication date on which the biological prod-21

uct would have been included on the list as

22

a selected drug pursuant to subsection (a)23but for subparagraph (A) and the selected24

drug publication date with respect to the25

initial price applicability year that is 1

ERN22335 9K1

S.L.C.

103
1

year after the initial price applicability

2year for which such biological product3

would have been included as a selected4drug on such list, the Secretary determines

5

that the biosimilar biological product for6which the manufacturer submitted the re-7quest under paragraph (1)(B)(i)(II) (and8

for which the Secretary previously made a9high likelihood determination under para-

10

graph (3)) has not been licensed and mar-11

keted under such section 351(k), the Sec-12

retary shall, at the request of such manu-

13

facturer—

14‘‘(I) reevaluate whether there is a15high likelihood (as described in para-

16

graph (3)) that such biosimilar bio-

17

logical product will be licensed and18marketed under such section 351(k)19

before the selected drug publication

20

date that is 2 years after the selected21

drug publication date for which such22

biological product would have been in-

23

cluded as a selected drug on such list

24

published but for subparagraph (A);

25

and

ERN22335 9K1

S.L.C.

104
1‘‘(II) evaluate whether, on the2basis of clear and convincing evidence,3

the manufacturer of such biosimilar

4

biological product has made a signifi-

5cant amount of progress (as deter-

6

mined by the Secretary) towards both

7

such licensure and the marketing of

8

such

9

(based on the items described in para-

10

graph (3)(B)) since the receipt by the11

Secretary of the request made by such12

manufacturer

13(1)(B)(i)(I).

14‘‘(ii)

15

TION.—If16

there is not a high likelihood that such bio-

17

similar biological product will be licensed

18

and marketed as described in clause (i)(I)19or there has not been a significant amount20

of progress as described in clause (i)(II)—21‘‘(I) the Secretary shall include

22

the biological product as a selected23

drug on the list published under sub-24

section (a) with respect to the initial

25

price applicability year that is 1 year

biosimilar

biological

under

SELECTION

AND

productparagraph

NEGOTIA-the Secretary determines that

ERN22335 9K1

S.L.C.

1051

after the initial price applicability year2

for which such biological product3

would have been included as a selected4drug on such list but for subpara-

5graph (A); and6‘‘(II) the manufacturer of such7

biological product shall pay a rebate

8

under paragraph (4) with respect to9

the year for which such manufacturer

10

would have provided access to a max-

11

imum fair price for such biological12

product but for subparagraph (A).

13‘‘(iii) SECOND 1-YEAR DELAY.—If the14

Secretary determines that there is a high15

likelihood that such biosimilar biological

16

product will be licensed and marketed (as17described in clause (i)(I)) and a significant

18

amount of progress has been made by the19

manufacturer of such biosimilar biological20

product towards such licensure and mar-21

keting (as described in clause (i)(II)), the22Secretary shall delay the inclusion of the23

biological product as a selected drug on the24list published under subsection (a) until25

the selected drug publication date of suchERN22335 9K1

S.L.C.

106
1

list with respect to the initial price applica-2

bility year that is 2 years after the initial

3

price applicability year for which such bio-

4

logical product would have been included5

as a selected drug on such list but for this6

subsection.

7‘‘(C) IF NOT LICENSED AND MARKETED

8

DURING THE YEAR TWO DELAY.—If, during the9time period between the selected drug publica-

10tion date of the list for which the biological11

product would have been included as a selected12drug but for subparagraph (B)(iii) and the se-13

lected drug publication date with respect to the14

initial price applicability year that is 2 years

15

after the initial price applicability year for

16

which such biological product would have been

17

included as a selected drug on such list but for18

this subsection, the Secretary determines that19such biosimilar biological product has not been

20

licensed and marketed—21‘‘(i) the Secretary shall include such22

biological product as a selected drug on

23

such list with respect to the initial price24

applicability year that is 2 years after the25

initial price applicability year for which

ERN22335 9K1

S.L.C.

107
1

such biological product would have been in-2

cluded as a selected drug on such list; and3‘‘(ii) the manufacturer of such biologi-

4

cal product shall pay a rebate under para-

5graph (4) with respect to the years for6

which such manufacturer would have pro-7

vided access to a maximum fair price for8such biological product but for this sub-9

section.

10‘‘(D) LIMITATIONS ON DELAYS.—

11‘‘(i) LIMITEDTO 2 YEARS.—In

no12

case shall the Secretary delay the inclusion

13of a biological product on the list published14

under subsection (a) for more than 2

15years.

16‘‘(ii)

EXCLUSIONOFBIOLOGICAL

17

PRODUCTS18

LONG-MONOPOLY

19

DELAY.—In the case of a biological prod-20

uct for which the inclusion on the list pub-21

lished pursuant to subsection (a) was de-22

layed by 1 year under subparagraph (A)23and for which there would have been a24change in status to a long-monopoly drug25

(as defined in section 1194(c)(5)) if such

THAT

TRANSITIONED
DRUG

DURINGTO

A

THE

ERN22335 9K1

S.L.C.

108
1

biological product had been a selected2drug, in no case may the Secretary provide

3

for a second 1-year delay under subpara-

4graph (B)(iii).

5‘‘(iii)EXCLUSIONOFBIOLOGICAL

6

PRODUCTS IF MORE THAN 1 YEAR SINCE

7LICENSURE.—In

8

retary delay the inclusion of a biological9

product on the list published under sub-10

section (a) if more than 1 year has elapsed

11

since the biosimilar biological product has

12been licensed under section 351(k) and13

marketing has not commenced for such

14

biosimilar biological product.

15

no case shall the Sec-‘‘(iv) CERTAIN MANUFACTURERS OF
EX-

16BIOSIMILAR

BIOLOGICAL

17

CLUDED.—In

no case shall the Secretary

18

delay the inclusion of a biological product19

as a selected drug on the list published20

under subsection (a) if the manufacturer

21of the biosimilar biological product de-22

scribed in paragraph (1)(A)—PRODUCTS

23‘‘(I) is the same as the manufac-

24

turer of the reference product de-25

scribed in such paragraph or is treat-ERN22335 9K1

S.L.C.

1091

ed as being the same pursuant to2paragraph (1)(C);

3‘‘(II) has—4‘‘(aa) in the past 5 years,

5

been subject to exclusion under6

section 1128(b)(7) or to the im-

7

position of civil monetary pen-8

alties under section 1128A; or

9‘‘(bb) an integrity agreement10

in effect with the Inspector Gen-11

eral of the Department of Health12and Human Services that was

13entered into in lieu of exclusion

14

under section 1128(b)(7);15‘‘(III) is currently subject to a16

cease and desist order or an injunc-

17tion in a proceeding or civil action

18

brought by the Federal Trade Com-19

mission except for proceedings or ac-

20

tions related solely to a merger or ac-

21

quisition; or

22‘‘(IV) has entered into any agree-

23

ment

described

inparagraph24(1)(B)(ii)(I)(bb) with the manufac-

25

turer of the reference product de-ERN22335 9K1

S.L.C.

1101

scribed in paragraph (1)(A) that re-2quires or incentivizes the manufac-

3

turer of the biosimilar biological prod-4

uct to submit a request described in5paragraph (1)(B).

6‘‘(E) PUBLIC NOTIFICATION.—If the Sec-7

retary delays the inclusion of a biological prod-8

uct as a selected drug on the list published9

under this section pursuant to subparagraph

10(A) or (B)(iii), the Secretary shall, within 30

11days of making the determination with respect

12

to such delay, provide notification to the public

13

of such delay in a form and manner determined

14

by the Secretary.

15‘‘(3) HIGH LIKELIHOOD.—

16‘‘(A) IN GENERAL.—For purposes of this17

subsection, there is a high likelihood described18

in paragraph (1) or paragraph (2), as applica-

19

ble, if the Secretary finds that—20‘‘(i) an application for licensure under

21

such section 351(k) for the biosimilar bio-

22

logical product has been accepted for re-23

view or approved by the Food and Drug

24

Administration; andERN22335 9K1

S.L.C.

111
1‘‘(ii) information from documents de-2

scribed in paragraph (1)(B)(ii) submitted

3by the manufacturer requesting a delay

4

under paragraph (1)(B) to the Secretary5

provides clear and convincing evidence that6such biosimilar biological product will,7

within the time period specified under8

paragraph (1)(A) or (2)(B)(i)(I), be mar-9keted.

10‘‘(B) ITEMS DESCRIBED.—The items de-11

scribed in this subparagraph are the following:

12‘‘(i) The manufacturing schedule for13

such biosimilar biological product sub-14

mitted to the Food and Drug Administra-

15

tion during its review of the application

16

under such section 351(k).

17‘‘(ii) Disclosures (in filings by the18

manufacturer of such biosimilar biological19

product with the Securities and Exchange

20

Commission required under section 12(b),21

12(g), 13(a), or 15(d) of the Securities Ex-

22change Act of 1934 about capital invest-

23

ment, revenue expectations, and actions

24

taken by the manufacturer that are typical

25of the normal course of business in theERN22335 9K1

S.L.C.

112
1

year (or the 2 years, as applicable) before

2

marketing of a biosimilar biological prod-3uct) that pertain to the marketing of such4

biosimilar biological product, or com-5

parable documentation that is distributed

6

to the shareholders of privately held com-7

panies.

8‘‘(iii) Agreements filed with the Fed-9eral Trade Commission or the Assistant10

Attorney General pursuant to subsections

11(a) and (c) of section 1112 of the Medicare

12

Prescription

13

Modernization Act of 2003.

14

Drug,

Improvement,and‘‘(4) REBATE.—

15‘‘(A) IN GENERAL.—For purposes of sub-16

paragraphs (B)(ii)(II) and (C)(ii) of paragraph

17(2), in the case of a biological product for which18

the inclusion on the list under subsection (a)19

was delayed under this subsection and for20

which the Secretary has negotiated and entered21

into an agreement under section 1193 with re-22

spect to such biological product, the manufac-

23

turer shall be required to pay a rebate to the24

Secretary at such time and in such manner as

25

determined by the Secretary.

ERN22335 9K1

S.L.C.

113
1‘‘(B) AMOUNT.—Subject to subparagraph2(C), the amount of the rebate under subpara-

3graph (A) with respect to a biological product4

shall be equal to the estimated amount—5‘‘(i) in the case of a biological product

6

that is a covered part D drug (as defined7

in section 1860D–2(e)), that is the sum of8

the products of—910‘‘(I) 75 percent of the amount bywhich—

11‘‘(aa) the average manufac-

12

turer price, as reported by the13

manufacturer of such covered

14

part D drug under section 1927

15(or, if not reported by such man-16

ufacturer under section 1927, as

17reported by such manufacturer to18

the Secretary pursuant to the19agreement

20

1193(a)) for such biological prod-21

uct, with respect to each of the22calendar quarters of the price ap-

23

plicability period that would have24

applied but for this subsection;

25

exceeds

undersectionERN22335 9K1

S.L.C.

114
1‘‘(bb) in the initial price ap-

2

plicability year that would have3

applied but for a delay under—

4‘‘(AA)

paragraph5(2)(A), the maximum fair6

price negotiated under sec-

7

tion 1194 for such biological

8

product under such agree-9ment; or

10‘‘(BB)

paragraph11(2)(B)(iii), such maximum

12

fair price, increased by the13annual percentage increase14

in the consumer price index

15

for all urban consumers (all16

items; United States city av-

17

erage) for the 12-month pe-

18

riod ending with September

19

of such previous year; and20‘‘(II) the number of units dis-21

pensed under part D of title XVIII

22

for such covered part D drug during

23

each such quarter of such price appli-

24

cability period; andERN22335 9K1

S.L.C.

115
1‘‘(ii) in the case of a biological prod-2

uct covered under part B of title XVIII,

3

that is the sum of the products of—45‘‘(I) 80 percent of the amount bywhich—

6‘‘(aa) the payment amount7

for such biological product under8

section 1847A(b), with respect to9each of the calendar quarters of10

the price applicability period that

11

would have applied but for this12

subsection; exceeds

13‘‘(bb) in the initial price ap-

14

plicability year that would have15

applied but for a delay under—

16‘‘(AA)

paragraph17(2)(A), the maximum fair18

price negotiated under sec-

19

tion 1194 for such biological20

product under such agree-

21

ment; or

22‘‘(BB)

paragraph23(2)(B)(iii), such maximum

24

fair price, increased by the25

annual percentage increaseERN22335 9K1

S.L.C.

116
1

in the consumer price index

2

for all urban consumers (all3items; United States city av-

4erage) for the 12-month pe-

5riod ending with September

6of such previous year; and7‘‘(II) the number of units (ex-8cluding units that are packaged into9

the payment amount for an item or

10service and are not separately payable

11

under such part B) of the billing and12

payment code of such biological prod-13

uct administered or furnished under

14

such part B during each such cal-15

endar quarter of such price applica-

16

bility period.

17‘‘(C) SPECIAL RULE FOR DELAYED BIO-

18

LOGICAL PRODUCTS THAT ARE LONG-MONOP-19

OLY DRUGS.—

20‘‘(i) IN GENERAL.—In the case of a21

biological product with respect to which a22

rebate is required to be paid under this23

paragraph, if such biological product quali-

24

fies as a long-monopoly drug (as defined in

25

section 1194(c)(5)) at the time of its inclu-

ERN22335 9K1

S.L.C.

117
1

sion on the list published under subsection

2(a), in determining the amount of the re-3bate for such biological product under sub-4

paragraph (B), the amount described in

5clause (ii) shall be substituted for the max-

6

imum fair price described in clause (i)(I)7or (ii)(I) of such subparagraph (B), as ap-

8plicable.

9‘‘(ii)AMOUNTDESCRIBED.—The10amount described in this clause is an11amount equal to 65 percent of the average

12

non-Federal average manufacturer price13

for the biological product for 2021 (or, in

14

the case that there is not an average non-15

Federal average manufacturer price avail-16

able for such biological product for 2021,

17

for the first full year following the market

18

entry for such biological product), in-19creased by the percentage increase in the20

consumer price index for all urban con-21

sumers (all items; United States city aver-

22age) from September 2021 (or December

23

of such first full year following the market

24entry), as applicable, to September of the25

year prior to the selected drug publication

ERN22335 9K1

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118
1

date with respect to the initial price appli-2cability year that would have applied but

3for this subsection.

4‘‘(D) REBATE DEPOSITS.—Amounts paid5

as rebates under this paragraph shall be depos-

6

ited into—

7‘‘(i) in the case payment is made for8such biological product under part B of

9title XVIII, the Federal Supplementary

10

Medical Insurance Trust Fund established11

under section 1841; and12‘‘(ii) in the case such biological prod-13

uct is a covered part D drug (as defined in

14

section 1860D–2(e)), the Medicare Pre-15

scription Drug Account under section

16

1860D–16 in such Trust Fund.

17‘‘(5) DETERMINATIONS.—The determinations of

18high likelihood and significant amount of progress

19

under this subsection and the determinations re-20

quired under paragraph (2)(D)(iv) shall be based on

21

information available to the Secretary, including in-

22

formation required by the Secretary from the manu-

23

facturer of the biosimilar biological product making

24

a request for a delay under this subsection.

ERN22335 9K1

S.L.C.

1191‘‘(6) DEFINITIONS OF BIOSIMILAR BIOLOGICAL

2

PRODUCT.—In this subsection, the term ‘biosimilar

3

biological product’ has the meanings given such term4in section 1847A(c)(6).’’; and5(E) in subsection (g), as redesignated by

6

subparagraph (C), by inserting ‘‘the application

7of subsection (f),’’ after ‘‘subsection (e),’’;

8(2) in section 1193(a)(4)—9(A) in the matter preceding subparagraph

10(A), by inserting ‘‘and for section 1192(f)’’11

after ‘‘section 1194(f)’’;

12
13
14
15

(B) in subparagraph (A), by striking‘‘and’’ at the end;(C) by adding at the end the following new
subparagraph:

16‘‘(C) information that the Secretary re-17

quires to carry out section 1192(f), including

18

rebates under paragraph (4) of such section;

19

and’’;

20(3) in section 1196(a)(7), by inserting ‘‘,211192(f)(1)(C),’’ after ‘‘sections 1192(d)(2)(B)’’; and

22(4) in section 1197—

23(A) by redesignating subsections (b), (c),24and (d) as subsections (c), (d), and (e), respec-25

tively; andERN22335 9K1

S.L.C.

120(B) by inserting after subsection (a) the1
2

following new subsection:3‘‘(b) VIOLATIONS RELATING

4TO

PROVIDING RE-

BATES.—Any manufacturer that fails to comply with the

5 rebate requirements under section 1192(f)(4) shall be sub6 ject to a civil monetary penalty equal to 10 times the
7 amount of the rebate the manufacturer failed to pay under
8 such section.’’.
(b) CONFORMING AMENDMENTS FOR DISCLOSURE

9
10

OF

CERTAIN INFORMATION.—Section 1927(b)(3)(D) of

11 the Social Security Act (42 U.S.C. 1396r–8(b)(3)(D)) is
12 amended—13(1) in clause (vi), by striking ‘‘and’’ at the end;

14(2) in clause (vii), by striking the period at the

15
16
17

end and inserting ‘‘; and’’; and(3) by inserting after clause (vii) the following
new clause:

18‘‘(viii) as the Secretary determines

19

necessary to carry out section 1192(f), in-20

cluding rebates under paragraph (4) of

21

such section.’’.

22(c) IMPLEMENTATION FOR 2026 THROUGH 2028.—

23 The Secretary of Health and Human Services shall imple24 ment this section, including the amendments made by thisERN22335 9K1

S.L.C.

121
1 section, for 2026, 2027, and 2028 by program instruction
2 or other forms of program guidance.
3

SEC. 11003. SELECTED DRUG MANUFACTURER EXCISE TAX

4IMPOSED DURING NONCOMPLIANCE PERI-

5

ODS.

6

(a) IN GENERAL.—Subtitle D of the Internal Rev-

7 enue Code of 1986 is amended by adding at the end the
8 following new chapter:
9‘‘CHAPTER 50A—SELECTED DRUGS‘‘Sec. 5000D. Selected drugs during noncompliance periods.

10
11
12

‘‘SEC. 5000D. SELECTED DRUGS DURING NONCOMPLIANCEPERIODS.

‘‘(a) IN GENERAL.—There is hereby imposed on the

13 sale by the manufacturer, producer, or importer of any
14 selected drug during a day described in subsection (b) a
15 tax in an amount such that the applicable percentage is
16 equal to the ratio of—17‘‘(1) such tax, divided by

18‘‘(2) the sum of such tax and the price for19

which so sold.

20‘‘(b) NONCOMPLIANCE PERIODS.—A day is described

21 in this subsection with respect to a selected drug if it is
22 a day during one of the following periods:
23‘‘(1) The period beginning on the March 1st24(or, in the case of initial price applicability year

ERN22335 9K1

S.L.C.

1221

2026, the October 2nd) immediately following the2

selected drug publication date and ending on the3

first date during which the manufacturer of the drug

4

has in place an agreement described in subsection

5(a) of section 1193 of the Social Security Act with6

respect to such drug.

7‘‘(2) The period beginning on the November

8

2nd immediately following the March 1st described9

in paragraph (1) (or, in the case of initial price ap-

10

plicability year 2026, the August 2nd immediately

11

following the October 2nd described in such para-

12

graph) and ending on the first date during which the13

manufacturer of the drug and the Secretary of

14

Health and Human Services have agreed to a max-

15

imum fair price under such agreement.

16‘‘(3) In the case of a selected drug with respect

17

to which the Secretary of Health and Human Serv-

18

ices has specified a renegotiation period under such

19

agreement, the period beginning on the first date20

after the last date of such renegotiation period and21

ending on the first date during which the manufac-

22

turer of the drug has agreed to a renegotiated max-

23

imum fair price under such agreement.

24‘‘(4) With respect to information that is re-25

quired to be submitted to the Secretary of HealthERN22335 9K1

S.L.C.

123
1

and Human Services under such agreement, the pe-2riod beginning on the date on which such Secretary3certifies that such information is overdue and ending

4on the date that such information is so submitted.

5‘‘(c) APPLICABLE PERCENTAGE.—For purposes of

6 this section, the term ‘applicable percentage’ means—7‘‘(1) in the case of sales of a selected drug dur-

8

ing the first 90 days described in subsection (b) with9

respect to such drug, 65 percent,10‘‘(2) in the case of sales of such drug during

11

the 91st day through the 180th day described in

12

subsection (b) with respect to such drug, 75 percent,13‘‘(3) in the case of sales of such drug during

14

the 181st day through the 270th day described in

15

subsection (b) with respect to such drug, 85 percent,16and‘‘(4) in the case of sales of such drug during

17
18

any subsequent day, 95 percent.

19‘‘(d) SELECTED DRUG.—For purposes of this sec-

20 tion—21‘‘(1) IN GENERAL.—The term ‘selected drug’

22means any selected drug (within the meaning of sec-

23

tion 1192(c) of the Social Security Act) which is24

manufactured or produced in the United States orERN22335 9K1

S.L.C.

124
1

entered into the United States for consumption, use,

2or warehousing.

3‘‘(2) UNITEDSTATES.—Theterm ‘United

4

States’ has the meaning given such term by section

54612(a)(4).

6‘‘(3) COORDINATION WITH RULES FOR POSSES-7

SIONS OF THE UNITED STATES.—Rules

similar to8

the rules of paragraphs (2) and (4) of section

94132(c) shall apply for purposes of this section.

10‘‘(e) OTHER DEFINITIONS.—For purposes of this

11 section, the terms ‘initial price applicability year’, ‘selected
12 drug publication date’, and ‘maximum fair price’ have the
13 meaning given such terms in section 1191 of the Social
14 Security Act.
15‘‘(f) SPECIAL RULES.—

16‘‘(1) ANTI-ABUSE RULE.—In the case of a sale

17

which was timed for the purpose of avoiding the tax

18

imposed by this section, the Secretary may treat

19such sale as occurring during a day described in20

subsection (b).

21‘‘(2) PROHIBITIONONADMINISTRATIVE

AP-

22

PEALS.—Any tax controversy with respect to the tax

23

imposed by this section shall not be referred to, or24

considered by, the Internal Revenue Service Inde-25

pendent Office of Appeals.

ERN22335 9K1

S.L.C.

1251‘‘(g) EXPORTS.—Rules similar to the rules of section

2 4662(e) (other than section 4662(e)(2)(A)(ii)(II)) shall
3 apply for purposes of this chapter.
4‘‘(h) REGULATIONS.—The Secretary shall prescribe

5 such regulations and other guidance as may be necessary
6 or appropriate to carry out this section.’’.
7(b) NO DEDUCTION FOR EXCISE TAX PAYMENTS.—

8 Section 275(a)(6) of the Internal Revenue Code of 1986
9 is amended by inserting ‘‘50A,’’ after ‘‘46,’’.
10(c) CIVIL ACTIONS FOR REFUND.—Section 7422 of

11 the Internal Revenue Code of 1986 is amended by insert12 ing after subsection (g) the following new subsection:13‘‘(h) SPECIAL RULES FOR EXCISE TAX IMPOSED BY

14 CHAPTER 50A.—No suit or proceeding shall be main15 tained in any court for the recovery of any tax imposed
16 under section 5000D until payment has been made by the
17 taxpayer in an amount equal to the full amount of the
18 tax imposed under such section (including any interest or
19 penalties in connection with such tax) with respect to any
20 sales of a selected drug (as defined in section
21 5000D(d)(1)) during the period for which a return is re22 quired to be made with respect to such tax (as determined
23 under regulations prescribed by the Secretary).’’.

ERN22335 9K1

S.L.C.

1261(d) CLERICAL AMENDMENT.—The table of chapters

2 for subtitle D of the Internal Revenue Code of 1986 is
3 amended by adding at the end the following new item:‘‘CHAPTER 50A—SELECTED DRUGS’’.

4(e) EFFECTIVE DATE.—The amendments made by

5 this section shall apply to sales after the date of the enact6 ment of this Act.
7
8

SEC. 11004. FUNDING.

In addition to amounts otherwise available, there is

9 appropriated to the Centers for Medicare & Medicaid Serv10 ices, out of any money in the Treasury not otherwise ap11 propriated, $3,000,000,000 for fiscal year 2022, to remain
12 available until expended, to carry out the provisions of,
13 including the amendments made by, this part.
14

PART 2—PRESCRIPTION DRUG INFLATION

15REBATES

16

SEC. 11101. MEDICARE PART B REBATE BY MANUFACTUR-

17
18

ERS.

(a) IN GENERAL.—Section 1847A of the Social Secu-

19 rity Act (42 U.S.C. 1395w–3a) is amended—20(1) by redesignating subsection (i) as subsection

21(j) and by inserting after subsection (h) the fol-22

lowing subsection:

23‘‘(i) REBATEBY

MANUFACTURERSFOR

SINGLE

24 SOURCE DRUGS AND BIOLOGICALS WITH PRICES IN25

CREASING FASTER THAN INFLATION.—ERN22335 9K1

S.L.C.

12712‘‘(1) REQUIREMENTS.—‘‘(A) SECRETARIAL PROVISION OF INFOR-

3

MATION.—Notlater than 6 months after the4

end of each calendar quarter beginning on or

5

after January 1, 2023, the Secretary shall, for6each part B rebatable drug, report to each7

manufacturer of such part B rebatable drug the8following for such calendar quarter:

9‘‘(i) Information on the total number

10of billing units of the billing and payment

11

code described in subparagraph (A)(i) of

12paragraph (3) with respect to such drug

13

and calendar quarter.

14‘‘(ii) Information on the amount (if15any) of the excess average sales price in-16

crease described in subparagraph (A)(ii) of

17such paragraph for such drug and calendar

18

quarter.

19‘‘(iii) The rebate amount specified

20

under such paragraph for such part B

21

rebatable drug and calendar quarter.

22‘‘(B) MANUFACTURERREQUIREMENT.—23

For each calendar quarter beginning on or after

24

January 1, 2023, the manufacturer of a part B

25

rebatable drug shall, for such drug, not laterERN22335 9K1

S.L.C.

128
1

than 30 days after the date of receipt from the2

Secretary of the information described in sub-3

paragraph (A) for such calendar quarter, pro-4

vide to the Secretary a rebate that is equal to5

the amount specified in paragraph (3) for such

6

drug for such calendar quarter.

7‘‘(C) TRANSITION

RULE

FOR

REPORT-

8

ING.—The

Secretary may, for each part B

9rebatable drug, delay the timeframe for report-

10

ing the information described in subparagraph

11(A) for calendar quarters beginning in 2023

12

and 2024 until not later than September 30,

13

2025.

14

‘‘(2) PART B REBATABLE DRUG DEFINED.—

15‘‘(A) IN GENERAL.—In this subsection, the16term ‘part B rebatable drug’ means a single

17source drug or biological (as defined in sub-18

paragraph (D) of subsection (c)(6)), including a

19biosimilar biological product (as defined in sub-20

paragraph (H) of such subsection) but exclud-21

ing a qualifying biosimilar biological product22(as defined in subsection (b)(8)(B)(iii)), that23

would be payable under this part if such drug

24

were furnished to an individual enrolled underERN22335 9K1

S.L.C.

1291

this part, except such term shall not include2

such a drug or biological—

3‘‘(i) if, as determined by the Sec-4

retary, the average total allowed charges

5

for such drug or biological under this part6

for a year per individual that uses such a7drug or biological are less than, subject to

8subparagraph (B), $100; or

9‘‘(ii) that is a vaccine described in

10

subparagraph11

1861(s)(10).

12‘‘(B) INCREASE.—The dollar amount ap-

13

(A)

or

(B)

of

sectionplied under subparagraph (A)(i)—

14‘‘(i) for 2024, shall be the dollar

15

amount specified under such subparagraph16

for 2023, increased by the percentage in-17

crease in the consumer price index for all

18

urban consumers (United States city aver-

19age) for the 12-month period ending with

20

June of the previous year; and21‘‘(ii) for a subsequent year, shall be

22

the dollar amount specified in this clause23(or clause (i)) for the previous year (with-24

out application of subparagraph (C)), in-25

creased by the percentage increase in theERN22335 9K1

S.L.C.

1301

consumer price index for all urban con-2

sumers (United States city average) for3

the 12-month period ending with June of4

the previous year.

5‘‘(C) ROUNDING.—Any dollar amount de-6

termined under subparagraph (B) that is not a7

multiple of $10 shall be rounded to the nearest8

multiple of $10.

9‘‘(3) REBATE AMOUNT.—

10‘‘(A) IN GENERAL.—For purposes of para-

11

graph (1), the amount specified in this para-

12

graph for a part B rebatable drug assigned to13

a billing and payment code for a calendar quar-14

ter is, subject to subparagraphs (B) and (G)15

and paragraph (4), the estimated amount equal

16

to the product of—17‘‘(i) the total number of billing units

18

determined under subparagraph (B) for19

the billing and payment code of such drug;

20

and

21

‘‘(ii) the amount (if any) by which—22‘‘(I) the amount equal to—

23‘‘(aa) in the case of a part B

24

rebatable drug described in para-

25

graph

(1)(B)

ofsectionERN22335 9K1

S.L.C.

131
1

1847A(b), 106 percent of the2amount determined under para-

3graph (4) of such section for4such drug during the calendar

5

quarter; or6‘‘(bb) in the case of a part B

7rebatable drug described in para-

8graph (1)(C) of such section, the9payment

10

paragraph for such drug during

11

the calendar quarter; exceeds

12‘‘(II) the inflation-adjusted pay-

13

ment amount determined under sub-14

paragraph (C) for such part B

15

rebatable drug during the calendar

16

quarter.

17

‘‘(B)

TOTAL

amountNUMBER

under

OF

such

BILLING

18

UNITS.—For purposes of subparagraph (A)(i),19

the total number of billing units with respect to20

a part B rebatable drug is determined as fol-

21

lows:

22
23

‘‘(i) Determine the total number ofunits equal to—24‘‘(I) the total number of units, as

25

reported under subsection (c)(1)(B)ERN22335 9K1

S.L.C.

132
1

for each National Drug Code of such2

drug during the calendar quarter that3is two calendar quarters prior to the4calendar quarter as described in sub-5

paragraph (A), minus

6‘‘(II) the total number of units

7with respect to each National Drug

8

Code of such drug for which payment

9

was made under a State plan under

10

title XIX (or waiver of such plan), as11

reported by States under section12

1927(b)(2)(A) for the rebate period

13that is the same calendar quarter as

14

described in subclause (I).

15‘‘(ii) Convert the units determined16

under clause (i) to billing units for the bill-17

ing and payment code of such drug, using

18

a methodology similar to the methodology

19

used under this section, by dividing the20units determined under clause (i) for each21

National Drug Code of such drug by the22billing unit for the billing and payment

23

code of such drug.

ERN22335 9K1

S.L.C.

133
1‘‘(iii) Compute the sum of the billing2

units for each National Drug Code of such3

drug in clause (ii).

4‘‘(C) DETERMINATION OF INFLATION-AD-

5JUSTED PAYMENT AMOUNT.—The inflation-ad-

6justed payment amount determined under this7

subparagraph for a part B rebatable drug for8

a calendar quarter is—

9‘‘(i) the payment amount for the bill-10

ing and payment code for such drug in the11payment amount benchmark quarter (as12defined in subparagraph (D)); increased by

13‘‘(ii) the percentage by which the re-14

bate period CPI–U (as defined in subpara-

15

graph (F)) for the calendar quarter ex-

16

ceeds the benchmark period CPI–U (as de-17

fined in subparagraph (E)).

18

‘‘(D)

PAYMENTAMOUNT

BENCHMARK19

QUARTER.—The term ‘payment amount bench-

20

mark quarter’ means the calendar quarter be-

21

ginning July 1, 2021.

22‘‘(E) BENCHMARKPERIODCPI–U.—The23

term ‘benchmark period CPI–U’ means the con-24

sumer price index for all urban consumers

25(United States city average) for January 2021.

ERN22335 9K1

S.L.C.

1341‘‘(F) REBATE PERIOD CPI–U.—The term2

‘rebate period CPI–U’ means, with respect to a3

calendar quarter described in subparagraph

4(C), the greater of the benchmark period CPI–

5

U and the consumer price index for all urban

6

consumers (United States city average) for the7

first month of the calendar quarter that is two

8

calendar quarters prior to such described cal-

9

endar quarter.

10‘‘(G) REDUCTION OR WAIVER FOR SHORTDISRUP-

11

AGES

12

TIONS.—The13

the amount under subparagraph (A) with re-14

spect to a part B rebatable drug and a calendar

15

quarter—

AND

SEVERE

SUPPLYCHAIN

Secretary shall reduce or waive

16‘‘(i) in the case of a part B rebatable

17

drug that is described as currently in

18

shortage on the shortage list in effect19

under section 506E of the Federal Food,

20

Drug, and Cosmetic Act at any point dur-21

ing the calendar quarter; or22‘‘(ii) in the case of a biosimilar bio-

23

logical product, when the Secretary deter-24

mines there is a severe supply chain dis-25

ruption during the calendar quarter, suchERN22335 9K1

S.L.C.

1351

as that caused by a natural disaster or2other unique or unexpected event.

34‘‘(4) SPECIAL TREATMENT OF CERTAIN DRUGSAND EXEMPTION.—

5‘‘(A) SUBSEQUENTLY APPROVED DRUGS.—

6

In the case of a part B rebatable drug first ap-

7

proved or licensed by the Food and Drug Ad-

8ministration after December 1, 2020, clause (i)9of paragraph (3)(C) shall be applied as if the10

term ‘payment amount benchmark quarter’

11

were defined under paragraph (3)(D) as the12third full calendar quarter after the day on

13which the drug was first marketed and clause

14(ii) of paragraph (3)(C) shall be applied as if

15

the term ‘benchmark period CPI–U’ were de-16

fined under paragraph (3)(E) as if the ref-17

erence to ‘January 2021’ under such paragraph18

were a reference to ‘the first month of the first

19

full calendar quarter after the day on which the20

drug was first marketed’.

21‘‘(B) TIMELINE FOR PROVISION OF RE-

22

BATES

23

DRUGS.—In the case of a part B rebatable drug

24

first approved or licensed by the Food and25

Drug Administration after December 1, 2020,

FOR

SUBSEQUENTLYAPPROVEDERN22335 9K1

S.L.C.

136
1

paragraph (1)(B) shall be applied as if the ref-2

erence to ‘January 1, 2023’ under such para-

3graph were a reference to ‘the later of the 6th

4full calendar quarter after the day on which the5drug was first marketed or January 1, 2023’.

6‘‘(C) SELECTED DRUGS.—In the case of a7part B rebatable drug that is a selected drug

8

(as defined in section 1192(c)) with respect to9a price applicability period (as defined in sec-

10

tion 1191(b)(2)), in the case such drug is no11

longer considered to be a selected drug under

12

section 1192(c), for each applicable period (as13defined under subsection (g)(7)) beginning after

14

the price applicability period with respect to15such drug, clause (i) of paragraph (3)(C) shall16

be applied as if the term ‘payment amount17

benchmark quarter’ were defined under para-

18

graph (3)(D) as the calendar quarter beginning

19

January 1 of the last year during such price20

applicability period with respect to such selected21

drug and clause (ii) of paragraph (3)(C) shall22

be applied as if the term ‘benchmark period

23

CPI–U’ were defined under paragraph (3)(E)24

as if the reference to ‘January 2021’ underERN22335 9K1

S.L.C.

137
1

such paragraph were a reference to ‘the July of2the year preceding such last year’.

3‘‘(5) APPLICATION TO BENEFICIARY COINSUR-

4

ANCE.—In the case of a part B rebatable drug fur-5

nished on or after April 1, 2023, if the payment

6

amount described in paragraph (3)(A)(ii)(I) (or, in7

the case of a part B rebatable drug that is a selected8drug (as defined in section 1192(c)), the payment

9amount described in subsection (b)(1)(B) for such

10drug) for a calendar quarter exceeds the inflation

11

adjusted payment for such quarter—

12‘‘(A) in computing the amount of any coin-

13

surance applicable under this part to an indi-

14vidual to whom such drug is furnished, the15

computation of such coinsurance shall be equal16

to 20 percent of the inflation-adjusted payment

17

amount determined under paragraph (3)(C) for18

such part B rebatable drug; and19‘‘(B) the amount of such coinsurance for20such calendar quarter, as computed under sub-21

paragraph (A), shall be applied as a percent, as

22

determined by the Secretary, to the payment

23

amount that would otherwise apply under sub-24

paragraphs (B) or (C) of subsection (b)(1).

ERN22335 9K1

S.L.C.

138
1‘‘(6) REBATE DEPOSITS.—Amounts paid as re-2bates under paragraph (1)(B) shall be deposited into3

the Federal Supplementary Medical Insurance Trust

4

Fund established under section 1841.

5‘‘(7) CIVIL MONEY PENALTY.—If a manufac-

6

turer of a part B rebatable drug has failed to com-7

ply with the requirements under paragraph (1)(B)8

for such drug for a calendar quarter, the manufac-

9turer shall be subject to, in accordance with a proc-

10

ess established by the Secretary pursuant to regula-

11

tions, a civil money penalty in an amount equal to12

at least 125 percent of the amount specified in para-

13

graph (3) for such drug for such calendar quarter.

14

The provisions of section 1128A (other than sub-15

sections (a) (with respect to amounts of penalties or16

additional assessments) and (b)) shall apply to a17

civil money penalty under this paragraph in the

18

same manner as such provisions apply to a penalty

19

or proceeding under section 1128A(a).’’; and

20
21
22
23

(2) in subsection (j), as redesignated by paragraph (1)—(A) in paragraph (4), by striking at theend ‘‘and’’;24(B) in paragraph (5), by striking at the25

end the period and inserting a semicolon; andERN22335 9K1

S.L.C.

139(C) by adding at the end the following new

1
2paragraphs:

3‘‘(6) the determination of units under sub-

4
5
6
7
8
9
10
11

section (i);‘‘(7) the determination of whether a drug is apart B rebatable drug under subsection (i);‘‘(8) the calculation of the rebate amount undersubsection (i); and‘‘(9) the computation of coinsurance under subsection (i)(5); and‘‘(10) the computation of amounts paid under

12

section 1833(a)(1)(EE).’’.

13(b) AMOUNTS PAYABLE; COST-SHARING.—Section

14 1833 of the Social Security Act (42 U.S.C. 1395l) is
15 amended—1617(1) in subsection (a)(1)—(A) in subparagraph (G), by inserting ‘‘,

18

subjecttosubsection

19

amounts paid’’;(i)(9),’’

after

‘‘the

20

(B) in subparagraph (S), by striking ‘‘with21

respect to’’ and inserting ‘‘subject to subpara-

22

graph (EE), with respect to’’;23
24(C) by striking ‘‘and (DD)’’ and inserting‘‘(DD)’’; andERN22335 9K1

S.L.C.

1401(D) by inserting before the semicolon at2

the end the following: ‘‘, and (EE) with respect3

to a part B rebatable drug (as defined in para-

4graph (2) of section 1847A(i)) furnished on or

5

after April 1, 2023, for which the payment

6

amount for a calendar quarter under paragraph

7(3)(A)(ii)(I) of such section (or, in the case of8

a part B rebatable drug that is a selected drug

9

(as defined in section 1192(c) for which, the10payment

11

1847A(b)(1)(B)) for such drug for such quarter

12

exceeds the inflation-adjusted payment under13

paragraph (3)(A)(ii)(II) of such section for

14

such quarter, the amounts paid shall be equal

15

to the percent of the payment amount under16

paragraph (3)(A)(ii)(I) of such section or sec-

17

tion 1847A(b)(1)(B), as applicable, that equals

18

the difference between (i) 100 percent, and (ii)

19

the

20

1847A(i)(5)(B)’’;21(2) in subsection (i), by adding at the end theamountpercent

described

appliedinundersectionsection22

following new paragraph:23‘‘(9) In the case of a part B rebatable drug (as de-

24 fined in paragraph (2) of section 1847A(i)) for which pay25 ment under this subsection is not packaged into a payment

ERN22335 9K1

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141
1 for a service furnished on or after April 1, 2023, under
2 the revised payment system under this subsection, in lieu
3 of calculation of coinsurance and the amount of payment
4 otherwise applicable under this subsection, the provisions
5 of section 1847A(i)(5) and paragraph (1)(EE) of sub6 section (a), shall, as determined appropriate by the Sec7 retary, apply under this subsection in the same manner
8 as such provisions of section 1847A(i)(5) and subsection
9 (a) apply under such section and subsection.’’; and
1011(3) in subsection (t)(8), by adding at the end
the following new subparagraph:12‘‘(F) PART B REBATABLE DRUGS.—In the13case of a part B rebatable drug (as defined in

14paragraph (2) of section 1847A(i), except if

15such drug does not have a copayment amount16

as a result of application of subparagraph (E))

17for which payment under this part is not pack-18

aged into a payment for a covered OPD service

19(or group of services) furnished on or after

20

April 1, 2023, and the payment for such drug

21

under this subsection is the same as the22amount for a calendar quarter under paragraph

23(3)(A)(ii)(I) of section 1847A(i), under the sys-24

tem under this subsection, in lieu of calculation

25of the copayment amount and the amount of

ERN22335 9K1

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142
1

payment otherwise applicable under this sub-2

section (other than the application of the limita-

3

tion described in subparagraph (C)), the provi-4

sions of section 1847A(i)(5) and paragraph

5(1)(EE) of subsection (a), shall, as determined

6

appropriate by the Secretary, apply under this7

subsection in the same manner as such provi-8

sions of section 1847A(i)(5) and subsection (a)9apply under such section and subsection.’’.

10(c) CONFORMING AMENDMENTS.—

11(1) TO PART B ASP CALCULATION.—Section

12

1847A(c)(3) of the Social Security Act (42 U.S.C.

13

1395w–3a(c)(3)) is amended by inserting ‘‘sub-14

section (i) or’’ before ‘‘section 1927’’.

15(2) EXCLUDING PART B DRUG INFLATION REPRICE.—Section

16

BATE

17

1927(c)(1)(C)(ii)(I) of the Social Security Act (4218

U.S.C. 1396r–8(c)(1)(C)(ii)(I)) is amended by in-

19

serting ‘‘or section 1847A(i)’’ after ‘‘this section’’.

FROM

BEST

20

(3) COORDINATION WITH MEDICAID REBATE IN-

21

FORMATION DISCLOSURE.—Section 1927(b)(3)(D)(i)22of the Social Security Act (42 U.S.C. 1396r–

23

8(b)(3)(D)(i)) is amended by inserting ‘‘and the re-24bate’’ after ‘‘the payment amount’’.

ERN22335 9K1

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143
1(4) EXCLUDING PART B DRUG INFLATION RE-

2

BATES FROM AVERAGE MANUFACTURER PRICE.—

3

Section 1927(k)(1)(B)(i) of the Social Security Act

4(42 U.S.C. 1396r–8(k)(1)(B)(i)), as amended by

5section 11001(b)(3), is amended—

67(A) in subclause (V), by striking ‘‘and’’ atthe end;

8(B) in subclause (VI), by striking the pe-

9riod at the end and inserting a semicolon; and10(C) by adding at the end the following new

11

subclause:‘‘(VII) rebates paid by manufac-

12
13
14

turers under section 1847A(i); and’’.
(d) FUNDING.—In addition to amounts otherwise

15 available, there are appropriated to the Centers for Medi16 care & Medicaid Services, out of any money in the Treas17 ury not otherwise appropriated, $80,000,000 for fiscal
18 year 2022, including $12,500,000 to carry out the provi19 sions of, including the amendments made by, this section
20 in fiscal year 2022, and $7,500,000 to carry out the provi21 sions of, including the amendments made by, this section
22 in each of fiscal years 2023 through 2031, to remain avail23 able until expended.

ERN22335 9K1

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144
1
2
3

SEC. 11102. MEDICARE PART D REBATE BY MANUFACTURERS.

(a) IN GENERAL.—Part D of title XVIII of the Social

4 Security Act is amended by inserting after section 1860D–
5 14A (42 U.S.C. 1395w–114a) the following new section:
6‘‘SEC. 1860D–14B. MANUFACTURER REBATE FOR CERTAIN

7DRUGS WITH PRICES INCREASING FASTER

8

THAN INFLATION.

9‘‘(a) REQUIREMENTS.—

10‘‘(1) SECRETARIALPROVISION OF INFORMA-

11

TION.—Not

later than 9 months after the end of

12

each applicable period (as defined in subsection

13(g)(7)), subject to paragraph (3), the Secretary

14

shall, for each part D rebatable drug, report to each15

manufacturer of such part D rebatable drug the fol-16

lowing for such period:

17‘‘(A) The amount (if any) of the excess an-18nual manufacturer price increase described in

19

subsection (b)(1)(A)(ii) for each dosage form

20

and strength with respect to such drug and pe-

21

riod.

22

‘‘(B) The rebate amount specified under23

subsection (b) for each dosage form and24strength with respect to such drug and period.

25

‘‘(2)

26

MANUFACTURERREQUIREMENTS.—For

each applicable period, the manufacturer of a part D

ERN22335 9K1

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1451

rebatable drug, for each dosage form and strength2with respect to such drug, not later than 30 days

3

after the date of receipt from the Secretary of the

4

information described in paragraph (1) for such pe-5riod, shall provide to the Secretary a rebate that is

6

equal to the amount specified in subsection (b) for7

such dosage form and strength with respect to such

8

drug for such period.

9‘‘(3) TRANSITION RULE FOR REPORTING.—The

10

Secretary may, for each rebatable covered part D

11drug, delay the timeframe for reporting the informa-

12tion and rebate amount described in subparagraphs

13(A) and (B) of such paragraph for the applicable pe-

14

riods beginning October 1, 2022, and October 1,

152023, until not later than December 31, 2025.

16‘‘(b) REBATE AMOUNT.—

17‘‘(1) IN GENERAL.—

18‘‘(A) CALCULATION.—For purposes of this19

section, the amount specified in this subsection

20

for a dosage form and strength with respect to

21

a part D rebatable drug and applicable period

22

is, subject to subparagraph (C), paragraph

23(5)(B), and paragraph (6), the estimated24

amount equal to the product of—ERN22335 9K1

S.L.C.

1461‘‘(i) subject to subparagraph (B) of

2

this paragraph, the total number of units

3that are used to calculate the average man-4

ufacturer price of such dosage form and5strength with respect to such part D

6rebatable drug, as reported by the manu-

7

facturer of such drug under section 1927

8

for each month, with respect to such pe-9riod; and10‘‘(ii) the amount (if any) by which—11‘‘(I) the annual manufacturer

12

price (as determined in paragraph13(2)) paid for such dosage form and14strength with respect to such part D

15

rebatable drug for the period; exceeds

16‘‘(II) the inflation-adjusted pay-17

ment amount determined under para-

18

graph (3) for such dosage form and19strength with respect to such part D

20

rebatable drug for the period.

21‘‘(B) EXCLUDED UNITS.—For purposes of22

subparagraph (A)(i), the Secretary shall exclude

23

from the total number of units for a dosage

24

form and strength with respect to a part D

ERN22335 9K1

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1471

rebatable drug, with respect to an applicable pe-2riod, the following:

3‘‘(i) Units of each dosage form and4strength of such part D rebatable drug for5which payment was made under a State

6

plan under title XIX (or waiver of such

7plan), as reported by States under section8

1927(b)(2)(A).

9‘‘(ii) Units of each dosage form and10strength of such part D rebatable drug for11

which a rebate is paid under section

12

1847A(i).

13‘‘(C) REDUCTION OR WAIVER FOR SHORTDISRUP-

14

AGES

15

TIONS.—The16

the amount under subparagraph (A) with re-17

spect to a part D rebatable drug and an appli-

18

cable period—

AND

SEVERE

SUPPLYCHAIN

Secretary shall reduce or waive

19‘‘(i) in the case of a part D rebatable

20

drug that is described as currently in

21

shortage on the shortage list in effect22

under section 506E of the Federal Food,

23

Drug, and Cosmetic Act at any point dur-

24

ing the applicable period;

ERN22335 9K1

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148
1‘‘(ii) in the case of a generic part D2rebatable drug (described in subsection

3(g)(1)(C)(ii)) or a biosimilar (defined as a4

biological product licensed under section

5351(k) of the Public Health Service Act),

6

when the Secretary determines there is a7

severe supply chain disruption during the8

applicable period, such as that caused by a9natural disaster or other unique or unex-

10

pected event; and11‘‘(iii) in the case of a generic Part D

12rebatable drug (as so described), if the13

Secretary determines that without such re-14

duction or waiver, the drug is likely to be

15

described as in shortage on such shortage

16

list during a subsequent applicable period.

17‘‘(2) DETERMINATION OF ANNUAL MANUFAC-

18

TURER PRICE.—The annual manufacturer price de-19

termined under this paragraph for a dosage form

20

and strength, with respect to a part D rebatable

21

drug and an applicable period, is the sum of the

22

products of—23‘‘(A) the average manufacturer price (as24defined in subsection (g)(6)) of such dosage

25

form and strength, as calculated for a unit ofERN22335 9K1

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149
1

such drug, with respect to each of the calendar

2

quarters of such period; and3‘‘(B) the ratio of—4‘‘(i) the total number of units of such5

dosage form and strength reported under6

section 1927 with respect to each such cal-

7

endar quarter of such period; to8‘‘(ii) the total number of units of such9

dosage form and strength reported under10

section 1927 with respect to such period,11

as determined by the Secretary.

12‘‘(3) DETERMINATION OF INFLATION-ADJUSTED

13PAYMENT AMOUNT.—The inflation-adjusted payment

14

amount determined under this paragraph for a dos-15

age form and strength with respect to a part D

16

rebatable drug for an applicable period, subject to17paragraph (5), is—18‘‘(A) the benchmark period manufacturer

19

price determined under paragraph (4) for such20

dosage form and strength with respect to such21

drug and period; increased by

22‘‘(B) the percentage by which the applica-

23

ble period CPI–U (as defined in subsection

24(g)(5)) for the period exceeds the benchmark

25

period CPI–U (as defined in subsection (g)(4)).

ERN22335 9K1

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150
1‘‘(4) DETERMINATION OF BENCHMARK PERIOD
PRICE.—Thebenchmark period

2

MANUFACTURER

3

manufacturer price determined under this paragraph4for a dosage form and strength, with respect to a5part D rebatable drug and an applicable period, is6

the sum of the products of—7‘‘(A) the average manufacturer price (as8defined in subsection (g)(6)) of such dosage

9

form and strength, as calculated for a unit of10such drug, with respect to each of the calendar

11

quarters of the payment amount benchmark pe-

12riod (as defined in subsection (g)(3)); and13‘‘(B) the ratio of—

14‘‘(i) the total number of units re-15

ported under section 1927 of such dosage

16

form and strength with respect to each17

such calendar quarter of such payment

18

amount benchmark period; to19‘‘(ii) the total number of units re-20

ported under section 1927 of such dosage

21

form and strength with respect to such22

payment amount benchmark period.

23‘‘(5) SPECIAL TREATMENT OF CERTAIN DRUGS

24

AND EXEMPTION.—ERN22335 9K1

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151
1‘‘(A) SUBSEQUENTLY APPROVED DRUGS.—2

In the case of a part D rebatable drug first ap-

3

proved or licensed by the Food and Drug Ad-

4ministration after October 1, 2021, subpara-

5graphs (A) and (B) of paragraph (4) shall be

6applied as if the term ‘payment amount bench-

7

mark period’ were defined under subsection

8(g)(3) as the first calendar year beginning after9

the day on which the drug was first marketed

10and subparagraph (B) of paragraph (3) shall be

11applied as if the term ‘benchmark period CPI–

12

U’ were defined under subsection (g)(4) as if

13

the reference to ‘January 2021’ under such

14

subsection were a reference to ‘January of the15

first year beginning after the date on which the16drug was first marketed’.

17‘‘(B) TREATMENT

18

OF

NEW

FORMULA-TIONS.—

19‘‘(i) IN GENERAL.—In the case of a20part D rebatable drug that is a line exten-

21

sion of a part D rebatable drug that is an22oral solid dosage form, the Secretary shall23

establish a formula for determining the re-24bate amount under paragraph (1) and the25

inflation adjusted payment amount underERN22335 9K1

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152
1

paragraph (3) with respect to such part D2rebatable drug and an applicable period,

3

consistent with the formula applied under

4

subsection (c)(2)(C) of section 1927 for

5determining a rebate obligation for a re-6bate period under such section.

7‘‘(ii) LINE EXTENSION DEFINED.—In

8

this subparagraph, the term ‘line exten-

9sion’ means, with respect to a part D

10rebatable drug, a new formulation of the11drug, such as an extended release formula-

12tion, but does not include an abuse-deter-

13

rent formulation of the drug (as deter-

14

mined by the Secretary), regardless of

15

whether such abuse-deterrent formulation

16

is an extended release formulation.

17‘‘(C) SELECTED DRUGS.—In the case of a18part D rebatable drug that is a selected drug19

(as defined in section 1192(c)) with respect to20

a price applicability period (as defined in sec-

21

tion 1191(b)(2)), in the case such drug is no22

longer considered to be a selected drug under23

section 1192(c), for each applicable period (as24defined under subsection (g)(7)) beginning after

25

the price applicability period with respect toERN22335 9K1

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153
1

such drug, subparagraphs (A) and (B) of para-

2graph (4) shall be applied as if the term ‘pay-

3

ment amount benchmark period’ were defined

4

under subsection (g)(3) as the last year begin-

5ning during such price applicability period with6

respect to such selected drug and subparagraph7(B) of paragraph (3) shall be applied as if the8term ‘benchmark period CPI–U’ were defined

9

under subsection (g)(4) as if the reference to

10‘January 2021’ under such subsection were a11reference to ‘January of the last year beginning

12

during such price applicability period with re-13

spect to such drug’.

14‘‘(6) RECONCILIATIONIN CASE OF REVISED15

AMP REPORTS.—The

Secretary shall provide for a16

method and process under which, in the case of a17

manufacturer of a part D rebatable drug that sub-18

mits revisions to information submitted under sec-

19

tion 1927 by the manufacturer with respect to such

20

drug, the Secretary determines, pursuant to such re-21

visions, adjustments, if any, to the calculation of the22amount specified in this subsection for a dosage

23

form and strength with respect to such part D

24

rebatable drug and an applicable period and rec-25

onciles any overpayments or underpayments inERN22335 9K1

S.L.C.

1541

amounts paid as rebates under this subsection. Any

2

identified underpayment shall be rectified by the3

manufacturer not later than 30 days after the date4of receipt from the Secretary of information on such5

underpayment.

6‘‘(c) REBATE DEPOSITS.—Amounts paid as rebates

7 under subsection (b) shall be deposited into the Medicare
8 Prescription Drug Account in the Federal Supplementary
9 Medical Insurance Trust Fund established under section
10 1841.
11‘‘(d) INFORMATION.—For purposes of carrying out

12 this section, the Secretary shall use information submitted
13 by manufacturers under section 1927(b)(3) and informa14 tion submitted by States under section 1927(b)(2)(A).
15‘‘(e) CIVIL MONEY PENALTY.—If a manufacturer of

16 a part D rebatable drug has failed to comply with the re17 quirement under subsection (a)(2) with respect to such
18 drug for an applicable period, the manufacturer shall be
19 subject to, in accordance with a process established by the
20 Secretary pursuant to regulations, a civil money penalty
21 in an amount equal to 125 percent of the amount specified
22 in subsection (b) for such drug for such period. The provi23 sions of section 1128A (other than subsections (a) (with24 respect to amounts of penalties or additional assessments)
25 and (b)) shall apply to a civil money penalty under thisERN22335 9K1

S.L.C.

155
1 subsection in the same manner as such provisions apply
2 to a penalty or proceeding under section 1128A(a).
3‘‘(f) NO ADMINISTRATIVE OR JUDICIAL REVIEW.—

4 There shall be no administrative or judicial review of the
5 following:‘‘(1) The determination of units under this sec-

6
7
8
9
10

tion.
‘‘(2) The determination of whether a drug is apart D rebatable drug under this section.
‘‘(3) The calculation of the rebate amount11

under this section.

12‘‘(g) DEFINITIONS.—In this section:

13‘‘(1) PART D REBATABLE DRUG.—

14‘‘(A) IN GENERAL.—Except as provided in

15

subparagraph (B), the term ‘part D rebatable

16

drug’ means, with respect to an applicable pe-

17riod, a drug or biological described in subpara-

18

graph (C) that would (without application of

19

this section) be a covered part D drug (as such20

term is defined under section 1860D–2(e)).

21‘‘(B) EXCLUSION.—

22‘‘(i) IN GENERAL.—Such term shall,

23

with respect to an applicable period, not24

include a drug or biological if the average

25

annual total cost under this part for suchERN22335 9K1

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156
1

period per individual who uses such a drug

2or biological, as determined by the Sec-3

retary, is less than, subject to clause (ii),4$100, as determined by the Secretary

5

using the most recent data available or, if

6data is not available, as estimated by the7

Secretary.

89‘‘(ii) INCREASE.—The dollar amountapplied under clause (i)—10‘‘(I) for the applicable period be-

11

ginning October 1, 2023, shall be the12dollar amount specified under such

13

clause for the applicable period begin-

14

ning October 1, 2022, increased by

15

the percentage increase in the con-16

sumer price index for all urban con-17

sumers (United States city average)18

for the 12-month period beginning

19with October of 2023; and20‘‘(II) for a subsequent applicable

21

period, shall be the dollar amount22

specified in this clause for the pre-23

vious applicable period, increased by24

the percentage increase in the con-25

sumer price index for all urban con-

ERN22335 9K1

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157
1

sumers (United States city average)

2

for the 12-month period beginning3

with October of the previous period.

4

Any dollar amount specified under this5clause that is not a multiple of $10 shall6

be rounded to the nearest multiple of $10.

7‘‘(C) DRUG OR BIOLOGICAL DESCRIBED.—8

A drug or biological described in this subpara-

9graph is a drug or biological that, as of the first10

day of the applicable period involved, is—11‘‘(i) a drug approved under a new

12drug application under section 505(c) of

13

the Federal Food, Drug, and Cosmetic

14

Act;

15

‘‘(ii) a drug approved under an abbre-

16

viated new drug application under section

17505(j) of the Federal Food, Drug, and18

Cosmetic Act, in the case where—

19‘‘(I) the reference listed drug ap-

20

proved under section 505(c) of the

21

Federal Food, Drug, and Cosmetic

22

Act, including any ‘authorized generic23

drug’ (as that term is defined in sec-

24

tion 505(t)(3) of the Federal Food,25

Drug, and Cosmetic Act), is not being

ERN22335 9K1

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158
1

marketed, as identified in the Food

2and Drug Administration’s National

3

Drug Code Directory;

4‘‘(II) there is no other drug ap-

5

proved under section 505(j) of the

6

Federal Food, Drug, and Cosmetic

7

Act that is rated as therapeutically8

equivalent (under the Food and Drug

9

Administration’s most recent publica-

10tion of ‘Approved Drug Products with

11

Therapeutic Equivalence Evaluations’)

12

and that is being marketed, as identi-

13

fied in the Food and Drug Adminis-

14

tration’s National Drug Code Direc-

15

tory;

16

‘‘(III) the manufacturer is not a

17‘first applicant’ during the ‘180-day

18

exclusivity period’, as those terms are19

defined in section 505(j)(5)(B)(iv) of20

the Federal Food, Drug, and Cos-

21

metic Act; and22‘‘(IV) the manufacturer is not a23‘first approved applicant’ for a com-24

petitive generic therapy, as that term25

is defined in section 505(j)(5)(B)(v)ERN22335 9K1

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159
1of the Federal Food, Drug, and Cos-2

metic Act; or3‘‘(iii) a biological licensed under sec-

4

tion 351 of the Public Health Service Act.

5‘‘(2) UNIT.—The term ‘unit’ means, with re-6

spect to a part D rebatable drug, the lowest dispen-

7

sable amount (such as a capsule or tablet, milligram

8

of molecules, or grams) of the part D rebatable

9drug, as reported under section 1927.

10

‘‘(3)

PAYMENTAMOUNT

BENCHMARKPE-

11

RIOD.—The term ‘payment amount benchmark pe-

12riod’ means the period beginning January 1, 2021,

13

and ending in the month immediately prior to Octo-14

ber 1, 2021.

15‘‘(4) BENCHMARK PERIOD CPI–U.—The term

16

‘benchmark period CPI–U’ means the consumer

17

price index for all urban consumers (United States

18

city average) for January 2021.

19‘‘(5) APPLICABLE PERIOD CPI–U.—The term

20

‘applicable period CPI–U’ means, with respect to an

21

applicable period, the consumer price index for all

22

urban consumers (United States city average) for23

the first month of such applicable period.

2425‘‘(6) AVERAGE

MANUFACTURER

PRICE.—Theterm ‘average manufacturer price’ has the meaning,ERN22335 9K1

S.L.C.

160
1

with respect to a part D rebatable drug of a manu-

2

facturer, given such term in section 1927(k)(1), with3

respect to a covered outpatient drug of a manufac-

4

turer for a rebate period under section 1927.

5‘‘(7) APPLICABLE PERIOD.—The term ‘applica-

6

ble period’ means a 12-month period beginning with

7

October 1 of a year (beginning with October 1,

82022).

9‘‘(h) IMPLEMENTATION

FOR

2022, 2023,

AND

10 2024.—The Secretary shall implement this section for
11 2022, 2023, and 2024 by program instruction or other12 forms of program guidance.’’.
13(b) CONFORMING AMENDMENTS.—

14(1) TO PART B ASP CALCULATION.—Section

15

1847A(c)(3) of the Social Security Act (42 U.S.C.

16

1395w–3a(c)(3)),

1711101(c)(1), is amended by striking ‘‘subsection (i)18or section 1927’’ and inserting ‘‘subsection (i), sec-

19

tion 1927, or section 1860D–14B’’.

20

asamendedbysection(2) EXCLUDING PART D DRUG INFLATION REPRICE.—Section

21

BATE

22

1927(c)(1)(C)(ii)(I) of the Social Security Act (4223

U.S.C. 1396r–8(c)(1)(C)(ii)(I)), as amended by sec-

24

tion 11101(c)(2), is amended by striking ‘‘or section

FROM

BEST

ERN22335 9K1

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161
1

1847A(i)’’ and inserting ‘‘, section 1847A(i), or sec-

2

tion 1860D–14B’’.

3(3) COORDINATION WITH MEDICAID REBATE IN-

4

FORMATION DISCLOSURE.—Section 1927(b)(3)(D)(i)5of the Social Security Act (42 U.S.C. 1396r–

68(b)(3)(D)(i)), as amended by section 11101(c)(3),7

is amended by striking ‘‘or to carry out section

8

1847B’’ and inserting ‘‘or to carry out section

9

1847B or section 1860D–14B’’.

10(4) EXCLUDING PART D DRUG INFLATION RE-

11

BATES FROM AVERAGE MANUFACTURER PRICE.—

12

Section 1927(k)(1)(B)(i) of the Social Security Act

13(42 U.S.C. 1396r–8(k)(1)(B)(i)), as amended by

14

section 11001(b)(3) and section 11101(c)(4), is15

amended by adding at the end the following new

16

subclause:

1718(A) in subclause (VI), by striking ‘‘and’’ atthe end;19(B) in subclause (VII), by striking the pe-

20

riod at the end and inserting a semicolon; and21(C) by adding at the end the following new

22
23
24

subclause:‘‘(VIII) rebates paid by manufacturers under section 1860D–14B.’’.

ERN22335 9K1

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1621(c) FUNDING.—In addition to amounts otherwise

2 available, there are appropriated to the Centers for Medi3 care & Medicaid Services, out of any money in the Treas4 ury not otherwise appropriated, $80,000,000 for fiscal
5 year 2022, including $12,500,000 to carry out the provi6 sions of, including the amendments made by, this section
7 in fiscal year 2022, and $7,500,000 to carry out the provi8 sions of, including the amendments made by, this section
9 in each of fiscal years 2023 through 2031, to remain avail10 able until expended.
11 PART 3—PART D IMPROVEMENTS AND MAXIMUM
12

OUT-OF-POCKET CAP FOR MEDICARE BENE-

13

FICIARIES

14
15

SEC. 11201. MEDICARE PART D BENEFIT REDESIGN.

(a)

BENEFITSTRUCTURE

REDESIGN.—Section

16 1860D–2(b) of the Social Security Act (42 U.S.C. 1395w–
17 102(b)) is amended—18(1) in paragraph (2)—19

(A) in subparagraph (A), in the matter

20

preceding clause (i), by inserting ‘‘for a year

21

preceding 2025 and for costs above the annual

22

deductible specified in paragraph (1) and up to23

the annual out-of-pocket threshold specified in

24paragraph (4)(B) for 2025 and each subsequent

25

year’’ after ‘‘paragraph (3)’’;

ERN22335 9K1

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163
1(B) in subparagraph (C)—2(i) in clause (i), in the matter pre-3

ceding subclause (I), by inserting ‘‘for a4

year preceding 2025,’’ after ‘‘paragraph

5(4),’’; and6(ii) in clause (ii)(III), by striking

7‘‘and each subsequent year’’ and inserting

8‘‘through 2024’’; and9(C) in subparagraph (D)—10(i) in clause (i)—11(I) in the matter preceding sub-12

clause (I), by inserting ‘‘for a year

13

preceding 2025,’’ after ‘‘paragraph

14(4),’’; and15(II) in subclause (I)(bb), by16

striking ‘‘a year after 2018’’ and in-

17

serting ‘‘each of years 2019 through18

2024’’; and19(ii) in clause (ii)(V), by striking

20‘‘2019 and each subsequent year’’ and in-21

serting ‘‘each of years 2019 through222024’’;

23(2) in paragraph (3)(A)—ERN22335 9K1

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164
1(A) in the matter preceding clause (i), by2

inserting ‘‘for a year preceding 2025,’’ after

3‘‘and (4),’’; and4(B) in clause (ii), by striking ‘‘for a subse-

5quent year’’ and inserting ‘‘for each of years

62007 through 2024’’; and7(3) in paragraph (4)—8(A) in subparagraph (A)—9(i) in clause (i)—10(I) by redesignating subclauses

11(I) and (II) as items (aa) and (bb),12respectively, and moving the margin

13of each such redesignated item 2 ems

14

to the right;

15(II) in the matter preceding item

16(aa), as redesignated by subclause (I),17by striking ‘‘is equal to the greater

18of—’’ and inserting ‘‘is equal to—‘‘(I) for a year preceding 2024,

1920

the greater of—’’;21(III) by striking the period at the22

end of item (bb), as redesignated by23

subclause (I), and inserting ‘‘; and’’;

24

and

ERN22335 9K1

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165
1
2
3(IV) by adding at the end the following:‘‘(II) for 2024 and each suc-4

ceeding year, $0.’’; and5(ii) in clause (ii)—

67(I) by striking ‘‘clause (i)(I)’’ andinserting ‘‘clause (i)(I)(aa)’’; and8(II) by adding at the end the fol-9

lowing new sentence: ‘‘The Secretary

10

shall continue to calculate the dollar

11amounts specified in clause (i)(I)(aa),12including with the adjustment under

13

this clause, after 2023 for purposes of

14

section 1860D–14(a)(1)(D)(iii).’’;

15(B) in subparagraph (B)—16(i) in clause (i)—

17
18
19

(I) in subclause (V), by striking‘‘or’’ at the end;(II) in subclause (VI)—20(aa) by striking ‘‘for a sub-21

sequent year’’ and inserting ‘‘for22each of years 2021 through23

2024’’; andERN22335 9K1

S.L.C.

1661(bb) by striking the period2

at the end and inserting a semi-

3colon; and4(III) by adding at the end the5following new subclauses:‘‘(VII) for 2025, is equal to67$2,000; or

8‘‘(VIII) for a subsequent year, is

9equal to the amount specified in this10

subparagraph for the previous year,

11

increased by the annual percentage in-12crease described in paragraph (6) for13

the year involved.’’; and14(ii) in clause (ii), by striking ‘‘clause

15(i)(II)’’ and inserting ‘‘clause (i)’’;

16(C) in subparagraph (C)—17(i) in clause (i), by striking ‘‘and for

18

amounts’’ and inserting ‘‘and, for a year

19

preceding 2025, for amounts’’; and20(ii) in clause (iii)—(I) by redesignating subclauses

21
22

(I)

through

(IV)

as

items

(aa)

23

through (dd) and indenting appro-

24

priately;ERN22335 9K1

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167
1(II) by striking ‘‘if such costs are2borne or paid’’ and inserting ‘‘if such3

costs—

4‘‘(I) are borne or paid—’’; and5(III) in item (dd), by striking the6

period at the end and inserting ‘‘; or’’;

7

and

8
9

(IV) by adding at the end the following new subclause:

10‘‘(II) for 2025 and subsequent

11

years, are reimbursed through insur-

12

ance, a group health plan, or certain

13

other third party payment arrange-

14

ments, but not including the coverage

15

provided by a prescription drug plan16

or an MA–PD plan that is basic pre-17

scription drug coverage (as defined in18

subsection (a)(3)) or any payments by

19

a manufacturer under the manufac-

20

turer discount program under section

21

1860D–14C.’’; and22(D) in subparagraph (E), by striking ‘‘In

23

applying’’ and inserting ‘‘For each of years

242011 through 2024, in applying’’.

ERN22335 9K1

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168
1(b) REINSURANCE PAYMENT AMOUNT.—Section

2 1860D–15(b) of the Social Security Act (42 U.S.C.
3 1395w–115(b)) is amended—
4
5
6
7
8

(1) in paragraph (1)—(A) by striking ‘‘equal to 80 percent’’ andinserting ‘‘equal to—‘‘(A) for a year preceding 2025, 80 percent’’;

9(B) in subparagraph (A), as added by sub-10

paragraph (A), by striking the period at the11

end and inserting ‘‘; and’’; and

12
13
14
15

(C) by adding at the end the following new
subparagraph:‘‘(B) for 2025 and each subsequent year,
the sum of—

16‘‘(i) with respect to applicable drugs

17(as defined in section 1860D–14C(g)(2)),

18

an amount equal to 20 percent of such al-

19lowable reinsurance costs attributable to20

that portion of gross covered prescription

21

drug costs as specified in paragraph (3) in-22

curred in the coverage year after such indi-

23

vidual has incurred costs that exceed the24annual out-of-pocket threshold specified in

25

section 1860D–2(b)(4)(B); andERN22335 9K1

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169
1‘‘(ii) with respect to covered part D2drugs that are not applicable drugs (as so

3

defined), an amount equal to 40 percent of

4such allowable reinsurance costs attrib-

5

utable to that portion of gross covered pre-6

scription drug costs as specified in para-

7

graph (3) incurred in the coverage year

8

after such individual has incurred costs

9

that

10

threshold specified in section 1860D–

112(b)(4)(B).’’;

12(2) in paragraph (2)—

13
14
15
16
17
18

exceedtheannualout-of-pocket(A) by striking ‘‘COSTS.—For purposes’’and inserting ‘‘COSTS.—‘‘(A) IN GENERAL.—Subject to subparagraph (B), for purposes’’; and(B) by adding at the end the following new
subparagraph:

19‘‘(B) INCLUSION OF MANUFACTURER DIS-

20

COUNTS ON APPLICABLE DRUGS.—For purposes

21

of applying subparagraph (A), the term ‘allow-

22

able reinsurance costs’ shall include the portion

23of the negotiated price (as defined in section

24

1860D–14C(g)(6)) of an applicable drug (as25defined in section 1860D–14C(g)(2)) that wasERN22335 9K1

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170
1

paid by a manufacturer under the manufacturer

2

discount program under section 1860D–14C.’’;

3

and

4

(3) in paragraph (3)—5(A) in the first sentence, by striking ‘‘For

6

purposes’’ and inserting ‘‘Subject to paragraph

7(2)(B), for purposes’’; and

8(B) in the second sentence, by inserting

9‘‘(or, with respect to 2025 and subsequent

10

years, in the case of an applicable drug, as de-11

fined in section 1860D–14C(g)(2), by a manu-

12

facturer)’’ after ‘‘by the individual or under the

13

plan’’.

14(c) MANUFACTURER DISCOUNT PROGRAM.—15(1) IN GENERAL.—Part D of title XVIII of the16

Social Security Act (42 U.S.C. 1395w–101 through17

42 U.S.C. 1395w–153), as amended by section

1811102, is amended by inserting after section

19

1860D–14B the following new sections:

20
21‘‘SEC. 1860D–14C. MANUFACTURER DISCOUNT PROGRAM.

‘‘(a) ESTABLISHMENT.—The Secretary shall estab-

22 lish a manufacturer discount program (in this section re23 ferred to as the ‘program’). Under the program, the Sec24 retary shall enter into agreements described in subsection

ERN22335 9K1

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171
1 (b) with manufacturers and provide for the performance
2 of the duties described in subsection (c).
3‘‘(b) TERMS OF AGREEMENT.—

4‘‘(1) IN GENERAL.—

5‘‘(A) AGREEMENT.—An agreement under

6

this section shall require the manufacturer to7

provide, in accordance with this section, dis-8

counted prices for applicable drugs of the man-9

ufacturer that are dispensed to applicable bene-

10

ficiaries on or after January 1, 2025.

1112‘‘(B) CLARIFICATION.—Nothing in thissection shall be construed as affecting—13‘‘(i) the application of a coinsurance

14

of 25 percent of the negotiated price, as

15

applied under paragraph (2)(A) of section

16

1860D–2(b), for costs described in such17

paragraph; or18‘‘(ii) the application of the copayment

19

amount described in paragraph (4)(A) of

20such section, with respect to costs de-21

scribed in such paragraph.

22‘‘(C) TIMING OF AGREEMENT.—

23‘‘(i) SPECIAL

RULE

FOR

2025.—In

24

order for an agreement with a manufac-

25

turer to be in effect under this section with

ERN22335 9K1

S.L.C.

1721

respect to the period beginning on January

2

1, 2025, and ending on December 31,

32025, the manufacturer shall enter into

4

such agreement not later than March 1,

5

2024.

6

‘‘(ii)2026

AND

SUBSEQUENT7YEARS.—In order for an agreement with a8manufacturer to be in effect under this9

section with respect to plan year 2026 or

10

a subsequent plan year, the manufacturer

11

shall enter into such agreement not later12

than a calendar quarter or semi-annual

13

deadline established by the Secretary.

14‘‘(2) PROVISION OF APPROPRIATE DATA.—Each15

manufacturer with an agreement in effect under this16

section shall collect and have available appropriate

17

data, as determined by the Secretary, to ensure that18

it can demonstrate to the Secretary compliance with19

the requirements under the program.

20‘‘(3) COMPLIANCE WITH REQUIREMENTS FOR
PROGRAM.—Eachmanufac-21

ADMINISTRATION

22

turer with an agreement in effect under this section

23

shall comply with requirements imposed by the Sec-24

retary, as applicable, for purposes of administering

25

the program, including any determination underOF

ERN22335 9K1

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173
1

subparagraph (A) of subsection (c)(1) or procedures

2established under such subsection (c)(1).

3‘‘(4) LENGTH OF AGREEMENT.—

4‘‘(A) IN GENERAL.—An agreement under5

this section shall be effective for an initial pe-

6

riod of not less than 12 months and shall be

7

automatically renewed for a period of not less8than 1 year unless terminated under subpara-

9graph (B).

10‘‘(B) TERMINATION.—

11‘‘(i) BY THE SECRETARY.—The Sec-12

retary shall provide for termination of an

13

agreement under this section for a knowing

14

and willful violation of the requirements of15

the agreement or other good cause shown.

16

Such termination shall not be effective ear-17lier than 30 days after the date of notice18

to the manufacturer of such termination.

19

The Secretary shall provide, upon request,

20

a manufacturer with a hearing concerning

21

such a termination, and such hearing shall22

take place prior to the effective date of the23

termination with sufficient time for such

24

effective date to be repealed if the Sec-25

retary determines appropriate.

ERN22335 9K1

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174
1‘‘(ii) BY A MANUFACTURER.—A man-2

ufacturer may terminate an agreement

3

under this section for any reason. Any

4such termination shall be effective, with re-5spect to a plan year—

6‘‘(I) if the termination occurs be-7fore January 31 of a plan year, as of8

the day after the end of the plan year;

9

and

10

‘‘(II) if the termination occurs on

11

or after January 31 of a plan year, as

12of the day after the end of the suc-13

ceeding plan year.

14‘‘(iii)

EFFECTIVENESSOFTERMI-

15

NATION.—Any termination under this sub-16

paragraph shall not affect discounts for

17

applicable drugs of the manufacturer that18

are due under the agreement before the ef-

19fective date of its termination.

20‘‘(5) EFFECTIVE DATE OF AGREEMENT.—An

21

agreement under this section shall take effect at the22start of a calendar quarter or another date specified

23

by the Secretary.

24‘‘(c) DUTIES DESCRIBED.—The duties described in

25 this subsection are the following:ERN22335 9K1

S.L.C.

17512‘‘(1) ADMINISTRATION OF PROGRAM.—Administering the program, including—3‘‘(A) the determination of the amount of4

the discounted price of an applicable drug of a5

manufacturer;

6‘‘(B) the establishment of procedures to7

ensure that, not later than the applicable num-8

ber of calendar days after the dispensing of an

9applicable drug by a pharmacy or mail order

10

service, the pharmacy or mail order service is11

reimbursed for an amount equal to the dif-12

ference between—

13
14
15

‘‘(i) the negotiated price of the applicable drug; and‘‘(ii) the discounted price of the appli-

16

cable drug;

17‘‘(C) the establishment of procedures to18

ensure that the discounted price for an applica-

19

ble drug under this section is applied before any

20

coverage or financial assistance under other21

health benefit plans or programs that provide

22

coverage or financial assistance for the pur-23

chase or provision of prescription drug coverage

24

on behalf of applicable beneficiaries as specified

25

by the Secretary; andERN22335 9K1

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176
1‘‘(D) providing a reasonable dispute resolu-

2tion mechanism to resolve disagreements be-3

tween manufacturers, prescription drug plans

4and MA–PD plans, and the Secretary.

5

‘‘(2)

MONITORINGCOMPLIANCE.—The

Sec-

6

retary shall monitor compliance by a manufacturer

7

with the terms of an agreement under this section.

8‘‘(3) COLLECTION OF DATA FROM PRESCRIP-

9TION DRUG PLANS AND MA–PD PLANS.—The

Sec-

10

retary may collect appropriate data from prescrip-

11

tion drug plans and MA–PD plans in a timeframe

12that allows for discounted prices to be provided for

13

applicable drugs under this section.

14‘‘(d) ADMINISTRATION.—

15‘‘(1) IN GENERAL.—Subject to paragraph (2),16

the Secretary shall provide for the implementation of

17

this section, including the performance of the duties

18

described in subsection (c).

19‘‘(2) LIMITATION.—In providing for the imple-

20

mentation of this section, the Secretary shall not re-21

ceive or distribute any funds of a manufacturer

22

under the program.

23‘‘(e) ENFORCEMENT.—ERN22335 9K1

S.L.C.

1771‘‘(1) AUDITS.—Each manufacturer with an2agreement in effect under this section shall be sub-3

ject to periodic audit by the Secretary.

4‘‘(2) CIVIL MONEY PENALTY.—

5‘‘(A) IN GENERAL.—A manufacturer that6

fails to provide discounted prices for applicable7

drugs of the manufacturer dispensed to applica-

8

ble beneficiaries in accordance with such agree-

9

ment shall be subject to a civil money penalty

10

for each such failure in an amount the Sec-11

retary determines is equal to the sum of—

12‘‘(i) the amount that the manufac-

13

turer would have paid with respect to such14

discounts under the agreement, which will

15

then be used to pay the discounts which16

the manufacturer had failed to provide;

17

and

18

‘‘(ii) 25 percent of such amount.

19‘‘(B) APPLICATION.—The provisions of

20

section 1128A (other than subsections (a) and21(b)) shall apply to a civil money penalty under

22

this paragraph in the same manner as such23

provisions apply to a penalty or proceeding24

under section 1128A(a).

ERN22335 9K1

S.L.C.

1781‘‘(f) CLARIFICATION REGARDING AVAILABILITY OF

2 OTHER COVERED PART D DRUGS.—Nothing in this sec3 tion shall prevent an applicable beneficiary from pur4 chasing a covered part D drug that is not an applicable
5 drug (including a generic drug or a drug that is not on
6 the formulary of the prescription drug plan or MA–PD
7 plan that the applicable beneficiary is enrolled in).
89‘‘(g) DEFINITIONS.—In this section:‘‘(1) APPLICABLE

BENEFICIARY.—The

term

10

‘applicable beneficiary’ means an individual who, on

11

the date of dispensing a covered part D drug—

12
13
14
15

‘‘(A) is enrolled in a prescription drug planor an MA–PD plan;‘‘(B) is not enrolled in a qualified retireeprescription drug plan; and16‘‘(C) has incurred costs, as determined in

17

accordance with section 1860D–2(b)(4)(C), for18

covered part D drugs in the year that exceed

19

the annual deductible specified in section

20

1860D–2(b)(1).

21‘‘(2) APPLICABLE DRUG.—The term ‘applicable22
23

drug’, with respect to an applicable beneficiary—‘‘(A) means a covered part D drug—

24‘‘(i) approved under a new drug appli-

25

cation under section 505(c) of the Federal

ERN22335 9K1

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179
1

Food, Drug, and Cosmetic Act or, in the2case of a biologic product, licensed under3

section 351 of the Public Health Service

4

Act; and5‘‘(ii)(I) if the PDP sponsor of the pre-6

scription drug plan or the MA organization

7

offering the MA–PD plan uses a for-8

mulary, which is on the formulary of the

9prescription drug plan or MA–PD plan

10that the applicable beneficiary is enrolled

11

in;

12

‘‘(II) if the PDP sponsor of the pre-13

scription drug plan or the MA organization

14

offering the MA–PD plan does not use a

15

formulary, for which benefits are available

16

under the prescription drug plan or MA–

17

PD plan that the applicable beneficiary is

18

enrolled in; or19‘‘(III) is provided through an excep-

20

tion or appeal; and21‘‘(B) does not include a selected drug (as22referred to under section 1192(c)) during a23

price applicability period (as defined in section

24

1191(b)(2)) with respect to such drug.

ERN22335 9K1

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180
1

‘‘(3)

2

DAYS.—The

3

days’ means—

4
5
6

APPLICABLENUMBEROF

CALENDAR

term ‘applicable number of calendar‘‘(A) with respect to claims for reimbursement submitted electronically, 14 days; and‘‘(B) with respect to claims for reimburse-

7

ment submitted otherwise, 30 days.

8‘‘(4) DISCOUNTED PRICE.—

9‘‘(A) IN GENERAL.—The term ‘discounted

10

price’ means, subject to subparagraphs (B) and

11(C), with respect to an applicable drug of a12manufacturer dispensed during a year to an ap-

13

plicable beneficiary—

14‘‘(i) who has not incurred costs, as de-15

terminedinaccordancewithsection16

1860D–2(b)(4)(C), for covered part D

17drugs in the year that are equal to or ex-

18

ceed the annual out-of-pocket threshold19

specified in section 1860D–2(b)(4)(B)(i)20

for the year, 90 percent of the negotiated21

price of such drug; and22‘‘(ii) who has incurred such costs, as

23

so determined, in the year that are equal24

to or exceed such threshold for the year,

ERN22335 9K1

S.L.C.

1811

80 percent of the negotiated price of such

2

drug.

3

‘‘(B) PHASE-IN FOR CERTAIN DRUGS DIS-

4PENSED TO LIS BENEFICIARIES.—

5‘‘(i) IN GENERAL.—In the case of an

6applicable drug of a specified manufacturer

7(as defined in clause (ii)) that is marketed

8

as of the date of enactment of this sub-9

paragraph and dispensed for an applicable10

beneficiary who is a subsidy eligible indi-

11

vidual (as defined in section 1860D–

12

14(a)(3)), the term ‘discounted price’13

means the specified LIS percent (as de-14

fined in clause (iii)) of the negotiated price15of the applicable drug of the manufacturer.

16‘‘(ii) SPECIFIED MANUFACTURER.—

17‘‘(I) IN GENERAL.—In this sub-18

paragraph, subject to subclause (II),

19

the

20

means a manufacturer of an applica-21

ble drug for which, in 2021—

term‘specified

manufacturer’

22‘‘(aa) the manufacturer had

23

a coverage gap discount agree-

24

ment under section 1860D–14A;

ERN22335 9K1

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182
1‘‘(bb) the total expenditures

2

for all of the specified drugs of

3

the

4

such agreement or agreements

5

for such year and covered under

6

this part during such year rep-7

resented less than 1.0 percent of8

the total expenditures under this9part for all covered Part D drugs

10during such year; andmanufacturer

coveredby

11‘‘(cc) the total expenditures

12

for all of the specified drugs of13

the manufacturer that are single

14source drugs and biological prod-15

ucts covered under part B during

16

such year represented less than17

1.0 percent of the total expendi-

18

tures under part B for all drugs

19

or biological products covered

20

under such part during such

21

year.

22

‘‘(II) SPECIFIED DRUGS.—

23‘‘(aa)IN

GENERAL.—For24

purposes of this clause, the term

25

‘specified drug’ means, with re-ERN22335 9K1

S.L.C.

183
1

spect to a specified manufac-

2

turer, for 2021, an applicable3

drug that is produced, prepared,4

propagated,5

verted, or processed by the man-6

ufacturer.

7‘‘(bb)

compounded,con-

AGGREGATION

8

RULE.—All persons treated as a9single employer under subsection

10(a) or (b) of section 52 of the In-

11

ternal Revenue Code of 1986

12

shall be treated as one manufac-

13

turer for purposes of this sub-14

paragraph. For purposes of mak-15

ing a determination pursuant to16

the previous sentence, an agree-

17

ment under this section shall re-18

quire that a manufacturer pro-19

vide and attest to such informa-

20tion as specified by the Secretary21

as necessary.

22‘‘(III) LIMITATION.—The term

23

‘specified manufacturer’ shall not in-24

clude a manufacturer described in25

subclause (I) if such manufacturer isERN22335 9K1

S.L.C.

1841

acquired after 2021 by another manu-

2

facturer that is not a specified manu-

3

facturer, effective at the beginning of4

the plan year immediately following

5such acquisition or, in the case of an

6acquisition before 2025, effective Jan-7uary 1, 2025.

8‘‘(iii) SPECIFIEDLIS PERCENT.—In

9

this subparagraph, the ‘specified LIS per-10

cent’ means, with respect to a year—11‘‘(I) for an applicable drug dis-12

pensed for an applicable beneficiary

13

described in clause (i) who has not in-

14

curred costs, as determined in accord-

15

ance with section 1860D–2(b)(4)(C),16

for covered part D drugs in the year

17

that are equal to or exceed the annual

18

out-of-pocket threshold specified in

19

section 1860D–2(b)(4)(B)(i) for the

20

year—

21

‘‘(aa) for 2025, 99 percent;

22‘‘(bb) for 2026, 98 percent;23‘‘(cc) for 2027, 95 percent;24‘‘(dd) for 2028, 92 percent;

25

and

ERN22335 9K1

S.L.C.

185
1‘‘(ee) for 2029 and each2subsequent year, 90 percent; and3‘‘(II) for an applicable drug dis-4

pensed for an applicable beneficiary5

described in clause (i) who has in-

6curred costs, as determined in accord-

7

ance with section 1860D–2(b)(4)(C),8for covered part D drugs in the year

9that are equal to or exceed the annual

10

out-of-pocket threshold specified in

11section 1860D–2(b)(4)(B)(i) for the

12

year—

13

‘‘(aa) for 2025, 99 percent;

14‘‘(bb) for 2026, 98 percent;

15‘‘(cc) for 2027, 95 percent;16‘‘(dd) for 2028, 92 percent;17‘‘(ee) for 2029, 90 percent;18‘‘(ff) for 2030, 85 percent;

19
20
21

and
‘‘(gg) for 2031 and eachsubsequent year, 80 percent.

22‘‘(C) PHASE-IN

23

MANUFACTURERS.—FOR

SPECIFIED

SMALL

24

‘‘(i) IN GENERAL.—In the case of an

25

applicable drug of a specified small manu-

ERN22335 9K1

S.L.C.

186
1

facturer (as defined in clause (ii)) that is

2

marketed as of the date of enactment of3

this subparagraph and dispensed for an

4

applicable beneficiary, the term ‘discounted

5

price’ means the specified small manufac-

6

turer percent (as defined in clause (iii)) of7

the negotiated price of the applicable drug

8of the manufacturer.

9‘‘(ii) SPECIFIED

10

SMALL

MANUFAC-

TURER.—

11‘‘(I) IN GENERAL.—In this sub-12

paragraph, subject to subclause (III),13

the term ‘specified small manufac-

14

turer’ means a manufacturer of an

15

applicable drug for which, in 2021—

16‘‘(aa) the manufacturer is a

17

specified manufacturer (as de-18

fined in subparagraph (B)(ii));

19

and

20

‘‘(bb) the total expenditures

21

under part D for any one of the22

specified23

drugs of the manufacturer that24

are covered by the agreement or

25

agreements

smallmanufacturer

undersectionERN22335 9K1

S.L.C.

187
1

1860D–14A of such manufac-

2

turer for such year and covered

3

under this part during such year4

are equal to or more than 80 per-5cent of the total expenditures

6

under this part for all specified

7

small manufacturer drugs of the8manufacturer that are covered by

9such agreement or agreements

10

for such year and covered under

11

this part during such year.

12‘‘(II) SPECIFIED

13

FACTURER DRUGS.—

14‘‘(aa)IN

SMALL MANU-

GENERAL.—For

15

purposes of this clause, the term

16

‘specified

17

drugs’ means, with respect to a18

specified small manufacturer, for192021, an applicable drug that is

20

produced, prepared, propagated,

21

compounded, converted, or proc-

22

essed by the manufacturer.

23‘‘(bb)

small

manufacturer

AGGREGATION

24

RULE.—All persons treated as a25

single employer under subsection

ERN22335 9K1

S.L.C.

1881(a) or (b) of section 52 of the In-

2

ternal Revenue Code of 1986

3

shall be treated as one manufac-

4

turer for purposes of this sub-5

paragraph. For purposes of mak-6

ing a determination pursuant to7

the previous sentence, an agree-8

ment under this section shall re-9quire that a manufacturer pro-10

vide and attest to such informa-

11tion as specified by the Secretary12as necessary.

13‘‘(III) LIMITATION.—The term

14

‘specified small manufacturer’ shall15

not include a manufacturer described

16

in subclause (I) if such manufacturer

17

is acquired after 2021 by another18

manufacturer that is not a specified

19

small manufacturer, effective at the20

beginning of the plan year imme-

21

diately following such acquisition or,

22

in the case of an acquisition before

23

2025, effective January 1, 2025.

24‘‘(iii) SPECIFIED

25

TURER PERCENT.—In

SMALL

MANUFAC-

this subparagraph,ERN22335 9K1

S.L.C.

1891

the term ‘specified small manufacturer per-2

cent’ means, with respect to a year—3‘‘(I) for an applicable drug dis-4

pensed for an applicable beneficiary5

who has not incurred costs, as deter-

6

mined in accordance with section

7

1860D–2(b)(4)(C), for covered part D

8drugs in the year that are equal to or

9exceed10

threshold specified in section 1860D–

112(b)(4)(B)(i) for the year—

theannualout-of-pocket

12‘‘(aa) for 2025, 99 percent;

13‘‘(bb) for 2026, 98 percent;

14‘‘(cc) for 2027, 95 percent;15‘‘(dd) for 2028, 92 percent;

16

and

17

‘‘(ee) for 2029 and each

18

subsequent year, 90 percent; and19‘‘(II) for an applicable drug dis-20

pensed for an applicable beneficiary21

who has incurred costs, as determined22

in accordance with section 1860D–

232(b)(4)(C), for covered part D drugs

24in the year that are equal to or exceed

25

the annual out-of-pocket thresholdERN22335 9K1

S.L.C.

1901

specifiedinsection2

2(b)(4)(B)(i) for the year—

1860D–

3‘‘(aa) for 2025, 99 percent;4‘‘(bb) for 2026, 98 percent;5‘‘(cc) for 2027, 95 percent;6‘‘(dd) for 2028, 92 percent;7‘‘(ee) for 2029, 90 percent;8‘‘(ff) for 2030, 85 percent;and9‘‘(gg) for 2031 and each

10subsequent year, 80 percent.

1112‘‘(D) TOTAL

EXPENDITURES.—For

pur-

13

poses of this paragraph, the term ‘total expend-

14

itures’ includes, in the case of expenditures with15

respect to part D, the total gross covered pre-16

scription drug costs as defined in section

17

1860D–15(b)(3). The term ‘total expenditures’18

excludes, in the case of expenditures with re-19

spect to part B, expenditures for a drug or bio-

20

logical that are bundled or packaged into the21

payment for another service.

22

‘‘(E)

23

CLAIMS.—

24
25

SPECIAL‘‘(i)
IBLE.—In

CLAIMSCASEFOR

CERTAINSPANNING

DEDUCT-

the case where the entire

ERN22335 9K1

S.L.C.

1911

amount of the negotiated price of an indi-2

vidual claim for an applicable drug with re-3spect to an applicable beneficiary does not

4fall above the annual deductible specified

5

in section 1860D–2(b)(1) for the year, the6manufacturer of the applicable drug shall7

provide the discounted price under this8

section on only the portion of the nego-

9tiated price of the applicable drug that10

falls above such annual deductible.

11‘‘(ii) CLAIMS SPANNING OUT-OF-POCK-12ET THRESHOLD.—In

the case where the13

entire amount of the negotiated price of an

14

individual claim for an applicable drug

15

with respect to an applicable beneficiary16

does not fall entirely below or entirely

17

above the annual out-of-pocket threshold18

specified in section 1860D–2(b)(4)(B)(i)19

for the year, the manufacturer of the ap-

20

plicable drug shall provide the discounted

21

price—

22‘‘(I) in accordance with subpara-

23

graph (A)(i) on the portion of the ne-24

gotiated price of the applicable drug

25

that falls below such threshold; andERN22335 9K1

S.L.C.

192
1‘‘(II) in accordance with subpara-

2graph (A)(ii) on the portion of such3

price of such drug that falls at or

4

above such threshold.

5‘‘(5) MANUFACTURER.—The term ‘manufac-

6

turer’ means any entity which is engaged in the pro-7

duction, preparation, propagation, compounding,

8

conversion, or processing of prescription drug prod-9

ucts, either directly or indirectly by extraction from10

substances of natural origin, or independently by

11means of chemical synthesis, or by a combination of

12extraction and chemical synthesis. Such term does13

not include a wholesale distributor of drugs or a re-14

tail pharmacy licensed under State law.

15‘‘(6) NEGOTIATED

PRICE.—Theterm ‘nego-

16

tiated price’ has the meaning given such term for

17

purposes of section 1860D–2(d)(1)(B), and, with re-18

spect to an applicable drug, such negotiated price

19

shall include any dispensing fee and, if applicable,

20

any vaccine administration fee for the applicable

21

drug.

22

‘‘(7) QUALIFIED RETIREE PRESCRIPTION DRUG

23

PLAN.—The term ‘qualified retiree prescription drug

24plan’ has the meaning given such term in section

25

1860D–22(a)(2).

ERN22335 9K1

S.L.C.

193
1
2‘‘SEC. 1860D–14D. SELECTED DRUG SUBSIDY PROGRAM.

‘‘With respect to covered part D drugs that would

3 be applicable drugs (as defined in section 1860D–
4 14C(g)(2)) but for the application of subparagraph (B)
5 of such section, the Secretary shall provide a process
6 whereby, in the case of an applicable beneficiary (as de7 fined in section 1860D–14C(g)(1)) who, with respect to
8 a year, is enrolled in a prescription drug plan or is enrolled
9 in an MA–PD plan, has not incurred costs that are equal
10 to or exceed the annual out-of-pocket threshold specified
11 in section 1860D–2(b)(4)(B)(i), and is dispensed such a
12 drug, the Secretary (periodically and on a timely basis)
13 provides the PDP sponsor or the MA organization offering
14 the plan, a subsidy with respect to such drug that is equal
15 to 10 percent of the negotiated price (as defined in section
16 1860D–14C(g)(6)) of such drug.’’.
17(2) SUNSET OF MEDICARE COVERAGE GAP DIS-

18

COUNT PROGRAM.—Section 1860D–14A of the So-

19cial Security Act (42 U.S.C. 1395w–114a) is amend-

20

ed—

21

(A) in subsection (a), in the first sentence,22

by striking ‘‘The Secretary’’ and inserting

23‘‘Subject to subsection (h), the Secretary’’; and24(B) by adding at the end the following new

25
26

subsection:‘‘(h) SUNSET OF PROGRAM.—ERN22335 9K1

S.L.C.

1941‘‘(1) IN

GENERAL.—Theprogram shall not2

apply with respect to applicable drugs dispensed on

3

or after January 1, 2025, and, subject to paragraph4(2), agreements under this section shall be termi-

5nated as of such date.

6‘‘(2) CONTINUED APPLICATION FOR APPLICA-

7BLE DRUGS DISPENSED PRIOR TO SUNSET.—The8

provisions of this section (including all responsibil-

9

ities and duties) shall continue to apply on and after

10

January 1, 2025, with respect to applicable drugs

11

dispensed prior to such date.’’.

12(3) SELECTED DRUG SUBSIDY PAYMENTS FROM

13

MEDICARE PRESCRIPTION DRUG ACCOUNT.—Section

14

1860D–16(b)(1) of the Social Security Act (4215

U.S.C. 1395w–116(b)(1)) is amended—

16
17
18
19
20
21

(A) in subparagraph (C), by striking‘‘and’’ at the end;(B) in subparagraph (D), by striking theperiod at the end and inserting ‘‘; and’’; and(C) by adding at the end the following new
subparagraph:

22‘‘(E) payments under section 1860D–14D

23(relating to selected drug subsidy payments).’’.

24(d) MEDICARE PART D PREMIUM STABILIZATION.—ERN22335 9K1

S.L.C.

195
1(1) 2024 THROUGH 2029.—Section 1860D–13

2of the Social Security Act (42 U.S.C. 1395w–113)

3

is amended—

4(A) in subsection (a)—5(i) in paragraph (1)(A), by inserting

6‘‘or (8) (as applicable)’’ after ‘‘paragraph

7(2)’’;

8(ii) in paragraph (2), in the matter9

preceding subparagraph (A), by striking

10‘‘The base’’ and inserting ‘‘Subject to11paragraph (8), the base’’;12(iii) in paragraph (7)—13(I) in subparagraph (B)(ii), by

14

inserting ‘‘or (8) (as applicable)’’ after

15‘‘paragraph (2)’’; and16(II) in subparagraph (E)(i), by

17

inserting ‘‘or (8) (as applicable)’’ after

18‘‘paragraph (2)’’; and19(iv) by adding at the end the following

20
21

new paragraph:‘‘(8) PREMIUM STABILIZATION.—

22‘‘(A) IN GENERAL.—The base beneficiary

23

premium under this paragraph for a prescrip-

24tion drug plan for a month in 2024 through25

2029 shall be computed as follows:

ERN22335 9K1

S.L.C.

1961‘‘(i) 2024.—The base beneficiary pre-2

mium for a month in 2024 shall be equal3

to the lesser of—4‘‘(I) the base beneficiary pre-5mium computed under paragraph (2)6for a month in 2023 increased by 6

7

percent; or8‘‘(II) the base beneficiary pre-9mium computed under paragraph (2)10for a month in 2024 that would have11

applied if this paragraph had not been

12

enacted.

13‘‘(ii) 2025.—The base beneficiary pre-14

mium for a month in 2025 shall be equal

15

to the lesser of—16‘‘(I) the base beneficiary pre-17

mium computed under clause (i) for a18month in 2024 increased by 6 per-19cent; or

20‘‘(II) the base beneficiary pre-21

mium computed under paragraph (2)22for a month in 2025 that would have23

applied if this paragraph had not been

24

enacted.

ERN22335 9K1

S.L.C.

197
1‘‘(iii) 2026.—The base beneficiary2premium for a month in 2026 shall be3equal to the lesser of—4‘‘(I) the base beneficiary pre-5mium computed under clause (ii) for6

a month in 2025 increased by 6 per-7cent; or

8‘‘(II) the base beneficiary pre-9mium computed under paragraph (2)10for a month in 2026 that would have11

applied if this paragraph had not been

12

enacted.

13‘‘(iv) 2027.—The base beneficiary

14

premium for a month in 2027 shall be

15

equal to the lesser of—16‘‘(I) the base beneficiary pre-17

mium computed under clause (iii) for18

a month in 2026 increased by 6 per-19cent; or

20‘‘(II) the base beneficiary pre-21

mium computed under paragraph (2)22for a month in 2027 that would have23

applied if this paragraph had not been

24

enacted.

ERN22335 9K1

S.L.C.

1981‘‘(v) 2028.—The base beneficiary pre-2

mium for a month in 2028 shall be equal3

to the lesser of—4‘‘(I) the base beneficiary pre-5mium computed under clause (iv) for6

a month in 2027 increased by 6 per-7cent; or

8‘‘(II) the base beneficiary pre-9mium computed under paragraph (2)10for a month in 2028 that would have11

applied if this paragraph had not been

12

enacted.

13‘‘(vi) 2029.—The base beneficiary

14

premium for a month in 2029 shall be

15

equal to the lesser of—16‘‘(I) the base beneficiary pre-17

mium computed under clause (v) for a18month in 2028 increased by 6 per-19cent; or

20‘‘(II) the base beneficiary pre-21

mium computed under paragraph (2)22for a month in 2029 that would have23

applied if this paragraph had not been

24

enacted.

ERN22335 9K1

S.L.C.

1991‘‘(B) CLARIFICATION REGARDING 2030 AND
YEARS.—Thebase beneficiary

2

SUBSEQUENT

3

premium for a month in 2030 or a subsequent

4

year shall be computed under paragraph (2)5without regard to this paragraph.’’; and

6(B) in subsection (b)(3)(A)(ii), by striking

7‘‘subsection (a)(2)’’ and inserting ‘‘paragraph8(2) or (8) of subsection (a) (as applicable)’’.

9(2) ADJUSTMENT TO BENEFICIARY PREMIUM

10PERCENTAGE FOR 2030 AND SUBSEQUENT YEARS.—

11

Section 1860D–13(a) of the Social Security Act (4212

U.S.C. 1395w–113(a)), as amended by paragraph

13(1), is amended—

14(A) in paragraph (3)(A), by inserting ‘‘(or,15

for 2030 and each subsequent year, the percent

16

specified under paragraph (9))’’ after ‘‘25.5

17

percent’’; and18(B) by adding at the end the following new

19

paragraph:20‘‘(9) PERCENT SPECIFIED.—

21‘‘(A) IN GENERAL.—Subject to subpara-

22

graph (B), for purposes of paragraph (3)(A),23

the percent specified under this paragraph for

242030 and each subsequent year is the percent

25

that the Secretary determines is necessary toERN22335 9K1

S.L.C.

200
1

ensure that the base beneficiary premium com-2

puted under paragraph (2) for a month in 2030

3

is equal to the lesser of—

4‘‘(i) the base beneficiary premium

5computed under paragraph (8)(A)(vi) for a6month in 2029 increased by 6 percent; or7‘‘(ii) the base beneficiary premium

8computed under paragraph (2) for a9month in 2030 that would have applied if

10

this paragraph had not been enacted.

11‘‘(B) FLOOR.—The percent specified under12

subparagraph (A) may not be less than 20 per-13

cent.’’.

14(3) CONFORMING AMENDMENTS.—

15(A) Section 1854(b)(2)(B) of the Social

16

Security Act 42 U.S.C. 1395w–24(b)(2)(B)) is17

amended by striking ‘‘section 1860D–13(a)(2)’’18

and inserting ‘‘paragraph (2) or (8) (as applica-

19ble) of section 1860D–13(a)’’.

20(B) Section 1860D–11(g)(6) of the Social

21

Security Act (42 U.S.C. 1395w–111(g)(6)) is22

amended by inserting ‘‘(or, for 2030 and each

23

subsequent year, the percent specified under24

section 1860D–13(a)(9))’’ after ‘‘25.5 percent’’.

ERN22335 9K1

S.L.C.

201(C) Section 1860D–13(a)(7)(B)(i) of the1
2

SocialSecurity

Act

(42

3

113(a)(7)(B)(i)) is amended—

U.S.C.

1395w–

4(i) in subclause (I), by inserting ‘‘(or,5

for 2030 and each subsequent year, the6

percent specified under paragraph (9))’’7after ‘‘25.5 percent’’; and8(ii) in subclause (II), by inserting

9‘‘(or, for 2030 and each subsequent year,10

the percent specified under paragraph11(9))’’ after ‘‘25.5 percent’’.

12(D) Section 1860D–15(a) of the Social Se-

13

curity Act (42 U.S.C. 1395w–115(a)) is amend-

14

ed—

15

(i) in the matter preceding paragraph

16(1), by inserting ‘‘(or, for each of 2024

17

through 2029, the percent applicable as a18

result of the application of section 1860D–

19

13(a)(8), or, for 2030 and each subsequent

20

year, 100 percent minus the percent speci-

21

fied under section 1860D–13(a)(9))’’ after

22‘‘74.5 percent’’; and23(ii) in paragraph (1)(B), by striking

24‘‘paragraph (2) of section 1860D–13(a)’’ERN22335 9K1

S.L.C.

2021

and inserting ‘‘paragraph (2) or (8) of sec-

2

tion 1860D–13(a) (as applicable)’’.

345(e) CONFORMING AMENDMENTS.—(1) Section 1860D–2 of the Social Security Act(42 U.S.C. 1395w–102) is amended—

6(A) in subsection (a(2)(A)(i)(I), by striking

7‘‘, or an increase in the initial’’ and inserting

8‘‘or, for a year preceding 2025, an increase in9

the initial’’;

10(B) in subsection (c)(1)(C)—11(i) in the subparagraph heading, by

12

striking ‘‘AT INITIAL COVERAGE LIMIT’’;

13

and

14

(ii) by inserting ‘‘for a year preceding

152025 or the annual out-of-pocket threshold16

specified in subsection (b)(4)(B) for the17

year for 2025 and each subsequent year’’

18

after ‘‘subsection (b)(3) for the year’’ each

19

place it appears; and20(C) in subsection (d)(1)(A), by striking ‘‘or21

an initial’’ and inserting ‘‘or, for a year pre-22

ceding 2025, an initial’’.

23(2) Section 1860D–4(a)(4)(B)(i) of the Social

24

Security Act (42 U.S.C. 1395w–104(a)(4)(B)(i)) isERN22335 9K1

S.L.C.

203
1

amended by striking ‘‘the initial’’ and inserting ‘‘for2

a year preceding 2025, the initial’’.

3(3) Section 1860D–14(a) of the Social Security

4

Act (42 U.S.C. 1395w–114(a)) is amended—

5(A) in paragraph (1)—6(i) in subparagraph (C), by striking

7‘‘The continuation’’ and inserting ‘‘For a8year preceding 2025, the continuation’’;9(ii) in subparagraph (D)(iii), by strik-10

ing ‘‘1860D–2(b)(4)(A)(i)(I)’’ and insert-11

ing ‘‘1860D–2(b)(4)(A)(i)(I)(aa)’’; and12(iii) in subparagraph (E), by striking

13‘‘The elimination’’ and inserting ‘‘For a14

year preceding 2024, the elimination’’; and

15(B) in paragraph (2)—16(i) in subparagraph (C), by striking

17‘‘The continuation’’ and inserting ‘‘For a18

year preceding 2025, the continuation’’;

19

and

20

(ii) in subparagraph (E), by striking

21‘‘1860D–2(b)(4)(A)(i)(I)’’andinserting22‘‘1860D–2(b)(4)(A)(i)(I)(aa) (for a year

23

preceding 2024)’’.

24(4) Section 1860D–21(d)(7) of the Social Secu-

25

rity Act (42 U.S.C. 1395w–131(d)(7)) is amended

ERN22335 9K1

S.L.C.

204
1by striking ‘‘section 1860D–2(b)(4)(B)(i)’’ and in-2

serting ‘‘section 1860D–2(b)(4)(C)(i)’’.

3(5) Section 1860D–22(a)(2)(A) of the Social

4

Security Act (42 U.S.C. 1395w–132(a)(2)(A)) is5

amended—67(A) by striking ‘‘the value of any discount’’and inserting the following: ‘‘the value of—‘‘(i) for years prior to 2025, any dis-8
9count’’;

10(B) in clause (i), as inserted by subpara-

11

graph (A) of this paragraph, by striking the pe-

12riod at the end and inserting ‘‘; and’’; and1314(C) by adding at the end the following newclause:15‘‘(ii) for 2025 and each subsequent

16

year, any discount provided pursuant to17section 1860D–14C.’’.

18(6) Section 1860D–41(a)(6) of the Social Secu-

19

rity Act (42 U.S.C. 1395w–151(a)(6)) is amended—

20(A) by inserting ‘‘for a year before 2025’’

21
22

after ‘‘1860D–2(b)(3)’’; and(B) by inserting ‘‘for such year’’ before the23

period.

24(7) Section 1860D–43 of the Social Security

25

Act (42 U.S.C. 1395w–153) is amended—ERN22335 9K1

S.L.C.

205
1
2
3
4

(A) in subsection (a)—(i) by striking paragraph (1) and inserting the following:‘‘(1) participate in—5‘‘(A) for 2011 through 2024, the Medicare

6

coverage gap discount program under section

7

1860D–14A; and8‘‘(B) for 2025 and each subsequent year,9

the manufacturer discount program under sec-

10

tion 1860D–14C;’’;

11
12
13

(ii) by striking paragraph (2) and inserting the following:‘‘(2) have entered into and have in effect—

14‘‘(A) for 2011 through 2024, an agreement

15

described in subsection (b) of section 1860D–

16

14A with the Secretary; and17‘‘(B) for 2025 and each subsequent year,18

an agreement described in subsection (b) of sec-

19

tion 1860D–14C with the Secretary; and’’; and20(iii) in paragraph (3), by striking

21‘‘such section’’ and inserting ‘‘section

22

1860D–14A’’; and23(B) by striking subsection (b) and insert-

24

ing the following:ERN22335 9K1

S.L.C.

2061‘‘(b) EFFECTIVE DATE.—Paragraphs (1)(A), (2)(A),

2 and (3) of subsection (a) shall apply to covered part D
3 drugs dispensed under this part on or after January 1,
4 2011, and before January 1, 2025, and paragraphs (1)(B)
5 and (2)(B) of such subsection shall apply to covered part
6 D drugs dispensed under this part on or after January
7 1, 2025.’’.
(8) Section 1927 of the Social Security Act (428
9U.S.C. 1396r–8) is amended—

10(A) in subsection (c)(1)(C)(i)(VI), by in-

11

serting before the period at the end the fol-12

lowing: ‘‘or under the manufacturer discount13

program under section 1860D–14C’’; and

14(B) in subsection (k)(1)(B)(i)(V), by in-

15

serting before the period at the end the fol-16

lowing: ‘‘or under section 1860D–14C’’.

17(f) IMPLEMENTATION FOR 2024 THROUGH 2026.—

18 The Secretary shall implement this section, including the
19 amendments made by this section, for 2024, 2025, and20 2026 by program instruction or other forms of program
21 guidance.
22(g) FUNDING.—In addition to amounts otherwise

23 available, there are appropriated to the Centers for Medi24 care & Medicaid Services, out of any money in the Treas25 ury not otherwise appropriated, $341,000,000 for fiscal

ERN22335 9K1

S.L.C.

207
1 year 2022, including $20,000,000 and $65,000,000 to
2 carry out the provisions of, including the amendments
3 made by, this section in fiscal years 2022 and 2023, re4 spectively, and $32,000,000 to carry out the provisions of,
5 including the amendments made by, this section in each
6 of fiscal years 2024 through 2031, to remain available
7 until expended.
8

SEC. 11202. MAXIMUM MONTHLY CAP ON COST-SHARING

9PAYMENTS

10

PLANS AND MA–PD PLANS.

11

UNDER

PRESCRIPTIONDRUG(a) IN GENERAL.—Section 1860D–2(b) of the Social

12 Security Act (42 U.S.C. 1395w–102(b)) is amended—
13
14
15
16
17
18
19

(1) in paragraph (2)—(A) in subparagraph (A), by striking ‘‘and(D)’’ and inserting ‘‘, (D), and (E)’’; and(B) by adding at the end the following new
subparagraph:‘‘(E) MAXIMUM MONTHLY CAP ON COSTSHARING PAYMENTS.—

20‘‘(i) IN GENERAL.—For plan years be-

21

ginning on or after January 1, 2025, each

22

PDP sponsor offering a prescription drug

23

plan and each MA organization offering an

24

MA–PD plan shall provide to any enrollee

25

of such plan, including an enrollee who isERN22335 9K1

S.L.C.

2081

a subsidy eligible individual (as defined in2paragraph (3) of section 1860D–14(a)),

3the option to elect with respect to a plan

4

year to pay cost-sharing under the plan in5monthly amounts that are capped in ac-

6

cordance with this subparagraph.

7‘‘(ii) DETERMINATION

OF MAXIMUM

8MONTHLY CAP.—For

9plan year for which an enrollee in a pre-10

scription drug plan or an MA–PD plan has

11made an election pursuant to clause (i),12the PDP sponsor or MA organization shall13

determine a maximum monthly cap (as de-14

fined in clause (iv)) for such enrollee.

15each month in the‘‘(iii) BENEFICIARYMONTHLY

PAY-

16

MENTS.—With respect to an enrollee who

17

has made an election pursuant to clause

18(i), for each month described in clause (ii),19

the PDP sponsor or MA organization shall20

bill such enrollee an amount (not to exceed

21

the maximum monthly cap) for the out-of-

22

pocket costs of such enrollee in such

23

month.

24
25‘‘(iv) MAXIMUMFINED.—In

MONTHLY CAP DE-

this subparagraph, the termERN22335 9K1

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209
1‘maximum monthly cap’ means, with re-2spect to an enrollee—

3‘‘(I) for the first month for which4

the enrollee has made an election pur-5

suant to clause (i), an amount deter-

6

mined by calculating—7‘‘(aa)

theannual8

pocket9paragraph (4)(B) minus the in-10

curred costs of the enrollee as de-11

scribed in paragraph (4)(C); di-12

vided by

13

thresholdout-of-specifiedin‘‘(bb) the number of months

14

remaining in the plan year; and15‘‘(II) for a subsequent month, an

16amount determined by calculating—17‘‘(aa) the sum of any re-18

maining out-of-pocket costs owed

19

by the enrollee from a previous

20month that have not yet been

21

billed to the enrollee and any ad-

22

ditional out-of-pocket costs in-23

curred by the enrollee; divided by24‘‘(bb) the number of months

25

remaining in the plan year.

ERN22335 9K1

S.L.C.

2101‘‘(v) ADDITIONAL REQUIREMENTS.—

2

The following requirements shall apply

3with respect to the option to make an elec-

4tion pursuant to clause (i) under this sub-5

paragraph:6‘‘(I) SECRETARIAL RESPONSIBIL-7ITIES.—The

Secretary shall provide

8

information to part D eligible individ-

9

uals on the option to make such elec-

10tion through educational materials, in-11

cluding through the notices provided

12

under section 1804(a).

13‘‘(II) TIMING OF ELECTION.—An

14

enrollee in a prescription drug plan or15

an MA–PD plan may make such an

16election—

17
18
19

‘‘(aa) prior to the beginningof the plan year; or‘‘(bb) in any month during

20

the plan year.

21‘‘(III) PDP SPONSOR AND MA ORRESPONSIBILITIES.—

22GANIZATION

23

Each PDP sponsor offering a pre-24

scription drug plan or MA organiza-

25

tion offering an MA–PD plan—

ERN22335 9K1

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211
1‘‘(aa) may not limit the op-2tion for an enrollee to make such3

an election to certain covered

4

part D drugs;

5‘‘(bb) shall, prior to the plan6

year, notify prospective enrollees

7of the option to make such an

8election in promotional materials;

9‘‘(cc) shall include informa-

10tion on such option in enrollee

11

educational materials;

12‘‘(dd) shall have in place a

13mechanism to notify a pharmacy

14

during the plan year when an en-

15rollee incurs out-of-pocket costs

16

with respect to covered part D

17drugs that make it likely the en-18rollee may benefit from making

19such an election;

20‘‘(ee) shall provide that a21

pharmacy, after receiving a noti-

22

fication described in item (dd)23with respect to an enrollee, in-24forms the enrollee of such notifi-

25

cation;ERN22335 9K1

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212
1‘‘(ff) shall ensure that such2

an election by an enrollee has no3

effect on the amount paid to4

pharmacies (or the timing of

5such payments) with respect to6covered part D drugs dispensed

7

to the enrollee; and8‘‘(gg) shall have in place a9financial reconciliation process to10

correct inaccuracies in payments

11

made by an enrollee under this12

subparagraph with respect to13covered part D drugs during the14plan year.

15‘‘(IV) FAILURE TO PAY AMOUNT16

BILLED.—If

an enrollee fails to pay

17

the amount billed for a month as re-18

quired under this subparagraph—19‘‘(aa) the election of the en-20rollee pursuant to clause (i) shall21

be terminated and the enrollee

22

shall pay the cost-sharing other-23

wise applicable for any covered

24part D drugs subsequently dis-25

pensed to the enrollee up to theERN22335 9K1

S.L.C.

2131

annualout-of-pocket

threshold2

specified in paragraph (4)(B);

3

and

4

‘‘(bb) the PDP sponsor or

5

MA organization may preclude

6

the enrollee from making an elec-

7tion pursuant to clause (i) in a8

subsequent plan year.

9‘‘(V) CLARIFICATION REGARDING

10PAST DUE AMOUNTS.—Nothing in this11

subparagraph shall be construed as

12prohibiting a PDP sponsor or an MA

13organization from billing an enrollee

14

for an amount owed under this sub-15

paragraph.

16‘‘(VI) TREATMENTOFUNSET-

17

TLED BALANCES.—Any unsettled bal-

18

ances with respect to amounts owed

19

under this subparagraph shall be

20

treated as plan losses and the Sec-21

retary shall not be liable for any such

22

balances outside of those assumed as23

losses estimated in plan bids.’’; and24(2) in paragraph (4)—ERN22335 9K1

S.L.C.

2141(A) in subparagraph (C), by striking ‘‘sub-2

paragraph (E)’’ and inserting ‘‘subparagraph3(E) or subparagraph (F)’’; and

45(B) by adding at the end the following new
subparagraph:6‘‘(F) INCLUSION OF COSTS PAID UNDER

7

MAXIMUM MONTHLY CAP OPTION.—In applying

8

subparagraph (A), with respect to an enrollee

9

who has made an election pursuant to clause (i)10of paragraph (2)(E), costs shall be treated as

11

incurred if such costs are paid by a PDP spon-12

sor or an MA organization under the option

13

provided under such paragraph.’’.

14(b) APPLICATION TO ALTERNATIVE PRESCRIPTION

15 DRUG COVERAGE.—Section 1860D–2(c) of the Social Se16 curity Act (42 U.S.C. 1395w–102(c)) is amended by add17 ing at the end the following new paragraph:18‘‘(4) SAME MAXIMUM MONTHLY CAP ON COST-

19

SHARING.—The maximum monthly cap on cost-shar-20

ing payments shall apply to coverage with respect to

21

an enrollee who has made an election pursuant to22clause (i) of subsection (b)(2)(E) under the option

23

provided under such subsection.’’.

24(c) IMPLEMENTATION

FOR

2025.—The Secretary

25 shall implement this section, including the amendments

ERN22335 9K1

S.L.C.

215
1 made by this section, for 2025 by program instruction or
2 other forms of program guidance.
3(d) FUNDING.—In addition to amounts otherwise

4 available, there are appropriated to the Centers for Medi5 care & Medicaid Services, out of any money in the Treas6 ury not otherwise appropriated, $10,000,000 for fiscal
7 year 2023, to remain available until expended, to carry
8 out the provisions of, including the amendments made by,
9 this section.
10

PART 4—REPEAL OF PRESCRIPTION DRUG

11

REBATE RULE

12SEC. 11301. PROHIBITING IMPLEMENTATION OF RULE RE-

13

LATING TO ELIMINATING THE ANTI-KICK-14

BACK STATUTE SAFE HARBOR PROTECTION

15FOR PRESCRIPTION DRUG REBATES.

16

Section 90006 of division I of the Infrastructure In-

17 vestment and Jobs Act (42 U.S.C. 1320a–7b note), as
18 amended by section 13101 of division A of the Bipartisan
19 Safer Communities Act, is amended by striking ‘‘, prior
20 to January 1, 2027,’’.

ERN22335 9K1

S.L.C.

216
1
2

PART 5—MISCELLANEOUS
SEC.

11401.

COVERAGE

OF

ADULT

VACCINESREC-

3OMMENDED BY THE ADVISORY COMMITTEE

4ON IMMUNIZATION PRACTICES UNDER MEDI-

5

CARE PART D.

6(a) ENSURING TREATMENT OF COST-SHARING AND

7 DEDUCTIBLE IS CONSISTENT WITH TREATMENT OF VAC8

CINES UNDER MEDICARE PART B.—Section 1860D–2 of

9 the Social Security Act (42 U.S.C. 1395w–102), as
10 amended by sections 11201 and 11202, is amended—
11(1) in subsection (b)—12(A) in paragraph (1)(A), by striking ‘‘The

13

coverage’’ and inserting ‘‘Subject to paragraph

14(8), the coverage’’;

15
16
17

(B) in paragraph (2)—(i) in subparagraph (A), by inserting‘‘and paragraph (8)’’ after ‘‘and (E)’’;18(ii) in subparagraph (C)(i), in the19matter preceding subclause (I), by striking

20‘‘paragraph (4)’’ and inserting ‘‘para-

21

graphs (4) and (8)’’; and22(iii) in subparagraph (D)(i), in the23

matter preceding subclause (I), by striking

24‘‘paragraph (4)’’ and inserting ‘‘para-

25

graphs (4) and (8)’’;

ERN22335 9K1

S.L.C.

217
1(C) in paragraph (4)(A)(i), by striking

2‘‘The coverage’’ and inserting ‘‘Subject to para-

3graph (8), the coverage’’; and(D) by adding at the end the following new

45paragraph:

6

‘‘(8)

TREATMENTOF

COST-SHARINGFOR

7

ADULT VACCINES RECOMMENDED BY THE ADVISORY

8COMMITTEE9SISTENT WITH TREATMENT OF VACCINES UNDER

10PART B.—ON

IMMUNIZATION

PRACTICES

CON-

11

‘‘(A) IN GENERAL.—For plan years begin-

12

ning on or after January 1, 2023, with respect

13

to an adult vaccine recommended by the Advi-

14

sory Committee on Immunization Practices (as15defined in subparagraph (B))—1617‘‘(i) the deductible under paragraph(1) shall not apply; and18‘‘(ii) there shall be no coinsurance or

19other cost-sharing under this part with re-20

spect to such vaccine.

21‘‘(B) ADULT VACCINES RECOMMENDED BY

22

THE ADVISORY COMMITTEE ON IMMUNIZATION

23

PRACTICES.—For24

the term ‘adult vaccine recommended by the25

Advisory Committee on Immunization Prac-

purposes of this paragraph,ERN22335 9K1

S.L.C.

218
1

tices’ means a covered part D drug that is a2

vaccine licensed under section 351 of the Public

3

Health Service Act for use by adult populations

4and administered in accordance with rec-5

ommendations of the Advisory Committee on

6Immunization Practices of the Centers for Dis-

7

ease Control and Prevention.’’; and

8(2) in subsection (c), by adding at the end thefollowing new paragraph:

9

‘‘(5)

10

TREATMENTOF

COST-SHARING

FOR

11

ADULT VACCINES RECOMMENDED BY THE ADVISORY

12COMMITTEE

13

coverage is in accordance with subsection (b)(8).’’.

14(b) CONFORMING AMENDMENTS TO COST-SHARING

15

FOR

ON

IMMUNIZATION

PRACTICES.—The

LOW-INCOME INDIVIDUALS.—Section 1860D–14(a)16 of the Social Security Act (42 U.S.C. 1395w–114(a)), as
17 amended by section 11201, is amended—18(1) in paragraph (1)(D), in each of clauses (ii)19

and (iii), by striking ‘‘In the case’’ and inserting

20‘‘Subject to paragraph (6), in the case’’;21(2) in paragraph (2)—22(A) in subparagraph (B), by striking ‘‘A

23

reduction’’ and inserting ‘‘Subject to section

24

1860D–2(b)(8), a reduction’’;ERN22335 9K1

S.L.C.

219
1(B) in subparagraph (D), by striking ‘‘The

2

substitution’’ and inserting ‘‘Subject to para-

3graph (6), the substitution’’; and4(C) in subparagraph (E), by striking ‘‘and5subsection (c)’’ and inserting ‘‘, paragraph (6)6of this subsection, and subsection (c)’’; and7(3) by adding at the end the following new

8paragraph:9‘‘(6) NO APPLICATION OF COST-SHARING OR

10

DEDUCTIBLE FOR ADULT VACCINES RECOMMENDED

11

BY THE ADVISORY COMMITTEE ON IMMUNIZATION

12PRACTICES.—For plan years beginning on or after

13

January 1, 2023, with respect to an adult vaccine

14

recommended by the Advisory Committee on Immu-

15

nization Practices (as defined in section 1860D–

162(b)(8)(B))—‘‘(A) the deductible under section 1860D–

17
182(b)(1) shall not apply; and‘‘(B) there shall be no cost-sharing under

19
20

this section with respect to such vaccine.’’.

21(c) TEMPORARY RETROSPECTIVE SUBSIDY.—Section

22 1860D–15 of the Social Security Act (42 U.S.C. 1395w–
23 115) is amended by adding at the end the following new
24 subsection:

ERN22335 9K1

S.L.C.

2201‘‘(h) TEMPORARY RETROSPECTIVE SUBSIDY FOR RE-

2

DUCTION IN COST-SHARING FOR ADULT VACCINES REC-

3

OMMENDED BY THE ADVISORY COMMITTEE ON IMMUNI-

4ZATION PRACTICES DURING 2023.—

5‘‘(1) IN

GENERAL.—In

addition to amounts

6

otherwise payable under this section to a PDP spon-7

sor of a prescription drug plan or an MA organiza-

8

tion offering an MA–PD plan, for plan year 2023,

9

the Secretary shall provide the PDP sponsor or MA

10organization offering the plan subsidies in an

11amount equal to the aggregate reduction in cost-

12

sharing by reason of the application of section

13

1860D–2(b)(8) for individuals under the plan during

14

the year.

15‘‘(2) TIMING.—The Secretary shall provide a

16

subsidy under paragraph (1), as applicable, not later17

than 18 months following the end of the applicable

18

plan year.’’.

19(d) RULE OF CONSTRUCTION.—Nothing in this sec-

20 tion shall be construed as limiting coverage under part D
21 of title XVIII of the Social Security Act for vaccines that
22 are not recommended by the Advisory Committee on Im23 munization Practices.
24(e) IMPLEMENTATION FOR 2023 THROUGH 2025.—

25 The Secretary shall implement this section, including theERN22335 9K1

S.L.C.

221
1 amendments made by this section, for 2023, 2024, and2 2025, by program instruction or other forms of program
3 guidance.
4

SEC. 11402. PAYMENT FOR BIOSIMILAR BIOLOGICAL PROD-

5UCTS DURING INITIAL PERIOD.

6

Section 1847A(c)(4) of the Social Security Act (427 U.S.C. 1395w–3a(c)(4)) is amended—
8(1) in each of subparagraphs (A) and (B), by

9

redesignating clauses (i) and (ii) as subclauses (I)10

and (II), respectively, and moving such subclauses 2

11

ems to the right;

12(2) by redesignating subparagraphs (A) and13(B) as clauses (i) and (ii) and moving such clauses

14

2 ems to the right;

15
16
17

(3) by striking ‘‘UNAVAILABLE.—In the case’’and inserting ‘‘UNAVAILABLE.—‘‘(A) IN GENERAL.—Subject to subpara-

18

graph (B), in the case’’; and19(4) by adding at the end the following new sub-20

paragraph:21‘‘(B) LIMITATION ON PAYMENT AMOUNT22

FOR BIOSIMILAR BIOLOGICAL PRODUCTS DUR-23

ING INITIAL PERIOD.—In

24

similar biological product furnished on or after

25

July 1, 2024, during the initial period described

the case of a bio-

ERN22335 9K1

S.L.C.

222
1

in subparagraph (A) with respect to the bio-2

similar biological product, the amount payable

3

under this section for the biosimilar biological4

product is the lesser of the following:

5‘‘(i) The amount determined under6

clause (ii) of such subparagraph for the7biosimilar biological product.

8‘‘(ii) The amount determined under9

subsection (b)(1)(B) for the reference bio-

10

logical product.’’.

11

SEC. 11403. TEMPORARY INCREASE IN MEDICARE PART B

12PAYMENT FOR CERTAIN BIOSIMILAR BIO-

13

LOGICAL PRODUCTS.

14

Section 1847A(b)(8) of the Social Security Act (4215 U.S.C. 1395w–3a(b)(8)) is amended—
16(1) by redesignating subparagraphs (A) and17(B) as clauses (i) and (ii), respectively, and moving

18

the margin of each such redesignated clause 2 ems

19

to the right;

20
21
22

(2) by striking ‘‘PRODUCT.—The amount’’ andinserting the following: ‘‘PRODUCT.—‘‘(A) IN GENERAL.—Subject to subpara-

23

graph (B), the amount’’; and24(3) by adding at the end the following new sub-25

paragraph:ERN22335 9K1

S.L.C.

223
1‘‘(B) TEMPORARY PAYMENT INCREASE.—

2‘‘(i) IN GENERAL.—In the case of a3

qualifying biosimilar biological product

4

that is furnished during the applicable 5-5year period for such product, the amount6

specified in this paragraph for such prod-7

uct with respect to such period is the sum

8determined under subparagraph (A), ex-

9cept that clause (ii) of such subparagraph10

shall be applied by substituting ‘8 percent’

11for ‘6 percent’.

12‘‘(ii) APPLICABLE 5-YEAR PERIOD.—

13

For purposes of clause (i), the applicable145-year period for a qualifying biosimilar bi-

15

ological product is—16‘‘(I) in the case of such a product17

for which payment was made under18

this paragraph as of September 30,

192022, the 5-year period beginning on

20

October 1, 2022; and21‘‘(II) in the case of such a prod-22

uct for which payment is first made23

under this paragraph during a cal-24

endar quarter during the period be-

25

ginning October 1, 2022, and endingERN22335 9K1

S.L.C.

224
1

December 31, 2027, the 5-year period

2beginning on the first day of such cal-3

endar quarter during which such pay-4

ment is first made.

5‘‘(iii) QUALIFYINGBIOSIMILAR

BIO-

DEFINED.—For

pur-

6

LOGICAL7

poses of this subparagraph, the term

8

‘qualifying biosimilar biological product’9means a biosimilar biological product de-10

scribed in paragraph (1)(C) with respect to11which—PRODUCT

12‘‘(I) in the case of a product de-13

scribed in clause (ii)(I), the average

14

sales price under paragraph (8)(A)(i)15

for a calendar quarter during the 5-

16

year period described in such clause is17

not more than the average sales price18

under paragraph (4)(A) for such

19

quarter for the reference biological20

product; and21‘‘(II) in the case of a product de-22

scribed in clause (ii)(II), the average

23

sales price under paragraph (8)(A)(i)24

for a calendar quarter during the 5-

25

year period described in such clause isERN22335 9K1

S.L.C.

2251

not more than the average sales price2

under paragraph (4)(A) for such3

quarter for the reference biological4

product.’’.

5

SEC. 11404. EXPANDING ELIGIBILITY FOR LOW-INCOME

6

SUBSIDIES UNDER PART D OF THE MEDI-

7

CARE PROGRAM.

8

Section 1860D–14(a) of the Social Security Act (429 U.S.C. 1395w–114(a)), as amended by section 11201, is
10 amended—
11(1) in the subsection heading, by striking ‘‘IN-

12

DIVIDUALS’’

13

and inserting ‘‘CERTAIN INDIVIDUALS’’;

14

and all that follows through ‘‘LINE’’(2) in paragraph (1)—15

(A) by striking the paragraph heading and16

inserting ‘‘INDIVIDUALS WITH CERTAIN LOW IN-

17

COMES’’; and18(B) in the matter preceding subparagraph

19(A), by inserting ‘‘(or, with respect to a plan

20

year beginning on or after January 1, 2024,

21

150 percent)’’ after ‘‘135 percent’’; and22(3) in paragraph (2)—23

(A) by striking the paragraph heading and24

inserting ‘‘OTHER LOW-INCOME INDIVIDUALS’’;

25

and

ERN22335 9K1

S.L.C.

2261(B) in the matter preceding subparagraph2(A), by striking ‘‘In the case of a subsidy’’ and3

inserting ‘‘With respect to a plan year begin-

4ning before January 1, 2024, in the case of a5

subsidy’’.

6

SEC. 11405. IMPROVING ACCESS TO ADULT VACCINES

7
8
9
10

UNDER MEDICAID AND CHIP.

(a) MEDICAID.—(1) REQUIRING COVERAGE OF ADULT VACCINATIONS.—(A) IN GENERAL.—Section 1902(a)(10)(A)

11
12

of

the

SocialSecurity

13

1396a(a)(10)(A)) is amended in the matter pre-14

ceding clause (i) by inserting ‘‘(13)(B),’’ after

15‘‘(5),’’.

16(B)

MEDICALLY

Act

(42

U.S.C.

NEEDY.—Section17

1902(a)(10)(C)(iv) of such Act (42 U.S.C.

18

1396a(a)(10)(C)(iv)) is amended by inserting ‘‘,19(13)(B),’’ after ‘‘(5)’’.

20(2) NO COST SHARING FOR VACCINATIONS.—

21

(A)

GENERAL

COST-SHARING

22

TIONS.—Section

23

Act (42 U.S.C. 1396o) is amended—

24

LIMITA-

1916 of the Social Security(i) in subsection (a)(2)—

ERN22335 9K1

S.L.C.

227(I) in subparagraph (G), by in-1

serting a comma after ‘‘State plan’’;2(II) in subparagraph (H), by3
4

striking

5comma;

‘‘;

or’’

and

insertinga6(III) in subparagraph (I), by7

striking ‘‘; and’’ and inserting ‘‘, or’’;

8and(IV) by adding at the end the fol-9

lowing new subparagraph:

10
11

‘‘(J)

vaccines

described

insection12

1905(a)(13)(B) and the administration of such

13

vaccines; and’’; and14(ii) in subsection (b)(2)—(I) in subparagraph (G), by in-

15
16

serting a comma after ‘‘State plan’’;(II) in subparagraph (H), by

17
18

striking

19

comma;

‘‘;

or’’

and

insertinga20(III) in subparagraph (I), by21

striking ‘‘; and’’ and inserting ‘‘, or’’;

22

and

23
24

(IV) by adding at the end the following new subparagraph:ERN22335 9K1

S.L.C.

228
1

‘‘(J)

vaccines

described

insection2

1905(a)(13)(B) and the administration of such3

vaccines; and’’.

4(B) APPLICATION TO ALTERNATIVE COST

5SHARING.—Section 1916A(b)(3)(B) of the So-

6cial Security Act (42 U.S.C. 1396o–1(b)(3)(B))

7

is amended by adding at the end the following

8

new clause:

9‘‘(xiv) Vaccines described in section10

1905(a)(13)(B) and the administration of

11such vaccines.’’.

12(3) INCREASED FMAP FOR ADULT VACCINES

13

AND THEIR ADMINISTRATION.—Section

14

the Social Security Act (42 U.S.C. 1396d(b)) is15

amended—16
17

1905(b) of(A) by striking ‘‘and (5)’’ and inserting‘‘(5)’’;

18(B) by striking ‘‘services and vaccines de-19

scribed in subparagraphs (A) and (B) of sub-20

section (a)(13), and prohibits cost-sharing for21

such services and vaccines’’ and inserting ‘‘serv-

22

ices described in subsection (a)(13)(A), and23

prohibits cost-sharing for such services’’;ERN22335 9K1

S.L.C.

229
1(C) by striking ‘‘medical assistance for2such services and vaccines’’ and inserting ‘‘med-3

ical assistance for such services’’; and4(D) by inserting ‘‘, and (6) during the first5

8 fiscal quarters beginning on or after the effec-

6

tive date of this clause, in the case of a State

7

which, as of the date of enactment of the Infla-

8tion Reduction Act of 2022, provides medical

9

assistance for vaccines described in subsection

10(a)(13)(B) and their administration and pro-11

hibits cost-sharing for such vaccines, the Fed-12eral medical assistance percentage, as deter-

13

mined under this subsection and subsection (y),14shall be increased by 1 percentage point with15

respect to medical assistance for such vaccines

16

and their administration’’ before the first pe-

17

riod.

18

(b) CHIP.—

19(1) REQUIRING COVERAGE OF ADULT VACCINA-

20

TIONS.—Section 2103(c) of the Social Security Act

21(42 U.S.C. 1397cc(c)) is amended by adding at the22

end the following paragraph:23‘‘(12) REQUIREDCOVERAGEOF

APPROVED,24

RECOMMENDED ADULT VACCINES AND THEIR AD-

25

MINISTRATION.—Regardless of the type of coverageERN22335 9K1

S.L.C.

230
1

elected by a State under subsection (a), if the State2

child health plan or a waiver of such plan provides

3

child health assistance or pregnancy-related assist-4ance (as defined in section 2112) to an individual

5

who is 19 years of age or older, such assistance shall6

include coverage of vaccines described in section7

1905(a)(13)(B) and their administration.’’.
(2) NO COST-SHARING FOR VACCINATIONS.—

8
9

Section2103(e)(2)

of

such

Act

(42

U.S.C.

101397cc(e)(2)) is amended by inserting ‘‘vaccines de-11

scribed in subsection (c)(12) (and the administration

12of such vaccines),’’ after ‘‘in vitro diagnostic prod-13

ucts described in subsection (c)(10) (and administra-

14tion of such products),’’.

15(c) EFFECTIVE DATE.—The amendments made by

16 this section take effect on the 1st day of the 1st fiscal
17 quarter that begins on or after the date that is 1 year
18 after the date of enactment of this Act and shall apply
19 to expenditures made under a State plan or waiver of such
20 plan under title XIX of the Social Security Act (42 U.S.C.
21 1396 through 1396w–6) or under a State child health plan
22 or waiver of such plan under title XXI of such Act (4223 U.S.C. 1397aa through 1397mm) on or after such effec24 tive date.

ERN22335 9K1

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231

2

Subtitle C—Affordable Care Act
Subsidies

3

SEC. 12001. IMPROVE AFFORDABILITY AND REDUCE PRE-

4

MIUM COSTS OF HEALTH INSURANCE FOR

5

CONSUMERS.

1

6

(a)

IN

GENERAL.—Clause

(iii)

of

section

7 36B(b)(3)(A) of the Internal Revenue Code of 1986 is
8 amended—
9(1) by striking ‘‘in 2021 or 2022’’ and inserting

10‘‘after December 31, 2020, and before January 1,

112026’’, and

12(2) by striking ‘‘2021 AND 2022’’ in the heading

13

and inserting ‘‘2021 THROUGH 2025’’.

14(b) EXTENSION THROUGH 2025 OF RULE TO ALLOW

15 CREDIT TO TAXPAYERS WHOSE HOUSEHOLD INCOME
16 EXCEEDS 400 PERCENT OF THE POVERTY LINE.—Sec17 tion 36B(c)(1)(E) of the Internal Revenue Code of 1986
18 is amended—
19(1) by striking ‘‘in 2021 or 2022’’ and inserting

20‘‘after December 31, 2020, and before January 1,

212026’’, and2223(2) by striking ‘‘2021 AND 2022’’ in the heading
and inserting ‘‘2021 THROUGH 2025’’.

ERN22335 9K1

S.L.C.

2321(c) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to taxable years beginning after
3 December 31, 2022.
4
5
6

Subtitle D—Energy Security
SEC. 13001. AMENDMENT OF 1986 CODE.

Except as otherwise expressly provided, whenever in

7 this subtitle an amendment or repeal is expressed in terms
8 of an amendment to, or repeal of, a section or other provi9 sion, the reference shall be considered to be made to a
10 section or other provision of the Internal Revenue Code
11 of 1986.
12

PART 1—CLEAN ELECTRICITY AND REDUCING

13

CARBON EMISSIONS

14

SEC. 13101. EXTENSION AND MODIFICATION OF CREDIT

15

FOR ELECTRICITY PRODUCED FROM CER-

16

TAIN RENEWABLE RESOURCES.

17(a) IN GENERAL.—The following provisions of sec-

18 tion 45(d) are each amended by striking ‘‘January 1,
19 2022’’ each place it appears and inserting ‘‘January 1,
20 2025’’:
21(1) Paragraph (2)(A).

22(2) Paragraph (3)(A).

23(3) Paragraph (6).

24(4) Paragraph (7).

25(5) Paragraph (9).

ERN22335 9K1

S.L.C.

233(6) Paragraph (11)(B).

1(b) BASE CREDIT AMOUNT.—Section 45 is amend-

2
3 ed—

(1) in subsection (a)(1), by striking ‘‘1.5 cents’’

4

and inserting ‘‘0.3 cents’’, and

5(2) in subsection (b)(2), by striking ‘‘1.5 cent’’6
7

and inserting ‘‘0.3 cent’’.

8(c) APPLICATION OF EXTENSION TO GEOTHERMAL

9AND

SOLAR.—Section 45(d)(4) is amended by striking

10 ‘‘and which’’ and all that follows through ‘‘January 1,
11 2022’’ and inserting ‘‘and the construction of which begins
12 before January 1, 2025’’.
13(d) EXTENSION OF ELECTION TO TREAT QUALIFIED

14 FACILITIESASENERGYPROPERTY.—Section

15 48(a)(5)(C)(ii) is amended by striking ‘‘January 1, 2022’’
16 and inserting ‘‘January 1, 2025’’.
1718(e) APPLICATION OF EXTENSION TO WIND FACILITIES.—

19(1) IN GENERAL.—Section 45(d)(1) is amended20

by striking ‘‘January 1, 2022’’ and inserting ‘‘Janu-21

ary 1, 2025’’.

22
23
24
25

(2) APPLICATIONOF

PHASEOUTPERCENT-ELECTRICITYPRODUC-AGE.—(A) RENEWABLE

TION CREDIT.—Section 45(b)(5) is amended by

ERN22335 9K1

S.L.C.

2341

inserting ‘‘which is placed in service before Jan-2uary 1, 2022’’ after ‘‘using wind to produce

3electricity’’.

4(B)

ENERGYCREDIT.—Section

5

48(a)(5)(E) is amended by inserting ‘‘placed in

6

service before January 1, 2022, and’’ before

7‘‘treated as energy property’’.

8(3) QUALIFIEDOFFSHORE WIND FACILITIES

9UNDER ENERGY CREDIT.—Section 48(a)(5)(F)(i) is

10

amended by striking ‘‘offshore wind facility’’ and all

11that follows and inserting the following: ‘‘offshore

12

wind facility, subparagraph (E) shall not apply.’’.

13(f) WAGE AND APPRENTICESHIP REQUIREMENTS.—

14 Section 45(b) is amended by adding at the end the fol15 lowing new paragraphs:
1617‘‘(6) INCREASED CREDIT AMOUNT FOR QUALIFIED FACILITIES.—

18‘‘(A) IN GENERAL.—In the case of any

19

qualified facility which satisfies the require-

20

ments of subparagraph (B), the amount of the21

credit determined under subsection (a) (deter-

22

mined after the application of paragraphs (1)23through (5) and without regard to this para-

24

graph) shall be equal to such amount multiplied

25

by 5.

ERN22335 9K1

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235
1

‘‘(B)

QUALIFIED

FACILITYREQUIRE-

2

MENTS.—A qualified facility meets the require-3

ments of this subparagraph if it is one of the4following:

5‘‘(i) A facility with a maximum net

6

output of less than 1 megawatt (as meas-

7

ured in alternating current).

8‘‘(ii) A facility the construction of

9which begins prior to the date that is 60

10

days after the Secretary publishes guid-11

ance with respect to the requirements of

12paragraphs (7)(A) and (8).

13‘‘(iii) A facility which satisfies the re-14

quirements of paragraphs (7)(A) and (8).

15‘‘(7) PREVAILING WAGE REQUIREMENTS.—

16‘‘(A) IN GENERAL.—The requirements de-17

scribed in this subparagraph with respect to18

any qualified facility are that the taxpayer shall19

ensure that any laborers and mechanics em-

20ployed by contractors and subcontractors in—‘‘(i) the construction of such facility,

21
22

and

23

‘‘(ii) with respect to any taxable year,24

for any portion of such taxable year which25

is within the period described in subsection

ERN22335 9K1

S.L.C.

236
1(a)(2)(A)(ii), the alteration or repair of2such facility,

3

shall be paid wages at rates not less than the4prevailing rates for construction, alteration, or5repair of a similar character in the locality in6which such facility is located as most recently

7

determined by the Secretary of Labor, in ac-

8

cordance with subchapter IV of chapter 31 of

9

title 40, United States Code. For purposes of

10determining an increased credit amount under11

paragraph (6)(A) for a taxable year, the re-12quirement under clause (ii) is applied to such13

taxable year in which the alteration or repair of14

the qualified facility occurs.’’‘‘(B) CORRECTION AND PENALTY RELATED

15
16

TO

17

MENTS.—

FAILURETO

SATISFYWAGE

REQUIRE-18‘‘(i) IN GENERAL.—In the case of any

19

taxpayer which fails to satisfy the require-20

ment under subparagraph (A) with respect

21

to the construction of any qualified facility

22

or with respect to the alteration or repair

23of a facility in any year during the period

24

described in subparagraph (A)(ii), such25

taxpayer shall be deemed to have satisfied

ERN22335 9K1

S.L.C.

237
1such requirement under such subparagraph2with respect to such facility for any year if,

3with respect to any laborer or mechanic

4

who was paid wages at a rate below the

5

rate described in such subparagraph for6

any period during such year, such tax-

7

payer—

8‘‘(I) makes payment to such la-

9borer or mechanic in an amount equal10

to the sum of—

1112‘‘(aa) an amount equal tothe difference between—

13‘‘(AA) the amount of

14

wages paid to such laborer

15

or mechanic during such pe-

16riod, and17‘‘(BB) the amount of18

wages required to be paid to

19such laborer or mechanic

20

pursuant to such subpara-

21

graph during such period,

22

plus

23

‘‘(bb)

interest

on

the

24

amount determined under item

25(aa) at the underpayment rate

ERN22335 9K1

S.L.C.

2381

established under section 6621

2

(determined by substituting ‘63

percentage points’ for ‘3 percent-4

age points’ in subsection (a)(2)5of such section) for the period

6

described in such item, and7‘‘(II) makes payment to the Sec-8

retary of a penalty in an amount9

equal to the product of—

10‘‘(aa) $5,000, multiplied by

11‘‘(bb) the total number of la-

12borers and mechanics who were13

paid wages at a rate below the

14

rate described in subparagraph

15(A) for any period during such

16

year.

17

‘‘(ii) DEFICIENCY PROCEDURES NOT

18

TO APPLY.—Subchapter

19(relating to deficiency procedures for in-

20

come, estate, gift, and certain excise taxes)

21

shall not apply with respect to the assess-22

ment or collection of any penalty imposed23by this paragraph.

24
25‘‘(iii) INTENTIONAL

B of chapter 63

DISREGARD.—If

the Secretary determines that any failureERN22335 9K1

S.L.C.

239
1

described in clause (i) is due to intentional

2

disregard of the requirements under sub-3

paragraph (A), such clause shall be ap-

4

plied—

5‘‘(I) in subclause (I), by sub-6

stituting ‘three times the sum’ for ‘the7sum’, and8‘‘(II) in subclause (II), by sub-9

stituting ‘$10,000’ for ‘5,000’ in item

10(aa) thereof.

11‘‘(iv) LIMITATIONONPERIODFOR12

PAYMENT.—Pursuant

13

the Secretary, in the case of a final deter-

14

mination by the Secretary with respect to15

any failure by the taxpayer to satisfy the16requirement under subparagraph (A), sub-17

paragraph (B)(i) shall not apply unless the18

payments described in subclauses (I) and19(II) of such subparagraph are made by the20

taxpayer on or before the date which is21

180 days after the date of such determina-

22

tion.

23
24

‘‘(8) APPRENTICESHIP

to rules issued by

REQUIREMENTS.—The

requirements described in this paragraph with re-ERN22335 9K1

S.L.C.

240
1

spect to the construction of any qualified facility are2

as follows:

3‘‘(A) LABOR HOURS.—

4‘‘(i) PERCENTAGE OF TOTAL LABOR

5HOURS.—Taxpayers shall ensure that, with6

respect to the construction of any qualified

7

facility, not less than the applicable per-8

centage of the total labor hours of the con-9

struction, alteration, or repair work (in-10

cluding such work performed by any con-11

tractor or subcontractor) with respect to

12such facility shall, subject to subparagraph

13(B), be performed by qualified apprentices.

14‘‘(ii) APPLICABLE PERCENTAGE.—For

15

purposes of clause (i), the applicable per-16

centage shall be—17‘‘(I) in the case of a qualified fa-

18

cility the construction of which begins

19

before January 1, 2023, 10 percent,

20‘‘(II) in the case of a qualified fa-

21

cility the construction of which begins

22

after December 31, 2022, and before

23

January 1, 2024, 12.5 percent, and24‘‘(III) in the case of a qualified

25

facility the construction of which be-

ERN22335 9K1

S.L.C.

2411

gins after December 31, 2023, 15 per-

2

cent.

3

‘‘(B) APPRENTICETOJOURNEYWORKER

4

RATIO.—The

5(A)(i) shall be subject to any applicable require-

6

ments for apprentice-to-journeyworker ratios of7

the Department of Labor or the applicable

8State apprenticeship agency.

9

‘‘(C)

requirement under subparagraph

PARTICIPATION.—Eachcontractor

10

and subcontractor who employs 4 or more indi-

11

viduals to perform construction, alteration, or12

repair work with respect to the construction of

13

a qualified facility shall employ 1 or more quali-

14

fied apprentices to perform such work.

15‘‘(D) EXCEPTION.—

16‘‘(i) IN GENERAL.—A taxpayer shall17

not be treated as failing to satisfy the re-18

quirements of this paragraph if such tax-

19

payer—

20
21‘‘(I) satisfies the requirements
described in clause (ii), or

22‘‘(II) subject to clause (iii), in the23case of any failure by the taxpayer to24satisfy the requirement under sub-25

paragraphs (A) and (C) with respect

ERN22335 9K1

S.L.C.

242
1

to the construction, alteration, or re-2

pair work on any qualified facility to3which subclause (I) does not apply,4

makes payment to the Secretary of a5

penalty in an amount equal to the6

product of—7‘‘(aa) $50, multiplied by

8‘‘(bb) the total labor hours

9

for which the requirement de-10

scribed in such subparagraph was

11

not satisfied with respect to the12construction, alteration, or repair

13

work on such qualified facility.

14‘‘(ii) GOOD FAITH EFFORT.—For pur-15

poses of clause (i), a taxpayer shall be16deemed to have satisfied the requirements

17

under this paragraph with respect to a18

qualified facility if such taxpayer has re-19quested qualified apprentices from a reg-20

istered apprenticeship program, as defined21

in section 3131(e)(3)(B), and—22‘‘(I) such request has been de-

23

nied, provided that such denial is not24

the result of a refusal by the contrac-

25

tors or subcontractors engaged in theERN22335 9K1

S.L.C.

2431

performance of construction, alter-2

ation, or repair work with respect to3such qualified facility to comply with4

the established standards and require-

5

ments of the registered apprenticeship6

program, or

7‘‘(II) the registered apprentice-8

ship program fails to respond to such9

request within 5 business days after10

the date on which such registered ap-

11

prenticeship program received such

12

request.

13‘‘(iii) INTENTIONALDISREGARD.—If

14

the Secretary determines that any failure

15

described in subclause (i)(II) is due to in-

16

tentional disregard of the requirements

17

under subparagraphs (A) and (C), sub-18

clause (i)(II) shall be applied by sub-19

stituting ‘$500’ for ‘$50’ in item (aa)20

thereof.

21‘‘(E) DEFINITIONS.—For purposes of this

22
23
24

paragraph—‘‘(i) LABOR HOURS.—The term ‘labor
hours’—

ERN22335 9K1

S.L.C.

2441‘‘(I) means the total number of2hours devoted to the performance of3

construction,

4

work by employees of the taxpayer

5(including construction, alteration, or6

repair work by any contractor or sub-7

contractor), andor

repair‘‘(II) excludes any hours worked

89alteration,

by—

10

‘‘(aa) foremen,

11‘‘(bb) superintendents,

12‘‘(cc) owners, or

13‘‘(dd) persons employed in a

14

bona fide executive, administra-

15

tive,

16

(within the meaning of those17

terms in part 541 of title 29,

18

Code of Federal Regulations).

19

orprofessional‘‘(ii) QUALIFIED

capacity

APPRENTICE.—The20

term ‘qualified apprentice’ means an indi-

21

vidual who is an employee of the con-22

tractor or subcontractor and who is par-23

ticipating in a registered apprenticeship24

program,25

3131(e)(3)(B).

asdefinedinsectionERN22335 9K1

S.L.C.

245
1‘‘(9) REGULATIONS AND GUIDANCE.—The Sec-2

retary shall issue such regulations or other guidance3

as the Secretary determines necessary or appropriate

4

to carry out the purposes of this subsection, includ-5

ing regulations or other guidance which provides for6

requirements for recordkeeping or information re-7

porting for purposes of administering the require-8

ments of this subsection.’’.

9(g) DOMESTIC CONTENT, PHASEOUT, AND ENERGY

10 COMMUNITIES.—Section 45(b), as amended by subsection
11 (f), is amended—
12
13
14
15

(1) by redesignating paragraph (9) as paragraph (12), and(2) by inserting after paragraph (8) the following:

16

‘‘(9)

DOMESTIC

17

AMOUNT.—

CONTENT

BONUS

CREDIT

18‘‘(A) IN GENERAL.—In the case of any

19

qualified facility which satisfies the requirement

20

under subparagraph (B)(i), the amount of the21

credit determined under subsection (a) (deter-

22

mined after the application of paragraphs (1)23through (8)) shall be increased by an amount24

equal to 10 percent of the amount so deter-

25

mined.

ERN22335 9K1

S.L.C.

2461‘‘(B) REQUIREMENT.—

2‘‘(i) IN GENERAL.—The requirement3

described in this subclause is satisfied with4

respect to any qualified facility if the tax-

5

payer certifies to the Secretary (at such

6

time, and in such form and manner, as the7

Secretary may prescribe) that any steel,

8iron, or manufactured product which is a9component of such facility (upon comple-

10tion of construction) was produced in the11

United States (as determined under sec-

12

tion 661 of title 49, Code of Federal Regu-

13

lations).

14‘‘(ii) STEEL AND IRON.—In the case15of steel or iron, clause (i) shall be applied16

in a manner consistent with section 661.5

17of title 49, Code of Federal Regulations.

18‘‘(iii) MANUFACTUREDPRODUCT.—19

For purposes of clause (i), the manufac-

20

tured products which are components of a21

qualified facility upon completion of con-22

struction shall be deemed to have been pro-23

duced in the United States if not less than24

the adjusted percentage (as determined25

under subparagraph (C)) of the total costs

ERN22335 9K1

S.L.C.

2471of all such manufactured products of such2

facility are attributable to manufactured

3

products (including components) which are4

mined, produced, or manufactured in the5United States.

6‘‘(C) ADJUSTED PERCENTAGE.—

7‘‘(i) IN

GENERAL.—Subject

to sub-8

clause (ii), for purposes of subparagraph

9(B)(iii), the adjusted percentage shall be

1040 percent.

11‘‘(ii) OFFSHORE

WIND

FACILITY.—

12

For purposes of subparagraph (B)(iii), in13

the case of a qualified facility which is an

14

offshore wind facility, the adjusted per-15

centage shall be 20 percent.

16‘‘(10) PHASEOUT FOR ELECTIVE PAYMENT.—

17‘‘(A) IN GENERAL.—In the case of a tax-

18

payer making an election under section 6417

19with respect to a credit under this section, the20amount of such credit shall be replaced with—

21‘‘(i) the value of such credit (deter-

22

mined without regard to this paragraph),23

multiplied by

24‘‘(ii) the applicable percentage.

ERN22335 9K1

S.L.C.

2481‘‘(B) 100 PERCENT APPLICABLE PERCENT-2

AGE FOR CERTAIN QUALIFIED FACILITIES.—In3

the case of any qualified facility—

4‘‘(i) which satisfies the requirements

5

under paragraph (9)(B) with respect to the6construction of such facility, or7‘‘(ii) with a maximum net output of8

less than 1 megawatt (as measured in al-

9ternating current),

10
11

the applicable percentage shall be 100 percent.
‘‘(C) PHASEDDOMESTICCONTENTRE-12QUIREMENT.—Subject to subparagraph (D), in13

the case of any qualified facility which is not

14

described in subparagraph (B), the applicable

15

percentage shall be—

16‘‘(i) if construction of such facility

17began before January 1, 2024, 100 per-18

cent, and19‘‘(ii) if construction of such facility

20

began in calendar year 2024, 90 percent.

21‘‘(D) EXCEPTION.—

22‘‘(i) IN GENERAL.—For purposes of23

this paragraph, the Secretary shall provide

24

exceptions to the requirements under thisERN22335 9K1

S.L.C.

249
1

paragraph for the construction of qualified

2

facilities if—

3‘‘(I) the inclusion of steel, iron,4

or manufactured products which are5

produced in the United States in-6creases the overall costs of construc-7

tion of qualified facilities by more

8than 25 percent, or

9‘‘(II) relevant steel, iron, or man-10

ufactured products are not produced

11

in the United States in sufficient and12reasonably available quantities or of a13

satisfactory quality.

14‘‘(ii) APPLICABLEPERCENTAGE.—In

15

any case in which the Secretary provides

16

an exception pursuant to clause (i), the ap-

17plicable percentage shall be 100 percent.

18‘‘(11) SPECIAL RULE FOR QUALIFIED FACILITY

19

LOCATED IN ENERGY COMMUNITY.—

20‘‘(A) IN GENERAL.—In the case of a quali-

21

fied facility which is located in an energy com-22

munity, the credit determined under subsection

23(a) (determined after the application of para-

24

graphs (1) through (10), without the applica-

25

tion of paragraph (9)) shall be increased by anERN22335 9K1

S.L.C.

250
1

amount equal to 10 percent of the amount so2

determined.

3‘‘(B) ENERGY COMMUNITY.—For purposes

4of this paragraph, the term ‘energy community’

5means—

6‘‘(i) a brownfield site (as defined in

7

subparagraphs (A), (B), and (D)(ii)(III) of

8

section 101(39) of the Comprehensive En-

9vironmental Response, Compensation, and10

Liability11

9601(39))),

Act

of

1980

(42

U.S.C.

12‘‘(ii) an area which has (or, at any

13time during the period beginning after De-

14

cember 31, 1999, had) significant employ-

15

ment related to the extraction, processing,16

transport, or storage of coal, oil, or natural

17gas (as determined by the Secretary), or18‘‘(iii) a census tract—19‘‘(I) in which—20‘‘(aa) after December 31,

21

1999, a coal mine has closed, or

22‘‘(bb) after December 31,

23

2009, a coal-fired electric gener-

24

ating unit has been retired, orERN22335 9K1

S.L.C.

251
1‘‘(II) which is directly adjoining2

to any census tract described in sub-3

clause (I).’’.

4(h) CREDIT REDUCED FOR TAX-EXEMPT BONDS.—

5 Section 45(b)(3) is amended to read as follows:
6

‘‘(3)

CREDIT

7

BONDS.—The8

under subsection (a) with respect to any facility for9any taxable year (determined after the application of10paragraphs (1) and (2)) shall be reduced by the11amount which is the product of the amount so deter-

12

mined for such year and the lesser of 15 percent or

13

a fraction—

REDUCEDFORTAX-EXEMPT

amount of the credit determined

14‘‘(A) the numerator of which is the sum,15

for the taxable year and all prior taxable years,

16of proceeds of an issue of any obligations the17interest on which is exempt from tax under sec-

18

tion 103 and which is used to provide financing

19

for the qualified facility, and20‘‘(B) the denominator of which is the ag-

21

gregate amount of additions to the capital ac-

22

count for the qualified facility for the taxable

23

year and all prior taxable years.

ERN22335 9K1

S.L.C.

252
1

The amounts under the preceding sentence for any

2taxable year shall be determined as of the close of3

the taxable year.’’.

4(i) ROUNDING ADJUSTMENT.—

5(1) IN GENERAL.—Section 45(b)(2) is amended

6

by striking the second sentence and inserting the fol-7

lowing: ‘‘If the 0.3 cent amount as increased under8

the preceding sentence is not a multiple of 0.05 cent,9

such amount shall be rounded to the nearest mul-

10

tiple of 0.05 cent. In any other case, if an amount11

as increased under this paragraph is not a multiple

12of 0.1 cent, such amount shall be rounded to the13nearest multiple of 0.1 cent.’’.

14

(2)

CONFORMINGAMENDMENT.—Section

15

45(b)(4)(A) is amended by striking ‘‘last sentence’’16

and inserting ‘‘last two sentences’’.

17(j) HYDROPOWER.—

18(1) ELIMINATION OF CREDIT RATE REDUCTION

19

FOR QUALIFIED HYDROELECTRIC PRODUCTION AND

20

MARINE

21

ERGY.—Section 45(b)(4)(A), as amended by the pre-22

ceding provisions of this section, is amended by23

striking ‘‘(7), (9), or (11)’’ and inserting ‘‘or (7)’’.

24(2) MARINE AND HYDROKINETIC RENEWABLE

25

AND

HYDROKINETIC

RENEWABLE

ENERGY.—Section 45 is amended—EN-ERN22335 9K1

S.L.C.

253(A) in subsection (c)(10)(A)—12(i) in clause (iii), by striking ‘‘or’’,3(ii) in clause (iv), by striking the period at the end and inserting ‘‘, or’’ and4(iii) by adding at the end the fol-5lowing:67‘‘(v) pressurized water used in a pipe-

8line (or similar man-made water convey-

9ance) which is operated—

10‘‘(I) for the distribution of water

11

for agricultural, municipal, or indus-

12

trial consumption, and‘‘(II) not primarily for the gen-

13

eration of electricity.’’, and

14(B) in subsection (d)(11)(A), by striking

15
16
17

‘‘150’’ and inserting ‘‘25’’.
(k) EFFECTIVE DATES.—

18(1) IN GENERAL.—Except as provided in para-

19

graphs (2) and (3), the amendments made by this20

section shall apply to facilities placed in service after21

December 31, 2021.

22

(2)

CREDIT

23

BONDS.—The24

shall apply to facilities the construction of which be-

25

gins after the date of enactment of this Act.

REDUCEDFORTAX-EXEMPT

amendment made by subsection (h)ERN22335 9K1

S.L.C.

254(3) DOMESTIC CONTENT, PHASEOUT, ENERGY

12

COMMUNITIES,

3

ments made by subsections (g) and (j) shall apply to4facilities placed in service after December 31, 2022.

5

SEC. 13102. EXTENSION AND MODIFICATION OF ENERGY

6
7

AND

HYDROPOWER.—The

amend-CREDIT.

(a) EXTENSION OF CREDIT.—The following provi-

8 sions of section 48 are each amended by striking ‘‘January
9 1, 2024’’ each place it appears and inserting ‘‘January
10 1, 2025’’:
11(1) Subsection (a)(2)(A)(i)(II).

12(2) Subsection (a)(3)(A)(ii).

13(3) Subsection (c)(1)(D).

14(4) Subsection (c)(2)(D).

15(5) Subsection (c)(3)(A)(iv).

16(6) Subsection (c)(4)(C).

17(7) Subsection (c)(5)(D).

18(b) FURTHER EXTENSION FOR CERTAIN ENERGY

19 PROPERTY.—Section 48(a)(3)(A)(vii) is amended by
20 striking ‘‘January 1, 2024’’ and inserting ‘‘January 1,
21 2035’’.
22(c) PHASEOUT OF CREDIT.—Section 48(a) is amend-

23 ed by striking paragraphs (6) and (7) and inserting the
24 following new paragraph:ERN22335 9K1

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255
1‘‘(6) PHASEOUT FOR CERTAIN ENERGY PROP-

2

ERTY.—In the case of any qualified fuel cell prop-

3

erty, qualified small wind property, or energy prop-

4

erty described in clause (i) or clause (ii) of para-

5graph (3)(A) the construction of which begins after6

December 31, 2019, and which is placed in service

7

before January 1, 2022, the energy percentage de-8termined under paragraph (2) shall be equal to 26

9percent.’’.

10(d) BASE ENERGY PERCENTAGE AMOUNT.—Section

11 48(a) is amended—(1) in paragraph (2)(A)—12(A) in clause (i), by striking ‘‘30 percent’’13

and inserting ‘‘6 percent’’, and

14(B) in clause (ii), by striking ‘‘10 percent’’15
16

and inserting ‘‘2 percent’’, and

17(2) in paragraph (5)(A)(ii), by striking ‘‘30 per-18

cent’’ and inserting ‘‘6 percent’’.

19(e) 6 PERCENT CREDIT FOR GEOTHERMAL.—Section

20 48(a)(2)(A)(i)(II) is amended by striking ‘‘paragraph
21 (3)(A)(i)’’ and inserting ‘‘clause (i) or (iii) of paragraph
22 (3)(A)’’.
23(f) ENERGY STORAGE TECHNOLOGIES; QUALIFIED

24 BIOGAS PROPERTY; MICROGRID CONTROLLERS; EXTEN25

SION OF OTHER PROPERTY.—

ERN22335 9K1

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256
1

(1)

IN

GENERAL.—Section

48(a)(3)(A)is

2amended by striking ‘‘or’’ at the end of clause (vii),

3and by adding at the end the following new clauses:

4‘‘(ix) energy storage technology,5‘‘(x) qualified biogas property, or

6‘‘(xi) microgrid controllers,’’.

7(2) APPLICATION OF 6 PERCENT CREDIT.—Sec-

8

tion 48(a)(2)(A)(i) is amended by striking ‘‘and’’ at9

the end of subclauses (IV) and (V) and adding at

10

the end the following new subclauses:

11‘‘(VI) energy storage technology,

12‘‘(VII) qualified biogas property,

13‘‘(VIII)

14

microgrid

controllers,

and

15

‘‘(IX) energy property described

16

in clauses (v) and (vii) of paragraph

17(3)(A), and’’.

18(3) DEFINITIONS.—Section 48(c) is amended

19

by adding at the end the following new paragraphs:

20‘‘(6) ENERGY STORAGE TECHNOLOGY.—2122‘‘(A) IN

GENERAL.—Theterm ‘energy

storage technology’ means—23‘‘(i) property (other than property pri-24

marily used in the transportation of goods

25

or individuals and not for the production

ERN22335 9K1

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257
1of electricity) which receives, stores, and2delivers energy for conversion to electricity

3(or, in the case of hydrogen, which stores

4energy), and has a nameplate capacity of5

not less than 5 kilowatt hours, and6‘‘(ii) thermal energy storage property.

7‘‘(B) MODIFICATIONS OF CERTAIN PROP-

8

ERTY.—In the case of any property which ei-

9

ther—

10

‘‘(i) was placed in service before the11date of enactment of this section and12would be described in subparagraph (A)(i),13

except that such property has a capacity of

14

less than 5 kilowatt hours and is modified

15

in a manner that such property (after such

16

modification) has a nameplate capacity of17

not less than 5 kilowatt hours, or18‘‘(ii) is described in subparagraph

19(A)(i) and is modified in a manner that

20such property (after such modification) has

21

an increase in nameplate capacity of not

22

less than 5 kilowatt hours,

23such property shall be treated as described in24

subparagraph (A)(i) except that the basis of25

any existing property prior to such modification

ERN22335 9K1

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258
1

shall not be taken into account for purposes of2

this section. In the case of any property to3which this subparagraph applies, subparagraph

4(D) shall be applied by substituting ‘modifica-

5tion’ for ‘construction’.

67‘‘(C) THERMAL ENERGY STORAGE PROPERTY.—

8‘‘(i) IN GENERAL.—Subject to clause

9(ii), for purposes of this paragraph, the10term ‘thermal energy storage property’

11means a system which—12‘‘(I) is directly connected to a13

heating, ventilation, or air condi-

14

tioning system,

15‘‘(II) removes heat from, or adds

16

heat to, a storage medium for subse-

17

quent use, and18‘‘(III) provides energy for the19

heating or cooling of the interior of a20

residential or commercial building.

21‘‘(ii) EXCLUSION.—The term ‘thermal

22energy storage property’ shall not in-23

clude—

24‘‘(I) a swimming pool,ERN22335 9K1

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259‘‘(II) combined heat and power

12

system property, or‘‘(III) a building or its structural

3
4components.

5‘‘(D) TERMINATION.—The term ‘energy

6storage technology’ shall not include any prop-

7

erty the construction of which begins after De-

8cember 31, 2024.

9‘‘(7) QUALIFIED BIOGAS PROPERTY.—

10‘‘(A) IN GENERAL.—The term ‘qualified

11

biogas property’ means property comprising a

12system which—13‘‘(i) converts biomass (as defined in

14

section 45K(c)(3), as in effect on the date15

of enactment of this paragraph) into a gas

16which—‘‘(I) consists of not less than 52

17
18

percent methane by volume, or19‘‘(II) is concentrated by such sys-

20

tem into a gas which consists of not21

less than 52 percent methane, and22‘‘(ii) captures such gas for sale or pro-23

ductive use, and not for disposal via com-24

bustion.

ERN22335 9K1

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2601‘‘(B) INCLUSION OF CLEANING AND CONPROPERTY.—Theterm ‘qualified

2

DITIONING

3

biogas property’ includes any property which is

4part of such system which cleans or conditions

5such gas.

6‘‘(C) TERMINATION.—The term ‘qualified

7

biogas property’ shall not include any property

8

the construction of which begins after Decem-

9

ber 31, 2024.

10‘‘(8) MICROGRID CONTROLLER.—

1112‘‘(A) IN GENERAL.—The term ‘microgrid
controller’ means equipment which is—13‘‘(i) part of a qualified microgrid, and14‘‘(ii) designed and used to monitor

15

and control the energy resources and loads

16

on such microgrid.

17‘‘(B) QUALIFIED MICROGRID.—The term

18

‘qualified microgrid’ means an electrical system

19

which—

20‘‘(i) includes equipment which is capa-21

ble of generating not less than 4 kilowatts

22

and not greater than 20 megawatts of elec-

23

tricity,24‘‘(ii) is capable of operating—ERN22335 9K1

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261
1‘‘(I) in connection with the elec-

2

trical grid and as a single controllable

3

entity with respect to such grid, and4‘‘(II) independently (and discon-

5nected) from such grid, and6‘‘(iii) is not part of a bulk-power sys-7tem (as defined in section 215 of the Fed-8eral Power Act (16 U.S.C. 824o)).

9‘‘(C) TERMINATION.—The term ‘microgrid

10controller’ shall not include any property the11construction of which begins after December

1231, 2024.’’.

13(4) DENIAL OF DOUBLE BENEFIT FOR QUALI-

14

FIED BIOGAS PROPERTY.—Section 45(e) is amended15

by adding at the end the following new paragraph:‘‘(12) COORDINATION

16WITH ENERGY CREDITPROPERTY.—The

term

17

FOR

18

‘qualified facility’ shall not include any facility which

19

produces electricity from gas produced by qualified

20

biogas property (as defined in section 48(c)(7)) if a21credit is allowed under section 48 with respect to22such property for the taxable year or any prior tax-

23

able year.’’.

24
25

QUALIFIEDBIOGAS(5) PHASEOUTOFCERTAIN

ENERGYPROP-

ERTY.—Section 48(a), as amended by the precedingERN22335 9K1

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262
1

provisions of this Act, is amended by adding at the2end the following new paragraph:3‘‘(7) PHASEOUT FOR CERTAIN ENERGY PROP-

4

ERTY.—In the case of any energy property described5

in clause (vii) of paragraph (3)(A), the energy per-6centage determined under paragraph (2) shall be

7equal to—8‘‘(A) in the case of any property the con-9

struction of which begins before January 1,

102033, and which is placed in service after De-

11

cember 31, 2021, 6 percent,12‘‘(B) in the case of any property the con-13

struction of which begins after December 31,

142032, and before January 1, 2034, 5.2 percent,

15

and

16

‘‘(C) in the case of any property the con-17

struction of which begins after December 31,

182033, and before January 1, 2035, 4.4 per-19

cent.’’.

20(6) PUBLIC

21

UTILITY

PROPERTY.—Paragraph(2) of section 50(d) is amended—

22(A) by adding after the first sentence the23

following new sentence: ‘‘At the election of a

24

taxpayer, this paragraph shall not apply to any

ERN22335 9K1

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263
1

energy storage technology (as defined in section

2

48(c)(6)), provided—’’, and(B) by adding the following new subpara-

3
4graphs:5‘‘(A) no election under this paragraph shall6

be permitted if the making of such election is

7

prohibited by a State or political subdivision

8

thereof, by any agency or instrumentality of the

9

United States, or by a public service or public

10

utility commission or other similar body of any

11State or political subdivision that regulates pub-

12

lic

13

7701(a)(33)(A),utilitiesasdescribed

insection14‘‘(B) an election under this paragraph15

shall be made separately with respect to each

16

energy storage technology by the due date (in-17cluding extensions) of the Federal tax return18

for the taxable year in which the energy storage

19

technology is placed in service by the taxpayer,

20

and once made, may be revoked only with the21consent of the Secretary, and22‘‘(C) an election shall not apply with re-23

spect to any energy storage technology if such

24energy storage technology has a maximum ca-

ERN22335 9K1

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264
1

pacity equal to or less than 500 kilowatt

2hours.’’.

3(g) FUEL CELLS USING ELECTROMECHANICAL

4 PROCESSES.—(1) IN GENERAL.—Section 48(c)(1) is amend-

5
6
7

ed—
(A) in subparagraph (A)(i)—(i) by inserting ‘‘or electromechanical’’

8
9after ‘‘electrochemical’’, and10(ii) by inserting ‘‘(1 kilowatt in the11case of a fuel cell power plant with a linear

12

generator assembly)’’ after ‘‘0.5 kilowatt’’,

13

and

14

(B) in subparagraph (C)—15(i) by inserting ‘‘, or linear generator

16

assembly,’’ after ‘‘a fuel cell stack assem-

17

bly’’, and

18

(ii)

19
20

by

inserting‘‘orelectromechanical’’ after ‘‘electrochemical’’.
(2) LINEAR

GENERATORASSEMBLY

LIMITA-

21

TION.—Section

48(c)(1) is amended by redesig-

22

nating subparagraph (D) as subparagraph (E) and23

by inserting after subparagraph (C) the following

24

new subparagraph:ERN22335 9K1

S.L.C.

265‘‘(D) LINEAR

1

GENERATORASSEMBLY.—2

The term ‘linear generator assembly’ does not3

include any assembly which contains rotating

4

parts.’’.

5(h) DYNAMIC GLASS.—Section 48(a)(3)(A)(ii) is

6 amended by inserting ‘‘, or electrochromic glass which
7 uses electricity to change its light transmittance properties
8 in order to heat or cool a structure,’’ after ‘‘sunlight’’.
9(i) COORDINATION WITH LOW INCOME HOUSING

10 TAX CREDIT.—Paragraph (3) of section 50(c) is amend11 ed—(1) by striking ‘‘and’’ at the end of subpara-

12
13

graph (A),(2) by striking the period at the end of sub-14
15

paragraph (B) and inserting ‘‘, and’’, and(3) by adding at the end the following new sub-16
17

paragraph:

18‘‘(C) paragraph (1) shall not apply for pur-19

poses of determining eligible basis under section

20

42.’’.

21(j) INTERCONNECTION PROPERTY.—Section 48(a),22 as amended by the preceding provisions of this Act, is
23 amended by adding at the end the following new para24 graph:25‘‘(8) INTERCONNECTION PROPERTY.—

ERN22335 9K1

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266
1‘‘(A) IN GENERAL.—For purposes of deter-2mining the credit under subsection (a), energy

3

property shall include amounts paid or incurred4

by the taxpayer for qualified interconnection

5

property in connection with the installation of

6energy property (as defined in paragraph (3))

7which has a maximum net output of not greater

8

than 5 megawatts (as measured in alternating

9

current), to provide for the transmission or dis-10

tribution of the electricity produced or stored by

11such property, and which are properly charge-

12

able to the capital account of the taxpayer.

13‘‘(B) QUALIFIED INTERCONNECTION PROP-

14

ERTY.—The

term ‘qualified interconnection

15

property’ means, with respect to an energy

16

project which is not a microgrid controller, any

17tangible property—

18‘‘(i) which is part of an addition,

19

modification, or upgrade to a transmission

20

or distribution system which is required at21

or beyond the point at which the energy

22

project interconnects to such transmission

23

or distribution system in order to accom-

24

modate such interconnection,

25‘‘(ii) either—

ERN22335 9K1

S.L.C.

2671‘‘(I) which is constructed, recon-2structed, or erected by the taxpayer,

3

or

4

‘‘(II) for which the cost with re-5spect to the construction, reconstruc-6tion, or erection of such property is

7

paid or incurred by such taxpayer,

8

and

9

‘‘(iii) the original use of which, pursu-

10

ant to an interconnection agreement, com-11

mences with a utility.

12‘‘(C) INTERCONNECTION

AGREEMENT.—

13

The term ‘interconnection agreement’ means an

14agreement with a utility for the purposes of

15

interconnecting the energy property owned by

16

such taxpayer to the transmission or distribu-

17

tion system of such utility.

18‘‘(D) UTILITY.—For purposes of this para-

19

graph, the term ‘utility’ means the owner or op-

20

erator of an electrical transmission or distribu-

21

tion system which is subject to the regulatory

22

authority of a State or political subdivision

23

thereof, any agency or instrumentality of the24

United States, a public service or public utility

25

commission or other similar body of any StateERN22335 9K1

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268
1or political subdivision thereof, or the governing

2

or ratemaking body of an electric cooperative.

3‘‘(E) SPECIAL RULE FOR INTERCONNEC-

4

TION PROPERTY.—In the case of expenses paid

5

or

6

amounts otherwise chargeable to capital ac-

7

count with respect to such expenses shall be re-8

duced under rules similar to the rules of section

950(c).’’.

10

incurredforinterconnection

property,(k) ENERGY PROJECTS, WAGE REQUIREMENTS, AND

11 APPRENTICESHIP REQUIREMENTS.—Section 48(a), as
12 amended by the preceding provisions of this Act, is amend13 ed by adding at the end the following new paragraphs:
14
15
16

‘‘(9) INCREASED CREDIT AMOUNT FOR ENERGY
PROJECTS.—‘‘(A) IN GENERAL.—

17‘‘(i) RULE.—In the case of any energy

18

project which satisfies the requirements of

19

subparagraph (B), the amount of the cred-20

it determined under this subsection (deter-

21

mined after the application of paragraphs

22(1) through (8) and without regard to this23

clause) shall be equal to such amount mul-

24

tiplied by 5.

ERN22335 9K1

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269
1‘‘(ii) ENERGY PROJECT DEFINED.—2

For purposes of this subsection, the term

3

‘energy project’ means a project consisting4of one or more energy properties that are

5part of a single project.

6‘‘(B) PROJECT REQUIREMENTS.—A project7

meets the requirements of this subparagraph if

8

it is one of the following:

9‘‘(i) A project with a maximum net

10

output of less than 1 megawatt (as meas-

11

ured in alternating current) of electrical or

12thermal energy.

13‘‘(ii) A project the construction of

14

which begins before the date that is 60

15

days after the Secretary publishes guid-16

ance with respect to the requirements of17paragraphs (10)(A) and (11).

18‘‘(iii) A project which satisfies the re-19quirements of paragraphs (10)(A) and

20

(11).

21

‘‘(10) PREVAILING WAGE REQUIREMENTS.—

22‘‘(A) IN GENERAL.—The requirements de-23

scribed in this subparagraph with respect to24

any energy project are that the taxpayer shallERN22335 9K1

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270
1

ensure that any laborers and mechanics em-

2ployed by contractors and subcontractors in—‘‘(i) the construction of such energy

3

project, and45‘‘(ii) for the 5-year period beginning6

on the date such project is originally7

placed in service, the alteration or repair of

8such project,9

shall be paid wages at rates not less than the10prevailing rates for construction, alteration, or11

repair of a similar character in the locality in

12which such project is located as most recently

13

determined by the Secretary of Labor, in ac-

14

cordance with subchapter IV of chapter 31 of

15

title 40, United States Code. Subject to sub-16

paragraph (C), for purposes of any determina-

17

tion under paragraph (9)(A)(i) for the taxable

18

year in which the energy project is placed in

19

service, the taxpayer shall be deemed to satisfy

20

the requirement under clause (ii) at the time

21

such project is placed in service.
‘‘(B) CORRECTION AND PENALTY RELATED

22
23

TO

24

MENTS.—Rules

25

45(b)(7)(B) shall apply.

FAILURETO

SATISFYWAGE

REQUIRE-similar to the rules of section

ERN22335 9K1

S.L.C.

271
1‘‘(C) RECAPTURE.—The Secretary shall,2by regulations or other guidance, provide for re-3

capturing the benefit of any increase in the4credit allowed under this subsection by reason

5of this paragraph with respect to any project6

which does not satisfy the requirements under7

subparagraph (A) (after application of subpara-

8graph (B)) for the period described in clause

9(ii) of subparagraph (A) (but which does not

10cease to be investment credit property within

11

the meaning of section 50(a)). The period and

12percentage of such recapture shall be deter-

13

mined under rules similar to the rules of section

1450(a).

15‘‘(11)APPRENTICESHIPREQUIREMENTS.—

16

Rules similar to the rules of section 45(b)(8) shall17

apply.’’.

18(l) DOMESTIC CONTENT; PHASEOUT FOR ELECTIVE

19 PAYMENT.—Section 48(a), as amended by the preceding
20 provisions of this Act, is amended by adding at the end
21 the following new paragraphs:
22
23‘‘(12) DOMESTICCONTENT

BONUS

CREDITAMOUNT.—

24‘‘(A) IN GENERAL.—In the case of any en-

25

ergy project which satisfies the requirement

ERN22335 9K1

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272
1

under subparagraph (B), for purposes of apply-2

ing paragraph (2) with respect to such prop-

3

erty, the energy percentage shall be increased

4by the applicable credit rate increase.
‘‘(B) REQUIREMENT.—Rules similar to the56rules of section 45(b)(9)(B) shall apply.

7

‘‘(C)

APPLICABLE

8CREASE.—For9

the applicable credit rate increase shall be—

CREDIT

RATE

IN-

purposes of subparagraph (A),10‘‘(i) in the case of an energy project11

which does not satisfy the requirements of

12paragraph (9)(B), 2 percentage points, and13‘‘(ii) in the case of an energy project14

which satisfies the requirements of para-

15

graph (9)(B), 10 percentage points.

16‘‘(13) PHASEOUT FOR ELECTIVE PAYMENT.—In17

the case of a taxpayer making an election under sec-

18

tion 6417 with respect to a credit under this section,19

rules similar to the rules of section 45(b)(10) shall20

apply.’’.

21(m) SPECIAL RULE FOR PROPERTY FINANCED BY

22 TAX-EXEMPT BONDS.—Section 48(a)(4) is amended to
23 read as follows:24‘‘(4) SPECIAL RULE FOR PROPERTY FINANCED

25

BY TAX-EXEMPT BONDS.—Rules similar to the rule

ERN22335 9K1

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273
1

under section 45(b)(3) shall apply for purposes of2

this section.’’.

3(n) TREATMENT OF CERTAIN CONTRACTS INVOLV-

4

ING ENERGY STORAGE.—Section 7701(e) is amended—

5(1) in paragraph (3)—6(A) in subparagraph (A)(i), by striking

7‘‘or’’ at the end of subclause (II), by striking

8‘‘and’’ at the end of subclause (III) and insert-9

ing ‘‘or’’, and by adding at the end the fol-10

lowing new subclause:‘‘(IV) the operation of a storage11

facility, and’’, and

12(B) by adding at the end the following new

13
14

subparagraph:15‘‘(F) STORAGE FACILITY.—For purposes

16

of subparagraph (A), the term ‘storage facility’

17

means a facility which uses energy storage tech-18

nology within the meaning of section 48(c)(6).’’,

19

and

20

(2) in paragraph (4), by striking ‘‘or water

21

treatment works facility’’ and inserting ‘‘water treat-22

ment works facility, or storage facility’’.

23(o) INCREASE IN CREDIT RATE FOR ENERGY COM-

24

MUNITIES.—Section 48(a), as amended by the precedingERN22335 9K1

S.L.C.

274
1 provisions of this Act, is amended by adding at the end
2 the following new paragraph:3
4‘‘(14) INCREASE IN CREDIT RATE FOR ENERGYCOMMUNITIES.—

5‘‘(A) IN GENERAL.—In the case of any en-

6ergy project that is placed in service within an

7energy community (as defined in section

845(b)(11)(B), as applied by substituting ‘energy

9project’ for ‘qualified facility’ each place it ap-

10

pears), for purposes of applying paragraph (2)11with respect to energy property which is part of

12

such project, the energy percentage shall be in-13

creased by the applicable credit rate increase.

14

‘‘(B)

APPLICABLE

15CREASE.—For16

the applicable credit rate increase shall be equal

17

to—

CREDIT

RATE

IN-

purposes of subparagraph (A),18‘‘(i) in the case of any energy project

19

which does not satisfy the requirements of20

paragraph (9)(B), 2 percentage points, and21‘‘(ii) in the case of any energy project

22

which satisfies the requirements of para-

23

graph (9)(B), 10 percentage points.’’.

ERN22335 9K1

S.L.C.

2751(p) REGULATIONS.—Section 48(a), as amended by

2 the preceding provisions of this Act, is amended by adding
3 at the end the following new paragraph:4‘‘(15) REGULATIONSANDGUIDANCE.—The

5

Secretary shall issue such regulations or other guid-6

ance as the Secretary determines necessary or ap-

7

propriate to carry out the purposes of this sub-8

section, including regulations or other guidance

9which provides for requirements for recordkeeping or

10

information reporting for purposes of administering

11

the requirements of this subsection.’’.

12(q) EFFECTIVE DATES.—

13(1) IN GENERAL.—Except as provided in para-

14

graphs (2) and (3), the amendments made by this15

section shall apply to property placed in service after16

December 31, 2021.

17

(2)

OTHER

PROPERTY.—The

amendments

18

made by subsections (f), (g), (h), (i), (j), (l), (n),19and (o) shall apply to property placed in service

20

after December 31, 2022.

21(3) SPECIAL RULE FOR PROPERTY FINANCED

22

BY TAX-EXEMPT BONDS.—The amendments made by23

subsection (m) shall apply to property the construc-24tion of which begins after the date of enactment of

25

this Act.

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276
1

SEC. 13103. INCREASE IN ENERGY CREDIT FOR SOLAR AND

2

WIND FACILITIES PLACED IN SERVICE IN

3

CONNECTION

4NITIES.

5WITH

LOW-INCOME

COMMU-(a) IN GENERAL.—Section 48 is amended by adding

6 at the end the following new subsection:7‘‘(e) SPECIAL RULES FOR CERTAIN SOLAR AND

8 WIND FACILITIES PLACED IN SERVICE IN CONNECTION
9 WITH LOW-INCOME COMMUNITIES.—
10‘‘(1) IN GENERAL.—In the case of any qualified

11

solar and wind facility with respect to which the Sec-12

retary makes an allocation of environmental justice13

solar and wind capacity limitation under paragraph

14

(4)—

15

‘‘(A) the energy percentage otherwise de-16

termined under paragraph (2) or (5) of sub-17

section (a) with respect to any eligible property

18

which is part of such facility shall be increased

19

by—

20

‘‘(i) in the case of a facility described21

in subclause (I) of paragraph (2)(A)(iii)22

and not described in subclause (II) of such

23

paragraph, 10 percentage points, and24‘‘(ii) in the case of a facility described25

in subclause (II) of paragraph (2)(A)(iii),

26

20 percentage points, andERN22335 9K1

S.L.C.

2771‘‘(B) the increase in the credit determined2

under subsection (a) by reason of this sub-3

section for any taxable year with respect to all

4property which is part of such facility shall not

5

exceed the amount which bears the same ratio

6to the amount of such increase (determined

7

without regard to this subparagraph) as—

8‘‘(i) the environmental justice solar

9

and wind capacity limitation allocated to

10such facility, bears to

11‘‘(ii) the total megawatt nameplate ca-

12pacity of such facility, as measured in di-

13

rect current.

14
15
16
17

‘‘(2) QUALIFIED SOLAR AND WIND FACILITY.—
For purposes of this subsection—‘‘(A) IN GENERAL.—The term ‘qualified
solar and wind facility’ means any facility—

18‘‘(i) which generates electricity solely

19from property described in section 45(d)(1)20

or in clause (i) or (vi) of subsection

21(a)(3)(A),

22‘‘(ii) which has a maximum net output

23

of less than 5 megawatts (as measured in24

alternating current), and25‘‘(iii) which—ERN22335 9K1

S.L.C.

2781‘‘(I) is located in a low-income

2community (as defined in section

3

45D(e)) or on Indian land (as defined4

in section 2601(2) of the Energy Pol-5

icy Act of 1992 (25 U.S.C. 3501(2))),

6

or

7

‘‘(II) is part of a qualified low-in-

8

come residential building project or a9qualified low-income economic benefit

10

project.

11‘‘(B) QUALIFIEDLOW-INCOME RESIDEN-

12

TIAL BUILDING PROJECT.—A

facility shall be

13

treated as part of a qualified low-income resi-

14

dential building project if—

15‘‘(i) such facility is installed on a resi-

16

dential rental building which participates

17in a covered housing program (as defined18

in section 41411(a) of the Violence Against

19

Women

20

12491(a)(3)), a housing assistance pro-

21

gram administered by the Department of

22

Agriculture under title V of the Housing

23

Act of 1949, a housing program adminis-

24

tered by a tribally designated housing enti-

25ty (as defined in section 4(22) of the Na-

Act

of

1994

(34

U.S.C.

ERN22335 9K1

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279
1

tive American Housing Assistance and2

Self-Determination Act of 1996 (25 U.S.C.

34103(22))) or such other affordable hous-4

ing programs as the Secretary may pro-

5vide, and6‘‘(ii) the financial benefits of the elec-

7

tricity produced by such facility are allo-8

cated equitably among the occupants of the9dwelling units of such building.

10‘‘(C) QUALIFIED LOW-INCOME ECONOMIC

11

BENEFIT PROJECT.—A facility shall be treated12

as part of a qualified low-income economic ben-13

efit project if at least 50 percent of the finan-

14

cial benefits of the electricity produced by such

15

facility are provided to households with income

16of—‘‘(i) less than 200 percent of the pov-

17
18

erty

line

(as

definedinsection19

36B(d)(3)(A)) applicable to a family of the20

size involved, or21‘‘(ii) less than 80 percent of area me-22dian gross income (as determined under23

section 142(d)(2)(B)).

24‘‘(D) FINANCIAL BENEFIT.—For purposes

25

of subparagraphs (B) and (C), electricity ac-

ERN22335 9K1

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280
1

quired at a below-market rate shall not fail to2

be taken into account as a financial benefit.

3‘‘(3) ELIGIBLE PROPERTY.—For purposes of4

this section, the term ‘eligible property’ means en-5ergy property which—

6‘‘(A) is part of a facility described in sec-

7

tion 45(d)(1) for which an election was made8

under subsection (a)(5), or

910‘‘(B) is described in clause (i) or (vi) ofsubsection (a)(3)(A),11

including energy storage technology (as described in

12

subsection (a)(3)(A)(ix)) installed in connection with

13

such energy property.

14‘‘(4) ALLOCATIONS.—

15‘‘(A) IN GENERAL.—Not later than 180

16days after the date of enactment of this sub-17

section, the Secretary shall establish a program18

to allocate amounts of environmental justice19

solar and wind capacity limitation to qualified

20

solar and wind facilities. In establishing such21

program and to carry out the purposes of this22

subsection, the Secretary shall provide proce-23

dures to allow for an efficient allocation proc-

24

ess, including, when determined appropriate,25

consideration of multiple projects in a single ap-

ERN22335 9K1

S.L.C.

281
1

plication if such projects will be placed in serv-

2

ice by a single taxpayer.

3‘‘(B) LIMITATION.—The amount of envi-

4ronmental justice solar and wind capacity limi-

5tation allocated by the Secretary under sub-6

paragraph (A) during any calendar year shall7

not exceed the annual capacity limitation with8

respect to such year.

9‘‘(C) ANNUAL CAPACITY LIMITATION.—For10

purposes of this paragraph, the term ‘annual

11

capacity limitation’ means 1.8 gigawatts of di-

12

rect current capacity for each of calendar years

132023 and 2024, and zero thereafter.

14‘‘(D) CARRYOVER

OF

UNUSED

LIMITA-

15

TION.—If the annual capacity limitation for any

16

calendar year exceeds the aggregate amount al-17

located for such year under this paragraph,

18

such limitation for the succeeding calendar year

19

shall be increased by the amount of such excess.

20

No amount may be carried under the preceding

21

sentence to any calendar year after 2024 except

22

as provided in section 48D(h)(4)(D)(ii).

23
24
25

‘‘(E) PLACED IN SERVICE DEADLINE.—‘‘(i) IN

GENERAL.—Paragraph(1)

shall not apply with respect to any prop-

ERN22335 9K1

S.L.C.

2821

erty which is placed in service after the2date that is 4 years after the date of the3

allocation with respect to the facility of

4

which such property is a part.

5‘‘(ii) APPLICATION OF CARRYOVER.—

6

Any amount of environmental justice solar

7

and wind capacity limitation which expires

8

under clause (i) during any calendar year

9

shall be taken into account as an excess

10

described in subparagraph (D) (or as an

11

increase in such excess) for such calendar

12

year, subject to the limitation imposed by

13

the last sentence of such subparagraph.

14‘‘(5) RECAPTURE.—The Secretary shall, by reg-

15

ulations or other guidance, provide for recapturing

16

the benefit of any increase in the credit allowed

17

under subsection (a) by reason of this subsection

18

with respect to any property which ceases to be

19

property eligible for such increase (but which does20

not cease to be investment credit property within the21

meaning of section 50(a)). The period and percent-22

age of such recapture shall be determined under23

rules similar to the rules of section 50(a). To the ex-24tent provided by the Secretary, such recapture may

25

not apply with respect to any property if, within 12

ERN22335 9K1

S.L.C.

283
1months after the date the taxpayer becomes aware

2(or reasonably should have become aware) of such3

property ceasing to be property eligible for such in-4crease, the eligibility of such property for such in-5crease is restored. The preceding sentence shall not

6

apply more than once with respect to any facility.’’.

7(b) EFFECTIVE DATE.—The amendments made by

8 this section shall take effect on January 1, 2023.
9SEC. 13104. EXTENSION AND MODIFICATION OF CREDIT

10

FOR CARBON OXIDE SEQUESTRATION.

11(a) MODIFICATION OF CARBON OXIDE CAPTURE RE-

1213QUIREMENTS.—(1) IN GENERAL.—Section 45Q(d) is amended

14

to read as follows:15‘‘(d) QUALIFIED FACILITY.—For purposes of this16 section, the term ‘qualified facility’ means any industrial
17 facility or direct air capture facility—
18
19
20
21

‘‘(1) the construction of which begins before
January 1, 2033, and either—‘‘(A) construction of carbon capture equipment begins before such date, or

22‘‘(B) the original planning and design for

23

such facility includes installation of carbon cap-

24

ture equipment, and25‘‘(2) which—ERN22335 9K1

S.L.C.

284
1‘‘(A) in the case of a direct air capture fa-

2cility, captures not less than 1,000 metric tons

3of qualified carbon oxide during the taxable

4

year,

5
6

‘‘(B) in the case of an electricity generating facility—

7‘‘(i) captures not less than 18,750

8metric tons of qualified carbon oxide dur-

9

ing the taxable year, and10‘‘(ii) with respect to any carbon cap-

11

ture equipment for the applicable electric

12

generating unit at such facility, has a cap-

13

ture design capacity of not less than 75

14percent of the baseline carbon oxide pro-15

duction of such unit, or

16‘‘(C) in the case of any other facility, cap-

17

tures not less than 12,500 metric tons of quali-

18

fied carbon oxide during the taxable year.’’.

19(2) DEFINITIONS.—

20(A) IN21

GENERAL.—Section

45Q(e) is

amended—22(i) by redesignating paragraphs (1)23through (3) as paragraphs (3) through (5),24respectively, andERN22335 9K1

S.L.C.

2851(ii) by inserting after ‘‘For purposes

2of this section—’’ the following new para-

3graphs:

4‘‘(1)

APPLICABLE

ELECTRIC

GENERATING

5

UNIT.—The term ‘applicable electric generating unit’6

means the principal electric generating unit for7which the carbon capture equipment is originally8planned and designed.

910‘‘(2) BASELINE CARBON OXIDE PRODUCTION.—‘‘(A) IN

GENERAL.—Theterm ‘baseline

11

carbon oxide production’ means either of the12

following:

13‘‘(i) In the case of an applicable elec-

14

tric generating unit which was originally15

placed in service more than 1 year prior to16

the date on which construction of the car-17

bon capture equipment begins, the average

18

annual carbon oxide production, by mass,

19

from such unit during the shorter of either

20

the following periods:

21‘‘(I) The period beginning on the22date such unit was placed in service

23

and ending on the date on which con-24

struction of such equipment began.

ERN22335 9K1

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286
1‘‘(II) The 6-year period preceding2

the date on which construction of

3such equipment began.

4‘‘(ii) In the case of an applicable elec-

5

tric generating unit which—6‘‘(I) as of the date on which con-7

struction of the carbon capture equip-

8

ment begins, is not yet placed in serv-

9

ice, or

10‘‘(II) was placed in service during

11

the 1-year period prior to the date on

12which construction of the carbon cap-

13

ture equipment begins,14

the designed annual carbon oxide produc-

15tion, by mass, as determined based on an

16

assumed capacity factor of 60 percent.

17‘‘(B) CAPACITY FACTOR.—The term ‘ca-18

pacity factor’ means the ratio (expressed as a19

percentage) of the actual electric output from20

the applicable electric generating unit to the po-21

tential electric output from such unit.’’.

22(B) CONFORMINGAMENDMENT.—Section

23

142(o)(1)(B) is amended by striking ‘‘section

24

45Q(e)(1)’’ and inserting ‘‘section 45Q(e)(3)’’.

ERN22335 9K1

S.L.C.

2871(b) MODIFIED APPLICABLE DOLLAR AMOUNT.—Sec-

2 tion 45Q(b)(1)(A) is amended—(1) in clause (i)—34(A) in subclause (I), by striking ‘‘the dollar

5amount’’ and all that follows through ‘‘such pe-

6riod’’ and inserting ‘‘$17’’, and

7(B) in subclause (II), by striking ‘‘the dol-8

lar amount’’ and all that follows through ‘‘such

9

period’’ and inserting ‘‘$12’’, and

10(2) in clause (ii)—(A) in subclause (I), by striking ‘‘$50’’ and11

inserting ‘‘$17’’, and

12(B) in subclause (II), by striking ‘‘$35’’

13

and inserting ‘‘$12’’.

14
15

(c)

DETERMINATIONOFAPPLICABLEDOLLAR

16 AMOUNT.—
17

(1)

IN

GENERAL.—Section

45Q(b)(1),as

18

amended by the preceding provisions of this Act, is19amended—

20
21
22
23

(A) by redesignating subparagraph (B) as
subparagraph (D), and(B) by inserting after subparagraph (A)the following new subparagraphs:

24‘‘(B) SPECIAL RULE FOR DIRECT AIR CAP-

25

TURE FACILITIES.—In the case of any qualified

ERN22335 9K1

S.L.C.

288
1

facility described in subsection (d)(2)(A) which2is placed in service after December 31, 2022,

3

the applicable dollar amount shall be an amount4

equal to the applicable dollar amount otherwise

5

determined with respect to such qualified facil-6

ity under subparagraph (A), except that such

7

subparagraph shall be applied—8910‘‘(i) by substituting ‘$36’ for ‘$17’
each place it appears, and‘‘(ii) by substituting ‘$26’ for ‘$12’

11

each place it appears.

12‘‘(C) APPLICABLE DOLLAR AMOUNT FOR

13

ADDITIONAL CARBON CAPTURE EQUIPMENT.—

14

In the case of any qualified facility which is15

placed in service before January 1, 2023, if any

16

additional carbon capture equipment is installed17

at such facility and such equipment is placed in

18

service after December 31, 2022, the applicable19

dollar amount shall be an amount equal to the20

applicable dollar amount otherwise determined

21

under this paragraph, except that subparagraph22(B) shall be applied—

23‘‘(i) by substituting ‘before January 1,

242023’ for ‘after December 31, 2022’, andERN22335 9K1

S.L.C.

289
1‘‘(ii) by substituting ‘the additional

2

carbon capture equipment installed at such3

qualified facility’ for ‘such qualified facil-

4ity’.’’.

5(2) CONFORMING AMENDMENTS.—

6(A) Section 45Q(b)(1)(A) is amended by7

striking ‘‘The applicable dollar amount’’ and in-

8

serting ‘‘Except as provided in subparagraph

9(B) or (C), the applicable dollar amount’’.

10(B) Section 45Q(b)(1)(D), as redesignated11

by paragraph (1)(A), is amended by striking

12‘‘subparagraph (A)’’ and inserting ‘‘subpara-

13

graph (A), (B), or (C)’’.

1415(d) INSTALLATION OF ADDITIONAL CARBON CAPTURE EQUIPMENT ON CERTAIN FACILITIES.—

16(1) IN GENERAL.—Section 45Q(b) is amended17

by redesignating paragraph (3) as paragraph (4)18and by inserting after paragraph (2) the following

19

new paragraph:20‘‘(3) INSTALLATION OF ADDITIONAL CARBON21

CAPTURE EQUIPMENT ON CERTAIN FACILITIES.—In22

the case of a qualified facility described in para-

23

graph (1)(C), the amount of qualified carbon oxide

24

which is captured by the taxpayer for purposes ofERN22335 9K1

S.L.C.

290
1

subsection (a) shall be determined pursuant to para-

2graph (2), as applied—‘‘(A) in the matter preceding subparagraph

3
4

(A)—

5

‘‘(i) by substituting ‘January 1, 2023’

6

for ‘the date of the enactment of the Bi-

7partisan Budget Act of 2018’, and8‘‘(ii) by substituting ‘after December

931, 2022’ for ‘on or after the date of the10enactment of such Act’, and11‘‘(B) in subparagraph (A)(ii), by sub-12

stituting ‘December 31, 2022’ for ‘the day be-13

fore the date of the enactment of the Bipartisan

14

Budget Act of 2018’.’’.

15

(2)

CONFORMINGAMENDMENT.—Section

16

45Q(b)(2) is amended by striking ‘‘In the case’’ and17

inserting ‘‘Subject to paragraph (3), in the case’’.

18(e) WAGE AND APPRENTICESHIP REQUIREMENTS.—

19 Section 45Q is amended by redesignating subsection (h)20 as subsection (i) and inserting after subsection (g) fol21 lowing new subsection:22‘‘(h) INCREASED CREDIT AMOUNT FOR QUALIFIED

23 FACILITIES AND CARBON CAPTURE EQUIPMENT.—
24‘‘(1) IN GENERAL.—In the case of any qualified

25

facility or any carbon capture equipment which sat-ERN22335 9K1

S.L.C.

2911

isfy the requirements of paragraph (2), the amount2of the credit determined under subsection (a) shall3

be equal to such amount (determined without regard

4to this sentence) multiplied by 5.

56‘‘(2) REQUIREMENTS.—The requirements described in this paragraph are that—

7‘‘(A) with respect to any qualified facility

8

the construction of which begins on or after the9date that is 60 days after the Secretary pub-10

lishes guidance with respect to the requirements

11of paragraphs (3)(A) and (4), as well as any

12carbon capture equipment placed in service at

13such facility—

14‘‘(i) subject to subparagraph (B) of

15

paragraph (3), the taxpayer satisfies the16

requirements under subparagraph (A) of

17such paragraph with respect to such facil-18

ity and equipment, and19‘‘(ii) the taxpayer satisfies the re-20

quirements under paragraph (4) with re-21

spect to the construction of such facility

22

and equipment,

23‘‘(B) with respect to any carbon capture

24

equipment the construction of which begins

25

after the date that is 60 days after the Sec-ERN22335 9K1

S.L.C.

2921

retary publishes guidance with respect to the2requirements of paragraphs (3)(A) and (4), and3which is installed at a qualified facility the con-4

struction of which began prior to such date—5‘‘(i) subject to subparagraph (B) of

6paragraph (3), the taxpayer satisfies the7requirements under subparagraph (A) of

8such paragraph with respect to such equip-

9

ment, and10‘‘(ii) the taxpayer satisfies the re-11quirements under paragraph (4) with re-

12spect to the construction of such equip-

13

ment, or

14‘‘(C) the construction of carbon capture

15

equipment begins prior to the date that is 60

16

days after the Secretary publishes guidance17with respect to the requirements of paragraphs

18(3)(A) and (4), and such equipment is installed

19

at a qualified facility the construction of which

20

begins prior to such date.

21‘‘(3) PREVAILING WAGE REQUIREMENTS.—

22‘‘(A) IN GENERAL.—The requirements de-23

scribed in this subparagraph with respect to24

any qualified facility and any carbon capture

25

equipment placed in service at such facility areERN22335 9K1

S.L.C.

293
1that the taxpayer shall ensure that any laborers2

and mechanics employed by contractors and3

subcontractors in—

45‘‘(i) the construction of such facility
or equipment, and6‘‘(ii) with respect to any taxable year,7

for any portion of such taxable year which

8

is within the period described in paragraph

9(3)(A) or (4)(A) of subsection (a), the al-

10

teration or repair of such facility or such

11

equipment,

12

shall be paid wages at rates not less than the13

prevailing rates for construction, alteration, or

14

repair of a similar character in the locality in

15

which such facility and equipment are located16

as most recently determined by the Secretary of

17

Labor, in accordance with subchapter IV of18

chapter 31 of title 40, United States Code. For

19

purposes of determining an increased credit

20

amount under paragraph (1) for a taxable year,21

the requirement under clause (ii) of this sub-22

paragraph is applied to such taxable year in23

which the alteration or repair of qualified facil-24

ity occurs.

ERN22335 9K1

S.L.C.

294‘‘(B) CORRECTION AND PENALTY RELATED

1

REQUIRE-

2

TO

3

MENTS.—Rules

4

45(b)(7)(B) shall apply.

5‘‘(4) APPRENTICESHIP REQUIREMENTS.—Rules

6

similar to the rules of section 45(b)(8) shall apply.

7‘‘(5) REGULATIONS AND GUIDANCE.—The Sec-8

retary shall issue such regulations or other guidance

9

as the Secretary determines necessary or appropriate

10

to carry out the purposes of this subsection, includ-11

ing regulations or other guidance which provides for

12

requirements for recordkeeping or information re-13

porting for purposes of administering the require-

14

ments of this subsection.’’.

15(f) CREDIT REDUCED FOR TAX-EXEMPT BONDS.—FAILURETO

SATISFY

WAGE

similar to the rules of section

16 Section 45Q(f) is amended—17(1) by striking the second paragraph (3), as18

added at the end of such section by section 80402(e)19of the Infrastructure Investment and Jobs Act (Pub-20

lic Law 117-58), and21(2) by adding at the end the following new22

paragraph:

23

‘‘(8)

24

BONDS.—Rules

25

45(b)(3) shall apply for purposes of this section.’’.

CREDIT

REDUCEDFORTAX-EXEMPT

similar to the rule under section

ERN22335 9K1

S.L.C.

2951(g) APPLICATION OF SECTION FOR CERTAIN CARBON

2 CAPTURE EQUIPMENT.—Section 45Q(g) is amended by
3 inserting ‘‘the earlier of January 1, 2023, and’’ before
4 ‘‘the end of the calendar year’’.
5(h) ELECTION.—Section 45Q(f), as amended by sub-

6 section (f), is amended by adding at the end the following
7 new paragraph:8‘‘(9) ELECTION.—For purposes of paragraphs

9(3) and (4) of subsection (a), a person described in

10paragraph (3)(A)(ii) may elect, at such time and in

11such manner as the Secretary may prescribe, to have12

the 12–year period begin on the first day of the first13

taxable year in which a credit under this section is

14

claimed with respect to carbon capture equipment

15

which is originally placed in service at a qualified fa-

16

cility on or after the date of the enactment of the17

Bipartisan Budget Act of 2018 (after application of18

subsection (f)(6), where applicable) if—

19‘‘(A) no taxpayer claimed a credit under

20

this section with respect to such carbon capture

21

equipment for any prior taxable year,22‘‘(B) the qualified facility at which such

23

carbon capture equipment is placed in service is24

located in an area affected by a federally-de-25

clareddisaster(asdefinedbysectionERN22335 9K1

S.L.C.

296
1

165(i)(5)(A)) after the carbon capture equip-2

ment is originally placed in service, and3‘‘(C) such federally-declared disaster re-4

sults in a cessation of the operation of the5qualified facility or the carbon capture equip-

6

ment after such equipment is originally placed

7

in service.’’.

8(i) REGULATIONS FOR BASELINE CARBON OXIDE

9 PRODUCTION.—Subsection (i) of section 45Q, as redesig10 nated by subsection (e), is amended—
11(1) in paragraph (1), by striking ‘‘and’’,12(2) in paragraph (2), by striking the period at

13
14
15

the end and inserting ‘‘, and’’, and(3) by adding at the end the following newparagraph:16‘‘(3) for purposes of subsection (d)(2)(B)(ii),17

adjust the baseline carbon oxide production with re-18

spect to any applicable electric generating unit at19

any electricity generating facility if—

20‘‘(A) after the date on which the carbon

21

capture equipment is placed in service, modi-

22

fications are made to such unit which result in23

a significant increase or decrease in carbon

24oxide production, orERN22335 9K1

S.L.C.

2971‘‘(B) for any reason other than a modifica-

2tion described in subparagraph (A), there is a3

significant increase or decrease in carbon oxide

4production with respect to such unit.’’.

5(j) EFFECTIVE DATES.—

6(1) IN GENERAL.—Except as provided in para-

7

graphs (2), (3), and (4), the amendments made by8

this section shall apply to facilities or equipment

9

placed in service after December 31, 2022.

10(2) MODIFICATION OF CARBON OXIDE CAPTURE

11

REQUIREMENTS.—The

12

section (a) shall apply to facilities or equipment the13

construction of which begins after the date of enact-

14

ment of this Act.

15

amendments made by sub-(3) APPLICATION OF SECTION FOR CERTAIN

16

CARBON CAPTURE EQUIPMENT.—The

amendments

17

made by subsection (g) shall take effect on the date18

of enactment of this Act.

19(4) ELECTION.—The amendments made by20

subsection (h) shall apply to carbon oxide captured

21

and disposed of after December 31, 2021.

ERN22335 9K1

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298
1

SEC. 13105. ZERO-EMISSION NUCLEAR POWER PRODUC-

2
3TION CREDIT.

(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. ZERO-EMISSION NUCLEAR POWER PRODUCTION

78

CREDIT.

‘‘(a) AMOUNT OF CREDIT.—For purposes of section

9 38, the zero-emission nuclear power production credit for
10 any taxable year is an amount equal to the amount by
11 which—
12‘‘(1) the product of—13‘‘(A) 0.3 cents, multiplied by

14‘‘(B) the kilowatt hours of electricity—‘‘(i) produced by the taxpayer at a15

qualified nuclear power facility, and1617‘‘(ii) sold by the taxpayer to an unre-18

lated person during the taxable year, ex-

19

ceeds

20

‘‘(2) the reduction amount for such taxable

21

year.

22

‘‘(b) DEFINITIONS.—

23‘‘(1) QUALIFIED NUCLEAR POWER FACILITY.—24

For purposes of this section, the term ‘qualified nu-

25clear power facility’ means any nuclear facility—

ERN22335 9K1

S.L.C.

2991‘‘(A) which is owned by the taxpayer and2which uses nuclear energy to produce elec-

3

tricity,4‘‘(B) which is not an advanced nuclear

5

power facility as defined in subsection (d)(1) of

6

section 45J, and7‘‘(C) which is placed in service before the8date of the enactment of this section.

9‘‘(2) REDUCTION AMOUNT.—

10‘‘(A) IN GENERAL.—For purposes of this11

section, the term ‘reduction amount’ means,

12with respect to any qualified nuclear power fa-

13

cility for any taxable year, the amount equal to14

the lesser of—

15
16
17
18

‘‘(i) the amount determined undersubsection (a)(1), or‘‘(ii) the amount equal to 80 percentof the excess of—19‘‘(I) subject to subparagraph (B),20

the gross receipts from any electricity

21

produced by such facility (including

22

any electricity services or products

23

provided in conjunction with the elec-

24

tricity produced by such facility) andERN22335 9K1

S.L.C.

300
1

sold to an unrelated person during

2such taxable year, over‘‘(II) the amount equal to the3

product of—4‘‘(aa) 2.5 cents, multiplied

5
by

6

‘‘(bb)

7
8

mined

9

(a)(1)(B).

10

‘‘(B)

TREATMENT11

CEIPTS.—

the
under

OF

amountdeter-

subsection

CERTAINRE-12‘‘(i) IN GENERAL.—The amount de-13

termined under subparagraph (A)(ii)(I)14

shall include any amount received by the15

taxpayer during the taxable year with re-16

spect to the qualified nuclear power facility

17from a zero-emission credit program.

18‘‘(ii) ZERO-EMISSIONCREDIT

PRO-

19

GRAM.—For

purposes of this subpara-

20

graph, the term ‘zero-emission credit pro-21

gram’ means any payments with respect to22

a qualified nuclear power facility as a re-23

sult of any Federal, State or local govern-

24

ment program for, in whole or in part, the25

zero-emission, zero-carbon, or air quality

ERN22335 9K1

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301
1

attributes of any portion of the electricity

2

produced by such facility.

3‘‘(3) ELECTRICITY.—For purposes of this sec-4

tion, the term ‘electricity’ means the energy pro-5

duced by a qualified nuclear power facility from the6

conversion of nuclear fuel into electric power.

7‘‘(c) OTHER RULES.—

8‘‘(1) INFLATION ADJUSTMENT.—The 0.3 cent9amount in subsection (a)(1)(A) and the 2.5 cent10

amount in subsection (b)(2)(A)(ii)(II)(aa) shall each11

be adjusted by multiplying such amount by the infla-

12tion adjustment factor (as determined under section

1345(e)(2), as applied by substituting ‘calendar year

142023’ for ‘calendar year 1992’ in subparagraph (B)15thereof) for the calendar year in which the sale oc-

16curs. If the 0.3 cent amount as increased under this17

paragraph is not a multiple of 0.05 cent, such18

amount shall be rounded to the nearest multiple of

19

0.05 cent. If the 2.5 cent amount as increased under

20

this paragraph is not a multiple of 0.1 cent, such21

amount shall be rounded to the nearest multiple of22

0.1 cent.

23‘‘(2) SPECIAL

RULES.—Rules

similar to the24rules of paragraphs (1), (3), (4), and (5) of section

25

45(e) shall apply for purposes of this section.

ERN22335 9K1

S.L.C.

3021‘‘(d) WAGE REQUIREMENTS.—

2‘‘(1) INCREASED CREDIT AMOUNT FOR QUALI-

3

FIED NUCLEAR POWER FACILITIES.—In the case of4

any qualified nuclear power facility which satisfies

5

the requirements of paragraph (2)(A), the amount of6

the credit determined under subsection (a) shall be

7equal to such amount (as determined without regard

8

to this sentence) multiplied by 5.

9‘‘(2) PREVAILING WAGE REQUIREMENTS.—

10‘‘(A) IN GENERAL.—The requirements de-11

scribed in this subparagraph with respect to12

any qualified nuclear power facility are that the13

taxpayer shall ensure that any laborers and me-

14

chanics employed by contractors and sub-15

contractors in the alteration or repair of such

16

facility shall be paid wages at rates not less17

than the prevailing rates for alteration or repair

18of a similar character in the locality in which

19

such facility is located as most recently deter-

20

mined by the Secretary of Labor, in accordance

21

with subchapter IV of chapter 31 of title 40,

22

United States Code.
‘‘(B) CORRECTION AND PENALTY RELATED

23
24

TO

FAILURETO

SATISFYWAGE

REQUIRE-ERN22335 9K1

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303
1

MENTS.—Rules

similar to the rules of section

2

45(b)(7)(B) shall apply.

3‘‘(3) REGULATIONS AND GUIDANCE.—The Sec-4

retary shall issue such regulations or other guidance5

as the Secretary determines necessary or appropriate

6

to carry out the purposes of this subsection, includ-7

ing regulations or other guidance which provides for8

requirements for recordkeeping or information re-9

porting for purposes of administering the require-

10

ments of this subsection.

11‘‘(e) TERMINATION.—This section shall not apply to

12 taxable years beginning after December 31, 2032.’’.
13(b) CONFORMING AMENDMENTS.—

14(1) Section 38(b) is amended—

15
16
17
18
19

(A) in paragraph (32), by striking ‘‘plus’’
at the end,(B) in paragraph (33), by striking the period at the end and inserting ‘‘, plus’’, and(C) by adding at the end the following new20

paragraph:21‘‘(34) the zero-emission nuclear power produc-22tion credit determined under section 45U(a).’’.

23(2) The table of sections for subpart D of part24

IV of subchapter A of chapter 1 is amended by add-25

ing at the end the following new item:‘‘Sec. 45U. Zero-emission nuclear power production credit.’’.

ERN22335 9K1

S.L.C.

3041(c) EFFECTIVE DATE.—This section shall apply to

2 electricity produced and sold after December 31, 2023, in
3 taxable years beginning after such date.
4

PART 2—CLEAN FUELS

5

SEC. 13201. EXTENSION OF INCENTIVES FOR BIODIESEL,6RENEWABLE

7

FUELS.

8

DIESELAND

ALTERNATIVE(a) BIODIESEL AND RENEWABLE DIESEL CREDIT.—

9 Section 40A(g) is amended by striking ‘‘December 31,
10 2022’’ and inserting ‘‘December 31, 2024’’.
11(b) BIODIESEL MIXTURE CREDIT.—
(1)

12

IN

GENERAL.—Section

6426(c)(6)is

13

amended by striking ‘‘December 31, 2022’’ and in-

14

serting ‘‘December 31, 2024’’.
(2) FUELS

15

NOT

USED

FOR

TAXABLE

PUR-

16

POSES.—Section 6427(e)(6)(B) is amended by strik-17

ing ‘‘December 31, 2022’’ and inserting ‘‘December

18

31, 2024’’.

19

(c)

ALTERNATIVEFUELCREDIT.—Section

20 6426(d)(5) is amended by striking ‘‘December 31, 2021’’
21 and inserting ‘‘December 31, 2024’’.
22(d) ALTERNATIVE FUEL MIXTURE CREDIT.—Section

23 6426(e)(3) is amended by striking ‘‘December 31, 2021’’
24 and inserting ‘‘December 31, 2024’’.

ERN22335 9K1

S.L.C.

3051(e) PAYMENTS FOR ALTERNATIVE FUELS.—Section

2 6427(e)(6)(C) is amended by striking ‘‘December 31,
3 2021’’ and inserting ‘‘December 31, 2024’’.
4(f) EFFECTIVE DATE.—The amendments made by

5 this section shall apply to fuel sold or used after December
6 31, 2021.
7(g) SPECIAL RULE.—Notwithstanding any other pro-

8 vision of law, in the case of any alternative fuel credit
9 properly determined under section 6426(d) of the Internal
10 Revenue Code of 1986 for the period beginning on Janu11 ary 1, 2022, and ending with the close of the last calendar
12 quarter beginning before the date of the enactment of this13 Act, such credit shall be allowed, and any refund or pay14 ment attributable to such credit (including any payment
15 under section 6427(e) of such Code) shall be made, only
16 in such manner as the Secretary of the Treasury (or the
17 Secretary’s delegate) shall provide. Such Secretary shall18 issue guidance within 30 days after the date of the enact19 ment of this Act providing for a one-time submission of
20 claims covering periods described in the preceding sen21 tence. Such guidance shall provide for a 180-day period
22 for the submission of such claims (in such manner as pre23 scribed by such Secretary) to begin not later than 30 days
24 after such guidance is issued. Such claims shall be paid
25 by such Secretary not later than 60 days after receipt.

ERN22335 9K1

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306
1 If such Secretary has not paid pursuant to a claim filed
2 under this subsection within 60 days after the date of the
3 filing of such claim, the claim shall be paid with interest
4 from such date determined by using the overpayment rate
5 and method under section 6621 of such Code.
67
8

SEC. 13202. EXTENSION OF SECOND GENERATION BIOFUELINCENTIVES.

(a) IN GENERAL.—Section 40(b)(6)(J)(i) is amended

9 by striking ‘‘2022’’ and inserting ‘‘2025’’.
10(b) EFFECTIVE DATE.—The amendment made by

11 subsection (a) shall apply to qualified second generation
12 biofuel production after December 31, 2021.
13
14SEC. 13203. SUSTAINABLE AVIATION FUEL CREDIT.

(a) IN GENERAL.—Subpart D of part IV of sub-

15 chapter A of chapter 1 is amended by inserting after sec16 tion 40A the following new section:
17
18‘‘SEC. 40B. SUSTAINABLE AVIATION FUEL CREDIT.

‘‘(a) IN GENERAL.—For purposes of section 38, the19 sustainable aviation fuel credit determined under this sec20 tion for the taxable year is, with respect to any sale or
21 use of a qualified mixture which occurs during such tax22 able year, an amount equal to the product of—
23
24
25

‘‘(1) the number of gallons of sustainable aviation fuel in such mixture, multiplied by‘‘(2) the sum of—ERN22335 9K1

S.L.C.

3071‘‘(A) $1.25, plus

2‘‘(B) the applicable supplementary amount3

with respect to such sustainable aviation fuel.

4‘‘(b) APPLICABLE SUPPLEMENTARY AMOUNT.—For

5 purposes of this section, the term ‘applicable supple6 mentary amount’ means, with respect to any sustainable
7 aviation fuel, an amount equal to $0.01 for each percent8 age point by which the lifecycle greenhouse gas emissions
9 reduction percentage with respect to such fuel exceeds 50
10 percent. In no event shall the applicable supplementary
11 amount determined under this subsection exceed $0.50.
12‘‘(c) QUALIFIED MIXTURE.—For purposes of this

13 section, the term ‘qualified mixture’ means a mixture of
14 sustainable aviation fuel and kerosene if—
15
16
17
18
19
20
21

‘‘(1) such mixture is produced by the taxpayer
in the United States,‘‘(2) such mixture is used by the taxpayer (orsold by the taxpayer for use) in an aircraft,‘‘(3) such sale or use is in the ordinary courseof a trade or business of the taxpayer, and‘‘(4) the transfer of such mixture to the fuel22

tank of such aircraft occurs in the United States.

23‘‘(d) SUSTAINABLE AVIATION FUEL.—ERN22335 9K1

S.L.C.

308
1‘‘(1) IN GENERAL.—For purposes of this sec-2

tion, the term ‘sustainable aviation fuel’ means liq-3

uid fuel which—

456‘‘(A) meets the requirements of—‘‘(i) ASTM International Standard
D7566, or7‘‘(ii) the Fischer Tropsch provisions of

8

ASTM International Standard D1655,

9Annex A1,

10‘‘(B) is not derived from coprocessing an

11applicable material (or materials derived from12

an applicable material) with a feedstock which13

is not biomass,

1415‘‘(C) is not derived from palm fatty aciddistillates or petroleum, and

16‘‘(D) has been certified in accordance with

17

subsection (e) as having a lifecycle greenhouse18

gas emissions reduction percentage of at least19

50 percent.

20‘‘(2) DEFINITIONS.—In this subsection—

21
22
23
24
25

‘‘(A) APPLICABLE MATERIAL.—The term‘applicable material’ means—‘‘(i) monoglycerides, diglycerides, andtriglycerides,‘‘(ii) free fatty acids, andERN22335 9K1

S.L.C.

309‘‘(iii) fatty acid esters.

12‘‘(B) BIOMASS.—The term ‘biomass’ has

3

the same meaning given such term in section

4

45K(c)(3).

5‘‘(e) LIFECYCLE GREENHOUSE GAS EMISSIONS RE-

6

DUCTION PERCENTAGE.—For purposes of this section, the

7 term ‘lifecycle greenhouse gas emissions reduction per8 centage’ means, with respect to any sustainable aviation
9 fuel, the percentage reduction in lifecycle greenhouse gas
10 emissions achieved by such fuel as compared with petro11 leum-based jet fuel, as defined in accordance with—
12‘‘(1) the most recent Carbon Offsetting and Re-

13

duction Scheme for International Aviation which has

14been adopted by the International Civil Aviation Or-

15

ganization with the agreement of the United States,

16

or

17

‘‘(2) any similar methodology which satisfies

18

the criteria under section 211(o)(1)(H) of the Clean

19

Air Act (42 U.S.C. 7545(o)(1)(H)), as in effect on

20

the date of enactment of this section.

21‘‘(f) REGISTRATIONOFSUSTAINABLE AVIATION

22 FUEL PRODUCERS.—No credit shall be allowed under this23 section with respect to any sustainable aviation fuel unless
24 the producer of such fuel—ERN22335 9K1

S.L.C.

310
1
2
3‘‘(1) is registered with the Secretary under section 4101, and‘‘(2) provides—

4‘‘(A) certification (in such form and man-5

ner as the Secretary shall prescribe) from an

6unrelated

7

with—

party

demonstratingcompliance

8‘‘(i) any general requirements, supply

9

chain traceability requirements, and infor-

10

mation transmission requirements estab-

11

lished under the Carbon Offsetting and

12

Reduction Scheme for International Avia-

13

tion described in paragraph (1) of sub-14

section (e), or15‘‘(ii) in the case of any methodology

16

established under paragraph (2) of such

17

subsection, requirements similar to the re-18

quirements described in clause (i), and19‘‘(B) such other information with respect

20

to such fuel as the Secretary may require for21

purposes of carrying out this section.

22‘‘(g) COORDINATION WITH CREDIT AGAINST EXCISE

23 TAX.—The amount of the credit determined under this
24 section with respect to any sustainable aviation fuel shall,
25 under rules prescribed by the Secretary, be properly re-ERN22335 9K1

S.L.C.

311
1 duced to take into account any benefit provided with re2 spect to such sustainable aviation fuel solely by reason of
3 the application of section 6426 or 6427(e).
4‘‘(h) TERMINATION.—This section shall not apply to

5 any sale or use after December 31, 2024.’’.
6(b) CREDIT MADE PART OF GENERAL BUSINESS

7 CREDIT.— Section 38(b), as amended by the preceding
8 provisions of this Act, is amended by striking ‘‘plus’’ at
9 the end of paragraph (33), by striking the period at the
10 end of paragraph (34) and inserting ‘‘, plus’’, and by in11 serting after paragraph (34) the following new paragraph:12‘‘(35) the sustainable aviation fuel credit deter-

13

mined under section 40B.’’.

14(c) COORDINATION WITH BIODIESEL INCENTIVES.—

15(1) IN GENERAL.—Section 40A(d)(1) is amend-16

ed by inserting ‘‘or 40B’’ after ‘‘determined under17

section 40’’.

18

(2)

CONFORMINGAMENDMENT.—Section

19

40A(f) is amended by striking paragraph (4).

20(d) SUSTAINABLE AVIATION FUEL ADDED TO CRED-

21

IT FOR ALCOHOL FUEL, BIODIESEL, AND ALTERNATIVE

22 FUEL MIXTURES.—
23(1) IN GENERAL.—Section 6426 is amended by24

adding at the end the following new subsection:

25‘‘(k) SUSTAINABLE AVIATION FUEL CREDIT.—ERN22335 9K1

S.L.C.

3121‘‘(1) IN GENERAL.—For purposes of this sec-2

tion, the sustainable aviation fuel credit for the tax-

3

able year is, with respect to any sale or use of a4

qualified mixture, an amount equal to the product

5

of—

6
7
8

‘‘(A) the number of gallons of sustainableaviation fuel in such mixture, multiplied by‘‘(B) the sum of—

9‘‘(i) $1.25, plus

10‘‘(ii) the applicable supplementary

11amount with respect to such sustainable

12

aviation fuel.

13‘‘(2) DEFINITIONS.—Any term used in this sub-14

section which is also used in section 40B shall have15

the meaning given such term by section 40B.

16‘‘(3) REGISTRATION REQUIREMENT.—For pur-17

poses of this subsection, rules similar to the rules of18

section 40B(f) shall apply.’’.

19(2) CONFORMING AMENDMENTS.—

20(A) Section 6426 is amended—21(i) in subsection (a)(1), by striking

22‘‘and (e)’’ and inserting ‘‘(e), and (k)’’,

23

and

ERN22335 9K1

S.L.C.

313
1(ii) in subsection (h), by striking

2‘‘under section 40 or 40A’’ and inserting

3‘‘under section 40, 40A, or 40B’’.

4(B) Section 6427(e) is amended—5(i) in the heading, by striking ‘‘OR

6

ALTERNATIVE FUEL’’ and inserting, ‘‘AL-

7

TERNATIVE FUEL, OR SUSTAINABLE AVIA-

8

TION FUEL’’,9(ii) in paragraph (1), by inserting ‘‘or10

the sustainable aviation fuel mixture cred-11

it’’ after ‘‘alternative fuel mixture credit’’,

12

and

13
14
15

(iii) in paragraph (6)—(I) in subparagraph (C), by striking ‘‘and’’ at the end,

16(II) in subparagraph (D), by17

striking the period at the end and in-18

serting ‘‘, and’’, and1920(III) by adding at the end thefollowing new subparagraph:21‘‘(E) any qualified mixture of sustainable

22

aviation fuel (as defined in section 6426(k)(3))

23

sold or used after December 31, 2024.’’.

24(C) Section 4101(a)(1) is amended by in-25

serting ‘‘every person producing sustainableERN22335 9K1

S.L.C.

3141

aviation fuel (as defined in section 40B),’’ be-2

fore ‘‘and every person producing second gen-3

eration biofuel’’.

4(D) The table of sections for subpart D of

5

subchapter A of chapter 1 is amended by in-

6serting after the item relating to section 40A7

the following new item:‘‘Sec. 40B. Sustainable aviation fuel credit.’’.

8(e) AMOUNT OF CREDIT INCLUDED IN GROSS IN-

9COME.—Section 87 is amended by striking ‘‘and’’ in para-

10 graph (1), by striking the period at the end of paragraph
11 (2) and inserting ‘‘, and’’, and by adding at the end the
12 following new paragraph:13‘‘(3) the sustainable aviation fuel credit deter-

14

mined with respect to the taxpayer for the taxable

15

year under section 40B(a).’’.

16(f) EFFECTIVE DATE.—The amendments made by

17 this section shall apply to fuel sold or used after December
18 31, 2022.
19
20
21

SEC. 13204. CLEAN HYDROGEN.

(a) CREDIT FOR PRODUCTION OF CLEAN HYDROGEN.—

22(1) IN GENERAL.—Subpart D of part IV of23

subchapter A of chapter 1, as amended by the pre-24

ceding provisions of this Act, is amended by adding

25

at the end the following new section:

ERN22335 9K1

S.L.C.

315
1
2
3‘‘SEC. 45V. CREDIT FOR PRODUCTION OF CLEAN HYDROGEN.

‘‘(a) AMOUNT OF CREDIT.—For purposes of section

4 38, the clean hydrogen production credit for any taxable
5 year is an amount equal to the product of—
6‘‘(1) the kilograms of qualified clean hydrogen7

produced by the taxpayer during such taxable year8

at a qualified clean hydrogen production facility dur-

9

ing the 10-year period beginning on the date such

10

facility was originally placed in service, multiplied by

11‘‘(2) the applicable amount (as determined

12

under subsection (b)) with respect to such hydrogen.

13‘‘(b) APPLICABLE AMOUNT.—

14‘‘(1) IN GENERAL.—For purposes of subsection

15(a)(2), the applicable amount shall be an amount16

equal to the applicable percentage of $0.60. If any

17amount as determined under the preceding sentence18

is not a multiple of 0.1 cent, such amount shall be

19rounded to the nearest multiple of 0.1 cent.

20‘‘(2) APPLICABLE PERCENTAGE.—For purposes

21

of paragraph (1), the applicable percentage shall be

22determined as follows:

23‘‘(A) In the case of any qualified clean hy-

24drogen which is produced through a process

25that results in a lifecycle greenhouse gas emis-

26

sions rate of—ERN22335 9K1

S.L.C.

316
1
2
3
4
5

‘‘(i) not greater than 4 kilograms ofCO2e per kilogram of hydrogen, and‘‘(ii) not less than 2.5 kilograms ofCO2e per kilogram of hydrogen,the applicable percentage shall be 20 percent.

6‘‘(B) In the case of any qualified clean hy-

7drogen which is produced through a process

8that results in a lifecycle greenhouse gas emis-

9

sions rate of—

10
11
12
13
14

‘‘(i) less than 2.5 kilograms of CO2e
per kilogram of hydrogen, and‘‘(ii) not less than 1.5 kilograms ofCO2e per kilogram of hydrogen,the applicable percentage shall be 25 percent.

15‘‘(C) In the case of any qualified clean hy-

16drogen which is produced through a process

17that results in a lifecycle greenhouse gas emis-

18

sions rate of—

19
20
21
22

‘‘(i) less than 1.5 kilograms of CO2e
per kilogram of hydrogen, and‘‘(ii) not less than 0.45 kilograms ofCO2e per kilogram of hydrogen,23

the applicable percentage shall be 33.4 percent.

24‘‘(D) In the case of any qualified clean hy-

25drogen which is produced through a process

ERN22335 9K1

S.L.C.

317
1

that results in a lifecycle greenhouse gas emis-

2

sions rate of less than 0.45 kilograms of CO2e3

per kilogram of hydrogen, the applicable per-4

centage shall be 100 percent.

5‘‘(3) INFLATIONADJUSTMENT.—The

$0.60

6

amount in paragraph (1) shall be adjusted by multi-

7plying such amount by the inflation adjustment fac-8

tor (as determined under section 45(e)(2), deter-

9mined by substituting ‘2022’ for ‘1992’ in subpara-

10

graph (B) thereof) for the calendar year in which11

the qualified clean hydrogen is produced. If any

12amount as increased under the preceding sentence is13

not a multiple of 0.1 cent, such amount shall be

14rounded to the nearest multiple of 0.1 cent.

15‘‘(c) DEFINITIONS.—For purposes of this section—

16

‘‘(1)

17

SIONS.—

LIFECYCLE

GREENHOUSE

GAS

EMIS-

18

‘‘(A) IN GENERAL.—Subject to subpara-

19

graph (B), the term ‘lifecycle greenhouse gas

20

emissions’ has the same meaning given such21

term under subparagraph (H) of section

22

211(o)(1) of the Clean Air Act (42 U.S.C.

23

7545(o)(1)), as in effect on the date of enact-

24

ment of this section.

ERN22335 9K1

S.L.C.

3181‘‘(B) GREET MODEL.—The term ‘lifecycle

2

greenhouse gas emissions’ shall only include

3

emissions through the point of production (well-4

to-gate), as determined under the most recent

5Greenhouse gases, Regulated Emissions, and

6

Energy use in Transportation model (commonly

7

referred to as the ‘GREET model’) developed

8

by Argonne National Laboratory, or a successor

9model (as determined by the Secretary).

10‘‘(2) QUALIFIED CLEAN HYDROGEN.—

11‘‘(A) IN GENERAL.—The term ‘qualified

12

clean hydrogen’ means hydrogen which is pro-13

duced through a process that results in a

14

lifecycle greenhouse gas emissions rate of not

15

greater than 4 kilograms of CO2e per kilogram16

of hydrogen.

17
18
19

‘‘(B) ADDITIONAL REQUIREMENTS.—Suchterm shall not include any hydrogen unless—‘‘(i) such hydrogen is produced—

20‘‘(I) in the United States (as de-21

fined in section 638(1)) or a posses-

22

sion of the United States (as defined23

in section 638(2)),

24‘‘(II) in the ordinary course of a25

trade or business of the taxpayer, andERN22335 9K1

S.L.C.

319
1‘‘(III) for sale or use, and2‘‘(ii) the production and sale or use of3such hydrogen is verified by an unrelated

4

party.

5‘‘(C) PROVISIONAL EMISSIONS RATE.—In

6

the case of any hydrogen for which a lifecycle

7

greenhouse gas emissions rate has not been de-8termined for purposes of this section, a tax-

9

payer producing such hydrogen may file a peti-

10tion with the Secretary for determination of the

11lifecycle greenhouse gas emissions rate with re-

12spect to such hydrogen.

13‘‘(3) QUALIFIED CLEAN HYDROGEN PRODUC-

14

TION FACILITY.—The term ‘qualified clean hydrogen15

production facility’ means a facility—

16‘‘(A) owned by the taxpayer,

17‘‘(B) which produces qualified clean hydro-

18
19
20
21
22

gen, and‘‘(C) the construction of which begins before January 1, 2033.
‘‘(d) SPECIAL RULES.—‘‘(1) TREATMENT OF FACILITIES OWNED BY

23

MORE THAN 1 TAXPAYER.—Rules

similar to the24rules section 45(e)(3) shall apply for purposes of25

this section.

ERN22335 9K1

S.L.C.

3201‘‘(2) COORDINATION WITH CREDIT FOR CARBON2OXIDE SEQUESTRATION.—No credit shall be allowed

3

under this section with respect to any qualified clean

4hydrogen produced at a facility which includes car-5bon capture equipment for which a credit is allowed

6

to any taxpayer under section 45Q for the taxable

7

year or any prior taxable year.

8‘‘(e) INCREASED CREDIT AMOUNT FOR QUALIFIED

9 CLEAN HYDROGEN PRODUCTION FACILITIES.—
10‘‘(1) IN GENERAL.—In the case of any qualified

11

clean hydrogen production facility which satisfies the12requirements of paragraph (2), the amount of the13

credit determined under subsection (a) with respect

14

to qualified clean hydrogen described in subsection

15(b)(2) shall be equal to such amount (determined

16

without regard to this sentence) multiplied by 5.

17‘‘(2) REQUIREMENTS.—A facility meets the re-18

quirements of this paragraph if it is one of the fol-19

lowing:20‘‘(A) A facility—

21‘‘(i) the construction of which begins

22

prior to the date that is 60 days after the23

Secretary publishes guidance with respect

24

to the requirements of paragraphs (3)(A)25

and (4), andERN22335 9K1

S.L.C.

321
1‘‘(ii) which meets the requirements of2paragraph (3)(A) with respect to alteration3

or repair of such facility which occurs after

4

such date.

5‘‘(B) A facility which satisfies the require-

6

ments of paragraphs (3)(A) and (4).

7‘‘(3) PREVAILING WAGE REQUIREMENTS.—

8‘‘(A) IN GENERAL.—The requirements de-9

scribed in this subparagraph with respect to10

any qualified clean hydrogen production facility

11

are that the taxpayer shall ensure that any la-12borers and mechanics employed by contractors

13and subcontractors in—‘‘(i) the construction of such facility,

14
15

and

16

‘‘(ii) with respect to any taxable year,

17

for any portion of such taxable year which18

is within the period described in subsection

19(a)(2), the alteration or repair of such fa-

20

cility,21

shall be paid wages at rates not less than the22

prevailing rates for construction, alteration, or23

repair of a similar character in the locality in24which such facility is located as most recently

25

determined by the Secretary of Labor, in ac-

ERN22335 9K1

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3221

cordance with subchapter IV of chapter 31 of2

title 40, United States Code. For purposes of3

determining an increased credit amount under4

paragraph (1) for a taxable year, the require-5

ment under clause (ii) of this subparagraph is

6

applied to such taxable year in which the alter-

7

ation or repair of qualified facility occurs.
‘‘(B) CORRECTION AND PENALTY RELATED

8REQUIRE-

9

TO

10

MENTS.—Rules

1145(b)(7)(B) shall apply.

12‘‘(4) APPRENTICESHIP REQUIREMENTS.—Rules

13

similar to the rules of section 45(b)(8) shall apply.

14‘‘(5) REGULATIONS AND GUIDANCE.—The Sec-15

retary shall issue such regulations or other guidance16

as the Secretary determines necessary or appropriate

17

to carry out the purposes of this subsection, includ-18

ing regulations or other guidance which provides for

19

requirements for recordkeeping or information re-20

porting for purposes of administering the require-

21

ments of this subsection.

22‘‘(f) REGULATIONS.—Not later than 1 year after the

FAILURETO

SATISFY

WAGE

similar to the rules of section

23 date of enactment of this section, the Secretary shall issue
24 regulations or other guidance to carry out the purposes

ERN22335 9K1

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323
1 of this section, including regulations or other guidance for
2 determining lifecycle greenhouse gas emissions.’’.
3(2)

CREDIT

REDUCEDFORTAX-EXEMPT4BONDS.—Section 45V(d), as added by this section,

5

is amended by adding at the end the following new

6paragraph:

7

‘‘(3)

8

BONDS.—Rules

945(b)(3) shall apply for purposes of this section.’’.

CREDIT

REDUCEDFORTAX-EXEMPT

similar to the rule under section

10(3) MODIFICATION OF EXISTING FACILITIES.—

11

Section 45V(d), as added and amended by the pre-12

ceding provisions of this section, is amended by add-

13

ing at the end the following new paragraph:

14

‘‘(4)

MODIFICATION

15

TIES.—For

16

case of any facility which—OF

EXISTING

FACILI-

purposes of subsection (a)(2), in the17‘‘(A) was originally placed in service before

18

January 1, 2023, and, prior to the modification

19

described in subparagraph (B), did not produce

20

qualified clean hydrogen, and

21
22
23
24

‘‘(B) after the date such facility was originally placed in service—‘‘(i) is modified to produce qualified
clean hydrogen, andERN22335 9K1

S.L.C.

324
1‘‘(ii) amounts paid or incurred with2

respect to such modification are properly

3chargeable to capital account of the tax-

4

payer,

5such facility shall be deemed to have been originally6

placed in service as of the date that the property re-7quired to complete the modification described in sub-8

paragraph (B) is placed in service.’’.

9
10
11

(4) CONFORMING AMENDMENTS.—(A) Section 38(b), as amended by the preceding provisions of this Act, is amended—(i) in paragraph (34), by striking

12
13‘‘plus’’ at the end,

14(ii) in paragraph (35), by striking the15

period at the end and inserting ‘‘, plus’’,

16

and

17
18
19
20

(iii) by adding at the end the following new paragraph:‘‘(36) the clean hydrogen production credit determined under section 45V(a).’’.

21(B) The table of sections for subpart D of

22part IV of subchapter A of chapter 1, as

23amended by the preceding provisions of this24

Act, is amended by adding at the end the fol-25

lowing new item:‘‘Sec. 45V. Credit for production of clean hydrogen.’’.

ERN22335 9K1

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325
1(5) EFFECTIVE DATES.—

2(A) IN GENERAL.—The amendments made3

by paragraphs (1) and (4) of this subsection

4

shall apply to hydrogen produced after Decem-5

ber 31, 2022.
(B) CREDIT REDUCED FOR TAX-EXEMPT

67BONDS.—The

amendment made by paragraph8(2) shall apply to facilities the construction of

9which begins after the date of enactment of this

10

Act.

11

(C) MODIFICATION OF EXISTING FACILI-

12

TIES.—The amendment made by paragraph (3)13shall apply to modifications made after Decem-

14

ber 31, 2022.

1516(b) CREDIT FOR ELECTRICITY PRODUCED FROM RENEWABLERESOURCES ALLOWEDIF

ELECTRICITY IS

17 USED TO PRODUCE CLEAN HYDROGEN.—
18(1) IN GENERAL.—Section 45(e), as amended

19

by the preceding provisions of this Act, is amended20

by adding at the end the following new paragraph:21‘‘(13) SPECIAL RULE FOR ELECTRICITY USED22

AT A QUALIFIED CLEAN HYDROGEN PRODUCTION

23

FACILITY.—Electricity

24

shall be treated as sold by such taxpayer to an unre-25

lated person during the taxable year if—

produced by the taxpayer

ERN22335 9K1

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326
1‘‘(A) such electricity is used during such2

taxable year by the taxpayer or a person related3

to the taxpayer at a qualified clean hydrogen4

production

5

45V(c)(3)) to produce qualified clean hydrogen6(as defined in section 45V(c)(2)), andfacility(asdefinedinsection7‘‘(B) such use and production is verified

8(in such form or manner as the Secretary may

9prescribe) by an unrelated third party.’’.

10(2) SIMILAR

RULE FOR ZERO-EMISSION NUCREDIT.—Subsection

11

CLEAR

12

(c)(2) of section 45U, as added by section 13105 of

13

this Act, is amended by striking ‘‘and (5)’’ and in-

14

serting ‘‘(5), and (13)’’.

POWER

PRODUCTION

15(3) EFFECTIVE DATE.—The amendments made16

by this subsection shall apply to electricity produced

17

after December 31, 2022.

18(c) ELECTION TO TREAT CLEAN HYDROGEN PRO-

19

DUCTION FACILITIES AS ENERGY PROPERTY.—

20(1) IN GENERAL.—Section 48(a), as amended

21

by the preceding provisions of this Act, is amend-

22

ed—

23
24

(A) by redesignating paragraph (15) asparagraph (16), andERN22335 9K1

S.L.C.

327
1(B) by inserting after paragraph (14) the2

following new paragraph:3‘‘(15) ELECTION TO TREAT CLEAN HYDROGEN

4

PRODUCTION FACILITIES AS ENERGY PROPERTY.—

5‘‘(A) IN GENERAL.—In the case of any

6qualified property (as defined in paragraph

7(5)(D)) which is part of a specified clean hydro-

8

gen production facility—

9‘‘(i) such property shall be treated as

10energy property for purposes of this sec-

11

tion, and12
13‘‘(ii) the energy percentage with respect to such property is—

14‘‘(I) in the case of a facility

15

which is designed and reasonably ex-

16pected to produce qualified clean hy-

17drogen which is described in a sub-18

paragraph (A) of section 45V(b)(2),19

1.2 percent,

20‘‘(II) in the case of a facility

21

which is designed and reasonably ex-

22pected to produce qualified clean hy-

23drogen which is described in a sub-24

paragraph (B) of such section, 1.5

25

percent,

ERN22335 9K1

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328
1‘‘(III) in the case of a facility

2which is designed and reasonably ex-3pected to produce qualified clean hy-

4drogen which is described in a sub-5

paragraph (C) of such section, 2 per-6

cent, and7‘‘(IV) in the case of a facility

8which is designed and reasonably ex-

9pected to produce qualified clean hy-

10drogen which is described in subpara-

11

graph (D) of such section, 6 percent.

12‘‘(B) DENIAL OF PRODUCTION CREDIT.—

13

No credit shall be allowed under section 45V or

14

section 45Q for any taxable year with respect to15

any specified clean hydrogen production facility

16

or any carbon capture equipment included at

17such facility.

18‘‘(C) SPECIFIED CLEAN HYDROGEN PRO-

19

DUCTION FACILITY.—For purposes of this para-

20

graph, the term ‘specified clean hydrogen pro-21

duction facility’ means any qualified clean hy-

22drogen production facility (as defined in section

23

45V(c)(3))—2425‘‘(i) which is placed in service after
December 31, 2022,

ERN22335 9K1

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329
1
2
3‘‘(ii) with respect to which—‘‘(I) no credit has been allowed
under section 45V or 45Q, and4‘‘(II) the taxpayer makes an ir-

5revocable election to have this para-

6graph apply, and7‘‘(iii) for which an unrelated third

8

party has verified (in such form or manner9as the Secretary may prescribe) that such

10

facility produces hydrogen through a proc-

11

ess which results in lifecycle greenhouse12

gas emissions which are consistent with the13hydrogen that such facility was designed

14and expected to produce under subpara-

15

graph (A)(ii).

16‘‘(D) QUALIFIED CLEAN HYDROGEN.—For17

purposes of this paragraph, the term ‘qualified

18

clean hydrogen’ has the meaning given such

19

term by section 45V(c)(2).

20‘‘(E) REGULATIONS.—The Secretary shall21

issue such regulations or other guidance as the22

Secretary determines necessary or appropriate

23

to carry out the purposes of this section, includ-24

ing regulations or other guidance which recap-

25tures so much of any credit allowed under thisERN22335 9K1

S.L.C.

330
1

section as exceeds the amount of the credit

2

which would have been allowed if the expected

3

production were consistent with the actual

4

verified production (or all of the credit so al-5

lowed in the absence of such verification).’’.

6(2)

CONFORMINGAMENDMENT.—Paragraph

7(9)(A)(i) of section 48(a), as added by section

813102, is amended by inserting ‘‘and paragraph

9(15)’’ after ‘‘paragraphs (1) through (8)’’.

10(3) EFFECTIVE DATE.—The amendments made11

by this subsection shall apply to property placed in

12

service after December 31, 2022, and, for any prop-

13

erty the construction of which begins prior to Janu-

14

ary 1, 2023, only to the extent of the basis thereof

15

attributable to the construction, reconstruction, or

16

erection after December 31, 2022.

17(d) TERMINATION OF EXCISE TAX CREDIT FOR HY-

1819

DROGEN.—(1)

IN

GENERAL.—Section

6426(d)(2)is

20

amended by striking subparagraph (D) and by re-21

designating subparagraphs (E), (F), and (G) as sub-22

paragraphs (D), (E), and (F), respectively.

23

(2)

CONFORMINGAMENDMENT.—Section

246426(e)(2) is amended by striking ‘‘(F)’’ and insert-25

ing ‘‘(E)’’.

ERN22335 9K1

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331
1(3) EFFECTIVE DATE.—The amendments made2by this subsection shall apply to fuel sold or used3

after December 31, 2022.

4PART 3—CLEAN ENERGY AND EFFICIENCY5

INCENTIVES FOR INDIVIDUALS

6SEC. 13301. EXTENSION, INCREASE, AND MODIFICATIONS

7

OF NONBUSINESS ENERGY PROPERTY CRED-

8

IT.

9

(a) EXTENSION OF CREDIT.—Section 25C(g)(2) is

10 amended by striking ‘‘December 31, 2021’’ and inserting
11 ‘‘December 31, 2032’’.
12(b) ALLOWANCE

OF

CREDIT.—Section 25C(a) is

13 amended to read as follows:
14‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-

15 dividual, there shall be allowed as a credit against the tax
16 imposed by this chapter for the taxable year an amount17 equal to 30 percent of the sum of—18‘‘(1) the amount paid or incurred by the tax-

19

payer for qualified energy efficiency improvements

20

installed during such taxable year, and21‘‘(2) the amount of the residential energy prop-

22

erty expenditures paid or incurred by the taxpayer

23

during such taxable year.’’.

ERN22335 9K1

S.L.C.

3321(c) APPLICATION OF ANNUAL LIMITATION IN LIEU

2

OF LIFETIME LIMITATION.—Section 25C(b) is amended

3 to read as follows:4‘‘(b) LIMITATIONS.—

5‘‘(1) IN GENERAL.—The credit allowed under

6

this section with respect to any taxpayer for any tax-

7

able year shall not exceed $1,200.

8‘‘(2) ENERGY PROPERTY.—The credit allowed

9

under this section by reason of subsection (a)(2)10with respect to any taxpayer for any taxable year

11

shall not exceed, with respect to any item of quali-

12

fied energy property, $600.

13‘‘(3) WINDOWS.—The credit allowed under this14

section by reason of subsection (a)(1) with respect to15

any taxpayer for any taxable year shall not exceed,

16

in the aggregate with respect to all exterior windows

17

and skylights, $600.

18‘‘(4) DOORS.—The credit allowed under this19

section by reason of subsection (a)(1) with respect to20

any taxpayer for any taxable year shall not exceed—

21‘‘(A) $250 in the case of any exterior door,

22
23
24

and
‘‘(B) $500 in the aggregate with respect toall exterior doors.

ERN22335 9K1

S.L.C.

3331‘‘(5) HEAT

PUMP AND HEAT PUMP WATER

2HEATERS; BIOMASS STOVES AND BOILERS.—Not-

3

withstanding paragraphs (1) and (2), the credit al-4lowed under this section by reason of subsection

5(a)(2) with respect to any taxpayer for any taxable

6

year shall not, in the aggregate, exceed $2,000 with7

respect to amounts paid or incurred for property de-8

scribed in clauses (i) and (ii) of subsection (d)(2)(A)9and in subsection (d)(2)(B).’’.

10(d) MODIFICATIONS RELATED TO QUALIFIED EN-

11
12

ERGY EFFICIENCY IMPROVEMENTS.—(1)STANDARDSFOR

ENERGYEFFICIENTCOMPONENTS.—Section

13

BUILDING

1425C(c)(2) is amended by striking ‘‘meets—’’ and all

15

that follows through the period at the end and in-

16

serting the following: ‘‘meets—

ENVELOPE

17‘‘(A) in the case of an exterior window or

18

skylight, Energy Star most efficient certifi-

19

cation requirements,

2021‘‘(B) in the case of an exterior door, applicable Energy Star requirements, and22‘‘(C) in the case of any other component,23

the prescriptive criteria for such component es-

24tablished by the most recent International En-

25

ergy Conservation Code standard in effect as ofERN22335 9K1

S.L.C.

334
1

the beginning of the calendar year which is 2

2

years prior to the calendar year in which such3

component is placed in service.’’.

4(2) ROOFS NOT TREATED AS BUILDING ENVE-

5LOPE COMPONENTS.—Section 25C(c)(3) is amended

6by adding ‘‘and’’ at the end of subparagraph (B), by7

striking ‘‘, and’’ at the end of subparagraph (C) and8

inserting a period, and by striking subparagraph

9

(D).

10

(3) AIR SEALING INSULATION ADDED TO DEFI-11

NITION OF BUILDING ENVELOPE COMPONENT.—Sec-

12

tion 25C(c)(3)(A) is amended by inserting ‘‘, includ-13

ing air sealing material or system,’’ after ‘‘material

14

or system’’.

15(e) MODIFICATION OF RESIDENTIAL ENERGY PROP-

16

ERTY

EXPENDITURES.—Section 25C(d) is amended to

17 read as follows:1819‘‘(d) RESIDENTIAL ENERGY PROPERTY EXPENDITURES.—For purposes of this section—

20‘‘(1) IN GENERAL.—The term ‘residential en-21

ergy property expenditures’ means expenditures22

made by the taxpayer for qualified energy property

23

which is—

ERN22335 9K1

S.L.C.

335
1‘‘(A) installed on or in connection with a2dwelling unit located in the United States and3

used as a residence by the taxpayer, and‘‘(B) originally placed in service by the tax-

4
5

payer.

6

Such term includes expenditures for labor costs

7

properly allocable to the onsite preparation, assem-

8

bly, or original installation of the property.

9

‘‘(2)

QUALIFIED

ENERGYPROPERTY.—The10

term ‘qualified energy property’ means any of the11

following:

12‘‘(A) Any of the following which meet or

13

exceed the highest efficiency tier (not including

14

any advanced tier) established by the Consor-

15

tium for Energy Efficiency which is in effect as

16of the beginning of the calendar year in which17

the property is placed in service:

18
19
20
21

‘‘(i) An electric or natural gas heatpump water heater.
‘‘(ii) An electric or natural gas heat
pump.

22

‘‘(iii) A central air conditioner.

23‘‘(iv) A natural gas, propane, or oil

24water heater.

ERN22335 9K1

S.L.C.

336‘‘(v) A natural gas, propane, or oil

1
2

furnace or hot water boiler.

3‘‘(B) A biomass stove or boiler which—4‘‘(i) uses the burning of biomass fuel5

to heat a dwelling unit located in the6

United States and used as a residence by

7

the taxpayer, or to heat water for use in8such a dwelling unit, and9‘‘(ii) has a thermal efficiency rating of

10

at least 75 percent (measured by the high-11

er heating value of the fuel).

12‘‘(C) Any oil furnace or hot water boiler

13

which—

14‘‘(i) is placed in service after Decem-

15

ber 31, 2022, and before January 1, 2027,

16

and—

17
18

‘‘(I) meets or exceeds 2021 Energy Star efficiency criteria, and19‘‘(II) is rated by the manufac-

20

turer for use with fuel blends at least21

20 percent of the volume of which

22

consists of an eligible fuel, or23‘‘(ii) is placed in service after Decem-24

ber 31, 2026, and—

ERN22335 9K1

S.L.C.

337
1‘‘(I) achieves an annual fuel utili-

2zation efficiency rate of not less than

3

90, and

4‘‘(II) is rated by the manufac-

5

turer for use with eligible fuel blends

6of 50 percent or more.

7‘‘(D) Any improvement to, or replacement

8of, a panelboard, sub-panelboard, branch cir-

9cuits, or feeders which—

10
11
12

‘‘(i) is installed in a manner consistent with the National Electric Code,‘‘(ii) has a load capacity of not less13

than 200 amps,

14‘‘(iii)15

installedin

conjunction

with—‘‘(I) any qualified energy effi-

16
17

is

ciency improvements, or18‘‘(II) any qualified energy prop-

19

erty described in subparagraphs (A)20through (C) for which a credit is al-21

lowed under this section for expendi-

22tures with respect to such property,

23

and

ERN22335 9K1

S.L.C.

338
1‘‘(iv) enables the installation and use

2of any property described in subclause (I)3or (II) of clause (iii).

45‘‘(3) ELIGIBLE FUEL.—For purposes of paragraph (2), the term ‘eligible fuel’ means—‘‘(A) biodiesel and renewable diesel (within

67

the meaning of section 40A), and‘‘(B) second generation biofuel (within the89meaning of section 40).’’.

10(f) HOME ENERGY AUDITS.—

11(1) IN GENERAL.—Section 25C(a), as amended

12

by subsection (b), is amended by striking ‘‘and’’ at13

the end of paragraph (1), by striking the period at14

the end of paragraph (2) and inserting ‘‘, and’’, and15

by adding at the end the following new paragraph:16‘‘(3) the amount paid or incurred by the tax-

17

payer during the taxable year for home energy au-

18

dits.’’.

19(2) LIMITATION.—Section 25C(b), as amended

20

by subsection (c), is amended adding at the end the21

following new paragraph:22‘‘(6) HOME ENERGY AUDITS.—

23‘‘(A) DOLLAR LIMITATION.—The amount24of the credit allowed under this section by rea-

25

son of subsection (a)(3) shall not exceed $150.

ERN22335 9K1

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339
1‘‘(B) SUBSTANTIATIONREQUIREMENT.—

2

No credit shall be allowed under this section by3

reason of subsection (a)(3) unless the taxpayer

4

includes with the taxpayer’s return of tax such5

information or documentation as the Secretary6

may require.’’.

7(3) HOME ENERGY AUDITS.—

8(A) IN GENERAL.—Section 25C is amend-9

ed by redesignating subsections (e), (f), and (g),10

as subsections (f), (g), and (h), respectively,

11

and by inserting after subsection (d) the fol-12

lowing new subsection:13‘‘(e) HOME ENERGY AUDITS.—For purposes of this

14 section, the term ‘home energy audit’ means an inspection
15 and written report with respect to a dwelling unit located
16 in the United States and owned or used by the taxpayer
17 as the taxpayer’s principal residence (within the meaning
18 of section 121) which—19‘‘(1) identifies the most significant and cost-ef-

20fective energy efficiency improvements with respect

21

to such dwelling unit, including an estimate of the22energy and cost savings with respect to each such

23

improvement, and24‘‘(2) is conducted and prepared by a home en-25

ergy auditor that meets the certification or other re-ERN22335 9K1

S.L.C.

340
1

quirements specified by the Secretary in regulations

2or other guidance (as prescribed by the Secretary3

not later than 365 days after the date of the enact-

4

ment of this subsection).’’.

5(B) CONFORMINGAMENDMENT.—Section

61016(a)(33) is amended by striking ‘‘section

7

25C(f)’’ and inserting ‘‘section 25C(g)’’.

8(4) LACK OF SUBSTANTIATION TREATED AS

9MATHEMATICAL

106213(g)(2) is amended—

11
12
13
14
15
16

OR

CLERICALERROR.—Section(A) in subparagraph (P), by striking‘‘and’’ at the end,(B) in subparagraph (Q), by striking theperiod at the end and inserting ‘‘, and’’, and(C) by inserting after subparagraph (Q)the following:

17‘‘(R) an omission of information or docu-

18

mentation required under section 25C(b)(6)(B)

19(relating to home energy audits) to be included

20

on a return.’’.

21(g) IDENTIFICATION NUMBER REQUIREMENT.—

22(1) IN GENERAL.—Section 25C, as amended by23

this section, is amended by redesignating subsection

24(h) as subsection (i) and by inserting after sub-25

section (g) the following new subsection:

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S.L.C.

341
12‘‘(h) PRODUCT IDENTIFICATION NUMBER REQUIREMENT.—

3‘‘(1) IN GENERAL.—No credit shall be allowed

4

under subsection (a) with respect to any item of

5

specified property placed in service after December

631, 2024, unless—78‘‘(A) such item is produced by a qualified
manufacturer, and9‘‘(B) the taxpayer includes the qualified

10

product identification number of such item on

11

the return of tax for the taxable year.

12‘‘(2) QUALIFIEDPRODUCTIDENTIFICATION

13

NUMBER.—For

14‘qualified product identification number’ means, with15

respect to any item of specified property, the prod-16

uct identification number assigned to such item by

17

the qualified manufacturer pursuant to the method-18

ology referred to in paragraph (3).

19

purposes of this section, the term‘‘(3) QUALIFIED

MANUFACTURER.—For

pur-

20

poses of this section, the term ‘qualified manufac-

21

turer’ means any manufacturer of specified property

22

which enters into an agreement with the Secretary

23

which provides that such manufacturer will—

24‘‘(A) assign a product identification num-25

ber to each item of specified property produced

ERN22335 9K1

S.L.C.

342
1

by such manufacturer utilizing a methodology

2that will ensure that such number (including

3

any alphanumeric) is unique to each such item4(by utilizing numbers or letters which are

5unique to such manufacturer or by such other6

method as the Secretary may provide),7‘‘(B) label such item with such number in8such manner as the Secretary may provide, and9‘‘(C) make periodic written reports to the10

Secretary (at such times and in such manner as

11

the Secretary may provide) of the product iden-

12tification numbers so assigned and including

13

such information as the Secretary may require14with respect to the item of specified property to15which such number was so assigned.

16‘‘(4) SPECIFIED PROPERTY.—For purposes of17this subsection, the term ‘specified property’ means18

any qualified energy property and any property de-19

scribed in subparagraph (B) or (C) of subsection

20(c)(3).’’.

21(2) OMISSION OF CORRECT PRODUCT IDENTI-

22

FICATION NUMBER TREATED AS MATHEMATICAL OR

23

CLERICAL ERROR.—Section 6213(g)(2), as amended

24by the preceding provisions of this Act, is amend-

25

ed—

ERN22335 9K1

S.L.C.

343(A) in subparagraph (Q), by striking

1‘‘and’’ at the end,

2(B) in subparagraph (R), by striking the3

period at the end and inserting ‘‘, and’’, and4(C) by inserting after subparagraph (R)5the following:

67‘‘(S) an omission of a correct product iden-

8tification number required under section 25C(h)9(relating to credit for nonbusiness energy prop-10erty) to be included on a return.’’.

11

(h)

ENERGYEFFICIENTHOMEIMPROVEMENT

12 CREDIT.—
13(1) IN GENERAL.—The heading for section 25C14

is amended by striking ‘‘NONBUSINESS ENERGY

15PROPERTY’’

16

HOME IMPROVEMENT CREDIT’’.

and inserting ‘‘ENERGY EFFICIENT

17(2) CLERICAL AMENDMENT.—The table of sec-

18

tions for subpart A of part IV of subchapter A of

19

chapter 1 is amended by striking the item relating20

to section 25C and inserting after the item relating

21

to section 25B the following item:‘‘Sec. 25C. Energy efficient home improvement credit.’’.

22(i) EFFECTIVE DATES.—

23(1) IN GENERAL.—Except as otherwise pro-24

vided by this subsection, the amendments made by

ERN22335 9K1

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344
1

this section shall apply to property placed in service

2

after December 31, 2022.

3(2) EXTENSION OF CREDIT.—The amendments

4

made by subsection (a) shall apply to property

5placed in service after December 31, 2021.

6(3) IDENTIFICATION NUMBER REQUIREMENT.—

7

The amendments made by subsection (g) shall apply

8

to property placed in service after December 31,

9

2024.

10
11

SEC. 13302. RESIDENTIAL CLEAN ENERGY CREDIT.

(a) EXTENSION OF CREDIT.—

12(1) IN GENERAL.—Section 25D(h) is amended

13

by striking ‘‘December 31, 2023’’ and inserting

14‘‘December 31, 2034’’.

15
16

(2)

APPLICATIONOF

PHASEOUT.—Section

25D(g) is amended—

17(A) in paragraph (2), by striking ‘‘before

18

January 1, 2023, 26 percent, and’’ and insert-

19

ing ‘‘before January 1, 2022, 26 percent,’’, and20(B) by striking paragraph (3) and by in-21

serting after paragraph (2) the following new22

paragraphs:

23‘‘(3) in the case of property placed in service

24

after December 31, 2021, and before January 1,

252033, 30 percent,ERN22335 9K1

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345
1‘‘(4) in the case of property placed in service

2

after December 31, 2032, and before January 1,

32034, 26 percent, and4‘‘(5) in the case of property placed in service

5

after December 31, 2033, and before January 1,

62035, 22 percent.’’.

7(b) RESIDENTIAL CLEAN ENERGY CREDIT FOR BAT-8TERY STORAGE TECHNOLOGY; CERTAIN EXPENDITURES

9 DISALLOWED.—
10
11
12
13
14

(1) ALLOWANCE OF CREDIT.—Paragraph (6) ofsection 25D(a) is amended to read as follows:‘‘(6) the qualified battery storage technology expenditures,’’.
(2) DEFINITION OF QUALIFIED BATTERY STOR-

15

AGE TECHNOLOGY EXPENDITURE.—Paragraph16of section 25D(d) is amended to read as follows:17‘‘(6) QUALIFIEDBATTERY

STORAGE

(6)

TECH-

18

NOLOGY EXPENDITURE.—Theterm ‘qualified bat-19

tery storage technology expenditure’ means an ex-

20

penditure for battery storage technology which—

21‘‘(A) is installed in connection with a22dwelling unit located in the United States and23

used as a residence by the taxpayer, and2425‘‘(B) has a capacity of not less than 3 kilowatt hours.’’.

ERN22335 9K1

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3461(c) CONFORMING AMENDMENTS.—

2(1) The heading for section 25D is amended by3

striking ‘‘ENERGY EFFICIENT PROPERTY’’ and4

inserting ‘‘CLEAN ENERGY CREDIT’’.

5(2) The table of sections for subpart A of part6

IV of subchapter A of chapter 1 is amended by7

striking the item relating to section 25D and insert-

8

ing the following:‘‘Sec. 25D. Residential clean energy credit.’’.

9(d) EFFECTIVE DATES.—

10(1) IN GENERAL.—Except as provided in para-

11

graph (2), the amendments made by this section

12

shall apply to expenditures made after December 31,

13

2021.

14

(2) RESIDENTIAL CLEAN ENERGY CREDIT FOR

15

BATTERY STORAGE TECHNOLOGY; CERTAIN EXPEND-

16

ITURES DISALLOWED.—The

17

subsection (b) shall apply to expenditures made after18

December 31, 2022.

19

SEC. 13303. ENERGY EFFICIENT COMMERCIAL BUILDINGS

20
21

amendments made by

DEDUCTION.

(a) IN GENERAL.—

22(1) MAXIMUM AMOUNT OF DEDUCTION.—Sub-

23

section (b) of section 179D is amended to read as24

follows:

25‘‘(b) MAXIMUM AMOUNT OF DEDUCTION.—ERN22335 9K1

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347
1‘‘(1) IN GENERAL.—The deduction under sub-2

section (a) with respect to any building for any tax-

3

able year shall not exceed the excess (if any) of—4‘‘(A) the product of—5‘‘(i) the applicable dollar value, and6‘‘(ii) the square footage of the build-7

ing, over

8‘‘(B) the aggregate amount of the deduc-9

tions under subsections (a) and (f) with respect

10

to the building for the 3 taxable years imme-

11

diately preceding such taxable year (or, in the12case of any such deduction allowable to a per-13

son other than the taxpayer, for any taxable

14

year ending during the 4-taxable-year period

15

ending with such taxable year).

16‘‘(2) APPLICABLE DOLLAR VALUE.—For pur-17

poses of paragraph (1)(A)(i), the applicable dollar

18

value shall be an amount equal to $0.50 increased

19(but not above $1.00) by $0.02 for each percentage

20

point by which the total annual energy and power21

costs for the building are certified to be reduced by22

a percentage greater than 25 percent.

2324‘‘(3) INCREASED CREDIT AMOUNT FOR CERTAIN
PROPERTY.—

ERN22335 9K1

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348
1‘‘(A) IN GENERAL.—In the case of any

2property which satisfies the requirements of3

subparagraph (B), paragraph (2) shall be ap-

4

plied by substituting ‘$2.50’ for ‘$0.50’, ‘$.10’

5for ‘$.02’, and ‘$5.00’ for ‘$1.00’.

6‘‘(B) PROPERTY REQUIREMENTS.—In the7case of any energy efficient commercial building

8

property, energy efficient building retrofit prop-

9erty, or property installed pursuant to a quali-

10

fied retrofit plan, such property shall meet the11requirements of this subparagraph if —12‘‘(i) installation of such property be-

13

gins prior to the date that is 60 days after

14

the Secretary publishes guidance with re-15

spect to the requirements of paragraphs

16(4)(A) and (5), or17‘‘(ii) installation of such property sat-18

isfies the requirements of paragraphs

19(4)(A) and (5).

20‘‘(4) PREVAILING WAGE REQUIREMENTS.—

21‘‘(A) IN GENERAL.—The requirements de-22

scribed in this subparagraph with respect to23

any property are that the taxpayer shall ensure

24

that any laborers and mechanics employed by25

contractors and subcontractors in the installa-

ERN22335 9K1

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349
1

tion of any property shall be paid wages at

2

rates not less than the prevailing rates for con-3

struction, alteration, or repair of a similar char-4

acter in the locality in which such property is

5located as most recently determined by the Sec-6

retary of Labor, in accordance with subchapter

7

IV of chapter 31 of title 40, United States

8

Code.
‘‘(B) CORRECTION AND PENALTY RELATED

9REQUIRE-

10

TO

11

MENTS.—Rules

1245(b)(7)(B) shall apply.

13‘‘(5) APPRENTICESHIP REQUIREMENTS.—Rules

14

similar to the rules of section 45(b)(8) shall apply.’’.

FAILURETO

SATISFY

similar to the rules of section(2) MODIFICATION

15

WAGE

OF

EFFICIENCYSTAND-

16

ARD.—Section 179D(c)(1)(D) is amended by strik-17

ing ‘‘50 percent’’ and inserting ‘‘25 percent’’.
(3)

18

REFERENCE

STANDARD.—Section

19

179D(c)(2) is amended by striking ‘‘the most re-

20

cent’’ and inserting the following: ‘‘the more recent

21

of—

22

‘‘(A) Standard 90.1-2007 published by the23

American Society of Heating, Refrigerating,24

and Air Conditioning Engineers and the Illu-

ERN22335 9K1

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350
1

minating Engineering Society of North Amer-2

ica, or3‘‘(B) the most recent’’.

4(4) FINAL DETERMINATION; EXTENSION OF PE-

5

RIOD; PLACED IN SERVICE DEADLINE.—Subpara-

6graph (B) of section 179D(c)(2), as amended by

7

paragraph (3), is amended—

8(A) by inserting ‘‘for which the Depart-

9

ment of Energy has issued a final determina-

10

tion and’’ before ‘‘which has been affirmed’’,1112(B) by striking ‘‘2 years’’ and inserting ‘‘4years’’, and13(C) by striking ‘‘that construction of such14

property begins’’ and inserting ‘‘such property

15

is placed in service’’.

16(5) ELIMINATION OF PARTIAL ALLOWANCE.—

17(A) IN18

amended—GENERAL.—Section

179D(d) is

19(i) by striking paragraph (1), and20(ii) by redesignating paragraphs (2)21through (6) as paragraphs (1) through (5),22respectively.

23(B) CONFORMING AMENDMENTS.—(i) Section 179D(c)(1)(D) is amend-

24
25

ed—

ERN22335 9K1

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351
1

(I)

by

striking‘‘subsection

2(d)(6)’’

andinserting‘‘subsection

3(d)(5)’’, and

4

(II)

by

striking‘‘subsection

5(d)(2)’’

andinserting‘‘subsection

6(d)(1)’’.

7(ii)

Paragraph(2)(A)

ofsection8

179D(d), as redesignated by subparagraph

9(A), is amended by striking ‘‘paragraph

10(2)’’ and inserting ‘‘paragraph (1)’’.

11

(iii)

Paragraph(4)ofsection12

179D(d), as redesignated by subparagraph

13(A), is amended by striking ‘‘paragraph

14(3)(B)(iii)’’

15(2)(B)(iii)’’.

16
17
18
19
20

and

inserting‘‘paragraph(iv) Section 179D is amended bystriking subsection (f).
(v) Section 179D(h) is amended bystriking ‘‘or (d)(1)(A)’’.
(6) ALLOCATION OF DEDUCTION BY CERTAIN

21

TAX-EXEMPT ENTITIES.—Paragraph22

179D(d), as redesignated by paragraph (5)(A), is23

amended to read as follows:2425(3) of section‘‘(3) ALLOCATION OF DEDUCTION BY CERTAIN
TAX-EXEMPT ENTITIES.—ERN22335 9K1

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352
1‘‘(A) IN GENERAL.—In the case of energy

2efficient commercial building property installed3

on or in property owned by a specified tax-ex-

4empt entity, the Secretary shall promulgate reg-5

ulations or guidance to allow the allocation of6

the deduction to the person primarily respon-

7

sible for designing the property in lieu of the8owner of such property. Such person shall be

9treated as the taxpayer for purposes of this sec-

10

tion.

11

‘‘(B) SPECIFIED TAX-EXEMPT ENTITY.—

12

For purposes of this paragraph, the term ‘spec-

13

ified tax-exempt entity’ means—14‘‘(i) the United States, any State or

15

local government (or political subdivision

16

thereof), any possession of the United

17

States, or any agency or instrumentality of18

any of the foregoing,

19‘‘(ii) an Indian tribal government (as20

defined in section 30D(g)(9)) or Alaska

21

Native Corporation (as defined in section 3

22of the Alaska Native Claims Settlement

23

Act (43 U.S.C. 1602(m)), and24
25‘‘(iii) any organization exempt fromtax imposed by this chapter.’’.

ERN22335 9K1

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353
1(7) ALTERNATIVE DEDUCTION FOR ENERGY EF-

2

FICIENT BUILDING RETROFIT PROPERTY.—Section

3

179D, as amended by the preceding provisions of

4

this section, is amended by inserting after subsection

5(e) the following new subsection:

6‘‘(f) ALTERNATIVE DEDUCTION FOR ENERGY EFFI-

7

CIENT BUILDING RETROFIT PROPERTY.—

8‘‘(1) IN GENERAL.—In the case of a taxpayer

9

which elects (at such time and in such manner as

10

the Secretary may provide) the application of this11

subsection with respect to any qualified building,12

there shall be allowed as a deduction for the taxable

13

year which includes the date of the qualifying final

14

certification with respect to the qualified retrofit

15

plan of such building, an amount equal to the lesser

16

of—

17

‘‘(A) the excess described in subsection (b)18(determined by substituting ‘energy use inten-

19

sity’ for ‘total annual energy and power costs’

20

in paragraph (2) thereof), or

21‘‘(B) the aggregate adjusted basis (deter-

22

mined after taking into account all adjustments

23

with respect to such taxable year other than the24

reduction under subsection (e)) of energy effi-

25

cient building retrofit property placed in service

ERN22335 9K1

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354
1

by the taxpayer pursuant to such qualified ret-2

rofit plan.

3‘‘(2) QUALIFIED RETROFIT PLAN.—For pur-4

poses of this subsection, the term ‘qualified retrofit

5plan’ means a written plan prepared by a qualified

6

professional which specifies modifications to a build-7

ing which, in the aggregate, are expected to reduce8such building’s energy use intensity by 25 percent or

9more in comparison to the baseline energy use inten-

10sity of such building. Such plan shall provide for a11

qualified professional to—

12‘‘(A) as of any date during the 1-year pe-

13

riod ending on the date on which the property

14

installed pursuant to such plan is placed in

15

service, certify the energy use intensity of such

16

building as of such date,17‘‘(B) certify the status of property installed

18

pursuant to such plan as meeting the require-

19

ments of subparagraphs (B) and (C) of para-

20

graph (3), and21‘‘(C) as of any date that is more than 1

22year after the date on which the property in-

23

stalled pursuant to such plan is placed in serv-

24

ice, certify the energy use intensity of such

25

building as of such date.

ERN22335 9K1

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355
1‘‘(3) ENERGY EFFICIENT BUILDING RETROFIT

2

PROPERTY.—For

purposes of this subsection, the3term ‘energy efficient building retrofit property’

4means property—

5‘‘(A) with respect to which depreciation (or6amortization in lieu of depreciation) is allow-

7

able,

8
9
10

‘‘(B) which is installed on or in any qualified building,‘‘(C) which is installed as part of—11‘‘(i) the interior lighting systems,

12‘‘(ii) the heating, cooling, ventilation,

13and hot water systems, or

14‘‘(iii) the building envelope, and

15‘‘(D) which is certified in accordance with

16

paragraph (2)(B) as meeting the requirements

17of subparagraphs (B) and (C).

18‘‘(4) QUALIFIED BUILDING.—For purposes of

19this subsection, the term ‘qualified building’ means

20

any building which—

21‘‘(A) is located in the United States, and22‘‘(B) was originally placed in service not23

less than 5 years before the establishment of24

the qualified retrofit plan with respect to such

25

building.

ERN22335 9K1

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356
1‘‘(5) QUALIFYING FINAL CERTIFICATION.—For2

purposes of this subsection, the term ‘qualifying

3

final certification’ means, with respect to any quali-

4

fied retrofit plan, the certification described in para-

5graph (2)(C) if the energy use intensity certified in

6such certification is not more than 75 percent of the7baseline energy use intensity of the building.

8‘‘(6) BASELINE ENERGY USE INTENSITY.—

9‘‘(A) IN GENERAL.—For purposes of this10

subsection, the term ‘baseline energy use inten-

11sity’ means the energy use intensity certified

12

under paragraph (2)(A), as adjusted to take13

into account weather.

14‘‘(B) DETERMINATION OF ADJUSTMENT.—

15

For purposes of subparagraph (A), the adjust-

16

ments described in such subparagraph shall be

17determined in such manner as the Secretary18

may provide.

19‘‘(7) OTHER DEFINITIONS.—For purposes of20

this subsection—

21‘‘(A) ENERGY USE INTENSITY.—The term

22

‘energy use intensity’ means the annualized,

23

measured site energy use intensity determined24

in accordance with such regulations or otherERN22335 9K1

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357
1

guidance as the Secretary may provide and2measured in British thermal units.

3

‘‘(B)

QUALIFIED

PROFESSIONAL.—The

4

term ‘qualified professional’ means an indi-

5

vidual who is a licensed architect or a licensed

6

engineer and meets such other requirements as

7

the Secretary may provide.

8‘‘(8) COORDINATION WITH DEDUCTION OTHER-

9

WISE ALLOWED UNDER SUBSECTION (a).—10‘‘(A) IN GENERAL.—In the case of any

11building with respect to which an election is

12

made under paragraph (1), the term ‘energy ef-

13

ficient commercial building property’ shall not

14

include any energy efficient building retrofit

15

property with respect to which a deduction is16

allowable under this subsection.

1718‘‘(B) CERTAIN RULES NOT APPLICABLE.—‘‘(i) IN

GENERAL.—Except

as pro-19

vided in clause (ii), subsection (d) shall not

20

apply for purposes of this subsection.

21‘‘(ii) ALLOCATION OF DEDUCTION BY
TAX-EXEMPTENTITIES.—Rules

22

CERTAIN23

similar to subsection (d)(3) shall apply for24

purposes of this subsection.’’.

ERN22335 9K1

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358
1
2

(8)

(A) by striking ‘‘2020’’ and inserting‘‘2022’’,(B) by striking ‘‘or subsection (d)(1)(A)’’,

5
6

and
(C) by striking ‘‘2019’’ and inserting

7
8
9

ADJUSTMENT.—Section

179D(g) is amended—

3
4

INFLATION‘‘2021’’.
(b) APPLICATION TO REAL ESTATE INVESTMENT

10 TRUST EARNINGS AND PROFITS.—Section 312(k)(3)(B)
11 is amended—
12(1) by striking ‘‘For purposes of computing the13

earnings and profits of a corporation’’ and inserting14

the following:

15‘‘(i) IN GENERAL.—For purposes of

16

computing the earnings and profits of a17

corporation, except as provided in clause18(ii)’’, and1920(2) by adding at the end the following newclause:21‘‘(ii) SPECIAL RULE.—In the case of a22

corporation that is a real estate investment

23

trust, any amount deductible under section

24

179D shall be allowed in the year in which25

the property giving rise to such deduction

ERN22335 9K1

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359
1

is placed in service (or, in the case of en-

2

ergy efficient building retrofit property, the3year in which the qualifying final certifi-

4

cation is made).’’.

5(c) CONFORMING AMENDMENT.—Paragraph (1) of

6 section 179D(d), as redesignated by subsection (a)(5)(A),
7 is amended by striking ‘‘not later than the date that is
8 2 years before the date that construction of such property
9 begins’’ and inserting ‘‘not later than the date that is 4
10 years before the date such property is placed in service’’.
11(d) EFFECTIVE DATE.—

12(1) IN GENERAL.—Except as otherwise pro-13

vided in this subsection, the amendments made by

14

this section shall apply to taxable years beginning

15

after December 31, 2022.

16(2) ALTERNATIVE DEDUCTION FOR ENERGY EFPROPERTY.—Sub-

17

FICIENT

18

section (f) of section 179D of the Internal Revenue

19

Code of 1986 (as amended by this section), and any

20other provision of such section solely for purposes of21

applying such subsection, shall apply to property

22

placed in service after December 31, 2022 (in tax-

23

able years ending after such date) if such property

24

is placed in service pursuant to qualified retrofit

BUILDINGRETROFITERN22335 9K1

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360
1

plan (within the meaning of such section) estab-2

lished after such date.

3

SEC. 13304. EXTENSION, INCREASE, AND MODIFICATIONS

45OF NEW ENERGY EFFICIENT HOME CREDIT.

(a) EXTENSIONOFCREDIT.—Section 45L(g) is

6 amended by striking ‘‘December 31, 2021’’ and inserting
7 ‘‘December 31, 2032’’.
8(b)

INCREASE

IN

CREDITAMOUNTS.—Section

9 45L(a)(2) is amended to read as follows:10‘‘(2) APPLICABLE AMOUNT.—For purposes of11paragraph (1), the applicable amount is an amount12

equal to—13‘‘(A) in the case of a dwelling unit which

14

is eligible to participate in the Energy Star

15

Residential New Construction Program or the16

Energy Star Manufactured New Homes pro-

17

gram—

18

‘‘(i) which meets the requirements of

19

subsection (c)(1)(A) (and which does not

20

meet

21

(c)(1)(B)), $2,500, and

22

the

requirementsofsubsection‘‘(ii) which meets the requirements of23

subsection (c)(1)(B), $5,000, and24‘‘(B) in the case of a dwelling unit which25

is part of a building eligible to participate inERN22335 9K1

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361
1

the Energy Star Multifamily New Construction2

Program—3‘‘(i) which meets the requirements of

4

subsection (c)(1)(A) (and which does not

5

meet

6

(c)(1)(B)), $500, and7

therequirementsofsubsection‘‘(ii) which meets the requirements of

8

subsection (c)(1)(B), $1,000.’’.

9(c) MODIFICATION OF ENERGY SAVING REQUIRE-

10MENTS.—Section 45L(c) is amended to read as follows:1112‘‘(c) ENERGY SAVING REQUIREMENTS.—‘‘(1) IN GENERAL.—

13‘‘(A) IN GENERAL.—A dwelling unit meets14

the requirements of this subparagraph if such

15

dwelling unit meets the requirements of para-

16

graph (2) or (3) (whichever is applicable).

17‘‘(B) ZERO ENERGY READY HOME PRO-18

GRAM.—A dwelling unit meets the requirements

19of this subparagraph if such dwelling unit is20

certified as a zero energy ready home under the21

zero energy ready home program of the Depart-

22

ment of Energy as in effect on January 1, 2023

23

(or any successor program determined by the24

Secretary).

ERN22335 9K1

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362
1‘‘(2) SINGLE-FAMILY HOME REQUIREMENTS.—

2

A dwelling unit meets the requirements of this para-

3graph if—

4‘‘(A) such dwelling unit meets—

5‘‘(i)(I) in the case of a dwelling unit

6

acquired before January 1, 2025, the En-

7ergy Star Single-Family New Homes Na-

8tional Program Requirements 3.1, or

9‘‘(II) in the case of a dwelling unit ac-

10

quired after December 31, 2024, the En-

11

ergy Star Single-Family New Homes Na-

12tional Program Requirements 3.2, and13‘‘(ii) the most recent Energy Star Sin-

14

gle-Family New Homes Program Require-15

ments applicable to the location of such16

dwelling unit (as in effect on the latter of17

January 1, 2023, or January 1 of two cal-18

endar years prior to the date the dwelling

19

unit was acquired), or

20‘‘(B) such dwelling unit meets the most re-21

cent Energy Star Manufactured Home National

22

program requirements as in effect on the latter23

of January 1, 2023, or January 1 of two cal-24

endar years prior to the date such dwelling unit25

is acquired.

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363
1‘‘(3) MULTI-FAMILY HOME REQUIREMENTS.—A2dwelling unit meets the requirements of this para-

3graph if—

4‘‘(A) such dwelling unit meets the most re-5cent Energy Star Multifamily New Construction

6

National Program Requirements (as in effect7

on either January 1, 2023, or January 1 of

8

three calendar years prior to the date the dwell-

9

ing was acquired, whichever is later), and

10‘‘(B) such dwelling unit meets the most re-

11cent Energy Star Multifamily New Construction

12

Regional Program Requirements applicable to13

the location of such dwelling unit (as in effect14

on either January 1, 2023, or January 1 of

15

three calendar years prior to the date the dwell-

16

ing was acquired, whichever is later).’’.

17(d) PREVAILING WAGE REQUIREMENT.—Section

18 45L is amended by redesignating subsection (g) as sub19 section (h) and by inserting after subsection (f) the fol20 lowing new subsection:
21‘‘(g) PREVAILING WAGE REQUIREMENT.—

22‘‘(1) IN GENERAL.—In the case of a qualifying

23

residence described in subsection (b)(2)(B) meeting24

the prevailing wage requirements of paragraphERN22335 9K1

S.L.C.

364
1(2)(A), the credit amount allowed with respect to2such residence shall be—3‘‘(A) $2,500 in the case of a residence

4

which meets the requirements of subparagraph5(A) of subsection (c)(1) (and which does not

6meet the requirements of subparagraph (B) of

7such subsection), and

8‘‘(B) $5,000 in the case of a residence

9which meets the requirements of subsection

10(c)(1)(B).

11‘‘(2) PREVAILING WAGE REQUIREMENTS.—

12‘‘(A) IN GENERAL.—The requirements de-13

scribed in this subparagraph with respect to14

any qualified residence are that the taxpayer

15

shall ensure that any laborers and mechanics

16

employed by contractors and subcontractors in17

the construction of such residence shall be paid

18

wages at rates not less than the prevailing rates

19

for construction, alteration, or repair of a simi-

20

lar character in the locality in which such resi-

21

dence is located as most recently determined by

22

the Secretary of Labor, in accordance with sub-23

chapter IV of chapter 31 of title 40, United

24

States Code.

ERN22335 9K1

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365‘‘(B) CORRECTION AND PENALTY RELATED

1

REQUIRE-

2

TO

3

MENTS.—Rules

4

45(b)(7)(B) shall apply.

5‘‘(3) REGULATIONS AND GUIDANCE.—The Sec-6

retary shall issue such regulations or other guidance

7

as the Secretary determines necessary or appropriate

8

to carry out the purposes of this subsection, includ-9

ing regulations or other guidance which provides for10

requirements for recordkeeping or information re-11

porting for purposes of administering the require-

12

ments of this subsection.’’.

13(e) BASIS ADJUSTMENT.—Section 45L(e) is amended

FAILURETO

SATISFY

WAGE

similar to the rules of section

14 by inserting after the first sentence the following: ‘‘This
15 subsection shall not apply for purposes of determining the
16 adjusted basis of any building under section 42.’’.
17(f) EFFECTIVE DATES.—

18(1) IN GENERAL.—Except as provided in para-

19

graph (2), the amendments made by this section

20

shall apply to dwelling units acquired after Decem-21

ber 31, 2022.

22(2) EXTENSION OF CREDIT.—The amendments

23

made by subsection (a) shall apply to dwelling units

24

acquired after December 31, 2021.

ERN22335 9K1

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366
1
2

PART 4—CLEAN VEHICLESSEC. 13401. CLEAN VEHICLE CREDIT.

3(a) PER VEHICLE DOLLAR LIMITATION.—Section

4 30D(b) is amended by striking paragraphs (2) and (3) and5 inserting the following:
6‘‘(2) CRITICAL MINERALS.—In the case of a ve-

7hicle with respect to which the requirement de-8

scribed in subsection (e)(1)(A) is satisfied, the9amount determined under this paragraph is $3,750.

10‘‘(3) BATTERY COMPONENTS.—In the case of a11

vehicle with respect to which the requirement de-

12

scribed in subsection (e)(2)(A) is satisfied, the13amount14$3,750.’’.

15(b) FINAL ASSEMBLY.—Section 30D(d) is amend-

determined

under

this

paragraphis

16 ed—
17(1) in paragraph (1)—(A) in subparagraph (E), by striking

18
19‘‘and’’ at the end,

20(B) in subparagraph (F)(ii), by striking

21

the period at the end and inserting ‘‘, and’’,

22

and

23

(C) by adding at the end the following:

24‘‘(G) the final assembly of which occurs

25

within North America.’’,26(2) by adding at the end the following:ERN22335 9K1

S.L.C.

367
1‘‘(5) FINAL ASSEMBLY.—For purposes of para-

2graph (1)(G), the term ‘final assembly’ means the3

process by which a manufacturer produces a new

4clean vehicle at, or through the use of, a plant, fac-5

tory, or other place from which the vehicle is deliv-

6

ered to a dealer or importer with all component

7

parts necessary for the mechanical operation of the8vehicle included with the vehicle, whether or not the9component parts are permanently installed in or on

10

the vehicle.’’.

11(c) DEFINITION OF NEW CLEAN VEHICLE.—

12(1) IN GENERAL.—Section 30D(d), as amended

13

by the preceding provisions of this section, is amend-

14

ed—

15

(A) in the heading, by striking ‘‘QUALI-

16

FIED PLUG-IN ELECTRIC DRIVE MOTOR’’ and17

inserting ‘‘CLEAN’’,18(B) in paragraph (1)—19(i) in the matter preceding subpara-

20

graph (A), by striking ‘‘qualified plug-in

21

electric

22‘‘clean’’,

23

drive

motor’’

andinserting(ii) in subparagraph (C), by inserting

24‘‘qualified’’ before ‘‘manufacturer’’,25(iii) in subparagraph (F)—ERN22335 9K1

S.L.C.

368(I) in clause (i), by striking ‘‘4’’

1

and inserting ‘‘7’’, and2(II) in clause (ii), by striking

34‘‘and’’ at the end,

5(iv) in subparagraph (G), by striking

6

the period at the end and inserting ‘‘,

7and’’, and8(v) by adding at the end the following:

9‘‘(H) for which the person who sells any

10

vehicle to the taxpayer furnishes a report to the11

taxpayer and to the Secretary, at such time and12

in such manner as the Secretary shall provide,13

containing—‘‘(i) the name and taxpayer identifica-

14
15

tion number of the taxpayer,

16‘‘(ii) the vehicle identification number

17of the vehicle, unless, in accordance with18

any applicable rules promulgated by the19

Secretary of Transportation, the vehicle is20

not assigned such a number,‘‘(iii) the battery capacity of the vehi-

21
22

cle,

23

‘‘(iv) verification that original use of24

the vehicle commences with the taxpayer,

25

and

ERN22335 9K1

S.L.C.

3691‘‘(v) the maximum credit under this2

section allowable to the taxpayer with re-3spect to the vehicle.’’,4(C) in paragraph (3)—5(i) in the heading, by striking ‘‘MANU-

6FACTURER’’and inserting ‘‘QUALIFIED

7

MANUFACTURER’’,8(ii) by striking ‘‘The term ‘manufac-

9turer’ has the meaning given such term in’’10

and inserting ‘‘The term ‘qualified manu-

11

facturer’ means any manufacturer (within

12

the meaning of the’’, and13(iii) by inserting ‘‘) which enters into14

a written agreement with the Secretary

15

under which such manufacturer agrees to16

make periodic written reports to the Sec-17

retary (at such times and in such manner18

as the Secretary may provide) providing

19

vehicle identification numbers and such20

other information related to each vehicle

21

manufactured by such manufacturer as the22

Secretary may require’’ before the period

23

at the end, and24(D) by adding at the end the following:ERN22335 9K1

S.L.C.

370
1‘‘(6) NEW QUALIFIED FUEL CELL MOTOR VEHI-

2

CLE.—For purposes of this section, the term ‘new3

clean vehicle’ shall include any new qualified fuel cell

4

motor vehicle (as defined in section 30B(b)(3))

5which meets the requirements under subparagraphs

6(G) and (H) of paragraph (1).’’.

78(2) CONFORMING AMENDMENTS.—Section 30D
is amended—

9(A) in subsection (a), by striking ‘‘new10

qualified plug-in electric drive motor vehicle’’11

and inserting ‘‘new clean vehicle’’, and

12(B) in subsection (b)(1), by striking ‘‘new13

qualified plug-in electric drive motor vehicle’’14

and inserting ‘‘new clean vehicle’’.

15(d) ELIMINATION OF LIMITATION ON NUMBER OF

16 VEHICLES ELIGIBLE

FOR

CREDIT.—Section 30D is

17 amended by striking subsection (e).
18(e) CRITICAL MINERAL AND BATTERY COMPONENT

19 REQUIREMENTS.—
20(1) IN GENERAL.—Section 30D, as amended by21

the preceding provisions of this section, is amended

22

by inserting after subsection (d) the following:23‘‘(e) CRITICAL MINERAL AND BATTERY COMPONENT

24 REQUIREMENTS.—
25‘‘(1) CRITICAL MINERALS REQUIREMENT.—ERN22335 9K1

S.L.C.

371
1‘‘(A) IN GENERAL.—The requirement de-2

scribed in this subparagraph with respect to a3

vehicle is that, with respect to the battery from4

which the electric motor of such vehicle draws

5electricity, the percentage of the value of the

6applicable critical minerals (as defined in sec-

7

tion 45X(c)(6)) contained in such battery that

8

were—

9

‘‘(i) extracted or processed in any

10country with which the United States has

11

a free trade agreement in effect, or

12‘‘(ii) recycled in North America,

13

is equal to or greater than the applicable per-14

centage (as certified by the qualified manufac-

15

turer, in such form or manner as prescribed by

16

the Secretary).

17

‘‘(B)

APPLICABLEPERCENTAGE.—For18

purposes of subparagraph (A), the applicable

19

percentage shall be—20‘‘(i) in the case of a vehicle placed in

21

service after the date on which the pro-22

posed guidance described in paragraph

23(3)(B) is issued by the Secretary and be-24fore January 1, 2024, 40 percent,ERN22335 9K1

S.L.C.

372
1‘‘(ii) in the case of a vehicle placed in

2

service during calendar year 2024, 50 per-

3

cent,

4

‘‘(iii) in the case of a vehicle placed in

5

service during calendar year 2025, 60 per-

6

cent,

7

‘‘(iv) in the case of a vehicle placed in

8

service during calendar year 2026, 70 per-9cent, and10‘‘(v) in the case of a vehicle placed in

11

service after December 31, 2026, 80 per-

12

cent.

13

‘‘(2) BATTERY COMPONENTS.—

14‘‘(A) IN GENERAL.—The requirement de-15

scribed in this subparagraph with respect to a16

vehicle is that, with respect to the battery from17

which the electric motor of such vehicle draws

18electricity, the percentage of the value of the

19

components contained in such battery that were20

manufactured or assembled in North America is21

equal to or greater than the applicable percent-22

age (as certified by the qualified manufacturer,

23

in such form or manner as prescribed by the24

Secretary).

ERN22335 9K1

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373
1

‘‘(B)

APPLICABLEPERCENTAGE.—For2

purposes of subparagraph (A), the applicable

3

percentage shall be—

4‘‘(i) in the case of a vehicle placed in

5

service after the date on which the pro-6

posed guidance described in paragraph

7(3)(B) is issued by the Secretary and be-8fore January 1, 2024, 50 percent,9‘‘(ii) in the case of a vehicle placed in

10

service during calendar year 2024 or 2025,

11

60 percent,12‘‘(iii) in the case of a vehicle placed in

13

service during calendar year 2026, 70 per-

14

cent,

15

‘‘(iv) in the case of a vehicle placed in

16

service during calendar year 2027, 80 per-

17

cent,

18

‘‘(v) in the case of a vehicle placed in

19

service during calendar year 2028, 90 per-

20

cent,

21

‘‘(vi) in the case of a vehicle placed in

22

service after December 31, 2028, 100 per-

23

cent.

24

‘‘(3) REGULATIONS AND GUIDANCE.—

ERN22335 9K1

S.L.C.

374
1‘‘(A) IN GENERAL.—The Secretary shall2

issue such regulations or other guidance as the3

Secretary determines necessary or appropriate

4

to carry out the purposes of this subsection, in-5cluding regulations or other guidance which

6

provides for requirements for recordkeeping or

7

information reporting for purposes of admin-

8

istering the requirements of this subsection.
‘‘(B) DEADLINE

9FORPROPOSED

GUID-

10

ANCE.—Not later than December 31, 2022, the11Secretary shall issue proposed guidance with re-

12spect to the requirements under this sub-13

section.’’.

14(2) EXCLUDED ENTITIES.—Section 30D(d), as

15

amended by the preceding provisions of this section,

16

is amended by adding at the end the following:

17‘‘(7) EXCLUDED ENTITIES.—For purposes of18

this section, the term ‘new clean vehicle’ shall not in-

19

clude—

20‘‘(A) any vehicle placed in service after De-

21

cember 31, 2024, with respect to which any of22

the applicable critical minerals contained in the23battery of such vehicle (as described in sub-24

section (e)(1)(A)) were extracted, processed, or

25

recycled by a foreign entity of concern (as de-ERN22335 9K1

S.L.C.

375
1

fined in section 40207(a)(5) of the Infrastruc-2

ture Investment and Jobs Act (42 U.S.C.

318741(a)(5))), or

4‘‘(B) any vehicle placed in service after De-

5cember 31, 2023, with respect to which any of6the components contained in the battery of such

7

vehicle (as described in subsection (e)(2)(A))

8

were manufactured or assembled by a foreign

9entity of concern (as so defined).’’.

10(f) SPECIAL RULES.—Section 30D(f) is amended by

11 adding at the end the following:
12‘‘(8) ONE CREDIT PER VEHICLE.—In the case13of any vehicle, the credit described in subsection (a)14shall only be allowed once with respect to such vehi-

15cle, as determined based upon the vehicle identifica-

16

tion number of such vehicle.

17‘‘(9) VIN REQUIREMENT.—No credit shall be

18

allowed under this section with respect to any vehicle

19

unless the taxpayer includes the vehicle identification

20

number of such vehicle on the return of tax for the21

taxable year.

2223‘‘(10) LIMITATION BASED ON MODIFIED ADJUSTED GROSS INCOME.—ERN22335 9K1

S.L.C.

376
1‘‘(A) IN GENERAL.—No credit shall be al-2

lowed under subsection (a) for any taxable year3if—‘‘(i) the lesser of—45‘‘(I) the modified adjusted gross6

income of the taxpayer for such tax-

7

able year, or

8‘‘(II) the modified adjusted gross9

income of the taxpayer for the pre-10

ceding taxable year, exceeds

11‘‘(ii) the threshold amount.

12‘‘(B) THRESHOLD AMOUNT.—For purposes

13

of subparagraph (A)(ii), the threshold amount14

shall be—15‘‘(i) in the case of a joint return or a16

surviving spouse (as defined in section

172(a)), $300,000,‘‘(ii) in the case of a head of house-

18
19

hold

20

$225,000, and

21

(as

definedinsection2(b)),‘‘(iii) in the case of a taxpayer not de-22

scribed in clause (i) or (ii), $150,000.

23‘‘(C) MODIFIED

ADJUSTED

GROSS

IN-

24

COME.—For

purposes of this paragraph, the25term ‘modified adjusted gross income’ means

ERN22335 9K1

S.L.C.

377
1

adjusted gross income increased by any amount2

excluded from gross income under section 911,

3

931, or 933.

4‘‘(11) MANUFACTURER’S

5SUGGESTED RETAILPRICE LIMITATION.—

6‘‘(A) IN GENERAL.—No credit shall be al-7

lowed under subsection (a) for a vehicle with a8manufacturer’s suggested retail price in excess

9of the applicable limitation.

10‘‘(B) APPLICABLE LIMITATION.—For pur-11

poses of subparagraph (A), the applicable limi-

12

tation for each vehicle classification is as fol-

13

lows:

14
15

‘‘(i) VANS.—In the case of a van,$80,000.

16‘‘(ii) SPORT UTILITY VEHICLES.—In17

the case of a sport utility vehicle, $80,000.

18‘‘(iii) PICKUP TRUCKS.—In the case of

19
20

a pickup truck, $80,000.
‘‘(iv) OTHER.—In the case of any

21other vehicle, $55,000.

22‘‘(C) REGULATIONS AND GUIDANCE.—For23

purposes of this paragraph, the Secretary shall24

prescribe such regulations or other guidance as

25

the Secretary determines necessary or appro-

ERN22335 9K1

S.L.C.

378
1

priate for determining vehicle classifications

2

using criteria similar to that employed by the3

Environmental Protection Agency and the De-

4partment of the Energy to determine size and5class of vehicles.’’.

6(g) TRANSFER OF CREDIT.—

7(1) IN GENERAL.—Section 30D is amended by8

striking subsection (g) and inserting the following:

9‘‘(g) TRANSFER OF CREDIT.—

10‘‘(1) IN GENERAL.—Subject to such regulations

11

or other guidance as the Secretary determines nec-

12

essary or appropriate, if the taxpayer who acquires

13

a new clean vehicle elects the application of this sub-14

section with respect to such vehicle, the credit which

15

would (but for this subsection) be allowed to such16

taxpayer with respect to such vehicle shall be al-17

lowed to the eligible entity specified in such election

18(and not to such taxpayer).

19‘‘(2) ELIGIBLE ENTITY.—For purposes of this20

subsection, the term ‘eligible entity’ means, with re-21

spect to the vehicle for which the credit is allowed

22

under subsection (a), the dealer which sold such ve-

23

hicle to the taxpayer and has—

24‘‘(A) subject to paragraph (4), registered25

with the Secretary for purposes of this para-

ERN22335 9K1

S.L.C.

379
1

graph, at such time, and in such form and2manner, as the Secretary may prescribe,

3‘‘(B) prior to the election described in

4paragraph (1) and not later than at the time of5such sale, disclosed to the taxpayer purchasing

6

such vehicle—

78‘‘(i) the manufacturer’s suggested retail price,

9‘‘(ii) the value of the credit allowed

10

and any other incentive available for the11purchase of such vehicle, and12‘‘(iii) the amount provided by the13

dealer to such taxpayer as a condition of14

the election described in paragraph (1),15‘‘(C) not later than at the time of such

16

sale, made payment to such taxpayer (whether

17

in cash or in the form of a partial payment or18

down payment for the purchase of such vehicle)

19

in an amount equal to the credit otherwise al-20

lowable to such taxpayer, and21‘‘(D) with respect to any incentive other-22

wise available for the purchase of a vehicle for23

which a credit is allowed under this section, in-24

cluding any incentive in the form of a rebate or

ERN22335 9K1

S.L.C.

380
1

discount provided by the dealer or manufac-

2

turer, ensured that—3‘‘(i) the availability or use of such in-

4centive shall not limit the ability of a tax-

5

payer to make an election described in

6paragraph (1), and78‘‘(ii) such election shall not limit thevalue or use of such incentive.

9‘‘(3) TIMING.—An election described in para-

10

graph (1) shall be made by the taxpayer not later11

than the date on which the vehicle for which the12credit is allowed under subsection (a) is purchased.

13‘‘(4) REVOCATIONOFREGISTRATION.—Upon

14

determination by the Secretary that a dealer has

15

failed to comply with the requirements described in

16

paragraph (2), the Secretary may revoke the reg-

17

istration (as described in subparagraph (A) of such18

paragraph) of such dealer.

19‘‘(5) TAX TREATMENT OF PAYMENTS.—With

20

respect to any payment described in paragraph

21(2)(C), such payment—

22
23
24
25

‘‘(A) shall not be includible in the gross income of the taxpayer, and‘‘(B) with respect to the dealer, shall not
be deductible under this title.

ERN22335 9K1

S.L.C.

381
1‘‘(6) APPLICATIONOFCERTAINOTHER2QUIREMENTS.—In

3

paragraph (1) with respect to any vehicle—RE-

the case of any election under4‘‘(A) the requirements of paragraphs (1)5and (2) of subsection (f) shall apply to the tax-

6

payer who acquired the vehicle in the same7

manner as if the credit determined under this8

section with respect to such vehicle were al-

9lowed to such taxpayer,‘‘(B) paragraph (6) of such subsection

10
11

shall not apply, and12‘‘(C) the requirement of paragraph (9) of

13such subsection (f) shall be treated as satisfied

14

if the eligible entity provides the vehicle identi-

15

fication number of such vehicle to the Secretary

16

in such manner as the Secretary may provide.

17

‘‘(7)

18

DEALERS.—ADVANCEPAYMENTTOREGISTERED

19‘‘(A) IN GENERAL.—The Secretary shall20

establish a program to make advance payments

21

to any eligible entity in an amount equal to the22

cumulative amount of the credits allowed under23

subsection (a) with respect to any vehicles sold24

by such entity for which an election described25

in paragraph (1) has been made.

ERN22335 9K1

S.L.C.

382
1‘‘(B) EXCESSIVE PAYMENTS.—Rules simi-

2

lar to the rules of section 6417(c)(6) shall apply

3

for purposes of this paragraph.
‘‘(C)

4

TREATMENTOFADVANCEPAY-

5

MENTS.—For purposes of section 1324 of title

631, United States Code, the payments under7

subparagraph (A) shall be treated in the same8

manner as a refund due from a credit provision9

referred to in subsection (b)(2) of such section.

10‘‘(8) DEALER.—For purposes of this sub-11

section, the term ‘dealer’ means a person licensed by

12

a State, the District of Columbia, the Common-

13

wealth of Puerto Rico, any other territory or posses-

14

sion of the United States, an Indian tribal govern-

15

ment, or any Alaska Native Corporation (as defined16

in section 3 of the Alaska Native Claims Settlement

17

Act (43 U.S.C. 1602(m)) to engage in the sale of ve-

18

hicles.

19‘‘(9) INDIAN TRIBAL GOVERNMENT.—For pur-20

poses of this subsection, the term ‘Indian tribal gov-

21

ernment’ means the recognized governing body of22

any Indian or Alaska Native tribe, band, nation,

23

pueblo, village, community, component band, or com-24

ponent reservation, individually identified (including

25

parenthetically) in the list published most recently as

ERN22335 9K1

S.L.C.

383
1of the date of enactment of this subsection pursuant

2

to section 104 of the Federally Recognized Indian

3

Tribe List Act of 1994 (25 U.S.C. 5131).’’.

4(2) CONFORMING AMENDMENTS.—Section 30D,

5

as amended by the preceding provisions of this sec-

6

tion, is amended—

78(A) in subsection (d)(1)(H) of such section—(i) in clause (iv), by striking ‘‘and’’ at9
10

the end,11(ii) in clause (v), by striking the pe-

12riod at the end and inserting ‘‘, and’’, and13(iii) by adding at the end the fol-14

lowing:15‘‘(vi) in the case of a taxpayer who

16

makes an election under subsection (g)(1),

17

any

18

(g)(2)(C) which has been provided to such

19

taxpayer.’’, and

20(B) in subsection (f)—amountdescribed

insubsection

21(i) by striking paragraph (3), and22(ii) in paragraph (8), by inserting ‘‘,

23

including any vehicle with respect to which24

the taxpayer elects the application of sub-25

section (g)’’ before the period at the end.

ERN22335 9K1

S.L.C.

3841(h) TERMINATION.—Section 30D is amended by add-

2 ing at the end the following:3‘‘(h) TERMINATION.—No credit shall be allowed

4 under this section with respect to any vehicle placed in
5 service after December 31, 2032.’’.
6(i) ADDITIONAL CONFORMING AMENDMENTS.—

7(1) The heading of section 30D is amended by8

striking ‘‘NEW QUALIFIED PLUG-IN ELECTRIC

9DRIVE MOTOR VEHICLES’’ and inserting ‘‘CLEAN

10

VEHICLE CREDIT’’.

11(2) Section 30B is amended—

12(A) in subsection (h)(8), by striking ‘‘, ex-13

cept that no benefit shall be recaptured if such14

property ceases to be eligible for such credit by15

reason of conversion to a qualified plug-in elec-

16

tric drive motor vehicle’’, and(B) by striking subsection (i).

1718(3) Section 38(b)(30) is amended by striking

19‘‘qualified plug-in electric drive motor’’ and inserting

20‘‘clean’’.

21
22
23
24

(4) Section 6213(g)(2), as amended by the preceding provisions of this Act, is amended—(A) in subparagraph (R), by striking‘‘and’’ at the end,

ERN22335 9K1

S.L.C.

385
1
2
3
4
5

(B) in subparagraph (S), by striking theperiod at the end and inserting ‘‘, and’’, and(C) by inserting after subparagraph (S)the following:‘‘(T) an omission of a correct vehicle iden-

6tification

730D(f)(9) (relating to credit for new clean vehi-

8cles) to be included on a return.’’.

9(5) Section 6501(m) is amended by striking

10

numberrequiredunder

section‘‘30D(e)(4)’’ and inserting ‘‘30D(f)(6)’’.

11(6) The table of sections for subpart B of part12

IV of subchapter A of chapter 1 is amended by13

striking the item relating to section 30D and insert-

14

ing after the item relating to section 30C the fol-15

lowing item:‘‘Sec. 30D. Clean vehicle credit.’’.

16(j) GROSS-UP OF DIRECT SPENDING.—Beginning in

17 fiscal year 2023 and each fiscal year thereafter, the por18 tion of any credit allowed to an eligible entity (as defined
19 in section 30D(g)(2) of the Internal Revenue Code of
20 1986) pursuant to an election made under section 30D(g)21 of the Internal Revenue Code of 1986 that is direct spend22 ing shall be increased by 6.0445 percent.
23(k) EFFECTIVE DATES.—

24(1) IN GENERAL.—Except as provided in para-

25

graphs (2), (3), (4), and (5), the amendments made

ERN22335 9K1

S.L.C.

386
1by this section shall apply to vehicles placed in serv-

2

ice after December 31, 2022.

3(2) FINAL ASSEMBLY.—The amendments made4

by subsection (b) shall apply to vehicles sold after5

the date of enactment of this Act.

6(3) PER VEHICLE DOLLAR LIMITATION AND RE-

7

LATED REQUIREMENTS.—The amendments made by8

subsections (a) and (e) shall apply to vehicles placed

9

in service after the date on which the proposed guid-10

ance described in paragraph (3)(B) of section

1130D(e) of the Internal Revenue Code of 1986 (as12added by subsection (e)) is issued by the Secretary

13of the Treasury (or the Secretary’s delegate).

14(4) TRANSFER OF CREDIT.—The amendments

15

made by subsection (g) shall apply to vehicles placed

16

in service after December 31, 2023.

17(5) ELIMINATION OF MANUFACTURER LIMITA-

18

TION.—The

amendment made by subsection (d)19shall apply to vehicles sold after December 31, 2022.

20(l) TRANSITION RULE.—Solely for purposes of the

21 application of section 30D of the Internal Revenue Code
22 of 1986, in the case of a taxpayer that—23(1) after December 31, 2021, and before the24date of enactment of this Act, purchased, or entered25

into a written binding contract to purchase, a new

ERN22335 9K1

S.L.C.

387
1

qualified plug-in electric drive motor vehicle (as de-2

fined in section 30D(d)(1) of the Internal Revenue

3

Code of 1986, as in effect on the day before the date4of enactment of this Act), and

56(2) placed such vehicle in service on or after thedate of enactment of this Act,

7 such taxpayer may elect (at such time, and in such form
8 and manner, as the Secretary of the Treasury, or the Sec9 retary’s delegate, may prescribe) to treat such vehicle as
10 having been placed in service on the day before the date
11 of enactment of this Act.
12
13
14

SEC. 13402. CREDIT FOR PREVIOUSLY-OWNED CLEAN VEHICLES.

(a) IN GENERAL.—Subpart A of part IV of sub-

15 chapter A of chapter 1 is amended by inserting after sec16 tion 25D the following new section:
17
18‘‘SEC. 25E. PREVIOUSLY-OWNED CLEAN VEHICLES.

‘‘(a) ALLOWANCE OF CREDIT.—In the case of a

19 qualified buyer who during a taxable year places in service
20 a previously-owned clean vehicle, there shall be allowed as
21 a credit against the tax imposed by this chapter for the
22 taxable year an amount equal to the lesser of—23‘‘(1) $4,000, or

24‘‘(2) the amount equal to 30 percent of the sale25

price with respect to such vehicle.

ERN22335 9K1

S.L.C.

3881‘‘(b) LIMITATION BASED ON MODIFIED ADJUSTED

2 GROSS INCOME.—
345‘‘(1) IN GENERAL.—No credit shall be allowed
under subsection (a) for any taxable year if—‘‘(A) the lesser of—

6‘‘(i) the modified adjusted gross in-

7

come of the taxpayer for such taxable year,

8

or

9

‘‘(ii) the modified adjusted gross in-

10

come of the taxpayer for the preceding tax-

11

able year, exceeds

12‘‘(B) the threshold amount.

13‘‘(2) THRESHOLD AMOUNT.—For purposes of

14paragraph (1)(B), the threshold amount shall be—

15‘‘(A) in the case of a joint return or a sur-

16

viving spouse (as defined in section 2(a)),

17$150,000,

18
19
20

‘‘(B) in the case of a head of household (asdefined in section 2(b)), $112,500, and‘‘(C) in the case of a taxpayer not de-21

scribed in subparagraph (A) or (B), $75,000.

22‘‘(3) MODIFIED ADJUSTED GROSS INCOME.—

23

For purposes of this subsection, the term ‘modified

24

adjusted gross income’ means adjusted gross income

ERN22335 9K1

S.L.C.

389
1

increased by any amount excluded from gross in-2

come under section 911, 931, or 933.

3‘‘(c) DEFINITIONS.—For purposes of this section—

4‘‘(1) PREVIOUSLY-OWNED CLEAN VEHICLE.—

5

The term ‘previously-owned clean vehicle’ means,

6with respect to a taxpayer, a motor vehicle—

7‘‘(A) the model year of which is at least 2

8years earlier than the calendar year in which

9

the taxpayer acquires such vehicle,

10
11
12

‘‘(B) the original use of which commenceswith a person other than the taxpayer,‘‘(C) which is acquired by the taxpayer in

13

a qualified sale, and

14‘‘(D) which—15‘‘(i) meets the requirements of sub-16

paragraphs (C), (D), (E), (F), and (H)17(except for clause (iv) thereof) of section18

30D(d)(1), or19‘‘(ii) is a motor vehicle which—20‘‘(I) satisfies the requirements

21

under subparagraphs (A) and (B) of

22

section 30B(b)(3), and2324‘‘(II) has a gross vehicle weightrating of less than 14,000 pounds.

ERN22335 9K1

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390
1
2
3
4
5
6

‘‘(2) QUALIFIED

SALE.—The

term ‘qualified

sale’ means a sale of a motor vehicle—‘‘(A) by a dealer (as defined in section
30D(g)(8)),‘‘(B) for a sale price which does not exceed$25,000, and7‘‘(C) which is the first transfer since the8date of the enactment of this section to a quali-

9fied buyer other than the person with whom the10

original use of such vehicle commenced.

11‘‘(3) QUALIFIED BUYER.—The term ‘qualified

12

buyer’ means, with respect to a sale of a motor vehi-

13cle, a taxpayer—

14‘‘(A) who is an individual,

15‘‘(B) who purchases such vehicle for use

16

and not for resale,17‘‘(C) with respect to whom no deduction is

18

allowable with respect to another taxpayer

19

under section 151, and20‘‘(D) who has not been allowed a credit

21

under this section for any sale during the 3-

22year period ending on the date of the sale of23such vehicle.

24‘‘(4) MOTOR VEHICLE; CAPACITY.—The terms

25‘motor vehicle’ and ‘capacity’ have the meaningERN22335 9K1

S.L.C.

391
1

given such terms in paragraphs (2) and (4) of sec-

2

tion 30D(d), respectively.

3‘‘(d) VIN NUMBER REQUIREMENT.—No credit shall

4 be allowed under subsection (a) with respect to any vehicle
5 unless the taxpayer includes the vehicle identification
6 number of such vehicle on the return of tax for the taxable
7 year.
8‘‘(e) APPLICATION OF CERTAIN RULES.—For pur-9 poses of this section, rules similar to the rules of section
10 30D(f) (without regard to paragraph (10) or (11) thereof)
11 shall apply for purposes of this section.
12‘‘(f) TERMINATION.—No credit shall be allowed

13 under this section with respect to any vehicle acquired
14 after December 31, 2032.’’.
15(b) TRANSFER OF CREDIT.—Section 25E, as added

16 by subsection (a), is amended—(1) by redesignating subsection (f) as sub-17
18

section (g), and(2) by inserting after subsection (e) the fol-

19
20

lowing:21‘‘(f) TRANSFER OF CREDIT.—Rules similar to the

22 rules of section 30D(g) shall apply.’’.
23(c)

CONFORMINGAMENDMENTS.—Section

24 6213(g)(2), as amended by the preceding provisions of
25 this Act, is amended—ERN22335 9K1

S.L.C.

392
1
2
3
4
5
6

(1) in subparagraph (S), by striking ‘‘and’’ atthe end,(2) in subparagraph (T), by striking the period
at the end and inserting ‘‘, and’’, and(3) by inserting after subparagraph (T) the following:

7‘‘(U) an omission of a correct vehicle iden-

8tification number required under section 25E(d)9(relating to credit for previously-owned clean

10

vehicles) to be included on a return.’’.

11(d) CLERICAL AMENDMENT.—The table of sections

12 for subpart A of part IV of subchapter A of chapter 1
13 is amended by inserting after the item relating to section
14 25D the following new item:‘‘Sec. 25E. Previously-owned clean vehicles.’’.

15(e) EFFECTIVE DATE.—

16(1) IN GENERAL.—Except as provided in para-

17

graph (2), the amendments made by this section

18

shall apply to vehicles acquired after December 31,

19

2022.

20

(2) TRANSFER OF CREDIT.—The amendments

21

made by subsection (b) shall apply to vehicles ac-

22

quired after December 31, 2023.

23
24

SEC. 13403. QUALIFIED COMMERCIAL CLEAN VEHICLES.

(a) IN GENERAL.—Subpart D of part IV of sub-

25 chapter A of chapter 1, as amended by the preceding pro-ERN22335 9K1

S.L.C.

393
1 visions of this Act, is amended by adding at the end the
2 following new section:
3
4
5‘‘SEC. 45W. CREDIT FOR QUALIFIED COMMERCIAL CLEAN
VEHICLES.

‘‘(a) IN GENERAL.—For purposes of section 38, the

6 qualified commercial clean vehicle credit for any taxable
7 year is an amount equal to the sum of the credit amounts
8 determined under subsection (b) with respect to each
9 qualified commercial clean vehicle placed in service by the
10 taxpayer during the taxable year.
11‘‘(b) PER VEHICLE AMOUNT.—

12‘‘(1) IN GENERAL.—Subject to paragraph (4),13the amount determined under this subsection with

14

respect to any qualified commercial clean vehicle

15

shall be equal to the lesser of—

16‘‘(A) 15 percent of the basis of such vehi-17cle (30 percent in the case of a vehicle not pow-

18

ered by a gasoline or diesel internal combustion

19

engine), or

20
21‘‘(B) the incremental cost of such vehicle.
‘‘(2) INCREMENTAL

COST.—For

purposes of22paragraph (1)(B), the incremental cost of any quali-

23

fied commercial clean vehicle is an amount equal to24

the excess of the purchase price for such vehicle over25

such price of a comparable vehicle.

ERN22335 9K1

S.L.C.

394
1‘‘(3) COMPARABLE VEHICLE.—For purposes of2

this subsection, the term ‘comparable vehicle’ means,3with respect to any qualified commercial clean vehi-

4cle, any vehicle which is powered solely by a gasoline

5or diesel internal combustion engine and which is

6comparable in size and use to such vehicle.

7‘‘(4) LIMITATION.—The amount determined8

under this subsection with respect to any qualified

9commercial clean vehicle shall not exceed—

10‘‘(A) in the case of a vehicle which has a11gross vehicle weight rating of less than 14,000

12pounds, $7,500, and‘‘(B) in the case of a vehicle not described

13
14
15

in subparagraph (A), $40,000.
‘‘(c) QUALIFIED COMMERCIAL CLEAN VEHICLE.—

16 For purposes of this section, the term ‘qualified commer17 cial clean vehicle’ means any vehicle which—
18

‘‘(1)

meets

the

requirementsofsection19

30D(d)(1)(C) and is acquired for use or lease by the20

taxpayer and not for resale,21‘‘(2) either—

22‘‘(A) meets the requirements of subpara-

23

graph (D) of section 30D(d)(1) and is manufac-

24

tured primarily for use on public streets, roads,

ERN22335 9K1

S.L.C.

395
1

and highways (not including a vehicle operated

2

exclusively on a rail or rails), or

3‘‘(B) is mobile machinery, as defined in

4section 4053(8) (including vehicles that are not5

designed to perform a function of transporting

6

a load over the public highways),7‘‘(3) either—

8‘‘(A) is propelled to a significant extent by

9an electric motor which draws electricity from a

10

battery which has a capacity of not less than 15

11kilowatt hours (or, in the case of a vehicle

12

which has a gross vehicle weight rating of less13

than 14,000 pounds, 7 kilowatt hours) and is14

capable of being recharged from an external

15source of electricity, or

16‘‘(B) is a motor vehicle which satisfies the17

requirements under subparagraphs (A) and (B)18of section 30B(b)(3), and19‘‘(4) is of a character subject to the allowance

20

for depreciation.

21‘‘(d) SPECIAL RULES.—

22‘‘(1) IN GENERAL.—Subject to paragraph (2),23rules similar to the rules under subsection (f) of sec-

24

tion 30D shall apply for purposes of this section.

ERN22335 9K1

S.L.C.

396
1‘‘(2) RECAPTURE.—The Secretary shall, by reg-2

ulations or other guidance, provide for recapturing

3

the benefit of any credit allowed under subsection

4(a) with respect to any property which ceases to be5

property eligible for such credit.

6‘‘(3) VEHICLES PLACED IN SERVICE BY TAXENTITIES.—Subsection(c)(4) shall not

7

EXEMPT

8

apply to any vehicle which is not subject to a lease9

and which is placed in service by a tax-exempt entity

10

described in clause (i), (ii), or (iv) of section11

168(h)(2)(A).

12‘‘(4) NO DOUBLE BENEFIT.—No credit shall be

13

allowed under this section with respect to any vehicle

14

for which a credit was allowed under section 30D.

15‘‘(e) VIN NUMBER REQUIREMENT.—No credit shall

16 be determined under subsection (a) with respect to any
17 vehicle unless the taxpayer includes the vehicle identifica18 tion number of such vehicle on the return of tax for the
19 taxable year.
20‘‘(f) REGULATIONS AND GUIDANCE.—The Secretary

21 shall issue such regulations or other guidance as the Sec22 retary determines necessary or appropriate to carry out
23 the purposes of this section, including regulations or other24 guidance relating to determination of the incremental cost
25 of any qualified commercial clean vehicle.

ERN22335 9K1

S.L.C.

3971‘‘(g) TERMINATION.—No credit shall be determined

2 under this section with respect to any vehicle acquired
3 after December 31, 2032.’’.
4
5
6
7
8
9
10
11

(b) CONFORMING AMENDMENTS.—(1) Section 38(b), as amended by the preceding
provisions of this Act, is amended—(A) in paragraph (35), by striking ‘‘plus’’
at the end,(B) in paragraph (36), by striking the period at the end and inserting ‘‘, plus’’, and(C) by adding at the end the following new

12paragraph:13‘‘(37) the qualified commercial clean vehicle

14
15
16
17
18
19
20
21
22
23
24

credit determined under section 45W.’’.
(2) Section 6213(g)(2), as amended by the preceding provisions of this Act, is amended—(A) in subparagraph (T), by striking‘‘and’’ at the end,(B) in subparagraph (U), by striking theperiod at the end and inserting ‘‘, and’’, and(C) by inserting after subparagraph (U)the following:‘‘(V) an omission of a correct vehicle identification

numberrequiredunder

sectionERN22335 9K1

S.L.C.

398
1

45W(e) (relating to commercial clean vehicle2

credit) to be included on a return.’’.

3(3) The table of sections for subpart D of part4

IV of subchapter A of chapter 1, as amended by the5preceding provisions of this Act, is amended by add-

6

ing at the end the following new item:‘‘Sec. 45W. Qualified commercial clean vehicle credit.’’.

7(c) EFFECTIVE DATE.—The amendments made by

8 this section shall apply to vehicles acquired after Decem9 ber 31, 2022.
10

SEC. 13404. ALTERNATIVE FUEL REFUELING PROPERTY

1112

CREDIT.

(a) IN GENERAL.—Section 30C(g) is amended by

13 striking ‘‘December 31, 2021’’ and inserting ‘‘December
14 31, 2032’’.
1516(b) CREDIT FOR PROPERTY OF A CHARACTER SUBJECT TO DEPRECIATION.—

17(1) IN GENERAL.—Section 30C(a) is amended

18

by inserting ‘‘(6 percent in the case of property of

19

a character subject to depreciation)’’ after ‘‘30 per-20

cent’’.

21
22
23
24

(2) MODIFICATION OF CREDIT LIMITATION.—
Subsection (b) of section 30C is amended—(A) in the matter preceding paragraph(1)—

ERN22335 9K1

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399
1(i) by striking ‘‘with respect to all’’2

and inserting ‘‘with respect to any single

3

item of’’, and4(ii) by striking ‘‘at a location’’, and

5(B) in paragraph (1), by striking ‘‘$30,000

6in the case of a property’’ and inserting

7‘‘$100,000 in the case of any such item of prop-

8

erty’’.

9(3) BIDIRECTIONAL CHARGING EQUIPMENT IN-

10

CLUDED AS QUALIFIED ALTERNATIVE FUEL VEHI-

11

CLE

12

amended to read as follows:13‘‘(c) QUALIFIED ALTERNATIVE FUEL VEHICLE RE-

14

REFUELING

PROPERTY.—Section

30C(c) is

FUELING PROPERTY.—For purposes of this section—

15‘‘(1) IN GENERAL.—The term ‘qualified alter-

16

native fuel vehicle refueling property’ has the same17

meaning as the term ‘qualified clean-fuel vehicle re-18

fueling property’ would have under section 179A

19

if—

20

‘‘(A) paragraph (1) of section 179A(d) did

21

not apply to property installed on property

22

which is used as the principal residence (within23

the meaning of section 121) of the taxpayer,

24

and

ERN22335 9K1

S.L.C.

4001‘‘(B) only the following were treated as

2clean-burning fuels for purposes of section

3

179A(d):4‘‘(i) Any fuel at least 85 percent of5

the volume of which consists of one or6more of the following: ethanol, natural gas,

7

compressed natural gas, liquified natural

8

gas, liquefied petroleum gas, or hydrogen.

9‘‘(ii) Any mixture—10‘‘(I) which consists of two or

11

more of the following: biodiesel (as de-12

fined in section 40A(d)(1)), diesel fuel13

(as defined in section 4083(a)(3)), or

14

kerosene, and15‘‘(II) at least 20 percent of the

16

volume of which consists of biodiesel

17(as so defined) determined without re-18

gard to any kerosene in such mixture.

19‘‘(iii) Electricity.

20‘‘(2) BIDIRECTIONAL CHARGING EQUIPMENT.—

21

Property shall not fail to be treated as qualified al-

22

ternative fuel vehicle refueling property solely be-23cause such property—

2425‘‘(A) is capable of charging the battery of
a motor vehicle propelled by electricity, andERN22335 9K1

S.L.C.

4011‘‘(B) allows discharging electricity from2such battery to an electric load external to such3

motor vehicle.’’.

45(c) CERTAIN ELECTRIC CHARGING STATIONS INCLUDED ASQUALIFIED ALTERNATIVE FUEL VEHICLE

6 REFUELING PROPERTY.—Section 30C is amended by re7 designating subsections (f) and (g) as subsections (g) and8 (h), respectively, and by inserting after subsection (e) the
9 following:
10‘‘(f) SPECIAL RULE FOR ELECTRIC CHARGING STA-

11

TIONS FOR CERTAIN VEHICLES WITH 2 OR 3 WHEELS.—

12 For purposes of this section—
13‘‘(1) IN GENERAL.—The term ‘qualified alter-

14

native fuel vehicle refueling property’ includes any

15

property described in subsection (c) for the re-16

charging of a motor vehicle described in paragraph

17(2), but only if such property—‘‘(A) meets the requirements of subsection

18
19(a)(2), and‘‘(B) is of a character subject to deprecia-

20
21

tion.

22

‘‘(2) MOTOR VEHICLE.—A motor vehicle is de-23

scribed in this paragraph if the motor vehicle—

ERN22335 9K1

S.L.C.

402
1‘‘(A) is manufactured primarily for use on

2

public streets, roads, or highways (not including

3

a vehicle operated exclusively on a rail or rails),

4‘‘(B) has at least 2, but not more than 3,
wheels, and56‘‘(C) is propelled by electricity.’’.

7(d) WAGE AND APPRENTICESHIP REQUIREMENTS.—

8 Section 30C, as amended by this section, is further
9 amended by redesignating subsections (g) and (h) as sub10 sections (h) and (i) and by inserting after subsection (f)11 the following new subsection:
12

‘‘(g)

13

MENTS.—

14
15

WAGE

AND

APPRENTICESHIPREQUIRE-‘‘(1) INCREASED CREDIT AMOUNT.—‘‘(A) IN GENERAL.—In the case of any

16

qualifiedalternative

fuelvehiclerefueling17

project which satisfies the requirements of sub-18

paragraph (C), the amount of the credit deter-

19

mined under subsection (a) for any qualified al-

20

ternative fuel vehicle refueling property of a21

character subject to an allowance for deprecia-

22

tion which is part of such project shall be equal23

to such amount (determined without regard to24

this sentence) multiplied by 5.

ERN22335 9K1

S.L.C.

403
1‘‘(B) QUALIFIED ALTERNATIVE FUEL VE-

2

HICLE REFUELING PROJECT.—For purposes of3

this subsection, the term ‘qualified alternative4

fuel vehicle refueling project’ means a project5

consisting of one or more properties that are

6part of a single project.

7‘‘(C) PROJECT REQUIREMENTS.—A project8

meets the requirements of this subparagraph if

9

it is one of the following:

10‘‘(i) A project the construction of

11

which begins prior to the date that is 60

12

days after the Secretary publishes guid-13

ance with respect to the requirements of

14

paragraphs (2)(A) and (3).

15‘‘(ii) A project which satisfies the re-16

quirements of paragraphs (2)(A) and (3).

17‘‘(2) PREVAILING WAGE REQUIREMENTS.—

18‘‘(A) IN GENERAL.—The requirements de-19

scribed in this subparagraph with respect to20

any qualified alternative fuel vehicle refueling21

project are that the taxpayer shall ensure that22

any laborers and mechanics employed by con-23

tractors and subcontractors in the construction

24of any qualified alternative fuel vehicle refueling25

property which is part of such project shall beERN22335 9K1

S.L.C.

404
1

paid wages at rates not less than the prevailing2

rates for construction, alteration, or repair of a3

similar character in the locality in which such4

project is located as most recently determined5by the Secretary of Labor, in accordance with

6

subchapter IV of chapter 31 of title 40, United

7

States Code.
‘‘(B) CORRECTION AND PENALTY RELATED

8REQUIRE-

9

TO

10

MENTS.—Rules

1145(b)(7)(B) shall apply.

12‘‘(3) APPRENTICESHIP REQUIREMENTS.—Rules

13

similar to the rules of section 45(b)(8) shall apply.

14‘‘(4) REGULATIONS AND GUIDANCE.—The Sec-15

retary shall issue such regulations or other guidance16

as the Secretary determines necessary or appropriate

17

to carry out the purposes of this subsection, includ-18

ing regulations or other guidance which provides for

19

requirements for recordkeeping or information re-20

porting for purposes of administering the require-

21

ments of this subsection.’’.

22(e) ELIGIBLE CENSUS TRACTS.—Subsection (c) of

FAILURETO

SATISFY

WAGE

similar to the rules of section

23 section 30C, as amended by subsection (b)(3), is amended
24 by adding at the end the following:ERN22335 9K1

S.L.C.

40512‘‘(3) PROPERTY REQUIRED TO BE LOCATED IN
ELIGIBLE CENSUS TRACTS.—

3‘‘(A) IN GENERAL.—Property shall not be4treated as qualified alternative fuel vehicle re-5

fueling property unless such property is placed

6

in service in an eligible census tract.

7‘‘(B) ELIGIBLE CENSUS TRACT.—8‘‘(i) IN GENERAL.—For purposes of

9this paragraph, the term ‘eligible census

10

tract’ means any population census tract

11

which—

12

‘‘(I)

13

45D(e), orisdescribed

insection14‘‘(II) is not an urban area.

15‘‘(ii) URBAN AREA.—For purposes of

16

clause (i)(II), the term ‘urban area’ means

17

a census tract (as defined by the Bureau

18of the Census) which, according to the19most recent decennial census, has been

20

designated as an urban area by the Sec-21

retary of Commerce.’’.

22(f) EFFECTIVE DATE.—

23(1) IN GENERAL.—Except as provided in para-

24

graph (2), the amendments made by this section

ERN22335 9K1

S.L.C.

406
1

shall apply to property placed in service after De-

2

cember 31, 2022.

3(2) EXTENSION.—The amendments made by4

subsection (a) shall apply to property placed in serv-

5

ice after December 31, 2021.

6PART 5—INVESTMENT IN CLEAN ENERGY7

MANUFACTURING AND ENERGY SECURITY

8

SEC.

13501.

9
10

EXTENSIONOFTHE

ADVANCED

ENERGYPROJECT CREDIT.

(a) EXTENSION OF CREDIT.—Section 48C is amend-

11 ed by redesignating subsection (e) as subsection (f) and
12 by inserting after subsection (d) the following new sub13 section:
14‘‘(e) ADDITIONAL ALLOCATIONS.—

15‘‘(1) IN GENERAL.—Not later than 180 days

16

after the date of enactment of this subsection, the17Secretary shall establish a program to consider and18

award certifications for qualified investments eligible

19

for credits under this section to qualifying advanced

20

energy project sponsors.

21‘‘(2) LIMITATION.—

22‘‘(A) IN GENERAL.—The total amount of

23

credits which may be allocated under the pro-

24

gram established under paragraph (1) shall not

25

exceed $10,000,000,000, of which not greater

ERN22335 9K1

S.L.C.

407
1

than $6,000,000,000 may be allocated to quali-

2

fied investments which are not located within

3

energy communities described in clause (iii) of

4

section 45(b)(11)(B).
‘‘(B) NO PRIOR CERTIFICATION AND ALLO-

5
6

CATION.—No

credits may be allocated under7

the program established under paragraph (1)8for any project which is located in a census

9

tract which, prior to the date of enactment of

10

this subsection, had received a certification and11allocation of credits under subsection (d).

12‘‘(3) CERTIFICATIONS.—

13‘‘(A) APPLICATION REQUIREMENT.—Each

14

applicant for certification under this subsection

15

shall submit an application at such time and16

containing such information as the Secretary17

may require.
‘‘(B) TIME TO MEET CRITERIA FOR CER-

18
19

TIFICATION.—Eachapplicant for certification

20

shall have 2 years from the date of acceptance21

by the Secretary of the application during

22

which to provide to the Secretary evidence that23

the requirements of the certification have been

24

met.

ERN22335 9K1

S.L.C.

408
1‘‘(C) PERIOD OF ISSUANCE.—An applicant

2which receives a certification shall have 2 years

3from the date of issuance of the certification in

4order to place the project in service and to no-5

tify the Secretary that such project has been so

6placed in service, and if such project is not

7

placed in service by that time period, then the8certification shall no longer be valid. If any cer-9tification is revoked under this subparagraph,10

the amount of the limitation under paragraph11(2) shall be increased by the amount of the12credit with respect to such revoked certification.

13‘‘(D) LOCATION OF PROJECT.—In the case14of an applicant which receives a certification, if

15

the Secretary determines that the project has

16

been placed in service at a location which is ma-

17terially different than the location specified in18

the application for such project, the certifi-

19

cation shall no longer be valid.

20‘‘(4) CREDIT RATE CONDITIONED UPON WAGE

21

AND APPRENTICESHIP REQUIREMENTS.—

22‘‘(A) BASE RATE.—For purposes of alloca-

23

tions under this subsection, the amount of the24credit determined under subsection (a) shall beERN22335 9K1

S.L.C.

409
1

determined by substituting ‘6 percent’ for ‘30

2

percent’.

3‘‘(B) ALTERNATIVE RATE.—In the case of4

any project which satisfies the requirements of5paragraphs (5)(A) and (6), subparagraph (A)6shall not apply.

7‘‘(5) PREVAILING WAGE REQUIREMENTS.—

8‘‘(A) IN GENERAL.—The requirements de-9

scribed in this subparagraph with respect to a

10

project are that the taxpayer shall ensure that11

any laborers and mechanics employed by con-12

tractors and subcontractors in the re-equipping,

13

expansion, or establishment of a manufacturing

14

facility shall be paid wages at rates not less15

than the prevailing rates for construction, alter-

16

ation, or repair of a similar character in the lo-

17cality in which such project is located as most18

recently determined by the Secretary of Labor,

19in accordance with subchapter IV of chapter 31

20

of title 40, United States Code.
‘‘(B) CORRECTION AND PENALTY RELATED

21
22

TO

23

MENTS.—Rules

24

45(b)(7)(B) shall apply.

FAILURETO

SATISFYWAGE

REQUIRE-similar to the rules of section

ERN22335 9K1

S.L.C.

410
1‘‘(6) APPRENTICESHIP REQUIREMENTS.—Rules

2

similar to the rules of section 45(b)(8) shall apply.

3‘‘(7) DISCLOSURE OF ALLOCATIONS.—The Sec-4

retary shall, upon making a certification under this5subsection, publicly disclose the identity of the appli-6

cant and the amount of the credit with respect to

7such applicant.’’.

8(b) MODIFICATION OF QUALIFYING ADVANCED EN-

9

ERGY PROJECTS.—Section 48C(c)(1)(A) is amended—

10(1) by inserting ‘‘, any portion of the qualified

11

investment of which is certified by the Secretary

12

under subsection (e) as eligible for a credit under

13

this section’’ after ‘‘means a project’’,14(2) in clause (i)—15(A) by striking ‘‘a manufacturing facility

16

for the production of’’ and inserting ‘‘an indus-

17

trial or manufacturing facility for the produc-18

tion or recycling of’’,19
20(B) in clause (I), by inserting ‘‘water,’’
after ‘‘sun,’’,21(C) in clause (II), by striking ‘‘an energy

22storage system for use with electric or hybrid-

23

electric motor vehicles’’ and inserting ‘‘energy

24storage systems and components’’,ERN22335 9K1

S.L.C.

411
1(D) in clause (III), by striking ‘‘grids to2

supportthetransmissionofintermittent

3sources of renewable energy, including storage

4of such energy’’ and inserting ‘‘grid moderniza-

5

tion equipment or components’’,

6(E) in subclause (IV), by striking ‘‘and se-

7quester carbon dioxide emissions’’ and inserting8‘‘, remove, use, or sequester carbon oxide emis-

9

sions’’,

1011(F) by striking subclause (V) and inserting
the following:

12‘‘(V) equipment designed to re-13

fine, electrolyze, or blend any fuel,14

chemical, or product which is—

15‘‘(aa) renewable, or

16‘‘(bb) low-carbon and low-

17

emission,’’,18(G) by striking subclause (VI),19(H) by redesignating subclause (VII) as

20
21
22
23
24

subclause (IX),(I) by inserting after subclause (V) the following new subclauses:‘‘(VI)

property

designedtoproduce energy conservation tech-ERN22335 9K1

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412
1

nologies (including residential, com-2

mercial, and industrial applications),

3‘‘(VII) light-, medium-, or heavy-

4duty electric or fuel cell vehicles, as

5well as—6‘‘(aa) technologies, compo-

7

nents, or materials for such vehi-

8cles, and‘‘(bb) associated charging or

9
10

refueling infrastructure,

11‘‘(VIII) hybrid vehicles with a12gross vehicle weight rating of not less13

than 14,000 pounds, as well as tech-

14

nologies, components, or materials for

15

such vehicles, or’’, and(J) in subclause (IX), as so redesignated,

16
17

by striking ‘‘and’’ at the end, and18(3) by striking clause (ii) and inserting the fol-19

lowing:20‘‘(ii) which re-equips an industrial or21

manufacturing facility with equipment de-22

signed to reduce greenhouse gas emissions

23

by at least 20 percent through the installa-

24tion of—ERN22335 9K1

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413‘‘(I) low- or zero-carbon process

1
2

heat systems,‘‘(II) carbon capture, transport,

3
4

utilization and storage systems,

5‘‘(III) energy efficiency and re-6

duction in waste from industrial proc-

7

esses, or

8‘‘(IV) any other industrial tech-9

nology designed to reduce greenhouse10

gas emissions, as determined by the11

Secretary, or

12‘‘(iii) which re-equips, expands, or es-

13tablishes an industrial facility for the proc-

14

essing, refining, or recycling of critical ma-

15

terials (as defined in section 7002(a) of the16

Energy171606(a)).’’.

18

Act

of

2020

(30

U.S.C.

(c) CONFORMING AMENDMENT.—Subparagraph (A)19 of section 48C(c)(2) is amended to read as follows:
20‘‘(A) which is necessary for—21‘‘(i) the production or recycling of

22

property described in clause (i) of para-

23

graph (1)(A),ERN22335 9K1

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414
1‘‘(ii) re-equipping an industrial or2

manufacturing facility described in clause

3(ii) of such paragraph, or

4‘‘(iii) re-equipping, expanding, or es-

5tablishing an industrial facility described in

6clause (iii) of such paragraph,’’.

7(d) DENIAL OF DOUBLE BENEFIT.—48C(f), as re-

8 designated by this section, is amended by striking ‘‘or
9 48B’’ and inserting ‘‘48B, 48D, 45Q, or 45V’’.
10(e) EFFECTIVE DATE.—The amendments made by

11 this section shall take effect on January 1, 2023.
12

SEC. 13502. ADVANCED MANUFACTURING PRODUCTION

13
14

CREDIT.

(a) IN GENERAL.—Subpart D of part IV of sub-

15 chapter A of chapter 1, as amended by the preceding pro16 visions of this Act, is amended by adding at the end the
17 following new section:
18
19
20

‘‘SEC.

45X.

ADVANCED

MANUFACTURING

PRODUCTION

CREDIT.

‘‘(a) IN GENERAL.—

21‘‘(1) ALLOWANCE OF CREDIT.—For purposes of22section 38, the advanced manufacturing production23

credit for any taxable year is an amount equal to the24

sum of the credit amounts determined under sub-

ERN22335 9K1

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415
1

section (b) with respect to each eligible component

2

which is—3‘‘(A) produced by the taxpayer, and

4‘‘(B) during the taxable year, sold by such5

taxpayer to an unrelated person.

6‘‘(2) PRODUCTION

AND

SALE

MUST

BE

IN

7

TRADE OR BUSINESS.—Any eligible component pro-8

duced and sold by the taxpayer shall be taken into

9

account only if the production and sale described in

10paragraph (1) is in a trade or business of the tax-

11

payer.

12‘‘(3) UNRELATED PERSON.—For purposes of

13this subsection, a taxpayer shall be treated as selling

14

components to an unrelated person if such compo-

15

nent is sold to such person by a person related to16

the taxpayer.

17‘‘(b) CREDIT AMOUNT.—

18‘‘(1) IN GENERAL.—Subject to paragraph (3),19the amount determined under this subsection with20

respect to any eligible component, including any eli-21

gible component it incorporates, shall be equal to—22‘‘(A) in the case of a thin film photovoltaic

23

cell or a crystalline photovoltaic cell, an amount24

equal to the product of—25‘‘(i) 4 cents, multiplied by

ERN22335 9K1

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416
1‘‘(ii) the capacity of such cell (ex-2pressed on a per direct current watt basis),3‘‘(B) in the case of a photovoltaic wafer,

4
5
6
7
8
9
10

$12 per square meter,‘‘(C) in the case of solar grade polysilicon,$3 per kilogram,‘‘(D) in the case of a polymeric backsheet,
40 cents per square meter,‘‘(E) in the case of a solar module, anamount equal to the product of—11‘‘(i) 7 cents, multiplied by

12‘‘(ii) the capacity of such module (ex-13pressed on a per direct current watt basis),

14‘‘(F) in the case of a wind energy compo-

15

nent—

16

‘‘(i) if such component is a related

17

offshore wind vessel, an amount equal to18

10 percent of the sales price of such vessel,

19

and

20

‘‘(ii) if such component is not de-21

scribed in clause (i), an amount equal to22

the product of—23‘‘(I) the applicable amount with24

respect to such component (as deter-

ERN22335 9K1

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417
1

mined under paragraph (2)(A)), mul-

2

tiplied by

3‘‘(II) the total rated capacity (ex-4pressed on a per watt basis) of the5completed wind turbine for which such6

component is designed,

7
8
9
10
11
12

‘‘(G) in the case of a torque tube, 87 cents
per kilogram,‘‘(H) in the case of a structural fastener,$2.28 per kilogram,‘‘(I) in the case of an inverter, an amountequal to the product of—13‘‘(i) the applicable amount with re-14

spect to such inverter (as determined15

under paragraph (2)(B)), multiplied by

16‘‘(ii) the capacity of such inverter (ex-17pressed on a per alternating current watt18

basis),

19‘‘(J) in the case of electrode active mate-

20

rials, an amount equal to 10 percent of the21

costs incurred by the taxpayer with respect to22

production of such materials,

23‘‘(K) in the case of a battery cell, an

24amount equal to the product of—25‘‘(i) $35, multiplied by

ERN22335 9K1

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418
1‘‘(ii) subject to paragraph (4), the ca-

2pacity of such battery cell (expressed on a3

kilowatt-hour basis),4‘‘(L) in the case of a battery module, an

5amount equal to the product of—6‘‘(i) $10 (or, in the case of a battery

7

module which does not use battery cells,

8$45), multiplied by

9‘‘(ii) subject to paragraph (4), the ca-

10pacity of such battery module (expressed11

on a kilowatt-hour basis), and

12‘‘(M) in the case of any applicable critical13

mineral, an amount equal to 10 percent of the14

costs incurred by the taxpayer with respect to

15

production of such mineral.

16‘‘(2) APPLICABLE AMOUNTS.—

17‘‘(A) WIND ENERGY COMPONENTS.—For18

purposes of paragraph (1)(F)(ii), the applicable19

amount with respect to any wind energy compo-

20

nent shall be—21‘‘(i) in the case of a blade, 2 cents,

22‘‘(ii) in the case of a nacelle, 5 cents,

23‘‘(iii) in the case of a tower, 3 cents,

24

and

ERN22335 9K1

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419
1
2‘‘(iv) in the case of an offshore windfoundation—‘‘(I) which uses a fixed platform,

34

2 cents, or‘‘(II) which uses a floating plat-

5
6

form, 4 cents.

7‘‘(B) INVERTERS.—For purposes of para-

8graph (1)(I), the applicable amount with re-9spect to any inverter shall be—

10
11
12
13
14
15
16
17
18
19
20

‘‘(i) in the case of a central inverter,
0.25 cents,‘‘(ii) in the case of a utility inverter,
1.5 cents,‘‘(iii) in the case of a commercial inverter, 2 cents,‘‘(iv) in the case of a residential inverter, 6.5 cents, and‘‘(v) in the case of a microinverter ora distributed wind inverter, 11 cents.
‘‘(3) PHASE OUT.—

21‘‘(A) IN GENERAL.—Subject to subpara-

22

graph (C), in the case of any eligible component

23

sold after December 31, 2029, the amount de-24

termined under this subsection with respect toERN22335 9K1

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420
1

such component shall be equal to the product

2

of—

3

‘‘(i) the amount determined under4

paragraph (1) with respect to such compo-

5nent, as determined without regard to this6

paragraph, multiplied by‘‘(ii) the phase out percentage under

7
8

subparagraph (B).

9

‘‘(B)

PHASE

OUT

PERCENTAGE.—The10phase out percentage under this subparagraph11

is equal to—12‘‘(i) in the case of an eligible compo-

13

nent sold during calendar year 2030, 75

14percent,

15‘‘(ii) in the case of an eligible compo-

16

nent sold during calendar year 2031, 50

17percent,

18‘‘(iii) in the case of an eligible compo-

19

nent sold during calendar year 2032, 25

20

percent,

21‘‘(iv) in the case of an eligible compo-

22

nent sold after December 31, 2032, 0 per-

23

cent.

24

‘‘(C) EXCEPTION.—For purposes of deter-25

mining the amount under this subsection with

ERN22335 9K1

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421
1

respect to any applicable critical mineral, this2paragraph shall not apply.

3‘‘(4) LIMITATION ON CAPACITY OF BATTERY4

CELLS AND BATTERY MODULES.—

5‘‘(A) IN GENERAL.—For purposes of sub-6

paragraph (K)(ii) or (L)(ii) of paragraph (1),7the capacity determined under either subpara-

8graph with respect to a battery cell or battery

9

module shall not exceed a capacity-to-power

10

ratio of 100:1.

11

‘‘(B)

CAPACITY-TO-POWERRATIO.—For12

purposes of this paragraph, the term ‘capacity-

13

to-power ratio’ means, with respect to a battery

14cell or battery module, the ratio of the capacity

15

of such cell or module to the maximum dis-16

charge amount of such cell or module.

1718‘‘(c) DEFINITIONS.—For purposes of this section—‘‘(1) ELIGIBLE COMPONENT.—

19‘‘(A) IN

GENERAL.—The

20

component’ means—term ‘eligible

21‘‘(i) any solar energy component,

22‘‘(ii) any wind energy component,

23‘‘(iii) any inverter described in sub-24

paragraphs (B) through (G) of paragraph

25

(2),

ERN22335 9K1

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422‘‘(iv) any qualifying battery compo-

12

nent, and‘‘(v) any applicable critical mineral.

34‘‘(B) APPLICATIONWITH OTHER CRED-

5

ITS.—The

term ‘eligible component’ shall not

6

include any property which is produced at a fa-

7cility if the basis of any property which is part8of such facility is taken into account for pur-9

poses of the credit allowed under section 48C

10

after the date of the enactment of this section.

11‘‘(2) INVERTERS.—

12‘‘(A) IN GENERAL.—The term ‘inverter’13

means an end product which is suitable to con-14

vert direct current electricity from 1 or more

15

solar modules or certified distributed wind en-16

ergy systems into alternating current electricity.

17

‘‘(B)

CENTRAL

INVERTER.—The

term

18

‘central inverter’ means an inverter which is

19

suitable for large utility-scale systems and has

20

a capacity which is greater than 1,000 kilowatts

21(expressed on a per alternating current watt

22

basis).

23‘‘(C) COMMERCIAL INVERTER.—The term

24

‘commercial

25

which—

inverter’

means

an

inverterERN22335 9K1

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423
1
2
3
4

‘‘(i) is suitable for commercial or utility-scale applications,‘‘(ii) has a rated output of 208, 480,
600, or 800 volt three-phase power, and5‘‘(iii) has a capacity which is not less6than 20 kilowatts and not greater than7

125 kilowatts (expressed on a per alter-

8

nating current watt basis).

9‘‘(D) DISTRIBUTED WIND INVERTER.—

10‘‘(i) IN GENERAL.—The term ‘distrib-

11

uted wind inverter’ means an inverter

12which—

13‘‘(I) is used in a residential or

14

non-residential system which utilizes 1

15

or more certified distributed wind en-16

ergy systems, and‘‘(II) has a rated output of not

17
18

greater than 150 kilowatts.

19‘‘(ii) CERTIFIED DISTRIBUTED WIND

20

ENERGY SYSTEM.—The term ‘certified dis-21

tributed wind energy system’ means a wind

22

energy system which is certified by an ac-

23

credited

24

Standard 9.1-2009 of the American Wind

25

Energy Association (including any subse-

certification

agencytomeet

ERN22335 9K1

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424
1

quent revisions to or modifications of such

2Standard which have been approved by the3American National Standards Institute).

4‘‘(E) MICROINVERTER.—The term ‘micro-

5
6
7
8
9
10
11

inverter’ means an inverter which—‘‘(i) is suitable to connect with one
solar module,‘‘(ii) has a rated output of—‘‘(I) 120 or 240 volt single-phasepower, or‘‘(II) 208 or 480 volt three-phase12

power, and13‘‘(iii) has a capacity which is not

14

greater than 650 watts (expressed on a per

15

alternating current watt basis).

16‘‘(F) RESIDENTIAL INVERTER.—The term

17

‘residential inverter’ means an inverter which—18‘‘(i) is suitable for a residence,

19‘‘(ii) has a rated output of 120 or 240

20

volt single-phase power, and21‘‘(iii) has a capacity which is not

22

greater than 20 kilowatts (expressed on a

23

per alternating current watt basis).

24‘‘(G) UTILITY INVERTER.—The term ‘util-25

ity inverter’ means an inverter which—ERN22335 9K1

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1
2
3
4

‘‘(i) is suitable for commercial or utility-scale systems,‘‘(ii) has a rated output of not lessthan 600 volt three-phase power, and5‘‘(iii) has a capacity which is greater

6

than 125 kilowatts and not greater than

7

1000 kilowatts (expressed on a per alter-

8

nating current watt basis)

9‘‘(3) SOLAR ENERGY COMPONENT.—

1011‘‘(A) IN GENERAL.—The term ‘solar energy component’ means any of the following:

12‘‘(i) Solar modules.

13‘‘(ii) Photovoltaic cells.

14‘‘(iii) Photovoltaic wafers.

15‘‘(iv) Solar grade polysilicon.

16‘‘(v) Torque tubes or structural fas-

17

teners.

18‘‘(vi) Polymeric backsheets.

19‘‘(B) ASSOCIATED DEFINITIONS.—

20‘‘(i) PHOTOVOLTAIC CELL.—The term

21

‘photovoltaic cell’ means the smallest semi-

22

conductor element of a solar module which

23

performs the immediate conversion of light24

into electricity.

ERN22335 9K1

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426
1‘‘(ii)

PHOTOVOLTAIC

WAFER.—The2

term ‘photovoltaic wafer’ means a thin3

slice, sheet, or layer of semiconductor ma-

4terial of at least 240 square centimeters—5‘‘(I) produced by a single manu-

6

facturer either—‘‘(aa) directly from molten

7
8

or

evaporated

solar

grade

9

polysilicon or deposition of solar

10

grade thin film semiconductor

11

photon absorber layer, or

12‘‘(bb) through formation of13

an ingot from molten polysilicon

14

and subsequent slicing, and15‘‘(II) which comprises the sub-16

strate or absorber layer of one or17

more photovoltaic cells.

18‘‘(iii) POLYMERIC BACKSHEET.—The

19

term ‘polymeric backsheet’ means a sheet

20

on the back of a solar module which acts

21

as an electric insulator and protects the22

inner components of such module from the23

surrounding environment.

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1‘‘(iv) SOLAR GRADE POLYSILICON.—2

The term ‘solar grade polysilicon’ means

3silicon which is—‘‘(I) suitable for use in photo-

4
5

voltaic manufacturing, and6‘‘(II) purified to a minimum pu-

7rity of 99.999999 percent silicon by

8

mass.

9

‘‘(v)

SOLAR

MODULE.—The

term

10

‘solar module’ means the connection and11lamination of photovoltaic cells into an en-

12vironmentally13

which is—protected

final

assembly

14‘‘(I) suitable to generate elec-

15

tricity when exposed to sunlight, and16‘‘(II) ready for installation with-17

out an additional manufacturing proc-

18

ess.

19

‘‘(vi) SOLAR

TRACKER.—The

term

20

‘solar tracker’ means a mechanical system

21that moves solar modules according to the22

position of the sun and to increase energy

23

output.

24‘‘(vii)25

NENTS.—SOLAR

TRACKERCOMPO-

ERN22335 9K1

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4281‘‘(I) TORQUE TUBE.—The term2

‘torque tube’ means a structural steel

3

support element (including longitu-

4

dinal purlins) which—567‘‘(aa) is part of a solar
tracker,‘‘(bb) is of any cross-sec-

8

tional shape,

9‘‘(cc)

maybeassembled

10

from individually manufactured

11

segments,

12
13‘‘(dd) spans longitudinally
between foundation posts,

14‘‘(ee) supports solar panels

15

and is connected to a mounting

16

attachment for solar panels (with17or without separate module inter-

18

face rails), and19‘‘(ff) is rotated by means of20

a drive system.

21‘‘(II) STRUCTURAL FASTENER.—

22

The term ‘structural fastener’ means

23

a component which is used—24‘‘(aa) to connect the me-25

chanical and drive system compo-

ERN22335 9K1

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4291

nents of a solar tracker to the2foundation of such solar tracker,‘‘(bb)

3

torque tubes to one another.

69torque‘‘(cc) to connect segments of5

8

connect

tubes to drive assemblies, or

4

7

to

‘‘(4) WIND ENERGY COMPONENT.—‘‘(A) IN GENERAL.—The term ‘wind energy component’ means any of the following:

10‘‘(i) Blades.

11‘‘(ii) Nacelles.

12‘‘(iii) Towers.

13‘‘(iv) Offshore wind foundations.

14‘‘(v) Related offshore wind vessels.

15‘‘(B) ASSOCIATED DEFINITIONS.—

16‘‘(i) BLADE.—The term ‘blade’ means

17

an airfoil-shaped blade which is responsible18

for converting wind energy to low-speed ro-

19

tational energy.

20‘‘(ii)

21

TION.—The

22

tion’ means the component (including tran-

23

sition piece) which secures an offshore

24

wind tower and any above-water turbine

25

components to the seafloor using—

OFFSHORE

WIND

FOUNDA-term ‘offshore wind founda-

ERN22335 9K1

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4301‘‘(I) fixed platforms, such as off-2

shore wind monopiles, jackets, or3gravity-based foundations, or‘‘(II) floating platforms and asso-

45ciated mooring systems.

6‘‘(iii) NACELLE.—The term ‘nacelle’7means the assembly of the drivetrain and8other tower-top components of a wind tur-

9bine (with the exception of the blades and10

the hub) within their cover housing.

11‘‘(iv) RELATED OFFSHORE WIND VES-

12

SEL.—The term ‘related offshore wind ves-

13sel’ means any vessel which is purpose-14

built or retrofitted for purposes of the de-15velopment, transport, installation, oper-

16

ation, or maintenance of offshore wind en-17

ergy components.

18

‘‘(v)

TOWER.—The

term‘tower’19

means a tubular or lattice structure which

20

supports the nacelle and rotor of a wind

21

turbine.

22‘‘(5) QUALIFYING BATTERY COMPONENT.—

23‘‘(A) IN GENERAL.—The term ‘qualifying

24

battery component’ means any of the following:

25‘‘(i) Electrode active materials.

ERN22335 9K1

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431
1‘‘(ii) Battery cells.

2‘‘(iii) Battery modules.

3‘‘(B) ASSOCIATED DEFINITIONS.—

4‘‘(i) ELECTRODE ACTIVE MATERIAL.—

5

The term ‘electrode active material’ means

6

cathode materials, anode materials, anode7

foils, and electrochemically active mate-

8

rials, including solvents, additives, and9electrolyte salts that contribute to the elec-

10trochemical processes necessary for energy

11storage .

1213‘‘(ii) BATTERY CELL.—The term ‘battery cell’ means an electrochemical cell—14‘‘(I) comprised of 1 or more posi-

15

tive electrodes and 1 or more negative

16

electrodes,

17‘‘(II) with an energy density of18

not less than 100 watt-hours per liter,

19

and

20

‘‘(III) capable of storing at least

21

20 watt-hours of energy.

22‘‘(iii) BATTERY MODULE.—The term

23

‘battery module’ means a module—

24‘‘(I)(aa) in the case of a module

25

using battery cells, with 2 or more

ERN22335 9K1

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432
1

battery cells which are configured

2electrically, in series or parallel, to3create voltage or current, as appro-

4

priate, to a specified end use, or

5‘‘(bb) with no battery cells, and6‘‘(II) with an aggregate capacity

7

of not less than 7 kilowatt-hours (or,8in the case of a module for a hydro-

9

gen fuel cell vehicle, not less than 1

10kilowatt-hour).

11‘‘(6) APPLICABLECRITICAL MINERALS.—The

12

term ‘applicable critical mineral’ means any of the13

following:

14‘‘(A) ALUMINUM.—Aluminum which is—‘‘(i) converted to metallurgical grade

15
16

bauxite, or‘‘(ii) purified to a minimum purity of

17
18

99.99 percent aluminum by mass.

19‘‘(B) ANTIMONY.—Antimony which is—‘‘(i) converted to antimony trisulfide,

20
21
22

or
‘‘(ii) purified to a minimum purity of23

99 percent antimony by mass.

24‘‘(C) BARITE.—Barite which is—25‘‘(i) converted to barium sulfate, orERN22335 9K1

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433
1‘‘(ii) purified to a minimum purity of2

99 percent barite by mass.

3‘‘(D) BERYLLIUM.—Beryllium which is—456‘‘(i) converted to copper-beryllium
master alloy, or‘‘(ii) purified to a minimum purity of7

99 percent beryllium by mass.

8‘‘(E) CERIUM.—Cerium which is—9‘‘(i) converted to cerium oxide which10

is purified to a minimum purity of 99.9

11

percent cerium oxide by mass, or

12‘‘(ii) purified to a minimum purity of13

99 percent cerium by mass.

14‘‘(F) CESIUM.—Cesium which is—

15
16
17

‘‘(i) converted to cesium formate or
cesium carbonate, or‘‘(ii) purified to a minimum purity of18

99 percent cesium by mass.

19‘‘(G) CHROMIUM.—Chromium which is—20‘‘(i) converted to ferrochromium con-21

sisting of not less than 60 percent chro-

22

mium by mass, or23‘‘(ii) purified to a minimum purity of24

99 percent chromium by mass.

25‘‘(H) COBALT.—Cobalt which is—ERN22335 9K1

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4341‘‘(i) converted to cobalt sulfate, or2‘‘(ii) purified to a minimum purity of3

99.6 percent cobalt by mass.

4

‘‘(I)

5

DYSPROSIUM.—Dysprosium

which

is—

6

‘‘(i) converted to not less than 99 per-7cent pure dysprosium iron alloy by mass,

8

or‘‘(ii) purified to a minimum purity of

910

99 percent dysprosium by mass.

11‘‘(J) EUROPIUM.—Europium which is—12‘‘(i) converted to europium oxide

13

which is purified to a minimum purity of

14

99.9 percent europium oxide by mass, or‘‘(ii) purified to a minimum purity of15
16

99 percent by mass.

17‘‘(K) FLUORSPAR.—Fluorspar which is—18‘‘(i) converted to acid grade fluorspar

19

which is purified to a minimum purity of20

97 percent calcium fluoride by mass, or‘‘(ii) purified to a minimum purity of21
22

99 percent fluorspar by mass.

23

‘‘(L)

24

is—

GADOLINIUM.—Gadolinium

whichERN22335 9K1

S.L.C.

4351‘‘(i) converted to gadolinium oxide2which is purified to a minimum purity of3

99.9 percent gadolinium oxide by mass, or

4‘‘(ii) purified to a minimum purity of5

99 percent gadolinium by mass.

6

‘‘(M)

7
8
9
10

GERMANIUM.—Germanium

which

is—
‘‘(i) converted to germanium tetrachloride, or‘‘(ii) purified to a minimum purity of11

99 percent germanium by mass.

12‘‘(N) GRAPHITE.—Graphite which is puri-

13

fied to a minimum purity of 99.9 percent gra-

14

phitic carbon by mass.

1516‘‘(O) INDIUM.—Indium which is—‘‘(i) converted to—17‘‘(I) indium tin oxide, or18‘‘(II) indium oxide which is puri-

19

fied to a minimum purity of 99.9 per-20

cent indium oxide by mass, or21‘‘(ii) purified to a minimum purity of22

99 percent indium by mass.

23‘‘(P) LITHIUM.—Lithium which is—2425‘‘(i) converted to lithium carbonate orlithium hydroxide, orERN22335 9K1

S.L.C.

436‘‘(ii) purified to a minimum purity of1
2

99.9 percent lithium by mass.

3‘‘(Q) MANGANESE.—Manganese which is—4‘‘(i) converted to manganese sulphate,or5‘‘(ii) purified to a minimum purity of

6
7

99.7 percent manganese by mass.

8

‘‘(R)

9

which

is—
‘‘(i) converted to neodymium-praseo-

10
11

NEODYMIUM.—Neodymium

dymium oxide, or‘‘(ii) purified to a minimum purity of12
13

99 percent neodymium by mass.

14‘‘(S) NICKEL.—Nickel which is—15‘‘(i) converted to nickel sulphate, or

16‘‘(ii) purified to a minimum purity of17

99 percent nickel by mass.

18‘‘(T) NIOBIUM.—Niobium which is—19‘‘(i) converted to ferronibium, or

20‘‘(ii) purified to a minimum purity of21

99 percent niobium by mass.

22‘‘(U) TELLURIUM.—Tellurium which is—‘‘(i) converted to cadmium telluride,

23
24

or

ERN22335 9K1

S.L.C.

437‘‘(ii) purified to a minimum purity of1
2

99 percent tellurium by mass.

3‘‘(V) TIN.—Tin which is—4‘‘(i) converted to indium tin oxide, or

5‘‘(ii) purified to low alpha emitting tin

6which—‘‘(I) has a purity of greater than

7

99.99 percent by mass, and89‘‘(II) possesses an alpha emission

10

rate of not greater than 0.01 counts

11

per hour per centimeter square.

12‘‘(W) TUNGSTEN.—Tungsten which is con-13

vertedto14

ferrotungsten.

ammonium

paratungstateor

15‘‘(X) VANADIUM.—Vanadium which is con-16

verted to ferrovanadium or vanadium pentoxide.

17‘‘(Y) YTTRIUM.—Yttrium which is—18‘‘(i) converted to yttrium oxide which19

is purified to a minimum purity of 99.920

percent yttrium oxide by mass, or21‘‘(ii) purified to a minimum purity of22

99 percent yttrium by mass.

23‘‘(Z) OTHER MINERALS.—Any of the fol-24

lowing minerals, provided that such mineral isERN22335 9K1

S.L.C.

4381

purified to a minimum purity of 99 percent by

2

mass:

3

‘‘(i) Arsenic.

4‘‘(ii) Bismuth.

5‘‘(iii) Erbium.

6‘‘(iv) Gallium.

7‘‘(v) Hafnium.

8‘‘(vi) Holmium.

9‘‘(vii) Iridium.

10‘‘(viii) Lanthanum.

11‘‘(ix) Lutetium.

12‘‘(x) Magnesium.

13‘‘(xi) Palladium.

14‘‘(xii) Platinum.

15‘‘(xiii) Praseodymium.

16‘‘(xiv) Rhodium.

17‘‘(xv) Rubidium.

18‘‘(xvi) Ruthenium.

19‘‘(xvii) Samarium.

20‘‘(xviii) Scandium.

21‘‘(xix) Tantalum.

22‘‘(xx) Terbium.

23‘‘(xxi) Thulium.

24‘‘(xxii) Titanium.

25‘‘(xxiii) Ytterbium.

ERN22335 9K1

S.L.C.

439
1‘‘(xxiv) Zinc.

2‘‘(xxv) Zirconium.

34‘‘(d) SPECIAL RULES.—In this section—‘‘(1) RELATEDPERSONS.—Persons

shall be5treated as related to each other if such persons

6would be treated as a single employer under the reg-

7

ulations prescribed under section 52(b).

8‘‘(2) ONLYPRODUCTION

IN

THE

UNITEDACCOUNT.—Sales

shall be9

STATES10taken into account under this section only with re-11

spect to eligible components the production of which

12

is within—

13
14
15

TAKEN

INTO

‘‘(A) the United States (within the meaning of section 638(1)), or‘‘(B) a possession of the United States

16(within the meaning of section 638(2)).

17‘‘(3) PASS-THRU IN THE CASE OF ESTATES AND

18

TRUSTS.—Under regulations prescribed by the Sec-19

retary, rules similar to the rules of subsection (d) of

20

section 52 shall apply.

21‘‘(4) SALE

OF INTEGRATED COMPONENTS.—

22

For purposes of this section, a person shall be treat-23

ed as having sold an eligible component to an unre-24

lated person if such component is integrated, incor-

ERN22335 9K1

S.L.C.

4401

porated, or assembled into another eligible compo-

2

nent which is sold to an unrelated person.’’.

3(b) CONFORMING AMENDMENTS.—

4(1) Section 38(b) of the Internal Revenue Code5of 1986, as amended by the preceding provisions of

6

this Act, is amended—(A) in paragraph (36), by striking ‘‘plus’’

7
8

at the end,(B) in paragraph (37), by striking the pe-

910

riod at the end and inserting ‘‘, plus’’, and(C) by adding at the end the following new11
12paragraph:13‘‘(38) the advanced manufacturing production

14

credit determined under section 45X(a).’’.

15(2) The table of sections for subpart D of part16

IV of subchapter A of chapter 1, as amended by the17

preceding provisions of this Act, is amended by add-18

ing at the end the following new item:‘‘Sec. 45X. Advanced manufacturing production credit.’’.

19(c) EFFECTIVE DATE.—The amendments made by

20 this section shall apply to components produced and sold21 after December 31, 2022.
22
23
24
25

PART 6—SUPERFUND
SEC. 13601. REINSTATEMENT OF SUPERFUND.

(a) HAZARDOUS SUBSTANCE SUPERFUND FINANCING RATE.—ERN22335 9K1

S.L.C.

441(1) EXTENSION.—Section 4611 is amended by

1
2

striking subsection (e).
(2) ADJUSTMENT FOR INFLATION.—

34(A) Section 4611(c)(2)(A) is amended by5

striking ‘‘9.7 cents’’ and inserting ‘‘16.4 cents’’.

6(B) Section 4611(c) is amended by adding

7

at the end the following:

8‘‘(3) ADJUSTMENT FOR INFLATION.—

9‘‘(A) IN GENERAL.—In the case of a year

10

beginning after 2023, the amount in paragraph

11(2)(A) shall be increased by an amount equal

12

to—

13

‘‘(i) such amount, multiplied by

14‘‘(ii) the cost-of-living adjustment de-15

termined under section 1(f)(3) for the cal-

16

endar year, determined by substituting

17‘calendar year 2022’ for ‘calendar year

18

2016’ in subparagraph (A)(ii) thereof.

19‘‘(B) ROUNDING.—If any amount as ad-

20

justed under subparagraph (A) is not a multiple

21

of $0.01, such amount shall be rounded to the22

next lowest multiple of $0.01.’’.

23

(b)

AUTHORITYFOR

ADVANCES.—Section

24 9507(d)(3)(B) is amended by striking ‘‘December 31,
25 1995’’ and inserting ‘‘December 31, 2032’’.

ERN22335 9K1

S.L.C.

4421(c) EFFECTIVE DATE.—The amendments made by

2 this section shall take effect on January 1, 2023.
3PART 7—INCENTIVES FOR CLEAN ELECTRICITY

4

AND CLEAN TRANSPORTATION

56

SEC. 13701. CLEAN ELECTRICITY PRODUCTION CREDIT.

(a) IN GENERAL.—Subpart D of part IV of sub-

7 chapter A of chapter 1, as amended by the preceding pro8 visions of this Act, is amended by adding at the end the
9 following new section:
10
11‘‘SEC. 45Y. CLEAN ELECTRICITY PRODUCTION CREDIT.

‘‘(a) AMOUNT OF CREDIT.—

12‘‘(1) IN GENERAL.—For purposes of section 38,

13

the clean electricity production credit for any taxable

14

year is an amount equal to the product of—

15
16
17

‘‘(A) the kilowatt hours of electricity—‘‘(i) produced by the taxpayer at aqualified facility, and18‘‘(ii)(I) sold by the taxpayer to an un-

19related person during the taxable year, or

20‘‘(II) in the case of a qualified facility

21

which is equipped with a metering device

22

which is owned and operated by an unre-23

lated person, sold, consumed, or stored by24

the taxpayer during the taxable year, mul-

25

tiplied by

ERN22335 9K1

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443
1‘‘(B) the applicable amount with respect to2such qualified facility.

3‘‘(2) APPLICABLE AMOUNT.—

4‘‘(A) BASEAMOUNT.—Subject

to sub-5section (g)(7), in the case of any qualified facil-

6

ity which is not described in clause (i) or (ii) of

7

subparagraph (B) and does not satisfy the re-8quirements described in clause (iii) of such sub-9

paragraph, the applicable amount shall be 0.3

10

cents.

11‘‘(B) ALTERNATIVE AMOUNT.—Subject to

12subsection (g)(7), in the case of any qualified

13

facility—

14‘‘(i) with a maximum net output of

15

less than 1 megawatt (as measured in al-

16

ternating current),

17‘‘(ii) the construction of which begins

18

prior to the date that is 60 days after the19

Secretary publishes guidance with respect

20

to the requirements of paragraphs (9) and21(10) of subsection (g), or22‘‘(iii) which—23‘‘(I) satisfies the requirements

24

under paragraph (9) of subsection (g),

25

and

ERN22335 9K1

S.L.C.

444
1‘‘(II) with respect to the con-2

struction of such facility, satisfies the3requirements under paragraph (10) of

4

subsection (g),5the applicable amount shall be 1.5 cents.

6‘‘(b) QUALIFIED FACILITY.—

7‘‘(1) IN GENERAL.—

8‘‘(A) DEFINITION.—Subject to subpara-

9graphs (B), (C), and (D), the term ‘qualified

10

facility’ means a facility owned by the tax-

11

payer—

12
13
14
15

‘‘(i) which is used for the generationof electricity,‘‘(ii) which is placed in service after
December 31, 2024, and16‘‘(iii) for which the greenhouse gas

17

emissions rate (as determined under para-

18

graph (2)) is not greater than zero.

19‘‘(B) 10-YEAR PRODUCTION CREDIT.—For20

purposes of this section, a facility shall only be

21treated as a qualified facility during the 10-year

22

period beginning on the date the facility was

23

originally placed in service.

24‘‘(C) EXPANSION

25OF

FACILITY;

INCRE-MENTAL PRODUCTION.—The term ‘qualified fa-

ERN22335 9K1

S.L.C.

4451

cility’ shall include either of the following in2

connection with a facility described in subpara-

3graph (A) (without regard to clause (ii) of such4

subparagraph) which was placed in service be-5fore January 1, 2025, but only to the extent of

6

the increased amount of electricity produced at7

the facility by reason of the following:89‘‘(i) A new unit which is placed inservice after December 31, 2024.

10‘‘(ii) Any additions of capacity which11

are placed in service after December 31,

12

2024.

13

‘‘(D) COORDINATION WITH OTHER CRED-

14

ITS.—The term ‘qualified facility’ shall not in-15

clude any facility for which a credit determined16

under section 45, 45J, 45Q, 45U, 48, 48A, or

17

48D is allowed under section 38 for the taxable

18

year or any prior taxable year.

19‘‘(2) GREENHOUSE GAS EMISSIONS RATE.—

20‘‘(A) IN GENERAL.—For purposes of this21

section, the term ‘greenhouse gas emissions

22

rate’ means the amount of greenhouse gases

23

emitted into the atmosphere by a facility in the24

production of electricity, expressed as grams of

25

CO2e per KWh.

ERN22335 9K1

S.L.C.

446
1‘‘(B) FUELCOMBUSTIONANDGASIFI-

2

CATION.—In

3

duces electricity through combustion or gasifi-

4

cation, the greenhouse gas emissions rate for5such facility shall be equal to the net rate of6greenhouse gases emitted into the atmosphere7

by such facility (taking into account lifecycle

8

greenhouse gas emissions, as described in sec-

9tion 211(o)(1)(H) of the Clean Air Act (4210

U.S.C. 7545(o)(1)(H))) in the production of

11electricity, expressed as grams of CO2e per

12

KWh.

13
14

‘‘(C)

the case of a facility which pro-ESTABLISHMENTOFEMISSIONSRATES FOR FACILITIES.—

15‘‘(i) PUBLISHING EMISSIONS RATES.—

16The Secretary shall annually publish a

17

table that sets forth the greenhouse gas

18

emissions rates for types or categories of19

facilities, which a taxpayer shall use for20

purposes of this section.

21‘‘(ii)PROVISIONALEMISSIONS

22

RATE.—In

the case of any facility for23

which an emissions rate has not been es-

24tablished by the Secretary, a taxpayer

25

which owns such facility may file a petition

ERN22335 9K1

S.L.C.

447
1with the Secretary for determination of the2emissions rate with respect to such facility.

3‘‘(D) CARBON CAPTURE AND SEQUESTRA-

4

TION EQUIPMENT.—For

purposes of this sub-5

section, the amount of greenhouse gases emit-

6

ted into the atmosphere by a facility in the pro-7

duction of electricity shall not include any quali-

8

fied carbon dioxide that is captured by the tax-

9

payer and—

10‘‘(i) pursuant to any regulations es-

11tablished under paragraph (2) of section

12

45Q(f), disposed of by the taxpayer in se-13

cure geological storage, or

14‘‘(ii) utilized by the taxpayer in a15

manner described in paragraph (5) of such

16

section.

17‘‘(c) INFLATION ADJUSTMENT.—

18‘‘(1) IN GENERAL.—In the case of a calendar

19

year beginning after 2024, the 0.3 cent amount in

20paragraph (2)(A) of subsection (a) and the 1.5 cent21

amount in paragraph (2)(B) of such subsection shall22

each be adjusted by multiplying such amount by the23

inflation adjustment factor for the calendar year in24

which the sale, consumption, or storage of the elec-

25

tricity occurs. If the 0.3 cent amount as increased

ERN22335 9K1

S.L.C.

4481

under this paragraph is not a multiple of 0.05 cent,2such amount shall be rounded to the nearest mul-

3

tiple of 0.05 cent. If the 1.5 cent amount as in-4creased under this paragraph is not a multiple of 0.1

5cent, such amount shall be rounded to the nearest

6

multiple of 0.1 cent.

7‘‘(2) ANNUAL

COMPUTATION.—The

Secretary

8shall, not later than April 1 of each calendar year,

9

determine and publish in the Federal Register the

10

inflation adjustment factor for such calendar year in

11

accordance with this subsection.

12‘‘(3) INFLATION ADJUSTMENT FACTOR.—The

13

term ‘inflation adjustment factor’ means, with re-14

spect to a calendar year, a fraction the numerator

15

of which is the GDP implicit price deflator for the16

preceding calendar year and the denominator of

17

which is the GDP implicit price deflator for the cal-18

endar year 1992. The term ‘GDP implicit price19

deflator’ means the most recent revision of the im-

20

plicit price deflator for the gross domestic product21

as computed and published by the Department of

22

Commerce before March 15 of the calendar year.

23‘‘(d) CREDIT PHASE-OUT.—

24‘‘(1) IN GENERAL.—The amount of the clean

25

electricity production credit under subsection (a) forERN22335 9K1

S.L.C.

449
1

any qualified facility the construction of which be-

2

gins during a calendar year described in paragraph3(2) shall be equal to the product of—4‘‘(A) the amount of the credit determined5

under subsection (a) without regard to this sub-6

section, multiplied by

7‘‘(B) the phase-out percentage under para-

8graph (2).

9‘‘(2) PHASE-OUT PERCENTAGE.—The phase-out

10

percentage under this paragraph is equal to—

11‘‘(A) for a facility the construction of

12

which begins during the first calendar year fol-13

lowing the applicable year, 100 percent,14‘‘(B) for a facility the construction of

15

which begins during the second calendar year

16

following the applicable year, 75 percent,17‘‘(C) for a facility the construction of

18

which begins during the third calendar year fol-19

lowing the applicable year, 50 percent, and20‘‘(D) for a facility the construction of

21

which begins during any calendar year subse-

22

quent to the calendar year described in sub-23

paragraph (C), 0 percent.

ERN22335 9K1

S.L.C.

4501‘‘(3) APPLICABLE YEAR.—For purposes of this2

subsection, the term ‘applicable year’ means the3later of—

4‘‘(A) the calendar year in which the Sec-5

retary determines that the annual greenhouse6

gas emissions from the production of electricity

7in the United States are equal to or less than

8

25 percent of the annual greenhouse gas emis-

9

sions from the production of electricity in the10

United States for calendar year 2022, or

1112‘‘(B) 2032.
‘‘(e) DEFINITIONS.—For purposes of this section:

13‘‘(1) CO2e PER KWh.—The term ‘CO2e per

14

KWh’ means, with respect to any greenhouse gas,15

the equivalent carbon dioxide (as determined based

16

on global warming potential) per kilowatt hour of

17electricity produced.

18‘‘(2) GREENHOUSE GAS.—The term ‘greenhouse

19

gas’ has the same meaning given such term under20

section 211(o)(1)(G) of the Clean Air Act (4221

U.S.C. 7545(o)(1)(G)), as in effect on the date of22

the enactment of this section.

23‘‘(3) QUALIFIED CARBON DIOXIDE.—The term

24

‘qualified carbon dioxide’ means carbon dioxide cap-

25

tured from an industrial source which—ERN22335 9K1

S.L.C.

451
1‘‘(A) would otherwise be released into the2atmosphere as industrial emission of green-3house gas,

4‘‘(B) is measured at the source of capture5

and verified at the point of disposal or utiliza-

6tion, and7‘‘(C) is captured and disposed or utilized

8

within the United States (within the meaning of

9section 638(1)) or a possession of the United

10

States (within the meaning of section 638(2)).

11‘‘(f) GUIDANCE.—Not later than January 1, 2025,

12 the Secretary shall issue guidance regarding implementa13 tion of this section, including calculation of greenhouse
14 gas emission rates for qualified facilities and determina15 tion of clean electricity production credits under this sec16 tion.
17‘‘(g) SPECIAL RULES.—

18‘‘(1) ONLYPRODUCTION

IN

THE

UNITEDACCOUNT.—Consumption,

19

STATES

20

sales, or storage shall be taken into account under

21

this section only with respect to electricity the pro-22

duction of which is within—

23
24

TAKEN

INTO

‘‘(A) the United States (within the meaning of section 638(1)), orERN22335 9K1

S.L.C.

452
1‘‘(B) a possession of the United States

2(within the meaning of section 638(2)).

3‘‘(2) COMBINED

456HEAT AND POWER SYSTEMPROPERTY.—‘‘(A) IN GENERAL.—For purposes of subsection (a)—7‘‘(i) the kilowatt hours of electricity

8

produced by a taxpayer at a qualified facil-

9

ity shall include any production in the10form of useful thermal energy by any com-11

bined heat and power system property

12

within such facility, and13‘‘(ii) the amount of greenhouse gases

14

emitted into the atmosphere by such facil-15

ity in the production of such useful ther-16

mal energy shall be included for purposes17

of determining the greenhouse gas emis-

18

sions rate for such facility.

19‘‘(B) COMBINED HEAT AND POWER SYS-

20

TEM PROPERTY.—For

purposes of this para-

21

graph, the term ‘combined heat and power sys-

22

tem property’ has the same meaning given such23

term by section 48(c)(3) (without regard to24

subparagraphs (A)(iv), (B), and (D) thereof).

25‘‘(C) CONVERSION FROM BTU TO KWH.—

ERN22335 9K1

S.L.C.

453
1‘‘(i) IN GENERAL.—For purposes of2

subparagraph (A)(i), the amount of kilo-

3

watt hours of electricity produced in the4form of useful thermal energy shall be5equal to the quotient of—6‘‘(I) the total useful thermal en-

7ergy produced by the combined heat8

and power system property within the9qualified facility, divided by‘‘(II) the heat rate for such facil-

10
11

ity.

12

‘‘(ii) HEAT RATE.—For purposes of

13this subparagraph, the term ‘heat rate’

14

means the amount of energy used by the15

qualified facility to generate 1 kilowatt

16hour of electricity, expressed as British

17

thermal units per net kilowatt hour gen-18

erated.

19‘‘(3) PRODUCTION ATTRIBUTABLE TO THE TAX-

20

PAYER.—In the case of a qualified facility in which

21

more than 1 person has an ownership interest, ex-22

cept to the extent provided in regulations prescribed

23

by the Secretary, production from the facility shall24

be allocated among such persons in proportion toERN22335 9K1

S.L.C.

454
1

their respective ownership interests in the gross2

sales from such facility.

3‘‘(4) RELATEDPERSONS.—Persons

shall be4

treated as related to each other if such persons

5would be treated as a single employer under the reg-

6

ulations prescribed under section 52(b). In the case7of a corporation which is a member of an affiliated8group of corporations filing a consolidated return,9

such corporation shall be treated as selling electricity

10

to an unrelated person if such electricity is sold to

11such a person by another member of such group.

12‘‘(5) PASS-THRU IN THE CASE OF ESTATES AND

13

TRUSTS.—Under regulations prescribed by the Sec-

14

retary, rules similar to the rules of subsection (d) of

15

section 52 shall apply.

16
17
18

‘‘(6) ALLOCATION OF CREDIT TO PATRONS OFAGRICULTURAL COOPERATIVE.—‘‘(A) ELECTION TO ALLOCATE.—

19‘‘(i) IN GENERAL.—In the case of an

20

eligible cooperative organization, any por-21

tion of the credit determined under sub-22

section (a) for the taxable year may, at the23election of the organization, be apportioned

24

among patrons of the organization on theERN22335 9K1

S.L.C.

455
1

basis of the amount of business done by2

the patrons during the taxable year.

3‘‘(ii) FORM AND EFFECT OF ELEC-

4

TION.—An election under clause (i) for any

5taxable year shall be made on a timely

6

filed return for such year. Such election,

7

once made, shall be irrevocable for such8

taxable year. Such election shall not take9

effect unless the organization designates10

the apportionment as such in a written no-11

tice mailed to its patrons during the pay-

12

ment period described in section 1382(d).

13‘‘(B) TREATMENT OF ORGANIZATIONS AND

14

PATRONS.—Theamount of the credit appor-

15

tioned to any patrons under subparagraph

16

(A)—

17

‘‘(i) shall not be included in the18

amount determined under subsection (a)19with respect to the organization for the20

taxable year, and21‘‘(ii) shall be included in the amount22

determined under subsection (a) for the23

first taxable year of each patron ending on

24

or after the last day of the payment period25(as defined in section 1382(d)) for the tax-

ERN22335 9K1

S.L.C.

456
1

able year of the organization or, if earlier,2

for the taxable year of each patron ending3

on or after the date on which the patron

4

receives notice from the cooperative of the5apportionment.

6‘‘(C) SPECIAL RULES FOR DECREASE IN

7

CREDITS FOR TAXABLE YEAR.—If the amount8of the credit of a cooperative organization de-9termined under subsection (a) for a taxable

10

year is less than the amount of such credit

11

shown on the return of the cooperative organi-

12

zation for such year, an amount equal to the13

excess of—

14‘‘(i) such reduction, over15‘‘(ii) the amount not apportioned to

16such patrons under subparagraph (A) for17

the taxable year,

18

shall be treated as an increase in tax imposed

19by this chapter on the organization. Such in-20

crease shall not be treated as tax imposed by

21

this chapter for purposes of determining the22amount of any credit under this chapter.

23‘‘(D) ELIGIBLE COOPERATIVE DEFINED.—

24

For purposes of this section, the term ‘eligible

25

cooperative’ means a cooperative organization

ERN22335 9K1

S.L.C.

457
1

described in section 1381(a) which is owned

2

more than 50 percent by agricultural producers

3

or by entities owned by agricultural producers.

4

For this purpose an entity owned by an agricul-

5tural producer is one that is more than 50 per-6cent owned by agricultural producers.

7‘‘(7) INCREASE IN CREDIT IN ENERGY COMMU-

8

NITIES.—In the case of any qualified facility which

9

is located in an energy community (as defined in

10

section 45(b)(11)(B)), for purposes of determining

11

the amount of the credit under subsection (a) with12

respect to any electricity produced by the taxpayer

13

at such facility during the taxable year, the applica-

14

ble amount under paragraph (2) of such subsection

15

shall be increased by an amount equal to 10 percent

16of the amount otherwise in effect under such para-

17

graph (without application of subparagraph (B)).

18

‘‘(8)

19

BONDS.—Rules

20

45(b)(3) shall apply.

21
22
23

CREDIT

REDUCEDFORTAX-EXEMPT

similar to the rules of section‘‘(9) WAGE REQUIREMENTS.—Rules similar to
the rules of section 45(b)(7) shall apply.
‘‘(10)APPRENTICESHIPREQUIREMENTS.—

24

Rules similar to the rules of section 45(b)(8) shall25

apply.

ERN22335 9K1

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458
1
2‘‘(11) DOMESTICCONTENT

BONUS

CREDITAMOUNT.—

3‘‘(A) IN GENERAL.—In the case of any

4qualified facility which satisfies the requirement

5

under subparagraph (B)(i), the amount of the6credit determined under subsection (a) shall be

7increased by an amount equal to 10 percent of8

the amount so determined.

9‘‘(B) REQUIREMENT.—

10‘‘(i) IN GENERAL.—The requirement

11

described in this subclause is satisfied with12

respect to any qualified facility if the tax-

13

payer certifies to the Secretary (at such

14

time, and in such form and manner, as the15

Secretary may prescribe) that any steel,

16

iron, or manufactured product which is a17

component of such facility (upon comple-

18

tion of construction) was produced in the19

United States (as determined under sec-

20

tion 661 of title 49, Code of Federal Regu-

21

lations).

22‘‘(ii) STEEL AND IRON.—In the case23of steel or iron, clause (i) shall be applied24

in a manner consistent with section 661.5

25

of title 49, Code of Federal Regulations.

ERN22335 9K1

S.L.C.

459
1‘‘(iii) MANUFACTUREDPRODUCT.—2

For purposes of clause (i), the manufac-

3

tured products which are components of a4

qualified facility upon completion of con-5

struction shall be deemed to have been pro-6

duced in the United States if not less than7

the adjusted percentage (as determined8

under subparagraph (C)) of the total costs

9of all such manufactured products of such

10

facility are attributable to manufactured

11

products (including components) which are12

mined, produced, or manufactured in the13

United States.

14‘‘(C) ADJUSTED PERCENTAGE.—

15‘‘(i) IN

GENERAL.—Subject

to sub-16

clause (ii), for purposes of subparagraph

17(B)(iii), the adjusted percentage shall be—

18‘‘(I) in the case of a facility the

19construction of which begins after De-

20

cember 31, 2024, and before January

21

1, 2026, 45 percent,22‘‘(II) in the case of a facility the23

construction of which begins after De-

24

cember 31, 2025, and before January

25

1, 2027, 50 percent, andERN22335 9K1

S.L.C.

460
1‘‘(III) in the case of a facility the2construction of which begins after De-

3

cember 31, 2026, 55 percent.

4‘‘(ii) OFFSHORE

WIND

FACILITY.—5

For purposes of subparagraph (B)(iii), in6

the case of a qualified facility which is an7

offshore wind facility, the adjusted per-8

centage shall be—9‘‘(I) in the case of a facility the10construction of which begins after De-

11

cember 31, 2024, and before January

12

1, 2026, 27.5 percent,13‘‘(II) in the case of a facility the

14

construction of which begins after De-

15

cember 31, 2025, and before January

16

1, 2027, 35 percent,17‘‘(III) in the case of a facility the18

construction of which begins after De-

19

cember 31, 2026, and before January20

1, 2028, 45 percent, and21‘‘(IV) in the case of a facility the22construction of which begins after De-

23

cember 31, 2027, 55 percent.

24‘‘(12) PHASEOUT FOR ELECTIVE PAYMENT.—ERN22335 9K1

S.L.C.

461
1‘‘(A) IN GENERAL.—In the case of a tax-

2

payer making an election under section 6417

3with respect to a credit under this section, the4amount of such credit shall be replaced with—

5‘‘(i) the value of such credit (deter-

6

mined without regard to this paragraph),7

multiplied by

8‘‘(ii) the applicable percentage.

9‘‘(B) 100 PERCENT APPLICABLE PERCENT-10AGE FOR CERTAIN QUALIFIED FACILITIES.—In

11

the case of any qualified facility—

12‘‘(i) which satisfies the requirements

13

under paragraph (11)(B) with respect to14

the construction of such facility, or

15‘‘(ii) with a maximum net output of

16

less than 1 megawatt (as measured in al-

17

ternating current),18
19

the applicable percentage shall be 100 percent.
‘‘(C) PHASEDDOMESTICCONTENTRE-20QUIREMENT.—Subject to subparagraph (D), in21

the case of any qualified facility which is not22

described in subparagraph (B), the applicable

23

percentage shall be—ERN22335 9K1

S.L.C.

4621‘‘(i) if construction of such facility

2began in calendar year 2025, 85 percent,

3

and

4

‘‘(ii) if construction of such facility

5began after December 31, 2025, 0 percent.

6‘‘(D) EXCEPTION.—

7‘‘(i) IN GENERAL.—For purposes of8this paragraph, the Secretary shall provide

9

exceptions to the requirements under this10

paragraph for the construction of qualified

11

facilities if—

12‘‘(I) the inclusion of steel, iron,13

or manufactured products which are

14

produced in the United States in-15

creases the overall costs of construc-16

tion of qualified facilities by more

17

than 25 percent, or18‘‘(II) relevant steel, iron, or man-19

ufactured products are not produced

20

in the United States in sufficient and21

reasonably available quantities or of a22

satisfactory quality.

23‘‘(ii) APPLICABLE

24

PERCENTAGE.—In

any case in which the Secretary provides

ERN22335 9K1

S.L.C.

463
1

an exception pursuant to clause (i), the ap-

2

plicable percentage shall be 100 percent.’’.

3
4
5
6
7
8
9
10

(b) CONFORMING AMENDMENTS.—(1) Section 38(b), as amended by the preceding
provisions of this Act, is amended—(A) in paragraph (37), by striking ‘‘plus’’
at the end,(B) in paragraph (38), by striking the period at the end and inserting ‘‘, plus’’, and(C) by adding at the end the following new11

paragraph:12‘‘(39) the clean electricity production credit de-13

termined under section 45Y(a).’’.

14(2) The table of sections for subpart D of part15

IV of subchapter A of chapter 1, as amended by the16

preceding provisions of this Act, is amended by add-

17

ing at the end the following new item:‘‘Sec. 45Y. Clean electricity production credit.’’.

18(c) EFFECTIVE DATE.—The amendments made by

19 this section shall apply to facilities placed in service after
20 December 31, 2024.
2122SEC. 13702. CLEAN ELECTRICITY INVESTMENT CREDIT.

(a) IN GENERAL.—Subpart E of part IV of sub-

23 chapter A of chapter 1 is amended by inserting after sec24 tion 48C the following new section:

ERN22335 9K1

S.L.C.

464
1
2
3‘‘SEC. 48D. CLEAN ELECTRICITY INVESTMENT CREDIT.

‘‘(a) INVESTMENT CREDIT FOR QUALIFIED PROPERTY.—

4‘‘(1) IN GENERAL.—For purposes of section 46,

5the clean electricity investment credit for any taxable

6

year is an amount equal to the applicable percentage

7of the qualified investment for such taxable year8

with respect to—9‘‘(A) any qualified facility, and

10‘‘(B) any energy storage technology.

11
12
13

‘‘(2) APPLICABLE PERCENTAGE.—‘‘(A) QUALIFIED FACILITIES.—Subject toparagraph (3)—14‘‘(i) BASE RATE.—In the case of any

15

qualified facility which is not described in

16

subclause (I) or (II) of clause (ii) and does17

not satisfy the requirements described in18

subclause (III) of such clause, the applica-

19

ble percentage shall be 6 percent.

20‘‘(ii) ALTERNATIVE

21case of any qualified facility—

RATE.—In

the22‘‘(I) with a maximum net output

23

of less than 1 megawatt (as measured

24

in alternating current),

25‘‘(II) the construction of which

26

begins prior to the date that is 60

ERN22335 9K1

S.L.C.

465
1days after the Secretary publishes

2

guidance with respect to the require-3

ments of paragraphs (3) and (4) of

4

subsection (d), or‘‘(III) which—5‘‘(aa) satisfies the require-

6

ments of subsection (d)(3), and78‘‘(bb) with respect to the9construction of such facility, sat-10

isfies the requirements of sub-11

section (d)(4),12

the applicable percentage shall be 30 per-

13

cent.

14

‘‘(B) ENERGY STORAGE TECHNOLOGY.—

15

Subject to paragraph (3)—16‘‘(i) BASE RATE.—In the case of any

17energy storage technology which is not de-18

scribed in subclause (I) or (II) of clause

19(ii) and does not satisfy the requirements

20

described in subclause (III) of such clause,21

the applicable percentage shall be 6 per-

22

cent.

23
24

‘‘(ii) ALTERNATIVE

RATE.—Incase of any energy storage technology—

theERN22335 9K1

S.L.C.

466‘‘(I) with a capacity of less than

1

1 megawatt,

2
3‘‘(II) the construction of which

4

begins prior to the date that is 60

5days after the Secretary publishes

6

guidance with respect to the require-

7

ments of paragraphs (3) and (4) of

8

subsection (d), or‘‘(III) which—9‘‘(aa) satisfies the require-

10

ments of subsection (d)(3), and1112‘‘(bb) with respect to the13

construction of such property,

14satisfies the requirements of sub-15

section (d)(4),16

the applicable percentage shall be 30 per-

17

cent.

18
19
20

‘‘(3) INCREASE IN CREDIT RATE IN CERTAIN
CASES.—‘‘(A) ENERGY COMMUNITIES.—

21‘‘(i) IN GENERAL.—In the case of any

22

qualified investment with respect to a23

qualified facility or with respect to energy

24storage technology which is placed in serv-

25

ice within an energy community (as de-ERN22335 9K1

S.L.C.

467
1

fined in section 45(b)(11)(B)), for pur-2

poses applying paragraph (2) with respect3

to such property or investment, the appli-

4

cable percentage shall be increased by the5applicable credit rate increase.

6‘‘(ii) APPLICABLE CREDIT RATE IN-

7

CREASE.—For

purposes of clause (i), the8applicable credit rate increase shall be an

9amount equal to—10‘‘(I) in the case of any qualified

11

investment with respect to a qualified

12

facility

13(2)(A)(i) or with respect to energy

14

storage technology described in para-

15

graph (2)(B)(i), 2 percentage points,

16

and

described

inparagraph

17‘‘(II) in the case of any qualified

18

investment with respect to a qualified

19

facility

20(2)(A)(ii) or with respect to energy

21

storage technology described in para-

22

graph

23

points.

24
25

described(2)(B)(ii),in10paragraph

percentage‘‘(B) DOMESTIC CONTENT.—Rules similar
to the rules of section 48(a)(12) shall apply.

ERN22335 9K1

S.L.C.

4681‘‘(b) QUALIFIED INVESTMENT WITH RESPECT TO A

2 QUALIFIED FACILITY.—
3‘‘(1) IN GENERAL.—For purposes of subsection

4(a), the qualified investment with respect to any

5qualified facility for any taxable year is the sum

6

of—

7

‘‘(A) the basis of any qualified property

8placed in service by the taxpayer during such9

taxable year which is part of a qualified facility,

10

plus

11
12
13
14

‘‘(B) the amount of any expenditures
which are—‘‘(i) paid or incurred by the taxpayer
for qualified interconnection property—

15‘‘(I) in connection with a quali-

16

fied facility which has a maximum net

17

output18

megawatts (as measured in alter-

19

nating current), and

20

of

not

greaterthan

5‘‘(II) placed in service during the21

taxable year of the taxpayer, and22‘‘(ii) properly chargeable to capital ac-

23

count of the taxpayer.

ERN22335 9K1

S.L.C.

469
1‘‘(2) QUALIFIED PROPERTY.—For purposes of2

this section, the term ‘qualified property’ means

3

property—‘‘(A) which is—45‘‘(i) tangible personal property, or

6‘‘(ii) other tangible property (not in-

7

cluding a building or its structural compo-

8nents), but only if such property is used as

9an integral part of the qualified facility,

10‘‘(B) with respect to which depreciation (or11amortization in lieu of depreciation) is allow-

12able, and13‘‘(C)(i) the construction, reconstruction, or

14

erection of which is completed by the taxpayer,

15

or

16

‘‘(ii) which is acquired by the taxpayer if

17

the original use of such property commences18with the taxpayer.

19‘‘(3) QUALIFIED FACILITY.—

20‘‘(A) IN GENERAL.—For purposes of this21

section, the term ‘qualified facility’ means a fa-

22

cility—2324‘‘(i) which is used for the generationof electricity,

ERN22335 9K1

S.L.C.

470
1
2‘‘(ii) which is placed in service after
December 31, 2024, and3‘‘(iii) for which the anticipated green-4house gas emissions rate (as determined5

under subparagraph (B)(ii)) is not greater

6

than zero.

7‘‘(B) ADDITIONAL RULES.—

8‘‘(i) EXPANSION OF FACILITY; INCRE-

9MENTAL PRODUCTION.—Rules10

the rules of section 45Y(b)(1)(C) shall11

apply for purposes of this paragraph.

12‘‘(ii) GREENHOUSE

GAS

similar to

EMISSIONS

13

RATE.—Rules similar to the rules of sec-

14

tion 45Y(b)(2) shall apply for purposes of15

this paragraph.

16‘‘(C) EXCLUSION.—The term ‘qualified fa-

17

cility’ shall not include any facility for which—18‘‘(i) a renewable electricity production19

credit determined under section 45,

20‘‘(ii) an advanced nuclear power facil-21

ity production credit determined under sec-

22

tion 45J,

23
24‘‘(iii) a carbon oxide sequestrationcredit determined under section 45Q,

ERN22335 9K1

S.L.C.

471
1‘‘(iv) a zero-emission nuclear power2

production credit determined under section

345U,‘‘(v) a clean electricity production

4

credit determined under section 45Y,

5‘‘(vi) an energy credit determined

6

under section 48, or

7‘‘(vii) a qualifying advanced coal

8

project credit under section 48A,

9
10

is allowed under section 38 for the taxable year

11

or any prior taxable year.

12

‘‘(4)

13

ERTY.—For

14‘qualified interconnection property’ has the meaning

15

given such term in section 48(a)(8)(B).

16

QUALIFIED

INTERCONNECTION

PROP-

purposes of this paragraph, the term‘‘(5) COORDINATIONWITHREHABILITATION

17

CREDIT.—Thequalified investment with respect to18

any qualified facility for any taxable year shall not

19

include that portion of the basis of any property

20

which is attributable to qualified rehabilitation ex-

21

penditures (as defined in section 47(c)(2)).

22‘‘(6) DEFINITIONS.—For purposes of this sub-23

section, the terms ‘CO2e per KWh’ and ‘greenhouse24

gas emissions rate’ have the same meaning given

25such terms under section 45Y.

ERN22335 9K1

S.L.C.

4721‘‘(c) QUALIFIED INVESTMENT WITH RESPECT TO

2 ENERGY STORAGE TECHNOLOGY.—3‘‘(1) QUALIFIED INVESTMENT.—For purposes4

of subsection (a), the qualified investment with re-5spect to energy storage technology for any taxable

6

year is the basis of any energy storage technology

7

placed in service by the taxpayer during such taxable

8

year.

9

‘‘(2) ENERGYSTORAGETECHNOLOGY.—For10

purposes of this section, the term ‘energy storage11

technology’ has the meaning given such term in sec-

12

tion 48(c)(6) (except that subparagraph (D) of such

13

section shall not apply).

14‘‘(d) SPECIAL RULES.—

15‘‘(1) CERTAIN PROGRESS EXPENDITURE RULES

16

MADE APPLICABLE.—Rules

similar to the rules of17

subsections (c)(4) and (d) of section 46 (as in effect18

on the day before the date of the enactment of the

19

Revenue Reconciliation Act of 1990) shall apply for20

purposes of subsection (a).

21‘‘(2) SPECIAL RULE FOR PROPERTY FINANCED

22

BY SUBSIDIZED ENERGY FINANCING OR PRIVATE AC-

23

TIVITY BONDS.—Rules similar to the rules of section

24

45(b)(3) shall apply.

ERN22335 9K1

S.L.C.

473
1

‘‘(3)

PREVAILINGWAGE

REQUIREMENTS.—

2

Rules similar to the rules of section 48(a)(10) shall3

apply.

4‘‘(4) APPRENTICESHIP REQUIREMENTS.—Rules

5

similar to the rules of section 45(b)(8) shall apply.

6‘‘(5) DOMESTIC CONTENT REQUIREMENT FOR

7

ELECTIVE PAYMENT.—In

the case of a taxpayer

8

making an election under section 6417 with respect

9

to a credit under this section, rules similar to the10rules of section 45(b)(10) shall apply.

11‘‘(e) CREDIT PHASE-OUT.—

12‘‘(1) IN GENERAL.—The amount of the clean

13

electricity investment credit under subsection (a) for14

any qualified investment with respect to any quali-

15

fied facility or energy storage technology the con-16

struction of which begins during a calendar year de-17

scribed in paragraph (2) shall be equal to the prod-18

uct of—

19‘‘(A) the amount of the credit determined20

under subsection (a) without regard to this sub-21

section, multiplied by

22‘‘(B) the phase-out percentage under para-

23

graph (2).

24‘‘(2) PHASE-OUT PERCENTAGE.—The phase-out

25

percentage under this paragraph is equal to—ERN22335 9K1

S.L.C.

474
1‘‘(A) for any qualified investment with re-2spect to any qualified facility or energy storage3

technology the construction of which begins

4

during the first calendar year following the ap-

5

plicable year, 100 percent,6‘‘(B) for any qualified investment with re-7

spect to any qualified facility or energy storage

8

technology the construction of which begins

9during the second calendar year following the10

applicable year, 75 percent,11‘‘(C) for any qualified investment with re-

12spect to any qualified facility or energy storage

13

technology the construction of which begins

14

during the third calendar year following the ap-

15

plicable year, 50 percent, and

16‘‘(D) for any qualified investment with re-17

spect to any qualified facility or energy storage18

technology the construction of which begins

19

during any calendar year subsequent to the cal-

20

endar year described in subparagraph (C), 0

21

percent.

22‘‘(3) APPLICABLE YEAR.—For purposes of this23

subsection, the term ‘applicable year’ has the same24

meaning given such term in section 45Y(d)(3).

ERN22335 9K1

S.L.C.

4751‘‘(f) GREENHOUSE GAS.—In this section, the term

2 ‘greenhouse gas’ has the same meaning given such term
3 under section 45Y(e)(2).
4‘‘(g) RECAPTURE OF CREDIT.—For purposes of sec-

5 tion 50, if the Secretary determines that the greenhouse
6 gas emissions rate for a qualified facility is greater than
7 10 grams of CO2e per KWh, any property for which a
8 credit was allowed under this section with respect to such
9 facility shall cease to be investment credit property in the
10 taxable year in which the determination is made.
11‘‘(h) SPECIAL RULESFORCERTAIN FACILITIES

12 PLACED IN SERVICE IN CONNECTION WITH LOW-INCOME
13 COMMUNITIES.—
14‘‘(1) IN GENERAL.—In the case of any applica-15

ble facility with respect to which the Secretary

16

makes an allocation of environmental justice capac-

17

ity limitation under paragraph (4)—18‘‘(A) the applicable percentage otherwise

19

determined under subsection (a)(2) with respect

20

to any eligible property which is part of such21

facility shall be increased by—22‘‘(i) in the case of a facility described23

in subclause (I) of paragraph (2)(A)(iii)24

and not described in subclause (II) of such25

paragraph, 10 percentage points, andERN22335 9K1

S.L.C.

476
1‘‘(ii) in the case of a facility described2

in subclause (II) of paragraph (2)(A)(iii),

3

20 percentage points, and

4‘‘(B) the increase in the credit determined5

under subsection (a) by reason of this sub-6

section for any taxable year with respect to all7

property which is part of such facility shall not

8

exceed the amount which bears the same ratio

9to the amount of such increase (determined

10

without regard to this subparagraph) as—

11‘‘(i) the environmental justice capacity

12

limitation allocated to such facility, bears

13

to

14

‘‘(ii) the total megawatt nameplate ca-

15pacity of such facility, as measured in di-

16

rect current.

17
18
19
20
21
22

‘‘(2) APPLICABLE FACILITY.—For purposes ofthis subsection—‘‘(A) IN GENERAL.—The term ‘applicablefacility’ means any qualified facility—‘‘(i) which is not described in section
45Y(b)(2)(B),

23‘‘(ii) which has a maximum net output

24

of less than 5 megawatts (as measured in25

alternating current), andERN22335 9K1

S.L.C.

477
1‘‘(iii) which—2‘‘(I) is located in a low-income

3community (as defined in section

4

45D(e)) or on Indian land (as defined5

in section 2601(2) of the Energy Pol-6

icy Act of 1992 (25 U.S.C. 3501(2))),

7

or

8

‘‘(II) is part of a qualified low-in-

9

come residential building project or a10

qualified low-income economic benefit

11

project.

12‘‘(B) QUALIFIEDLOW-INCOME RESIDEN-

13

TIAL BUILDING PROJECT.—A

facility shall be

14

treated as part of a qualified low-income resi-

15

dential building project if—

16‘‘(i) such facility is installed on a resi-

17

dential rental building which participates18in a covered housing program (as defined19

in section 41411(a) of the Violence Against

20

Women

21

12491(a)(3)), a housing assistance pro-

22

gram administered by the Department of

23

Agriculture under title V of the Housing

24

Act of 1949, a housing program adminis-

25

tered by a tribally designated housing enti-

Act

of

1994

(34

U.S.C.

ERN22335 9K1

S.L.C.

4781

ty (as defined in section 4(22) of the Na-

2tive American Housing Assistance and3

Self-Determination Act of 1996 (25 U.S.C.

44103(22))) or such other affordable hous-5

ing programs as the Secretary may pro-

6

vide, and7‘‘(ii) the financial benefits of the elec-

8

tricity produced by such facility are allo-

9

cated equitably among the occupants of the10

dwelling units of such building.

11‘‘(C) QUALIFIED LOW-INCOME ECONOMIC

12BENEFIT PROJECT.—A facility shall be treated13

as part of a qualified low-income economic ben-14

efit project if at least 50 percent of the finan-

15

cial benefits of the electricity produced by such

16

facility are provided to households with income

17of—‘‘(i) less than 200 percent of the pov-

18
19

erty

line

(as

definedinsection20

36B(d)(3)(A)) applicable to a family of the21

size involved, or22‘‘(ii) less than 80 percent of area me-23

dian gross income (as determined under24

section 142(d)(2)(B)).

ERN22335 9K1

S.L.C.

479
1‘‘(D) FINANCIAL BENEFIT.—For purposes2

of subparagraphs (B) and (C), electricity ac-3

quired at a below-market rate shall not fail to4

be taken into account as a financial benefit.

5‘‘(3) ELIGIBLE PROPERTY.—For purposes of

6

this subsection, the term ‘eligible property’ means a7qualified investment with respect to any applicable8

facility.

9‘‘(4) ALLOCATIONS.—

10‘‘(A) IN GENERAL.—Not later than Janu-11

ary 1, 2025, the Secretary shall establish a pro-

12

gram to allocate amounts of environmental jus-

13

tice capacity limitation to applicable facilities.

14

In establishing such program and to carry out

15

the purposes of this subsection, the Secretary

16

shall provide procedures to allow for an efficient

17

allocation process, including, when determined18

appropriate, consideration of multiple projects

19

in a single application if such projects will be

20

placed in service by a single taxpayer.

21‘‘(B) LIMITATION.—The amount of envi-

22ronmental justice capacity limitation allocated23by the Secretary under subparagraph (A) dur-

24

ing any calendar year shall not exceed the an-ERN22335 9K1

S.L.C.

4801

nual capacity limitation with respect to such

2

year.

3

‘‘(C) ANNUAL CAPACITY LIMITATION.—For4

purposes of this paragraph, the term ‘annual

5

capacity limitation’ means 1.8 gigawatts of di-

6

rect current capacity for each calendar year

7

during the period beginning on January 1,

82025, and ending on December 31 of the appli-

9cable year (as defined in section 45Y(d)(3)),

10and zero thereafter.

1112‘‘(D) CARRYOVER

OF

UNUSED

LIMITA-

TION.—

13‘‘(i) IN GENERAL.—If the annual ca-

14pacity limitation for any calendar year ex-

15

ceeds the aggregate amount allocated for16

such year under this paragraph, such limi-

17

tation for the succeeding calendar year

18

shall be increased by the amount of such

19

excess. No amount may be carried under20

the preceding sentence to any calendar

21

year after the third calendar year following

22

the applicable year (as defined in section

23

45Y(d)(3)).

24‘‘(ii) CARRYOVER FROM SECTION 48

25

FOR CALENDAR YEAR 2025.—If the annual

ERN22335 9K1

S.L.C.

481
1

capacity limitation for calendar year 2024

2

under section 48(e)(4)(D) exceeds the ag-

3gregate amount allocated for such year

4

under such section, such excess amount5

may be carried over and applied to the an-6nual capacity limitation under this sub-7

section for calendar year 2025. The annual

8

capacity limitation for calendar year 2025

9

shall be increased by the amount of such

10

excess.

11‘‘(E) PLACED IN SERVICE DEADLINE.—

12‘‘(i) IN

GENERAL.—Paragraph

(1)

13

shall not apply with respect to any prop-

14

erty which is placed in service after the15

date that is 4 years after the date of the16

allocation with respect to the facility of

17which such property is a part.

18‘‘(ii) APPLICATION OF CARRYOVER.—

19

Any amount of environmental justice ca-

20

pacity21

clause (i) during any calendar year shall be

22taken into account as an excess described23

in subparagraph (D)(i) (or as an increase24

in such excess) for such calendar year,

limitation

which

expiresunder

ERN22335 9K1

S.L.C.

482
1

subject to the limitation imposed by the2last sentence of such subparagraph.

3‘‘(5) RECAPTURE.—The Secretary shall, by reg-

4

ulations or other guidance, provide for recapturing

5

the benefit of any increase in the credit allowed

6

under subsection (a) by reason of this subsection

7

with respect to any property which ceases to be8

property eligible for such increase (but which does9

not cease to be investment credit property within the10meaning of section 50(a)). The period and percent-11

age of such recapture shall be determined under12

rules similar to the rules of section 50(a). To the ex-

13tent provided by the Secretary, such recapture may

14

not apply with respect to any property if, within 12

15

months after the date the taxpayer becomes aware

16(or reasonably should have become aware) of such17

property ceasing to be property eligible for such in-18

crease, the eligibility of such property for such in-19crease is restored. The preceding sentence shall not

20

apply more than once with respect to any facility.

21‘‘(i) GUIDANCE.—Not later than January 1, 2025,

22 the Secretary shall issue guidance regarding implementa23 tion of this section.’’.
24(b) CONFORMING AMENDMENTS.—ERN22335 9K1

S.L.C.

483(1) Paragraph (6) of section 46 is amended to1
2

read as follows:3‘‘(6) the clean electricity investment credit.’’.

4(2) Section 49(a)(1)(C) is amended—(A) by striking ‘‘and’’ at the end of clause

5
(iv),

6

(B) by striking the period at the end of7

clause (v) and inserting a comma, and8(C) by adding at the end the following new9clauses:

1011‘‘(vi) the basis of any qualified prop-

12

erty which is part of a qualified facility

13

under section 48D, and‘‘(vii) the basis of any energy storage

14

technology under section 48D.’’.

15(3) Section 50(a)(2)(E) is amended by striking

16
17

‘‘or

48C(b)(2)’’18

48D(e)’’.

andinserting‘‘48C(b)(2),or

19(4) Section 50(c)(3) is amended by inserting

20‘‘or clean electricity investment credit’’ after ‘‘In the21case of any energy credit’’.

22(5) The table of sections for subpart E of part23

IV of subchapter A of chapter 1 is amended by in-24

serting after the item relating to section 48C the fol-25

lowing new item:‘‘48D. Clean electricity investment credit.’’.

ERN22335 9K1

S.L.C.

484(c) EFFECTIVE DATE.—The amendments made by

1

2 this section shall apply to property placed in service after
3 December 31, 2024.
4

SEC. 13703. COST RECOVERY FOR QUALIFIED FACILITIES,5

QUALIFIED PROPERTY, AND ENERGY STOR-

6

AGE TECHNOLOGY.

7(a) IN GENERAL.—Section 168(e)(3)(B) is amend-

8 ed—(1) in clause (vi)(III), by striking ‘‘and’’ at the

9
10
11
12

end,
(2) in clause (vii), by striking the period at theend and inserting ‘‘, and’’, and13(3) by inserting after clause (vii) the following:

14‘‘(viii) any qualified facility (as de-15

fined in section 45Y(b)(1)(A)), any quali-

16

fied property (as defined in subsection

17(b)(2) of section 48D) which is a qualified

18

investment (as defined in subsection (b)(1)19

of such section), or any energy storage

20

technology (as defined in subsection (c)(2)21

of such section).’’.

22(b) EFFECTIVE DATE.—The amendments made by

23 this section shall apply to facilities and property placed
24 in service after December 31, 2024.

ERN22335 9K1

S.L.C.

485
1
2

SEC. 13704. CLEAN FUEL PRODUCTION CREDIT.

(a) IN GENERAL.—Subpart D of part IV of sub-

3 chapter A of chapter 1, as amended by the preceding pro4 visions of this Act, is amended by adding at the end the
5 following new section:
6
7‘‘SEC. 45Z. CLEAN FUEL PRODUCTION CREDIT.

‘‘(a) AMOUNT OF CREDIT.—

8‘‘(1) IN GENERAL.—For purposes of section 38,

9

the clean fuel production credit for any taxable year10

is an amount equal to the product of—11‘‘(A) the applicable amount per gallon (or12gallon equivalent) with respect to any transpor-

13

tation fuel which is—1415‘‘(i) produced by the taxpayer at aqualified facility, and16‘‘(ii) sold by the taxpayer in a manner

17

described in paragraph (4) during the tax-

18

able year, and19‘‘(B) the emissions factor for such fuel (as20

determined under subsection (b)).

21‘‘(2) APPLICABLE AMOUNT.—

22‘‘(A) BASE AMOUNT.—In the case of any

23transportation fuel produced at a qualified facil-24

ity which does not satisfy the requirements de-25

scribed in subparagraph (B), the applicable26

amount shall be 20 cents.

ERN22335 9K1

S.L.C.

486
1‘‘(B) ALTERNATIVE AMOUNT.—In the case2of any transportation fuel produced at a quali-

3

fied facility which satisfies the requirements

4

under paragraphs (6) and (7) of subsection (f),5the applicable amount shall be $1.00.

6‘‘(3) SPECIAL RATE FOR SUSTAINABLE AVIA-

7

TION FUEL.—

8‘‘(A) IN GENERAL.—In the case of a trans-

9

portation fuel which is sustainable aviation fuel,10

paragraph (2) shall be applied—

11‘‘(i) in the case of fuel produced at a12

qualified facility described in paragraph

13(2)(A), by substituting ‘35 cents’ for ‘20

14

cents’, and15‘‘(ii) in the case of fuel produced at a16

qualified facility described in paragraph

17(2)(B), by substituting ‘$1.75’ for ‘$1.00’.

18‘‘(B) SUSTAINABLE AVIATION FUEL.—For19

purposes of this subparagraph (A), the term

20

‘sustainable aviation fuel’ means liquid fuel21

which is sold for use in an aircraft and which—

22
23
24

‘‘(i) meets the requirements of—‘‘(I) ASTM International Standard D7566, orERN22335 9K1

S.L.C.

487
1‘‘(II) the Fischer Tropsch provi-2

sions of ASTM International Stand-3

ard D1655, Annex A1, and4‘‘(ii) is not derived from palm fatty

5acid distillates or petroleum.

6‘‘(4) SALE.—For purposes of paragraph (1),7the transportation fuel is sold in a manner described

8

in this paragraph if such fuel is sold by the taxpayer

9

to an unrelated person—

10
11
12
13

‘‘(A) for use by such person in the production of a fuel mixture,‘‘(B) for use by such person in a trade orbusiness, or

14‘‘(C) who sells such fuel at retail to an-15

other person and places such fuel in the fuel16

tank of such other person.

17‘‘(5) ROUNDING.—If any amount determined18

under paragraph (1) is not a multiple of 1 cent,19

such amount shall be rounded to the nearest cent.

20‘‘(b) EMISSIONS FACTORS.—

21‘‘(1) EMISSIONS FACTOR.—

22‘‘(A) CALCULATION.—

23‘‘(i) IN GENERAL.—The emissions fac-24

tor of a transportation fuel shall be an

25

amount equal to the quotient of—ERN22335 9K1

S.L.C.

488‘‘(I) an amount equal to—1‘‘(aa) 50 kilograms of CO2e2

per mmBTU, minus

3‘‘(bb) the emissions rate for45such fuel, divided by

6‘‘(II) 50 kilograms of CO2e per
mmBTU.

7
8

‘‘(B)

9

RATE.—ESTABLISHMENTOFEMISSIONS

10‘‘(i) IN GENERAL.—Subject to clauses

11(ii) and (iii), the Secretary shall annually

12

publish a table which sets forth the emis-

13

sions rate for similar types and categories

14of transportation fuels based on the15amount of lifecycle greenhouse gas emis-

16

sions (as described in section 211(o)(1)(H)

17

of

18

7545(o)(1)(H)), as in effect on the date of19

the enactment of this section) for such

20

fuels, expressed as kilograms of CO2e per

21

mmBTU, which a taxpayer shall use for22

purposes of this section.

23

the

Clean

Air

Act

‘‘(ii) NON-AVIATION(42

U.S.C.

FUEL.—Inthe24case of any transportation fuel which is25

not a sustainable aviation fuel, the lifecycle

ERN22335 9K1

S.L.C.

489
1

greenhouse gas emissions of such fuel shall2

be based on the most recent determina-

3

tions under the Greenhouse gases, Regu-

4lated Emissions, and Energy use in Trans-5

portation model developed by Argonne Na-

6tional Laboratory, or a successor model (as7determined by the Secretary).

8‘‘(iii) AVIATION FUEL.—In the case of9

any transportation fuel which is a sustain-

10

able aviation fuel, the lifecycle greenhouse11

gas emissions of such fuel shall be deter-

12

mined in accordance with—

13‘‘(I) the most recent Carbon Off-

14

setting and Reduction Scheme for

15

International Aviation which has been

16

adopted by the International Civil

17

Aviation Organization with the agree-

18

ment of the United States, or19‘‘(II) any similar methodology

20

which satisfies the criteria under sec-

21

tion 211(o)(1)(H) of the Clean Air

22

Act (42 U.S.C. 7545(o)(1)(H)), as in

23

effect on the date of enactment of this24

section.

25‘‘(C) ROUNDING OF EMISSIONS RATE.—ERN22335 9K1

S.L.C.

490
1‘‘(i) IN GENERAL.—Subject to clause2(ii), the Secretary may round the emissions

3

rates under subparagraph (B) to the near-4

est multiple of 5 kilograms of CO2e per

5mmBTU.

6‘‘(ii) EXCEPTION.—In the case of an

7emissions rate that is between 2.5 kilo-

8grams of CO2e per mmBTU and -2.5 kilo-

9grams of CO2e per mmBTU, the Secretary

10

may round such rate to zero.

11‘‘(D) PROVISIONAL EMISSIONS RATE.—In

12

the case of any transportation fuel for which an

13emissions rate has not been established under

14

subparagraph (B), a taxpayer producing such

15

fuel may file a petition with the Secretary for

16

determination of the emissions rate with respect

17

to such fuel.

18‘‘(2) ROUNDING.—If any amount determined19

under paragraph (1)(A) is not a multiple of 0.1,

20

such amount shall be rounded to the nearest mul-

21

tiple of 0.1.

22‘‘(c) INFLATION ADJUSTMENT.—

23‘‘(1) IN GENERAL.—In the case of calendar

24

years beginning after 2024, the 20 cent amount in

25

subsection (a)(2)(A), the $1.00 amount in sub-

ERN22335 9K1

S.L.C.

491
1

section (a)(2)(B), the 35 cent amount in subsection2(a)(3)(A)(i), and the $1.75 amount in subsection

3(a)(3)(A)(ii) shall each be adjusted by multiplying

4such amount by the inflation adjustment factor for5

the calendar year in which the sale of the transpor-

6

tation fuel occurs. If any amount as increased under7

the preceding sentence is not a multiple of 1 cent,8

such amount shall be rounded to the nearest mul-

9

tiple of 1 cent.

10‘‘(2) INFLATIONADJUSTMENT FACTOR.—For11

purposes of paragraph (1), the inflation adjustment

12

factor shall be the inflation adjustment factor deter-

13

mined and published by the Secretary pursuant to14

section 45Y(c), determined by substituting ‘calendar

15

year 2022’ for ‘calendar year 1992’ in paragraph (3)16thereof.

17‘‘(d) DEFINITIONS.—In this section:1819‘‘(1) mmBTU.—The term ‘mmBTU’ means
1,000,000 British thermal units.

20‘‘(2) CO2e.—The term ‘CO2e’ means, with re-21

spect to any greenhouse gas, the equivalent carbon

22

dioxide (as determined based on relative global

23

warming potential).

24‘‘(3) GREENHOUSE GAS.—The term ‘greenhouse

25

gas’ has the same meaning given that term underERN22335 9K1

S.L.C.

492
1

section 211(o)(1)(G) of the Clean Air Act (422

U.S.C. 7545(o)(1)(G)), as in effect on the date of3

the enactment of this section.

4
5
6
7

‘‘(4) QUALIFIED FACILITY.—The term ‘qualified facility’—‘‘(A) means a facility used for the production of transportation fuels, and

8‘‘(B) does not include any facility for

9which one of the following credits is allowed

10

under section 38 for the taxable year:1112‘‘(i) The credit for production of cleanhydrogen under section 45V.

13‘‘(ii) The credit determined under sec-

14

tion 46 to the extent that such credit is at-

15

tributable to the energy credit determined16

under section 48 with respect to any speci-

17

fied clean hydrogen production facility for18

which an election is made under subsection

19(a)(16) of such section.

20
21
22
23
24

‘‘(iii) The credit for carbon oxide sequestration under section 45Q.
‘‘(5) TRANSPORTATION FUEL.—‘‘(A) IN GENERAL.—The term ‘transportation fuel’ means a fuel which—ERN22335 9K1

S.L.C.

493
12‘‘(i) is suitable for use as a fuel in a
highway vehicle or aircraft,

3‘‘(ii) has an emissions rate which is4

not greater than 50 kilograms of CO2e per

5mmBTU, and6‘‘(iii) is not derived from coprocessing

7

an applicable material (or materials de-

8

rived from an applicable material) with a9feedstock which is not biomass.

10‘‘(B) DEFINITIONS.—In this paragraph—

11
12
13
14

‘‘(i)

APPLICABLE

MATERIAL.—Theterm ‘applicable material’ means—‘‘(I) monoglycerides, diglycerides,
and triglycerides,

15‘‘(II) free fatty acids, and16‘‘(III) fatty acid esters.

17‘‘(ii) BIOMASS.—The term ‘biomass’18

has the same meaning given such term in

19

section 45K(c)(3).

20‘‘(e) GUIDANCE.—Not later than January 1, 2025,

21 the Secretary shall issue guidance regarding implementa22 tion of this section, including calculation of emissions fac23 tors for transportation fuel, the table described in sub24 section (b)(1)(B)(i), and the determination of clean fuel25 production credits under this section.

ERN22335 9K1

S.L.C.

494
123‘‘(f) SPECIAL RULES.—‘‘(1) ONLY REGISTERED PRODUCTION IN THE
UNITED STATES TAKEN INTO ACCOUNT.—

4‘‘(A) IN GENERAL.—No clean fuel produc-5tion credit shall be determined under subsection

6(a) with respect to any transportation fuel un-

7

less—

8

‘‘(i) the taxpayer—

9‘‘(I) is registered as a producer

10of clean fuel under section 4101 at

11

the time of production, and12‘‘(II) in the case of any transpor-

13

tation fuel which is a sustainable avia-

14

tion fuel, provides—

15‘‘(aa) certification (in such16

form and manner as the Sec-17

retary shall prescribe) from an

18unrelated

19

compliance with—party

demonstrating‘‘(AA) any general re-20
21quirements,

supply22

traceability

requirements,

23

and

24

mission requirements estab-

25

lished under the Carbon Off-

information

chain

trans-

ERN22335 9K1

S.L.C.

495
1

setting

andReduction2

SchemeforInternational

3

Aviation described in sub-4

clause5(b)(1)(B)(iii), or

(I)

of

subsection

6‘‘(BB) in the case of7

any methodology described8

in subclause (II) of such9

subsection,

10

similar to the requirements

11

described in subitem (AA),

12

and

13

‘‘(bb) such other information

14

with respect to such fuel as the15

Secretary may require for pur-16

poses of carrying out this section,

17

and

18

requirements‘‘(ii) such fuel is produced in the19

United States.

20‘‘(B) UNITED STATES.—For purposes of

21

this paragraph, the term ‘United States’ in-22

cludes any possession of the United States.

23‘‘(2) PRODUCTION ATTRIBUTABLE TO THE TAX-24

PAYER.—In the case of a facility in which more than25

1 person has an ownership interest, except to the ex-ERN22335 9K1

S.L.C.

496
1

tent provided in regulations prescribed by the Sec-2

retary, production from the facility shall be allocated3

among such persons in proportion to their respective

4

ownership interests in the gross sales from such fa-

5cility.

6‘‘(3) RELATEDPERSONS.—Persons

shall be7

treated as related to each other if such persons

8would be treated as a single employer under the reg-

9

ulations prescribed under section 52(b). In the case10of a corporation which is a member of an affiliated11group of corporations filing a consolidated return,12

such corporation shall be treated as selling fuel to13

an unrelated person if such fuel is sold to such a

14

person by another member of such group.

15‘‘(4) PASS-THRU IN THE CASE OF ESTATES AND

16

TRUSTS.—Under regulations prescribed by the Sec-17

retary, rules similar to the rules of subsection (d) of

18

section 52 shall apply.

19‘‘(5) ALLOCATION OF CREDIT TO PATRONS OF

20

AGRICULTURAL COOPERATIVE.—Rules similar to the21rules of section 45Y(g)(6) shall apply.

22‘‘(6) PREVAILING WAGE REQUIREMENTS.—

23‘‘(A) IN GENERAL.—Subject to subpara-

24

graph (B), rules similar to the rules of section

25

45(b)(7) shall apply.

ERN22335 9K1

S.L.C.

497
1

‘‘(B)

SPECIAL

RULE

FOR

FACILITIES
1,2

PLACED3

2025.—For

4

the case of any qualified facility placed in serv-

5

ice before January 1, 2025—

6
7

IN

SERVICE

BEFOREJANUARY

purposes of subparagraph (A), in‘‘(i) clause (i) of section 45(b)(7)(A)shall not apply, and8‘‘(ii) clause (ii) of such section shall9

be applied by substituting ‘with respect to10

any taxable year beginning after December

1131, 2024, for which the credit is allowed

12

under this section’ for ‘with respect to any

13

taxable year, for any portion of such tax-

14

able year which is within the period de-15

scribed in subsection (a)(2)(A)(ii)’.

16‘‘(7) APPRENTICESHIP REQUIREMENTS.—Rules

17

similar to the rules of section 45(b)(8) shall apply.

18‘‘(g) TERMINATION.—This section shall not apply to

19 transportation fuel sold after December 31, 2027.’’.
20
21
22
23
24

(b) CONFORMING AMENDMENTS.—(1) Section 25C(d)(3), as amended by the preceding provisions of this Act, is amended—(A) in subparagraph (A), by striking‘‘and’’ at the end,

ERN22335 9K1

S.L.C.

498
1
2
3
4
5

(B) in subparagraph (B), by striking theperiod at the end and inserting ‘‘, and’’, and(C) by adding at the end the following new
subparagraph:‘‘(C) transportation fuel (as defined in sec-

6

tion 45Z(d)(5)).’’.

7(2) Section 30C(c)(1)(B), as amended by the8preceding provisions of this Act, is amended by add-

9

ing at the end the following new clause:

10
11
12
13
14
15
16
17
18

‘‘(iv) Any transportation fuel (as defined in section 45Z(d)(5)).’’.
(3) Section 38(b), as amended by the preceding
provisions of this Act, is amended—(A) in paragraph (38), by striking ‘‘plus’’
at the end,(B) in paragraph (39), by striking the period at the end and inserting ‘‘, plus’’, and(C) by adding at the end the following new

19

paragraph:20‘‘(40) the clean fuel production credit deter-

21

mined under section 45Z(a).’’.

22(4) The table of sections for subpart D of part23

IV of subchapter A of chapter 1, as amended by the24

preceding provisions of this Act, is amended by add-25

ing at the end the following new item:‘‘Sec. 45Z. Clean fuel production credit.’’.

ERN22335 9K1

S.L.C.

499
1(5) Section 4101(a)(1), as amended by the pre-2

ceding provisions of this Act, is amended by insert-3

ing ‘‘every person producing a fuel eligible for the4clean fuel production credit (pursuant to section

545Z),’’ after ‘‘section 6426(k)(3)),’’.

6(c) EFFECTIVE DATE.—The amendments made by

7 this section shall apply to transportation fuel produced
8 after December 31, 2024.
9PART 8—CREDIT MONETIZATION AND

10

APPROPRIATIONS

11

SEC. 13801. ELECTIVE PAYMENT FOR ENERGY PROPERTY

12AND ELECTRICITY PRODUCED FROM CER-

13

TAIN RENEWABLE RESOURCES, ETC.

14(a) IN GENERAL.—Subchapter B of chapter 65 is

15 amended by inserting after section 6416 the following new
16 section:
17‘‘SEC. 6417. ELECTIVE PAYMENT OF APPLICABLE CREDITS.

18‘‘(a) IN GENERAL.—In the case of an applicable enti-

19 ty making an election (at such time and in such manner
20 as the Secretary may provide) under this section with re21 spect to any applicable credit determined with respect to22 such entity, such entity shall be treated as making a pay23 ment against the tax imposed by subtitle A (for the tax24 able year with respect to which such credit was deter25 mined) equal to the amount of such credit.

ERN22335 9K1

S.L.C.

5001‘‘(b) APPLICABLE CREDIT.—The term ‘applicable

2 credit’ means each of the following:
3‘‘(1) So much of the credit for alternative fuel4vehicle refueling property allowed under section 30C5which, pursuant to subsection (d)(1) of such section,

6

is treated as a credit listed in section 38(b).

7‘‘(2) So much of the renewable electricity pro-8

duction credit determined under section 45(a) as is

9

attributable to qualified facilities which are originally10placed in service after December 31, 2022.

11‘‘(3) So much of the credit for carbon oxide se-

12questration determined under section 45Q(a) as is

13

attributable to carbon capture equipment which is

14

originally placed in service after December 31, 2022.

15‘‘(4) The zero-emission nuclear power produc-

16

tion credit determined under section 45U(a).

17‘‘(5) So much of the credit for production of18

clean hydrogen determined under section 45V(a) as

19

is attributable to qualified clean hydrogen produc-

20tion facilities which are originally placed in service

21

after December 31, 2012.

22‘‘(6) In the case of a tax-exempt entity de-23

scribed in clause (i), (ii), or (iv) of section24

168(h)(2)(A), the credit for qualified commercial ve-

ERN22335 9K1

S.L.C.

501
1

hicles determined under section 45W by reason of2

subsection (d)(3) thereof.
‘‘(7) The credit for advanced manufacturing

3
4

production under section 45X(a).
‘‘(8) The clean electricity production credit de-5
6termined under section 45Y(a).
‘‘(9) The clean fuel production credit deter-

78mined under section 45Z(a).
‘‘(10) The energy credit determined under sec-

910tion 48.
‘‘(11) The qualifying advanced energy project11
12

credit determined under section 48C.
‘‘(12) The clean electricity investment credit de-13
14

termined under section 48D.

15‘‘(c) SPECIAL RULES.—For purposes of this sec-

16 tion—17‘‘(1) APPLICABLE ENTITY.—

18‘‘(A) IN GENERAL.—The term ‘applicable19

entity’ means any organization exempt from the20

tax imposed by subtitle A, any State or local

21

government (or political subdivision thereof),

22

the Tennessee Valley Authority, an Indian trib-

23

al

24

30D(g)(9)), or any Alaska Native Corporation

government(asdefinedinsectionERN22335 9K1

S.L.C.

502
1(as defined in section 3 of the Alaska Native2

Claims Settlement Act (43 U.S.C. 1602(m)).

3‘‘(B) ELECTION WITH RESPECT TO CREDIT

4

FOR PRODUCTION OF CLEAN HYDROGEN.—If a

5

taxpayer other than an entity described in sub-6

paragraph (A) makes an election under this7

subparagraph with respect to any taxable year

8

in which such taxpayer has placed in service a

9qualified clean hydrogen production facility (as10defined in section 45V(c)(3)), such taxpayer

11

shall be treated as an applicable entity for pur-12

poses of this section for such taxable year, but

13

only with respect to the credit described in sub-14

section (b)(5).
‘‘(C) ELECTION WITH RESPECT TO CREDIT

15

SEQUESTRATION.—If

a

16

FOR

17

taxpayer other than an entity described in sub-18

paragraph (A) makes an election under this19

subparagraph with respect to any taxable year

20

in which such taxpayer has, after December 31,

212022, placed in service carbon capture equip-

22

ment at a qualified facility (as defined in sec-

23

tion 45Q(d)), such taxpayer shall be treated as24

an applicable entity for purposes of this section

CARBONOXIDEERN22335 9K1

S.L.C.

503
1

for such taxable year, but only with respect to2

the credit described in subsection (b)(3).

3‘‘(D) ELECTION WITH RESPECT TO AD-

4

VANCED MANUFACTURING PRODUCTION CRED-

5

IT.—

6

‘‘(i) IN

GENERAL.—If

a taxpayer

7other than an entity described in subpara-

8graph (A) makes an election under this9

subparagraph with respect to any taxable

10

year in which such taxpayer has, after De-

11

cember 31, 2022, produced eligible compo-

12

nents (as defined in section 45X(c)(1)),

13such taxpayer shall be treated as an appli-

14

cable entity for purposes of this section for

15

such taxable year, but only with respect to16

the credit described in subsection (b)(7).

17‘‘(ii) LIMITATION.—

18‘‘(I) IN

GENERAL.—Except

as19

provided in subclause (II), if a tax-

20

payer makes an election under this21

subparagraph with respect to any tax-

22

able year, such taxpayer shall be

23

treated as having made such election

24

for each of the 4 succeeding taxable

25

years ending before January 1, 2033.

ERN22335 9K1

S.L.C.

504
1‘‘(II) EXCEPTION.—A taxpayer2

may elect to revoke the application of3

the election made under this subpara-

4graph to any taxable year described in5subclause (I). Any such election, if

6

made, shall apply to the applicable

7

year specified in such election and8each subsequent taxable year within

9

the period described in subclause (I).

10

Any election under this subclause may

11

not be subsequently revoked.
‘‘(E) OTHER RULES.—

1213‘‘(i) IN GENERAL.—An election made14

under subparagraph (B), (C), or (D) shall15

be made at such time and in such manner16

as the Secretary may provide.

17‘‘(ii) LIMITATION.—No election may

18

be made under subparagraph (B), (C), or

19(D) with respect to any taxable year begin-

20

ning after December 31, 2032.

21‘‘(2) APPLICATION.—In the case of any applica-22

ble entity which makes the election described in sub-23

section (a), any applicable credit shall be deter-

24

mined—

ERN22335 9K1

S.L.C.

505
12‘‘(A) without regard to paragraphs (3) and(4)(A)(i) of section 50(b), and3‘‘(B) by treating any property with respect

4

to which such credit is determined as used in

5

a trade or business of the applicable entity.

6‘‘(3) ELECTIONS.—

7‘‘(A) IN GENERAL.—

8‘‘(i) DUE DATE.—Any election under9

subsection (a) shall be made not later

10

than—

11

‘‘(I) in the case of any govern-

12

ment, or political subdivision, de-13

scribed in paragraph (1) and for

14

which no return is required under sec-

15

tion 6011 or 6033(a), such date as is

16

determined appropriate by the Sec-17

retary, or18‘‘(II) in any other case, the due

19date (including extensions of time) for20

the return of tax for the taxable year

21

for which the election is made, but in22

no event earlier than 180 days after

23

the date of the enactment of this sec-

24

tion.

ERN22335 9K1

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506
1‘‘(ii) ADDITIONAL RULES.—Any elec-

2tion under subsection (a), once made, shall3

be irrevocable and shall apply (except as

4otherwise provided in this paragraph) with5

respect to any credit for the taxable year

6

for which the election is made.

7‘‘(B) RENEWABLE ELECTRICITY PRODUC-

8

TION CREDIT.—In

9

scribed in subsection (b)(2), any election under

10

subsection (a) shall—

1112

the case of the credit de-‘‘(i) apply separately with respect toeach qualified facility,

13‘‘(ii) be made for the taxable year in14

which such qualified facility is originally15

placed in service, and16‘‘(iii) shall apply to such taxable year

17

and to any subsequent taxable year which18

is within the period described in subsection

19(a)(2)(A)(ii) of section 45 with respect to20such qualified facility.

21‘‘(C) CREDIT FOR CARBON OXIDE SEQUES-

22TRATION.—23‘‘(i) IN GENERAL.—In the case of the24credit described in subsection (b)(3), any

25election under subsection (a) shall—

ERN22335 9K1

S.L.C.

507
1‘‘(I) apply separately with respect2

to the carbon capture equipment origi-

3nally placed in service by the applica-4

ble entity during a taxable year, and5‘‘(II)(aa) in the case of a tax-

6

payer who makes an election described7

in paragraph (1)(C), apply to the tax-

8

able year in which such equipment is

9placed in service and the 4 subsequent

10

taxable years with respect to such

11

equipment which end before January

12

1, 2033, and13‘‘(bb) in any other case, apply to

14such taxable year and to any subse-

15

quent taxable year which is within the

16

period described in paragraph (3)(A)17or (4)(A) of section 45Q(a) with re-18

spect to such equipment.

19‘‘(ii) PROHIBITION ON TRANSFER.—

20

For any taxable year described in clause

21(i)(II)(aa) with respect to carbon capture

22

equipment, no election may be made by the23

taxpayer under section 6418(a) for such24

taxable year with respect to such equip-

ERN22335 9K1

S.L.C.

508
1

ment for purposes of the credit described2

in subsection (b)(3).

3‘‘(iii) REVOCATION OF ELECTION.—In

4

the case of a taxpayer who makes an elec-

5tion described in paragraph (1)(C) with re-6

spect to carbon capture equipment, such7

taxpayer may, at any time during the pe-

8riod described in clause (i)(II)(aa), revoke

9

the application of such election with re-10spect to such equipment for any subse-

11

quent taxable years during such period.

12

Any such election, if made, shall apply to

13

the applicable year specified in such elec-

14

tion and each subsequent taxable year

15

within the period described in clause

16(i)(II)(aa). Any election under this sub-17

clause may not be subsequently revoked.

18‘‘(D) CREDIT FOR PRODUCTION OF CLEAN

19

HYDROGEN.—20‘‘(i) IN GENERAL.—In the case of the21

credit described in subsection (b)(5), any

22election under subsection (a) shall—

23‘‘(I) apply separately with respect

24

to each qualified clean hydrogen pro-25

duction facility,

ERN22335 9K1

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509
1‘‘(II) be made for the taxable

2

year in which such facility is placed in

3

service (or within the 1-year period

4subsequent to the date of enactment

5of this section in the case of facilities

6

placed in service before December 31,

72022), and8‘‘(III)(aa) in the case of a tax-

9

payer who makes an election described10

in paragraph (1)(B), apply to such11

taxable year and the 4 subsequent

12

taxable years with respect to such fa-

13cility which end before January 1,

142033, and15‘‘(bb) in any other case, apply to

16such taxable year and all subsequent

17

taxable years with respect to such fa-

18

cility.

19‘‘(ii) PROHIBITION ON TRANSFER.—

20

For any taxable year described in clause

21(i)(III)(aa) with respect to a qualified

22

clean hydrogen production facility, no elec-

23

tion may be made by the taxpayer under24

section 6418(a) for such taxable year with

ERN22335 9K1

S.L.C.

510
1

respect to such facility for purposes of the2credit described in subsection (b)(5).

3‘‘(iii) REVOCATION OF ELECTION.—In

4

the case of a taxpayer who makes an elec-

5tion described in paragraph (1)(B) with re-6

spect to a qualified clean hydrogen produc-7tion facility, such taxpayer may, at any

8time during the period described in clause

9(i)(III)(aa), revoke the application of such

10

election with respect to such facility for11

any subsequent taxable years during such

12

period. Any such election, if made, shall13

apply to the applicable year specified in

14such election and each subsequent taxable

15

year within the period described in clause

16(i)(II)(aa). Any election under this sub-17

clause may not be subsequently revoked.

18‘‘(E) CLEAN

ELECTRICITYPRODUCTION

19

CREDIT.—In the case of the credit described in20

subsection (b)(8), any election under subsection

21(a) shall—

2223‘‘(i) apply separately with respect toeach qualified facility,

24‘‘(ii) be made for the taxable year in25

which such facility is placed in service, andERN22335 9K1

S.L.C.

511
1‘‘(iii) shall apply to such taxable year2

and to any subsequent taxable year which3

is within the period described in subsection

4(b)(1)(B) of section 45Y with respect to5such facility.

67‘‘(4) TIMING.—The payment described in subsection (a) shall be treated as made on—8‘‘(A) in the case of any government, or po-

9litical subdivision, described in paragraph (1)10and for which no return is required under sec-

11

tion 6011 or 6033(a), the later of the date that12

a return would be due under section 6033(a) if

13such government or subdivision were described

14

in that section or the date on which such gov-

15

ernment or subdivision submits a claim for16

credit or refund (at such time and in such man-17

ner as the Secretary shall provide), and18‘‘(B) in any other case, the later of the due

19date (determined without regard to extensions)20of the return of tax for the taxable year or the21

date on which such return is filed.

22‘‘(5) ADDITIONAL INFORMATION.—As a condi-

23

tion of, and prior to, any amount being treated as24

a payment which is made by an applicable entity

25

under subsection (a), the Secretary may require suchERN22335 9K1

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5121

information or registration as the Secretary deems

2

necessary or appropriate for purposes of preventing

3

duplication, fraud, improper payments, or excessive

4

payments under this section.

5‘‘(6) EXCESSIVE PAYMENT.—

6‘‘(A) IN GENERAL.—In the case of any

7amount treated as a payment which is made by

8

the applicable entity under subsection (a) which

9

the Secretary determines constitutes an exces-

10

sive payment, the tax imposed on such entity by

11chapter 1 (regardless of whether such entity

12

would otherwise be subject to tax under such

13

chapter) for the taxable year in which such de-14

termination is made shall be increased by an

15

amount equal to the sum of—

16
17
18

‘‘(i) the amount of such excessive payment, plus‘‘(ii) an amount equal to 20 percent of

19such excessive payment.

20‘‘(B) REASONABLE CAUSE.—Subparagraph21(A) shall not apply if the applicable entity dem-

22

onstrates to the satisfaction of the Secretary

23

that the excessive payment resulted from rea-24

sonable cause.

ERN22335 9K1

S.L.C.

513
1‘‘(C) EXCESSIVE PAYMENT DEFINED.—For2

purposes of this paragraph, the term ‘excessive

3

payment’ means, with respect to a facility or

4property for which an election is made under5

this section for any taxable year, an amount6

equal to the excess of—

7‘‘(i) the amount treated as a payment

8

which is made by the applicable entity

9

under subsection (a) with respect to such

10

facility or property for such taxable year,

11

over

12

‘‘(ii) the amount of the credit which,13

without application of this section, would

14

be otherwise allowable (as determined pur-15

suant to paragraph (2) and without regard16

to section 38(c)) under this title with re-17

spect to such facility or property for such18

taxable year.

19‘‘(d) DENIAL OF DOUBLE BENEFIT.—In the case of

20 an applicable entity making an election under this section
21 with respect to an applicable credit, such credit shall be
22 reduced to zero and shall, for any other purposes under
23 this title, be deemed to have been allowed to such entity
24 for such taxable year.

ERN22335 9K1

S.L.C.

514‘‘(e) MIRROR CODE POSSESSIONS.—In the case of

1

2 any possession of the United States with a mirror code
3 tax system (as defined in section 24(k)), this section shall4 not be treated as part of the income tax laws of the United
5 States for purposes of determining the income tax law of
6 such possession unless such possession elects to have this7 section be so treated.
‘‘(f) BASIS REDUCTION AND RECAPTURE.—Except

8

9 as otherwise provided in subsection (c)(2)(A), rules similar
10 to the rules of section 50 shall apply for purposes of this
11 section.
‘‘(g) REGULATIONS.—The Secretary shall issue such12

13 regulations or other guidance as may be necessary or ap14 propriate to carry out the purposes of this section, includ15 ing guidance to ensure that the amount of the payment
16 or deemed payment made under this section is commensu17 rate with the amount of the credit that would be otherwise
18 allowable (determined without regard to section 38(c)).’’.
(b) TRANSFER OF CERTAIN CREDITS.—Subchapter

19

20 B of chapter 65, as amended by subsection (a), is amend21 ed by inserting after section 6417 the following new sec22 tion:
23
24‘‘SEC. 6418. TRANSFER OF CERTAIN CREDITS.

‘‘(a) IN GENERAL.—In the case of an eligible tax-

25 payer which elects to transfer all (or any portion specified

ERN22335 9K1

S.L.C.

515
1 in the election) of an eligible credit determined with re2 spect to such taxpayer for any taxable year to a taxpayer
3 (referred to in this section as the ‘transferee taxpayer’)
4 which is not related (within the meaning of section 267(b)5 or 707(b)(1)) to the eligible taxpayer, the transferee tax6 payer specified in such election (and not the eligible tax7 payer) shall be treated as the taxpayer for purposes of
8 this title with respect to such credit (or such portion there9 of).
10‘‘(b) TREATMENT OF PAYMENTS MADE IN CONNEC-

11

TION WITH TRANSFER.—With respect to any amount paid

12 by a transferee taxpayer to an eligible taxpayer as consid13 eration for a transfer described in subsection (a), such
14 consideration—
15‘‘(1) shall be required to be paid in cash,

16‘‘(2) shall not be includible in gross income of17
18

the eligible taxpayer, and‘‘(3) with respect to the transferee taxpayer,

19

shall not be deductible under this title.

20‘‘(c) APPLICATION TO PARTNERSHIPS AND S COR-

21

PORATIONS.—

22‘‘(1) IN GENERAL.—In the case of any eligible

23

credit determined with respect to any facility or

24

property held directly by a partnership or S corpora-25

tion, if such partnership or S corporation makes anERN22335 9K1

S.L.C.

516
1

election under subsection (a) (in such manner as the2

Secretary may provide) with respect to such credit—

3‘‘(A) any amount received as consideration

4

for a transfer described in such subsection shall5

be treated as tax exempt income for purposes of6sections 705 and 1366, and7‘‘(B) a partner’s distributive share of such8

tax exempt income shall be based on such part-9

ner’s distributive share of the otherwise eligible

10

credit for each taxable year.

11‘‘(2) COORDINATIONWITHAPPLICATIONAT12PARTNER OR SHAREHOLDER LEVEL.—In the case of13

any facility or property held directly by a partner-

14

ship or S corporation, no election by any partner or

15

shareholder shall be allowed under subsection (a)16with respect to any eligible credit determined with17

respect to such facility or property.

18‘‘(d) TAXABLE YEAR IN WHICH CREDIT TAKEN INTO

19 ACCOUNT.—In the case of any credit (or portion thereof)
20 with respect to which an election is made under subsection
21 (a), such credit shall be taken into account in the first
22 taxable year of the transferee taxpayer ending with, or
23 after, the taxable year of the eligible taxpayer with respect
24 to which the credit was determined.
25‘‘(e) LIMITATIONS ON ELECTION.—ERN22335 9K1

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517
1‘‘(1) TIME FOR ELECTION.—An election under2

subsection (a) to transfer any portion of an eligible

3

credit shall be made not later than the due date (in-4cluding extensions of time) for the return of tax for5

the taxable year for which the credit is determined,6

but in no event earlier than 180 days after the date7of the enactment of this section. Any such election,

8

once made, shall be irrevocable.

9‘‘(2) NO ADDITIONAL TRANSFERS.—No election

10

may be made under subsection (a) by a transferee

11

taxpayer with respect to any portion of an eligible

12

credit which has been previously transferred to such13

taxpayer pursuant to this section.

14‘‘(f) DEFINITIONS.—For purposes of this section—

15
16
17

‘‘(1) ELIGIBLE CREDIT.—‘‘(A) IN

GENERAL.—Theterm ‘eligible

credit’ means each of the following:

18‘‘(i) So much of the credit for alter-

19

native fuel vehicle refueling property al-

20

lowed under section 30C which, pursuant

21

to subsection (d)(1) of such section, is22

treated as a credit listed in section 38(b).

23‘‘(ii) The renewable electricity produc-

24tion credit determined under section 45(a).

ERN22335 9K1

S.L.C.

518‘‘(iii) The credit for carbon oxide se-12questration

3

45Q(a).

determinedundersection4‘‘(iv) The zero-emission nuclear power5

production credit determined under section

6

45U(a).
‘‘(v) The clean hydrogen production

78

credit determined under section 45V(a).

9‘‘(vi) The advanced manufacturing

10

production credit determined under section

11

45X(a).
‘‘(vii) The clean electricity production

12
13

credit determined under section 45Y(a).
‘‘(viii) The clean fuel production cred-14
15

it determined under section 45Z(a).
‘‘(ix) The energy credit determined16
17

under section 48.

18‘‘(x) The qualifying advanced energy

19

project credit determined under section

20

48C.

21

‘‘(xi) The clean electricity investment

22

credit determined under section 48D.

23‘‘(B) ELECTION FOR CERTAIN CREDITS.—24

In the case of any eligible credit described in25

clause (ii), (iii), (v), or (vii) of subparagraphERN22335 9K1

S.L.C.

519
1(A), an election under subsection (a) shall be

2

made—

3

‘‘(i) separately with respect to each4

facility for which such credit is determined,

5

and

6

‘‘(ii) for each taxable year during the7

10-year period beginning on the date such

8

facility was originally placed in service (or,9in the case of the credit described in clause

10(iii), for each year during the 12-year pe-

11

riod beginning on the date the carbon cap-

12ture equipment was originally placed in

13

service at such facility).

14‘‘(C) EXCEPTION FOR BUSINESS CREDIT

15

CARRYFORWARDS OR CARRYBACKS.—The

term

16

‘eligible credit’ shall not include any business

17

credit carryforward or business credit carryback

18

determined under section 39.

19‘‘(2) ELIGIBLE TAXPAYER.—The term ‘eligible

20

taxpayer’ means any taxpayer which is not described21

in section 6417(c)(1)(A).

22‘‘(g) SPECIAL RULES.—For purposes of this sec-

23 tion—24‘‘(1) ADDITIONAL INFORMATION.—As a condi-

25

tion of, and prior to, any transfer of any portion of

ERN22335 9K1

S.L.C.

520
1

an eligible credit pursuant to subsection (a), the2Secretary may require such information (including,3

in such form or manner as is determined appro-

4

priate by the Secretary, such information returns) or5registration as the Secretary deems necessary or ap-

6

propriate for purposes of preventing duplication,

7

fraud, improper payments, or excessive payments

8

under this section.

9‘‘(2) EXCESSIVE PAYMENT.—

10‘‘(A) IN GENERAL.—In the case of any

11

portion of an eligible credit which is transferred12

to a transferee taxpayer pursuant to subsection

13(a) which the Secretary determines constitutes

14an excessive payment, the tax imposed on the15transferee taxpayer by chapter 1 (regardless of

16

whether such entity would otherwise be subject

17

to tax under such chapter) for the taxable year18

in which such determination is made shall be

19

increased by an amount equal to the sum of—

20‘‘(i) the amount of such excessive pay-

21
22

ment, plus‘‘(ii) an amount equal to 20 percent of

23such excessive payment.

24‘‘(B) REASONABLE CAUSE.—Subparagraph

25(A) shall not apply if the transferee taxpayer

ERN22335 9K1

S.L.C.

521
1

demonstrates to the satisfaction of the Sec-2

retary that the excessive payment resulted from3reasonable cause.

4‘‘(C) EXCESSIVE PAYMENT DEFINED.—For5

purposes of this paragraph, the term ‘excessive

6

payment’ means, with respect to a facility or

7property for which an election is made under8

subsection (a) for any taxable year, an amount9

equal to the excess of—

10‘‘(i) the amount of the eligible credit

11

claimed by the transferee taxpayer with re-

12spect to such facility or property for such13

taxable year, over14‘‘(ii) the amount of such credit which,15

without application of this section, would

16

be otherwise allowable (determined without

17

regard to section 38(c)) under this title

18

with respect to such facility or property for

19such taxable year.

20‘‘(3) BASIS REDUCTION.—In the case of any

21election under subsection (a) with respect to any

22

portion of an eligible credit described in clauses (ix)23through (xi) of subsection (f)(1)(A), subsection (c)24of section 50 shall apply to the applicable investment

25

credit property (as defined in subsection (a)(5) of

ERN22335 9K1

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522
1

such section) as if such eligible credit was allowed to2

the eligible taxpayer.

3‘‘(4) PROHIBITION ON ELECTION OR TRANSFER

4

WITH RESPECT TO PROGRESS EXPENDITURES.—This

5

section shall not apply with respect to any amount6of an eligible credit which is allowed pursuant to7rules similar to the rules of subsections (c)(4) and8(d) of section 46 (as in effect on the day before the9date of the enactment of the Revenue Reconciliation

10

Act of 1990).

11‘‘(h) REGULATIONS.—The Secretary shall issue such

12 regulations or other guidance as may be necessary or ap13 propriate to carry out the purposes of this section, includ14 ing regulations or other guidance providing rules for deter15 mining a partner’s distributive share of the tax exempt
16 income described in subsection (c)(1).’’.
17(c) REAL ESTATE INVESTMENT TRUSTS.—Section

18 50(d) is amended by adding at the end the following: ‘‘In
19 the case of a real estate investment trust making an elec20 tion under section 6418, paragraphs (1)(B) and (2)(B)
21 of the section 46(e) referred to in paragraph (1) of this22 subsection shall not apply to any investment credit prop23 erty of such real estate investment trust to which such
24 election applies.’’.

ERN22335 9K1

S.L.C.

523
1(d) 3-YEAR CARRYBACK FOR APPLICABLE CRED-

2

ITS.—Section 39(a) is amended by adding at the end the

3 following:‘‘(4) 3-YEAR

4

CARRYBACKFORAPPLICABLE

5

CREDITS.—Notwithstanding

subsection (d), in the6case of any applicable credit (as defined in section

76417(b))—8‘‘(A) this section shall be applied sepa-

9rately from the business credit (other than the10

applicable credit),11‘‘(B) paragraph (1) shall be applied by

12

substituting ‘each of the 3 taxable years’ for13‘the taxable year’ in subparagraph (A) thereof,

14and‘‘(C) paragraph (2) shall be applied—

1516‘‘(i) by substituting ‘23 taxable years’17for ‘21 taxable years’ in subparagraph (A)18thereof, and19‘‘(ii) by substituting ‘22 taxable years’20

for ‘20 taxable years’ in subparagraph (B)21thereof.’’.

22(e) CLERICAL AMENDMENT.—The table of sections

23 for subchapter B of chapter 65 is amended by inserting
24 after the item relating to section 6416 the following new
25 items:

ERN22335 9K1

S.L.C.

524‘‘Sec. 6417. Elective payment of applicable credits.
‘‘Sec. 6418. Transfer of certain credits.’’.

1(f) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to taxable years beginning after
3 December 31, 2022.
45SEC. 13802. APPROPRIATIONS.

Immediately upon the enactment of this Act, in addi-

6 tion to amounts otherwise available, there are appro7 priated for fiscal year 2022, out of any money in the
8 Treasury not otherwise appropriated, $500,000,000 to re9 main available until September 30, 2031, for necessary ex10 penses for the Internal Revenue Service to carry out this11 subtitle (and the amendments made by this subtitle),
12 which shall supplement and not supplant any other appro13 priations that may be available for this purpose.
14

PART IX—OTHER PROVISIONS

15

SEC. 13901. PERMANENT EXTENSION OF TAX RATE TO

16

FUND BLACK LUNG DISABILITY TRUST FUND.

17(a) IN GENERAL.—Section 4121 is amended by strik-

18 ing subsection (e).
19(b) EFFECTIVE DATE.—The amendment made by

20 this section shall apply to sales in calendar quarters begin21 ning after the date of the enactment of this Act.

ERN22335 9K1

S.L.C.

525
1

SEC. 13902. INCREASE IN RESEARCH CREDIT AGAINST PAY-

2

ROLL TAX FOR SMALL BUSINESSES.

3(a) IN GENERAL.—Clause (i) of section 41(h)(4)(B)

4 is amended—
5(1) by striking ‘‘AMOUNT.—The amount’’ and6

inserting ‘‘AMOUNT.—

7

‘‘(I)

8

amount’’, and

9
10

IN

GENERAL.—The(2) by adding at the end the following new subclause:

11‘‘(II) INCREASE.—In the case of

12

taxable years beginning after Decem-

13

ber 31, 2022, the amount in subclause

14(I) shall be increased by $250,000.’’.

15
16
17

(b) ALLOWANCE OF CREDIT.—(1) IN GENERAL.—Paragraph (1) of section
3111(f) is amended—

18(A) by striking ‘‘for a taxable year, there

19

shall be allowed’’ and inserting ‘‘for a taxable

20

year—

21

‘‘(A) there shall be allowed’’,22(B) by striking ‘‘equal to the’’ and insert-23

ing ‘‘equal to so much of the’’,24(C) by striking the period at the end and25

inserting ‘‘as does not exceed the limitation of26

subclause (I) of section 41(h)(4)(B)(i) (appliedERN22335 9K1

S.L.C.

526
1

without regard to subclause (II) thereof), and’’,

2

and

3
4

(D) by adding at the end the following new
subparagraph:5‘‘(B) there shall be allowed as a credit

6

against the tax imposed by subsection (b) for7

the first calendar quarter which begins after the8date on which the taxpayer files the return

9specified in section 41(h)(4)(A)(ii) an amount10

equal to so much of the payroll tax credit por-11

tion determined under section 41(h)(2) as is12

not allowed as a credit under subparagraph

13(A).’’.

14(2) LIMITATION.—Paragraph (2) of section

15
16
17

3111(f) is amended—(A) by striking ‘‘paragraph (1)’’ and inserting ‘‘paragraph (1)(A)’’, and18(B) by inserting ‘‘, and the credit allowed

19

by paragraph (1)(B) shall not exceed the tax

20

imposed by subsection (b) for any calendar

21

quarter,’’ after ‘‘calendar quarter’’.

22(3) CARRYOVER.—Paragraph (3) of section

23

3111(f) is amended by striking ‘‘the credit’’ and in-24

serting ‘‘any credit’’.

ERN22335 9K1

S.L.C.

527
1
2
3
4
5
6
7

(4) DEDUCTION ALLOWED.—Paragraph (4) ofsection 3111(f) is amended—(A) by striking ‘‘credit’’ and inserting‘‘credits’’, and(B) by striking ‘‘subsection (a)’’ and inserting ‘‘subsection (a) or (b)’’.
(c) AGGREGATION RULES.—Clause (ii) of section

8 41(h)(5)(B) is amended by striking ‘‘the $250,000
9 amount’’ and inserting ‘‘each of the $250,000 amounts’’.
10(d) EFFECTIVE DATE.—The amendments made by

11 this section shall apply to taxable years beginning after
12 December 31, 2022.

TITLE II—COMMITTEE ON AGRI14CULTURE, NUTRITION, AND
15
FORESTRY
16
Subtitle A—General Provisions
13

17
18

SEC. 20001. DEFINITION OF SECRETARY.

In this title, the term ‘‘Secretary’’ means the Sec-

19 retary of Agriculture.
20

Subtitle B—Conservation

21

SEC. 21001. ADDITIONAL AGRICULTURAL CONSERVATION

22
23

INVESTMENTS.

(a) APPROPRIATIONS.—In addition to amounts other-

24 wise available (and subject to subsection (b)), there are
25 appropriated to the Secretary, out of any money in theERN22335 9K1

S.L.C.

528
1 Treasury not otherwise appropriated, to remain available
2 until September 30, 2031 (subject to the condition that
3 no such funds may be disbursed after September 30,
4 2031)—5(1) to carry out, using the facilities and au-

6thorities of the Commodity Credit Corporation, the7environmental quality incentives program under sub-8

chapter A of chapter 4 of subtitle D of title XII of

9

the Food Security Act of 1985 (16 U.S.C. 3839aa

10through 3839aa–8)—

11(A)(i) $250,000,000 for fiscal year 2023;

12(ii) $1,750,000,000 for fiscal year 2024;

13(iii) $3,000,000,000 for fiscal year 2025;

14and(iv) $3,450,000,000 for fiscal year 2026;

15
16
17
18

and
(B) subject to the conditions on the use of
the funds that—

19(i) section 1240B(f)(1) of the Food

20

Security Act of 1985 (16 U.S.C. 3839aa–

21

2(f)(1)) shall not apply;

22(ii) section 1240H(c)(2) of the Food

23

Security Act of 1985 (16 U.S.C. 3839aa–

24

8(c)(2)) shall be applied—ERN22335 9K1

S.L.C.

529
1

(I)

by

2

‘‘$50,000,000’’

3

and
(II)

4

for

with

substituting‘‘$25,000,000’’;

theSecretary

5prioritizing proposals that utilize diet6

and feed management to reduce en-

7

teric

8

ruminants;

9(iii) the funds shall be available for 1

10

or more agricultural conservation practices

11

or enhancements that the Secretary deter-

12

mines directly improve soil carbon or re-13

duce nitrogen losses or greenhouse gas

14

emissions, or capture or sequester green-

15

house gas emissions, associated with agri-

16

cultural production; andmethaneemissions

from

17

(iv) the Secretary shall prioritize

18

projects and activities that mitigate or ad-

19

dress climate change through the manage-

20

ment of agricultural production, including

21

by reducing or avoiding greenhouse gas

22

emissions;23(2) to carry out, using the facilities and au-

24

thorities of the Commodity Credit Corporation, the25conservation stewardship program under subchapter

ERN22335 9K1

S.L.C.

530
1

B of that chapter (16 U.S.C. 3839aa–21 through23839aa–25)—

3(A)(i) $250,000,000 for fiscal year 2023;

4(ii) $500,000,000 for fiscal year 2024;

5(iii) $1,000,000,000 for fiscal year 2025;

6and(iv) $1,500,000,000 for fiscal year 2026;

7
8
9
10
11
12

and
(B) subject to the conditions on the use of
the funds that—(i) the funds shall only be available
for—

13

(I) 1 or more agricultural con-14

servation practices or enhancements

15

that the Secretary determines directly

16

improve soil carbon or reduce nitrogen17

losses or greenhouse gas emissions, or18

capture or sequester greenhouse gas

19

emissions, associated with agricultural

20

production; or21(II) State-specific or region-spe-

22cific groupings or bundles of agricul-

23

tural conservation activities for cli-

24

mate change mitigation appropriate

25

for cropland, pastureland, rangeland,ERN22335 9K1

S.L.C.

531
1

nonindustrial private forest land, and2producers transitioning to organic or

3

perennial production systems; and4(ii) the Secretary shall prioritize

5

projects and activities that mitigate or ad-

6

dress climate change through the manage-

7

ment of agricultural production, including

8

by reducing or avoiding greenhouse gas

9emissions;

10(3) to carry out, using the facilities and au-

11thorities of the Commodity Credit Corporation, the12agricultural conservation easement program under13

subtitle H of title XII of that Act (16 U.S.C. 3865

14through 3865d)—

15(A)(i) $100,000,000 for fiscal year 2023;

16(ii) $200,000,000 for fiscal year 2024;

17(iii) $500,000,000 for fiscal year 2025;

18

and

19

(iv) $600,000,000 for fiscal year 2026; and20(B) subject to the condition on the use of21

the funds that the Secretary shall prioritize

22

projects and activities that mitigate or address

23

climate change through the management of ag-

24

ricultural production, including by reducing or

25

avoiding greenhouse gas emissions; andERN22335 9K1

S.L.C.

532
1(4) to carry out, using the facilities and au-

2

thorities of the Commodity Credit Corporation, the3regional conservation partnership program under4

subtitle I of title XII of that Act (16 U.S.C. 3871

5

through 3871f)—

6(A)(i) $250,000,000 for fiscal year 2023;

7(ii) $1,200,000,000 for fiscal year 2024;

8(iii) $2,250,000,000 for fiscal year 2025;

9and(iv) $3,050,000,000 for fiscal year 2026;

10
11
12
13

and
(B) subject to the conditions on the use of
the funds that the Secretary—

14(i) shall prioritize partnership agree-

15

ments under section 1271C(d) of the Food

16

Security Act of 1985 (16 U.S.C. 3871c(d))

17that support the implementation of con-18

servation projects that assist agricultural

19

producers

20

forestland owners in directly improving soil

21

carbon or reducing nitrogen losses or

22greenhouse gas emissions, or capturing or

23

sequestering greenhouse gas emissions, as-24

sociated with agricultural production;

andnonindustrial

privateERN22335 9K1

S.L.C.

533
1(ii) shall prioritize projects and activi-

2

ties that mitigate or address climate

3

change through the management of agri-

4

cultural production, including by reducing

5

or avoiding greenhouse gas emissions; and6(iii) may prioritize projects that—(I)

7

leverage

corporate

supplychain sustainability commitments; or89(II) utilize models that pay for10outcomes from targeting methane and11nitrous oxide emissions associated12with agricultural production systems.

13(b) CONDITIONS.—The funds made available under

14 subsection (a) are subject to the conditions that the Sec15 retary shall not—16(1) enter into any agreement—(A) that is for a term extending beyond

17
18

September 30, 2031; or

19(B) under which any payment could be

20

outlaid or funds disbursed after September 30,

212031; or22(2) use any other funds available to the Sec-23

retary to satisfy obligations initially made under this24

section.

25(c) CONFORMING AMENDMENTS.—ERN22335 9K1

S.L.C.

534
1
2
3
4
5
6
7
8
9

(1) Section 1240B of the Food Security Act of1985 (16 U.S.C. 3839aa–2) is amended—(A) in subsection (a), by striking ‘‘2023’’
and inserting ‘‘2031’’; and(B) in subsection (f)(2)(B)—(i) in the subparagraph heading, bystriking ‘‘2023’’ and inserting ‘‘2031’’; and(ii) by striking ‘‘2023’’ and inserting‘‘2031’’.

10(2) Section 1240H of the Food Security Act of

111985 (16 U.S.C. 3839aa–8) is amended by striking

12‘‘2023’’ each place it appears and inserting ‘‘2031’’.

13(3) Section 1240J(a) of the Food Security Act14

of 1985 (16 U.S.C. 3839aa–22(a)) is amended, in15

the matter preceding paragraph (1), by striking

16‘‘2023’’ and inserting ‘‘2031’’.

17(4) Section 1240L(h)(2)(A) of the Food Secu-

18

rity Act of 1985 (16 U.S.C. 3839aa–24(h)(2)(A)) is19

amended by striking ‘‘2023’’ and inserting ‘‘2031’’.

20(5) Section 1241 of the Food Security Act of

21
221985 (16 U.S.C. 3841) is amended—(A) in subsection (a)—23(i) in the matter preceding paragraph24(1), by striking ‘‘2023’’ and inserting

25‘‘2031’’;

ERN22335 9K1

S.L.C.

535
1(ii) in paragraph (1), by striking

2‘‘2023’’ each place it appears and inserting3‘‘2031’’;45(iii) in paragraph (2)(F), by striking‘‘2023’’ and inserting ‘‘2031’’; and6(iv) in paragraph (3), by striking ‘‘fis-7

cal year 2023’’ each place it appears and8

inserting ‘‘each of fiscal years 2023

9

through 2031’’;10(B) in subsection (b), by striking ‘‘2023’’

11

and inserting ‘‘2031’’; and12(C) in subsection (h)—13(i) in paragraph (1)(B), in the sub-14

paragraph heading, by striking ‘‘2023’’ and15

inserting ‘‘2031’’; and1617(ii) by striking ‘‘2023’’ each place it
appears and inserting ‘‘2031’’.

18(6) Section 1244(n)(3)(A) of the Food Security

19

Act of 1985 (16 U.S.C. 3844(n)(3)(A)) is amended20

by striking ‘‘2023’’ and inserting ‘‘2031’’.

21(7) Section 1271D(a) of the Food Security Act22

of 1985 (16 U.S.C. 3871d(a)) is amended by strik-23

ing ‘‘2023’’ and inserting ‘‘2031’’.

ERN22335 9K1

S.L.C.

536
1
2

SEC. 21002. CONSERVATION TECHNICAL ASSISTANCE.

(a) APPROPRIATIONS.—In addition to amounts other-

3 wise available (and subject to subsection (b)), there are
4 appropriated to the Secretary for fiscal year 2022, out of
5 any money in the Treasury not otherwise appropriated,
6 to remain available until September 30, 2031 (subject to
7 the condition that no such funds may be disbursed after
8 September 30, 2031)—
9(1) $1,000,000,000 to provide conservation

10

technical assistance through the Natural Resources

11

Conservation Service; and

12(2) $300,000,000 to carry out a carbon seques-13

tration and greenhouse gas emissions quantification

14

program through which the Natural Resources Con-15

servation Service, including through technical service

16

providers and other partners, shall collect field-based

17

data to assess the carbon sequestration and green-

18

house gas emissions reduction outcomes associated19with activities carried out pursuant to this section20

and use the data to monitor and track greenhouse21

gas emissions and carbon sequestration trends

22

through the Greenhouse Gas Inventory and Assess-23

ment Program of the Department of Agriculture.

24(b) CONDITIONS.—The funds made available under

25 this section are subject to the conditions that the Sec26 retary shall not—

ERN22335 9K1

S.L.C.

537(1) enter into any agreement—

1(A) that is for a term extending beyond

2

September 30, 2031; or

34(B) under which any payment could be

5outlaid or funds disbursed after September 30,

6

2031;

7

(2) use any other funds available to the Sec-8

retary to satisfy obligations initially made under this9

section; or

10(3) interpret this section to authorize funds of

11

the Commodity Credit Corporation for activities

12

under this section if such funds are not expressly

13

authorized or currently expended for such purposes.

14

(c)

ADMINISTRATIVECOSTS.—In

additionto

15 amounts otherwise available, there is appropriated to the
16 Secretary for fiscal year 2022, out of any money in the
17 Treasury not otherwise appropriated, $100,000,000, to re18 main available until September 30, 2028, for administra19 tive costs of the agencies and offices of the Department
20 of Agriculture for costs related to implementing this sec21 tion.

ERN22335 9K1

S.L.C.

538
1

Subtitle C—Rural Development

2

SEC. 22001. ADDITIONAL FUNDING FOR ELECTRIC LOANS

3
4

FOR RENEWABLE ENERGY.

Section 9003 of the Farm Security and Rural Invest-

5 ment Act of 2002 (7 U.S.C. 8103) is amended by adding
6 at the end the following:78‘‘(h) ADDITIONAL FUNDING FOR ELECTRIC LOANS
FOR RENEWABLE ENERGY.—

9‘‘(1) APPROPRIATIONS.—Notwithstanding sub-10

sections (a) through (e), and (g), in addition to11

amounts otherwise available, there is appropriated to12

the Secretary for fiscal year 2022, out of any money

13

in

14

$1,000,000,000, to remain available until September

1530, 2031, for the cost of loans under section 317 of

16

the Rural Electrification Act of 1936 (7 U.S.C.

17940g), including for projects that store electricity

18that support the types of eligible projects under that

19

section, which shall be forgiven based on how the20

borrower and the project meets the terms and condi-

21

tions for loan forgiveness consistent with the pur-22

poses of that section established by the Secretary.

theTreasurynototherwise

appropriated,

23‘‘(2) LIMITATION.—The Secretary shall not24

enter into any loan agreement pursuant this sub-

ERN22335 9K1

S.L.C.

539
1

section that could result in disbursements after Sep-2

tember 30, 2031.

3‘‘(3) RESTRICTION.—A loan under paragraph4(1) shall be forgiven in an amount that is not great-5

er than 50 percent of the loan, unless the Secretary

6

waives such restriction.’’.

7
8SEC. 22002. RURAL ENERGY FOR AMERICA PROGRAM.

(a) APPROPRIATION.—In addition to amounts other-

9 wise available, there is appropriated to the Secretary, out
10 of any money in the Treasury not otherwise appropriated,
11 for eligible projects under section 9007 of the Farm Secu12 rity and Rural Investment Act of 2002 (7 U.S.C. 8107),
13 and notwithstanding section 9007(c)(3)(A) of that Act,
14 the amount of a grant shall not exceed 50 percent of the
15 cost of the activity carried out using the grant funds—
1617(1) $820,250,000 for fiscal year 2022, to remain available until September 30, 2031; and

18(2) $180,276,500 for each of fiscal years 2023

19

through 2027, to remain available until September

20

30, 2031.

21(b) UNDERUTILIZED RENEWABLE ENERGY TECH-22NOLOGIES.—In addition to amounts otherwise available,

23 there is appropriated to the Secretary, out of any money
24 in the Treasury not otherwise appropriated, to provide
25 grants and loans guaranteed by the Secretary (includingERN22335 9K1

S.L.C.

540
1 the costs of such loans) under the program described in
2 subsection (a) relating to underutilized renewable energy
3 technologies, and to provide technical assistance for apply4 ing to the program described in subsection (a), including
5 for underutilized renewable energy technologies, notwith6 standing section 9007(c)(3)(A) of the Farm Security and7 Rural Investment Act of 2002 (7 U.S.C. 8107(c)(3)(A)),
8 the amount of a grant shall not exceed 50 percent of the
9 cost of the activity carried out using the grant funds, and
10 to the extent the following amounts remain available at
11 the end of each fiscal year, the Secretary shall use such
12 amounts in accordance with subsection (a)—1314(1) $144,750,000 for fiscal year 2022, to remain available until September 30, 2031; and

15(2) $31,813,500 for each of fiscal years 2023

16

through 2027, to remain available until September

1730, 2031.

18(c) LIMITATION.—The Secretary shall not enter into,

19 pursuant to this section—
20
21
22
23

(1) any loan agreement that may result in a
disbursement after September 30, 2031; or(2) any grant agreement that may result in any
outlay after September 30, 2031.

ERN22335 9K1

S.L.C.

541
1

SEC.

22003.

2
3

BIOFUELINFRASTRUCTURE

AND

AGRI-

CULTURE PRODUCT MARKET EXPANSION.

Section 9003 of the Farm Security and Rural Invest-

4 ment Act of 2002 (7 U.S.C. 8103) (as amended by section
5 22001) is amended by adding at the end the following:
6‘‘(i) BIOFUEL INFRASTRUCTURE AND AGRICULTURE

7 PRODUCT MARKET EXPANSION.—
8‘‘(1) APPROPRIATION.—Notwithstanding sub-9

sections (a) through (e) and subsection (g), in addi-

10tion to amounts otherwise available, there is appro-

11

priated to the Secretary for fiscal year 2022, out of12

any money in the Treasury not otherwise appro-

13

priated, $500,000,000, to remain available until

14

September 30, 2031, to carry out this subsection.

15‘‘(2) USE OF FUNDS.—The Secretary shall use

16

the amounts made available by paragraph (1) to

17

provide grants, for which the Federal share shall be

18

not more than 75 percent of the total cost of car-19

rying out a project for which the grant is provided,20

on a competitive basis, to increase the sale and use

21

of agricultural commodity-based fuels through infra-

22

structure improvements for blending, storing, sup-23

plying, or distributing biofuels, except for transpor-

24

tation infrastructure not on location where such25

biofuels are blended, stored, supplied, or distrib-

26

uted—

ERN22335 9K1

S.L.C.

542
1‘‘(A) by installing, retrofitting, or other-2

wise upgrading fuel dispensers or pumps and3

related equipment, storage tank system compo-

4nents, and other infrastructure required at a lo-

5cation related to dispensing certain biofuels6

blends to ensure the increased sales of fuels7with high levels of commodity-based ethanol

8and biodiesel that are at or greater than the9levels required in the Notice of Funding Avail-10

ability for the Higher Blends Infrastructure In-

11

centive Program for Fiscal Year 2020, pub-12

lished in the Federal Register (85 Fed. Reg.

13

26656), as determined by the Secretary; and

14‘‘(B) by building and retrofitting home15

heating oil distribution centers or equivalent en-

16

tities and distribution systems for ethanol and17

biodiesel blends.

18‘‘(3) LIMITATION.—The Secretary may not

19

limit the amount of funding an eligible entity may

20

receive under this subsection provided that no eligi-

21

ble entity may receive more than 10 percent of the22

funds appropriated under paragraph (1) unless there23

are insufficient eligible applicants, as determined by24

the Secretary, to which to award those funds.’’.

ERN22335 9K1

S.L.C.

543
1

SEC. 22004. USDA ASSISTANCE FOR RURAL ELECTRIC CO-

2
3

OPERATIVES.

Section 9003 of the Farm Security and Rural Invest-

4 ment Act of 2002 (7 U.S.C. 8103) (as amended by section
5 22003) is amended by adding at the end the following:
67‘‘(j) USDA ASSISTANCE FOR RURAL ELECTRIC COOPERATIVES.—

8‘‘(1) APPROPRIATION.—Notwithstanding sub-9

sections (a) through (e) and (g), in addition to10

amounts otherwise available, there is appropriated to

11

the Secretary for fiscal year 2022, out of any money

12

in

13

$9,700,000,000, to remain available until September

1430, 2031, for the long-term resiliency, reliability,

15

and affordability of rural electric systems and for

16

purposes described in section 310B(a)(2)(C) of the17

Consolidated Farm and Rural Development Act (718

U.S.C. 1932(a)(2)(C)) (provided that the term re-19

newable energy system in that paragraph has the20

meaning given that term in section 9001), for zero-

21

emission systems, or for carbon capture and storage

22

systems, by providing to an eligible entity (defined23

as an electric cooperative described in section

24

501(c)(12) or 1381(a)(2) of the Internal Revenue

25

Code of 1986 and is or has been a Rural Utilities

26

Service electric loan borrower pursuant to the Ruralthe

Treasurynototherwise

appropriated,

ERN22335 9K1

S.L.C.

544
1

Electrification Act of 1936 or serving a predomi-

2nantly rural area or a wholly or jointly owned sub-3

sidiary of such electric cooperative) financial assist-

4

ance, including loans and the cost of loans and5

modifications thereof, to purchase renewable energy,

6renewable energy systems, zero-emission systems,

7

and carbon capture and storage systems, to deploy

8such systems, or to make energy efficiency improve-9

ments to electric generation and transmission sys-

10tems of the eligible entity after the date of enact-

11

ment of this subsection, that will achieve the great-12

est reduction in greenhouse gas emissions associated13with rural electric systems using financial assistance14

provided under this subsection and that will other-15

wise aid disadvantaged rural communities, as deter-

16

mined by the Secretary.

17‘‘(2) LIMITATION.—No eligible entity may re-18

ceive an amount equal to more than 10 percent of19

the total amount made available by this subsection.

20‘‘(3) REQUIREMENT.—The amount of a grant

21

under this subsection shall be not more than 25 per-22

cent of the total project costs of the eligible entity

23

carrying out a project using a grant under this sub-24

section.

ERN22335 9K1

S.L.C.

545
1‘‘(4) PROHIBITION.—Nothing in this subsection

2

shall be interpreted to authorize funds of the Com-3

modity Credit Corporation for activities under this4

subsection if such funds are not expressly authorized

5

or currently expended for such purposes.

67‘‘(5) DISBURSEMENTS.—The Secretary shallnot enter into, pursuant to this subsection—

8‘‘(A) any loan agreement that may result

9in a disbursement after September 30, 2031; or

10‘‘(B) any grant agreement that may result

11
12
13
14

in any outlay after September 30, 2031.’’.
SEC. 22005. ADDITIONAL USDA RURAL DEVELOPMENT ADMINISTRATIVE FUNDS.

In addition to amounts otherwise available, there is

15 appropriated to the Secretary for fiscal year 2022, out of
16 any money in the Treasury not otherwise appropriated,
17 $100,000,000, to remain available until September 30,
18 2031, for administrative costs and salaries and expenses
19 for the Rural Development mission area and expenses of
20 the agencies and offices of the Department for costs re21 lated to implementing this subtitle.

ERN22335 9K1

S.L.C.

546
1

Subtitle D—Forestry

2

SEC. 23001. NATIONAL FOREST SYSTEM RESTORATION AND

3

FUELS REDUCTION PROJECTS.

4(a) APPROPRIATIONS.—In addition to amounts other-

5 wise available, there are appropriated to the Secretary for
6 fiscal year 2022, out of any money in the Treasury not
7 otherwise appropriated, to remain available until Sep8 tember 30, 2031—
9(1) $1,800,000,000 for hazardous fuels reduc-10tion projects on National Forest System land within

11

the wildland-urban interface;12(2) $200,000,000 for vegetation management

13

projects on National Forest System land carried out

14

in accordance with a water source management plan15

or a watershed protection and restoration action

16

plan;

17

(3) $100,000,000 to provide for more efficient18

and more effective environmental reviews by the19

Chief of the Forest Service in satisfying the obliga-

20

tions of the Chief of the Forest Service under the

21

National Environmental Policy Act of 1969 (4222

U.S.C. 4321 through 4370m–12); and

23(4) $50,000,000 to develop and carry out activi-

24

ties and tactics for the protection of old-growth for-25

ests on National Forest System land and to com-

ERN22335 9K1

S.L.C.

547
1

plete an inventory of old-growth forests and mature2

forests within the National Forest System.

3(b) PRIORITY FOR FUNDING.—For projects described

4 in paragraphs (1) and (2) of subsection (a), the Secretary
5 shall prioritize for implementation projects—
6(1) for which an environmental assessment or

7

an environmental impact statement required under8

the National Environmental Policy Act of 1969 (429U.S.C. 4321 through 4370m–12) has been com-10

pleted;11(2) that are collaboratively developed; or

12(3) that include opportunities to restore sus-

13

tainable recreation infrastructure or access or ac-

14complish other recreation outcomes on National For-15

est System lands, if the opportunities are compatible

16

with the primary restoration purposes of the project.

17(c) RESTRICTIONS.—None of the funds made avail-18 able by this section may be used for any activity—
19
20
21
22

(1) conducted in a wilderness area or wilderness
study area;(2) that includes the construction of a permanent road or motorized trail;

23(3) that includes the construction of a tem-24

porary road, except in the case of a temporary road

ERN22335 9K1

S.L.C.

548
1

that is decommissioned by the Secretary not later2

than 3 years after the earlier of—(A) the date on which the temporary road3
4

is no longer needed; and5(B) the date on which the project for6which the temporary road was constructed is

7completed;8(4) inconsistent with the applicable land man-

9

agement plan;

10(5) inconsistent with the prohibitions of the rule11of the Forest Service entitled ‘‘Special Areas;

12

Roadless Area Conservation’’ (66 Fed. Reg. 3244

13

(January 12, 2001)), as modified by subparts C and

14

D of part 294 of title 36, Code of Federal Regula-

15

tions; or

16(6) carried out on any land that is not National

17

Forest System land, including other forested land on

18

Federal, State, Tribal, or private land.

19(d) LIMITATIONS.—Nothing in this section shall be

20 interpreted to authorize funds of the Commodity Credit
21 Corporation for activities under this section if such funds
22 are not expressly authorized or currently expended for
23 such purposes.
24(e) COST-SHARING WAIVER.—ERN22335 9K1

S.L.C.

549
1(1) IN GENERAL.—The non-Federal cost-share2

requirement of a project described in paragraph (2)3may be waived at the discretion of the Secretary.

4
5
6
7

(2) PROJECT DESCRIBED.—A project referred
to in paragraph (1) is a project that—(A) is carried out using funds made available under this section;

8(B) requires a partnership agreement, in-9cluding a cooperative agreement or mutual in-10

terest agreement; and

11
12
13

(C) is subject to a non-Federal cost-sharerequirement.
(f) DEFINITIONS.—In this section:

14(1) COLLABORATIVELY DEVELOPED.—The term

15‘‘collaboratively developed’’ means, with respect to a

16

project located exclusively on National Forest Sys-

17

tem land, that the project is developed and imple-

18

mented through a collaborative process that—

19(A) includes multiple interested persons

20

representing diverse interests, except such per-21

sons shall not be employed by the Federal Gov-

22

ernment or be representatives of foreign enti-

23

ties; and

24

(B)(i) is transparent and nonexclusive; orERN22335 9K1

S.L.C.

550(ii) meets the requirements for a resource

12

advisory3

through (f) of section 205 of the Secure Rural

4

Schools and Community Self-Determination Act

5

of 2000 (16 U.S.C. 7125).

6(2) DECOMMISSION.—The term ‘‘decommis-

7

under

subsections(c)sion’’ means, with respect to a road—(A) reestablishing native vegetation on the89committee

road;

10

(B) restoring any natural drainage, water-

11

shed function, or other ecological processes that

12

were disrupted or adversely impacted by the

13

road

14

connecting the road prism and reestablishing15

stable slope contours; andbyremovingorhydrologicallydis-(C) effectively blocking the road to vehic-

16
17

ular traffic, where feasible.

18(3) ECOLOGICAL INTEGRITY.—The term ‘‘eco-

19

logical integrity’’ has the meaning given the term in

20

section 219.19 of title 36, Code of Federal Regula-

21

tions (as in effect on the date of enactment of this

22

Act).

23

(4)

HAZARDOUS

FUELS

REDUCTION

24

PROJECT.—Theterm ‘‘hazardous fuels reduction

25

project’’ means an activity, including the use of pre-

ERN22335 9K1

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551
1

scribed fire, to protect structures and communities

2

from wildfire that is carried out on National Forest

3

System land.

4(5) RESTORATION.—The term ‘‘restoration’’5

has the meaning given the term in section 219.19 of

6

title 36, Code of Federal Regulations (as in effect on

7

the date of enactment of this Act).

8(6) VEGETATION MANAGEMENT PROJECT.—The

9

term ‘‘vegetation management project’’ means an ac-

10tivity carried out on National Forest System land to11enhance the ecological integrity and achieve the res-12

toration of a forest ecosystem through the removal

13

of vegetation, the use of prescribed fire, the restora-

14tion of aquatic habitat, or the decommissioning of an

15

unauthorized, temporary, or system road.

16(7) WATER SOURCE MANAGEMENT PLAN.—The

17

term ‘‘water source management plan’’ means a plan18

developed under section 303(d)(1) of the Healthy

19

Forests Restoration Act of 2003 (16 U.S.C.

20

6542(d)(1)).

21(8) WATERSHED PROTECTION AND RESTORA-

22

TION ACTION PLAN.—The term ‘‘watershed protec-

23

tion and restoration action plan’’ means a plan de-24veloped under section 304(a)(3) of the Healthy For-ERN22335 9K1

S.L.C.

552
1

ests

Restoration

26543(a)(3)).

Act

of

2003

(16

U.S.C.

3(9) WILDLAND-URBAN INTERFACE.—The term

4‘‘wildland-urban interface’’ has the meaning given5

the term in section 101 of the Healthy Forests Res-

6

toration Act of 2003 (16 U.S.C. 6511).

789SEC. 23002. COMPETITIVE GRANTS FOR NON-FEDERAL FOREST LANDOWNERS.

(a) APPROPRIATIONS.—In addition to amounts other-

10 wise available, there are appropriated to the Secretary for
11 fiscal year 2022, out of any money in the Treasury not
12 otherwise appropriated, to remain available until Sep13 tember 30, 2031—
14(1) $150,000,000 for the competitive grant pro-

15

gram under section 13A of the Cooperative Forestry

16

Assistance Act of 1978 (16 U.S.C. 2109a) for pro-17

viding through that program a cost share to carry18

out climate mitigation or forest resilience practices

19in the case of underserved forest landowners, subject

20

to the condition that subsection (h) of that section

21

shall not apply;

22(2) $150,000,000 for the competitive grant pro-

23

gram under section 13A of the Cooperative Forestry

24

Assistance Act of 1978 (16 U.S.C. 2109a) for pro-25

viding through that program grants to support theERN22335 9K1

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553
1

participation of underserved forest landowners in2

emerging private markets for climate mitigation or3

forest resilience, subject to the condition that sub-4

section (h) of that section shall not apply;

5(3) $100,000,000 for the competitive grant pro-

6

gram under section 13A of the Cooperative Forestry

7

Assistance Act of 1978 (16 U.S.C. 2109a) for pro-8

viding through that program grants to support the9participation of forest landowners who own less than10

2,500 acres of forest land in emerging private mar-11

kets for climate mitigation or forest resilience, sub-12

ject to the condition that subsection (h) of that sec-

13

tion shall not apply;

14(4) $50,000,000 for the competitive grant pro-

15

gram under section 13A of the Cooperative Forestry

16

Assistance Act of 1978 (16 U.S.C. 2109a) to pro-17

vide grants to states and other eligible entities to18

provide payments to owners of private forest land19

for implementation of forestry practices on private

20

forest land, that are determined by the Secretary,

21

based on the best available science, to provide meas-

22

urable increases in carbon sequestration and storage

23

beyond customary practices on comparable land,

24

subject to the conditions that—ERN22335 9K1

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554
1(A) those payments shall not preclude2

landowners from participation in other public

3

and private sector financial incentive programs;

4

and

5

(B) subsection (h) of that section shall not

6

apply; and

7(5) $100,000,000 to provide grants under the8wood innovation grant program under section 8643

9of the Agriculture Improvement Act of 2018 (710U.S.C. 7655d), including for the construction of new

11

facilities that advance the purposes of the program

12

and for the hauling of material removed to reduce13

hazardous fuels to locations where that material can

14

be utilized, subject to the conditions that—

1516(A) the amount of such a grant shall be
not more than $5,000,000;

17(B) notwithstanding subsection (d) of that18

section, a recipient of such a grant shall provide

19

funds equal to not less than 50 percent of the20

amount received under the grant, to be derived

21

from non-Federal sources; and22(C) a priority shall be placed on projects

23that create a financial model for addressing for-24

est restoration needs on public or private forest

25

land.

ERN22335 9K1

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555
1(b) COST-SHARING REQUIREMENT.—Any partnership

2 agreements, including cooperative agreements and mutual
3 interest agreements, using funds made available under
4 this section shall be subject to a non-Federal cost-share
5 requirement of not less than 20 percent of the project cost,
6 which may be waived at the discretion of the Secretary.
7(c) LIMITATIONS.—Nothing in this section shall be

8 interpreted to authorize funds of the Commodity Credit
9 Corporation for activities under this section if such funds
10 are not expressly authorized or currently expended for
11 such purposes.
12
13
14

SEC. 23003. STATE AND PRIVATE FORESTRY CONSERVATION PROGRAMS.

(a) APPROPRIATIONS.—In addition to amounts other-

15 wise available, there are appropriated to the Secretary for
16 fiscal year 2022, out of any money in the Treasury not
17 otherwise appropriated, to remain available until Sep18 tember 30, 2031—
19(1) $700,000,000 to provide competitive grants20

to States through the Forest Legacy Program estab-

21

lished under section 7 of the Cooperative Forestry

22

Assistance Act of 1978 (16 U.S.C. 2103c) to acquire23

land and interests in land, with priority given to24

grant applications that offer significant natural car-

ERN22335 9K1

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556
1

bon sequestration benefits or provide benefits to un-2derserved populations; and3(2) $1,500,000,000 to provide multiyear, pro-4

grammatic, competitive grants to a State agency, a5

local governmental entity, an agency or govern-

6

mental entity of the District of Columbia, an Indian

7

Tribe, or a nonprofit organization through the

8

Urban and Community Forestry Assistance program

9

established under section 9(c) of the Cooperative

10

Forestry Assistance Act of 1978 (16 U.S.C.

112105(c)) for tree planting and related activities, with12

a priority for projects that benefit underserved popu-

13

lations and areas.

14(b) WAIVER.—Any non-Federal cost-share require-

15 ment otherwise applicable to projects carried out under
16 this section may be waived at the discretion of the Sec17 retary.
18
19

SEC. 23004. LIMITATION.

The funds made available under this subtitle are sub-

20 ject to the condition that the Secretary shall not—
21
22
23

(1) enter into any agreement—(A) that is for a term extending beyond
September 30, 2031; orERN22335 9K1

S.L.C.

557
1(B) under which any payment could be2

outlaid or funds disbursed after September 30,

32031; or4(2) use any other funds available to the Sec-5

retary to satisfy obligations initially made under this6

subtitle.

78SEC. 23005. ADMINISTRATIVE COSTS.

In addition to amounts otherwise available, there is

9 appropriated to the Secretary for fiscal year 2022, out of
10 any money in the Treasury not otherwise appropriated,
11 $100,000,000 to remain available until September 30,
12 2031, for administrative costs of the agencies and offices
13 of the Department of Agriculture for costs related to im14 plementing this subtitle.
15

TITLE
III—COMMITTEE
16
BANKING,
HOUSING,
17
URBAN AFFAIRS

ON
AND

18

SEC. 30001. ENHANCED USE OF DEFENSE PRODUCTION ACT19
20

OF 1950.

In addition to amounts otherwise available, there is

21 appropriated for fiscal year 2022, out of any money in
22 the Treasury not otherwise appropriated, $500,000,000,
23 to remain available until September 30, 2024, to carry out
24 the Defense Production Act of 1950 (50 U.S.C. 4501 et
25 seq.).

ERN22335 9K1

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558
1

SEC. 30002. IMPROVING ENERGY EFFICIENCY OR WATER

2

EFFICIENCY OR CLIMATE RESILIENCE OF AF-

3

FORDABLE HOUSING.

4(a) APPROPRIATION.—In addition to amounts other-

5 wise available, there is appropriated to the Secretary of
6 Housing and Urban Development (in this section referred
7 to as the ‘‘Secretary’’) for fiscal year 2022, out of any
8 money in the Treasury not otherwise appropriated—
9(1) $837,500,000, to remain available until

10

September 30, 2028, for the cost of providing direct

11loans, including the costs of modifying such loans,

12

and for grants, as provided for and subject to terms

13

and conditions in subsection (b), including to sub-14

sidize gross obligations for the principal amount of

15

direct loans, not to exceed $4,000,000,000, to fund16

projects that improve energy or water efficiency, in-17door air quality or sustainability, implement the use

18

of low-emission technologies, materials, or processes,

19

including zero-emission electricity generation, energy

20

storage, or building electrification, or address cli-

21

mate resilience, of an eligible property;

22(2) $60,000,000, to remain available until Sep-

23

tember 30, 2030, for the costs to the Secretary of24

administering and overseeing the implementation of

25

this section, including information technology, finan-

26

cial reporting, research and evaluation, other cross-ERN22335 9K1

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559
1

program costs in support of programs administered2

by the Secretary in this title, and other costs;

3(3) $60,000,000, to remain available until Sep-

4

tember 30, 2029, for expenses of contracts adminis-

5

tered by the Secretary, including to carry out prop-

6

erty climate risk, energy, or water assessments, due

7diligence, and underwriting functions for such grant8

and direct loan program; and

9(4) $42,500,000, to remain available until Sep-

10

tember

30,

2028,

for

energy

and

water

11

benchmarking of properties eligible to receive grants

12

or loans under this section, regardless of whether

13

they actually received such grants, along with associ-14

ated data analysis and evaluation at the property

15

and portfolio level, including the development of in-

16

formation technology systems necessary for the col-17

lection, evaluation, and analysis of such data.

18(b) LOAN AND GRANT TERMS AND CONDITIONS.—

19 Amounts made available under this section shall be for
20 direct loans, grants, and direct loans that can be converted
21 to grants to eligible recipients that agree to an extended
22 period of affordability for the property.
23
24
25

(c) DEFINITIONS.—As used in this section—(1) the term ‘‘eligible recipient’’ means any
owner or sponsor of an eligible property; andERN22335 9K1

S.L.C.

560
1
2
3
4

(2) the term ‘‘eligible property’’ means a property assisted pursuant to—(A) section 202 of the Housing Act of1959 (12 U.S.C. 1701q);

5(B) section 202 of the Housing Act of

61959 (former 12 U.S.C. 1701q), as such section

7

existed before the enactment of the Cranston-

8

Gonzalez National Affordable Housing Act;

9(C) section 811 of the Cranston-Gonzalez

10

National Affordable Housing Act (42 U.S.C.

118013);

12
13
14
15

(D) section 8(b) of the United States
Housing Act of 1937 (42 U.S.C. 1437f(b));(E) section 236 of the National Housing
Act (12 U.S.C. 1715z–1); or

16(F) a Housing Assistance Payments con-17

tract for Project-Based Rental Assistance in fis-18

cal year 2021.

19(d) WAIVER.—The Secretary may waive or specify al-

20 ternative requirements for any provision of subsection (c)21 or (bb) of section 8 of the United States Housing Act of
22 1937 (42 U.S.C. 1437f(c), 1437f(bb)) upon a finding that
23 the waiver or alternative requirement is necessary to facili24 tate the use of amounts made available under this section.

ERN22335 9K1

S.L.C.

5611(e) IMPLEMENTATION.—The Secretary shall have the2 authority to establish by notice any requirements that the
3 Secretary determines are necessary for timely and effec4 tive implementation of the program and expenditure of
5 funds appropriated, which requirements shall take effect
6 upon issuance.

TITLE IV—COMMITTEE ON COM8MERCE,SCIENCE,AND
9
TRANSPORTATION
7

10
11
12

SEC. 40001. INVESTING IN COASTAL COMMUNITIES AND
CLIMATE RESILIENCE.

(a) IN GENERAL.—In addition to amounts otherwise

13 available, there is appropriated to the National Oceanic
14 and Atmospheric Administration for fiscal year 2022, out
15 of any money in the Treasury not otherwise appropriated,
16 $2,600,000,000, to remain available until September 30,
17 2026, to provide funding through direct expenditure, con18 tracts, grants, cooperative agreements, or technical assist19 ance to coastal states (as defined in paragraph (4) of sec20 tion 304 of the Coastal Zone Management Act of 1972
21 (16 U.S.C. 1453(4))), the District of Columbia, Tribal
22 Governments, nonprofit organizations, local governments,
23 and institutions of higher education (as defined in sub24 section (a) of section 101 of the Higher Education Act
25 of 1965 (20 U.S.C. 1001(a))), for the conservation, res-

ERN22335 9K1

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562
1 toration, and protection of coastal and marine habitats
2 and resources, including fisheries, to enable coastal com3 munities to prepare for extreme storms and other chang4 ing climate conditions, and for projects that support nat5 ural resources that sustain coastal and marine resource
6 dependent communities, and for related administrative ex7 penses.
8(b) TRIBAL GOVERNMENT DEFINED.—In this sec-

9 tion, the term ‘‘Tribal Government’’ means the recognized
10 governing body of any Indian or Alaska Native tribe,
11 band, nation, pueblo, village, community, component band,
12 or component reservation, individually identified (includ13 ing parenthetically) in the list published most recently as
14 of the date of enactment of this subsection pursuant to
15 section 104 of the Federally Recognized Indian Tribe List
16 Act of 1994 (25 U.S.C. 5131).
17

SEC. 40002. FACILITIES OF THE NATIONAL OCEANIC AND

18

ATMOSPHERIC

19

TIONAL MARINE SANCTUARIES.

20
21

ADMINISTRATION

AND

NA-

(a) NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATIONFACILITIES.—In addition to amounts other-

22 wise available, there is appropriated to the National Oce23 anic and Atmospheric Administration for fiscal year 2022,
24 out of any money in the Treasury not otherwise appro25 priated, $150,000,000, to remain available until Sep-

ERN22335 9K1

S.L.C.

563
1 tember 30, 2026, for the construction of new facilities (in2 cluding facilities in need of replacement) including piers,
3 marine operations facilities, and fisheries laboratories.
4(b) NATIONAL MARINE SANCTUARIES FACILITIES.—

5 In addition to amounts otherwise available, there is appro6 priated to the National Oceanic and Atmospheric Adminis7 tration for fiscal year 2022, out of any money in the
8 Treasury not otherwise appropriated, $50,000,000, to re9 main available until September 30, 2026, for the construc10 tion of facilities to support the National Marine Sanctuary
11 System established under subsection (c) of section 301 of
12 the National Marine Sanctuaries Act (16 U.S.C. 1431(c)).
13
14SEC. 40003. NOAA EFFICIENT AND EFFECTIVE REVIEWS.

In addition to amounts otherwise available, there is

15 appropriated to the National Oceanic and Atmospheric
16 Administration for fiscal year 2022, out of any money in
17 the Treasury not otherwise appropriated, $20,000,000, to
18 remain available until September 30, 2026, to conduct
19 more efficient, accurate, and timely reviews for planning,
20 permitting and approval processes through the hiring and
21 training of personnel, and the purchase of technical and22 scientific services and new equipment, and to improve
23 agency transparency, accountability, and public engage24 ment.

ERN22335 9K1

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564
1

SEC. 40004. OCEANIC AND ATMOSPHERIC RESEARCH AND

2

FORECASTING FOR WEATHER AND CLIMATE.

3(a) FORECASTING AND RESEARCH.—In addition to

4 amounts otherwise available, there is appropriated to the
5 National Oceanic and Atmospheric Administration for fis6 cal year 2022, out of any money in the Treasury not other7 wise appropriated, $150,000,000, to remain available until
8 September 30, 2026, to accelerate advances and improve9 ments in research, observation systems, modeling, fore10 casting, assessments, and dissemination of information to
11 the public as it pertains to ocean and atmospheric proc12 esses related to weather, coasts, oceans, and climate, and
13 to carry out section 102(a) of the Weather Research and
14 Forecasting Innovation Act of 2017 (15 U.S.C. 8512(a)),
15 and for related administrative expenses.
16(b) RESEARCH GRANTS AND SCIENCE INFORMATION,

17 PRODUCTS, AND SERVICES.—In addition to amounts oth18 erwise available, there are appropriated to the National
19 Oceanic and Atmospheric Administration for fiscal year
20 2022, out of any money in the Treasury not otherwise ap21 propriated, to remain available until September 30, 2026,
22 $50,000,000 for competitive grants to fund climate re23 search as it relates to weather, ocean, coastal, and atmos24 pheric processes and conditions, and impacts to marine
25 species and coastal habitat, and for related administrative
26 expenses.

ERN22335 9K1

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565
1

SEC. 40005. COMPUTING CAPACITY AND RESEARCH FOR

2WEATHER, OCEANS, AND CLIMATE.

3

In addition to amounts otherwise available, there is

4 appropriated to the National Oceanic and Atmospheric
5 Administration for fiscal year 2022, out of any money in
6 the Treasury not otherwise appropriated, $190,000,000,
7 to remain available until September 30, 2026, for the pro8 curement of additional high-performance computing, data
9 processing capacity, data management, and storage assets,
10 to carry out section 204(a)(2) of the High-Performance
11 Computing Act of 1991 (15 U.S.C. 5524(a)(2)), and for
12 transaction

agreements

authorized

undersection

13 301(d)(1)(A) of the Weather Research and Forecasting
14 Innovation Act of 2017 (15 U.S.C. 8531(d)(1)(A)), and15 for related administrative expenses.
16
17
18

SEC. 40006. ACQUISITION OF HURRICANE FORECASTING
AIRCRAFT.

In addition to amounts otherwise available, there is

19 appropriated to the National Oceanic and Atmospheric
20 Administration for fiscal year 2022, out of any money in
21 the Treasury not otherwise appropriated, $100,000,000,
22 to remain available until September 30, 2026, for the ac23 quisition of hurricane hunter aircraft under section 413(a)24 of the Weather Research and Forecasting Innovation Act
25 of 2017 (15 U.S.C. 8549(a)).

ERN22335 9K1

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566
1

SEC. 40007. ALTERNATIVE FUEL AND LOW-EMISSION AVIA-

2

TION TECHNOLOGY PROGRAM.

3(a) APPROPRIATIONANDESTABLISHMENT.—For

4 purposes of establishing a competitive grant program for
5 eligible entities to carry out projects located in the United
6 States that produce, transport, blend, or store sustainable
7 aviation fuel, or develop, demonstrate, or apply low-emis8 sion aviation technologies, in addition to amounts other9 wise available, there are appropriated to the Secretary for
10 fiscal year 2022, out of any money in the Treasury not
11 otherwise appropriated, to remain available until Sep12 tember 30, 2026—
13(1) $244,530,000 for projects relating to the

14

production, transportation, blending, or storage of15

sustainable aviation fuel;1617(2) $46,530,000 for projects relating to lowemission aviation technologies; and

18(3) $5,940,000 to fund the award of grants

19

under this section, and oversight of the program, by

20

the Secretary.

21(b) CONSIDERATIONS.—In carrying out subsection

22 (a), the Secretary shall consider, with respect to a pro23 posed project—
24(1) the capacity for the eligible entity to in-25

crease the domestic production and deployment of26

sustainable aviation fuel or the use of low-emission

ERN22335 9K1

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567
1

aviation technologies among the United States com-2

mercial aviation and aerospace industry;3(2) the projected greenhouse gas emissions

4

from such project, including emissions resulting

5

from the development of the project, and the poten-

6tial the project has to reduce or displace, on a

7

lifecycle basis, United States greenhouse gas emis-

8

sions associated with air travel;

910(3) the capacity to create new jobs and develop
supply chain partnerships in the United States;

11(4) for projects related to the production of sus-

12

tainable aviation fuel, the projected lifecycle green-

13

house gas emissions benefits from the proposed

14

project, which shall include feedstock and fuel pro-15

duction and potential direct and indirect greenhouse16

gas emissions (including resulting from changes in

17

land use); and18(5) the benefits of ensuring a diversity of feed-

19

stocks for sustainable aviation fuel, including the use

20

of waste carbon oxides and direct air capture.

21(c) COST SHARE.—The Federal share of the cost of

22 a project carried out using grant funds under subsection
23 (a) shall be 75 percent of the total proposed cost of the
24 project, except that such Federal share shall increase to
25 90 percent of the total proposed cost of the project if theERN22335 9K1

S.L.C.

568
1 eligible entity is a small hub airport or nonhub airport,
2 as such terms are defined in section 47102 of title 49,
3 United States Code.
4(d) FUEL EMISSIONS REDUCTION TEST.—For pur-5 poses of clause (ii) of subsection (e)(7)(E), the Secretary
6 shall, not later than 2 years after the date of enactment
7 of this section, adopt at least 1 methodology for testing
8 lifecycle greenhouse gas emissions that meets the require9 ments of such clause.
10
11
12

(e) DEFINITIONS.—In this section:(1) ELIGIBLE ENTITY.—The term ‘‘eligible entity’’ means—

13(A) a State or local government, including

14

the District of Columbia, other than an airport

15

sponsor;

16(B) an air carrier;

17(C) an airport sponsor;

18(D) an accredited institution of higher edu-

19

cation;20(E) a research institution;

21(F) a person or entity engaged in the pro-22

duction, transportation, blending, or storage of23

sustainable aviation fuel in the United States or

24

feedstocks in the United States that could be

25

used to produce sustainable aviation fuel;ERN22335 9K1

S.L.C.

5691(G) a person or entity engaged in the de-2velopment, demonstration, or application of low-3

emission aviation technologies; or

4(H) nonprofit entities or nonprofit con-5

sortia with experience in sustainable aviation

6

fuels, low-emission aviation technologies, or7other clean transportation research programs.

8(2) FEEDSTOCK.—The term ‘‘feedstock’’ means

9sources of hydrogen and carbon not originating from10

unrefined or refined petrochemicals.

11(3) INDUCEDLAND-USE CHANGE VALUES.—

12

The term ‘‘induced land-use change values’’ means

13

the greenhouse gas emissions resulting from the con-14

version of land to the production of feedstocks and15from the conversion of other land due to the dis-

16

placement of crops or animals for which the original

17

land was previously used.

18

(4)

LIFECYCLE

19

SIONS.—The

20

sions’’ means the combined greenhouse gas emis-

21

sions from feedstock production, collection of feed-

22

stock, transportation of feedstock to fuel production

23

facilities, conversion of feedstock to fuel, transpor-

24

tation and distribution of fuel, and fuel combustion

GREENHOUSE

GAS

EMIS-

term ‘‘lifecycle greenhouse gas emis-

ERN22335 9K1

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570
1

in an aircraft engine, as well as from induced land-2

use change values.
(5) LOW-EMISSION AVIATION TECHNOLOGIES.—

3
4

The

term

‘‘low-emission

aviationtechnologies’’

5means technologies, produced in the United States,

6

that significantly—

7(A) improve aircraft fuel efficiency;

8(B) increase utilization of sustainable avia-

910tion fuel; or(C) reduce greenhouse gas emissions pro-11

duced during operation of civil aircraft.

12(6) SECRETARY.—The term ‘‘Secretary’’ means

13

the Secretary of Transportation.

14(7) SUSTAINABLE AVIATION FUEL.—The term

15‘‘sustainable aviation fuel’’ means liquid fuel, pro-16

duced in the United States, that—

17(A) consists of synthesized hydrocarbons;

18(B) meets the requirements of—

19

(i)

ASTM

20

D7566; orInternational

Standard

21(ii) the co-processing provisions of

22

ASTM International Standard D1655,

23

Annex A1 (or such successor standard);

24(C) is derived from biomass (in a similar25

manner as such term is defined in section

ERN22335 9K1

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571
1

45K(c)(3) of the Internal Revenue Code of21986),

3

sources, or gaseous carbon oxides;

4
5

waste

streams,

renewableenergy(D) is not derived from palm fatty aciddistillates; and6(E) achieves at least a 50 percent lifecycle

7

greenhouse gas emissions reduction in compari-8

son with petroleum-based jet fuel, as deter-

9mined by a test that shows—

10

(i)

the

fuel

production

pathway

11

achieves at least a 50 percent reduction of

12

the aggregate attributional core lifecycle

13

emissions and the induced land-use change

14values under a lifecycle methodology for15

sustainable aviation fuels similar to that16

adopted by the International Civil Aviation

17

Organization with the agreement of the18

United States; or

19

(ii)

the

fuel

production

pathway

20

achieves at least a 50 percent reduction of21

the aggregate attributional core lifecycle

22

greenhouse gas emissions values and the23

induced land-use change values under an-

24

other methodology that the Secretary de-25

termines is—ERN22335 9K1

S.L.C.

572(I) reflective of the latest sci-

1
2

entific

3

greenhouse gas emissions; andoflifecycle(II) as stringent as the require-

4
5

understanding

ment under clause (i).

TITLE V—COMMITTEE ON EN7
ERGY AND NATURAL RE8
SOURCES
9
Subtitle A—Energy
610PART 1—GENERAL PROVISIONS

11

SEC. 50111. DEFINITIONS.

12

In this subtitle:

13(1) GREENHOUSE GAS.—The term ‘‘greenhouse

14gas’’ has the meaning given the term in section

151610(a) of the Energy Policy Act of 1992 (4216

U.S.C. 13389(a)).

1718(2) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of Energy.

19(3) STATE.—The term ‘‘State’’ means a State,

20

the District of Columbia, and a United States Insu-

21

lar Area (as that term is defined in section 50211).

22(4) STATE ENERGY OFFICE.—The term ‘‘State

23

energy office’’ has the meaning given the term in

24

section 124(a) of the Energy Policy Act of 2005 (4225

U.S.C. 15821(a)).

ERN22335 9K1

S.L.C.

573
1

(5)

STATE

ENERGYPROGRAM.—The

term

2

‘‘State Energy Program’’ means the State Energy

3Program established pursuant to part D of title III

4of the Energy Policy and Conservation Act (425

U.S.C. 6321 through 6326).

6PART 2—RESIDENTIAL EFFICIENCY AND

7

ELECTRIFICATION REBATES

8

SEC. 50121. HOME ENERGY PERFORMANCE-BASED, WHOLE-

910HOUSE REBATES.

(a) APPROPRIATION.—

11(1) IN GENERAL.—In addition to amounts oth-12

erwise available, there is appropriated to the Sec-13

retary for fiscal year 2022, out of any money in the

14

Treasury

15$4,300,000,000, to remain available through Sep-

16

tember 30, 2031, to carry out a program to award

17

grants to State energy offices to develop and imple-

18

ment a HOMES rebate program.

19

not

otherwise

appropriated,(2) ALLOCATION OF FUNDS.—

20(A) IN GENERAL.—The Secretary shall re-21

serve funds made available under paragraph (1)22for each State energy office—23(i) in accordance with the allocation

24

formula for the State Energy Program in

25

effect on January 1, 2022; andERN22335 9K1

S.L.C.

574
1(ii) to be distributed to a State energy

2

office if the application of the State energy

3

office under subsection (b) is approved.

4(B)

ADDITIONALFUNDS.—Not

earlier5than 2 years after the date of enactment of this

6

Act, any money reserved under subparagraph

7(A) but not distributed under clause (ii) of that8subparagraph shall be redistributed to the State

9energy offices operating a HOMES rebate pro-

10

gram using a grant received under this section

11

in proportion to the amount distributed to those

12

State

13

(A)(ii).

14(3) ADMINISTRATIVE EXPENSES.—Of the funds

15

made available under paragraph (1), the Secretary

16

shall use not more than 3 percent for—energyoffices

undersubparagraph

17(A) administrative purposes; and18(B) providing technical assistance relating

19

to activities carried out under this section.

20(b) APPLICATION.—A State energy office seeking a

21 grant under this section shall submit to the Secretary an
22 application that includes a plan to implement a HOMES
23 rebate program, including a plan—24(1) to use procedures, as approved by the Sec-25

retary, for determining the reductions in home en-ERN22335 9K1

S.L.C.

575
1

ergy use resulting from the implementation of a2home energy efficiency retrofit that is calibrated to3historical energy usage for a home consistent with4

BPI 2400, for purposes of modeled performance5

home rebates;

6(2) to use open-source advanced measurement

7

and verification software, as approved by the Sec-8

retary, for determining and documenting the month-9ly and hourly (if available) weather-normalized en-

10ergy use of a home before and after the implementa-

11

tion of a home energy efficiency retrofit, for pur-12

poses of measured performance home rebates;

1314(3) to value savings based on time, location, or
greenhouse gas emissions;15(4) for quality monitoring to ensure that each16

home energy efficiency retrofit for which a rebate is

17

provided is documented in a certificate that—

18(A) is provided by the contractor and cer-19

tified by a third party to the homeowner; and

20(B) details the work performed, the equip-

21

ment and materials installed, and the projected22energy savings or energy generation to support

23

accurate valuation of the retrofit;

24(5) to provide a contractor performing a home

25

energy efficiency retrofit or an aggregator who has

ERN22335 9K1

S.L.C.

576
1

the right to claim a rebate $200 for each home lo-2cated in an underserved community that receives a3home energy efficiency retrofit for which a rebate is

4

provided under the program; and5(6) to ensure that a homeowner or aggregator

6

does not receive a rebate for the same upgrade

7

through both a HOMES rebate program and any

8other Federal grant or rebate program, pursuant to

9subsection (c)(8).

10(c) HOMES REBATE PROGRAM.—11(1) IN GENERAL.—A HOMES rebate program

12

carried out by a State energy office receiving a grant13

pursuant to this section shall provide rebates to

14

homeowners and aggregators for whole-house energy

15saving retrofits begun on or after the date of enact-

16

ment of this Act and completed by not later than17

September 30, 2031.

18(2) AMOUNT OF

REBATE.—Subject

to para-19

graph (3)(B), under a HOMES rebate program, the20amount of a rebate shall not exceed—

21(A) for individuals and aggregators car-22

rying out energy efficiency upgrades of single-

23

family homes—

24(i) in the case of a retrofit that25

achieves modeled energy system savings ofERN22335 9K1

S.L.C.

577
1

not less than 20 percent but less than 35

2

percent, the lesser of—3(I) $2,000; and4(II) 50 percent of the project

5

cost;

6

(ii) in the case of a retrofit that

7

achieves modeled energy system savings of

8

not less than 35 percent, the lesser of—

9(I) $4,000; and10(II) 50 percent of the project11

cost; and12(iii) for measured energy savings, in13

the case of a home or portfolio of homes

14

that achieves energy savings of not less15

than 15 percent—16(I) a payment rate per kilowatt

17hour saved, or kilowatt hour-equiva-

18

lent saved, equal to $2,000 for a 20

19

percent reduction of energy use for20

the average home in the State; or(II) 50 percent of the project

21
22

cost;

23

(B) for multifamily building owners and24

aggregators carrying out energy efficiency up-

25

grades of multifamily buildings—

ERN22335 9K1

S.L.C.

578
1(i) in the case of a retrofit that2achieves modeled energy system savings of3

not less than 20 percent but less than 35

4percent, $2,000 per dwelling unit, with a5maximum of $200,000 per multifamily

6building;

7(ii) in the case of a retrofit that8

achieves modeled energy system savings of

9

not less than 35 percent, $4,000 per dwell-10

ing unit, with a maximum of $400,000 per

11multifamily building; or12(iii) for measured energy savings, in13

the case of a multifamily building or port-

14

folio of multifamily buildings that achieves

15

energy savings of not less than 15 per-

16

cent—

17

(I) a payment rate per kilowatt

18hour saved, or kilowatt hour-equiva-

19

lent saved, equal to $2,000 for a 20

20

percent reduction of energy use per

21dwelling unit for the average multi-

22

family building in the State; or2324(II) 50 percent of the project
cost; and

ERN22335 9K1

S.L.C.

579
1(C) for individuals and aggregators car-2

rying out energy efficiency upgrades of a single-

3

family home occupied by a low- or moderate-in-4come household or a multifamily building not5less than 50 percent of the dwelling units of

6

which are occupied by low- or moderate-income

7households—

8(i) in the case of a retrofit that

9achieves modeled energy system savings of

10

not less than 20 percent but less than 35

11

percent, the lesser of—(I) $4,000 per single-family home

12
13

or dwelling unit; and(II) 80 percent of the project

14
15

cost;

16

(ii) in the case of a retrofit that17

achieves modeled energy system savings of18

not less than 35 percent, the lesser of—

19
20
21

(I) $8,000 per single-family homeor dwelling unit; and(II) 80 percent of the project22

cost; and23(iii) for measured energy savings, in24

the case of a single-family home, multi-

25

family building, or portfolio of single-fam-ERN22335 9K1

S.L.C.

580
1

ily homes or multifamily buildings that2achieves energy savings of not less than 15

3

percent—

4(I) a payment rate per kilowatt

5hour saved, or kilowatt hour-equiva-

6

lent saved, equal to $4,000 for a 20

7

percent reduction of energy use per8

single-family home or dwelling unit, as

9applicable, for the average single-fam-

10

ily home or multifamily building in

11

the State; or(II) 80 percent of the project

12
13
14
15

cost.
(3) REBATES TO LOW- OR MODERATE-INCOME
HOUSEHOLDS.—

16(A) IN GENERAL.—A State energy office17

carrying out a HOMES rebate program using a

18

grant awarded pursuant to this section is en-

19

couraged to provide rebates, to the maximum

20

extent practicable, to low- or moderate-income

21households.

22(B) INCREASE IN REBATE AMOUNT.—On

23

approval from the Secretary, notwithstanding

24

paragraph (2), a State energy office carrying

25

out a HOMES rebate program using a grantERN22335 9K1

S.L.C.

581
1

awarded pursuant to this section may increase2

rebate amounts for low- or moderate-income

3households.

4(4) USE OF FUNDS.—A State energy office that5

receives a grant pursuant to this section may use

6

not more than 20 percent of the grant amount for7planning, administration, or technical assistance re-8

lated to a HOMES rebate program.

9(5) DATA ACCESS GUIDELINES.—The Secretary

10

shall develop and publish guidelines for States relat-

11

ing to residential electric and natural gas energy

12data sharing.

13(6) COORDINATION.—In carrying out this sec-

14

tion, the Secretary shall coordinate with State en-15

ergy offices to ensure that HOMES rebate programs

16

for which grants are provided under this section are17

developed to achieve maximum greenhouse gas emis-

18

sions reductions and household energy and costs sav-

19

ings regardless of source energy.

20(7) EXEMPTION.—Activities carried out by a

21

State energy office using a grant awarded pursuant

22

to this section shall not be subject to the expenditure23

prohibitions and limitations described in section

24

420.18 of title 10, Code of Federal Regulations.

ERN22335 9K1

S.L.C.

582
1(8) PROHIBITION ON COMBINING REBATES.—A

2

rebate provided by a State energy office under a

3

HOMES rebate program may not be combined with4

any other Federal grant or rebate, including a re-5bate provided under a high-efficiency electric home6

rebate program (as defined in section 50122(d)), for7

the same single upgrade.

8(d) DEFINITIONS.—In this section:

9(1) HOMESREBATEPROGRAM.—The

term

10

‘‘HOMES rebate program’’ means a Home Owner

11

Managing Energy Savings rebate program estab-

12

lished by a State energy office as part of an ap-

13

proved State energy conservation plan under the

14

State Energy Program.

15

(2)

LOW-

OR

MODERATE-INCOME

HOUSE-

16

HOLD.—The term ‘‘low- or moderate-income house-

17

hold’’ means an individual or family the total annual

18

income of which is less than 80 percent of the me-19dian income of the area in which the individual or20

family resides, as reported by the Department of21

Housing and Urban Development, including an indi-

22

vidual or family that has demonstrated eligibility for23

another Federal program with income restrictions

24

equal to or below 80 percent of area median income.

ERN22335 9K1

S.L.C.

583
12(3) UNDERSERVEDCOMMUNITY.—The

term‘‘underserved community’’ means—3(A) a community located in a ZIP code

4

that includes 1 or more census tracts that in-5clude—

6(i) a low-income community; or7(ii) a community of racial or ethnic

8

minority concentration; and9(B) any other community that the Sec-10

retary determines is disproportionately vulner-

11able to, or bears a disproportionate burden of,12

any combination of economic, social, and envi-

13

ronmental stressors.

14

SEC. 50122. HIGH-EFFICIENCY ELECTRIC HOME REBATE

15
16
17

PROGRAM.

(a) APPROPRIATIONS.—(1) FUNDS TO STATE ENERGY OFFICES AND IN-

18

DIAN TRIBES.—In

addition to amounts otherwise

19

available, there is appropriated to the Secretary for

20

fiscal year 2022, out of any money in the Treasury

21

not otherwise appropriated, to carry out a pro-

22

gram—

23

(A) to award grants to State energy offices24

to develop and implement a high-efficiency elec-

25

tric home rebate program in accordance with

ERN22335 9K1

S.L.C.

584
1

subsection (c), $4,275,000,000, to remain avail-2

able through September 30, 2031; and3(B) to award grants to Indian Tribes to4develop and implement a high-efficiency electric5home rebate program in accordance with sub-6

section (c), $225,000,000, to remain available

7

through September 30, 2031.

8(2) ALLOCATION OF FUNDS.—

9(A) STATE ENERGY OFFICES.—The Sec-10

retary shall reserve funds made available under11

paragraph (1)(A) for each State energy office—12(i) in accordance with the allocation

13

formula for the State Energy Program in

14

effect on January 1, 2022; and15(ii) to be distributed to a State energy

16

office if the application of the State energy

17

office under subsection (b) is approved.

18(B) INDIAN TRIBES.—The Secretary shall19

reserve funds made available under paragraph

20(1)(B)—

2122(i) in a manner determined appropriate by the Secretary; and23(ii) to be distributed to an Indian

24

Tribe if the application of the Indian Tribe

25

under subsection (b) is approved.

ERN22335 9K1

S.L.C.

585
1(C) ADDITIONAL FUNDS.—Not earlier than

2

2 years after the date of enactment of this Act,3

any money reserved under—

4(i) subparagraph (A) but not distrib-

5

uted under clause (ii) of that subparagraph6

shall be redistributed to the State energy

7

offices operating a high-efficiency electric8home rebate program in proportion to the9amount distributed to those State energy

10

offices under that clause; and11(ii) subparagraph (B) but not distrib-

12

uted under clause (ii) of that subparagraph13

shall be redistributed to the Indian Tribes

14

operating a high-efficiency electric home15

rebate program in proportion to the16amount distributed to those Indian Tribes

17

under that clause.

18(3) ADMINISTRATIVE EXPENSES.—Of the funds

19

made available under paragraph (1), the Secretary

20

shall use not more than 3 percent for—

21(A) administrative purposes; and

22(B) providing technical assistance relating23

to activities carried out under this section.

24(b) APPLICATION.—A State energy office or Indian

25 Tribe seeking a grant under the program shall submit toERN22335 9K1

S.L.C.

586
1 the Secretary an application that includes a plan to imple2 ment a high-efficiency electric home rebate program, in3 cluding—4(1) a plan to verify the income eligibility of eli-

5gible entities seeking a rebate for a qualified elec-

6

trification project;

7(2) a plan to allow rebates for qualified elec-

8

trification projects at the point of sale in a manner

9that ensures that the income eligibility of an eligible

10

entity seeking a rebate may be verified at the point11of sale;12(3) a plan to ensure that an eligible entity does13

not receive a rebate for the same qualified elec-

14

trification project through both a high-efficiency

15

electric home rebate program and any other Federal

16

grant or rebate program, pursuant to subsection

17(c)(8); and18(4) any additional information that the Sec-19

retary may require.

20(c) HIGH-EFFICIENCY ELECTRIC HOME REBATE

21 PROGRAM.—22(1) IN GENERAL.—Under the program, the Sec-23

retary shall award grants to State energy offices and24

Indian Tribes to establish a high-efficiency electric

25

home rebate program under which rebates shall beERN22335 9K1

S.L.C.

587
1

provided to eligible entities for qualified electrifica-

2tion projects.

3(2) GUIDELINES.—The Secretary shall pre-4

scribe guidelines for high-efficiency electric home re-5bate programs, including guidelines for providing

6

point of sale rebates in a manner consistent with the7

income eligibility requirements under this section.

8(3) AMOUNT OF REBATE.—

9(A) APPLIANCE UPGRADES.—The amount10of a rebate provided under a high-efficiency

11

electric home rebate program for the purchase12of an appliance under a qualified electrification

13

project shall be—(i) not more than $1,750 for a heat

14
15

pump water heater;(ii) not more than $8,000 for a heat16
17

pump for space heating or cooling; and18(iii) not more than $840 for—(I) an electric stove, cooktop,

19

range, or oven; or20(II) an electric heat pump clothes

21

dryer.

22
23(B)

NONAPPLIANCEUPGRADES.—The24

amount of a rebate provided under a high-effi-

25

ciency electric home rebate program for theERN22335 9K1

S.L.C.

588
1

purchase of a nonappliance upgrade under a2qualified electrification project shall be—

3
4
5
6
7

(i) not more than $4,000 for an electric load service center upgrade;(ii) not more than $1,600 for insulation, air sealing, and ventilation; and(iii) not more than $2,500 for electric8

wiring.

9(C) MAXIMUM REBATE.—An eligible entity

10

receiving multiple rebates under this section

11

may receive not more than a total of $14,000

12in rebates.

13(4) LIMITATIONS.—A rebate provided using

14
15
16

funding under this section shall not exceed—(A) in the case of an eligible entity described in subsection (d)(1)(A)—17(i) 50 percent of the cost of the quali-

18

fied electrification project for a household

19

the annual income of which is not less than20

80 percent and not greater than 150 per-21

cent of the area median income; and22(ii) 100 percent of the cost of the23

qualified electrification project for a house-

24

hold the annual income of which is less

ERN22335 9K1

S.L.C.

589
1

than 80 percent of the area median in-

2

come;

3

(B) in the case of an eligible entity de-4

scribed in subsection (d)(1)(B)—5(i) 50 percent of the cost of the quali-

6

fied electrification project for a multifamily

7

building not less than 50 percent of the8residents of which are households the an-

9nual income of which is not less than 80

10percent and not greater than 150 percent

11of the area median income; and12(ii) 100 percent of the cost of the

13

qualified electrification project for a multi-

14

family building not less than 50 percent of15

the residents of which are households the16annual income of which is less than 80

17percent of the area median income; or

18(C) in the case of an eligible entity de-19

scribed in subsection (d)(1)(C)—20(i) 50 percent of the cost of the quali-

21

fied electrification project for a house-

22

hold—

23
24

(I) on behalf of which the eligible
entity is working; andERN22335 9K1

S.L.C.

590
1(II) the annual income of which2

is not less than 80 percent and not3

greater than 150 percent of the area

4

median income; and5(ii) 100 percent of the cost of the

6qualified electrification project for a house-

7

hold—
(I) on behalf of which the eligible

8

entity is working; and910(II) the annual income of which11

is less than 80 percent of the area

12

median income.

13

(5)

AMOUNT

14

GRADES.—FORINSTALLATION

OF

UP-

15

(A) IN GENERAL.—In the case of an eligi-

16

ble entity described in subsection (d)(1)(C) that17

receives a rebate under the program and per-18

forms the installation of the applicable qualified

19

electrification project, a State energy office or

20

Indian Tribe shall provide to that eligible enti-

21ty, in addition to the rebate, an amount that—22(i) does not exceed $500; and23(ii) is commensurate with the scale of24

the upgrades installed as part of the quali-

25

fied electrification project and any en-ERN22335 9K1

S.L.C.

591
1

hanced labor practices, as determined by2

the Secretary.

3(B) TREATMENT.—An amount received

4

under subparagraph (A) by an eligible entity

5

described in that subparagraph shall not be

6subject to the requirement under paragraph

7

(6).

8

(6) REQUIREMENT.—An eligible entity de-9

scribed in subparagraph (C) of subsection (d)(1)10

shall discount the amount of a rebate received for a11

qualified electrification project from any amount12

charged by that eligible entity to the eligible entity

13

described in subparagraph (A) or (B) of that sub-14

section on behalf of which the qualified electrifica-

15

tion project is carried out.

16(7) EXEMPTION.—Activities carried out by a17

State energy office using a grant provided under the18

program shall not be subject to the expenditure pro-19

hibitions and limitations described in section 420.18

20of title 10, Code of Federal Regulations.

21(8) PROHIBITION ON COMBINING REBATES.—A

22

rebate provided by a State energy office or Indian

23

Tribe under a high-efficiency electric home rebate

24

program may not be combined with any other Fed-25

eral grant or rebate, including a rebate provided

ERN22335 9K1

S.L.C.

592
1

under a HOMES rebate program (as defined in sec-

2

tion 50121(d)), for the same qualified electrification3

project.

4(9) ADMINISTRATIVE COSTS.—A State energy

5

office or Indian Tribe that receives a grant under6

the program shall use not more than 20 percent of7

the grant amount for planning, administration, or

8technical assistance relating to a high-efficiency elec-

9

tric home rebate program.

10(d) DEFINITIONS.—In this section:

1112(1) ELIGIBLE ENTITY.—The term ‘‘eligible entity’’ means—

13(A) a low- or moderate-income household;

14(B) an individual or entity that owns a

15

multifamily building not less than 50 percent of16

the residents of which are low- or moderate-in-17

come households; and18(C) a governmental, commercial, or non-19

profit entity, as determined by the Secretary,

20

carrying out a qualified electrification project

21

on behalf of an entity described in subpara-

22

graph (A) or (B).

23(2) HIGH-EFFICIENCY ELECTRIC HOME REBATE

24

PROGRAM.—The term ‘‘high-efficiency electric home25

rebate program’’ means a rebate program carriedERN22335 9K1

S.L.C.

593
1

out by a State energy office or Indian Tribe pursu-

2

ant to subsection (c) using a grant received under3

the program.

4(3) INDIAN TRIBE.—The term ‘‘Indian Tribe’’

5

has the meaning given the term in section 4 of the

6

Indian Self-Determination and Education Assistance7

Act (25 U.S.C. 5304).

8

(4)

LOW-

OR

MODERATE-INCOME

HOUSE-

9

HOLD.—The term ‘‘low- or moderate-income house-

10

hold’’ means an individual or family the total annual

11

income of which is less than 150 percent of the me-12dian income of the area in which the individual or

13

family resides, as reported by the Department of

14

Housing and Urban Development, including an indi-

15

vidual or family that has demonstrated eligibility for16another Federal program with income restrictions

17

equal to or below 150 percent of area median in-

18

come.

19

(5) PROGRAM.—The term ‘‘program’’ means20

the program carried out by the Secretary under sub-21

section (a)(1).

22
23
24

(6) QUALIFIED ELECTRIFICATION PROJECT.—(A) IN

GENERAL.—Theterm ‘‘qualified

electrification project’’ means a project that—ERN22335 9K1

S.L.C.

594
12(i) includes the purchase and installation of—(I) an electric heat pump water

3
4

heater;(II) an electric heat pump for

5
6

space heating and cooling;(III) an electric stove, cooktop,

7
8

range, or oven;

9

(IV)

10

clothes dryer;

electric

heat

pump

(V) an electric load service cen-

11
12

an

ter;

13

(VI) insulation;

14(VII) air sealing and materials to

15
16

improve ventilation; or(VIII) electric wiring;17(ii) with respect to any appliance de-18

scribed in clause (i), the purchase of which19

is carried out—

20(I) as part of new construction;

21(II) to replace a nonelectric ap-

22
23
24

pliance; or(III) as a first-time purchasewith respect to that appliance; andERN22335 9K1

S.L.C.

595
1(iii) is carried out at, or relating to, a2single-family home or multifamily building,3

as applicable and defined by the Secretary.

4(B) EXCLUSIONS.—The term ‘‘qualified

5electrification project’’ does not include any

6project with respect to which the appliance, sys-

7tem, equipment, infrastructure, component, or8other item described in subclauses (I) through9(VIII) of subparagraph (A)(i) is not certified

10

under the Energy Star program established by

11section 324A of the Energy Policy and Con-12

servation Act (42 U.S.C. 6294a), if applicable.

13

SEC. 50123. STATE-BASED HOME ENERGY EFFICIENCY CON-

14
15

TRACTOR TRAINING GRANTS.

(a) APPROPRIATION.—In addition to amounts other-

16 wise available, there is appropriated to the Secretary for
17 fiscal year 2022, out of any money in the Treasury not
18 otherwise appropriated, $200,000,000, to remain available
19 through September 30, 2031, to carry out a program to
20 provide financial assistance to States to develop and imple21 ment a State program described in section 362(d)(13) of
22 the Energy Policy and Conservation Act (42 U.S.C.
23 6322(d)(13)), which shall provide training and education
24 to contractors involved in the installation of home energy
25 efficiency and electrification improvements, including im-ERN22335 9K1

S.L.C.

596
1 provements eligible for rebates under a HOMES rebate
2 program (as defined in section 50121(d)) or a high-effi3 ciency electric home rebate program (as defined in section
4 50122(d)), as part of an approved State energy conserva5 tion plan under the State Energy Program.
6(b) USE OF FUNDS.—A State may use amounts re-

7 ceived under subsection (a)—89(1) to reduce the cost of training contractor
employees;

10(2) to provide testing and certification of con-11

tractors trained and educated under a State pro-

12

gram developed and implemented pursuant to sub-13

section (a); and

14(3) to partner with nonprofit organizations to15

develop and implement a State program pursuant to

16

subsection (a).

17(c) ADMINISTRATIVE EXPENSES.—Of the amounts

18 received by a State under subsection (a), a State shall use
19 not more than 10 percent for administrative expenses as20 sociated with developing and implementing a State pro21 gram pursuant to that subsection.

ERN22335 9K1

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597
1

PART 3—BUILDING EFFICIENCY AND

2

RESILIENCE

3

SEC. 50131. ASSISTANCE FOR LATEST AND ZERO BUILDING

45ENERGY CODE ADOPTION.

(a) APPROPRIATION.—In addition to amounts other-

6 wise available, there is appropriated to the Secretary for
7 fiscal year 2022, out of any money in the Treasury not
8 otherwise appropriated—
9(1) $330,000,000, to remain available through10

September 30, 2029, to carry out activities under11

part D of title III of the Energy Policy and Con-12

servation Act (42 U.S.C. 6321 through 6326) in ac-

13

cordance with subsection (b); and

14(2) $670,000,000, to remain available through15

September 30, 2029, to carry out activities under16

part D of title III of the Energy Policy and Con-17

servation Act (42 U.S.C. 6321 through 6326) in ac-

18

cordance with subsection (c).

19(b) LATEST BUILDING ENERGY CODE.—The Sec-

20 retary shall use funds made available under subsection
21 (a)(1) for grants to assist States, and units of local gov22 ernment that have authority to adopt building codes—
23(1) to adopt—

24(A) a building energy code (or codes) for25

residential buildings that meets or exceeds the262021 International Energy Conservation Code,ERN22335 9K1

S.L.C.

598
1

or achieves equivalent or greater energy sav-

2

ings;

3

(B) a building energy code (or codes) for

4

commercial buildings that meets or exceeds the5

ANSI/ASHRAE/IES Standard 90.1–2019, or

6achieves equivalent or greater energy savings;

7

or

8

(C) any combination of building energy

9codes described in subparagraph (A) or (B);

10

and

11

(2) to implement a plan for the jurisdiction to12

achieve full compliance with any building energy

13

code adopted under paragraph (1) in new and ren-14

ovated residential or commercial buildings, as appli-

15

cable, which plan shall include active training and16

enforcement programs and measurement of the rate17

of compliance each year.

18(c) ZERO ENERGY CODE.—The Secretary shall use

19 funds made available under subsection (a)(2) for grants
20 to assist States, and units of local government that have
21 authority to adopt building codes—
22(1) to adopt a building energy code (or codes)

23

for residential and commercial buildings that meets24

or exceeds the zero energy provisions in the 2021

ERN22335 9K1

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599
1

International Energy Conservation Code or an equiv-

2

alent stretch code; and3(2) to implement a plan for the jurisdiction to4achieve full compliance with any building energy

5code adopted under paragraph (1) in new and ren-6

ovated residential and commercial buildings, which

7plan shall include active training and enforcement

8

programs and measurement of the rate of compli-

9ance each year.

10(d) STATE MATCH.—The State cost share require-

11 ment under the item relating to ‘‘Department of Energy—
12 Energy Conservation’’ in title II of the Department of the
13 Interior and Related Agencies Appropriations Act, 1985
14 (42 U.S.C. 6323a; 98 Stat. 1861), shall not apply to as15 sistance provided under this section.
16(e) ADMINISTRATIVE COSTS.—Of the amounts made17 available under this section, the Secretary shall reserve 5
18 percent for administrative costs necessary to carry out this19 section.
20

PART 4—DOE LOAN AND GRANT PROGRAMS

21

SEC. 50141. FUNDING FOR DEPARTMENT OF ENERGY LOAN

22
23

PROGRAMS OFFICE.

(a) COMMITMENT AUTHORITY.—In addition to com-

24 mitment authority otherwise available and previously pro25 vided, the Secretary may make commitments to guarantee

ERN22335 9K1

S.L.C.

600
1 loans for eligible projects under section 1703 of the En2 ergy Policy Act of 2005 (42 U.S.C. 16513), up to a total
3 principal amount of $40,000,000,000, to remain available
4 through September 30, 2026.
5(b) APPROPRIATION.—In addition to amounts other-

6 wise available and previously provided, there is appro7 priated to the Secretary for fiscal year 2022, out of any
8 money in the Treasury not otherwise appropriated,
9 $3,600,000,000, to remain available through September
10 30, 2026, for the costs of guarantees made under section
11 1703 of the Energy Policy Act of 2005 (42 U.S.C. 16513),
12 using the loan guarantee authority provided under sub13 section (a) of this section.
14(c) ADMINISTRATIVE EXPENSES.—Of the amount

15 made available under subsection (b), the Secretary shall16 reserve 3 percent for administrative expenses to carry out
17 title XVII of the Energy Policy Act of 2005 and for car18 rying out section 1702(h)(3) of such Act (42 U.S.C.
19 16512(h)(3)).
20(d) LIMITATIONS.—

21(1) CERTIFICATION.—None of the amounts

22

made available under this section for loan guaran-

23

tees shall be available for any project unless the24

President has certified in advance in writing that theERN22335 9K1

S.L.C.

601
1

loan guarantee and the project comply with the pro-2

visions under this section.

3(2) DENIAL OF DOUBLE BENEFIT.—Except as

4

provided in paragraph (3), none of the amounts

5

made available under this section for loan guaran-

6

tees shall be available for commitments to guarantee

7loans for any projects under which funds, personnel,

8or property (tangible or intangible) of any Federal

9agency, instrumentality, personnel, or affiliated enti-

10

ty are expected to be used (directly or indirectly)

11

through acquisitions, contracts, demonstrations, ex-

12changes, grants, incentives, leases, procurements,

13

sales, other transaction authority, or other arrange-

14

ments to support the project or to obtain goods or

15

services from the project.

16(3) EXCEPTION.—Paragraph (2) shall not pre-17

clude the use of the loan guarantee authority pro-18

vided under this section for commitments to guar-

19

antee loans for—20
21(A) projects benefitting from otherwise allowable Federal tax benefits;

22(B) projects benefitting from being located23

on Federal land pursuant to a lease or right-of-

24

way agreement for which all consideration for25

all uses is—ERN22335 9K1

S.L.C.

6021(i) paid exclusively in cash;2(ii) deposited in the Treasury as offsetting receipts; and34(iii) equal to the fair market value;

5(C) projects benefitting from the Federal

6

insurance program under section 170 of the7

Atomic Energy Act of 1954 (42 U.S.C. 2210);

8

or

9

(D) electric generation projects using

10

transmission facilities owned or operated by a

11

Federal Power Marketing Administration or the12

Tennessee Valley Authority that have been au-

13

thorized, approved, and financed independent of14

the project receiving the guarantee.

15(e) GUARANTEE.—Section 1701(4)(A) of the Energy

16 Policy Act of 2005 (42 U.S.C. 16511(4)(A)) is amended
17 by inserting ‘‘, except that a loan guarantee may guar18 antee any debt obligation of a non-Federal borrower to
19 any Eligible Lender (as defined in section 609.2 of title
20 10, Code of Federal Regulations)’’ before the period at
21 the end.
22(f) SOURCE OF PAYMENTS.—Section 1702(b) of the

23 Energy Policy Act of 2005 (42 U.S.C. 16512(b)(2)) is
24 amended by adding at the end the following:ERN22335 9K1

S.L.C.

603
1‘‘(3) SOURCE OF PAYMENTS.—The source of a2

payment received from a borrower under subpara-

3graph (A) or (B) of paragraph (2) may not be a4loan or other debt obligation that is made or guaran-

5

teed by the Federal Government.’’.

67
8SEC. 50142. ADVANCED TECHNOLOGY VEHICLE MANUFACTURING.

(a) APPROPRIATION.—In addition to amounts other-

9 wise available, there is appropriated to the Secretary for
10 fiscal year 2022, out of any money in the Treasury not
11 otherwise appropriated, $3,000,000,000, to remain avail12 able through September 30, 2028, for the costs of pro13 viding direct loans under section 136(d) of the Energy
14 Independence and Security Act of 2007 (42 U.S.C.
15 17013(d)): Provided, That funds appropriated by this sec16 tion may be used for the costs of providing direct loans
17 for reequipping, expanding, or establishing a manufac18 turing facility in the United States to produce, or for engi19 neering integration performed in the United States of, ad20 vanced technology vehicles described in subparagraph (C),
21 (D), (E), or (F) of section 136(a)(1) of such Act (4222 U.S.C. 17013(a)(1)) only if such advanced technology ve23 hicles emit, under any possible operational mode or condi24 tion, low or zero exhaust emissions of greenhouse gases.

ERN22335 9K1

S.L.C.

604(b) ADMINISTRATIVE COSTS.—The Secretary shall1

2 reserve $25,000,000 of amounts made available under3 subsection (a) for administrative costs of providing loans
4 as described in subsection (a).
(c) ELIMINATION OF LOAN PROGRAM CAP.—Section

5

6 136(d)(1) of the Energy Independence and Security Act
7 of 2007 (42 U.S.C. 17013(d)(1)) is amended by striking
8 ‘‘a total of not more than $25,000,000,000 in’’.
9
10
11

SEC.

50143.

DOMESTIC

MANUFACTURING

CONVERSIONGRANTS.

(a) APPROPRIATION.—In addition to amounts other-

12 wise available, there is appropriated to the Secretary for
13 fiscal year 2022, out of any money in the Treasury not
14 otherwise appropriated, $2,000,000,000, to remain avail15 able through September 30, 2031, to provide grants for
16 domestic production of efficient hybrid, plug-in electric hy17 brid, plug-in electric drive, and hydrogen fuel cell electric
18 vehicles, in accordance with section 712 of the Energy Pol19 icy Act of 2005 (42 U.S.C. 16062).
20(b) COST SHARE.—The Secretary shall require a re-

21 cipient of a grant provided under subsection (a) to provide
22 not less than 50 percent of the cost of the project carried
23 out using the grant.
24(c) ADMINISTRATIVE COSTS.—The Secretary shall

25 reserve 3 percent of amounts made available under sub-

ERN22335 9K1

S.L.C.

605
1 section (a) for administrative costs of making grants de2 scribed in such subsection (a) pursuant to section 712 of
3 the Energy Policy Act of 2005 (42 U.S.C. 16062).
4

SEC. 50144. ENERGY INFRASTRUCTURE REINVESTMENT FI-

56

NANCING.

(a) APPROPRIATION.—In addition to amounts other-

7 wise available, there is appropriated to the Secretary for
8 fiscal year 2022, out of any money in the Treasury not
9 otherwise appropriated, $5,000,000,000, to remain avail10 able through September 30, 2026, to carry out activities
11 under section 1706 of the Energy Policy Act of 2005.
12(b) COMMITMENT AUTHORITY.—The Secretary may

13 make, through September 30, 2026, commitments to
14 guarantee loans for projects under section 1706 of the En15 ergy Policy Act of 2005 the total principal amount of
16 which is not greater than $250,000,000,000, subject to17 the limitations that apply to loan guarantees under section
18 50141(d).
19(c) ENERGY INFRASTRUCTURE REINVESTMENT FI-

20

NANCING.—Title XVII of the Energy Policy Act of 2005

21 is amended by inserting after section 1705 (42 U.S.C.
22 16516) the following:ERN22335 9K1

S.L.C.

606
1‘‘SEC. 1706. ENERGY INFRASTRUCTURE REINVESTMENT FI-

2
3

NANCING.

‘‘(a) IN GENERAL.—Notwithstanding section 1703,

4 the Secretary may make guarantees, including refi5 nancing, under this section only for projects that—‘‘(1) retool, repower, repurpose, or replace en-67ergy infrastructure that has ceased operations; or8‘‘(2) enable operating energy infrastructure to

9

avoid, reduce, utilize, or sequester air pollutants or10

anthropogenic emissions of greenhouse gases.

11‘‘(b) INCLUSION.—A project under subsection (a)12 may include the remediation of environmental damage as13 sociated with energy infrastructure.
14‘‘(c) REQUIREMENT.—A project under subsection

15 (a)(1) that involves electricity generation through the use
16 of fossil fuels shall be required to have controls or tech17 nologies to avoid, reduce, utilize, or sequester air pollut18 ants and anthropogenic emissions of greenhouse gases.
19‘‘(d) APPLICATION.—To apply for a guarantee under

20 this section, an applicant shall submit to the Secretary an
21 application at such time, in such manner, and containing
22 such information as the Secretary may require, includ23 ing—
2425‘‘(1) a detailed plan describing the proposed
project;

ERN22335 9K1

S.L.C.

607
1‘‘(2) an analysis of how the proposed project2

will engage with and affect associated communities;

3

and

4

‘‘(3) in the case of an applicant that is an elec-

5

tric utility, an assurance that the electric utility

6

shall pass on any financial benefit from the guar-

7

antee made under this section to the customers of,8or associated communities served by, the electric9utility.

10‘‘(e) TERM.—Notwithstanding section 1702(f), the

11 term of an obligation shall require full repayment over a
12 period not to exceed 30 years.
13‘‘(f) DEFINITION OF ENERGY INFRASTRUCTURE.—In

14 this section, the term ‘energy infrastructure’ means a fa15 cility, and associated equipment, used for—1617‘‘(1) the generation or transmission of electricenergy; or18‘‘(2) the production, processing, and delivery of19

fossil fuels, fuels derived from petroleum, or petro-20

chemical feedstocks.’’.

21(d) CONFORMING AMENDMENT.—Section 1702(o)(3)22 of the Energy Policy Act of 2005 (42 U.S.C. 16512(o)(3))
23 is amended by inserting ‘‘and projects described in section
24 1706(a)’’ before the period at the end.

ERN22335 9K1

S.L.C.

608(e) CLERICAL AMENDMENT.—The table of contents

1

2 for the Energy Policy Act of 2005 is amended by inserting
3 after the item relating to section 1705 (Public Law 109–
4 58; 119 Stat. 604; 123 Stat. 145) the following:‘‘Sec. 1706. Energy infrastructure reinvestment financing.’’.

5

SEC. 50145. TRIBAL ENERGY LOAN GUARANTEE PROGRAM.

6(a) APPROPRIATION.—In addition to amounts other-

7 wise available, there is appropriated to the Secretary for
8 fiscal year 2022, out of any money in the Treasury not
9 otherwise appropriated, $75,000,000, to remain available
10 through September 30, 2028, to carry out section 2602(c)11 of the Energy Policy Act of 1992 (25 U.S.C. 3502(c)),
12 subject to the limitations that apply to loan guarantees
13 under section 50141(d).
14(b) DEPARTMENTOF

ENERGY TRIBAL ENERGY

15 LOAN GUARANTEE PROGRAM.—Section 2602(c) of the
16 Energy Policy Act of 1992 (25 U.S.C. 3502(c)) is amend17 ed—
18(1) in paragraph (1), by striking ‘‘) for an

19amount equal to not more than 90 percent of’’ and20

inserting ‘‘, except that a loan guarantee may guar-

21

antee any debt obligation of a non-Federal borrower22

to any Eligible Lender (as defined in section 609.2

23

of title 10, Code of Federal Regulations)) for’’; and

24
25

(2)

in

paragraph

(4),

by

striking‘‘$2,000,000,000’’ and inserting ‘‘$20,000,000,000’’.

ERN22335 9K1

S.L.C.

609
1
2
3

PART 5—ELECTRIC TRANSMISSION
SEC. 50151. TRANSMISSION FACILITY FINANCING.

(a) APPROPRIATION.—In addition to amounts other-

4 wise available, there is appropriated to the Secretary for
5 fiscal year 2022, out of any money in the Treasury not
6 otherwise appropriated, $2,000,000,000, to remain avail7 able through September 30, 2030, to carry out this sec8 tion: Provided, That the Secretary shall not enter into any
9 loan agreement pursuant to this section that could result
10 in disbursements after September 30, 2031.
11(b) USE OF FUNDS.—The Secretary shall use the

12 amounts made available by subsection (a) to carry out a
13 program to make direct loans to non-Federal borrowers,
14 subject to the limitations that apply to loan guarantees
15 under section 50141(d) and under such terms and condi16 tions as the Secretary determines to be appropriate, for
17 the construction or modification of electric transmission
18 facilities designated by the Secretary to be necessary in
19 the national interest under section 216(a) of the Federal
20 Power Act (16 U.S.C. 824p(a)).
21(c) LOANS.—A direct loan provided under this sec-

22 tion—23
24(1) shall have a term that does not exceed thelesser of—ERN22335 9K1

S.L.C.

6101(A) 90 percent of the projected useful life,2

in years, of the eligible transmission facility;

3

and

4
5
6

(B) 30 years;(2) shall not exceed 80 percent of the project
costs; and7(3) shall, on first issuance, be subject to the8condition that the direct loan is not subordinate to9other financing.

10(d) INTEREST RATES.—A direct loan provided under

11 this section shall bear interest at a rate determined by
12 the Secretary, taking into consideration market yields on
13 outstanding marketable obligations of the United States
14 of comparable maturities as of the date on which the di15 rect loan is made.
16(e) DEFINITION OF DIRECT LOAN.—In this section,

17 the term ‘‘direct loan’’ has the meaning given the term
18 in section 502 of the Federal Credit Reform Act of 1990
19 (2 U.S.C. 661a).
20
21
22

SEC. 50152. GRANTS TO FACILITATE THE SITING OF INTERSTATE ELECTRICITY TRANSMISSION LINES.

(a) APPROPRIATION.—In addition to amounts other-

23 wise available, there is appropriated to the Secretary for
24 fiscal year 2022, out of any money in the Treasury not
25 otherwise appropriated, $760,000,000, to remain available

ERN22335 9K1

S.L.C.

611
1 through September 30, 2029, for making grants in accord2 ance with this section and for administrative expenses as3 sociated with carrying out this section.
4(b) USE OF FUNDS.—

5(1) IN GENERAL.—The Secretary may make a

6

grant under this section to a siting authority for,7

with respect to a covered transmission project, any

8of the following activities:

910(A) Studies and analyses of the impacts ofthe covered transmission project.

11(B) Examination of up to 3 alternate

12

siting corridors within which the covered trans-13

mission project feasibly could be sited.

14(C) Hosting and facilitation of negotiations

15

in settlement meetings involving the siting au-

16

thority, the covered transmission project appli-17

cant, and opponents of the covered transmission

18

project, for the purpose of identifying and ad-

19

dressing issues that are preventing approval of20

the application relating to the siting or permit-

21

ting of the covered transmission project.

22(D) Participation by the siting authority in23

regulatory proceedings or negotiations in an-

24

other jurisdiction, or under the auspices of a25

Transmission Organization (as defined in sec-

ERN22335 9K1

S.L.C.

612
1

tion 3 of the Federal Power Act (16 U.S.C.

2796)) that is also considering the siting or per-3

mitting of the covered transmission project.

4(E) Participation by the siting authority in5

regulatory proceedings at the Federal Energy

6

Regulatory Commission or a State regulatory

7

commission for determining applicable rates

8

and cost allocation for the covered transmission

9

project.

10(F) Other measures and actions that may

11

improve the chances of, and shorten the time

12

required for, approval by the siting authority of13

the application relating to the siting or permit-

14

ting of the covered transmission project, as the15

Secretary determines appropriate.

16(2) ECONOMIC DEVELOPMENT.—The Secretary17

may make a grant under this section to a siting au-

18

thority, or other State, local, or Tribal governmental

19

entity, for economic development activities for com-20

munities that may be affected by the construction

21

and operation of a covered transmission project, pro-22

vided that the Secretary shall not enter into any

23

grant agreement pursuant to this section that could

24

result in any outlays after September 30, 2031.

25(c) CONDITIONS.—ERN22335 9K1

S.L.C.

613
1(1) FINALDECISIONONAPPLICATION.—In

2

order to receive a grant for an activity described in

3

subsection (b)(1), the Secretary shall require a siting

4

authority to agree, in writing, to reach a final deci-

5

sion on the application relating to the siting or per-6

mitting of the applicable covered transmission

7

project not later than 2 years after the date on

8which such grant is provided, unless the Secretary9authorizes an extension for good cause.

10(2) FEDERAL SHARE.—The Federal share of11

the cost of an activity described in subparagraph

12(D) or (E) of subsection (b)(1) shall not exceed 50

13percent.

14(3) ECONOMIC DEVELOPMENT.—The Secretary15

may only disburse grant funds for economic develop-

16

ment activities under subsection (b)(2)—17(A) to a siting authority upon approval by18

the siting authority of the applicable covered

19transmission project; and

20(B) to any other State, local, or Tribal

21

governmental entity upon commencement of

22

construction of the applicable covered trans-23

mission project in the area under the jurisdic-

24tion of the entity.

ERN22335 9K1

S.L.C.

614
1(d) RETURNING FUNDS.—If a siting authority that

2 receives a grant for an activity described in subsection
3 (b)(1) fails to use all grant funds within 2 years of receipt,
4 the siting authority shall return to the Secretary any such
5 unused funds.
67(e) DEFINITIONS.—In this section:(1) COVEREDTRANSMISSION PROJECT.—The8

term ‘‘covered transmission project’’ means a high-9

voltage interstate or offshore electricity transmission

10

line—

11
12

(A) that is proposed to be constructed andto operate—

13(i) at a minimum of 275 kilovolts of

14

either alternating-current or direct-current

15electric energy by an entity; or16(ii) offshore and at a minimum of 200

17

kilovolts of either alternating-current or di-18

rect-current electric energy by an entity;

19

and

20

(B) for which such entity has applied, or21

informed a siting authority of such entity’s in-

22tent to apply, for regulatory approval.

23(2) SITING AUTHORITY.—The term ‘‘siting au-

24

thority’’ means a State, local, or Tribal govern-

25

mental entity with authority to make a final deter-

ERN22335 9K1

S.L.C.

615
1

mination regarding the siting, permitting, or regu-

2

latory status of a covered transmission project that3

is proposed to be located in an area under the juris-4

diction of the entity.

5

SEC. 50153. INTERREGIONAL AND OFFSHORE WIND ELEC-6

TRICITY

7

ELING, AND ANALYSIS.

8

TRANSMISSION

PLANNING,

MOD-(a) APPROPRIATION.—In addition to amounts other-

9 wise available, there is appropriated to the Secretary for
10 fiscal year 2022, out of any money in the Treasury not
11 otherwise appropriated, $100,000,000, to remain available
12 through September 30, 2031, to carry out this section.
13(b) USEOF

FUNDS.—The Secretary shall use

14 amounts made available under subsection (a)—15(1) to pay expenses associated with convening

16

relevant stakeholders, including States, generation17

and transmission developers, regional transmission

18

organizations, independent system operators, envi-

19

ronmental organizations, electric utilities, and other20

stakeholders the Secretary determines appropriate,21

to address the development of interregional elec-

22

tricity transmission and transmission of electricity

23that is generated by offshore wind; and24(2) to conduct planning, modeling, and analysis

25

regarding interregional electricity transmission andERN22335 9K1

S.L.C.

616
1

transmission of electricity that is generated by off-2

shore wind, taking into account the local, regional,

3

and national economic, reliability, resilience, secu-

4rity, public policy, and environmental benefits of

5interregional electricity transmission and trans-

6

mission of electricity that is generated by offshore

7

wind, including planning, modeling, and analysis, as

8

the Secretary determines appropriate, pertaining

9

to—

10

(A) clean energy integration into the elec-

11

tric grid, including the identification of renew-

12

able energy zones;

13(B) the effects of changes in weather due

14

to climate change on the reliability and resil-

15

ience of the electric grid;16(C) cost allocation methodologies that fa-

17

cilitate the expansion of the bulk power system;18(D) the benefits of coordination between

19generator interconnection processes and trans-20

mission planning processes;

2122(E) the effect of increased electrificationon the electric grid;23(F) power flow modeling;

24(G) the benefits of increased interconnec-

25

tions or interties between or among the West-ERN22335 9K1

S.L.C.

617
1

ern Interconnection, the Eastern Interconnec-

2tion, the Electric Reliability Council of Texas,3and other interconnections, as applicable;

4(H) the cooptimization of transmission and

5generation, including variable energy resources,

6energy storage, and demand-side management;

7(I) the opportunities for use of nontrans-8

mission alternatives, energy storage, and grid-9enhancing technologies;

10(J) economic development opportunities for

11

communities arising from development of inter-12

regional electricity transmission and trans-13

mission of electricity that is generated by off-

14

shore wind;

15(K) evaluation of existing rights-of-way

16

and the need for additional transmission cor-

17

ridors; and18(L) a planned national transmission grid,

19

which would include a networked transmission

20

system to optimize the existing grid for inter-21

connection of offshore wind farms.

ERN22335 9K1

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618
1

PART 6—INDUSTRIAL

2

SEC. 50161. ADVANCED INDUSTRIAL FACILITIES DEPLOY-

345MENT PROGRAM.

(a) OFFICEOF

CLEAN ENERGY DEMONSTRA-TIONS.—In addition to amounts otherwise available, there

6 is appropriated to the Secretary, acting through the Office
7 of Clean Energy Demonstrations, for fiscal year 2022, out
8 of any money in the Treasury not otherwise appropriated,
9 $5,812,000,000, to remain available through September
10 30, 2026, to carry out this section.
11(b) FINANCIAL ASSISTANCE.—The Secretary shall

12 use funds appropriated by subsection (a) to provide finan13 cial assistance, on a competitive basis, to eligible entities
14 to carry out projects for—15

(1) the purchase and installation, or implemen-

16tation, of advanced industrial technology at an eligi-

17

ble facility;18(2) retrofits, upgrades to, or operational im-

19

provements at an eligible facility to install or imple-

20

ment advanced industrial technology; or

21(3) engineering studies and other work needed22

to prepare an eligible facility for activities described23

in paragraph (1) or (2).

24(c) APPLICATION.—To be eligible to receive financial

25 assistance under subsection (b), an eligible entity shall
26 submit to the Secretary an application at such time, inERN22335 9K1

S.L.C.

619
1 such manner, and containing such information as the Sec2 retary may require, including the expected greenhouse gas
3 emissions reductions to be achieved by carrying out the
4 project.
5(d) PRIORITY.—In providing financial assistance

6 under subsection (b), the Secretary shall give priority con7 sideration to projects on the basis of, as determined by
8 the Secretary—
9(1) the expected greenhouse gas emissions re-10

ductions to be achieved by carrying out the project;

11(2) the extent to which the project would pro-12

vide the greatest benefit for the greatest number of

13

people within the area in which the eligible facility

14

is located; and15(3) whether the eligible entity participates or16

would participate in a partnership with purchasers

17of the output of the eligible facility.

18(e) COST SHARE.—The Secretary shall require an eli-

19 gible entity to provide not less than 50 percent of the cost
20 of a project carried out pursuant to this section.
21(f) ADMINISTRATIVE COSTS.—The Secretary shall re-

22 serve $200,000,000 of amounts made available under sub23 section (a) for administrative costs of carrying out this
24 section.
25(g) DEFINITIONS.—In this section:

ERN22335 9K1

S.L.C.

620(1) ADVANCED

1

INDUSTRIALTECHNOLOGY.—2

The term ‘‘advanced industrial technology’’ means a3technology directly involved in an industrial process,4

as described in any of paragraphs (1) through (6)5of section 454(c) of the Energy Independence and6

Security Act of 2007 (42 U.S.C. 17113(c)), and de-7

signed to accelerate greenhouse gas emissions reduc-8tion progress to net-zero at an eligible facility, as de-9termined by the Secretary.

10(2) ELIGIBLE ENTITY.—The term ‘‘eligible enti-

11ty’’ means the owner or operator of an eligible facil-

12

ity.

13

(3) ELIGIBLE FACILITY.—The term ‘‘eligible fa-

14

cility’’ means a domestic, non-Federal, nonpower in-

15

dustrial or manufacturing facility engaged in energy-

16

intensive industrial processes, including production

17

processes for iron, steel, steel mill products, alu-

18

minum, cement, concrete, glass, pulp, paper, indus-

19

trial ceramics, chemicals, and other energy intensive

20

industrial processes, as determined by the Secretary.

21(4) FINANCIAL ASSISTANCE.—The term ‘‘finan-

22

cial assistance’’ means a grant, rebate, direct loan,

23

or cooperative agreement.

ERN22335 9K1

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621
1

PART 7—OTHER ENERGY MATTERS

2

SEC. 50171. DEPARTMENT OF ENERGY OVERSIGHT.

3

In addition to amounts otherwise available, there is

4 appropriated to the Secretary for fiscal year 2022, out of
5 any money in the Treasury not otherwise appropriated,
6 $10,000,000, to remain available through September 30,
7 2031, for oversight by the Department of Energy Office
8 of Inspector General of the Department of Energy activi9 ties for which funding is appropriated in this subtitle.
10
11

SEC. 50172. NATIONAL LABORATORY INFRASTRUCTURE.

(a) OFFICE OF SCIENCE.—In addition to amounts

12 otherwise available, there is appropriated to the Secretary,
13 acting through the Director of the Office of Science, for
14 fiscal year 2022, out of any money in the Treasury not
15 otherwise appropriated, to remain available through Sep16 tember 30, 2027—1718(1) $133,240,000 to carry out activities forscience laboratory infrastructure projects;

19(2) $303,656,000 to carry out activities for20high energy physics construction and major items of21

equipment projects;

22(3) $280,000,000 to carry out activities for fu-

23

sion energy science construction and major items of24

equipment projects;

ERN22335 9K1

S.L.C.

622
1(4) $217,000,000 to carry out activities for nu-

2

clear physics construction and major items of equip-3

ment projects;

4
5
6
7
8

(5) $163,791,000 to carry out activities for advanced scientific computing research facilities;(6) $294,500,000 to carry out activities forbasic energy sciences projects; and(7) $157,813,000 to carry out activities for iso-9

tope research and development facilities.

10(b) OFFICE OF FOSSIL ENERGY AND CARBON MAN-

11

AGEMENT.—In addition to amounts otherwise available,

12 there is appropriated to the Secretary for fiscal year 2022,
13 out of any money in the Treasury not otherwise appro14 priated, $150,000,000, to remain available through Sep15 tember 30, 2027, to carry out activities for infrastructure
16 and general plant projects carried out by the Office of
17 Fossil Energy and Carbon Management.
18(c) OFFICE OF NUCLEAR ENERGY.—In addition to

19 amounts otherwise available, there is appropriated to the
20 Secretary for fiscal year 2022, out of any money in the
21 Treasury not otherwise appropriated, $150,000,000, to re22 main available through September 30, 2027, to carry out
23 activities for infrastructure and general plant projects car24 ried out by the Office of Nuclear Energy.

ERN22335 9K1

S.L.C.

623
1(d) OFFICE OF ENERGY EFFICIENCY AND RENEW-

2

ABLE ENERGY.—In addition to amounts otherwise avail-3 able, there is appropriated to the Secretary for fiscal year
4 2022, out of any money in the Treasury not otherwise ap5 propriated, $150,000,000, to remain available through6 September 30, 2027, to carry out activities for infrastruc7 ture and general plant projects carried out by the Office
8 of Energy Efficiency and Renewable Energy.
91011SEC. 50173. AVAILABILITY OF HIGH-ASSAY LOW-ENRICHEDURANIUM.

(a) APPROPRIATIONS.—In addition to amounts other-

12 wise available, there is appropriated to the Secretary of
13 for fiscal year 2022, out of any money in the Treasury
14 not otherwise appropriated, to remain available through15 September 30, 2026—
16(1) $100,000,000 to carry out the program ele-

17

ments described in subparagraphs (A) through (C)18of section 2001(a)(2) of the Energy Act of 2020 (4219

U.S.C. 16281(a)(2));20(2) $500,000,000 to carry out the program ele-

21

ments described in subparagraphs (D) through (H)22of that section; and

23(3) $100,000,000 to carry out activities to sup-24

port the availability of high-assay low-enriched ura-

25

nium for civilian domestic research, development,

ERN22335 9K1

S.L.C.

6241

demonstration, and commercial use under section

2

2001 of the Energy Act of 2020 (42 U.S.C. 16281).

3(b) COMPETITIVE PROCEDURES.—To the maximum

4 extent practicable, the Department of Energy shall, in a
5 manner consistent with section 989 of the Energy Policy
6 Act of 2005 (42 U.S.C. 16353), use a competitive, merit7 based review process in carrying out research, develop8 ment, demonstration, and deployment activities under sec9 tion 2001 of the Energy Act of 2020 (42 U.S.C. 16281).
10(c) ADMINISTRATIVE EXPENSES.—The Secretary

11 may use not more than 3 percent of the amounts appro12 priated by subsection (a) for administrative purposes.
13

Subtitle B—Natural Resources

14

PART 1—GENERAL PROVISIONS

15

SEC. 50211. DEFINITIONS.

16

In this subtitle:

17
18
19

(1) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of the Interior.
(2) UNITEDSTATES

INSULAR

AREAS.—The20

term ‘‘United States Insular Areas’’ means Amer-21

ican Samoa, the Commonwealth of the Northern

22Mariana Islands, Guam, the Commonwealth of Puer-

23

to Rico, and the United States Virgin Islands.

ERN22335 9K1

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625
1

PART 2—PUBLIC LANDS

2

SEC. 50221. NATIONAL PARKS AND PUBLIC LANDS CON-

3
4

SERVATION AND RESILIENCE.

In addition to amounts otherwise available, there is

5 appropriated to the Secretary for fiscal year 2022, out of
6 any money in the Treasury not otherwise appropriated,
7 $250,000,000, to remain available through September 30,
8 2031, to carry out projects for the conservation, protec9 tion, and resiliency of lands and resources administered
10 by the National Park Service and Bureau of Land Man11 agement. None of the funds provided under this section
12 shall be subject to cost-share or matching requirements.
13

SEC. 50222. NATIONAL PARKS AND PUBLIC LANDS CON-

14

SERVATION AND ECOSYSTEM RESTORATION.

15

In addition to amounts otherwise available, there is

16 appropriated to the Secretary for fiscal year 2022, out of
17 any money in the Treasury not otherwise appropriated,
18 $250,000,000, to remain available through September 30,
19 2031, to carry out conservation, ecosystem and habitat
20 restoration projects on lands administered by the National
21 Park Service and Bureau of Land Management. None of
22 the funds provided under this section shall be subject to23 cost-share or matching requirements.
24
25

SEC. 50223. NATIONAL PARK SERVICE EMPLOYEES.

In addition to amounts otherwise available, there is

26 appropriated to the Secretary for fiscal year 2022, out of

ERN22335 9K1

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626
1 any money in the Treasury not otherwise appropriated,
2 $500,000,000, to remain available through September 30,
3 2030, to hire employees in units of the National Park Sys4 tem.
5

PART 3—DROUGHT RESPONSE AND

6

PREPAREDNESS

7SEC. 50231. BUREAU OF RECLAMATION DOMESTIC WATER

89SUPPLY PROJECTS.

In addition to amounts otherwise available, there is

10 appropriated to the Secretary, acting through the Com11 missioner of Reclamation, for fiscal year 2022, out of any
12 money in the Treasury not otherwise appropriated,
13 $550,000,000, to remain available through September 30,
14 2031, for grants, contracts, or financial assistance agree15 ments for disadvantaged communities (identified accord16 ing to criteria adopted by the Commissioner of Reclama17 tion) in a manner as determined by the Commissioner of
18 Reclamation for up to 100 percent of the cost of the plan19 ning, design, or construction of water projects the primary
20 purpose of which is to provide domestic water supplies to
21 communities or households that do not have reliable access
22 to domestic water supplies in a State or territory described
23 in the first section of the Act of June 17, 1902 (43 U.S.C.
24 391; 32 Stat. 388, chapter 1093).

ERN22335 9K1

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627
1

SEC. 50232. CANAL IMPROVEMENT PROJECTS.

In addition to amounts otherwise available, there is2

3 appropriated to the Secretary, acting through the Com4 missioner of Reclamation, for fiscal year 2022, out of any
5 money in the Treasury not otherwise appropriated,
6 $25,000,000, to remain available through September 30,
7 2031, for the design, study, and implementation of
8 projects (including pilot and demonstration projects) to
9 cover water conveyance facilities with solar panels to gen10 erate renewable energy in a manner as determined by the
11 Secretary or for other solar projects associated with Bu12 reau of Reclamation projects that increase water efficiency
13 and assist in implementation of clean energy goals.
14
15
16
17

PART 4—INSULAR AFFAIRS
SEC.

50241.

OFFICEOF

INSULARAFFAIRS

CLIMATECHANGE TECHNICAL ASSISTANCE.

(a) IN GENERAL.—In addition to amounts otherwise

18 available, there is appropriated to the Secretary, acting
19 through the Office of Insular Affairs, for fiscal year 2022,
20 out of any money in the Treasury not otherwise appro21 priated, $15,000,000, to remain available through Sep22 tember 30, 2026, to provide technical assistance for cli23 mate change planning, mitigation, adaptation, and resil24 ience to United States Insular Areas.
25(b) ADMINISTRATIVE EXPENSES.—In addition to

26 amounts otherwise available, there is appropriated to theERN22335 9K1

S.L.C.

628
1 Secretary, acting through the Office of Insular Affairs, for2 fiscal year 2022, out of any money in the Treasury not
3 otherwise appropriated, $900,000, to remain available
4 through September 30, 2026, for necessary administrative
5 expenses associated with carrying out this section.
6

PART 5—OFFSHORE WIND

7

SEC. 50251. LEASING ON THE OUTER CONTINENTAL SHELF.

8(a) LEASING AUTHORIZED.—The Secretary may

9 grant leases, easements, and rights-of-way pursuant to
10 section 8(p)(1)(C) of the Outer Continental Shelf Lands
11 Act (43 U.S.C. 1337(p)(1)(C)) in an area withdrawn by—
12(1) the Presidential memorandum entitled13‘‘Memorandum on the Withdrawal of Certain Areas

14of the United States Outer Continental Shelf from

15

Leasing Disposition’’ and dated September 8, 2020;

16

or

17

(2) the Presidential memorandum entitled

18‘‘Presidential Determination on the Withdrawal of

19

Certain Areas of the United States Outer Conti-

20

nental Shelf from Leasing Disposition’’ and dated

21

September 25, 2020.

22(b) OFFSHORE WIND FOR THE TERRITORIES.—

23(1) APPLICATION

OF

OUTER

CONTINENTAL

24

SHELF LANDS ACT WITH RESPECT TO TERRITORIES

25

OF THE UNITED STATES.—ERN22335 9K1

S.L.C.

629
1(A) IN GENERAL.—Section 2 of the Outer

2

Continental Shelf Lands Act (43 U.S.C. 1331)

3

is amended—(i) in subsection (a)—4(I) by striking ‘‘means all’’ and5

inserting the following: ‘‘means—67‘‘(1) all’’; and8(II) in paragraph (1) (as so des-9

ignated), by striking ‘‘control;’’ and10

inserting the following: ‘‘control or

11within the exclusive economic zone of12

the United States and adjacent to any

13

territory of the United States; and’’;14and(III) by adding at the end fol-15

lowing:1617‘‘(2) does not include any area conveyed by

18

Congress to a territorial government for administra-

19tion;’’;(ii) in subsection (p), by striking

20
21‘‘and’’ after the semicolon at the end;

22(iii) in subsection (q), by striking the23

period at the end and inserting ‘‘; and’’;

24

and

ERN22335 9K1

S.L.C.

630(iv) by adding at the end the fol-1
2
3

lowing:‘‘(r) The term ‘State’ means—4‘‘(1) each of the several States;

5‘‘(2) the Commonwealth of Puerto Rico;

6‘‘(3) Guam;

7‘‘(4) American Samoa;

8‘‘(5) the United States Virgin Islands; and9‘‘(6) the Commonwealth of the Northern Mar-

10

iana Islands.’’.

11(B) EXCLUSIONS.—Section 18 of the

12

Outer Continental Shelf Lands Act (43 U.S.C.

131344) is amended by adding at the end the fol-14

lowing:15‘‘(i) APPLICATION.—This section shall16

not apply to the scheduling of any lease17

sale in an area of the outer Continental

18

Shelf that is adjacent to the Common-

19

wealth of Puerto Rico, Guam, American

20

Samoa, the United States Virgin Islands,

21or the Commonwealth of the Northern

22Mariana Islands.’’.

2324(2) WIND LEASE SALES FOR AREAS OF THE
OUTER CONTINENTAL SHELF.—The

Outer Conti-

ERN22335 9K1

S.L.C.

631
1

nental Shelf Lands Act (43 U.S.C. 1331 et seq.) is2

amended by adding at the end the following:

3‘‘SEC. 33. WIND LEASE SALES FOR AREAS OF THE OUTER

4CONTINENTAL SHELF OFFSHORE OF TERRI-

5

TORIES OF THE UNITED STATES.

6
7
8
9

‘‘(a) WIND LEASE SALES OFF COASTS OF TERRITORIES OF THE UNITED STATES.—‘‘(1) CALL FOR INFORMATION AND NOMINATIONS.—

10‘‘(A) IN GENERAL.—The Secretary shall11

issue calls for information and nominations for

12

proposed wind lease sales for areas of the outer

13

Continental Shelf described in paragraph (2)14that are determined to be feasible.

15‘‘(B) INITIAL CALL.—Not later than Sep-

16

tember 30, 2025, the Secretary shall issue an

17

initial call for information and nominations

18

under this paragraph.

19‘‘(2) CONDITIONAL WIND LEASE SALES.—The

20

Secretary may conduct wind lease sales in each area

21

within the exclusive economic zone of the United

22

States adjacent to the Commonwealth of Puerto

23

Rico, Guam, American Samoa, the United States

24

Virgin Islands, or the Commonwealth of the North-ERN22335 9K1

S.L.C.

632
1

ern Mariana Islands that meets each of the following

2

criteria:

34‘‘(A) The Secretary has concluded that awind lease sale in the area is feasible.

5‘‘(B) The Secretary has determined that6

there is sufficient interest in leasing the area.

7‘‘(C) The Secretary has consulted with the8Governor of the territory regarding the suit-

9ability of the area for wind energy develop-

10ment.’’.

11

PART 6—FOSSIL FUEL RESOURCES

12
13SEC. 50261. OFFSHORE OIL AND GAS ROYALTY RATE.

Section 8(a)(1) of the Outer Continental Shelf Lands

14 Act (43 U.S.C. 1337(a)(1)) is amended—15(1) in each of subparagraphs (A) and (C), by16

striking ‘‘not less than 121⁄2 per centum’’ each place17

it appears and inserting ‘‘not less than 162⁄3 per-18

cent, but not more than 183⁄4 percent, during the19

10-year period beginning on the date of enactment

20of the Inflation Reduction Act of 2022, and not less21

than 162⁄3 percent thereafter,’’;22(2) in subparagraph (F), by striking ‘‘no less23

than 121⁄2 per centum’’ and inserting ‘‘not less than24

162⁄3 percent, but not more than 183⁄4 percent, dur-25

ing the 10-year period beginning on the date of en-

ERN22335 9K1

S.L.C.

633
1

actment of the Inflation Reduction Act of 2022, and2

not less than 162⁄3 percent thereafter,’’; and3(3) in subparagraph (H), by striking ‘‘no less4

than 12 and 1⁄2 per centum’’ and inserting ‘‘not less5than 162⁄3 percent, but not more than 183⁄4 percent,6

during the 10-year period beginning on the date of7enactment of the Inflation Reduction Act of 2022,8

and not less than 162⁄3 percent thereafter,’’.

9

SEC. 50262. MINERAL LEASING ACT MODERNIZATION.

10(a) ONSHORE OIL AND GAS ROYALTY RATES.—

11(1) LEASE OF OIL AND GAS LAND.—Section 17

12of the Mineral Leasing Act (30 U.S.C. 226) is

13

amended—

14
15
16
17

(A) in subsection (b)(1)(A), in the fifth
sentence—(i) by striking ‘‘12.5’’ and inserting‘‘162⁄3’’; and18(ii) by inserting ‘‘or, in the case of a19lease issued during the 10-year period be-

20

ginning on the date of enactment of the21

Inflation Reduction Act of 2022, 162⁄3 per-22

cent in amount or value of the production

23

removed or sold from the lease’’ before the24

period at the end; andERN22335 9K1

S.L.C.

634
1(B) by striking ‘‘121⁄2 per centum’’ each2

place it appears and inserting ‘‘162⁄3 percent’’.

3(2) CONDITIONS FOR REINSTATEMENT.—Sec-

4

tion 31(e)(3) of the Mineral Leasing Act (30 U.S.C.

5

188(e)(3)) is amended by striking ‘‘162⁄3’’ each place6

it appears and inserting ‘‘20’’.

7(b) OIL AND GAS MINIMUM BID.—Section 17(b) of

8 the Mineral Leasing Act (30 U.S.C. 226(b)) is amended—
9(1) in paragraph (1)(B), in the first sentence,10

by striking ‘‘$2 per acre for a period of 2 years from11

the date of enactment of the Federal Onshore Oil

12

and Gas Leasing Reform Act of 1987.’’ and insert-13

ing ‘‘$10 per acre during the 10-year period begin-

14

ning on the date of enactment of the Inflation Re-

15

duction Act of 2022.’’; and

16(2) in paragraph (2)(C), by striking ‘‘$2 per

17

acre’’ and inserting ‘‘$10 per acre’’.

18(c) FOSSIL FUEL RENTAL RATES.—

19(1) ANNUAL RENTALS.—Section 17(d) of the20

Mineral Leasing Act (30 U.S.C. 226(d)) is amended,

21

in the first sentence, by striking ‘‘$1.50 per acre’’

22

and all that follows through the period at the end

23

and inserting ‘‘$3 per acre per year during the 2-

24

year period beginning on the date the lease begins

25

for new leases, and after the end of that 2-year pe-ERN22335 9K1

S.L.C.

635
1

riod, $5 per acre per year for the following 6-year2

period, and not less than $15 per acre per year3

thereafter, or, in the case of a lease issued during

4

the 10-year period beginning on the date of enact-

5

ment of the Inflation Reduction Act of 2022, $3 per

6acre per year during the 2-year period beginning on

7

the date the lease begins, and after the end of that

82-year period, $5 per acre per year for the following

9

6-year period, and $15 per acre per year there-

10

after.’’.

11(2) RENTALS IN REINSTATED LEASES.—Section

1231(e)(2) of the Mineral Leasing Act (30 U.S.C.

13

188(e)(2)) is amended by striking ‘‘$10’’ and insert-

14

ing ‘‘$20’’.

15(d) EXPRESSION OF INTEREST FEE.—Section 17 of

16 the Mineral Leasing Act (30 U.S.C. 226) is amended by
17 adding at the end the following:
18‘‘(q) FEE FOR EXPRESSION OF INTEREST.—

19‘‘(1) IN GENERAL.—The Secretary shall assess20

a nonrefundable fee against any person that, in ac-

21

cordance with procedures established by the Sec-22

retary to carry out this subsection, submits an ex-

23

pression of interest in leasing land available for dis-24

position under this section for exploration for, and25

development of, oil or gas.

ERN22335 9K1

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636
1‘‘(2) AMOUNT OF FEE.—

2‘‘(A) IN GENERAL.—Subject to subpara-

3graph (B), the fee assessed under paragraph4(1) shall be $5 per acre of the area covered by

5

the applicable expression of interest.

6‘‘(B) ADJUSTMENT

OF

FEE.—TheSec-

7

retary shall, by regulation, not less frequently

8than every 4 years, adjust the amount of the9

fee under subparagraph (A) to reflect the

10change in inflation.’’.

11(e) ELIMINATION OF NONCOMPETITIVE LEASING.—

12(1) IN GENERAL.—Section 17 of the Mineral

13

Leasing Act (20 U.S.C. 226) is amended—

14(A) in subsection (b)—15(i) in paragraph (1)(A)—16(I) in the first sentence, by strik-17

ing ‘‘paragraphs (2) and (3) of this18

subsection’’ and inserting ‘‘paragraph

19(2)’’; and(II) by striking the last sentence;

20
21

and

22

(ii) by striking paragraph (3);23
24(B) by striking subsection (c) and inserting the following:ERN22335 9K1

S.L.C.

6371‘‘(c) ADDITIONAL ROUNDS OF COMPETITIVE BID-

2

DING.—Land made available for leasing under subsection

3 (b)(1) for which no bid is accepted or received, or the land
4 for which a lease terminates, expires, is cancelled, or is
5 relinquished, may be made available by the Secretary of
6 the Interior for a new round of competitive bidding under
7 that subsection.’’; and8(C) by striking subsection (e) and inserting9

the following:10‘‘(e) TERM OF LEASE.—

11‘‘(1) IN GENERAL.—Any lease issued under this12

section, including a lease for tar sand areas, shall be

13

for a primary term of 10 years.

14‘‘(2) CONTINUATION OF LEASE.—A lease de-15

scribed in paragraph (1) shall continue after the pri-

16

mary term of the lease for any period during which17

oil or gas is produced in paying quantities.

18‘‘(3) ADDITIONAL

EXTENSIONS.—Any

lease

19

issued under this section for land on which, or for20

which under an approved cooperative or unit plan of21

development or operation, actual drilling operations

22

were commenced and diligently prosecuted prior to23

the end of the primary term of the lease shall be ex-

24tended for 2 years and for any period thereafter dur-

ERN22335 9K1

S.L.C.

638
1

ing which oil or gas is produced in paying quan-2

tities.’’.

3(2) CONFORMING AMENDMENTS.—Section 31 of

4

the Mineral Leasing Act (30 U.S.C. 188) is amend-

5

ed—

6

(A) in subsection (d)(1), in the first sen-7

tence, by striking ‘‘or section 17(c) of this Act’’;

89(B) in subsection (e)—(i) in paragraph (2)—10(I) by striking ‘‘either’’; and11(II) by striking ‘‘or the inclu-

12sion’’ and all that follows through ‘‘,

13all’’; and14(ii) in paragraph (3)—

15
16
17
18
19
20
21
22

(I) in subparagraph (A), by adding ‘‘and’’ after the semicolon;(II) by striking subparagraph(B); and(III) by striking ‘‘(3)(A) payment’’ and inserting the following:‘‘(3) payment’’;(C) in subsection (g)—23(i) in paragraph (1), by striking ‘‘as a

24competitive’’ and all that follows through25‘‘of this Act’’ and inserting ‘‘in the same

ERN22335 9K1

S.L.C.

639
1

manner as the original lease issued pursu-

2

ant to section 17’’;3(ii) by striking paragraph (2);4(iii) by redesignating paragraphs (3)5and (4) as paragraphs (2) and (3), respec-6

tively; and7(iv) in paragraph (2) (as so redesig-

8

nated), by striking ‘‘applicable to leases

9issued under subsection 17(c) of this Act

10(30 U.S.C. 226(c)) except,’’ and inserting

11‘‘except’’;

12(D) in subsection (h), by striking ‘‘sub-13

sections (d) and (f) of this section’’ and insert-

14

ing ‘‘subsection (d)’’;15(E) in subsection (i), by striking ‘‘(i)(1) In

16

acting’’ and all that follows through ‘‘of this17

section’’ in paragraph (2) and inserting the fol-18

lowing:19‘‘(i) ROYALTY REDUCTION IN REIN-

20

STATED LEASES.—In acting on a petition

21

for reinstatement pursuant to subsection

22(d)’’;

23(F) by striking subsection (f); andERN22335 9K1

S.L.C.

640
1

(G)

by

redesignating

subsections(g)2

through (j) as subsections (f) through (i), re-3spectively.

4(f) OIL AND GAS BONDING REQUIREMENTS.—Sec-

5 tion 17(g) of the Mineral Leasing Act (30 U.S.C. 226(g))
6 is amended by inserting after the third sentence the fol7 lowing: ‘‘At a minimum each bond, surety, or other finan8 cial arrangement established for a lease shall be consid9 ered inadequate if the bond, surety, or other financial ar10 rangement is for less than $150,000, in the case of an
11 individual oil or gas lease in a State, or for less than
12 $500,000, in the case of an arrangement for all of the
13 oil and gas leases of an operating entity in a State, or
14 for less than $2,000,000, in the case of an arrangement
15 for all of the oil and gas leases of an operating entity na16 tionwide. The Secretary shall, by regulation, not less fre17 quently than every 4 years, adjust the amount at which
18 a bond, surety, or other financial arrangement is consid19 ered inadequate to reflect the change in inflation.’’.
20
21

SEC. 50263. ROYALTIES ON ALL EXTRACTED METHANE.

(a) IN GENERAL.—For all leases issued after the

22 date of enactment of this Act, except as provided in sub23 section (b), royalties paid for gas produced from Federal
24 land and on the outer Continental Shelf shall be assessed
25 on all gas produced, including all gas that is consumed

ERN22335 9K1

S.L.C.

641
1 or lost by venting, flaring, or negligent releases through2 any equipment during upstream operations.
3(b) EXCEPTION.—Subsection (a) shall not apply with

4 respect to—5(1) gas vented or flared for not longer than 48

6hours in an emergency situation that poses a danger

7

to human health, safety, or the environment;

8(2) gas used or consumed within the area of the9lease, unit, or communitized area for the benefit of10

the lease, unit, or communitized area; or

11(3) gas that is unavoidably lost.

12
13
14
15

SEC. 50264. LEASE SALES UNDER THE 2017–2022 OUTERCONTINENTAL SHELF LEASING PROGRAM.

(a) DEFINITIONS.—In this section:(1) 2022

LEASE

SALES.—Theterm ‘‘2022

16

Lease Sales’’ means each of the following lease sales

17

described in the 2017–2022 Outer Continental Shelf

18

Oil and Gas Leasing Proposed Final Program pub-19

lished on November 18, 2016, and approved by the20

Secretary in the Record of Decision issued on Janu-21

ary 17, 2017, described in the notice of availability

22

entitled ‘‘Record of Decision for the 2017–2022

23

Outer Continental Shelf Oil and Gas Leasing Pro-

24

gram Final Programmatic Environmental Impact

ERN22335 9K1

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642
1

Statement; MMAA104000’’ (82 Fed. Reg. 6643

2

(January 19, 2017)):3(A) Lease Sale 258.

4(B) Lease Sale 259.

5(2) LEASE SALE 257.—The term ‘‘Lease Sale

6257’’ means the lease sale numbered 257 that was

7

approved in the Record of Decision described in the8

notice of availability of a record of decision issued on

9August 31, 2021, entitled ‘‘Gulf of Mexico, Outer

10

Continental Shelf (OCS), Oil and Gas Lease Sale

11

257’’ (86 Fed. Reg. 50160 (September 7, 2021)),12

and is the subject of the final notice of sale entitled

13‘‘Gulf of Mexico Outer Continental Shelf Oil and

14

Gas Lease Sale 257’’ (86 Fed. Reg. 54728 (October15

4, 2021)).

16(3) LEASE SALE 261.—The term ‘‘Lease Sale

17

261’’ means the lease sale numbered 261 described18

in the 2017–2022 Outer Continental Shelf Oil and

19

Gas Leasing Proposed Final Program published on

20

November 18, 2016, and approved by the Secretary

21in the Record of Decision issued on January 17,22

2017, described in the notice of availability entitled

23‘‘Record of Decision for the 2017–2022 Outer Conti-

24

nental Shelf Oil and Gas Leasing Program Final

25

Programmatic Environmental Impact Statement;

ERN22335 9K1

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643
1

MMAA104000’’ (82 Fed. Reg. 6643 (January 19,22017)).

3(b) LEASE SALE 257 REINSTATEMENT.—

4(1) ACCEPTANCE OF BIDS.—Not later 30 days

5

after the date of enactment of this Act, the Sec-6

retary shall, without modification or delay—

7(A) accept the highest valid bid for each8

tract or bidding unit of Lease Sale 257 for

9which a valid bid was received on November 17,

102021; and11(B) provide the appropriate lease form to

12

the winning bidder to execute and return.

13(2) LEASE ISSUANCE.—On receipt of an exe-

14

cuted lease form under paragraph (1)(B) and pay-

15

ment of the rental for the first year, the balance of16

the bonus bid (unless deferred), and any required

17bond or security from the high bidder, the Secretary

18

shall promptly issue to the high bidder a fully exe-

19

cuted lease, in accordance with—

20
21(A) the regulations in effect on the date ofLease Sale 257; and

22(B) the terms and conditions of the final

23

notice of sale entitled ‘‘Gulf of Mexico Outer

24

Continental Shelf Oil and Gas Lease Sale 257’’

25(86 Fed. Reg. 54728 (October 4, 2021)).

ERN22335 9K1

S.L.C.

6441(c) REQUIREMENT FOR 2022 LEASE SALES.—Not-

2 withstanding the expiration of the 2017–2022 leasing pro3 gram, not later than December 31, 2022, the Secretary
4 shall conduct the 2022 Lease Sales in accordance with the
5 Record of Decision approved by the Secretary on January
6 17, 2017, described in the notice of availability entitled
7 ‘‘Record of Decision for the 2017–2022 Outer Continental
8 Shelf Oil and Gas Leasing Program Final Programmatic
9 Environmental Impact Statement; MMAA104000’’ issued
10 on January 17, 2017 (82 Fed. Reg. 6643 (January 19,
11 2017)).
12(d) REQUIREMENT FOR LEASE SALE 261.—Notwith-

13 standing the expiration of the 2017–2022 leasing pro14 gram, not later than September 30, 2023, the Secretary
15 shall conduct Lease Sale 261 in accordance with the
16 Record of Decision approved by the Secretary on January
17 17, 2017, described in the notice of availability entitled18 ‘‘Record of Decision for the 2017–2022 Outer Continental
19 Shelf Oil and Gas Leasing Program Final Programmatic
20 Environmental Impact Statement; MMAA104000’’ issued
21 on January 17, 2017 (82 Fed. Reg. 6643 (January 19,
22 2017)).
23
24

SEC. 50265. ENSURING ENERGY SECURITY.

(a) DEFINITIONS.—In this section:

ERN22335 9K1

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645
1(1) FEDERAL LAND.—The term ‘‘Federal land’’2means public lands (as defined in section 103 of the3

Federal Land Policy and Management Act of 1976

4

(43 U.S.C. 1702)).

5(2) OFFSHORE LEASE SALE.—The term ‘‘off-6

shore lease sale’’ means an oil and gas lease sale—

7(A) that is held by the Secretary in accord-

8

ance with the Outer Continental Shelf Lands

9

Act (43 U.S.C. 1331 et seq.); and

10(B) that, if any acceptable bids have been

11

received for any tract offered in the lease sale,

12

results in the issuance of a lease.

13(3) ONSHORE LEASE SALE.—The term ‘‘on-14

shore lease sale’’ means a quarterly oil and gas lease

15

sale—

16

(A) that is held by the Secretary in accord-

17

ance with section 17 of the Mineral Leasing Act

18(30 U.S.C. 226); and

19(B) that, if any acceptable bids have been

20

received for any parcel offered in the lease sale,21

results in the issuance of a lease.

22(b) LIMITATION ON ISSUANCE OF CERTAIN LEASES23

OR RIGHTS-OF-WAY.—During the 10-year period begin-

24 ning on the date of enactment of this Act—ERN22335 9K1

S.L.C.

646
1(1) the Secretary may not issue a right-of-way

2

for wind or solar energy development on Federal

3

land unless—

4(A) an onshore lease sale has been held

5

during the 120-day period ending on the date

6of the issuance of the right-of-way for wind or

7

solar energy development; and

8(B) the sum total of acres offered for lease9in onshore lease sales during the 1-year period

10

ending on the date of the issuance of the right-

11

of-way for wind or solar energy development is

12

not less than the lesser of—

13(i) 2,000,000 acres; and14(ii) 50 percent of the acreage for15

which expressions of interest have been

16

submitted for lease sales during that pe-

17riod; and18(2) the Secretary may not issue a lease for off-

19

shore wind development under section 8(p)(1)(C) of20

the Outer Continental Shelf Lands Act (43 U.S.C.

21

1337(p)(1)(C)) unless—

22(A) an offshore lease sale has been held

23

during the 1-year period ending on the date of24

the issuance of the lease for offshore wind de-25velopment; andERN22335 9K1

S.L.C.

647
1(B) the sum total of acres offered for lease2

in offshore lease sales during the 1-year period

3

ending on the date of the issuance of the lease4

for offshore wind development is not less than

5

60,000,000 acres.

6(c) SAVINGS.—Except as expressly provided in para-

7 graphs (1) and (2) of subsection (b), nothing in this sec8 tion supersedes, amends, or modifies existing law.
9

PART 7—UNITED STATES GEOLOGICAL SURVEY

10SEC. 50271. UNITED STATES GEOLOGICAL SURVEY 3D ELE-

1112VATION PROGRAM.

In addition to amounts otherwise available, there is

13 appropriated to the Secretary, acting through the Director
14 of the United States Geological Survey, for fiscal year
15 2022, out of any money in the Treasury not otherwise ap16 propriated, $23,500,000, to remain available through Sep17 tember 30, 2031, to produce, collect, disseminate, and use
18 3D elevation data.
19 PART 8—OTHER NATURAL RESOURCES MATTERS
20
21

SEC. 50281. DEPARTMENT OF THE INTERIOR OVERSIGHT.

In addition to amounts otherwise available, there is

22 appropriated to the Secretary for fiscal year 2022, out of
23 any money in the Treasury not otherwise appropriated,
24 $10,000,000, to remain available through September 30,
25 2031, for oversight by the Department of the Interior Of-

ERN22335 9K1

S.L.C.

648
1 fice of Inspector General of the Department of the Interior
2 activities for which funding is appropriated in this subtitle.
3
4
5
6

Subtitle C—Environmental
Reviews
SEC. 50301. DEPARTMENT OF ENERGY.

In addition to amounts otherwise available, there is

7 appropriated to the Secretary of Energy for fiscal year
8 2022, out of any money in the Treasury not otherwise ap9 propriated, $125,000,000, to remain available through10 September 30, 2031, to provide for the hiring and training
11 of personnel, the development of programmatic environ12 mental documents, the procurement of technical or sci13 entific services for environmental reviews, the development
14 of environmental data or information systems, stakeholder
15 and community engagement, and the purchase of new
16 equipment for environmental analysis to facilitate timely
17 and efficient environmental reviews and authorizations.
18

SEC. 50302. FEDERAL ENERGY REGULATORY COMMISSION.

19(a) IN GENERAL.—In addition to amounts otherwise

20 available, there is appropriated to the Federal Energy
21 Regulatory Commission for fiscal year 2022, out of any
22 money in the Treasury not otherwise appropriated,
23 $100,000,000, to remain available through September 30,
24 2031, to provide for the hiring and training of personnel,
25 the development of programmatic environmental docu-

ERN22335 9K1

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649
1 ments, the procurement of technical or scientific services
2 for environmental reviews, the development of environ3 mental data or information systems, stakeholder and com4 munity engagement, and the purchase of new equipment
5 for environmental analysis to facilitate timely and efficient
6 environmental reviews and authorizations.
7(b) FEES AND CHARGES.—Section 3401(a) of the

8 Omnibus Budget Reconciliation Act of 1986 (42 U.S.C.
9 7178(a)) shall not apply to the costs incurred by the Fed10 eral Energy Regulatory Commission in carrying out this
11 section.
12
13

SEC. 50303. DEPARTMENT OF THE INTERIOR.

In addition to amounts otherwise available, there is

14 appropriated to the Secretary of the Interior for fiscal year
15 2022, out of any money in the Treasury not otherwise ap16 propriated, $150,000,000, to remain available through17 September 30, 2026, to provide for the hiring and training
18 of personnel, the development of programmatic environ19 mental documents, the procurement of technical or sci20 entific services for environmental reviews, the development
21 of environmental data or information systems, stakeholder
22 and community engagement, and the purchase of new
23 equipment for environmental analysis to facilitate timely
24 and efficient environmental reviews and authorizations by
25 the National Park Service, the Bureau of Land Manage-ERN22335 9K1

S.L.C.

650
1 ment, the Bureau of Ocean Energy Management, the Bu2 reau of Reclamation, the Bureau of Safety and Environ3 mental Enforcement, and the Office of Surface Mining
4 Reclamation and Enforcement.

TITLE VI—COMMITTEE ON ENVI6RONMENTAND
PUBLIC
7WORKS
8Subtitle A—Air Pollution
5

9
10

SEC. 60101. CLEAN HEAVY-DUTY VEHICLES.

The Clean Air Act is amended by inserting after sec-

11 tion 131 of such Act (42 U.S.C. 7431) the following:
12
13‘‘SEC. 132. CLEAN HEAVY-DUTY VEHICLES.

‘‘(a) APPROPRIATIONS.—‘‘(1) IN

14

GENERAL.—In

addition to amounts

15

otherwise available, there is appropriated to the Ad-

16ministrator for fiscal year 2022, out of any money

17

in

18

$600,000,000, to remain available until September

1930, 2031, to carry out this section.

theTreasurynototherwise

appropriated,20‘‘(2) NONATTAINMENT AREAS.—In addition to21

amounts otherwise available, there is appropriated to22

the Administrator for fiscal year 2022, out of any

23money in the Treasury not otherwise appropriated,

24$400,000,000, to remain available until September

25

30, 2031, to make awards under this section to eligi-

ERN22335 9K1

S.L.C.

651
1

ble recipients and to eligible contractors that propose2

to replace eligible vehicles to serve 1 or more com-3

munities located in an air quality area designated4

pursuant to section 107 as nonattainment for any

5

air pollutant.

6‘‘(3) RESERVATION.—Of the funds appro-

7

priated by paragraph (1), the Administrator shall re-8

serve 3 percent for administrative costs necessary to

9carry out this section.

10‘‘(b) PROGRAM.—Beginning not later than 180 days

11 after the date of enactment of this section, the Adminis12 trator shall implement a program to make awards of
13 grants and rebates to eligible recipients, and to make14 awards of contracts to eligible contractors for providing
15 rebates, for up to 100 percent of costs for—16‘‘(1) the incremental costs of replacing an eligi-

17

ble vehicle that is not a zero-emission vehicle with a18

zero-emission vehicle, as determined by the Adminis-

19

trator based on the market value of the vehicles;20‘‘(2) purchasing, installing, operating, and21

maintaining infrastructure needed to charge, fuel, or22

maintain zero-emission vehicles;23‘‘(3) workforce development and training to

24

support the maintenance, charging, fueling, and op-

25

eration of zero-emission vehicles; andERN22335 9K1

S.L.C.

652
1‘‘(4) planning and technical activities to support2

the adoption and deployment of zero-emission vehi-

3

cles.

4

‘‘(c) APPLICATIONS.—To seek an award under this

5 section, an eligible recipient or eligible contractor shall
6 submit to the Administrator an application at such time,
7 in such manner, and containing such information as the
8 Administrator shall prescribe.
9‘‘(d) DEFINITIONS.—For purposes of this section:

10‘‘(1) ELIGIBLE CONTRACTOR.—The term ‘eligi-

11

ble contractor’ means a contractor that has the ca-

12pacity—13‘‘(A) to sell, lease, license, or contract for

14

service zero-emission vehicles, or charging or

15

other equipment needed to charge, fuel, or

16

maintain zero-emission vehicles, to individuals

17

or entities that own, lease, license, or contract18

for service an eligible vehicle; or

19‘‘(B) to arrange financing for such a sale,20

lease, license, or contract for service.

21‘‘(2) ELIGIBLE RECIPIENT.—The term ‘eligible

22

recipient’ means—

23‘‘(A) a State;

24‘‘(B) a municipality;

25‘‘(C) an Indian tribe; orERN22335 9K1

S.L.C.

653‘‘(D) a nonprofit school transportation as-12sociation.

3‘‘(3) ELIGIBLE VEHICLE.—The term ‘eligible

4vehicle’ means a Class 6 or Class 7 heavy-duty vehi-

5

cle as defined in section 1037.801 of title 40, Code6of Federal Regulations (as in effect on the date of7enactment of this section).
‘‘(4)

8

ZERO-EMISSIONVEHICLE.—The

term

9

‘zero-emission vehicle’ means a vehicle that has a10drivetrain that produces, under any possible oper-

11

ational mode or condition, zero exhaust emissions

12

of—

13

‘‘(A) any air pollutant that is listed pursu-

14

ant to section 108(a) (or any precursor to such15

an air pollutant); and16‘‘(B) any greenhouse gas (as defined in

17

section 211(o)(1)(G) (as in effect on the date of18

enactment of this section)).’’.

19

SEC. 60102. GRANTS TO REDUCE AIR POLLUTION AT PORTS.

20

The Clean Air Act is amended by inserting after sec-

21 tion 132 of such Act, as added by section 60101 of this22 Act, the following:
23
24‘‘SEC. 133. GRANTS TO REDUCE AIR POLLUTION AT PORTS.

‘‘(a) APPROPRIATIONS.—ERN22335 9K1

S.L.C.

654
1‘‘(1) GENERALASSISTANCE.—In

addition to2amounts otherwise available, there is appropriated to3

the Administrator for fiscal year 2022, out of any

4money in the Treasury not otherwise appropriated,

5$2,250,000,000, to remain available until September

630, 2027, to award rebates and grants to eligible re-7

cipients on a competitive basis—

8‘‘(A) to purchase or install zero-emission

9

port equipment or technology for use at, or to10

directly serve, one or more ports;

11‘‘(B) to conduct any relevant planning or

12permitting in connection with the purchase or

13

installation of such zero-emission port equip-

14

ment or technology; and15‘‘(C) to develop qualified climate action

16

plans.

17‘‘(2) NONATTAINMENT AREAS.—In addition to18

amounts otherwise available, there is appropriated to19

the Administrator for fiscal year 2022, out of any

20

money in the Treasury not otherwise appropriated,

21$750,000,000, to remain available until September

2230, 2027, to award rebates and grants to eligible re-23

cipients to carry out activities described in para-

24

graph (1) with respect to ports located in air quality

ERN22335 9K1

S.L.C.

655
1

areas designated pursuant to section 107 as non-2

attainment for an air pollutant.

3‘‘(b) LIMITATION.—Funds awarded under this sec-

4 tion shall not be used by any recipient or subrecipient to5 purchase or install zero-emission port equipment or tech6 nology that will not be located at, or directly serve, the
7 one or more ports involved.
8‘‘(c) ADMINISTRATION OF FUNDS.—Of the funds

9 made available by this section, the Administrator shall re10 serve 2 percent for administrative costs necessary to carry
11 out this section.
12
13
14

‘‘(d) DEFINITIONS.—In this section:‘‘(1) ELIGIBLE RECIPIENT.—The term ‘eligible
recipient’ means—

15‘‘(A) a port authority;

16‘‘(B) a State, regional, local, or Tribal

17

agency that has jurisdiction over a port author-

18

ity or a port;

19‘‘(C) an air pollution control agency; or

20‘‘(D) a private entity (including a non-21

profit organization) that—22‘‘(i) applies for a grant under this sec-

23

tion in partnership with an entity de-24

scribed in any of subparagraphs (A)25through (C); andERN22335 9K1

S.L.C.

656
1‘‘(ii) owns, operates, or uses the facili-

2ties, cargo-handling equipment, transpor-

3

tation equipment, or related technology of4

a port.

5‘‘(2) GREENHOUSE GAS.—The term ‘greenhouse

6gas’ has the meaning given the term in section

7

211(o)(1)(G) (as in effect on the date of enactment

8of this section).

9‘‘(3) QUALIFIED CLIMATE ACTION PLAN.—The10

term ‘qualified climate action plan’ means a detailed

11

and strategic plan that—

12

‘‘(A)

establishes

goals,

implementation

13

strategies, and accounting and inventory prac-

14

tices (including practices used to measure15

progress toward stated goals) to reduce emis-

16

sions at one or more ports of—17‘‘(i) greenhouse gases;

18‘‘(ii) an air pollutant that is listed

19

pursuant to section 108(a) (or any pre-20

cursor to such an air pollutant); and21‘‘(iii) hazardous air pollutants;

22‘‘(B) includes a strategy to collaborate

23

with, communicate with, and address potential

24

effects on stakeholders that may be affected by25

implementation of the plan, including low-in-ERN22335 9K1

S.L.C.

657
1

come and disadvantaged near-port communities;

2

and

3

‘‘(C) describes how an eligible recipient has

4

implemented or will implement measures to in-5crease the resilience of the one or more ports

6

involved, including measures related to with-7

standing and recovering from extreme weather

8

events.

9‘‘(4) ZERO-EMISSIONPORT

EQUIPMENTOR10TECHNOLOGY.—The term ‘zero-emission port equip-

11

ment or technology’ means human-operated equip-

12

ment or human-maintained technology that—

13‘‘(A) produces zero emissions of any air

14pollutant that is listed pursuant to section

15

108(a) (or any precursor to such an air pollut-

16ant) and any greenhouse gas other than water

17

vapor; or

18‘‘(B) captures 100 percent of the emissions

19

described in subparagraph (A) that are pro-20

duced by an ocean-going vessel at berth.’’.

21
22SEC. 60103. GREENHOUSE GAS REDUCTION FUND.

The Clean Air Act is amended by inserting after sec-

23 tion 133 of such Act, as added by section 60102 of this24 Act, the following:ERN22335 9K1

S.L.C.

658
1
2‘‘SEC. 134. GREENHOUSE GAS REDUCTION FUND.

‘‘(a) APPROPRIATIONS.—

3‘‘(1) ZERO-EMISSION TECHNOLOGIES.—In addi-

4tion to amounts otherwise available, there is appro-

5

priated to the Administrator for fiscal year 2022,

6

out of any money in the Treasury not otherwise ap-

7

propriated, $7,000,000,000, to remain available

8

until September 30, 2024, to make grants, on a9competitive basis and beginning not later than 180

10calendar days after the date of enactment of this11

section, to States, municipalities, Tribal govern-

12

ments, and eligible recipients for the purposes of13

providing grants, loans, or other forms of financial

14

assistance, as well as technical assistance, to enable15

low-income and disadvantaged communities to de-16

ploy or benefit from zero-emission technologies, in-17cluding distributed technologies on residential roof-

18

tops, and to carry out other greenhouse gas emission

19

reduction activities, as determined appropriate by

20

the Administrator in accordance with this section.

21‘‘(2) GENERALASSISTANCE.—In

addition to22

amounts otherwise available, there is appropriated to23

the Administrator for fiscal year 2022, out of any

24money in the Treasury not otherwise appropriated,25$11,970,000,000, to remain available until Sep-

26

tember 30, 2024, to make grants, on a competitiveERN22335 9K1

S.L.C.

659
1

basis and beginning not later than 180 calendar

2days after the date of enactment of this section, to3

eligible recipients for the purposes of providing fi-

4nancial assistance and technical assistance in ac-

5cordance with subsection (b).

6‘‘(3) LOW-INCOME AND DISADVANTAGED COM-

7

MUNITIES.—In addition to amounts otherwise avail-8able, there is appropriated to the Administrator for

9fiscal year 2022, out of any money in the Treasury10

not otherwise appropriated, $8,000,000,000, to re-11

main available until September 30, 2024, to make12

grants, on a competitive basis and beginning not13

later than 180 calendar days after the date of enact-

14

ment of this section, to eligible recipients for the15

purposes of providing financial assistance and tech-

16

nical assistance in low-income and disadvantaged

17communities in accordance with subsection (b).

18‘‘(4) ADMINISTRATIVE COSTS.—In addition to19

amounts otherwise available, there is appropriated to20

the Administrator for fiscal year 2022, out of any

21money in the Treasury not otherwise appropriated,

22$30,000,000, to remain available until September

23

30, 2031, for the administrative costs necessary to

24carry out activities under this section.

ERN22335 9K1

S.L.C.

660
1‘‘(b) USE OF FUNDS.—An eligible recipient that re-

2 ceives a grant pursuant to subsection (a) shall use the
3 grant in accordance with the following:
45‘‘(1) DIRECT INVESTMENT.—The eligible recipient shall—

6‘‘(A) provide financial assistance to quali-

7

fied projects at the national, regional, State,

8

and local levels;

9‘‘(B) prioritize investment in qualified

10

projects that would otherwise lack access to fi-

11nancing; and12‘‘(C) retain, manage, recycle, and monetize13

all repayments and other revenue received from14

fees, interest, repaid loans, and all other types

15

of financial assistance provided using grant16

funds under this section to ensure continued

17

operability.

18‘‘(2) INDIRECT INVESTMENT.—The eligible re-19

cipient shall provide funding and technical assistance20

to establish new or support existing public, quasi-

21

public, not-for-profit, or nonprofit entities that pro-22

vide financial assistance to qualified projects at the23

State, local, territorial, or Tribal level or in the Dis-

24

trict of Columbia, including community- and low-in-

25

come-focused lenders and capital providers.

ERN22335 9K1

S.L.C.

661
123‘‘(c) DEFINITIONS.—In this section:‘‘(1) ELIGIBLE RECIPIENT.—The term ‘eligible
recipient’ means a nonprofit organization that—

4‘‘(A) is designed to provide capital, includ-5

ing by leveraging private capital, and other6

forms of financial assistance for the rapid de-7ployment of low- and zero-emission products,

8

technologies, and services;

9‘‘(B) does not take deposits other than de-10

posits from repayments and other revenue re-11

ceived from financial assistance provided using

12

grant funds under this section;‘‘(C) is funded by public or charitable con-13
14

tributions; and‘‘(D) invests in or finances projects alone

15
16

or in conjunction with other investors.

17‘‘(2) GREENHOUSE GAS.—The term ‘greenhouse

18

gas’ has the meaning given the term in section

19

211(o)(1)(G) (as in effect on the date of enactment

20of this section).

21‘‘(3) QUALIFIED PROJECT.—The term ‘qualified

22

project’ includes any project, activity, or technology

23

that—

24

‘‘(A) reduces or avoids greenhouse gas

25

emissions and other forms of air pollution inERN22335 9K1

S.L.C.

662
1

partnership with, and by leveraging investment

2

from, the private sector; or

3‘‘(B) assists communities in the efforts of

4

those communities to reduce or avoid green-

5house gas emissions and other forms of air pol-6

lution.

7‘‘(4) PUBLICLY AVAILABLE EQUIPMENT.—The8

term ‘publicly available equipment’ means equipment

9

that—

10
11

‘‘(A) is located at a multi-unit housing
structure;

12‘‘(B) is located at a workplace and is avail-13

able to employees of such workplace or employ-14

ees of a nearby workplace; or

15‘‘(C) is at a location that is publicly acces-

16

sible for a minimum of 12 hours per day at17least 5 days per week and networked or other-18

wise capable of being monitored remotely.

19‘‘(5) ZERO-EMISSION TECHNOLOGY.—The term

20

‘zero-emission technology’ means any technology

21that produces zero emissions of—22‘‘(A) any air pollutant that is listed pursu-

23

ant to section 108(a) (or any precursor to such24

an air pollutant); and25‘‘(B) any greenhouse gas.’’.

ERN22335 9K1

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663
1
2

SEC. 60104. DIESEL EMISSIONS REDUCTIONS.

(a) GOODS MOVEMENT.—In addition to amounts oth-

3 erwise available, there is appropriated to the Adminis4 trator of the Environmental Protection Agency for fiscal
5 year 2022, out of any money in the Treasury not otherwise
6 appropriated, $60,000,000, to remain available until Sep7 tember 30, 2031, for grants, rebates, and loans under sec8 tion 792 of the Energy Policy Act of 2005 (42 U.S.C.
9 16132) to identify and reduce diesel emissions resulting
10 from goods movement facilities, and vehicles servicing
11 goods movement facilities, in low-income and disadvan12 taged communities to address the health impacts of such
13 emissions on such communities.
14(b) ADMINISTRATIVE COSTS.—The Administrator of

15 the Environmental Protection Agency shall reserve 2 per16 cent of the amounts made available under this section for
17 the administrative costs necessary to carry out activities
18 pursuant to this section.
19
20

SEC. 60105. FUNDING TO ADDRESS AIR POLLUTION.

(a) FENCELINE AIR MONITORING AND SCREENING

21 AIR MONITORING.—In addition to amounts otherwise
22 available, there is appropriated to the Administrator of the
23 Environmental Protection Agency for fiscal year 2022, out
24 of any money in the Treasury not otherwise appropriated,
25 $117,500,000, to remain available until September 30,
26 2031, for grants and other activities authorized under sub-

ERN22335 9K1

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664
1 sections (a) through (c) of section 103 and section 105
2 of the Clean Air Act (42 U.S.C. 7403(a)–(c), 7405) to
3 deploy, integrate, support, and maintain fenceline air
4 monitoring, screening air monitoring, national air toxics
5 trend stations, and other air toxics and community moni6 toring.
7(b) MULTIPOLLUTANT MONITORING STATIONS.—In

8 addition to amounts otherwise available, there is appro9 priated to the Administrator of the Environmental Protec10 tion Agency for fiscal year 2022, out of any money in the
11 Treasury not otherwise appropriated, $50,000,000, to re12 main available until September 30, 2031, for grants and13 other activities authorized under subsections (a) through14 (c) of section 103 and section 105 of the Clean Air Act
15 (42 U.S.C. 7403(a)–(c), 7405)—
16(1) to expand the national ambient air quality

17

monitoring network with new multipollutant moni-18

toring stations; and19(2) to replace, repair, operate, and maintain ex-

20

isting monitors.

21(c) AIR QUALITY SENSORS IN LOW-INCOME AND DIS-

22

ADVANTAGEDCOMMUNITIES.—In addition to amounts

23 otherwise available, there is appropriated to the Adminis24 trator of the Environmental Protection Agency for fiscal
25 year 2022, out of any money in the Treasury not otherwise

ERN22335 9K1

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665
1 appropriated, $3,000,000, to remain available until Sep2 tember 30, 2031, for grants and other activities author3 ized under subsections (a) through (c) of section 103 and4 section 105 of the Clean Air Act (42 U.S.C. 7403(a)–(c),5 7405) to deploy, integrate, and operate air quality sensors
6 in low-income and disadvantaged communities.
7(d) EMISSIONS FROM WOOD HEATERS.—In addition

8 to amounts otherwise available, there is appropriated to
9 the Administrator of the Environmental Protection Agen10 cy for fiscal year 2022, out of any money in the Treasury
11 not otherwise appropriated, $15,000,000, to remain avail12 able until September 30, 2031, for grants and other activi13 ties authorized under subsections (a) through (c) of sec14 tion 103 and section 105 of the Clean Air Act (42 U.S.C.
15 7403(a)–(c), 7405) for testing and other agency activities
16 to address emissions from wood heaters.
17(e) METHANE MONITORING.—In addition to amounts

18 otherwise available, there is appropriated to the Adminis19 trator of the Environmental Protection Agency for fiscal
20 year 2022, out of any money in the Treasury not otherwise
21 appropriated, $20,000,000, to remain available until Sep22 tember 30, 2031, for grants and other activities author23 ized under subsections (a) through (c) of section 103 and
24 section 105 of the Clean Air Act (42 U.S.C. 7403(a)–(c),25 7405) for monitoring emissions of methane.

ERN22335 9K1

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1(f) CLEAN AIR ACT GRANTS.—In addition to

2 amounts otherwise available, there is appropriated to the
3 Administrator of the Environmental Protection Agency for
4 fiscal year 2022, out of any money in the Treasury not
5 otherwise appropriated, $25,000,000, to remain available
6 until September 30, 2031, for grants and other activities
7 authorized under subsections (a) through (c) of section
8 103 and section 105 of the Clean Air Act (42 U.S.C.
9 7403(a)–(c), 7405).
10(g) OTHER ACTIVITIES.—In addition to amounts oth-

11 erwise available, there is appropriated to the Adminis12 trator of the Environmental Protection Agency for fiscal
13 year 2022, out of any money in the Treasury not otherwise
14 appropriated, $45,000,000, to remain available until Sep15 tember 30, 2031, to carry out, with respect to greenhouse
16 gases, sections 111, 115, 165, 177, 202, 211, 213, 231,
17 and 612 of the Clean Air Act (42 U.S.C. 7411, 7415,
18 7475, 7507, 7521, 7545, 7547, 7571, and 7671k).
1920(h) GREENHOUSE GAS AND ZERO-EMISSION STANDARDS FOR

MOBILE SOURCES.—In addition to amounts

21 otherwise available, there is appropriated to the Adminis22 trator of the Environmental Protection Agency for fiscal
23 year 2022, out of any money in the Treasury not otherwise
24 appropriated, $5,000,000, to remain available until Sep25 tember 30, 2031, to provide grants to States to adopt andERN22335 9K1

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667
1 implement greenhouse gas and zero-emission standards
2 for mobile sources pursuant to section 177 of the Clean
3 Air Act (42 U.S.C. 7507).
4(i) DEFINITION OF GREENHOUSE GAS.—In this sec-

5 tion, the term ‘‘greenhouse gas’’ has the meaning given
6 the term in section 211(o)(1)(G) of the Clean Air Act (427 U.S.C. 7545(o)(1)(G)) (as in effect on the date of enact8 ment of this Act).
9

SEC. 60106. FUNDING TO ADDRESS AIR POLLUTION AT

1011

SCHOOLS.

(a) IN GENERAL.—In addition to amounts otherwise

12 available, there is appropriated to the Administrator of the
13 Environmental Protection Agency for fiscal year 2022, out
14 of any money in the Treasury not otherwise appropriated,
15 $37,500,000, to remain available until September 30,
16 2031, for grants and other activities to monitor and re17 duce air pollution and greenhouse gas (as defined in sec18 tion 211(o)(1)(G) of the Clean Air Act (42 U.S.C.
19 7545(o)(1)(G)) (as in effect on the date of enactment of
20 this Act)) emissions at schools in low-income and dis21 advantaged communities under subsections (a) through22 (c) of section 103 of the Clean Air Act (42 U.S.C.
23 7403(a)–(c)) and section 105 of that Act (42 U.S.C.
24 7405).

ERN22335 9K1

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668
1(b)

TECHNICALASSISTANCE.—In

additionto

2 amounts otherwise available, there is appropriated to the
3 Administrator of the Environmental Protection Agency for
4 fiscal year 2022, out of any money in the Treasury not
5 otherwise appropriated, $12,500,000, to remain available
6 until September 30, 2031, for providing technical assist7 ance to schools in low-income and disadvantaged commu8 nities under subsections (a) through (c) of section 103 of
9 the Clean Air Act (42 U.S.C. 7403(a)–(c)) and section
10 105 of that Act (42 U.S.C. 7405)—
11(1) to address environmental issues;

12(2) to develop school environmental quality

13

plans that include standards for school building, de-14

sign, construction, and renovation; and

15
16
17
18

(3) to identify and mitigate ongoing air pollution hazards.
SEC. 60107. LOW EMISSIONS ELECTRICITY PROGRAM.

The Clean Air Act is amended by inserting after sec-

19 tion 134 of such Act, as added by section 60103 of this20 Act, the following:
21
22‘‘SEC. 135. LOW EMISSIONS ELECTRICITY PROGRAM.

‘‘(a) APPROPRIATION.—In addition to amounts oth-23 erwise available, there is appropriated to the Adminis24 trator for fiscal year 2022, out of any money in the Treas-

ERN22335 9K1

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669
1 ury not otherwise appropriated, to remain available until
2 September 30, 2031—
3‘‘(1) $17,000,000 for consumer-related edu-

4cation and partnerships with respect to reductions in

5greenhouse gas emissions that result from domestic

6

electricity generation and use;

7‘‘(2) $17,000,000 for education, technical as-

8

sistance, and partnerships within low-income and9disadvantaged communities with respect to reduc-10

tions in greenhouse gas emissions that result from11

domestic electricity generation and use;

12‘‘(3) $17,000,000 for industry-related outreach13

and technical assistance, including through partner-

14

ships, with respect to reductions in greenhouse gas

15

emissions that result from domestic electricity gen-

16

eration and use;

17‘‘(4) $17,000,000 for outreach and technical as-

18

sistance to State, Tribal, and local governments, in-19cluding through partnerships, with respect to reduc-20

tions in greenhouse gas emissions that result from21

domestic electricity generation and use;

22‘‘(5) $1,000,000 to assess, not later than 1 year

23

after the date of enactment of this section, the re-24

ductions in greenhouse gas emissions that result

25

from changes in domestic electricity generation andERN22335 9K1

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670
1

use that are anticipated to occur on an annual basis

2

through fiscal year 2031; and3‘‘(6) $18,000,000 to carry out this section to4

ensure that reductions in greenhouse gas emissions

5

from domestic electricity generation and use are

6achieved through use of the authorities of this Act,

7

including through the establishment of requirements

8

under this Act, incorporating the assessment under9

paragraph (5) as a baseline.

10‘‘(b) ADMINISTRATION OF FUNDS.—Of the amounts

11 made available under subsection (a), the Administrator
12 shall reserve 2 percent for the administrative costs nec13 essary to carry out activities pursuant to that subsection.
14‘‘(c) DEFINITION OF GREENHOUSE GAS.—In this15 section, the term ‘greenhouse gas’ has the meaning given
16 the term in section 211(o)(1)(G) (as in effect on the date
17 of enactment of this section).’’.
18
19
20

SEC. 60108. FUNDING FOR SECTION 211(O) OF THE CLEAN
AIR ACT.

(a) TEST AND PROTOCOL DEVELOPMENT.—In addi-

21 tion to amounts otherwise available, there is appropriated22 to the Administrator of the Environmental Protection
23 Agency for fiscal year 2022, out of any money in the
24 Treasury not otherwise appropriated, $5,000,000, to re25 main available until September 30, 2031, to carry out sec-

ERN22335 9K1

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671
1 tion 211(o) of the Clean Air Act (42 U.S.C. 7545(o)) with
2 respect to—3(1) the development and establishment of tests

4and protocols regarding the environmental and pub-5

lic health effects of a fuel or fuel additive;

6(2) internal and extramural data collection and7analyses to regularly update applicable regulations,

8

guidance, and procedures for determining lifecycle

9greenhouse gas emissions of a fuel; and

10(3) the review, analysis and evaluation of the11

impacts of all transportation fuels, including fuel12

lifecycle implications, on the general public and on

13

low-income and disadvantaged communities.

14(b) INVESTMENTS IN ADVANCED BIOFUELS.—In ad-

15 dition to amounts otherwise available, there is appro16 priated to the Administrator of the Environmental Protec17 tion Agency for fiscal year 2022, out of any money in the
18 Treasury not otherwise appropriated, $10,000,000, to re19 main available until September 30, 2031, for new grants
20 to industry and other related activities under section
21 211(o) of the Clean Air Act (42 U.S.C. 7545(o)) to sup22 port investments in advanced biofuels.
23(c) DEFINITION OF GREENHOUSE GAS.—In this sec-

24 tion, the term ‘‘greenhouse gas’’ has the meaning given
25 the term in section 211(o)(1)(G) of the Clean Air Act (42ERN22335 9K1

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672
1 U.S.C. 7545(o)(1)(G)) (as in effect on the date of enact2 ment of this Act).
3

SEC. 60109. FUNDING FOR IMPLEMENTATION OF THE

4

AMERICAN

5

TURING ACT.

6INNOVATIONANDMANUFAC-(a) APPROPRIATIONS.—

7(1) IN GENERAL.—In addition to amounts oth-8

erwise available, there is appropriated to the Admin-

9istrator of the Environmental Protection Agency for

10

fiscal year 2022, out of any money in the Treasury

11

not otherwise appropriated, $20,000,000, to remain

12

available until September 30, 2026, to carry out

13subsections (a) through (i) and subsection (k) of sec-

14

tion 103 of division S of Public Law 116–260 (4215

U.S.C. 7675).

16

(2)

IMPLEMENTATIONANDCOMPLIANCE

17

TOOLS.—In addition to amounts otherwise available,

18

there is appropriated to the Administrator of the19

Environmental Protection Agency for fiscal year

202022, out of any money in the Treasury not other-21

wise appropriated, $3,500,000, to remain available

22

until September 30, 2026, to deploy new implemen-

23

tation and compliance tools to carry out subsections

24(a) through (i) and subsection (k) of section 103 of25

division S of Public Law 116–260 (42 U.S.C. 7675).

ERN22335 9K1

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673
1(3) COMPETITIVE

GRANTS.—In

addition to2amounts otherwise available, there is appropriated to3

the Administrator of the Environmental Protection

4

Agency for fiscal year 2022, out of any money in the5

Treasury not otherwise appropriated, $15,000,000,

6

to remain available until September 30, 2026, for7competitive grants for reclaim and innovative de-8struction technologies under subsections (a) through9(i) and subsection (k) of section 103 of division S

10of Public Law 116–260 (42 U.S.C. 7675).

11(b) ADMINISTRATIONOFFUNDS.—Of the funds

12 made available pursuant to subsection (a)(3), the Admin13 istrator of the Environmental Protection Agency shall re14 serve 5 percent for administrative costs necessary to carry
15 out activities pursuant to such subsection.
16
17
18

SEC. 60110. FUNDING FOR ENFORCEMENT TECHNOLOGYAND PUBLIC INFORMATION.

(a) COMPLIANCE MONITORING.—In addition to

19 amounts otherwise available, there is appropriated to the
20 Administrator of the Environmental Protection Agency for
21 fiscal year 2022, out of any money in the Treasury not
22 otherwise appropriated, $18,000,000, to remain available
23 until September 30, 2031, to update the Integrated Com24 pliance Information System of the Environmental Protec25 tion Agency and any associated systems, necessary infor-

ERN22335 9K1

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674
1 mation technology infrastructure, or public access soft2 ware tools to ensure access to compliance data and related
3 information.
4(b) COMMUNICATIONS WITH ICIS.—In addition to

5 amounts otherwise available, there is appropriated to the6 Administrator of the Environmental Protection Agency for
7 fiscal year 2022, out of any money in the Treasury not
8 otherwise appropriated, $3,000,000, to remain available
9 until September 30, 2031, for grants to States, Indian
10 tribes, and air pollution control agencies (as such terms
11 are defined in section 302 of the Clean Air Act (42 U.S.C.
12 7602)) to update their systems to ensure communication
13 with the Integrated Compliance Information System of the
14 Environmental Protection Agency and any associated sys15 tems.
16(c) INSPECTION SOFTWARE.—In addition to amounts

17 otherwise available, there is appropriated to the Adminis18 trator of the Environmental Protection Agency for fiscal
19 year 2022, out of any money in the Treasury not otherwise
20 appropriated, $4,000,000, to remain available until Sep21 tember 30, 2031—
22(1) to acquire or update inspection software for23

use by the Environmental Protection Agency, States,

24

Indian tribes, and air pollution control agencies (asERN22335 9K1

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675
1

such terms are defined in section 302 of the Clean

2

Air Act (42 U.S.C. 7602)); or

3
4
5
6

(2) to acquire necessary devices on which to run
such inspection software.
SEC. 60111. GREENHOUSE GAS CORPORATE REPORTING.

In addition to amounts otherwise available, there is

7 appropriated to the Administrator of the Environmental
8 Protection Agency for fiscal year 2022, out of any money
9 in the Treasury not otherwise appropriated, $5,000,000,
10 to remain available until September 30, 2031, for the En11 vironmental Protection Agency to support—
12(1) enhanced standardization and transparency

13

of corporate climate action commitments and plans14

to reduce greenhouse gas (as defined in section

15

211(o)(1)(G) of the Clean Air Act (42 U.S.C.

16

7545(o)(1)(G)) (as in effect on the date of enact-

17

ment of this Act)) emissions;18(2) enhanced transparency regarding progress

19

toward meeting such commitments and imple-

20

menting such plans; and2122(3) progress toward meeting such commitments
and implementing such plans.

ERN22335 9K1

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676
1

SEC. 60112. ENVIRONMENTAL PRODUCT DECLARATION AS-

2
3

SISTANCE.

(a) IN GENERAL.—In addition to amounts otherwise

4 available, there is appropriated to the Administrator of the
5 Environmental Protection Agency for fiscal year 2022, out
6 of any money in the Treasury not otherwise appropriated,
7 $250,000,000, to remain available until September 30,
8 2031, to develop and carry out a program to support the
9 development, and enhanced standardization and trans10 parency, of environmental product declarations for con11 struction materials and products, including by—
12(1) providing grants to businesses that manu-

13

facture construction materials and products for de-

14veloping and verifying environmental product dec-

15

larations, and to States, Indian Tribes, and non-16

profit organizations that will support such busi-

17

nesses;18(2) providing technical assistance to businesses

19

that manufacture construction materials and prod-20

ucts in developing and verifying environmental prod-21

uct declarations, and to States, Indian Tribes, and22

nonprofit organizations that will support such busi-

23

nesses; and24(3) carrying out other activities that assist in25

measuring, reporting, and steadily reducing theERN22335 9K1

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677
1

quantity of embodied carbon of construction mate-2

rials and products.

3(b) ADMINISTRATIVE COSTS.—Of the amounts made4 available under this section, the Administrator of the En5 vironmental Protection Agency shall reserve 5 percent for
6 administrative costs necessary to carry out this section.
7(c) DEFINITIONS.—In this section:

8(1) EMBODIED CARBON.—The term ‘‘embodied

9

carbon’’ means the quantity of greenhouse gas (as10defined in section 211(o)(1)(G) of the Clean Air Act

11(42 U.S.C. 7545(o)(1)(G)) (as in effect on the date12of enactment of this Act)) emissions associated with13

all relevant stages of production of a material or

14

product, measured in kilograms of carbon dioxide-

15

equivalent per unit of such material or product.

16

(2)

17

TION.—The

18

tion’’ means a document that reports the environ-19

mental impact of a material or product that—

20
21

ENVIRONMENTAL

PRODUCTDECLARA-

term ‘‘environmental product declara-(A) includes measurement of the embodied
carbon of the material or product;

22(B) conforms with international standards,

23

such as a Type III environmental product dec-

24

laration, as defined by the International Orga-ERN22335 9K1

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678
1

nization for Standardization standard 14025;

2

and

3

(C) is developed in accordance with any

4standardized reporting criteria specified by the5Administrator of the Environmental Protection

6

Agency.

7(3) STATE.—The term ‘‘State’’ has the mean-

8

ing given to that term in section 302(d) of the Clean

9

Air Act (42 U.S.C. 7602(d)).

1011SEC. 60113. METHANE EMISSIONS REDUCTION PROGRAM.

The Clean Air Act is amended by inserting after sec-

12 tion 135 of such Act, as added by section 60107 of this13 Act, the following:
14‘‘SEC. 136. METHANE EMISSIONS AND WASTE REDUCTION

15

INCENTIVE PROGRAM FOR PETROLEUM AND

16

NATURAL GAS SYSTEMS.

17‘‘(a) INCENTIVES FOR METHANE MITIGATION AND

18 MONITORING.—In addition to amounts otherwise avail19 able, there is appropriated to the Administrator for fiscal
20 year 2022, out of any money in the Treasury not otherwise
21 appropriated, $850,000,000, to remain available until
22 September 30, 2028—
23‘‘(1) for grants, rebates, contracts, loans, and24other activities of the Environmental Protection

25

Agency for the purposes of providing financial andERN22335 9K1

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679
1

technical assistance to owners and operators of ap-

2

plicable facilities to prepare and submit greenhouse3

gas reports under subpart W of part 98 of title 40,

4

Code of Federal Regulations;

5‘‘(2) for grants, rebates, contracts, loans, and6other activities of the Environmental Protection

7

Agency authorized under subsections (a) through (c)8of section 103 for methane emissions monitoring;

9‘‘(3) for grants, rebates, contracts, loans, and10other activities of the Environmental Protection

11

Agency for the purposes of providing financial and

12technical assistance to reduce methane and other13

greenhouse gas emissions from petroleum and nat-14ural gas systems, mitigate legacy air pollution from15

petroleum and natural gas systems, and provide sup-16

port for communities, including funding for—

17‘‘(A) improving climate resiliency of com-18

munities and petroleum and natural gas sys-

19

tems;

20

‘‘(B) improving and deploying industrial

21

equipment and processes that reduce methane22

and other greenhouse gas emissions and waste;

23‘‘(C) supporting innovation in reducing

24

methane and other greenhouse gas emissions

ERN22335 9K1

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680
1

and waste from petroleum and natural gas sys-

2

tems;
‘‘(D) permanently shutting in and plugging

3
4

wells on non-Federal land;5‘‘(E) mitigating health effects of methane6

and other greenhouse gas emissions, and legacy

7

air pollution from petroleum and natural gas

8systems in low-income and disadvantaged com-9

munities; and‘‘(F) supporting environmental restoration;

10
11

and

12

‘‘(4) to cover all direct and indirect costs re-13

quired to administer this section, including the costs

14of implementing the waste emissions charge under15

subsection (c), preparing inventories, gathering em-

16

pirical data, and tracking emissions.

17‘‘(b) INCENTIVES FOR METHANE MITIGATION FROM

18 CONVENTIONAL WELLS.—In addition to amounts other19 wise available, there is appropriated to the Administrator
20 for fiscal year 2022, out of any money in the Treasury
21 not otherwise appropriated, $700,000,000, to remain
22 available until September 30, 2028, for activities described
23 in paragraphs (1) through (4) of subsection (a) at mar24 ginal conventional wells.

ERN22335 9K1

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6811‘‘(c) WASTE EMISSIONS CHARGE.—The Adminis-

2 trator shall impose and collect a charge on methane emis3 sions that exceed an applicable waste emissions threshold
4 under subsection (f) from an owner or operator of an ap5 plicable facility that reports more than 25,000 metric tons
6 of carbon dioxide equivalent of greenhouse gases emitted
7 per year pursuant to subpart W of part 98 of title 40,
8 Code of Federal Regulations, regardless of the reporting
9 threshold under that subpart.
10‘‘(d) APPLICABLE FACILITY.—For purposes of this

11 section, the term ‘applicable facility’ means a facility with12 in the following industry segments, as defined in subpart
13 W of part 98 of title 40, Code of Federal Regulations:
14
15
16
17

‘‘(1) Offshore petroleum and natural gas production.
‘‘(2) Onshore petroleum and natural gas production.

18‘‘(3) Onshore natural gas processing.

19‘‘(4) Onshore natural gas transmission com-20

pression.

21‘‘(5) Underground natural gas storage.

22‘‘(6) Liquefied natural gas storage.

23‘‘(7) Liquefied natural gas import and export

24

equipment.

ERN22335 9K1

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68212‘‘(8) Onshore petroleum and natural gas gathering and boosting.

3‘‘(9) Onshore natural gas transmission pipeline.

4‘‘(e) CHARGE AMOUNT.—The amount of a charge

5 under subsection (c) for an applicable facility shall be
6 equal to the product obtained by multiplying—
7‘‘(1) the number of metric tons of methane

8

emissions reported pursuant to subpart W of part9

98 of title 40, Code of Federal Regulations, for the10

applicable facility that exceed the applicable annual

11

waste emissions threshold listed in subsection (f)12during the previous reporting period; and

13
14
15
16
17

‘‘(2)(A) $900 for emissions reported for calendar year 2024;‘‘(B) $1,200 for emissions reported for calendar
year 2025; or‘‘(C) $1,500 for emissions reported for calendar

18

year 2026 and each year thereafter.

19‘‘(f) WASTE EMISSIONS THRESHOLD.—

20‘‘(1) PETROLEUM AND NATURAL GAS PRODUC-

21

TION.—With respect to imposing and collecting the22

charge under subsection (c) for an applicable facility

23

in an industry segment listed in paragraph (1) or

24(2) of subsection (d), the Administrator shall impose

25

and collect the charge on the reported metric tons

ERN22335 9K1

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683
1of methane emissions from such facility that ex-

2

ceed—

3
4

‘‘(A) 0.20 percent of the natural gas sent
to sale from such facility; or5‘‘(B) 10 metric tons of methane per million

6barrels of oil sent to sale from such facility, if

7such facility sent no natural gas to sale.

8‘‘(2) NONPRODUCTION PETROLEUM AND NAT-

9

URAL GAS SYSTEMS.—With respect to imposing and10collecting the charge under subsection (c) for an ap-

11

plicable facility in an industry segment listed in

12paragraph (3), (6), (7), or (8) of subsection (d), the13

Administrator shall impose and collect the charge on

14

the reported metric tons of methane emissions that15

exceed 0.05 percent of the natural gas sent to sale16

from such facility.

17‘‘(3) NATURAL GAS TRANSMISSION.—With re-18

spect to imposing and collecting the charge under19

subsection (c) for an applicable facility in an indus-

20

try segment listed in paragraph (4), (5), or (9) of

21

subsection (d), the Administrator shall impose and22collect the charge on the reported metric tons of23

methane emissions that exceed 0.11 percent of the24natural gas sent to sale from such facility.

ERN22335 9K1

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684
1‘‘(4) COMMON OWNERSHIP OR CONTROL.—In2

calculating the total emissions charge obligation for

3

facilities under common ownership or control, the4Administrator shall allow for the netting of emis-

5

sions by reducing the total obligation to account for

6

facility emissions levels that are below the applicable

7

thresholds within and across all applicable segments

8

identified in subsection (d).

9‘‘(5) EXEMPTION.—Charges shall not be im-10

posed pursuant to paragraph (1) on emissions that11

exceed the waste emissions threshold specified in

12such paragraph if such emissions are caused by un-

13

reasonable delay, as determined by the Adminis-

14

trator, in environmental permitting of gathering or

15transmission infrastructure necessary for offtake of

16

increased volume as a result of methane emissions

17

mitigation implementation.

1819‘‘(6) EXEMPTION FOR REGULATORY COMPLIANCE.—

20‘‘(A) IN GENERAL.—Charges shall not be

21

imposed pursuant to subsection (c) on an appli-

22

cable facility that is subject to and in compli-

23

ance with methane emissions requirements pur-24

suant to subsections (b) and (d) of section 111

ERN22335 9K1

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685
1

upon a determination by the Administrator

2

that—

3

‘‘(i) methane emissions standards and4plans pursuant to subsections (b) and (d)5of section 111 have been approved and are

6

in effect in all States with respect to the7applicable facilities; and8‘‘(ii) compliance with the requirements

9

described in clause (i) will result in equiva-

10

lent or greater emissions reductions as

11

would be achieved by the proposed rule of12

the Administrator entitled ‘Standards of13

Performance for New, Reconstructed, and14

Modified Sources and Emissions Guide-15

lines for Existing Sources: Oil and Natural

16

Gas Sector Climate Review’ (86 Fed. Reg.

17

63110 (November 15, 2021)), if such rule18

had been finalized and implemented.

19‘‘(B) RESUMPTION

OF CHARGE.—If

the

20

conditions in clause (i) or (ii) of subparagraph21(A) cease to apply after the Administrator has

22

made the determination in that subparagraph,23

the applicable facility will again be subject to24

the charge under subsection (c) beginning in25

the first calendar year in which the conditions

ERN22335 9K1

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686
1

in either clause (i) or (ii) of that subparagraph2

are no longer met.

3‘‘(7) PLUGGED WELLS.—Charges shall not be

4

imposed with respect to the emissions rate from any

5well that has been permanently shut-in and plugged

6

in the previous year in accordance with all applicable

7

closure requirements, as determined by the Adminis-

8

trator.

9‘‘(g) PERIOD.—The charge under subsection (c) shall

10 be imposed and collected beginning with respect to emis11 sions reported for calendar year 2024 and for each year
12 thereafter.
13‘‘(h) IMPLEMENTATION.—In addition to other au-

14 thorities in this Act addressing air pollution from the oil
15 and natural gas sectors, the Administrator may issue
16 guidance or regulations as necessary to carry out this sec17 tion.
18‘‘(i) REPORTING.—Not later than 2 years after the

19 date of enactment of this section, and as necessary there20 after, the Administrator shall revise the requirements of
21 subpart W of part 98 of title 40, Code of Federal Regula22 tions, to ensure the reporting under such subpart, and cal23 culation of charges under subsections (e) and (f) of this
24 section, are based on empirical data, including data col25 lected pursuant to subsection (a)(4), accurately reflect theERN22335 9K1

S.L.C.

687
1 total methane emissions and waste emissions from the ap2 plicable facilities, and allow owners and operators of appli3 cable facilities to submit empirical emissions data, in a
4 manner to be prescribed by the Administrator, to dem5 onstrate the extent to which a charge under subsection
6 (c) is owed.
7‘‘(j) LIABILITY FOR CHARGE PAYMENT.—Except as

8 established under this section, a facility owner or opera9 tor’s liability for payment of the charge under subsection
10 (c) is not affected in any way by emission standards, per11 mit fees, penalties, or other requirements under this Act
12 or any other legal authorities.
13‘‘(k) DEFINITION OF GREENHOUSE GAS.—In this

14 section, the term ‘greenhouse gas’ has the meaning given
15 the term in section 211(o)(1)(G) (as in effect on the date
16 of enactment of this section).’’.
17
18

SEC. 60114. CLIMATE POLLUTION REDUCTION GRANTS.

The Clean Air Act is amended by inserting after sec-

19 tion 136 of such Act, as added by section 60113 of this20 Act, the following:
21
22
23
24
25

‘‘SEC. 137. GREENHOUSE GAS AIR POLLUTION PLANS AND
IMPLEMENTATION GRANTS.

‘‘(a) APPROPRIATIONS.—‘‘(1) GREENHOUSE GAS AIR POLLUTION PLANNING GRANTS.—In

addition to amounts otherwise

ERN22335 9K1

S.L.C.

6881

available, there is appropriated to the Administrator

2

for fiscal year 2022, out of any amounts in the3

Treasury not otherwise appropriated, $250,000,000,

4

to remain available until September 30, 2031, to

5carry out subsection (b).

6‘‘(2) GREENHOUSE GAS AIR POLLUTION IMPLE-

7MENTATION GRANTS.—In addition to amounts other-8

wise available, there is appropriated to the Adminis-

9

trator for fiscal year 2022, out of any amounts in

10

the

11

$4,750,000,000, to remain available until September

1230, 2026, to carry out subsection (c).

Treasurynototherwise

appropriated,

13‘‘(3) ADMINISTRATIVE COSTS.—Of the funds

14

made available under paragraph (2), the Adminis-

15

trator shall reserve 3 percent for administrative

16

costs necessary to carry out this section, including

17

providing technical assistance to eligible entities, de-18veloping a plan that could be used as a model by

19

grantees in developing a plan under subsection (b),20

and modeling the effects of plans described in this21

section.

22‘‘(b) GREENHOUSE GAS AIR POLLUTION PLANNING

23 GRANTS.—The Administrator shall make a grant to at
24 least one eligible entity in each State for the costs of devel25 oping a plan for the reduction of greenhouse gas air pollu-

ERN22335 9K1

S.L.C.

689
1 tion to be submitted with an application for a grant under2 subsection (c). Each such plan shall include programs,
3 policies, measures, and projects that will achieve or facili4 tate the reduction of greenhouse gas air pollution. Not
5 later than 270 days after the date of enactment of this
6 section, the Administrator shall publish a funding oppor7 tunity announcement for grants under this subsection.
8‘‘(c) GREENHOUSE GAS AIR POLLUTION REDUCTION

9 IMPLEMENTATION GRANTS.—
10‘‘(1) IN

GENERAL.—The

Administrator shall11

competitively award grants to eligible entities to im-

12

plement plans developed under subsection (b).

13‘‘(2) APPLICATION.—To apply for a grant

14

under this subsection, an eligible entity shall submit

15

to the Administrator an application at such time, in

16such manner, and containing such information as

17

the Administrator shall require, which such applica-

18

tion shall include information regarding—19‘‘(A) the degree to which greenhouse gas

20

air pollution is projected to be reduced, includ-21

ing with respect to low-income and disadvan-

22

taged communities; and

23
24

‘‘(B)

the

quantifiability,

specificity,

additionality, permanence, and verifiability ofERN22335 9K1

S.L.C.

690
1

such projected greenhouse gas air pollution re-2

duction.

3‘‘(3) TERMS AND CONDITIONS.—The Adminis-

4

trator shall make funds available to a grantee under5

this subsection in such amounts, upon such a sched-

6ule, and subject to such conditions based on its per-7

formance in implementing its plan submitted under

8

this section and in achieving projected greenhouse9

gas air pollution reduction, as determined by the Ad-

10ministrator.

11‘‘(d) DEFINITIONS.—In this section:

1213‘‘(1) ELIGIBLE ENTITY.—The term ‘eligible entity’ means—

14‘‘(A) a State;

15‘‘(B) an air pollution control agency;

16‘‘(C) a municipality;

17‘‘(D) an Indian tribe; and18‘‘(E) a group of one or more entities listed

19

in subparagraphs (A) through (D).

20‘‘(2) GREENHOUSE GAS.—The term ‘greenhouse

21

gas’ has the meaning given the term in section

22

211(o)(1)(G) (as in effect on the date of enactment

23of this section).’’.

ERN22335 9K1

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691
1

SEC. 60115. ENVIRONMENTAL PROTECTION AGENCY EFFI-

2
3

CIENT, ACCURATE, AND TIMELY REVIEWS.

In addition to amounts otherwise available, there is

4 appropriated to the Environmental Protection Agency for
5 fiscal year 2022, out of any money in the Treasury not
6 otherwise appropriated, $40,000,000, to remain available
7 until September 30, 2026, to provide for the development
8 of efficient, accurate, and timely reviews for permitting
9 and approval processes through the hiring and training
10 of personnel, the development of programmatic docu11 ments, the procurement of technical or scientific services
12 for reviews, the development of environmental data or in13 formation systems, stakeholder and community engage14 ment, the purchase of new equipment for environmental
15 analysis, and the development of geographic information
16 systems and other analysis tools, techniques, and guidance
17 to improve agency transparency, accountability, and public
18 engagement.
19
20
21

SEC. 60116. LOW-EMBODIED CARBON LABELING FOR CONSTRUCTION MATERIALS.

(a) IN GENERAL.—In addition to amounts otherwise

22 available, there is appropriated to the Administrator of the
23 Environmental Protection Agency for fiscal year 2022, out
24 of any money in the Treasury not otherwise appropriated,
25 $100,000,000, to remain available until September 30,
26 2026, for necessary administrative costs of the Adminis-

ERN22335 9K1

S.L.C.

692
1 trator of the Environmental Protection Agency to carry
2 out this section and to develop and carry out a program,3 in consultation with the Administrator of the Federal
4 Highway Administration for construction materials used
5 in transportation projects and the Administrator of Gen6 eral Services for construction materials used for Federal
7 buildings, to identify and label low-embodied carbon con8 struction materials and products based on—
9(1) environmental product declarations;10(2) determinations of the California Depart-

11

ment of General Services Procurement Division, in

12

consultation with the California Air Resources

13

Board; or14(3) determinations by other State agencies, as

15

verified by the Administrator of the Environmental

16

Protection Agency.

17(b) DEFINITIONS.—In this section:

18(1) EMBODIED CARBON.—The term ‘‘embodied

19

carbon’’ means the quantity of greenhouse gas (as20

defined in section 211(o)(1)(G) of the Clean Air Act

21(42 U.S.C. 7545(o)(1)(G)) (as in effect on the date22of enactment of this Act)) emissions associated with23

all relevant stages of production of a material or

24

product, measured in kilograms of carbon dioxide-

25

equivalent per unit of such material or product.

ERN22335 9K1

S.L.C.

693
1

(2)

2

TION.—The

3

tion’’ means a document that reports the environ-4

mental impact of a material or product that—

5
6

ENVIRONMENTAL

PRODUCTDECLARA-

term ‘‘environmental product declara-(A) includes measurement of the embodied
carbon of the material or product;

7(B) conforms with international standards,

8such as a Type III environmental product dec-

9

laration as defined by the International Organi-

10

zation for Standardization standard 14025; and11(C) is developed in accordance with any

12standardized reporting criteria specified by the13

Administrator of the Environmental Protection

14

Agency.

15(3) LOW-EMBODIEDCARBONCONSTRUCTION

16

MATERIALS AND PRODUCTS.—Theterm ‘‘low-em-

17bodied carbon construction materials and products’’18

means construction materials and products identified

19

by the Administrator of the Environmental Protec-

20tion Agency as having substantially lower levels of

21

embodied carbon as compared to estimated industry

22

averages of similar materials or products.

ERN22335 9K1

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694
1
2
3
4

Subtitle B—Hazardous Materials
SEC.

60201.

ENVIRONMENTALAND

CLIMATEJUSTICEBLOCK GRANTS.

The Clean Air Act is amended by inserting after sec-

5 tion 137, as added by subtitle A of this title, the following:
6
7
8‘‘SEC. 138. ENVIRONMENTAL AND CLIMATE JUSTICE BLOCKGRANTS.

‘‘(a) APPROPRIATION.—In addition to amounts oth-

9 erwise available, there is appropriated to the Adminis10 trator for fiscal year 2022, out of any money in the Treas11 ury not otherwise appropriated—
12‘‘(1) $2,800,000,000 to remain available until

13

September 30, 2026, to award grants for the activi-

14

ties described in subsection (b); and15‘‘(2) $200,000,000 to remain available until

16

September 30, 2026, to provide technical assistance17

to eligible entities related to grants awarded under18

this section.

19‘‘(b) GRANTS.—

20‘‘(1) IN

GENERAL.—The

Administrator shall21

use amounts made available under subsection (a)(1)22

to award grants for periods of up to 3 years to eligi-

23

ble entities to carry out activities described in para-

24

graph (2) that benefit disadvantaged communities,

25

as defined by the Administrator.

ERN22335 9K1

S.L.C.

695
1‘‘(2) ELIGIBLE ACTIVITIES.—An eligible entity

2

may use a grant awarded under this subsection

3

for—

4

‘‘(A) community-led air and other pollution

5

monitoring, prevention, and remediation, and6

investments in low- and zero-emission and resil-

7ient technologies and related infrastructure and8

workforce development that help reduce green-

9house gas (as defined in section 211(o)(1)(G)10(as in effect on the date of enactment of this11

section)) emissions and other air pollutants;

12‘‘(B) mitigating climate and health risks

13

from urban heat islands, extreme heat, wood

14

heater emissions, and wildfire events;

15‘‘(C) climate resiliency and adaptation;

16‘‘(D) reducing indoor toxics and indoor air

17

pollution; or

18‘‘(E) facilitating engagement of disadvan-

19

taged communities in State and Federal public

20

processes, including facilitating such engage-

21

ment in advisory groups, workshops, and22

rulemakings.

23‘‘(3) ELIGIBLE ENTITIES.—In this subsection,

24
25

the term ‘eligible entity’ means—‘‘(A) a partnership between—

ERN22335 9K1

S.L.C.

6961‘‘(i) an Indian tribe, a local govern-

2ment, or an institution of higher education;

3

and‘‘(ii) a community-based nonprofit or-

45

ganization;

6‘‘(B) a community-based nonprofit organi-

7

zation; or‘‘(C) a partnership of community-based

8910

nonprofit organizations.
‘‘(c) ADMINISTRATIVE COSTS.—The Administrator

11 shall reserve 7 percent of the amounts made available
12 under subsection (a) for administrative costs to carry out
13 this section.’’.

15

Subtitle C—United States Fish andWildlife Service

16

SEC. 60301. ENDANGERED SPECIES ACT RECOVERY PLANS.

17

In addition to amounts otherwise available, there is

14

18 appropriated to the United States Fish and Wildlife Serv19 ice for fiscal year 2022, out of any money in the Treasury
20 not otherwise appropriated, $125,000,000, to remain
21 available until expended, for the purposes of developing
22 and implementing recovery plans under paragraphs (1),
23 (3), and (4) of subsection (f) of section 4 of the Endan24 gered Species Act of 1973 (16 U.S.C. 1533(f)).

ERN22335 9K1

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697
1

SEC. 60302. FUNDING FOR THE UNITED STATES FISH AND

2

WILDLIFE SERVICE TO ADDRESS CLIMATE-IN-

3

DUCED WEATHER EVENTS.

4(a) IN GENERAL.—In addition to amounts otherwise

5 available, there is appropriated to the United States Fish
6 and Wildlife Service for fiscal year 2022, out of any money
7 in

the

Treasurynototherwise

appropriated,

8 $121,250,000, to remain available until September 30,
9 2026, to make direct expenditures, award grants, and
10 enter into contracts and cooperative agreements for the
11 purposes of rebuilding and restoring units of the National
12 Wildlife Refuge System and State wildlife management
13 areas, including by—
14(1) addressing the threat of invasive species;

15(2) increasing the resiliency and capacity of16

habitats and infrastructure to withstand climate-in-

17

duced weather events; and(3) reducing the amount of damage caused by

18
19

climate-induced weather events.

20

(b)

ADMINISTRATIVECOSTS.—In

additionto

21 amounts otherwise available, there is appropriated to the
22 United States Fish and Wildlife Service for fiscal year
23 2022, out of any money in the Treasury not otherwise ap24 propriated, $3,750,000, to remain available until Sep25 tember 30, 2026, for necessary administrative expenses
26 associated with carrying out this section.

ERN22335 9K1

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698

2

Subtitle D—Council on
Environmental Quality

3

SEC. 60401. ENVIRONMENTAL AND CLIMATE DATA COLLEC-

1

4
5

TION.

In addition to amounts otherwise available, there is

6 appropriated to the Chair of the Council on Environmental
7 Quality for fiscal year 2022, out of any money in the
8 Treasury not otherwise appropriated, $32,500,000, to re9 main available until September 30, 2026—(1) to support data collection efforts relating

10
11
12
13
14

to—
(A)

disproportionate

negativeenviron-mental harms and climate impacts; and(B) cumulative impacts of pollution and15

temperature rise;

16(2) to establish, expand, and maintain efforts to17

track disproportionate burdens and cumulative im-18

pacts, including academic and workforce support for

19

analytics and informatics infrastructure and data

20

collection systems; and21(3) to support efforts to ensure that any map-

22

ping or screening tool is accessible to community-

23

based organizations and community members.

ERN22335 9K1

S.L.C.

699
1

SEC. 60402. COUNCIL ON ENVIRONMENTAL QUALITY EFFI-

2

CIENT AND EFFECTIVE ENVIRONMENTAL RE-

3

VIEWS.

4

In addition to amounts otherwise available, there is

5 appropriated to the Chair of the Council on Environmental
6 Quality for fiscal year 2022, out of any money in the
7 Treasury not otherwise appropriated, $30,000,000, to re8 main available until September 30, 2026, to carry out the
9 Council on Environmental Quality’s functions and for the
10 purposes of training personnel, developing programmatic
11 environmental documents, and developing tools, guidance,
12 and techniques to improve stakeholder and community en13 gagement.

15

Subtitle E—Transportation andInfrastructure

16

SEC. 60501. NEIGHBORHOOD ACCESS AND EQUITY GRANT

14

17
18

PROGRAM.

(a) IN GENERAL.—Chapter 1 of title 23, United

19 States Code, is further amended by adding at the end the
20 following:
21 ‘‘§ 178. Neighborhood access and equity grant pro22
23

gram

‘‘(a) IN GENERAL.—In addition to amounts other-

24 wise available, there is appropriated for fiscal year 2022,
25 out of any money in the Treasury not otherwise appro26 priated, $1,893,000,000, to remain available until Sep-

ERN22335 9K1

S.L.C.

700
1 tember 30, 2026, to the Administrator of the Federal
2 Highway Administration for competitive grants to eligible
3 entities described in subsection (b)—4‘‘(1) to improve walkability, safety, and afford-

5

able transportation access through construction of

6

projects that are context-sensitive—78‘‘(A) to remove, remediate, or reuse a facility described in subsection (c)(1);9‘‘(B) to replace a facility described in sub-10

section (c)(1) with a facility that is at-grade or

11lower speed;

1213‘‘(C) to retrofit or cap a facility describedin subsection (c)(1);14‘‘(D) to build or improve complete streets,

15

multiuse trails, regional greenways, or active

16

transportation networks and spines; or17‘‘(E) to provide affordable access to essen-

18

tial destinations, public spaces, or transpor-

19

tation links and hubs;20‘‘(2) to mitigate or remediate negative impacts

21

on the human or natural environment resulting from22

a facility described in subsection (c)(2) in a dis-23

advantaged or underserved community, including

24

construction of—ERN22335 9K1

S.L.C.

7011‘‘(A) noise barriers to reduce impacts re-2

sulting from a facility described in subsection

3(c)(2);

4‘‘(B) technologies, infrastructure, and ac-

5tivities to reduce surface transportation-related

6

air pollution, including greenhouse gas emis-

7

sions;

8‘‘(C) infrastructure or protective features9

to reduce or manage stormwater run-off result-10

ing from a facility described in subsection

11(c)(2), including through natural infrastructure

12

and pervious, permeable, or porous pavement;

13‘‘(D) infrastructure and natural features to14

reduce or mitigate urban heat island hot spots

15

in the transportation right-of-way or on surface

16

transportation facilities; or‘‘(E) safety improvements for vulnerable

17
18

road users; and19‘‘(3) for planning and capacity building activi-

20

ties in disadvantaged or underserved communities

21

to—

22

‘‘(A) identify, monitor, or assess local and23

ambient air quality, emissions of transportation

24

greenhouse gases, hot spot areas of extreme

25

heat or elevated air pollution, gaps in tree can-

ERN22335 9K1

S.L.C.

7021

opy coverage, or flood prone transportation in-2

frastructure;3‘‘(B) assess transportation equity or pollu-

4tion impacts and develop local anti-displacement

5

policies and community benefit agreements;‘‘(C) conduct predevelopment activities for

6
7

projects eligible under this subsection;

8‘‘(D) expand public participation in trans-

9

portation planning by individuals and organiza-

10

tions in disadvantaged or underserved commu-

11

nities; or12‘‘(E) administer or obtain technical assist-

13

ance related to activities described in this sub-14

section.

15‘‘(b) ELIGIBLE ENTITIES DESCRIBED.—An eligible

16 entity referred to in subsection (a) is—17‘‘(1) a State;18‘‘(2) a unit of local government;19‘‘(3) a political subdivision of a State;

20

‘‘(4)

21

207(m)(1)(E);anentitydescribed

insection22‘‘(5) a territory of the United States;

23‘‘(6) a special purpose district or public author-

24

ity with a transportation function;

ERN22335 9K1

S.L.C.

703‘‘(7) a metropolitan planning organization (as12defined in section 134(b)(2)); or3‘‘(8) with respect to a grant described in sub-4

section (a)(3), in addition to an eligible entity de-5

scribed in paragraphs (1) through (7), a nonprofit

6

organization or institution of higher education that7

has entered into a partnership with an eligible entity

8

described in paragraphs (1) through (7).

9‘‘(c) FACILITY DESCRIBED.—A facility referred to in

10 subsection (a) is—11‘‘(1) a surface transportation facility for which

12high speeds, grade separation, or other design fac-

13

tors create an obstacle to connectivity within a com-14

munity; or

15‘‘(2) a surface transportation facility which is a16

source of air pollution, noise, stormwater, or other17

burden to a disadvantaged or underserved commu-

18

nity.

19

‘‘(d) INVESTMENT

20

TAGED COMMUNITIES.—

21‘‘(1) ININ

ECONOMICALLY DISADVAN-

GENERAL.—In

addition to amounts

22

otherwise available, there is appropriated for fiscal

23

year 2022, out of any money in the Treasury not24otherwise appropriated, $1,109,950,000, to remain

25

available until September 30, 2026, to the Adminis-

ERN22335 9K1

S.L.C.

704
1

trator of the Federal Highway Administration to

2

provide grants for projects in communities described3

in paragraph (2) for the same purposes and admin-

4

istered in the same manner as described in sub-5

section (a).

6‘‘(2) COMMUNITIES DESCRIBED.—A community

7

referred to in paragraph (1) is a community that—

8‘‘(A) is economically disadvantaged, includ-9

ing an underserved community or a community

10

located in an area of persistent poverty;

11‘‘(B) has entered or will enter into a com-12

munity benefits agreement with representatives

13of the community;

14‘‘(C) has an anti-displacement policy, a15community land trust, or a community advisory

16

board in effect; or17‘‘(D) has demonstrated a plan for employ-18

ing local residents in the area impacted by the19

activity or project proposed under this section.

20‘‘(e) ADMINISTRATION.—

21‘‘(1) IN GENERAL.—A project carried out under22

subsection (a) or (d) shall be treated as a project on

23

a Federal-aid highway.

2425‘‘(2) COMPLIANCE WITH EXISTING REQUIREMENTS.—Funds

made available for a grant underERN22335 9K1

S.L.C.

705
1

this section and administered by or through a State2

department of transportation shall be expended in

3compliance with the U.S. Department of Transpor-

4

tation’s Disadvantaged Business Enterprise Pro-

5

gram.

6

‘‘(f) COST SHARE.—The Federal share of the cost of

7 an activity carried out using a grant awarded under this8 section shall be not more than 80 percent, except that the
9 Federal share of the cost of a project in a disadvantaged
10 or underserved community may be up to 100 percent.
11

‘‘(g)

TECHNICALASSISTANCE.—In

additionto

12 amounts otherwise available, there is appropriated for fis13 cal year 2022, out of any money in the Treasury not other14 wise appropriated, $42,150,000, to remain available until
15 September 30, 2026, to the Administrator of the Federal
16 Highway Administration for—17‘‘(1) guidance, technical assistance, templates,

18

training, or tools to facilitate efficient and effective

19

contracting, design, and project delivery by units of

20

local government;

21‘‘(2) subgrants to units of local government to22

build capacity of such units of local government to23

assume responsibilities to deliver surface transpor-

24

tation projects; andERN22335 9K1

S.L.C.

706
1‘‘(3) operations and administration of the Fed-2eral Highway Administration.

3‘‘(h) LIMITATIONS.—Amounts made available under

4 this section shall not—5‘‘(1) be subject to any restriction or limitation

6

on the total amount of funds available for implemen-

7tation or execution of programs authorized for Fed-8eral-aid highways; and9‘‘(2) be used for a project for additional

10

through travel lanes for single-occupant passenger

11

vehicles.

12‘‘(i) DEFINITION OF GREENHOUSE GAS.—In this sec-

13 tion, the term ‘greenhouse gas’ has the meaning given the
14 term in section 211(o)(1)(G) of the Clean Air Act (4215 U.S.C. 7545(o)(1)(G)) (as in effect on the date of enact16 ment of this section).’’.
17(b) CLERICAL AMENDMENT.—The analysis for chap-

18 ter 1 of title 23, United States Code, is further amended
19 by adding at the end the following:‘‘178. Neighborhood access and equity grant program.’’.

20
21

SEC. 60502. ASSISTANCE FOR FEDERAL BUILDINGS.

In addition to amounts otherwise available, there is

22 appropriated for fiscal year 2022, out of any money in
23 the Treasury not otherwise appropriated, $250,000,000,
24 to remain available until September 30, 2031, to be depos25 ited in the Federal Buildings Fund established under sec-

ERN22335 9K1

S.L.C.

707
1 tion 592 of title 40, United States Code, for measures nec2 essary to convert facilities of the Administrator of General
3 Services to high-performance green buildings (as defined
4 in section 401 of the Energy Independence and Security
5 Act of 2007 (42 U.S.C. 17061)).
67SEC. 60503. USE OF LOW-CARBON MATERIALS.

(a) APPROPRIATION.—In addition to amounts other-

8 wise available, there is appropriated for fiscal year 2022,
9 out of any money in the Treasury not otherwise appro10 priated, $2,150,000,000, to remain available until Sep11 tember 30, 2026, to be deposited in the Federal Buildings
12 Fund established under section 592 of title 40, United
13 States Code, to acquire and install low-embodied carbon
14 materials and products for use in the construction or alter15 ation of buildings under the jurisdiction, custody, and con16 trol of the General Services Administration.
17(b) DEFINITIONS.—In this section:

18(1) EMBODIED CARBON.—The term ‘‘embodied

19

carbon’’ means the quantity of greenhouse gas (as20

defined in section 211(o)(1)(G) of the Clean Air Act

21(42 U.S.C. 7545(o)(1)(G)) (as in effect on the date22of enactment of this Act)) emissions associated with23

all relevant stages of production of a material or

24

product, measured in kilograms of carbon dioxide-

25

equivalent per unit of such material or product.

ERN22335 9K1

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708
1(2) LOW-EMBODIED CARBON MATERIALS AND

2

PRODUCTS.—The term ‘‘low-embodied carbon mate-3

rials and products’’ means materials and products

4

identified by the Administrator of the Environmental

5

Protection Agency as having substantially lower lev-6

els of embodied carbon as compared to estimated in-

7

dustry averages of similar products or materials.

8SEC. 60504. GENERAL SERVICES ADMINISTRATION EMERG-

910

ING TECHNOLOGIES.

In addition to amounts otherwise available, there is

11 appropriated to the Administrator of General Services for
12 fiscal year 2022, out of any money in the Treasury not
13 otherwise appropriated, $975,000,000, to remain available
14 until September 30, 2026, to be deposited in the Federal
15 Buildings Fund established under section 592 of title 40,
16 United States Code, for emerging and sustainable tech17 nologies, and related sustainability and environmental pro18 grams.
19

SEC. 60505. ENVIRONMENTAL REVIEW IMPLEMENTATION

20
21

FUNDS.

(a) IN GENERAL.—Chapter 1 of title 23, United

22 States Code, is further amended by adding at the end the
23 following:ERN22335 9K1

S.L.C.

709
1 ‘‘§ 179. Environmental review implementation funds
2‘‘(a) ESTABLISHMENT.—In addition to amounts oth-

3 erwise available, for fiscal year 2022, there is appropriated
4 to the Administrator, out of any money in the Treasury
5 not otherwise appropriated, $100,000,000, to remain
6 available until September 30, 2026, for the purpose of fa7 cilitating the development and review of documents for the
8 environmental review process for proposed projects, in9 cluding through—10‘‘(1) the provision of guidance, technical assist-

11

ance, templates, training, or tools to facilitate an ef-

12ficient and effective environmental review process for13

surface transportation projects, including any ad-

14

ministrative expenses of the Federal Highway Ad-

15ministration to conduct such activities; and1617‘‘(2) providing funds made available under thissubsection to eligible entities—

18‘‘(A) to build capacity of such eligible enti-

19

ties and facilitate the environmental review

20

process for proposed projects, including—21‘‘(i) defining the scope or study areas;

22‘‘(ii) identifying impacts, mitigation23

measures, and reasonable alternatives;

24‘‘(iii) preparing planning and environ-25

mental studies and other documents prior26

to and during the environmental review

ERN22335 9K1

S.L.C.

710
1

process, for potential use in the environ-2

mental review process in accordance with3

applicable statutes and regulations;

45‘‘(iv) conducting public engagement
activities; and6‘‘(v) carrying out other activities, in-7

cluding permitting activities, as the Admin-

8

istrator determines to be appropriate, to9support the timely completion of an envi-

10ronmental review process required for a

11

proposed project; and12‘‘(B) for administrative expenses of the eli-

13

gible entity to conduct any of the activities de-14

scribed in subparagraph (A).

15‘‘(b) COST SHARE.—

16‘‘(1) IN GENERAL.—The Federal share of the17

cost of an activity carried out under this section by18

an eligible entity shall be not more than 80 percent.

19‘‘(2) SOURCEOF

FUNDS.—The

non-Federal

20

share of the cost of an activity carried out under

21

this section by an eligible entity may be satisfied

22

using funds made available to the eligible entity

23

under any other Federal, State, or local grant pro-

24

gram, including funds made available to the eligible

ERN22335 9K1

S.L.C.

711
1

entity under this title or administered by the U.S.

2

Department of Transportation.

3‘‘(c) DEFINITIONS.—In this section:

4‘‘(1) ADMINISTRATOR.—The term ‘Adminis-

5

trator’ means the Administrator of the Federal

6

Highway Administration.

78‘‘(2) ELIGIBLE ENTITY.—The term ‘eligible entity’ means—9‘‘(A) a State;

10‘‘(B) a unit of local government;

11‘‘(C) a political subdivision of a State;

12‘‘(D) a territory of the United States;

13

‘‘(E)

14

207(m)(1)(E);

15
16
17

an

entitydescribed

insection‘‘(F) a recipient of funds under section
203; or‘‘(G) a metropolitan planning organization18(as defined in section 134(b)(2)).

19‘‘(3) ENVIRONMENTAL REVIEW PROCESS.—The20

term ‘environmental review process’ has the meaning

21

given the term in section 139(a)(5).

22‘‘(4) PROPOSED PROJECT.—The term ‘proposed23

project’ means a surface transportation project for24

which an environmental review process is required.’’.

ERN22335 9K1

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712
1(b) CLERICAL AMENDMENT.—The analysis for chap-

2 ter 1 of title 23, United States Code, is further amended
3 by adding at the end the following:‘‘179. Environmental review implementation funds.’’.

4

SEC. 60506. LOW-CARBON TRANSPORTATION MATERIALS

5
6GRANTS.

(a) IN GENERAL.—Chapter 1 of title 23, United

7 States Code, is further amended by adding at the end the
8 following:
9 ‘‘§ 180. Low-carbon transportation materials grants
1011‘‘(a) FEDERAL HIGHWAY ADMINISTRATION APPROPRIATION.—In

addition to amounts otherwise available,

12 there is appropriated for fiscal year 2022, out of any
13 money in the Treasury not otherwise appropriated,
14 $2,000,000,000, to remain available until September 30,
15 2026, to the Administrator to reimburse or provide incen16 tives to eligible recipients for the use of low-embodied car17 bon construction materials and products in projects, and18 for the operations and administration of the Federal High19 way Administration to carry out this section.
2021‘‘(b) REIMBURSEMENT OF INCREMENTAL COSTS; INCENTIVES.—

22‘‘(1) IN GENERAL.—The Administrator shall,

23

subject to the availability of funds, either reimburse24

or provide incentives to eligible recipients that use

ERN22335 9K1

S.L.C.

713
1

low-embodied carbon construction materials and2

products on a project funded under this title.

3

‘‘(2)

4

AMOUNTS.—

5REIMBURSEMENT

‘‘(A)

AND

INCREMENTALINCENTIVEAMOUNT.—The

6

amount of reimbursement under paragraph (1)7shall be equal to the incrementally higher cost8of using such materials relative to the cost of

9

using traditional materials, as determined by

10

the eligible recipient and verified by the Admin-

11

istrator.

12‘‘(B) INCENTIVE AMOUNT.—The amount13

of an incentive under paragraph (1) shall be

14

equal to 2 percent of the cost of using low-em-

15

bodied carbon construction materials and prod-16

ucts on a project funded under this title.

17‘‘(3) FEDERAL SHARE.—If a reimbursement or

18

incentive is provided under paragraph (1), the total

19

Federal share payable for the project for which the20

reimbursement or incentive is provided shall be up

21

to 100 percent.

22‘‘(4) LIMITATIONS.—

23‘‘(A) IN

GENERAL.—The

Administrator

24

shall only provide a reimbursement or incentive

25

under paragraph (1) for a project on a—

ERN22335 9K1

S.L.C.

7141‘‘(i) Federal-aid highway;2‘‘(ii) tribal transportation facility;

3‘‘(iii) Federal lands transportation fa-

4cility; or‘‘(iv) Federal lands access transpor-

5
6

tation facility.

7

‘‘(B)

OTHER

RESTRICTIONS.—Amounts

8

made available under this section shall not be

9subject to any restriction or limitation on the10

total amount of funds available for implementa-

11

tion or execution of programs authorized for

12

Federal-aid highways.

13‘‘(C) SINGLE OCCUPANT PASSENGER VEHI-

14

CLES.—Funds

made available under this sec-

15

tion shall not be used for projects that result in

16

additional through travel lanes for single occu-

17

pant passenger vehicles.

18‘‘(5) MATERIALSIDENTIFICATION.—The

Ad-

19

ministrator shall review the low-embodied carbon

20

construction materials and products identified by the21

Administrator of the Environmental Protection

22

Agency and shall identify low-embodied carbon con-23

struction materials and products—

2425‘‘(A) appropriate for use in projects eligible
under this title; andERN22335 9K1

S.L.C.

715‘‘(B) eligible for reimbursement or incen-

1
2

tives under this section.

3‘‘(c) DEFINITIONS.—In this section:

4‘‘(1) ADMINISTRATOR.—The term ‘Adminis-

5

trator’ means the Administrator of the Federal

6

Highway Administration.

78‘‘(2) ELIGIBLE RECIPIENT.—The term ‘eligible
recipient’ means—9‘‘(A) a State;

10‘‘(B) a unit of local government;

11‘‘(C) a political subdivision of a State;

12‘‘(D) a territory of the United States;

13

‘‘(E)

14

207(m)(1)(E));

17
18
19

entitydescribed

insection‘‘(F) a recipient of funds under section

15
16

an

203;
‘‘(G) a metropolitan planning organization(as defined in section 134(b)(2)); or‘‘(H) a special purpose district or public

20

authority with a transportation function.

21‘‘(3) EMBODIED CARBON.—The term ‘embodied

22

carbon’ means the quantity of greenhouse gas (as23

defined in section 211(o)(1)(G) of the Clean Air Act

24(42 U.S.C. 7545(o)(1)(G)) (as in effect on the date25

of enactment of this Act)) emissions associated with

ERN22335 9K1

S.L.C.

716
1

all relevant stages of production of a material or

2

product, measured in kilograms of carbon dioxide-3

equivalent per unit of such material or product.

4‘‘(4) LOW-EMBODIED CARBON CONSTRUCTION
PRODUCTS.—Theterm ‘low-em-

5

MATERIALS

6bodied carbon construction materials and products’

7means construction materials and products identified

8

by the Administrator of the Environmental Protec-

9tion Agency as having substantially lower levels of

10

embodied carbon as compared to estimated industry

11

averages of similar products or materials.’’.

12(b) CLERICAL AMENDMENT.—The analysis for chap-AND

13 ter 1 of title 23, United States Code, is further amended
14 by adding at the end the following:‘‘180. Low-carbon transportation materials grants.’’.

TITLE
VII—COMMITTEEON
16
HOMELAND SECURITY AND
17
GOVERNMENTAL AFFAIRS
15

18
19
20

SEC. 70001. DHS OFFICE OF CHIEF READINESS SUPPORTOFFICER.

In addition to the amounts otherwise available, there

21 is appropriated to the Secretary of Homeland Security for
22 fiscal year 2022, out of any money in the Treasury not
23 otherwise appropriated, $500,000,000, to remain available
24 until September 30, 2028, for the Office of the Chief

ERN22335 9K1

S.L.C.

717
1 Readiness Support Officer to carry out sustainability and2 environmental programs.
3

SEC. 70002. UNITED STATES POSTAL SERVICE CLEAN

45FLEETS.

In addition to amounts otherwise available, there is

6 appropriated to the United States Postal Service for fiscal
7 year 2022, out of any money in the Treasury not otherwise
8 appropriated, to be deposited into the Postal Service Fund
9 established under section 2003 of title 39, United States
10 Code, $3,000,000,000, to remain available through Sep11 tember 30, 2031, for—(1) the purchase of zero-emission delivery vehi-

1213cles; and14(2) the purchase, design, and installation of the15

requisite infrastructure to support zero-emission de-

16

livery vehicles at facilities that the United States

17

Postal Service owns or leases from non-Federal enti-

18

ties.

19
20
21

SEC. 70003. UNITED STATES POSTAL SERVICE OFFICE OF
INSPECTOR GENERAL.

In addition to amounts otherwise available, there is

22 appropriated to the Office of Inspector General of the
23 United States Postal Service for fiscal year 2022, out of
24 any money in the Treasury not otherwise appropriated,
25 $15,000,000, to remain available through September 30,

ERN22335 9K1

S.L.C.

718
1 2031, to support oversight of United States Postal Service
2 activities implemented pursuant to this Act.
3

SEC. 70004. GOVERNMENT ACCOUNTABILITY OFFICE OVER-

45

SIGHT.

In addition to amounts otherwise available, there is

6 appropriated to the Comptroller General of the United
7 States for fiscal year 2022, out of any money in the Treas8 ury not otherwise appropriated, $25,000,000, to remain
9 available until September 30, 2031, for necessary expenses
10 of the Government Accountability Office to support the
11 oversight of—
1213(1) the distribution and use of funds appropriated under this Act; and

14(2) whether the economic, social, and environ-15

mental impacts of the funds described in paragraph16(1) are equitable.

17

SEC. 70005. OFFICE OF MANAGEMENT AND BUDGET OVER-

18
19

SIGHT.

In addition to amounts otherwise available, there are

20 appropriated to the Director of the Office of Management
21 and Budget for fiscal year 2022, out of any money in the
22 Treasury not otherwise appropriated, $25,000,000, to re23 main available until September 30, 2026, for necessary ex24 penses to—25(1) oversee the implementation of this Act; andERN22335 9K1

S.L.C.

719(2) track labor, equity, and environmental

1standards and performance.

2
3

SEC. 70006. FEMA BUILDING MATERIALS PROGRAM.

Through September 30, 2026, the Administrator of

4

5 the Federal Emergency Management Agency may provide
6 financial assistance under sections 203(h), 404(a), and
7 406(b) of the Robert T. Stafford Disaster Relief and
8 Emergency Assistance Act (42 U.S.C. 5133(h), 42 U.S.C.
9 5170c(a), 42 U.S.C. 5172(b)) for—(1) costs associated with low-carbon materials;

10
and

11
12

(2) incentives that encourage low-carbon and13

net-zero energy projects, which may include an in-

14

crease in the Federal cost share for those projects.

15

SEC. 70007. FEDERAL PERMITTING IMPROVEMENT STEER-16ING COUNCIL ENVIRONMENTAL REVIEW IM-

17

PROVEMENT FUND MANDATORY FUNDING.

18(a) IN GENERAL.—In addition to amounts otherwise

19 available, there is appropriated to the Environmental Re20 view

Improvement

Fundestablishedbysection

21 41009(d)(1) of the FAST Act (42 U.S.C. 4370m–
22 8(d)(1)), out of any money in the Treasury not otherwise
23 appropriated, $70,000,000 for each of fiscal years 2022
24 through 2026.

ERN22335 9K1

S.L.C.

720
1(b)

AVAILABILITY.—Notwithstanding

section

2 41009(d)(2) of the FAST Act (42 U.S.C. 4370m–
3 8(d)(2)), funds appropriated under subsection (a) for a
4 fiscal year shall remain available for the following 5 fiscal
5 years.
6
7
8

TITLE VIII—COMMITTEE ON
INDIAN AFFAIRSSEC. 80001. TRIBAL CLIMATE RESILIENCE.

9(a) TRIBAL CLIMATE RESILIENCE AND ADAPTA-

10

TION.—In addition to amounts otherwise available, there

11 is appropriated to the Director of the Bureau of Indian
12 Affairs for fiscal year 2022, out of any money in the
13 Treasury not otherwise appropriated, $220,000,000, to re14 main available until September 30, 2031, for Tribal cli15 mate resilience and adaptation programs.
16(b) BUREAU OF INDIAN AFFAIRS FISH HATCH-

17

ERIES.—In addition to amounts otherwise available, there

18 is appropriated to the Director of the Bureau of Indian
19 Affairs for fiscal year 2022, out of any money in the
20 Treasury not otherwise appropriated, $10,000,000, to re21 main available until September 30, 2031, for fish hatchery
22 operations and maintenance programs of the Bureau of
23 Indian Affairs.
24(c) ADMINISTRATION.—In addition to amounts other-

25 wise available, there is appropriated to the Director of theERN22335 9K1

S.L.C.

721
1 Bureau of Indian Affairs for fiscal year 2022, out of any
2 money in the Treasury not otherwise appropriated,
3 $5,000,000, to remain available until September 30, 2031,
4 for the administrative costs of carrying out this section.
5
6

(d)

COST-SHARINGAND

MATCHINGREQUIRE-

MENTS.—None of the funds provided by this section shall

7 be subject to cost-sharing or matching requirements.
8(e) SMALL AND NEEDY PROGRAM.—Amounts made9 available under this section shall be excluded from the cal10 culation of funds received by those Tribal governments
11 that participate in the ‘‘Small and Needy’’ program.
12(f) DISTRIBUTION; USE OF FUNDS.—Amounts made13 available under this section that are distributed to Indian
14 Tribes and Tribal organizations for services pursuant to
15 a self-determination contract (as defined in subsection (j)16 of section 4 of the Indian Self-Determination and Edu17 cation Assistance Act (25 U.S.C. 5304(j))) or a self-gov18 ernance compact entered into pursuant to subsection (a)19 of section 404 of the Indian Self-Determination and Edu20 cation Assistance Act (25 U.S.C. 5364(a))—21(1) shall be distributed on a 1-time basis;

22(2) shall not be part of the amount required by23

subsections (a) through (b) of section 106 of the In-

24dian Self-Determination and Education Assistance25

Act (25 U.S.C. 5325(a)–(b)); andERN22335 9K1

S.L.C.

722(3) shall only be used for the purposes identi-

1
2
3
4

fied under the applicable subsection.
SEC. 80002. NATIVE HAWAIIAN CLIMATE RESILIENCE.

(a) NATIVE HAWAIIAN CLIMATE RESILIENCE AND

5 ADAPTATION.—In addition to amounts otherwise avail6 able, there is appropriated to the Senior Program Director
7 of the Office of Native Hawaiian Relations for fiscal year
8 2022, out of any money in the Treasury not otherwise ap9 propriated, $23,500,000, to remain available until Sep10 tember 30, 2031, to carry out, through financial assist11 ance, technical assistance, direct expenditure, grants, con12 tracts, or cooperative agreements, climate resilience and
13 adaptation activities that serve the Native Hawaiian Com14 munity.
15(b) ADMINISTRATION.—In addition to amounts oth-

16 erwise available, there is appropriated to the Senior Pro17 gram Director of the Office of Native Hawaiian Relations
18 for fiscal year 2022, out of any money in the Treasury
19 not otherwise appropriated, $1,500,000, to remain avail20 able until September 30, 2031, for the administrative
21 costs of carrying out this section.
22
23

(c)

COST-SHARINGAND

MATCHINGREQUIRE-

MENTS.—None of the funds provided by this section shall

24 be subject to cost-sharing or matching requirements.

ERN22335 9K1

S.L.C.

723
1
2

SEC. 80003. TRIBAL ELECTRIFICATION PROGRAM.

(a) TRIBAL ELECTRIFICATION PROGRAM.—In addi-

3 tion to amounts otherwise available, there is appropriated
4 to the Director of the Bureau of Indian Affairs for fiscal
5 year 2022, out of any money in the Treasury not otherwise
6 appropriated, $145,500,000, to remain available until
7 September 30, 2031, for—8(1) the provision of electricity to unelectrified

9

Tribal homes through zero-emissions energy sys-

10

tems;
(2) transitioning electrified Tribal homes to11
12

zero-emissions energy systems; and13(3) associated home repairs and retrofitting

14

necessary to install the zero-emissions energy sys-

15tems authorized under paragraphs (1) and (2).

16(b) ADMINISTRATION.—In addition to amounts oth-

17 erwise available, there is appropriated to the Director of
18 the Bureau of Indian Affairs for fiscal year 2022, out of
19 any money in the Treasury not otherwise appropriated,
20 $4,500,000, to remain available until September 30, 2031,
21 for the administrative costs of carrying out this section.
22
23

(c)

COST-SHARINGAND

MATCHINGREQUIRE-

MENTS.—None of the funds provided by this section shall

24 be subject to cost-sharing or matching requirements.
25(d) SMALL AND NEEDY PROGRAM.—Amounts made26 available under this section shall be excluded from the cal-ERN22335 9K1

S.L.C.

724
1 culation of funds received by those Tribal governments
2 that participate in the ‘‘Small and Needy’’ program.
3(e) DISTRIBUTION; USE OF FUNDS.—Amounts made4 available under this section that are distributed to Indian
5 Tribes and Tribal organizations for services pursuant to
6 a self-determination contract (as defined in subsection (j)7 of section 4 of the Indian Self-Determination and Edu8 cation Assistance Act (25 U.S.C. 5304(j))) or a self-gov9 ernance compact entered into pursuant to subsection (a)10 of section 404 of the Indian Self-Determination and Edu11 cation Assistance Act (25 U.S.C. 5364(a))—12(1) shall be distributed on a 1-time basis;

13(2) shall not be part of the amount required by

14

subsections (a) through (b) of section 106 of the In-

15dian Self-Determination and Education Assistance16

Act (25 U.S.C. 5325(a)–(b)); and

17
18
19
20

(3) shall only be used for the purposes identified under the applicable subsection.
SEC. 80004. EMERGENCY DROUGHT RELIEF FOR TRIBES.

(a) EMERGENCY DROUGHT RELIEF FOR TRIBES.—

21 In addition to amounts otherwise available, there is appro22 priated to the Commissioner of the Bureau of Reclamation
23 for fiscal year 2022, out of any money in the Treasury
24 not otherwise appropriated, $12,500,000, to remain avail25 able until September 30, 2026, for near-term drought re-ERN22335 9K1

S.L.C.

725
1 lief actions to mitigate drought impacts for Indian Tribes
2 that are impacted by the operation of a Bureau of Rec3 lamation water project, including through direct financial
4 assistance to address drinking water shortages and to
5 mitigate the loss of Tribal trust resources.
6
7

(b)

COST-SHARINGAND

MATCHINGREQUIRE-

MENTS.—None of the funds provided by this section shall

8 be subject to cost-sharing or matching requirements.