II 

115TH CONGRESS 

1ST SESSION S. 1068 

To amend the Internal Revenue Code of 1986 to provide tax incentives 

for increased investment in clean energy. 

IN THE SENATE OF THE UNITED STATES 

MAY 8, 2017 

Mr. WYDEN (for himself, Mr. SCHUMER, Ms. STABENOW, Ms. CANTWELL, Mr. 

MENENDEZ, Mr. CARPER, Mr. CARDIN, Mr. BENNET, Mr. DURBIN, Ms. 

KLOBUCHAR, Mr. WHITEHOUSE, Mrs. SHAHEEN, Mrs. GILLIBRAND, Mr. 

COONS, Mr. SCHATZ, Mr. HEINRICH, Mr. KING, Mr. KAINE, Mr. BOOKER, Ms. DUCKWORTH, Ms. HASSAN, and Ms. CORTEZ MASTO) introduced 

the following bill; which was read twice and referred to the Committee 

on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

tax incentives for increased investment in clean energy. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; ETC. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Clean Energy for America Act’’. 

6 (b) AMENDMENT OF 1986 CODE.—Except as other7 wise expressly provided, whenever in this Act an amend8 ment or repeal is expressed in terms of an amendment 


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1 to, or repeal of, a section or other provision, the reference 

2 shall be considered to be made to a section or other provi3 sion of the Internal Revenue Code of 1986. 

4 (c) TABLE OF CONTENTS.—The table of contents of 

5 this Act is as follows: 

Sec. 1. Short title; etc. 

TITLE I—CLEAN ENERGY TAX CREDITS 

Sec. 101. Clean energy production credit. 

Sec. 102. Clean energy investment credit. 

Sec. 103. Extensions and modifications of various energy provisions. 

TITLE II—CLEAN FUEL TAX CREDITS 

Sec. 201. Clean fuel production credit. 

Sec. 202. Temporary extension of existing fuel and transportation incentives. 

TITLE III—ENERGY EFFICIENCY INCENTIVES 

Sec. 301. Credit for new energy efficient residential buildings. 

Sec. 302. Heating and air conditioning replacement credit. 

Sec. 303. Energy efficiency credit for existing residential buildings. 

Sec. 304. Deduction for new energy efficient commercial buildings. 

Sec. 305. Energy efficiency deduction for existing commercial buildings. 

Sec. 306. Temporary extension of existing energy efficiency incentives. 

TITLE IV—CLEAN ELECTRICITY AND FUEL BONDS 

Sec. 401. Clean energy bonds. 

6 TITLE I—CLEAN ENERGY TAX 

7 CREDITS 

8 SEC. 101. CLEAN ENERGY PRODUCTION CREDIT. 

9 (a) IN GENERAL.—Subpart D of part IV of sub10 chapter A of chapter 1 is amended by adding at the end 

11 the following new section: 

12 ‘‘SEC. 45S. CLEAN ENERGY PRODUCTION CREDIT. 

13 ‘‘(a) AMOUNT OF CREDIT.— 


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1 ‘‘(1) IN GENERAL.—For purposes of section 38, 

2 the clean energy production credit for any taxable 

3 year is an amount equal to the product of— 

4 ‘‘(A) the applicable credit rate (as deter5 mined under paragraph (2)), multiplied by 

6 ‘‘(B) the kilowatt hours of electricity— 

7 ‘‘(i) produced by the taxpayer at a 

8 qualified facility, and 

9 ‘‘(ii)(I) sold by the taxpayer to an un10 related person during the taxable year, or 

11 ‘‘(II) in the case of a qualified facility 

12 which is equipped with a metering device 

13 which is owned and operated by an unre14 lated person, sold, consumed, or stored by 

15 the taxpayer during the taxable year. 

16 ‘‘(2) APPLICABLE CREDIT RATE.— 

17 ‘‘(A) IN GENERAL.— 

18 ‘‘(i) MAXIMUM CREDIT RATE.—Except 

19 as provided in clause (ii), the applicable 

20 credit rate is 1.5 cents. 

21 ‘‘(ii) REDUCTION OF CREDIT BASED

22 ON GREENHOUSE GAS EMISSION RATE.— 

23 The applicable credit rate shall be reduced 

24 (but not below zero) by an amount which 

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1 fect under clause (i) as the greenhouse gas 

2 emissions rate for the qualified facility 

3 bears to 325 grams of CO2e per KWh. 

4 ‘‘(B) ROUNDING.—If any amount deter5 mined under subparagraph (A)(ii) is not a mul6 tiple of 0.1 cent, such amount shall be rounded 

7 to the nearest multiple of 0.1 cent. 

8 ‘‘(b) GREENHOUSE GAS EMISSIONS RATE.— 

9 ‘‘(1) IN GENERAL.—For purposes of this sec10 tion, the term ‘greenhouse gas emissions rate’ means 

11 the amount of greenhouse gases emitted into the at12 mosphere by a qualified facility in the production of 

13 electricity, expressed as grams of CO2e per KWh. 

14 ‘‘(2) NON-FOSSIL FUEL COMBUSTION AND GAS15 IFICATION.—In the case of a qualified facility which 

16 produces electricity through combustion or gasifi17 cation of a non-fossil fuel, the greenhouse gas emis18 sions rate for such facility shall be equal to the net 

19 rate of greenhouse gases emitted into the atmos20 phere by such facility in the production of electricity, 

21 expressed as grams of CO2e per KWh. 

22 ‘‘(3) ESTABLISHMENT OF SAFE HARBOR FOR

23 QUALIFIED FACILITIES.— 

24 ‘‘(A) IN GENERAL.—The Secretary, in con25 sultation with the Administrator of the EnviVerDate Sep 11 2014 21:58 May 12, 2017 Jkt 069200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1068.IS S1068

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1 ronmental Protection Agency, shall establish 

2 safe-harbor greenhouse gas emissions rates for 

3 types or categories of qualified facilities, which 

4 a taxpayer may elect to use for purposes of this 

5 section. 

6 ‘‘(B) ROUNDING.—In establishing the safe7 harbor greenhouse gas emissions rates for 

8 qualified facilities, the Secretary may round 

9 such rates to the nearest multiple of 32.5 

10 grams of CO2e per KWh (or, in the case of a 

11 greenhouse gas emissions rate which is less 

12 than 16.25 grams of CO2e per KWh, by round13 ing such rate to zero). 

14 ‘‘(4) CARBON CAPTURE AND SEQUESTRATION

15 EQUIPMENT.—For purposes of this subsection, the 

16 amount of greenhouse gases emitted into the atmos17 phere by a qualified facility in the production of 

18 electricity shall not include any qualified carbon di19 oxide (as defined in section 48E(c)(3)(A)) that is 

20 captured and disposed of by the taxpayer. 

21 ‘‘(c) INFLATION ADJUSTMENT.— 

22 ‘‘(1) IN GENERAL.—In the case of a calendar 

23 year beginning after 2018, the 1.5 cent amount in 

24 clause (i) of subsection (a)(2)(A) shall be adjusted 

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1 ment factor for the calendar year in which the sale 

2 or use of the electricity occurs. If any amount as in3 creased under the preceding sentence is not a mul4 tiple of 0.1 cent, such amount shall be rounded to 

5 the nearest multiple of 0.1 cent. 

6 ‘‘(2) ANNUAL COMPUTATION.—The Secretary 

7 shall, not later than April 1 of each calendar year, 

8 determine and publish in the Federal Register the 

9 inflation adjustment factor for such calendar year in 

10 accordance with this subsection. 

11 ‘‘(3) INFLATION ADJUSTMENT FACTOR.—The 

12 term ‘inflation adjustment factor’ means, with re13 spect to a calendar year, a fraction the numerator 

14 of which is the GDP implicit price deflator for the 

15 preceding calendar year and the denominator of 

16 which is the GDP implicit price deflator for the cal17 endar year 1992. The term ‘GDP implicit price 

18 deflator’ means the most recent revision of the im19 plicit price deflator for the gross domestic product 

20 as computed and published by the Department of 

21 Commerce before March 15 of the calendar year. 

22 ‘‘(d) CREDIT PHASE-OUT.— 

23 ‘‘(1) IN GENERAL.—If the Secretary, in con24 sultation with the Secretary of Energy and the Ad25 ministrator of the Environmental Protection Agency, 


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1 determines that the annual greenhouse gas emis2 sions from electrical production in the United States 

3 are equal to or less than 65 percent of the annual 

4 greenhouse gas emissions from electrical production 

5 in the United States for calendar year 2017, the 

6 amount of the clean energy production credit under 

7 subsection (a) for any qualified facility placed in 

8 service during a calendar year described in para9 graph (2) shall be equal to the product of— 

10 ‘‘(A) the amount of the credit determined 

11 under subsection (a) without regard to this sub12 section, multiplied by 

13 ‘‘(B) the phase-out percentage under para14 graph (2). 

15 ‘‘(2) PHASE-OUT PERCENTAGE.—The phase-out 

16 percentage under this paragraph is equal to— 

17 ‘‘(A) for a facility placed in service during 

18 the first calendar year following the calendar 

19 year in which the determination described in 

20 paragraph (1) is made, 75 percent, 

21 ‘‘(B) for a facility placed in service during 

22 the second calendar year following such deter23 mination year, 50 percent, 


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1 ‘‘(C) for a facility placed in service during 

2 the third calendar year following such deter3 mination year, 25 percent, and 

4 ‘‘(D) for a facility placed in service during 

5 any calendar year subsequent to the year de6 scribed in subparagraph (C), 0 percent. 

7 ‘‘(e) DEFINITIONS.—In this section: 

8 ‘‘(1) CO2e PER KWh.—The term ‘CO2e per 

9 KWh’ means, with respect to any greenhouse gas, 

10 the equivalent carbon dioxide per kilowatt hour of 

11 electricity produced. 

12 ‘‘(2) GREENHOUSE GAS.—The term ‘greenhouse 

13 gas’ has the same meaning given such term under 

14 section 211(o)(1)(G) of the Clean Air Act (42 

15 U.S.C. 7545(o)(1)(G)), as in effect on the date of 

16 the enactment of this section. 

17 ‘‘(3) QUALIFIED FACILITY.— 

18 ‘‘(A) IN GENERAL.—Subject to subpara19 graphs (B) and (C), the term ‘qualified facility’ 

20 means a facility which is— 

21 ‘‘(i) used for the generation of elec22 tricity, and 

23 ‘‘(ii) originally placed in service after 

24 December 31, 2018. 


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1 ‘‘(B) 10-YEAR PRODUCTION CREDIT.—For 

2 purposes of this section, a facility shall only be 

3 treated as a qualified facility during the 10-year 

4 period beginning on the date the facility was 

5 originally placed in service. 

6 ‘‘(C) EXPANSION OF FACILITY; INCRE7 MENTAL PRODUCTION.—A qualified facility 

8 shall include either of the following in connec9 tion with a facility described in subparagraph 

10 (A)(i) that was previously placed in service, but 

11 only to the extent of the increased amount of 

12 electricity produced at the facility by reason of 

13 the following: 

14 ‘‘(i) A new unit placed in service after 

15 December 31, 2018. 

16 ‘‘(ii) Any efficiency improvements or 

17 additions of capacity placed in service after 

18 December 31, 2018. 

19 ‘‘(D) COORDINATION WITH OTHER CRED20 ITS.—The term ‘qualified facility’ shall not in21 clude any facility for which— 

22 ‘‘(i) a renewable electricity production 

23 credit determined under section 45 is al24 lowed under section 38 for the taxable year 

25 or any prior taxable year, 


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1 ‘‘(ii) an energy credit determined 

2 under section 48 is allowed under section 

3 38 for the taxable year or any prior tax4 able year, or 

5 ‘‘(iii) a clean energy investment credit 

6 determined under section 48E is allowed 

7 under section 38 for the taxable year or 

8 any prior taxable year. 

9 ‘‘(f) FINAL GUIDANCE.—Not later than January 1, 

10 2018, the Secretary, in consultation with the Adminis11 trator of the Environmental Protection Agency, shall issue 

12 final guidance regarding implementation of this section, 

13 including calculation of greenhouse gas emission rates for 

14 qualified facilities and determination of clean energy pro15 duction credits under this section. 

16 ‘‘(g) SPECIAL RULES.— 

17 ‘‘(1) ONLY PRODUCTION IN THE UNITED

18 STATES TAKEN INTO ACCOUNT.—Consumption or 

19 sales shall be taken into account under this section 

20 only with respect to electricity the production of 

21 which is within— 

22 ‘‘(A) the United States (within the mean23 ing of section 638(1)), or 

24 ‘‘(B) a possession of the United States 

25 (within the meaning of section 638(2)). 


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1 ‘‘(2) COMBINED HEAT AND POWER SYSTEM

2 PROPERTY.— 

3 ‘‘(A) IN GENERAL.—For purposes of sub4 section (a)(1)(B), the kilowatt hours of elec5 tricity produced by a taxpayer at a qualified fa6 cility shall include any production in the form 

7 of useful thermal energy by any combined heat 

8 and power system property within such facility. 

9 ‘‘(B) COMBINED HEAT AND POWER SYS10 TEM PROPERTY.—For purposes of this para11 graph, the term ‘combined heat and power sys12 tem property’ has the same meaning given such 

13 term by section 48(c)(3) (without regard to 

14 subparagraphs (A)(iv), (B), and (D) thereof). 

15 ‘‘(C) CONVERSION FROM BTU TO KWH.— 

16 ‘‘(i) IN GENERAL.—For purposes of 

17 subparagraph (A), the amount of kilowatt 

18 hours of electricity produced in the form of 

19 useful thermal energy shall be equal to the 

20 quotient of— 

21 ‘‘(I) the total useful thermal en22 ergy produced by the combined heat 

23 and power system property within the 

24 qualified facility, divided by 


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1 ‘‘(II) the heat rate for such facil2 ity. 

3 ‘‘(ii) HEAT RATE.—For purposes of 

4 this subparagraph, the term ‘heat rate’ 

5 means the amount of energy used by the 

6 qualified facility to generate 1 kilowatt 

7 hour of electricity, expressed as British 

8 thermal units per net kilowatt hour gen9 erated. 

10 ‘‘(3) PRODUCTION ATTRIBUTABLE TO THE TAX11 PAYER.—In the case of a qualified facility in which 

12 more than 1 person has an ownership interest, ex13 cept to the extent provided in regulations prescribed 

14 by the Secretary, production from the facility shall 

15 be allocated among such persons in proportion to 

16 their respective ownership interests in the gross 

17 sales from such facility. 

18 ‘‘(4) RELATED PERSONS.—Persons shall be 

19 treated as related to each other if such persons 

20 would be treated as a single employer under the reg21 ulations prescribed under section 52(b). In the case 

22 of a corporation which is a member of an affiliated 

23 group of corporations filing a consolidated return, 

24 such corporation shall be treated as selling electricity 


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1 to an unrelated person if such electricity is sold to 

2 such a person by another member of such group. 

3 ‘‘(5) PASS-THRU IN THE CASE OF ESTATES AND

4 TRUSTS.—Under regulations prescribed by the Sec5 retary, rules similar to the rules of subsection (d) of 

6 section 52 shall apply. 

7 ‘‘(6) ALLOCATION OF CREDIT TO PATRONS OF

8 AGRICULTURAL COOPERATIVE.— 

9 ‘‘(A) ELECTION TO ALLOCATE.— 

10 ‘‘(i) IN GENERAL.—In the case of an 

11 eligible cooperative organization, any por12 tion of the credit determined under sub13 section (a) for the taxable year may, at the 

14 election of the organization, be apportioned 

15 among patrons of the organization on the 

16 basis of the amount of business done by 

17 the patrons during the taxable year. 

18 ‘‘(ii) FORM AND EFFECT OF ELEC19 TION.—An election under clause (i) for any 

20 taxable year shall be made on a timely 

21 filed return for such year. Such election, 

22 once made, shall be irrevocable for such 

23 taxable year. Such election shall not take 

24 effect unless the organization designates 

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1 tice mailed to its patrons during the pay2 ment period described in section 1382(d). 

3 ‘‘(B) TREATMENT OF ORGANIZATIONS AND

4 PATRONS.—The amount of the credit appor5 tioned to any patrons under subparagraph 

6 (A)— 

7 ‘‘(i) shall not be included in the 

8 amount determined under subsection (a) 

9 with respect to the organization for the 

10 taxable year, and 

11 ‘‘(ii) shall be included in the amount 

12 determined under subsection (a) for the 

13 first taxable year of each patron ending on 

14 or after the last day of the payment period 

15 (as defined in section 1382(d)) for the tax16 able year of the organization or, if earlier, 

17 for the taxable year of each patron ending 

18 on or after the date on which the patron 

19 receives notice from the cooperative of the 

20 apportionment. 

21 ‘‘(C) SPECIAL RULES FOR DECREASE IN

22 CREDITS FOR TAXABLE YEAR.—If the amount 

23 of the credit of a cooperative organization de24 termined under subsection (a) for a taxable 

25 year is less than the amount of such credit 


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1 shown on the return of the cooperative organi2 zation for such year, an amount equal to the 

3 excess of— 

4 ‘‘(i) such reduction, over 

5 ‘‘(ii) the amount not apportioned to 

6 such patrons under subparagraph (A) for 

7 the taxable year, 

8 shall be treated as an increase in tax imposed 

9 by this chapter on the organization. Such in10 crease shall not be treated as tax imposed by 

11 this chapter for purposes of determining the 

12 amount of any credit under this chapter. 

13 ‘‘(D) ELIGIBLE COOPERATIVE DEFINED.— 

14 For purposes of this section, the term ‘eligible 

15 cooperative’ means a cooperative organization 

16 described in section 1381(a) which is owned 

17 more than 50 percent by agricultural producers 

18 or by entities owned by agricultural producers. 

19 For this purpose an entity owned by an agricul20 tural producer is one that is more than 50 per21 cent owned by agricultural producers.’’. 

22 (b) CONFORMING AMENDMENTS.— 

23 (1) Section 38(b) is amended— 

24 (A) in paragraph (35), by striking ‘‘plus’’ 

25 at the end, 


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1 (B) in paragraph (36), by striking the pe2 riod at the end and inserting ‘‘, plus’’, and 

3 (C) by adding at the end the following new 

4 paragraph: 

5 ‘‘(37) the clean energy production credit deter6 mined under section 45S(a).’’. 

7 (2) The table of sections for subpart D of part 

8 IV of subchapter A of chapter 1 is amended by add9 ing at the end the following new item: 

‘‘Sec. 45S. Clean energy production credit.’’. 

10 (c) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to facilities placed in service after 

12 December 31, 2018. 

13 SEC. 102. CLEAN ENERGY INVESTMENT CREDIT. 

14 (a) BUSINESS CREDIT.— 

15 (1) IN GENERAL.—Subpart E of part IV of 

16 subchapter A of chapter 1 is amended by inserting 

17 after section 48D the following new section: 

18 ‘‘SEC. 48E. CLEAN ENERGY INVESTMENT CREDIT. 

19 ‘‘(a) INVESTMENT CREDIT FOR QUALIFIED PROP20 ERTY.— 

21 ‘‘(1) IN GENERAL.—For purposes of section 46, 

22 the clean energy investment credit for any taxable 

23 year is an amount equal to the sum of— 


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1 ‘‘(A) the clean energy percentage of the 

2 qualified investment for such taxable year with 

3 respect to any qualified facility, plus 

4 ‘‘(B) 30 percent of the qualified invest5 ment for such taxable year with respect to— 

6 ‘‘(i) qualified carbon capture and se7 questration equipment, and 

8 ‘‘(ii) energy storage property. 

9 ‘‘(2) CLEAN ENERGY PERCENTAGE.— 

10 ‘‘(A) IN GENERAL.— 

11 ‘‘(i) MAXIMUM PERCENTAGE.—Except 

12 as provided in clause (ii), the clean energy 

13 percentage is 30 percent. 

14 ‘‘(ii) REDUCTION OF PERCENTAGE

15 BASED ON GREENHOUSE GAS EMISSIONS

16 RATE.—The clean energy percentage shall 

17 be reduced (but not below zero) by an 

18 amount which bears the same ratio to 30 

19 percent as the anticipated greenhouse gas 

20 emissions rate for the qualified facility 

21 bears to 325 grams of CO2e per KWh. 

22 ‘‘(B) ROUNDING.—If any amount deter23 mined under subparagraph (A)(ii) is not a mul24 tiple of 1 percent, such amount shall be round25 ed to the nearest multiple of 1 percent. 


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1 ‘‘(3) COORDINATION WITH REHABILITATION

2 CREDIT.—The clean energy percentage shall not 

3 apply to that portion of the basis of any property 

4 which is attributable to qualified rehabilitation ex5 penditures (as defined in section 47(c)(2)). 

6 ‘‘(b) QUALIFIED INVESTMENT WITH RESPECT TO

7 ANY QUALIFIED FACILITY.— 

8 ‘‘(1) IN GENERAL.—For purposes of subsection 

9 (a)(1)(A), the qualified investment with respect to 

10 any qualified facility for any taxable year is the 

11 basis of any qualified property placed in service by 

12 the taxpayer during such taxable year which is part 

13 of a qualified facility. 

14 ‘‘(2) QUALIFIED PROPERTY.—The term ‘quali15 fied property’ means property— 

16 ‘‘(A) which is— 

17 ‘‘(i) tangible personal property, or 

18 ‘‘(ii) other tangible property (not in19 cluding a building or its structural compo20 nents), but only if such property is used as 

21 an integral part of the qualified facility, 

22 ‘‘(B) with respect to which depreciation (or 

23 amortization in lieu of depreciation) is allow24 able, 


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1 ‘‘(C) which is constructed, reconstructed, 

2 erected, or acquired by the taxpayer, and 

3 ‘‘(D) the original use of which commences 

4 with the taxpayer. 

5 ‘‘(3) QUALIFIED FACILITY.—The term ‘quali6 fied facility’ has the same meaning given such term 

7 under section 45S(e)(3) (without regard to subpara8 graphs (B) and (D) thereof). Such term shall not in9 clude any facility for which a renewable electricity 

10 production credit under section 45 or an energy 

11 credit determined under section 48 is allowed under 

12 section 38 for the taxable year or any prior taxable 

13 year. 

14 ‘‘(c) QUALIFIED INVESTMENT WITH RESPECT TO

15 QUALIFIED CARBON CAPTURE AND SEQUESTRATION

16 EQUIPMENT.— 

17 ‘‘(1) IN GENERAL.—For purposes of subsection 

18 (a)(1)(B)(i), the qualified investment with respect to 

19 qualified carbon capture and sequestration equip20 ment for any taxable year is the basis of any quali21 fied carbon capture and sequestration equipment 

22 placed in service by the taxpayer during such taxable 

23 year. 

24 ‘‘(2) QUALIFIED CARBON CAPTURE AND SE25 QUESTRATION EQUIPMENT.—The term ‘qualified 


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1 carbon capture and sequestration equipment’ means 

2 property— 

3 ‘‘(A) installed at a facility placed in service 

4 before January 1, 2019, which produces elec5 tricity, 

6 ‘‘(B) which results in at least a 50 percent 

7 reduction in the carbon dioxide emissions rate 

8 at the facility, as compared to such rate before 

9 installation of such equipment, through the cap10 ture and disposal of qualified carbon dioxide (as 

11 defined in paragraph (3)(A)), 

12 ‘‘(C) with respect to which depreciation is 

13 allowable, 

14 ‘‘(D) which is constructed, reconstructed, 

15 erected, or acquired by the taxpayer, and 

16 ‘‘(E) the original use of which commences 

17 with the taxpayer. 

18 ‘‘(3) QUALIFIED CARBON DIOXIDE.— 

19 ‘‘(A) IN GENERAL.—The term ‘qualified 

20 carbon dioxide’ means carbon dioxide captured 

21 from an industrial source which— 

22 ‘‘(i) would otherwise be released into 

23 the atmosphere as industrial emission of 

24 greenhouse gas, 


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1 ‘‘(ii) is measured at the source of cap2 ture and verified at the point of disposal or 

3 injection, 

4 ‘‘(iii) is disposed of by the taxpayer in 

5 secure geological storage, and 

6 ‘‘(iv) is captured and disposed of with7 in the United States (within the meaning 

8 of section 638(1)) or a possession of the 

9 United States (within the meaning of sec10 tion 638(2)). 

11 ‘‘(B) SECURE GEOLOGICAL STORAGE.— 

12 The term ‘secure geological storage’ has the 

13 same meaning given to such term under section 

14 45Q(d)(2). 

15 ‘‘(d) QUALIFIED INVESTMENT WITH RESPECT TO

16 ENERGY STORAGE PROPERTY.— 

17 ‘‘(1) IN GENERAL.—For purposes of subsection 

18 (a)(1)(B)(ii), the qualified investment with respect 

19 to energy storage property for any taxable year is 

20 the basis of any energy storage property placed in 

21 service by the taxpayer during such taxable year. 

22 ‘‘(2) ENERGY STORAGE PROPERTY.—The term 

23 ‘energy storage property’ means property— 


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1 ‘‘(A) which receives, stores, and delivers 

2 electricity or energy for conversion to electricity, 

3 provided that such electricity is— 

4 ‘‘(i) sold by the taxpayer to an unre5 lated person, or 

6 ‘‘(ii) in the case of a facility which is 

7 equipped with a metering device which is 

8 owned and operated by an unrelated per9 son, sold or consumed by the taxpayer, 

10 ‘‘(B) with respect to which depreciation is 

11 allowable, 

12 ‘‘(C) which is constructed, reconstructed, 

13 erected, or acquired by the taxpayer, 

14 ‘‘(D) the original use of which commences 

15 with the taxpayer, and 

16 ‘‘(E) which is placed in service after De17 cember 31, 2018. 

18 ‘‘(e) GREENHOUSE GAS EMISSIONS RATE.— 

19 ‘‘(1) IN GENERAL.—For purposes of this sec20 tion, the term ‘greenhouse gas emissions rate’ has 

21 the same meaning given such term under subsection 

22 (b) of section 45S. 

23 ‘‘(2) ESTABLISHMENT OF SAFE HARBOR FOR

24 QUALIFIED PROPERTY.— 


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1 ‘‘(A) IN GENERAL.—The Secretary, in con2 sultation with the Administrator of the Envi3 ronmental Protection Agency, shall establish 

4 safe-harbor greenhouse gas emissions rates for 

5 types or categories of qualified property which 

6 are part of a qualified facility, which a taxpayer 

7 may elect to use for purposes of this section. 

8 ‘‘(B) ROUNDING.—In establishing the safe9 harbor greenhouse gas emissions rates for 

10 qualified property, the Secretary may round 

11 such rates to the nearest multiple of 32.5 

12 grams of CO2e per KWh (or, in the case of a 

13 greenhouse gas emissions rate which is less 

14 than 16.25 grams of CO2e per KWh, by round15 ing such rate to zero). 

16 ‘‘(f) CERTAIN PROGRESS EXPENDITURE RULES

17 MADE APPLICABLE.—Rules similar to the rules of sub18 sections (c)(4) and (d) of section 46 (as in effect on the 

19 day before the date of the enactment of the Revenue Rec20 onciliation Act of 1990) shall apply for purposes of sub21 section (a). 

22 ‘‘(g) CREDIT PHASE-OUT.— 

23 ‘‘(1) IN GENERAL.—If the Secretary, in con24 sultation with the Secretary of Energy and the Ad25 ministrator of the Environmental Protection Agency, 


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1 determines that the annual greenhouse gas emis2 sions from electrical production in the United States 

3 are equal to or less than 65 percent of the annual 

4 greenhouse gas emissions from electrical production 

5 in the United States for calendar year 2017, the 

6 amount of the clean energy investment credit under 

7 subsection (a) for any qualified facility, qualified 

8 carbon capture and sequestration equipment, or en9 ergy storage property placed in service during a cal10 endar year described in paragraph (2) shall be equal 

11 to the product of— 

12 ‘‘(A) the amount of the credit determined 

13 under subsection (a) without regard to this sub14 section, multiplied by 

15 ‘‘(B) the phase-out percentage under para16 graph (2). 

17 ‘‘(2) PHASE-OUT PERCENTAGE.—The phase-out 

18 percentage under this paragraph is equal to— 

19 ‘‘(A) for a facility or property placed in 

20 service during the first calendar year following 

21 the calendar year in which the determination 

22 described in paragraph (1) is made, 75 percent, 

23 ‘‘(B) for a facility or property placed in 

24 service during the second calendar year fol25 lowing such determination year, 50 percent, 


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1 ‘‘(C) for a facility or property placed in 

2 service during the third calendar year following 

3 such determination year, 25 percent, and 

4 ‘‘(D) for a facility or property placed in 

5 service during any calendar year subsequent to 

6 the year described in subparagraph (C), 0 per7 cent. 

8 ‘‘(h) DEFINITIONS.—In this section: 

9 ‘‘(1) CO2e PER KWh.—The term ‘CO2e per 

10 KWh’ has the same meaning given such term under 

11 section 45S(e)(1). 

12 ‘‘(2) GREENHOUSE GAS.—The term ‘greenhouse 

13 gas’ has the same meaning given such term under 

14 section 45S(e)(2). 

15 ‘‘(i) RECAPTURE OF CREDIT.—For purposes of sec16 tion 50, if the Administrator of the Environmental Protec17 tion Agency determines that— 

18 ‘‘(1) the greenhouse gas emissions rate for a 

19 qualified facility is significantly higher than the an20 ticipated greenhouse gas emissions rate claimed by 

21 the taxpayer for purposes of the clean energy invest22 ment credit under this section, or 

23 ‘‘(2) with respect to any qualified carbon cap24 ture and sequestration equipment installed in a facil25 ity, the carbon dioxide emissions from such facility 


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1 cease to be captured or disposed of in a manner con2 sistent with the requirements of subsection (c), 

3 the facility or equipment shall cease to be investment cred4 it property in the taxable year in which the determination 

5 is made. 

6 ‘‘(j) FINAL GUIDANCE.—Not later than January 1, 

7 2018, the Secretary, in consultation with the Adminis8 trator of the Environmental Protection Agency, shall issue 

9 final guidance regarding implementation of this section, 

10 including calculation of greenhouse gas emission rates for 

11 qualified facilities and determination of clean energy in12 vestment credits under this section.’’. 

13 (2) CONFORMING AMENDMENTS.— 

14 (A) Section 46 is amended by inserting a 

15 comma at the end of paragraph (4), by striking 

16 ‘‘and’’ at the end of paragraph (5), by striking 

17 the period at the end of paragraph (6) and in18 serting ‘‘, and’’, and by adding at the end the 

19 following new paragraph: 

20 ‘‘(7) the clean energy investment credit.’’. 

21 (B) Section 49(a)(1)(C) is amended by 

22 striking ‘‘and’’ at the end of clause (v), by 

23 striking the period at the end of clause (vi) and 

24 inserting a comma, and by adding at the end 

25 the following new clauses: 


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1 ‘‘(vii) the basis of any qualified prop2 erty which is part of a qualified facility 

3 under section 48E, 

4 ‘‘(viii) the basis of any qualified car5 bon capture and sequestration equipment 

6 under section 48E, and 

7 ‘‘(ix) the basis of any energy storage 

8 property under section 48E.’’. 

9 (C) Section 50(a)(2)(E) is amended by in10 serting ‘‘or 48E(e)’’ after ‘‘section 48(b)’’. 

11 (D) The table of sections for subpart E of 

12 part IV of subchapter A of chapter 1 is amend13 ed by inserting after the item relating to section 

14 48D the following new item: 

‘‘48E. Clean energy investment credit.’’. 

15 (3) EFFECTIVE DATE.—The amendments made 

16 by this subsection shall apply to property placed in 

17 service after December 31, 2018, under rules similar 

18 to the rules of section 48(m) of the Internal Revenue 

19 Code of 1986 (as in effect on the day before the 

20 date of the enactment of the Revenue Reconciliation 

21 Act of 1990). 

22 (b) INDIVIDUAL CREDIT.— 

23 (1) IN GENERAL.—Section 25D is amended to 

24 read as follows: 


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1 ‘‘SEC. 25D. CLEAN RESIDENTIAL ENERGY CREDIT. 

2 ‘‘(a) ALLOWANCE OF CREDIT.— 

3 ‘‘(1) IN GENERAL.—In the case of an indi4 vidual, there shall be allowed as a credit against the 

5 tax imposed by this chapter for the taxable year an 

6 amount equal to the sum of— 

7 ‘‘(A) the clean energy percentage of the ex8 penditures made by the taxpayer for qualified 

9 property which is— 

10 ‘‘(i) for use in a dwelling unit which 

11 is located in the United States and used as 

12 a residence by the taxpayer, and 

13 ‘‘(ii) placed in service during such tax14 able year, plus 

15 ‘‘(B) 30 percent of the expenditures made 

16 by the taxpayer for energy storage property 

17 which is— 

18 ‘‘(i) for use in a dwelling unit which 

19 is located in the United States and used as 

20 a residence by the taxpayer, and 

21 ‘‘(ii) placed in service during such tax22 able year. 

23 ‘‘(2) CLEAN ENERGY PERCENTAGE.— 

24 ‘‘(A) IN GENERAL.— 


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1 ‘‘(i) MAXIMUM PERCENTAGE.—Except 

2 as provided in clause (ii), the clean energy 

3 percentage is 30 percent. 

4 ‘‘(ii) REDUCTION OF PERCENTAGE

5 BASED ON GREENHOUSE GAS EMISSIONS

6 RATE.—The clean energy percentage shall 

7 be reduced (but not below zero) by an 

8 amount which bears the same ratio to 30 

9 percent as the anticipated greenhouse gas 

10 emissions rate for the qualified property 

11 bears to 325 grams of CO2e per KWh. 

12 ‘‘(B) ROUNDING.—If any amount deter13 mined under subparagraph (A)(ii) is not a mul14 tiple of 1 percent, such amount shall be round15 ed to the nearest multiple of 1 percent. 

16 ‘‘(C) DEFINITIONS.—For purposes of this 

17 section, the terms ‘greenhouse gas emissions 

18 rate’ and ‘CO2e per KWh’ have the same mean19 ings given such terms under subsections (b) and 

20 (e)(1) of section 45S, respectively. 

21 ‘‘(3) ESTABLISHMENT OF SAFE HARBOR FOR

22 QUALIFIED PROPERTY.— 

23 ‘‘(A) IN GENERAL.—The Secretary, in con24 sultation with the Administrator of the Envi25 ronmental Protection Agency, shall establish 


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1 safe-harbor greenhouse gas emissions rates for 

2 types or categories of qualified property which 

3 are for use in a dwelling unit, which a taxpayer 

4 may elect to use for purposes of this section. 

5 ‘‘(B) ROUNDING.—In establishing the safe6 harbor greenhouse gas emissions rates for 

7 qualified property, the Secretary may round 

8 such rates to the nearest multiple of 32.5 

9 grams of CO2e per KWh (or, in the case of a 

10 greenhouse gas emissions rate which is less 

11 than 16.25 grams of CO2e per KWh, by round12 ing such rate to zero). 

13 ‘‘(b) QUALIFIED PROPERTY.—The term ‘qualified 

14 property’ means property— 

15 ‘‘(1) which is tangible personal property, 

16 ‘‘(2) which is used for the generation of elec17 tricity, 

18 ‘‘(3) which is constructed, reconstructed, erect19 ed, or acquired by the taxpayer, 

20 ‘‘(4) the original use of which commences with 

21 the taxpayer, and 

22 ‘‘(5) which is originally placed in service after 

23 December 31, 2018. 

24 ‘‘(c) ENERGY STORAGE PROPERTY.—The term ‘en25 ergy storage property’ means property which— 


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1 ‘‘(1) receives, stores, and delivers electricity or 

2 energy for conversion to electricity which is con3 sumed by the taxpayer, and 

4 ‘‘(2) is equipped with a metering device which 

5 is owned and operated by an unrelated person. 

6 ‘‘(d) CARRYFORWARD OF UNUSED CREDIT.—If the 

7 credit allowable under subsection (a) exceeds the limita8 tion imposed by section 26(a) for such taxable year re9 duced by the sum of the credits allowable under this sub10 part (other than this section), such excess shall be carried 

11 to the succeeding taxable year and added to the credit al12 lowable under subsection (a) for such succeeding taxable 

13 year. 

14 ‘‘(e) CREDIT PHASE-OUT.— 

15 ‘‘(1) IN GENERAL.—If the Secretary determines 

16 that the annual greenhouse gas emissions from elec17 trical production in the United States are equal to 

18 or less than the percentage specified in section 

19 48E(g), the amount of the credit allowable under 

20 subsection (a) for any qualified property or energy 

21 storage property placed in service during a calendar 

22 year described in paragraph (2) shall be equal to the 

23 product of— 


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1 ‘‘(A) the amount of the credit determined 

2 under subsection (a) without regard to this sub3 section, multiplied by 

4 ‘‘(B) the phase-out percentage under para5 graph (2). 

6 ‘‘(2) PHASE-OUT PERCENTAGE.—The phase-out 

7 percentage under this paragraph is equal to— 

8 ‘‘(A) for property placed in service during 

9 the first calendar year following the calendar 

10 year in which the determination described in 

11 paragraph (1) is made, 75 percent, 

12 ‘‘(B) for property placed in service during 

13 the second calendar year following such deter14 mination year, 50 percent, 

15 ‘‘(C) for property placed in service during 

16 the third calendar year following such deter17 mination year, 25 percent, and 

18 ‘‘(D) for property placed in service during 

19 any calendar year subsequent to the year de20 scribed in subparagraph (C), 0 percent. 

21 ‘‘(f) SPECIAL RULES.—For purposes of this section: 

22 ‘‘(1) LABOR COSTS.—Expenditures for labor 

23 costs properly allocable to the onsite preparation, as24 sembly, or original installation of the qualified prop25 erty or energy storage property and for piping or 


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1 wiring to interconnect such property to the dwelling 

2 unit shall be taken into account for purposes of this 

3 section. 

4 ‘‘(2) TENANT-STOCKHOLDER IN COOPERATIVE

5 HOUSING CORPORATION.—In the case of an indi6 vidual who is a tenant-stockholder (as defined in sec7 tion 216) in a cooperative housing corporation (as 

8 defined in such section), such individual shall be 

9 treated as having made his tenant-stockholder’s pro10 portionate share (as defined in section 216(b)(3)) of 

11 any expenditures of such corporation. 

12 ‘‘(3) CONDOMINIUMS.— 

13 ‘‘(A) IN GENERAL.—In the case of an indi14 vidual who is a member of a condominium man15 agement association with respect to a condo16 minium which the individual owns, such indi17 vidual shall be treated as having made the indi18 vidual’s proportionate share of any expenditures 

19 of such association. 

20 ‘‘(B) CONDOMINIUM MANAGEMENT ASSO21 CIATION.—For purposes of this paragraph, the 

22 term ‘condominium management association’ 

23 means an organization which meets the require24 ments of paragraph (1) of section 528(c) (other 

25 than subparagraph (E) thereof) with respect to 


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1 a condominium project substantially all of the 

2 units of which are used as residences. 

3 ‘‘(4) ALLOCATION IN CERTAIN CASES.—If less 

4 than 80 percent of the use of a property is for non5 business purposes, only that portion of the expendi6 tures for such property which is properly allocable to 

7 use for nonbusiness purposes shall be taken into ac8 count. 

9 ‘‘(g) BASIS ADJUSTMENT.—For purposes of this sub10 title, if a credit is allowed under this section for any ex11 penditures with respect to any property, the increase in 

12 the basis of such property which would (but for this sub13 section) result from such expenditures shall be reduced by 

14 the amount of the credit so allowed. 

15 ‘‘(h) FINAL GUIDANCE.—Not later than January 1, 

16 2018, the Secretary, in consultation with the Adminis17 trator of the Environmental Protection Agency, shall issue 

18 final guidance regarding implementation of this section, 

19 including calculation of greenhouse gas emission rates for 

20 qualified property and determination of residential clean 

21 energy property credits under this section.’’. 

22 (2) CONFORMING AMENDMENTS.— 

23 (A) Paragraph (1) of section 45(d) is 

24 amended by striking ‘‘Such term’’ and all that 

25 follows through the period and inserting the folVerDate Sep 11 2014 21:58 May 12, 2017 Jkt 069200 PO 00000 Frm 00034 Fmt 6652 Sfmt 6201 E:\BILLS\S1068.IS S1068

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1 lowing: ‘‘Such term shall not include any facil2 ity with respect to which any expenditures for 

3 qualified property (as defined in subsection (b) 

4 of section 25D) which uses wind to produce 

5 electricity is taken into account in determining 

6 the credit under such section.’’. 

7 (B) Paragraph (34) of section 1016(a) is 

8 amended by striking ‘‘section 25D(f)’’ and in9 serting ‘‘section 25D(h)’’. 

10 (C) The item relating to section 25D in 

11 the table of contents for subpart A of part IV 

12 of subchapter A of chapter 1 is amended to 

13 read as follows: 

‘‘Sec. 25D. Clean residential energy credit.’’. 

14 (3) EFFECTIVE DATE.—The amendments made 

15 by this section shall apply to property placed in serv16 ice after December 31, 2018. 

17 SEC. 103. EXTENSIONS AND MODIFICATIONS OF VARIOUS 

18 ENERGY PROVISIONS. 

19 (a) RESIDENTIAL ENERGY EFFICIENT PROPERTY.— 

20 (1) IN GENERAL.—Subsection (h) of section 

21 25D is amended by striking ‘‘December 31, 2016’’ 

22 and inserting ‘‘December 31, 2018’’. 

23 (2) ELIMINATION OF PHASEOUT.—Section 25D, 

24 as amended by paragraph (1), is amended— 


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1 (A) in paragraphs (1) and (2) of sub2 section (a), by striking ‘‘the applicable percent3 age’’ each place it appears and inserting ‘‘30 

4 percent’’, 

5 (B) in subsection (h), by striking ‘‘(Decem6 ber 31, 2021, in the case of any qualified solar 

7 electric property expenditures and qualified 

8 solar water heating property expenditures)’’, 

9 (C) by striking subsection (g), and 

10 (D) by redesignating subsection (h) as sub11 section (g). 

12 (3) EFFECTIVE DATE.—The amendments made 

13 by this subsection shall apply to property placed in 

14 service after December 31, 2016. 

15 (b) ELECTRICITY PRODUCED FROM CERTAIN RE16 NEWABLE RESOURCES.— 

17 (1) IN GENERAL.—The following provisions of 

18 section 45(d) are each amended by striking ‘‘Janu19 ary 1, 2017’’ each place it appears and inserting 

20 ‘‘January 1, 2019’’: 

21 (A) Paragraph (2)(A). 

22 (B) Paragraph (3)(A). 

23 (C) Paragraph (4)(B). 

24 (D) Paragraph (6). 

25 (E) Paragraph (7). 


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1 (F) Paragraph (9). 

2 (G) Paragraph (11)(B). 

3 (2) TERMINATION OF HALF-CREDIT RATE.— 

4 Subparagraph (A) of section 45(b)(4) is amended by 

5 inserting ‘‘and before 2017’’ after ‘‘after 2003’’. 

6 (3) EFFECTIVE DATE.—The amendments made 

7 by this subsection shall take effect on January 1, 

8 2017. 

9 (c) CREDIT FOR PRODUCTION FROM ADVANCED NU10 CLEAR POWER FACILITIES.—Section 45J(d)(1)(B) is 

11 amended by striking ‘‘2021’’ and inserting ‘‘2019’’. 

12 (d) REPEAL OF ENERGY EFFICIENT APPLIANCE

13 CREDIT.— 

14 (1) IN GENERAL.—Subpart D of part IV of 

15 subchapter A of chapter 1 of subtitle A is amended 

16 by striking section 45M. 

17 (2) CONFORMING AMENDMENTS.— 

18 (A) Section 38(b) is amended by striking 

19 paragraph (24). 

20 (B) The table of sections for subpart D of 

21 part IV of subchapter A of chapter 1 of subtitle 

22 A is amended by striking the item relating to 

23 section 45M. 


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1 (3) EFFECTIVE DATE.—The amendments made 

2 by this subsection shall take effect on the date of the 

3 enactment of this Act. 

4 (e) CREDIT FOR CARBON DIOXIDE SEQUESTRA5 TION.—Section 45Q(c) is amended— 

6 (1) in paragraph (2), by striking ‘‘and’’ at the 

7 end, 

8 (2) in paragraph (3), by striking the period at 

9 the end and inserting ‘‘, and’’, and 

10 (3) by adding at the end the following new 

11 paragraph: 

12 ‘‘(4) which is placed in service before January 

13 1, 2019.’’. 

14 (f) ELIMINATION OF PHASEOUT OF CREDITS FOR

15 WIND FACILITIES AND SOLAR ENERGY PROPERTY.— 

16 (1) WIND FACILITIES.— 

17 (A) IN GENERAL.—Paragraph (1) of sec18 tion 45(d) is amended by striking ‘‘January 1, 

19 2020’’ and inserting ‘‘January 1, 2019’’. 

20 (B) PHASEOUT.—Subsection (b) of section 

21 45 is amended by striking paragraph (5). 

22 (C) QUALIFIED INVESTMENT CREDIT FA23 CILITY.— 

24 (i) IN GENERAL.—Section 

25 48(a)(5)(C)(ii) is amended by striking 


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1 ‘‘January 1, 2017’’ and all that follows 

2 through ‘‘section 45(d))’’ and inserting 

3 ‘‘January 1, 2019’’. 

4 (ii) PHASEOUT.—Paragraph (5) of 

5 section 48(a) is amended by striking sub6 paragraph (E). 

7 (D) EFFECTIVE DATE.—The amendments 

8 made by this paragraph shall take effect on 

9 January 1, 2017. 

10 (2) SOLAR ENERGY PROPERTY.— 

11 (A) IN GENERAL.—Subclause (II) of sec12 tion 48(a)(2)(A)(i) is amended by striking 

13 ‘‘property the construction of which begins be14 fore January 1, 2022’’ and inserting ‘‘periods 

15 ending before January 1, 2019’’. 

16 (B) PHASEOUT.—Subsection (a) of section 

17 48 is amended by striking paragraph (6). 

18 (C) CONFORMING AMENDMENT.—Subpara19 graph (A) of section 48(a)(2) is amended by 

20 striking ‘‘Except as provided in paragraph (6), 

21 the energy percentage’’ and inserting ‘‘The en22 ergy percentage’’. 

23 (D) EFFECTIVE DATE.—The amendments 

24 made by this paragraph shall take effect on 

25 January 1, 2017. 


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1 (g) ENERGY CREDIT.— 

2 (1) SOLAR ENERGY PROPERTY.—Section 

3 48(a)(3)(A) is amended— 

4 (A) in clause (i), by inserting ‘‘but only 

5 with respect to periods ending before January 

6 1, 2019’’ after ‘‘swimming pool,’’, and 

7 (B) in clause (ii), by striking ‘‘January 1, 

8 2017’’ and inserting ‘‘January 1, 2019’’. 

9 (2) GEOTHERMAL ENERGY PROPERTY.—Section 

10 48(a)(3)(A)(iii) is amended by inserting ‘‘with re11 spect to periods ending before January 1, 2019, 

12 and’’ after ‘‘but only’’. 

13 (3) THERMAL ENERGY PROPERTY.—Section 

14 48(a)(3)(A)(vii) is amended by striking ‘‘January 1, 

15 2017’’ and inserting ‘‘January 1, 2019’’. 

16 (4) QUALIFIED FUEL CELL PROPERTY.—Sec17 tion 48(c)(1)(D) is amended by striking ‘‘December 

18 31, 2016’’ and inserting ‘‘December 31, 2018’’. 

19 (5) QUALIFIED MICROTURBINE PROPERTY.— 

20 Section 48(c)(2)(D) is amended by striking ‘‘Decem21 ber 31, 2016’’ and inserting ‘‘December 31, 2018’’. 

22 (6) COMBINED HEAT AND POWER SYSTEM

23 PROPERTY.—Section 48(c)(3)(A)(iv) is amended by 

24 striking ‘‘January 1, 2017’’ and inserting ‘‘January 

25 1, 2019’’. 


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1 (7) QUALIFIED SMALL WIND ENERGY PROP2 ERTY.—Section 48(c)(4)(C) is amended by striking 

3 ‘‘December 31, 2016’’ and inserting ‘‘December 31, 

4 2018’’. 

5 (h) QUALIFYING ADVANCED ENERGY PROJECT

6 CREDIT.— 

7 (1) IN GENERAL.—Section 48C is amended— 

8 (A) by redesignating subsection (e) as sub9 section (f), and 

10 (B) by inserting after subsection (d) the 

11 following new subsection: 

12 ‘‘(e) ADDITIONAL QUALIFYING ADVANCED ENERGY

13 PROGRAM.— 

14 ‘‘(1) ESTABLISHMENT.— 

15 ‘‘(A) IN GENERAL.—Not later than 180 

16 days after the date of enactment of this sub17 section, the Secretary, in consultation with the 

18 Secretary of Energy, shall establish an addi19 tional qualifying advanced energy project pro20 gram to consider and award certifications for 

21 qualified investments eligible for credits under 

22 this section to qualifying advanced energy 

23 project sponsors. 

24 ‘‘(B) LIMITATION.—The total amount of 

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1 gram described in subparagraph (A) shall not 

2 exceed $5,000,000,000. 

3 ‘‘(2) CERTIFICATION.— 

4 ‘‘(A) APPLICATION PERIOD.—Each appli5 cant for certification under this paragraph shall 

6 submit an application containing such informa7 tion as the Secretary may require during the 2- 

8 year period beginning on the date the Secretary 

9 establishes the program under paragraph (1). 

10 ‘‘(B) TIME TO MEET CRITERIA FOR CER11 TIFICATION.—Each applicant for certification 

12 shall have 1 year from the date of acceptance 

13 by the Secretary of the application during 

14 which to provide to the Secretary evidence that 

15 the requirements of the certification have been 

16 met. 

17 ‘‘(C) PERIOD OF ISSUANCE.—An applicant 

18 which receives a certification shall have 3 years 

19 from the date of issuance of the certification in 

20 order to place the project in service and if such 

21 project is not placed in service by that time pe22 riod, then the certification shall no longer be 

23 valid. 

24 ‘‘(3) SELECTION CRITERIA.—In determining 

25 which qualifying advanced energy projects to certify 


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1 under this section, the Secretary shall consider the 

2 same criteria described in subsection (d)(3). 

3 ‘‘(4) REVIEW AND REDISTRIBUTION.— 

4 ‘‘(A) REVIEW.—Not later than 4 years 

5 after the date of enactment of this subsection, 

6 the Secretary shall review the credits allocated 

7 pursuant to this subsection as of such date. 

8 ‘‘(B) REDISTRIBUTION.—The Secretary 

9 may reallocate credits awarded under this sec10 tion if the Secretary determines that— 

11 ‘‘(i) there is an insufficient quantity 

12 of qualifying applications for certification 

13 pending at the time of the review, or 

14 ‘‘(ii) any certification made pursuant 

15 to paragraph (2) has been revoked pursu16 ant to paragraph (2)(B) because the 

17 project subject to the certification has been 

18 delayed as a result of third-party opposi19 tion or litigation to the proposed project. 

20 ‘‘(C) REALLOCATION.—If the Secretary de21 termines that credits under this section are 

22 available for reallocation pursuant to the re23 quirements set forth in paragraph (2), the Sec24 retary is authorized to conduct an additional 

25 program for applications for certification. 


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1 ‘‘(5) DISCLOSURE OF ALLOCATIONS.—The Sec2 retary shall, upon making a certification under this 

3 subsection, publicly disclose the identity of the appli4 cant and the amount of the credit with respect to 

5 such applicant.’’. 

6 (2) EFFECTIVE DATE.—The amendments made 

7 by this subsection shall apply to periods after the 

8 date of the enactment of this Act, under rules simi9 lar to the rules of section 48(m) of the Internal Rev10 enue Code of 1986 (as in effect on the day before 

11 the date of the enactment of the Revenue Reconcili12 ation Act of 1990). 

13 TITLE II—CLEAN FUEL TAX 

14 CREDITS 

15 SEC. 201. CLEAN FUEL PRODUCTION CREDIT. 

16 (a) IN GENERAL.—Subpart D of part IV of sub17 chapter A of chapter 1, as amended by section 101, is 

18 amended by adding at the end the following new section: 

19 ‘‘SEC. 45T. CLEAN FUEL PRODUCTION CREDIT. 

20 ‘‘(a) AMOUNT OF CREDIT.— 

21 ‘‘(1) IN GENERAL.—For purposes of section 38, 

22 the clean fuel production credit for any taxable year 

23 is an amount equal to the product of— 

24 ‘‘(A) $1.00 per gallon with respect to any 

25 transportation fuel which is— 


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1 ‘‘(i) produced by the taxpayer at a 

2 qualified facility, and 

3 ‘‘(ii) sold or used by the taxpayer in 

4 a manner described in paragraph (2), and 

5 ‘‘(B) the emissions factor for such fuel (as 

6 determined under subsection (b)(2)). 

7 ‘‘(2) SALE OR USE.—For purposes of para8 graph (1)(A)(ii), the transportation fuel is sold or 

9 used in a manner described in this paragraph if such 

10 fuel is— 

11 ‘‘(A) sold by the taxpayer to an unrelated 

12 person— 

13 ‘‘(i) for use by such person in the pro14 duction of a fuel mixture that will be used 

15 as a transportation fuel, 

16 ‘‘(ii) for use by such person as a 

17 transportation fuel in a trade or business, 

18 or 

19 ‘‘(iii) who sells such fuel at retail to 

20 another person and places such fuel in the 

21 fuel tank of such other person, or 

22 ‘‘(B) used or sold by the taxpayer for any 

23 purpose described in subparagraph (A). 

24 ‘‘(3) ROUNDING.—If any amount determined 

25 under paragraph (1) is not a multiple of 0.1 cent, 


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1 such amount shall be rounded to the nearest mul2 tiple of 0.1 cent. 

3 ‘‘(b) EMISSIONS FACTORS.— 

4 ‘‘(1) EMISSIONS FACTOR.— 

5 ‘‘(A) IN GENERAL.—The emissions factor 

6 of a transportation fuel shall be an amount 

7 equal to the quotient of— 

8 ‘‘(i) an amount (not less than zero) 

9 equal to— 

10 ‘‘(I) 75, minus 

11 ‘‘(II) the emissions rate for such 

12 fuel, divided by 

13 ‘‘(ii) 75. 

14 ‘‘(B) ESTABLISHMENT OF SAFE HARBOR

15 EMISSIONS RATE.—The Secretary, in consulta16 tion with the Administrator of the Environ17 mental Protection Agency, shall establish the 

18 safe harbor emissions rate for similar types and 

19 categories of transportation fuels based on the 

20 amount of lifecycle greenhouse gas emissions 

21 (as described in section 211(o)(1)(H) of the 

22 Clean Air Act (42 U.S.C. 7545(o)(1)(H)), as in 

23 effect on the date of the enactment of this sec24 tion) for such fuels, expressed as kilograms of 


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1 CO2e per mmBTU, which a taxpayer may elect 

2 to use for purposes of this section. 

3 ‘‘(C) ROUNDING OF SAFE HARBOR EMIS4 SIONS RATE.—The Secretary may round the 

5 safe harbor emissions rates under subparagraph 

6 (B) to the nearest multiple of 7.50 kilograms of 

7 CO2e per mmBTU, except that, in the case of 

8 an emissions rate that is less than 3.75 kilo9 grams of CO2e per mmBTU, the Secretary may 

10 round such rate to zero. 

11 ‘‘(D) PROVISIONAL SAFE HARBOR EMIS12 SIONS RATE.— 

13 ‘‘(i) IN GENERAL.—In the case of any 

14 transportation fuel for which a safe harbor 

15 emissions rate has not been established by 

16 the Secretary, a taxpayer producing such 

17 fuel may file a petition with the Secretary 

18 for determination of the safe harbor emis19 sions rate with respect to such fuel. 

20 ‘‘(ii) ESTABLISHMENT OF PROVI21 SIONAL AND FINAL SAFE HARBOR EMIS22 SIONS RATE.—In the case of a transpor23 tation fuel for which a petition described in 

24 clause (i) has been filed, the Secretary, in 


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1 consultation with the Administrator of the 

2 Environmental Protection Agency, shall— 

3 ‘‘(I) not later than 12 months 

4 after the date on which the petition 

5 was filed, provide a provisional safe 

6 harbor emissions rate for such fuel 

7 which a taxpayer may use for pur8 poses of this section, and 

9 ‘‘(II) not later than 24 months 

10 after the date on which the petition 

11 was filed, establish the safe harbor 

12 emissions rate for such fuel. 

13 ‘‘(E) ROUNDING.—If any amount deter14 mined under subparagraph (A) is not a multiple 

15 of 0.1, such amount shall be rounded to the 

16 nearest multiple of 0.1. 

17 ‘‘(2) PUBLISHING SAFE HARBOR EMISSIONS

18 RATE.—The Secretary, in consultation with the Ad19 ministrator of the Environmental Protection Agency, 

20 shall publish a table that sets forth the safe harbor 

21 emissions rate (as established pursuant to paragraph 

22 (1)) for similar types and categories of transpor23 tation fuels. 

24 ‘‘(c) INFLATION ADJUSTMENT.— 


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1 ‘‘(1) IN GENERAL.—In the case of calendar 

2 years beginning after 2019, the $1.00 amount in 

3 subsection (a)(1)(A) shall be adjusted by multiplying 

4 such amount by the inflation adjustment factor for 

5 the calendar year in which the sale or use of the 

6 transportation fuel occurs. If any amount as in7 creased under the preceding sentence is not a mul8 tiple of 1 cent, such amount shall be rounded to the 

9 nearest multiple of 1 cent. 

10 ‘‘(2) INFLATION ADJUSTMENT FACTOR.—For 

11 purposes of paragraph (1), the inflation adjustment 

12 factor shall be the inflation adjustment factor deter13 mined and published by the Secretary pursuant to 

14 section 45S(c), determined by substituting ‘calendar 

15 year 2018’ for ‘calendar year 1992’ in paragraph (3) 

16 thereof. 

17 ‘‘(d) CREDIT PHASE-OUT.— 

18 ‘‘(1) IN GENERAL.—If the Secretary, in con19 sultation with the Secretary of Energy and the Ad20 ministrator of the Environmental Protection Agency, 

21 determines that the greenhouse gas emissions from 

22 transportation fuel produced and sold at retail annu23 ally in the United States are equal to or less than 

24 65 percent of the greenhouse gas emissions from 

25 transportation fuel produced and sold at retail in the 


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1 United States during calendar year 2017, the 

2 amount of the clean fuel production credit under 

3 this section for any qualified facility placed in serv4 ice during a calendar year described in paragraph 

5 (2) shall be equal to the product of— 

6 ‘‘(A) the amount of the credit determined 

7 under subsection (a) without regard to this sub8 section, multiplied by 

9 ‘‘(B) the phase-out percentage under para10 graph (2). 

11 ‘‘(2) PHASE-OUT PERCENTAGE.—The phase-out 

12 percentage under this paragraph is equal to— 

13 ‘‘(A) for a facility placed in service during 

14 the first calendar year following the calendar 

15 year in which the determination described in 

16 paragraph (1) is made, 75 percent, 

17 ‘‘(B) for a facility placed in service during 

18 the second calendar year following such deter19 mination year, 50 percent, 

20 ‘‘(C) for a facility placed in service during 

21 the third calendar year following such deter22 mination year, 25 percent, and 

23 ‘‘(D) for a facility placed in service during 

24 any calendar year subsequent to the year de25 scribed in subparagraph (C), 0 percent. 


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1 ‘‘(e) DEFINITIONS.—In this section: 

2 ‘‘(1) mmBTU.—The term ‘mmBTU’ means 

3 1,000,000 British thermal units. 

4 ‘‘(2) CO2e.—The term ‘CO2e’ means, with re5 spect to any greenhouse gas, the equivalent carbon 

6 dioxide. 

7 ‘‘(3) GREENHOUSE GAS.—The term ‘greenhouse 

8 gas’ has the same meaning given that term under 

9 section 211(o)(1)(G) of the Clean Air Act (42 

10 U.S.C. 7545(o)(1)(G)), as in effect on the date of 

11 the enactment of this section. 

12 ‘‘(4) QUALIFIED FACILITY.— 

13 ‘‘(A) IN GENERAL.—Subject to subpara14 graphs (B) and (C), the term ‘qualified facility’ 

15 means a facility used for the production of 

16 transportation fuels. 

17 ‘‘(B) 10-YEAR PRODUCTION CREDIT.—For 

18 purposes of this section, a facility shall only 

19 qualify as a qualified facility— 

20 ‘‘(i) in the case of a facility that is 

21 originally placed in service after December 

22 31, 2018, for the 10-year period beginning 

23 on the date such facility is placed in serv24 ice, or 


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1 ‘‘(ii) in the case of a facility that is 

2 originally placed in service before January 

3 1, 2019, for the 10-year period beginning 

4 on January 1, 2019. 

5 ‘‘(5) TRANSPORTATION FUEL.—The term 

6 ‘transportation fuel’ means a fuel which is suitable 

7 for use as a fuel in a highway vehicle or aircraft. 

8 ‘‘(f) FINAL GUIDANCE.—Not later than January 1, 

9 2018, the Secretary, in consultation with the Adminis10 trator of the Environmental Protection Agency, shall issue 

11 final guidance regarding implementation of this section, 

12 including calculation of emissions factors for transpor13 tation fuel, the table described in subsection (b)(2), and 

14 the determination of clean fuel production credits under 

15 this section. 

16 ‘‘(g) SPECIAL RULES.— 

17 ‘‘(1) ONLY REGISTERED PRODUCTION IN THE

18 UNITED STATES TAKEN INTO ACCOUNT.— 

19 ‘‘(A) IN GENERAL.—No clean fuel produc20 tion credit shall be determined under subsection 

21 (a) with respect to any transportation fuel un22 less— 

23 ‘‘(i) the taxpayer is registered as a 

24 producer of clean fuel under section 4101 

25 at the time of production, and 


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1 ‘‘(ii) such fuel is produced in the 

2 United States. 

3 ‘‘(B) UNITED STATES.—For purposes of 

4 this paragraph, the term ‘United States’ in5 cludes any possession of the United States. 

6 ‘‘(2) PRODUCTION ATTRIBUTABLE TO THE TAX7 PAYER.—In the case of a facility in which more than 

8 1 person has an ownership interest, except to the ex9 tent provided in regulations prescribed by the Sec10 retary, production from the facility shall be allocated 

11 among such persons in proportion to their respective 

12 ownership interests in the gross sales from such fa13 cility. 

14 ‘‘(3) RELATED PERSONS.—Persons shall be 

15 treated as related to each other if such persons 

16 would be treated as a single employer under the reg17 ulations prescribed under section 52(b). In the case 

18 of a corporation which is a member of an affiliated 

19 group of corporations filing a consolidated return, 

20 such corporation shall be treated as selling fuel to 

21 an unrelated person if such fuel is sold to such a 

22 person by another member of such group. 

23 ‘‘(4) PASS-THRU IN THE CASE OF ESTATES AND

24 TRUSTS.—Under regulations prescribed by the SecVerDate Sep 11 2014 21:58 May 12, 2017 Jkt 069200 PO 00000 Frm 00053 Fmt 6652 Sfmt 6201 E:\BILLS\S1068.IS S1068

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1 retary, rules similar to the rules of subsection (d) of 

2 section 52 shall apply. 

3 ‘‘(5) ALLOCATION OF CREDIT TO PATRONS OF

4 AGRICULTURAL COOPERATIVE.— 

5 ‘‘(A) ELECTION TO ALLOCATE.— 

6 ‘‘(i) IN GENERAL.—In the case of an 

7 eligible cooperative organization, any por8 tion of the credit determined under sub9 section (a) for the taxable year may, at the 

10 election of the organization, be apportioned 

11 among patrons of the organization on the 

12 basis of the amount of business done by 

13 the patrons during the taxable year. 

14 ‘‘(ii) FORM AND EFFECT OF ELEC15 TION.—An election under clause (i) for any 

16 taxable year shall be made on a timely 

17 filed return for such year. Such election, 

18 once made, shall be irrevocable for such 

19 taxable year. Such election shall not take 

20 effect unless the organization designates 

21 the apportionment as such in a written no22 tice mailed to its patrons during the pay23 ment period described in section 1382(d). 

24 ‘‘(B) TREATMENT OF ORGANIZATIONS AND

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1 tioned to any patrons under subparagraph 

2 (A)— 

3 ‘‘(i) shall not be included in the 

4 amount determined under subsection (a) 

5 with respect to the organization for the 

6 taxable year, and 

7 ‘‘(ii) shall be included in the amount 

8 determined under subsection (a) for the 

9 first taxable year of each patron ending on 

10 or after the last day of the payment period 

11 (as defined in section 1382(d)) for the tax12 able year of the organization or, if earlier, 

13 for the taxable year of each patron ending 

14 on or after the date on which the patron 

15 receives notice from the cooperative of the 

16 apportionment. 

17 ‘‘(C) SPECIAL RULES FOR DECREASE IN

18 CREDITS FOR TAXABLE YEAR.—If the amount 

19 of the credit of a cooperative organization de20 termined under subsection (a) for a taxable 

21 year is less than the amount of such credit 

22 shown on the return of the cooperative organi23 zation for such year, an amount equal to the 

24 excess of— 

25 ‘‘(i) such reduction, over 


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1 ‘‘(ii) the amount not apportioned to 

2 such patrons under subparagraph (A) for 

3 the taxable year, 

4 shall be treated as an increase in tax imposed 

5 by this chapter on the organization. Such in6 crease shall not be treated as tax imposed by 

7 this chapter for purposes of determining the 

8 amount of any credit under this chapter. 

9 ‘‘(D) ELIGIBLE COOPERATIVE DEFINED.— 

10 For purposes of this section the term ‘eligible 

11 cooperative’ means a cooperative organization 

12 described in section 1381(a) which is owned 

13 more than 50 percent by agricultural producers 

14 or by entities owned by agricultural producers. 

15 For this purpose an entity owned by an agricul16 tural producer is one that is more than 50 per17 cent owned by agricultural producers.’’. 

18 (b) CONFORMING AMENDMENTS.— 

19 (1) Section 38(b), as amended by section 101, 

20 is amended— 

21 (A) in paragraph (36), by striking ‘‘plus’’ 

22 at the end, 

23 (B) in paragraph (37), by striking the pe24 riod at the end and inserting ‘‘, plus’’, and 


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1 (C) by adding at the end the following new 

2 paragraph: 

3 ‘‘(38) the clean fuel production credit deter4 mined under section 45T(a).’’. 

5 (2) The table of sections for subpart D of part 

6 IV of subchapter A of chapter 1, as amended by sec7 tion 101, is amended by adding at the end the fol8 lowing new item: 

‘‘Sec. 45T. Clean fuel production credit.’’. 

9 (3) Section 4101(a)(1) is amended by inserting 

10 ‘‘every person producing a fuel eligible for the clean 

11 fuel production credit (pursuant to section 45T),’’ 

12 after ‘‘section 6426(b)(4)(A)),’’. 

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

14 this section shall apply to transportation fuel produced 

15 after December 31, 2018. 

16 SEC. 202. TEMPORARY EXTENSION OF EXISTING FUEL AND 

17 TRANSPORTATION INCENTIVES. 

18 (a) ALTERNATIVE MOTOR VEHICLE CREDIT FOR

19 FUEL CELL MOTOR VEHICLES.— 

20 (1) IN GENERAL.—Paragraph (1) of section 

21 30B(k) is amended by striking ‘‘December 31, 

22 2016’’ and inserting ‘‘December 31, 2026’’. 

23 (2) EFFECTIVE DATE.—The amendments made 

24 by this subsection shall apply to property purchased 

25 after December 31, 2016. 


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1 (b) ALTERNATIVE FUEL VEHICLE REFUELING

2 PROPERTY CREDIT.— 

3 (1) IN GENERAL.—Paragraph (1) of section 

4 30C(g) is amended by striking ‘‘December 31, 

5 2016’’ and inserting ‘‘December 31, 2018’’. 

6 (2) EFFECTIVE DATE.—The amendments made 

7 by this subsection shall apply to property placed in 

8 service after December 31, 2016. 

9 (c) NEW QUALIFIED PLUG-IN ELECTRIC DRIVE

10 MOTOR VEHICLES.— 

11 (1) 2- AND 3-WHEELED PLUG-IN ELECTRIC VE12 HICLES.— 

13 (A) IN GENERAL.—Clause (ii) of section 

14 30D(g)(3)(E) is amended to read as follows: 

15 ‘‘(ii) after December 31, 2016, and 

16 before January 1, 2019.’’. 

17 (B) EFFECTIVE DATE.—The amendments 

18 made by this paragraph shall apply to vehicles 

19 acquired after December 31, 2016. 

20 (2) ELIMINATION ON LIMITATION ON NUMBER

21 OF VEHICLES ELIGIBLE FOR CREDIT.— 

22 (A) IN GENERAL.—Section 30D, as 

23 amended by paragraph (1), is amended— 

24 (i) by striking subsection (e), and 


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1 (ii) by redesignating subsections (f) 

2 and (g) as subsections (e) and (f), respec3 tively. 

4 (B) CONFORMING AMENDMENT.—Para5 graph (37) of section 1016(a) is amended by 

6 striking ‘‘section 30D(f)(1)’’ and inserting ‘‘sec7 tion 30D(e)(1)’’. 

8 (C) EFFECTIVE DATE.—The amendments 

9 made by this paragraph shall apply to vehicles 

10 sold after the date of the enactment of this Act. 

11 (d) SECOND GENERATION BIOFUEL PRODUCER

12 CREDIT.— 

13 (1) IN GENERAL.—Section 40(b)(6) is amend14 ed— 

15 (A) in subparagraph (E)(i)— 

16 (i) in subclause (I), by striking ‘‘and’’ 

17 at the end, 

18 (ii) in subclause (II), by striking the 

19 period at the end and inserting ‘‘, and’’, 

20 and 

21 (iii) by inserting at the end the fol22 lowing new subclause: 

23 ‘‘(III) qualifies as a transpor24 tation fuel (as defined in section 

25 45T(e)(5)).’’, and 


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1 (B) in subparagraph (J)(i), by striking 

2 ‘‘2017’’ and inserting ‘‘2019’’. 

3 (2) EFFECTIVE DATE.—The amendments made 

4 by this subsection shall apply to qualified second 

5 generation biofuel production after December 31, 

6 2016. 

7 (e) BIODIESEL AND RENEWABLE DIESEL USED AS

8 FUEL.— 

9 (1) IN GENERAL.—Section 40A is amended— 

10 (A) in subsection (f)(3)(B), by striking ‘‘or 

11 D396’’, and 

12 (B) in subsection (g), by striking ‘‘2016’’ 

13 and inserting ‘‘2018’’. 

14 (2) EFFECTIVE DATE.—The amendments made 

15 by this subsection shall apply to fuel sold or used 

16 after December 31, 2016. 

17 (f) CREDIT FOR BIODIESEL AND ALTERNATIVE

18 FUEL MIXTURES.— 

19 (1) IN GENERAL.—Section 6426 is amended— 

20 (A) in subsection (c)(6), by striking 

21 ‘‘2016’’ and inserting ‘‘2018’’, 

22 (B) in subsection (d)— 

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

24 ‘‘motor vehicle’’ and inserting ‘‘highway ve25 hicle’’, 


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1 (ii) in paragraph (2)(D), by striking 

2 ‘‘liquefied’’, and 

3 (iii) in paragraph (5), by striking 

4 ‘‘2016’’ and inserting ‘‘2018’’, and 

5 (C) in subsection (e), by amending para6 graph (3) to read as follows: 

7 ‘‘(3) TERMINATION.—This subsection shall not 

8 apply to any sale or use for any period after— 

9 ‘‘(A) in the case of any alternative fuel 

10 mixture sold or used by the taxpayer for the 

11 purposes described in subsection (d)(1), Decem12 ber 31, 2018, 

13 ‘‘(B) in the case of any sale or use involv14 ing hydrogen that is not for the purposes de15 scribed in subsection (d)(1), December 31, 

16 2018, and 

17 ‘‘(C) in the case of any sale or use not de18 scribed in subparagraph (A) or (B), December 

19 31, 2016.’’. 

20 (2) EFFECTIVE DATE.—The amendments made 

21 by this subsection shall apply to fuel sold or used 

22 after December 31, 2016. 

23 (3) SPECIAL RULE FOR CERTAIN PERIODS.— 

24 Notwithstanding any other provision of law, in the 

25 case of— 


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1 (A) any biodiesel mixture credit properly 

2 determined under section 6426(c) of the Inter3 nal Revenue Code of 1986 for the periods after 

4 December 31, 2016, and before the date of the 

5 enactment of this Act, and 

6 (B) any alternative fuel credit properly de7 termined under section 6426(d) of such Code 

8 for such periods, 

9 such credit shall be allowed, and any refund or pay10 ment attributable to such credit (including any pay11 ment under section 6427(e) of such Code) shall be 

12 made, only in such manner as the Secretary of the 

13 Treasury (or the Secretary’s delegate) shall provide. 

14 Such Secretary shall issue guidance within 30 days 

15 after the date of the enactment of this Act providing 

16 for a one-time submission of claims covering periods 

17 described in the preceding sentence. Such guidance 

18 shall provide for a 180-day period for the submission 

19 of such claims (in such manner as prescribed by 

20 such Secretary) to begin not later than 30 days after 

21 such guidance is issued. Such claims shall be paid 

22 by such Secretary not later than 60 days after re23 ceipt. If such Secretary has not paid pursuant to a 

24 claim filed under this subsection within 60 days 

25 after the date of the filing of such claim, the claim 


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1 shall be paid with interest from such date deter2 mined by using the overpayment rate and method 

3 under section 6621 of such Code. 

4 (g) BIODIESEL, BIODIESEL MIXTURES, AND ALTER5 NATIVE FUELS.— 

6 (1) IN GENERAL.—Section 6427(e)(6) is 

7 amended— 

8 (A) in subparagraph (B), by striking 

9 ‘‘2016’’ and inserting ‘‘2018’’, and 

10 (B) in subparagraph (C), by striking 

11 ‘‘2016’’ and inserting ‘‘2018’’. 

12 (2) EFFECTIVE DATE.—The amendments made 

13 by this subsection shall apply to fuel sold or used 

14 after December 31, 2016. 

15 TITLE III—ENERGY EFFICIENCY 

16 INCENTIVES 

17 SEC. 301. CREDIT FOR NEW ENERGY EFFICIENT RESIDEN18 TIAL BUILDINGS. 

19 (a) IN GENERAL.—Section 45L is amended to read 

20 as follows: 

21 ‘‘SEC. 45L. NEW ENERGY EFFICIENT HOME CREDIT. 

22 ‘‘(a) ALLOWANCE OF CREDIT.—For purposes of sec23 tion 38, in the case of an eligible contractor, the new en24 ergy efficient home credit for the taxable year is the appli25 cable amount for each qualified residence which is— 


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1 ‘‘(1) constructed by the eligible contractor, and 

2 ‘‘(2) acquired by a person from such eligible 

3 contractor for use as a residence during the taxable 

4 year. 

5 ‘‘(b) APPLICABLE AMOUNT.— 

6 ‘‘(1) IN GENERAL.—For purposes of subsection 

7 (a), the applicable amount shall be an amount equal 

8 to $1,500 increased (but not above $3,000) by $100 

9 for every 5 percentage points by which the efficiency 

10 ratio for the qualified residence is certified to be 

11 greater than 25 percent. 

12 ‘‘(2) EFFICIENCY RATIO.—For purposes of this 

13 section, the efficiency ratio of a qualified residence 

14 shall be equal to the quotient, expressed as a per15 centage, obtained by dividing— 

16 ‘‘(A) an amount equal to the difference be17 tween— 

18 ‘‘(i) the annual level of energy con19 sumption of the qualified residence, and 

20 ‘‘(ii) the annual level of energy con21 sumption of the baseline residence, by 

22 ‘‘(B) the annual level of energy consump23 tion of the baseline residence. 


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1 ‘‘(3) BASELINE RESIDENCE.—For purposes of 

2 this section, the baseline residence shall be a resi3 dence which is— 

4 ‘‘(A) comparable to the qualified residence, 

5 and 

6 ‘‘(B) constructed in accordance with the 

7 standards of the 2015 International Energy 

8 Conservation Code, as such Code (including 

9 supplements) is in effect on the date of the en10 actment of the Clean Energy for America Act. 

11 ‘‘(c) DEFINITIONS.—For purposes of this section: 

12 ‘‘(1) ELIGIBLE CONTRACTOR.—The term ‘eligi13 ble contractor’ means— 

14 ‘‘(A) the person who constructed the quali15 fied residence, or 

16 ‘‘(B) in the case of a qualified residence 

17 which is a manufactured home, the manufac18 tured home producer of such residence. 

19 ‘‘(2) QUALIFIED RESIDENCE.—The term ‘quali20 fied residence’ means a dwelling unit— 

21 ‘‘(A) located in the United States, 

22 ‘‘(B) the construction of which is substan23 tially completed after the date of the enactment 

24 of this section, and 


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1 ‘‘(C) which is certified to have an annual 

2 level of energy consumption that is less than 

3 the baseline residence and an efficiency ratio of 

4 not less than 25 percent. 

5 ‘‘(3) CONSTRUCTION.—The term ‘construction’ 

6 does not include substantial reconstruction or reha7 bilitation. 

8 ‘‘(d) CERTIFICATION.— 

9 ‘‘(1) IN GENERAL.— 

10 ‘‘(A) ACCREDITED THIRD PARTY.—A cer11 tification described in this section shall be made 

12 by a third party that is accredited by a certifi13 cation program approved by the Secretary, in 

14 consultation with the Secretary of Energy. 

15 ‘‘(B) GUIDANCE.—A certification described 

16 in this section shall be made in accordance with 

17 guidance prescribed by the Secretary, in con18 sultation with the Secretary of Energy. Such 

19 guidance shall— 

20 ‘‘(i) specify procedures and methods 

21 for calculating annual energy consumption 

22 levels, and 

23 ‘‘(ii) include requirements to ensure 

24 the safe operation of energy efficiency im25 provements and that all improvements are 


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1 installed according to the applicable stand2 ards of such certification program. 

3 ‘‘(2) COMPUTER SOFTWARE.— 

4 ‘‘(A) IN GENERAL.—Any calculation under 

5 paragraph (1)(B)(i) shall be prepared by quali6 fied computer software. 

7 ‘‘(B) QUALIFIED COMPUTER SOFTWARE.— 

8 For purposes of this paragraph, the term 

9 ‘qualified computer software’ means software— 

10 ‘‘(i) for which the software designer 

11 has certified that the software meets all 

12 procedures and detailed methods for calcu13 lating energy consumption levels as re14 quired by the Secretary, and 

15 ‘‘(ii) which provides such forms as re16 quired to be filed by the Secretary in con17 nection with energy consumption levels and 

18 the credit allowed under this section. 

19 ‘‘(e) BASIS ADJUSTMENT.—For purposes of this sub20 title, if a credit is allowed under this section in connection 

21 with any expenditure for any property (other than a quali22 fied low-income building, as described in section 42(c)(2)), 

23 the increase in the basis of such property which would (but 

24 for this subsection) result from such expenditure shall be 

25 reduced by the amount of the credit so determined. 


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1 ‘‘(f) COORDINATION WITH INVESTMENT CREDITS.— 

2 For purposes of this section, expenditures taken into ac3 count under section 25D or 47 shall not be taken into 

4 account under this section.’’. 

5 (b) EFFECTIVE DATE.—The amendment made by 

6 this section shall apply to any qualified residence acquired 

7 after December 31, 2018. 

8 SEC. 302. HEATING AND AIR CONDITIONING REPLACEMENT 

9 CREDIT. 

10 (a) IN GENERAL.—Subpart A of part IV of sub11 chapter A of chapter 1 is amended by adding at the end 

12 the following new section: 

13 ‘‘SEC. 25E. HEATING AND AIR CONDITIONING REPLACE14 MENT CREDIT. 

15 ‘‘(a) IN GENERAL.—In the case of an individual, 

16 there shall be allowed as a credit against the tax imposed 

17 by this chapter for the taxable year an amount equal to 

18 the lesser of— 

19 ‘‘(1) the sum of the applicable qualified prop20 erty amounts for any qualified property placed in 

21 service by the individual during such taxable year, or 

22 ‘‘(2) $1,500. 

23 ‘‘(b) APPLICABLE QUALIFIED PROPERTY AMOUNT.— 

24 For any qualified property, the applicable qualified prop25 erty amount shall be equal to the lesser of— 


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1 ‘‘(1) 50 percent of the amount paid or incurred 

2 by the individual for such qualified property, or 

3 ‘‘(2) $500. 

4 ‘‘(c) QUALIFIED PROPERTY.—The term ‘qualified 

5 property’ means a furnace, boiler, condensing water heat6 er, central air conditioning unit, heat pump, or biomass 

7 property which— 

8 ‘‘(1) meets the requirements of the Energy Star 

9 program which are in effect at the time that the 

10 property was placed in service, 

11 ‘‘(2) is installed according to applicable ACCA– 

12 QI standards which are in effect at the time that the 

13 property was placed in service, 

14 ‘‘(3) is for use in a dwelling unit which is lo15 cated in the United States and used as a residence 

16 by the individual, and 

17 ‘‘(4) is reasonably expected to remain in service 

18 in such dwelling unit for not less than 5 years. 

19 ‘‘(d) BIOMASS PROPERTY.— 

20 ‘‘(1) IN GENERAL.—For purposes of this sec21 tion, the term ‘biomass property’ means any prop22 erty which— 

23 ‘‘(A) uses the burning of biomass fuel to 

24 heat a dwelling unit or to heat water for use in 

25 a dwelling unit, and 


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1 ‘‘(B) using the higher heating value, has a 

2 thermal efficiency of not less than 75 percent. 

3 ‘‘(2) BIOMASS FUEL.—For purposes of para4 graph (1), the term ‘biomass fuel’ means any plant5 derived fuel which is available on a renewable or re6 curring basis, including any such fuel which has 

7 been subject to a densification process (such as wood 

8 pellets). 

9 ‘‘(e) DENIAL OF DOUBLE BENEFIT.—No credit shall 

10 be allowed under subsection (a) for any amounts paid or 

11 incurred for which a deduction or credit is allowed under 

12 any other provision of this chapter.’’. 

13 (b) CLERICAL AMENDMENT.—The table of sections 

14 for subpart A of part IV of subchapter A chapter 1 is 

15 amended by inserting after the item relating to section 

16 25D the following new item: 

‘‘25E. Heating and air conditioning replacement credit.’’. 

17 (c) EFFECTIVE DATE.—The amendments made by 

18 this section shall apply to qualified property placed in 

19 service after December 31, 2018. 

20 SEC. 303. ENERGY EFFICIENCY CREDIT FOR EXISTING RES21 IDENTIAL BUILDINGS. 

22 (a) IN GENERAL.—Section 25C is amended to read 

23 as follows: 


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1 ‘‘SEC. 25C. CREDIT FOR ENERGY EFFICIENCY IMPROVE2 MENTS TO RESIDENTIAL BUILDINGS. 

3 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in4 dividual, there shall be allowed as a credit against the tax 

5 imposed by this chapter for the taxable year an amount 

6 equal to the lesser of— 

7 ‘‘(1) the applicable amount for the qualified res8 idence based on energy efficiency improvements 

9 made by the taxpayer and placed in service during 

10 such taxable year, or 

11 ‘‘(2) 30 percent of the amount paid or incurred 

12 by the taxpayer for energy efficiency improvements 

13 made to the qualified residence that were placed in 

14 service during such taxable year. 

15 ‘‘(b) APPLICABLE AMOUNT.— 

16 ‘‘(1) IN GENERAL.—For purposes of subsection 

17 (a)(1), the applicable amount shall be an amount 

18 equal to $1,750 increased (but not above $6,500) by 

19 $300 for every 5 percentage points by which the effi20 ciency ratio for the qualified residence is certified to 

21 be greater than 20 percent. 

22 ‘‘(2) EFFICIENCY RATIO.—For purposes of this 

23 section, the efficiency ratio of a qualified residence 

24 shall be equal to the quotient, expressed as a per25 centage, obtained by dividing— 


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1 ‘‘(A) an amount equal to the difference be2 tween— 

3 ‘‘(i) the projected annual level of en4 ergy consumption of the qualified residence 

5 after the energy efficiency improvements 

6 have been placed in service, and 

7 ‘‘(ii) the annual level of energy con8 sumption of such qualified residence prior 

9 to the energy efficiency improvements 

10 being placed in service, by 

11 ‘‘(B) the annual level of energy consump12 tion described in subparagraph (A)(ii). 

13 ‘‘(3) COORDINATION WITH CREDIT FOR RESI14 DENTIAL ENERGY EFFICIENT PROPERTY.—For pur15 poses of paragraph (2)(A), the determination of the 

16 difference in annual levels of energy consumption of 

17 the qualified residence shall not include any reduc18 tion in net energy consumption related to— 

19 ‘‘(A) qualified property or energy storage 

20 property for which a credit was allowed under 

21 section 25D, or 

22 ‘‘(B) qualified property for which a credit 

23 was allowed under section 25E. 

24 ‘‘(c) DEFINITIONS.—For purposes of this section: 


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1 ‘‘(1) QUALIFIED RESIDENCE.—The term ‘quali2 fied residence’ means a dwelling unit— 

3 ‘‘(A) located in the United States, 

4 ‘‘(B) owned and used by the taxpayer as 

5 the taxpayer’s principal residence (within the 

6 meaning of section 121), and 

7 ‘‘(C) which is certified to have— 

8 ‘‘(i) a projected annual level of energy 

9 consumption after the energy efficiency im10 provements have been placed in service 

11 that is less than the annual level of energy 

12 consumption prior to the energy efficiency 

13 improvements being placed in service, and 

14 ‘‘(ii) an efficiency ratio of not less 

15 than 20 percent. 

16 ‘‘(2) ENERGY EFFICIENCY IMPROVEMENTS.— 

17 ‘‘(A) IN GENERAL.—The term ‘energy effi18 ciency improvements’ means any property in19 stalled on or in a dwelling unit which has been 

20 certified to reduce the level of energy consump21 tion for such unit, provided that— 

22 ‘‘(i) the original use of such property 

23 commences with the taxpayer, and 


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1 ‘‘(ii) such property reasonably can be 

2 expected to remain in use for at least 5 

3 years. 

4 ‘‘(B) AMOUNTS PAID OR INCURRED FOR

5 ENERGY EFFICIENCY IMPROVEMENTS.—For 

6 purposes of subsection (a)(2), the amount paid 

7 or incurred by the taxpayer— 

8 ‘‘(i) shall include expenditures for de9 sign and for labor costs properly allocable 

10 to the onsite preparation, assembly, or 

11 original installation of the property, and 

12 ‘‘(ii) shall not include any expendi13 tures related to expansion of the building 

14 floor area. 

15 ‘‘(d) SPECIAL RULES.—For purposes of this section: 

16 ‘‘(1) TENANT-STOCKHOLDER IN COOPERATIVE

17 HOUSING CORPORATION.—In the case of an indi18 vidual who is a tenant-stockholder (as defined in sec19 tion 216) in a cooperative housing corporation (as 

20 defined in such section), such individual shall be 

21 treated as having made his tenant-stockholder’s pro22 portionate share (as defined in section 216(b)(3)) of 

23 any expenditures for energy efficiency improvements 

24 of such corporation. 

25 ‘‘(2) CONDOMINIUMS.— 


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1 ‘‘(A) IN GENERAL.—In the case of an indi2 vidual who is a member of a condominium man3 agement association with respect to a condo4 minium which the individual owns, such indi5 vidual shall be treated as having made the indi6 vidual’s proportionate share of any expenditures 

7 for energy efficiency improvements of such as8 sociation. 

9 ‘‘(B) CONDOMINIUM MANAGEMENT ASSO10 CIATION.—For purposes of this paragraph, the 

11 term ‘condominium management association’ 

12 means an organization which meets the require13 ments of paragraph (1) of section 528(c) (other 

14 than subparagraph (E) thereof) with respect to 

15 a condominium project substantially all of the 

16 units of which are used as residences. 

17 ‘‘(3) ALLOCATION IN CERTAIN CASES.—If less 

18 than 80 percent of the use of a property is for non19 business purposes, only that portion of the expendi20 tures for energy efficiency improvements for such 

21 property which is properly allocable to use for non22 business purposes shall be taken into account. 

23 ‘‘(e) CERTIFICATION.— 

24 ‘‘(1) IN GENERAL.— 


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1 ‘‘(A) ACCREDITED THIRD PARTY.—A cer2 tification described in this section shall be made 

3 by a third party that is accredited by a certifi4 cation program approved by the Secretary, in 

5 consultation with the Secretary of Energy. 

6 ‘‘(B) GUIDANCE.—A certification described 

7 in this section shall be made in accordance with 

8 guidance prescribed by the Secretary, in con9 sultation with the Secretary of Energy. Such 

10 guidance shall— 

11 ‘‘(i) specify procedures and methods 

12 for calculating annual energy consumption 

13 levels, and 

14 ‘‘(ii) include requirements to ensure 

15 the safe operation of energy efficiency im16 provements and that all improvements are 

17 installed according to the applicable stand18 ards of such certification program. 

19 ‘‘(2) COMPUTER SOFTWARE.— 

20 ‘‘(A) IN GENERAL.—Any calculation under 

21 paragraph (1)(B)(i) shall be prepared by quali22 fied computer software. 

23 ‘‘(B) QUALIFIED COMPUTER SOFTWARE.— 

24 For purposes of this paragraph, the term 

25 ‘qualified computer software’ has the same 


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1 meaning given such term under section 

2 45L(d)(2). 

3 ‘‘(f) BASIS ADJUSTMENT.—For purposes of this sub4 title, if a credit is allowed under this section for any ex5 penditures with respect to any energy efficiency improve6 ments, the increase in the basis of such property which 

7 would (but for this subsection) result from such expendi8 tures shall be reduced by the amount of the credit so al9 lowed. 

10 ‘‘(g) COORDINATION WITH INVESTMENT CREDITS.— 

11 For purposes of this section, expenditures taken into ac12 count under section 25D or 47 shall not be taken into 

13 account under this section.’’. 

14 (b) CONFORMING AMENDMENT.—The table of sec15 tions for subpart A of part IV of subchapter A of chapter 

16 1 is amended by striking the item relating to section 25C 

17 and inserting after the item relating to section 25B the 

18 following item: 

‘‘Sec. 25C. Credit for energy efficiency improvements to residential buildings.’’. 

19 (c) EFFECTIVE DATE.—The amendments made by 

20 this section shall apply to any energy efficiency improve21 ments placed in service after December 31, 2018. 

22 SEC. 304. DEDUCTION FOR NEW ENERGY EFFICIENT COM23 MERCIAL BUILDINGS. 

24 (a) IN GENERAL.—Section 179D is amended to read 

25 as follows: 


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1 ‘‘SEC. 179D. ENERGY EFFICIENT COMMERCIAL BUILDING 

2 DEDUCTION. 

3 ‘‘(a) IN GENERAL.—There shall be allowed as a de4 duction an amount equal to the applicable amount for each 

5 qualified building placed in service by the taxpayer during 

6 the taxable year. 

7 ‘‘(b) APPLICABLE AMOUNT.— 

8 ‘‘(1) IN GENERAL.—For purposes of subsection 

9 (a), the applicable amount shall be an amount equal 

10 to the product of— 

11 ‘‘(A) the applicable dollar value, and 

12 ‘‘(B) the square footage of the qualified 

13 building. 

14 ‘‘(2) APPLICABLE DOLLAR VALUE.—For pur15 poses of paragraph (1)(A), the applicable dollar 

16 value shall be an amount equal to $1.00 increased 

17 (but not above $4.75) by $0.25 for every 5 percent18 age points by which the efficiency ratio for the quali19 fied building is certified to be greater than 25 per20 cent. 

21 ‘‘(3) EFFICIENCY RATIO.— 

22 ‘‘(A) IN GENERAL.—For purposes of this 

23 section, the efficiency ratio of a qualified build24 ing shall be equal to the quotient, expressed as 

25 a percentage, obtained by dividing— 


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1 ‘‘(i) an amount equal to the difference 

2 between— 

3 ‘‘(I) the annual level of energy 

4 consumption of the qualified building, 

5 and 

6 ‘‘(II) the annual level of energy 

7 consumption of the baseline building, 

8 by 

9 ‘‘(ii) the annual level of energy con10 sumption of the baseline building. 

11 ‘‘(B) EXCLUSION OF PLUG LOADS.—For 

12 purposes of determining the annual level of en13 ergy consumption of the qualified and baseline 

14 buildings under this paragraph, any energy con15 sumption attributable to plug loads shall be ex16 cluded. 

17 ‘‘(4) BASELINE BUILDING.—For purposes of 

18 this section, the baseline building shall be a building 

19 which— 

20 ‘‘(A) is comparable to the qualified build21 ing, and 

22 ‘‘(B) meets the minimum requirements of 

23 Standard 90.1–2016 of the American Society of 

24 Heating, Refrigerating, and Air Conditioning 

25 Engineers and the Illuminating Engineering SoVerDate Sep 11 2014 21:58 May 12, 2017 Jkt 069200 PO 00000 Frm 00079 Fmt 6652 Sfmt 6201 E:\BILLS\S1068.IS S1068

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1 ciety of North America (as in effect on the date 

2 of the enactment of the Clean Energy for 

3 America Act). 

4 ‘‘(c) QUALIFIED BUILDING.—The term ‘qualified 

5 building’ means a building— 

6 ‘‘(1) located in the United States, 

7 ‘‘(2) which is owned by the taxpayer, and 

8 ‘‘(3) which is certified to have an annual level 

9 of energy consumption that is less than the baseline 

10 building and an efficiency ratio of not less than 25 

11 percent. 

12 ‘‘(d) ALLOCATION OF DEDUCTION.— 

13 ‘‘(1) IN GENERAL.—In the case of a qualified 

14 building owned by an eligible entity, the Secretary 

15 shall promulgate regulations to allow the allocation 

16 of the deduction to the person primarily responsible 

17 for designing the property in lieu of the owner of 

18 such property, with such person to be treated as the 

19 taxpayer for purposes of this section. 

20 ‘‘(2) ELIGIBLE ENTITY.—For purposes of this 

21 subsection, the term ‘eligible entity’ means— 

22 ‘‘(A) a Federal, State, or local government 

23 or a political subdivision thereof, 

24 ‘‘(B) an Indian tribe (as defined in section 

25 45A(c)(6)), or 


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1 ‘‘(C) an organization described in section 

2 501(c) and exempt from tax under section 

3 501(a). 

4 ‘‘(e) BASIS ADJUSTMENT.—For purposes of this sub5 title, if a deduction is allowed under this section with re6 spect to any qualified building, the basis of such property 

7 shall be reduced by the amount of the deduction so al8 lowed. 

9 ‘‘(f) CERTIFICATION.— 

10 ‘‘(1) IN GENERAL.— 

11 ‘‘(A) ACCREDITED THIRD PARTY.—A cer12 tification described in this section shall be made 

13 by a third party that is accredited by a certifi14 cation program approved by the Secretary, in 

15 consultation with the Secretary of Energy. 

16 ‘‘(B) GUIDANCE.—A certification described 

17 in this section shall be made in accordance with 

18 guidance prescribed by the Secretary, in con19 sultation with the Secretary of Energy. Such 

20 guidance shall— 

21 ‘‘(i) specify procedures and methods 

22 for calculating annual energy consumption 

23 levels, and 

24 ‘‘(ii) include requirements to ensure 

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1 provements and that all improvements are 

2 installed according to the applicable stand3 ards of such certification program. 

4 ‘‘(2) COMPUTER SOFTWARE.— 

5 ‘‘(A) IN GENERAL.—Any calculation under 

6 paragraph (1)(B)(i) shall be prepared by quali7 fied computer software. 

8 ‘‘(B) QUALIFIED COMPUTER SOFTWARE.— 

9 For purposes of this paragraph, the term 

10 ‘qualified computer software’ means software— 

11 ‘‘(i) for which the software designer 

12 has certified that the software meets all 

13 procedures and detailed methods for calcu14 lating energy consumption levels as re15 quired by the Secretary, and 

16 ‘‘(ii) which provides such forms as re17 quired to be filed by the Secretary in con18 nection with energy consumption levels and 

19 the deduction allowed under this section.’’. 

20 (b) CONFORMING AMENDMENT.—The table of sec21 tions for part VI of subchapter B of chapter 1 is amended 

22 by striking the item relating to section 179D and inserting 

23 after the item relating to section 179C the following item: 

‘‘Sec. 179D. Energy efficient commercial building deduction.’’. 


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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to any qualified building placed 

3 in service after December 31, 2018. 

4 SEC. 305. ENERGY EFFICIENCY DEDUCTION FOR EXISTING 

5 COMMERCIAL BUILDINGS. 

6 (a) IN GENERAL.—Part VI of subchapter B of chap7 ter 1 is amended by inserting after section 179E the fol8 lowing new section: 

9 ‘‘SEC. 179F. DEDUCTION FOR ENERGY EFFICIENCY IM10 PROVEMENTS TO COMMERCIAL BUILDINGS. 

11 ‘‘(a) IN GENERAL.—There shall be allowed as a de12 duction an amount equal to the lesser of— 

13 ‘‘(1) the applicable amount for the qualified 

14 building based on energy efficiency improvements 

15 made by the taxpayer and placed in service during 

16 the taxable year, or 

17 ‘‘(2) the amount paid or incurred by the tax18 payer for energy efficiency improvements made to 

19 the qualified building which were placed in service 

20 during the taxable year. 

21 ‘‘(b) APPLICABLE AMOUNT.— 

22 ‘‘(1) IN GENERAL.—For purposes of subsection 

23 (a), the applicable amount shall be an amount equal 

24 to the product of— 

25 ‘‘(A) the applicable dollar value, and 


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1 ‘‘(B) the square footage of the qualified 

2 building. 

3 ‘‘(2) APPLICABLE DOLLAR VALUE.—For pur4 poses of paragraph (1), the applicable dollar value 

5 shall be an amount equal to $1.25 increased (but 

6 not above $9.25) by $0.50 for every 5 percentage 

7 points by which the efficiency ratio for the qualified 

8 building is certified to be greater than 20 percent. 

9 ‘‘(3) EFFICIENCY RATIO.— 

10 ‘‘(A) IN GENERAL.—For purposes of this 

11 section, the efficiency ratio of a qualified build12 ing shall be equal to the quotient, expressed as 

13 a percentage, obtained by dividing— 

14 ‘‘(i) an amount equal to the difference 

15 between— 

16 ‘‘(I) the projected annual level of 

17 energy consumption of the qualified 

18 building after the energy efficiency 

19 improvements have been placed in 

20 service, and 

21 ‘‘(II) the annual level of energy 

22 consumption of such qualified building 

23 prior to the energy efficiency improve24 ments being placed in service, by 


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1 ‘‘(ii) the annual level of energy con2 sumption described in clause (i)(II). 

3 ‘‘(B) EXCLUSION OF PLUG LOADS.—For 

4 purposes of determining the annual level of en5 ergy consumption of the qualified building 

6 under this paragraph, any energy consumption 

7 attributable to plug loads shall be excluded. 

8 ‘‘(4) COORDINATION WITH CLEAN ENERGY IN9 VESTMENT CREDIT.—For purposes of paragraph 

10 (3)(A)(i), the determination of the difference in an11 nual levels of energy consumption of the qualified 

12 building shall not include any reduction in net en13 ergy consumption related to qualified property or en14 ergy storage property for which a credit was allowed 

15 under section 48E. 

16 ‘‘(c) DEFINITIONS.— 

17 ‘‘(1) QUALIFIED BUILDING.—The term ‘quali18 fied building’ means a building— 

19 ‘‘(A) located in the United States, 

20 ‘‘(B) which is owned by the taxpayer, and 

21 ‘‘(C) which is certified to have— 

22 ‘‘(i) a projected annual level of energy 

23 consumption after the energy efficiency im24 provements have been placed in service 

25 that is less than the annual level of energy 


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1 consumption prior to the energy efficiency 

2 improvements being placed in service, and 

3 ‘‘(ii) an efficiency ratio of not less 

4 than 20 percent. 

5 ‘‘(2) ENERGY EFFICIENCY IMPROVEMENTS.— 

6 ‘‘(A) IN GENERAL.—The term ‘energy effi7 ciency improvements’ means any property in8 stalled on or in a qualified building which has 

9 been certified to reduce the level of energy con10 sumption for such building, provided that de11 preciation (or amortization in lieu of deprecia12 tion) is allowable with respect to such property. 

13 ‘‘(B) AMOUNTS PAID OR INCURRED FOR

14 ENERGY EFFICIENCY IMPROVEMENTS.—For 

15 purposes of subsection (a)(2), the amount paid 

16 or incurred by the taxpayer— 

17 ‘‘(i) shall include expenditures for de18 sign and for labor costs properly allocable 

19 to the onsite preparation, assembly, or 

20 original installation of the property, and 

21 ‘‘(ii) shall not include any expendi22 tures related to expansion of the building 

23 floor area. 

24 ‘‘(d) CERTIFICATION.— 

25 ‘‘(1) IN GENERAL.— 


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1 ‘‘(A) ACCREDITED THIRD PARTY.—A cer2 tification described in this section shall be made 

3 by a third party that is accredited by a certifi4 cation program approved by the Secretary, in 

5 consultation with the Secretary of Energy. 

6 ‘‘(B) GUIDANCE.—A certification described 

7 in this section shall be made in accordance with 

8 guidance prescribed by the Secretary, in con9 sultation with the Secretary of Energy. Such 

10 guidance shall— 

11 ‘‘(i) specify procedures and methods 

12 for calculating annual energy consumption 

13 levels, and 

14 ‘‘(ii) include requirements to ensure 

15 the safe operation of energy efficiency im16 provements and that all improvements are 

17 installed according to the applicable stand18 ards of such certification program. 

19 ‘‘(2) COMPUTER SOFTWARE.— 

20 ‘‘(A) IN GENERAL.—Any calculation under 

21 paragraph (1)(B)(i) shall be prepared by quali22 fied computer software. 

23 ‘‘(B) QUALIFIED COMPUTER SOFTWARE.— 

24 For purposes of this paragraph, the term 

25 ‘qualified computer software’ has the same 


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1 meaning given such term under section 

2 179D(f)(2). 

3 ‘‘(e) ALLOCATION OF DEDUCTION.— 

4 ‘‘(1) IN GENERAL.—In the case of a qualified 

5 building owned by an eligible entity, the Secretary 

6 shall promulgate regulations to allow the allocation 

7 of the deduction to the person primarily responsible 

8 for designing the energy efficiency improvements in 

9 lieu of the owner of such property, with such person 

10 to be treated as the taxpayer for purposes of this 

11 section. 

12 ‘‘(2) ELIGIBLE ENTITY.—For purposes of this 

13 subsection, the term ‘eligible entity’ has the same 

14 meaning given such term under section 179D(d)(2). 

15 ‘‘(f) BASIS REDUCTION.—For purposes of this sub16 title, if a deduction is allowed under this section with re17 spect to any energy efficiency improvements, the basis of 

18 such property shall be reduced by the amount of the de19 duction so allowed. 

20 ‘‘(g) COORDINATION WITH OTHER CREDITS.—For 

21 purposes of this section, expenditures taken into account 

22 under section 47 or 48E shall not be taken into account 

23 under this section.’’. 

24 (b) CONFORMING AMENDMENT.— 

25 (1) Section 263(a) is amended— 


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1 (A) in subparagraph (K), by striking ‘‘or’’ 

2 at the end, 

3 (B) in subparagraph (L), by striking the 

4 period and inserting ‘‘, or’’, and 

5 (C) by inserting at the end the following 

6 new subparagraph: 

7 ‘‘(M) expenditures for which a deduction is 

8 allowed under section 179F.’’. 

9 (2) Section 312(k)(3)(B) is amended— 

10 (A) in the heading, by striking ‘‘OR 179E’’ 

11 and inserting ‘‘179E, OR 179F’’, and 

12 (B) by striking ‘‘or 179E’’ and inserting 

13 ‘‘179E, or 179F’’. 

14 (3) Section 1016(a) is amended— 

15 (A) in paragraph (36), by striking ‘‘and’’ 

16 at the end, 

17 (B) in paragraph (37), by striking the pe18 riod at the end and inserting ‘‘, and’’, and 

19 (C) by inserting at the end the following 

20 new paragraph: 

21 ‘‘(38) to the extent provided in section 

22 179D(f).’’. 

23 (4) Section 1245(a) is amended— 

24 (A) in paragraph (2)(C), by inserting 

25 ‘‘179F,’’ after ‘‘179E,’’, and 


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1 (B) in paragraph (3)(C), by inserting 

2 ‘‘179F,’’ after ‘‘179E,’’. 

3 (5) The table of sections for part VI of sub4 chapter B of chapter 1 is amended by inserting after 

5 the item relating to section 179E the following new 

6 item: 

‘‘Sec. 179F. Deduction for energy efficiency improvements to commercial buildings.’’. 

7 (c) EFFECTIVE DATE.—The amendments made by 

8 this section shall apply to any energy efficiency improve9 ments placed in service after December 31, 2018. 

10 SEC. 306. TEMPORARY EXTENSION OF EXISTING ENERGY 

11 EFFICIENCY INCENTIVES. 

12 (a) NONBUSINESS ENERGY PROPERTY.— 

13 (1) IN GENERAL.—Paragraph (2) of section 

14 25C(g) is amended by striking ‘‘December 31, 

15 2016’’ and inserting ‘‘December 31, 2018’’. 

16 (2) EFFECTIVE DATE.—The amendments made 

17 by this subsection shall apply to property placed in 

18 service after December 31, 2016. 

19 (b) NEW ENERGY EFFICIENT HOME CREDIT.— 

20 (1) IN GENERAL.—Subsection (g) of section 

21 45L is amended by striking ‘‘December 31, 2016’’ 

22 and inserting ‘‘December 31, 2018’’. 

23 (2) EFFECTIVE DATE.—The amendments made 

24 by this subsection shall apply to any qualified new 


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1 energy efficient home acquired after December 31, 

2 2016. 

3 (c) ENERGY EFFICIENT COMMERCIAL BUILDINGS

4 DEDUCTION.— 

5 (1) IN GENERAL.—Subsection (h) of section 

6 179D is amended by striking ‘‘December 31, 2016’’ 

7 and inserting ‘‘December 31, 2018’’. 

8 (2) EFFECTIVE DATE.—The amendments made 

9 by this section shall apply to property placed in serv10 ice after December 31, 2016. 

11 TITLE IV—CLEAN ELECTRICITY 

12 AND FUEL BONDS 

13 SEC. 401. CLEAN ENERGY BONDS. 

14 (a) IN GENERAL.—Subpart J of part IV of sub15 chapter A of chapter 1 is amended by adding at the end 

16 the following new section: 

17 ‘‘SEC. 54BB. CLEAN ENERGY BONDS. 

18 ‘‘(a) IN GENERAL.—If a taxpayer holds a clean en19 ergy bond on one or more interest payment dates of the 

20 bond during any taxable year, 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 sum of the credits 

23 determined under subsection (b) with respect to such 

24 dates. 

25 ‘‘(b) AMOUNT OF CREDIT.— 


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1 ‘‘(1) IN GENERAL.—The amount of the credit 

2 determined under this subsection with respect to any 

3 interest payment date for a clean energy bond is the 

4 applicable percentage (as determined under para5 graph (2)) of the amount of interest payable by the 

6 issuer with respect to such date. 

7 ‘‘(2) APPLICABLE PERCENTAGE.— 

8 ‘‘(A) IN GENERAL.— 

9 ‘‘(i) MAXIMUM PERCENTAGE.—Except 

10 as provided in clause (ii), the applicable 

11 percentage is 70 percent. 

12 ‘‘(ii) REDUCTION OF CREDIT BASED

13 ON GREENHOUSE GAS EMISSION RATE.— 

14 The applicable percentage shall be reduced 

15 (but not below zero) by an amount which 

16 bears the same ratio to the percentage in 

17 effect under clause (i) as— 

18 ‘‘(I) in the case of a qualified fa19 cility described in subsection (e)(3) of 

20 section 45S, the greenhouse gas emis21 sions rate for the facility bears to 325 

22 grams of CO2e per KWh (as such 

23 terms are defined in subsections 

24 (b)(1) and (e)(1) of such section), or 


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1 ‘‘(II) in the case of a qualified fa2 cility described in subsection (e)(4) of 

3 section 45T, the average emissions 

4 rate for all transportation fuel pro5 duced by such facility bears to 75 

6 kilograms of CO2e per mmBTU (as 

7 such terms are defined in subsections 

8 (b) and (e) of such section). 

9 ‘‘(B) ROUNDING.—If any applicable per10 centage determined under subparagraph (A) is 

11 not a whole percentage point, such percentage 

12 shall be rounded to the nearest whole percent13 age point. 

14 ‘‘(C) SAFE HARBOR RULES.—Rules similar 

15 to the rules of sections 45S(b)(3) and 45T(b) 

16 shall apply for purposes of this section. 

17 ‘‘(c) LIMITATION BASED ON AMOUNT OF TAX.— 

18 ‘‘(1) IN GENERAL.—The credit allowed under 

19 subsection (a) for any taxable year shall not exceed 

20 the excess of— 

21 ‘‘(A) the sum of the regular tax liability 

22 (as defined in section 26(b)) plus the tax im23 posed by section 55, over 


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1 ‘‘(B) the sum of the credits allowable 

2 under this part (other than subpart C and this 

3 subpart). 

4 ‘‘(2) CARRYOVER OF UNUSED CREDIT.—If the 

5 credit allowable under subsection (a) exceeds the 

6 limitation imposed by paragraph (1) for such taxable 

7 year, such excess shall be carried to the succeeding 

8 taxable year and added to the credit allowable under 

9 subsection (a) for such taxable year (determined be10 fore the application of paragraph (1) for such suc11 ceeding taxable year). 

12 ‘‘(d) CLEAN ENERGY BOND.— 

13 ‘‘(1) IN GENERAL.—For purposes of this sec14 tion, the term ‘clean energy bond’ means any bond 

15 issued as part of an issue if— 

16 ‘‘(A) 100 percent of the excess of the avail17 able project proceeds (as defined in section 

18 54A(e)(4)) of such issue over the amounts in a 

19 reasonably required reserve (within the meaning 

20 of section 150(a)(3)) with respect to such issue 

21 are to be used for capital expenditures incurred 

22 by an entity described in subparagraph (B) for 

23 one or more qualified facilities, 

24 ‘‘(B) the bond is issued by— 


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1 ‘‘(i) a governmental body (as defined 

2 in paragraph (3) of section 54C(d)), 

3 ‘‘(ii) a public power provider (as de4 fined in paragraph (2) of such section), or 

5 ‘‘(iii) a cooperative electric company 

6 (as defined in paragraph (4) of such sec7 tion), and 

8 ‘‘(C) the issuer makes an irrevocable elec9 tion to have this section apply. 

10 ‘‘(2) APPLICABLE RULES.—For purposes of ap11 plying paragraph (1)— 

12 ‘‘(A) for purposes of section 149(b), a 

13 clean energy bond shall not be treated as feder14 ally guaranteed by reason of the credit allowed 

15 under subsection (a) or section 6433, 

16 ‘‘(B) for purposes of section 148, the yield 

17 on a clean energy bond shall be determined 

18 without regard to the credit allowed under sub19 section (a), and 

20 ‘‘(C) a bond shall not be treated as a clean 

21 energy bond if the issue price has more than a 

22 de minimis amount (determined under rules 

23 similar to the rules of section 1273(a)(3)) of 

24 premium over the stated principal amount of 

25 the bond. 


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1 ‘‘(3) QUALIFIED FACILITY.—The term ‘quali2 fied facility’ means a facility— 

3 ‘‘(A) which is described in section 

4 45S(e)(3), or 

5 ‘‘(B) which is described in section 

6 45T(e)(4) and only produces transportation fuel 

7 which has an emissions rate of less than 75 

8 kilograms of CO2e per mmBTU (as such terms 

9 are defined in subsections (b) and (e) of such 

10 section). 

11 ‘‘(e) INTEREST PAYMENT DATE.—For purposes of 

12 this section, the term ‘interest payment date’ means any 

13 date on which the holder of record of the clean energy 

14 bond is entitled to a payment of interest under such bond. 

15 ‘‘(f) CREDIT PHASE OUT.— 

16 ‘‘(1) ELECTRICAL PRODUCTION.—In the case of 

17 a clean energy bond for which the proceeds are used 

18 for capital expenditures incurred by an entity for a 

19 qualified facility described in subsection (d)(3)(A), if 

20 the Secretary, in consultation with the Secretary of 

21 Energy and the Administrator of the Environmental 

22 Protection Agency, determines that the annual 

23 greenhouse gas emissions from electrical production 

24 in the United States are equal to or less than the 

25 percentage specified in section 45S(d)(1), the 


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1 amount of the credit determined under subsection 

2 (b) with respect to any clean energy bond issued 

3 during a calendar year described in paragraph (3) 

4 shall be equal to the product of— 

5 ‘‘(A) the amount determined under sub6 section (b) without regard to this subsection, 

7 multiplied by 

8 ‘‘(B) the phase-out percentage under para9 graph (3). 

10 ‘‘(2) FUEL PRODUCTION.—In the case of a 

11 clean energy bond for which the proceeds are used 

12 for capital expenditures incurred by an entity for a 

13 qualified facility described in subsection (d)(3)(B), if 

14 the Secretary, in consultation with the Secretary of 

15 Energy and the Administrator of the Environmental 

16 Protection Agency, determines that the annual 

17 greenhouse gas emissions from transportation fuel 

18 produced and sold at retail annually in the United 

19 States are equal to or less than the percentage speci20 fied in section 45T(d)(1), the amount of the credit 

21 determined under subsection (b) with respect to any 

22 clean energy bond issued during a calendar year de23 scribed in paragraph (3) shall be equal to the prod24 uct of— 


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1 ‘‘(A) the amount determined under sub2 section (b) without regard to this subsection, 

3 multiplied by 

4 ‘‘(B) the phase-out percentage under para5 graph (3). 

6 ‘‘(3) PHASE-OUT PERCENTAGE.—The phase-out 

7 percentage under this paragraph is equal to— 

8 ‘‘(A) for any bond issued during the first 

9 calendar year following the calendar year in 

10 which the determination described in paragraph 

11 (1)(A) or (2)(A) is made, 75 percent, 

12 ‘‘(B) for any bond issued during the sec13 ond calendar year following such determination 

14 year, 50 percent, 

15 ‘‘(C) for any bond issued during the third 

16 calendar year following such determination 

17 year, 25 percent, and 

18 ‘‘(D) for any bond issued during any cal19 endar year subsequent to the year described in 

20 subparagraph (C), 0 percent. 

21 ‘‘(g) SPECIAL RULES.— 

22 ‘‘(1) INTEREST ON CLEAN ENERGY BONDS IN23 CLUDIBLE IN GROSS INCOME FOR FEDERAL INCOME

24 TAX PURPOSES.—For purposes of this title, interest 


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1 on any clean energy bond shall be includible in gross 

2 income. 

3 ‘‘(2) APPLICATION OF CERTAIN RULES.—Rules 

4 similar to the rules of subsections (f), (g), (h), and 

5 (i) of section 54A shall apply for purposes of the 

6 credit allowed under subsection (a). 

7 ‘‘(h) REGULATIONS.—The Secretary may prescribe 

8 such regulations and other guidance as may be necessary 

9 or appropriate to carry out this section and section 

10 6433.’’. 

11 (b) CREDIT FOR QUALIFIED CLEAN ENERGY BONDS

12 ALLOWED TO ISSUER.—Subchapter B of chapter 65 of 

13 subtitle F is amended by adding at the end the following 

14 new section: 

15 ‘‘SEC. 6433. CREDIT FOR QUALIFIED CLEAN ENERGY BONDS 

16 ALLOWED TO ISSUER. 

17 ‘‘(a) IN GENERAL.—The issuer of a qualified clean 

18 energy bond shall be allowed a credit with respect to each 

19 interest payment under such bond which shall be payable 

20 by the Secretary as provided in subsection (b). 

21 ‘‘(b) PAYMENT OF CREDIT.— 

22 ‘‘(1) IN GENERAL.—The Secretary shall pay 

23 (contemporaneously with each interest payment date 

24 under such bond) to the issuer of such bond (or to 

25 any person who makes such interest payments on 


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1 behalf of the issuer) the applicable percentage (as 

2 determined under subsection (b) of section 54BB) of 

3 the interest payable under such bond on such date. 

4 ‘‘(2) INTEREST PAYMENT DATE.—For purposes 

5 of this subsection, the term ‘interest payment date’ 

6 means each date on which interest is payable by the 

7 issuer under the terms of the bond. 

8 ‘‘(c) APPLICATION OF ARBITRAGE RULES.—For pur9 poses of section 148, the yield on a qualified clean energy 

10 bond shall be reduced by the credit allowed under this sec11 tion. 

12 ‘‘(d) QUALIFIED CLEAN ENERGY BOND.—For pur13 poses of this section, the term ‘qualified clean energy 

14 bond’ means a clean energy bond (as defined in section 

15 54BB(d)) issued as part of an issue if the issuer, in lieu 

16 of any credit allowed under section 54BB(a) with respect 

17 to such bond, makes an irrevocable election to have this 

18 section apply.’’. 

19 (c) CONFORMING AMENDMENTS.— 

20 (1) The table of sections for subpart J of part 

21 IV of subchapter A of chapter 1 is amended by add22 ing at the end the following new item: 

‘‘Sec. 54BB. Clean energy bonds.’’. 

23 (2) The heading of such subpart (and the item 

24 relating to such subpart in the table of subparts for 

25 part IV of subchapter A of chapter 1) are each 


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1 amended by striking ‘‘Build America Bonds’’ 

2 and inserting ‘‘Build America Bonds and 

3 Clean Energy Bonds’’. 

4 (3) The table of sections for subchapter B of 

5 chapter 65 of subtitle F is amended by adding at 

6 the end the following new item: 

‘‘Sec. 6433. Credit for qualified clean energy bonds allowed to issuer.’’. 

7 (4) Subparagraph (A) of section 6211(b)(4) is 

8 amended by striking ‘‘and 6431’’ and inserting 

9 ‘‘6431, and 6433’’. 

10 (d) GROSS-UP OF PAYMENT TO ISSUERS IN CASE OF

11 SEQUESTRATION.— 

12 (1) IN GENERAL.—In the case of any payment 

13 under subsection (b) of section 6433 of the Internal 

14 Revenue Code of 1986 (as added by this Act) made 

15 after the date of the enactment of this Act to which 

16 sequestration applies, the amount of such payment 

17 shall be increased to an amount equal to— 

18 (A) such payment (determined before such 

19 sequestration), multiplied by 

20 (B) the quotient obtained by dividing 1 by 

21 the amount by which 1 exceeds the percentage 

22 reduction in such payment pursuant to such se23 questration. 

24 (2) SEQUESTRATION.—For purposes of this 

25 subsection, the term ‘‘sequestration’’ means any reVerDate Sep 11 2014 21:58 May 12, 2017 Jkt 069200 PO 00000 Frm 00101 Fmt 6652 Sfmt 6201 E:\BILLS\S1068.IS S1068

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1 duction in direct spending ordered by the President 

2 under the Balanced Budget and Emergency Deficit 

3 Control Act of 1985 or the Statutory Pay-As-You4 Go Act of 2010. 

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

6 this section shall apply to obligations issued after the date 

7 of the enactment of this Act. 

Æ 


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