II 

115TH CONGRESS 

1ST SESSION S. 1535 

To amend the Internal Revenue Code of 1986 to improve, expand, and 

extend the credit for carbon dioxide sequestration. 

IN THE SENATE OF THE UNITED STATES 

JULY 12, 2017 

Ms. HEITKAMP (for herself, Mrs. CAPITO, Mr. WHITEHOUSE, Mr. BARRASSO, 

Mr. KAINE, Mr. GRAHAM, Mr. SCHATZ, Mr. BLUNT, Mr. BOOKER, Mr. 

PORTMAN, Mr. TESTER, Mr. COCHRAN, Mr. CASEY, Ms. KLOBUCHAR, 

Mr. DURBIN, Mr. FRANKEN, Mr. BROWN, Mr. WARNER, Mr. DONNELLY, 

Mr. MANCHIN, Ms. DUCKWORTH, Mr. PETERS, Mr. COONS, Mr. BENNET, and Mr. KING) 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 improve, 

expand, and extend the credit for carbon dioxide sequestration. 

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. 

4 This Act may be cited as the ‘‘Furthering carbon cap5 ture, Utilization, Technology, Underground storage, and 

6 Reduced Emissions Act’’ or the ‘‘FUTURE Act’’. 

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1 SEC. 2. ENHANCEMENT OF CARBON DIOXIDE SEQUESTRA2 TION CREDIT. 

3 (a) IN GENERAL.—Section 45Q of the Internal Rev4 enue Code of 1986 is amended to read as follows: 

5 ‘‘SEC. 45Q. CREDIT FOR CARBON OXIDE SEQUESTRATION. 

6 ‘‘(a) GENERAL RULE.—For purposes of section 38, 

7 the carbon oxide sequestration credit for any taxable year 

8 is an amount equal to the sum of— 

9 ‘‘(1) $20 per metric ton of qualified carbon 

10 oxide which is— 

11 ‘‘(A) captured by the taxpayer using car12 bon capture equipment which is originally 

13 placed in service at a qualified facility before 

14 the date of the enactment of the FUTURE Act, 

15 and 

16 ‘‘(B) disposed of by the taxpayer in secure 

17 geological storage and not used by the taxpayer 

18 as described in paragraph (2)(B), 

19 ‘‘(2) $10 per metric ton of qualified carbon 

20 oxide which is— 

21 ‘‘(A) captured by the taxpayer using car22 bon capture equipment which is originally 

23 placed in service at a qualified facility before 

24 the date of the enactment of the FUTURE Act, 

25 and 

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1 ‘‘(B)(i) used by the taxpayer as a tertiary 

2 injectant in a qualified enhanced oil or natural 

3 gas recovery project and disposed of by the tax4 payer in secure geological storage, or 

5 ‘‘(ii) utilized by the taxpayer in a manner 

6 described in subsection (f)(5), 

7 ‘‘(3) the applicable dollar amount (as deter8 mined under subsection (b)(1)) per metric ton of 

9 qualified carbon oxide which is— 

10 ‘‘(A) captured by the taxpayer using car11 bon capture equipment which is originally 

12 placed in service at a qualified facility on or 

13 after the date of the enactment of the FU14 TURE Act, during the 12-year period begin15 ning on the date the equipment was originally 

16 placed in service, and 

17 ‘‘(B) disposed of by the taxpayer in secure 

18 geological storage and not used by the taxpayer 

19 as described in paragraph (4)(B), and 

20 ‘‘(4) the applicable dollar amount (as deter21 mined under subsection (b)(1)) per metric ton of 

22 qualified carbon oxide which is— 

23 ‘‘(A) captured by the taxpayer using car24 bon capture equipment which is originally 

25 placed in service at a qualified facility on or 

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1 after the date of the enactment of the FU2 TURE Act, during the 12-year period begin3 ning on the date the equipment was originally 

4 placed in service, and 

5 ‘‘(B)(i) used by the taxpayer as a tertiary 

6 injectant in a qualified enhanced oil or natural 

7 gas recovery project and disposed of by the tax8 payer in secure geological storage, or 

9 ‘‘(ii) utilized by the taxpayer in a manner 

10 described in subsection (f)(5). 

11 ‘‘(b) APPLICABLE DOLLAR AMOUNT; ADDITIONAL

12 EQUIPMENT; ELECTION.— 

13 ‘‘(1) APPLICABLE DOLLAR AMOUNT.— 

14 ‘‘(A) IN GENERAL.—The applicable dollar 

15 amount shall be an amount equal to— 

16 ‘‘(i) for any taxable year beginning in 

17 a calendar year after 2016 and ending be18 fore 2027— 

19 ‘‘(I) for purposes of paragraph 

20 (3) of subsection (a), the dollar 

21 amount established by linear inter22 polation between $22.66 and $50 for 

23 each calendar year during such pe24 riod, and 

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1 ‘‘(II) for purposes of paragraph 

2 (4) of such subsection, the dollar 

3 amount established by linear inter4 polation between $12.83 and $35 for 

5 each calendar year during such pe6 riod, and 

7 ‘‘(ii) for any taxable year beginning in 

8 a calendar year after 2026— 

9 ‘‘(I) for purposes of paragraph 

10 (3) of subsection (a), an amount equal 

11 to the product of $50 and the infla12 tion adjustment factor for such cal13 endar year determined under section 

14 43(b)(3)(B) for such calendar year, 

15 determined by substituting ‘2025’ for 

16 ‘1990’, and 

17 ‘‘(II) for purposes of paragraph 

18 (4) of such subsection, an amount 

19 equal to the product of $35 and the 

20 inflation adjustment factor for such 

21 calendar year determined under sec22 tion 43(b)(3)(B) for such calendar 

23 year, determined by substituting 

24 ‘2025’ for ‘1990’. 

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1 ‘‘(B) ROUNDING.—The applicable dollar 

2 amount determined under subparagraph (A) 

3 shall be rounded to the nearest cent. 

4 ‘‘(2) INSTALLATION OF ADDITIONAL CARBON

5 CAPTURE EQUIPMENT ON EXISTING QUALIFIED FA6 CILITY.—In the case of a qualified facility placed in 

7 service before the date of the enactment of the FU8 TURE Act, for which additional carbon capture 

9 equipment is placed in service on or after the date 

10 of the enactment of such Act, the amount of quali11 fied carbon oxide which is captured by the taxpayer 

12 shall be equal to— 

13 ‘‘(A) for purposes of paragraphs (1)(A) 

14 and (2)(A) of subsection (a), the lesser of— 

15 ‘‘(i) the total amount of qualified car16 bon oxide captured at such facility for the 

17 taxable year, or 

18 ‘‘(ii) the total amount of the carbon 

19 dioxide capture capacity of the carbon cap20 ture equipment in service at such facility 

21 on the day before the date of the enact22 ment of the FUTURE Act, and 

23 ‘‘(B) for purposes of paragraphs (3)(A) 

24 and (4)(A) of such subsection, an amount (not 

25 less than zero) equal to the excess of— 

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1 ‘‘(i) the amount described in clause (i) 

2 of subparagraph (A), over 

3 ‘‘(ii) the amount described in clause 

4 (ii) of such subparagraph. 

5 ‘‘(3) ELECTION.—For purposes of determining 

6 the carbon oxide sequestration credit under this sec7 tion, a taxpayer may elect to have the dollar 

8 amounts applicable under paragraph (1) or (2) of 

9 subsection (a) apply in lieu of the dollar amounts 

10 applicable under paragraph (3) or (4) of such sub11 section for each metric ton of qualified carbon oxide 

12 which is captured by the taxpayer using carbon cap13 ture equipment which is originally placed in service 

14 at a qualified facility on or after the date of the en15 actment of the FUTURE Act. 

16 ‘‘(c) QUALIFIED CARBON OXIDE.—For purposes of 

17 this section— 

18 ‘‘(1) IN GENERAL.—The term ‘qualified carbon 

19 oxide’ means— 

20 ‘‘(A) any carbon dioxide which— 

21 ‘‘(i) is captured from an industrial 

22 source by carbon capture equipment which 

23 is originally placed in service before the 

24 date of the enactment of the FUTURE 

25 Act, 

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1 ‘‘(ii) would otherwise be released into 

2 the atmosphere as industrial emission of 

3 greenhouse gas or lead to such release, and 

4 ‘‘(iii) is measured at the source of 

5 capture and verified at the point of dis6 posal, injection, or utilization, 

7 ‘‘(B) any carbon dioxide or other carbon 

8 oxide which— 

9 ‘‘(i) is captured from an industrial 

10 source by carbon capture equipment which 

11 is originally placed in service on or after 

12 the date of the enactment of the FUTURE 

13 Act, 

14 ‘‘(ii) would otherwise be released into 

15 the atmosphere as industrial emission of 

16 greenhouse gas or lead to such release, and 

17 ‘‘(iii) is measured at the source of 

18 capture and verified at the point of dis19 posal, injection, or utilization, or 

20 ‘‘(C) in the case of a direct air capture fa21 cility, any carbon dioxide which— 

22 ‘‘(i) is captured directly from the am23 bient air, and 

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

3 injection, or utilization. 

4 ‘‘(2) RECYCLED CARBON OXIDE.—The term 

5 ‘qualified carbon oxide’ includes the initial deposit of 

6 captured carbon oxide used as a tertiary injectant. 

7 Such term does not include carbon oxide that is re8 captured, recycled, and re-injected as part of the en9 hanced oil and natural gas recovery process. 

10 ‘‘(d) QUALIFIED FACILITY.—For purposes of this 

11 section, the term ‘qualified facility’ means any industrial 

12 facility or direct air capture facility— 

13 ‘‘(1) the construction of which begins before 

14 January 1, 2024, and— 

15 ‘‘(A) construction of carbon capture equip16 ment begins before such date, or 

17 ‘‘(B) the original planning and design for 

18 such facility includes installation of carbon cap19 ture equipment, and 

20 ‘‘(2) which captures— 

21 ‘‘(A) in the case of a facility which emits 

22 not more than 500,000 metric tons of carbon 

23 oxide into the atmosphere during the taxable 

24 year, not less than 25,000 metric tons of quali25 fied carbon oxide during the taxable year which 

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1 is utilized in a manner described in subsection 

2 (f)(5), 

3 ‘‘(B) in the case of an electricity gener4 ating facility which is not described in subpara5 graph (A), not less than 500,000 metric tons of 

6 qualified carbon oxide during the taxable year, 

7 or 

8 ‘‘(C) in the case of a direct air capture fa9 cility or any facility not described in subpara10 graph (A) or (B), not less than 100,000 metric 

11 tons of qualified carbon oxide during the tax12 able year. 

13 ‘‘(e) DEFINITIONS.—For purposes of this section— 

14 ‘‘(1) DIRECT AIR CAPTURE FACILITY.— 

15 ‘‘(A) IN GENERAL.—Subject to subpara16 graph (B), the term ‘direct air capture facility’ 

17 means any facility which uses carbon capture 

18 equipment to capture carbon dioxide directly 

19 from the ambient air. 

20 ‘‘(B) EXCEPTION.—The term ‘direct air 

21 capture facility’ shall not include any facility 

22 which captures carbon dioxide— 

23 ‘‘(i) which is deliberately released 

24 from naturally occurring subsurface 

25 springs, or 

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1 ‘‘(ii) using natural photosynthesis. 

2 ‘‘(2) QUALIFIED ENHANCED OIL OR NATURAL

3 GAS RECOVERY PROJECT.—The term ‘qualified en4 hanced oil or natural gas recovery project’ has the 

5 meaning given the term ‘qualified enhanced oil re6 covery project’ by section 43(c)(2), by substituting 

7 ‘crude oil or natural gas’ for ‘crude oil’ in subpara8 graph (A)(i) thereof. 

9 ‘‘(3) TERTIARY INJECTANT.—The term ‘ter10 tiary injectant’ has the same meaning as when used 

11 within section 193(b)(1). 

12 ‘‘(f) SPECIAL RULES.— 

13 ‘‘(1) ONLY QUALIFIED CARBON OXIDE CAP14 TURED AND DISPOSED OF OR USED WITHIN THE

15 UNITED STATES TAKEN INTO ACCOUNT.—The credit 

16 under this section shall apply only with respect to 

17 qualified carbon oxide the capture and disposal, use, 

18 or utilization of which is within— 

19 ‘‘(A) the United States (within the mean20 ing of section 638(1)), or 

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

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

23 ‘‘(2) SECURE GEOLOGICAL STORAGE.—The Sec24 retary, in consultation with the Administrator of the 

25 Environmental Protection Agency, the Secretary of 

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1 Energy, and the Secretary of the Interior, shall es2 tablish regulations for determining adequate security 

3 measures for the geological storage of qualified car4 bon oxide under subsection (a) such that the quali5 fied carbon oxide does not escape into the atmos6 phere. Such term shall include storage at deep saline 

7 formations, oil and gas reservoirs, and unminable 

8 coal seams under such conditions as the Secretary 

9 may determine under such regulations. 

10 ‘‘(3) CREDIT ATTRIBUTABLE TO TAXPAYER.— 

11 ‘‘(A) IN GENERAL.—Except as provided in 

12 subparagraph (B) or in any regulations pre13 scribed by the Secretary, any credit under this 

14 section shall be attributable to— 

15 ‘‘(i) in the case of qualified carbon 

16 oxide captured using carbon capture equip17 ment which is originally placed in service 

18 at a qualified facility before the date of the 

19 enactment of the FUTURE Act, the per20 son that captures and physically or con21 tractually ensures the disposal, utilization, 

22 or use as a tertiary injectant of such quali23 fied carbon oxide, and 

24 ‘‘(ii) in the case of qualified carbon 

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1 ment which is originally placed in service 

2 at a qualified facility on or after the date 

3 of the enactment of the FUTURE Act, the 

4 person that owns the carbon capture equip5 ment and physically or contractually en6 sures the capture and disposal, utilization, 

7 or use as a tertiary injectant of such quali8 fied carbon oxide. 

9 ‘‘(B) ELECTION.—If the person described 

10 in subparagraph (A) makes an election under 

11 this subparagraph in such time and manner as 

12 the Secretary may prescribe by regulations, the 

13 credit under this section— 

14 ‘‘(i) shall be allowable to the person 

15 that disposes of the qualified carbon oxide, 

16 utilizes the qualified carbon oxide, or uses 

17 the qualified carbon oxide as a tertiary 

18 injectant, and 

19 ‘‘(ii) shall not be allowable to the per20 son described in subparagraph (A). 

21 ‘‘(4) RECAPTURE.—The Secretary shall, by reg22 ulations, provide for recapturing the benefit of any 

23 credit allowable under subsection (a) with respect to 

24 any qualified carbon oxide which ceases to be cap25 tured, disposed of, or used as a tertiary injectant in 

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1 a manner consistent with the requirements of this 

2 section. 

3 ‘‘(5) UTILIZATION OF QUALIFIED CARBON

4 OXIDE.— 

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

6 section, utilization of qualified carbon oxide 

7 means— 

8 ‘‘(i) the fixation of such qualified car9 bon oxide through photosynthesis or 

10 chemosynthesis, such as through the grow11 ing of algae or bacteria, 

12 ‘‘(ii) the chemical conversion of such 

13 qualified carbon oxide to a material or 

14 chemical compound in which such qualified 

15 carbon oxide is securely stored, or 

16 ‘‘(iii) the use of such qualified carbon 

17 oxide for any other purpose for which a 

18 commercial market exists (with the excep19 tion of use as a tertiary injectant in a 

20 qualified enhanced oil or natural gas recov21 ery project), as determined by the Sec22 retary. 

23 ‘‘(B) MEASUREMENT.— 

24 ‘‘(i) IN GENERAL.—For purposes of 

25 determining the amount of qualified carbon 

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1 oxide utilized by the taxpayer under para2 graph (2)(B)(ii) or (4)(B)(ii) of subsection 

3 (a), such amount shall be equal to the met4 ric tons of qualified carbon oxide which the 

5 taxpayer demonstrates, based upon an 

6 analysis of lifecycle greenhouse gas emis7 sions and subject to such requirements as 

8 the Secretary, in consultation with the Sec9 retary of Energy and the Administrator of 

10 the Environmental Protection Agency, de11 termines appropriate, were— 

12 ‘‘(I) captured and permanently 

13 isolated from the atmosphere, or 

14 ‘‘(II) displaced from being emit15 ted into the atmosphere, 

16 through use of a process described in sub17 paragraph (A). 

18 ‘‘(ii) LIFECYCLE GREENHOUSE GAS

19 EMISSIONS.—For purposes of clause (i), 

20 the term ‘lifecycle greenhouse gas emis21 sions’ has the same meaning given such 

22 term under subparagraph (H) of section 

23 211(o)(1) of the Clean Air Act (42 U.S.C. 

24 7545(o)(1)), as in effect on the date of the 

25 enactment of the FUTURE Act, except 

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1 that ‘product’ shall be substituted for ‘fuel’ 

2 each place it appears in such subpara3 graph. 

4 ‘‘(6) ELECTION FOR APPLICABLE FACILITIES.— 

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

6 section, in the case of an applicable facility, for 

7 any taxable year in which such facility captures 

8 not less than 500,000 metric tons of qualified 

9 carbon oxide during the taxable year, the per10 son described in paragraph (3)(A)(ii) may elect 

11 to have such facility, and any carbon capture 

12 equipment placed in service at such facility, 

13 deemed as having been placed in service on the 

14 date of the enactment of the FUTURE Act. 

15 ‘‘(B) APPLICABLE FACILITY.—For pur16 poses of this paragraph, the term ‘applicable fa17 cility’ means a qualified facility— 

18 ‘‘(i) which was placed in service before 

19 the date of the enactment of the FUTURE 

20 Act, and 

21 ‘‘(ii) for which no taxpayer claimed a 

22 credit under this section in regards to such 

23 facility for any taxable year ending before 

24 the date of the enactment of such Act. 

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1 ‘‘(7) INFLATION ADJUSTMENT.—In the case of 

2 any taxable year beginning in a calendar year after 

3 2009, there shall be substituted for each dollar 

4 amount contained in paragraphs (1) and (2) of sub5 section (a) an amount equal to the product of— 

6 ‘‘(A) such dollar amount, multiplied by 

7 ‘‘(B) the inflation adjustment factor for 

8 such calendar year determined under section 

9 43(b)(3)(B) for such calendar year, determined 

10 by substituting ‘2008’ for ‘1990’. 

11 ‘‘(g) APPLICATION OF SECTION FOR CERTAIN CAR12 BON CAPTURE EQUIPMENT.—In the case of any carbon 

13 capture equipment placed in service before the date of the 

14 enactment of the FUTURE Act, the credit under this sec15 tion shall apply with respect to qualified carbon oxide cap16 tured using such equipment before the end of the calendar 

17 year in which the Secretary, in consultation with the Ad18 ministrator of the Environmental Protection Agency, cer19 tifies that, during the period beginning after October 3, 

20 2008, a total of 75,000,000 metric tons of qualified carbon 

21 oxide have been taken into account in accordance with— 

22 ‘‘(1) subsection (a) of this section, as in effect 

23 on the day before the date of the enactment of the 

24 FUTURE Act, and 

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1 ‘‘(2) paragraphs (1) and (2) of subsection (a) 

2 of this section. 

3 ‘‘(h) REGULATIONS.—The Secretary may prescribe 

4 such regulations and other guidance as may be necessary 

5 or appropriate to carry out this section, including regula6 tions or other guidance to— 

7 ‘‘(1) ensure proper allocation under subsection 

8 (a) for qualified carbon oxide captured by a taxpayer 

9 during the taxable year ending after the date of the 

10 enactment of the FUTURE Act, and 

11 ‘‘(2) determine whether a facility satisfies the 

12 requirements under subsection (d)(1) during such 

13 taxable year.’’. 

14 (b) EFFECTIVE DATE.—The amendments made by 

15 this section shall take effect on the date of the enactment 

16 of this Act. 

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