I 

116TH CONGRESS 

1ST SESSION H. R. 3861 

To amend the Internal Revenue Code of 1986 to provide for the issuance 

of exempt facility bonds for qualified carbon dioxide capture facilities. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 19, 2019 

Mr. BURCHETT introduced the following bill; which was referred to the 

Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

for the issuance of exempt facility bonds for qualified 

carbon dioxide capture facilities. 

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 ‘‘Carbon Capture Im5 provement Act of 2019’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 

8 (1) Capture and long-term storage of carbon di9 oxide from coal, natural gas, and biomass-fired 

10 power plants, as well as from industrial sectors such 


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1 as oil refining and production of fertilizer, cement, 

2 and ethanol, can help protect the environment while 

3 improving the economy and national security of the 

4 United States. 

5 (2) The United States is a world leader in the 

6 field of carbon dioxide capture and long-term stor7 age, as well as the beneficial use of carbon dioxide 

8 in enhanced oil recovery operations, with many man9 ufacturers and licensors of carbon dioxide capture 

10 technology based in the United States. 

11 (3) While the prospects for large-scale carbon 

12 capture in the United States are promising, costs re13 main relatively high. Lowering the financing costs 

14 for carbon dioxide capture projects would accelerate 

15 the deployment of this technology, and if the cap16 tured carbon dioxide is subsequently sold for indus17 trial use, such as for use in enhanced oil recovery 

18 operations, the economic prospects are further im19 proved. 

20 (4) Since 1968, tax-exempt private activity 

21 bonds have been used to provide access to lower-cost 

22 financing for private businesses that are purchasing 

23 new capital equipment for certain specified environ24 mental facilities, including facilities that reduce, reVerDate Sep 11 2014 02:03 Aug 01, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3861.IH H3861

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1 cycle, or dispose of waste, pollutants, and hazardous 

2 substances. 

3 (5) Allowing tax-exempt financing for the pur4 chase of capital equipment that is used to capture 

5 carbon dioxide will reduce the costs of developing 

6 carbon dioxide capture projects, accelerate their de7 ployment, and, in conjunction with carbon dioxide 

8 utilization and long-term storage, help the United 

9 States meet critical environmental, economic, and 

10 national security goals. 

11 SEC. 3. CARBON DIOXIDE CAPTURE FACILITIES. 

12 (a) IN GENERAL.—Section 142 of the Internal Rev13 enue Code of 1986 is amended— 

14 (1) in subsection (a)— 

15 (A) in paragraph (14), by striking ‘‘or’’ at 

16 the end, 

17 (B) in paragraph (15), by striking the pe18 riod at the end and inserting ‘‘, or’’, and 

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

20 paragraph: 

21 ‘‘(16) qualified carbon dioxide capture facili22 ties.’’, and 

23 (2) by adding at the end the following new sub24 section: 


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1 ‘‘(n) QUALIFIED CARBON DIOXIDE CAPTURE FACIL2 ITY.— 

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

4 (a)(16), the term ‘qualified carbon dioxide capture 

5 facility’ means the eligible components of an indus6 trial carbon dioxide facility. 

7 ‘‘(2) DEFINITIONS.—In this subsection: 

8 ‘‘(A) ELIGIBLE COMPONENT.— 

9 ‘‘(i) IN GENERAL.—The term ‘eligible 

10 component’ means any equipment installed 

11 in an industrial carbon dioxide facility that 

12 satisfies the requirements under paragraph 

13 (3) and is— 

14 ‘‘(I) used for the purpose of cap15 ture, treatment and purification, com16 pression, transportation, or on-site 

17 storage of carbon dioxide produced by 

18 the industrial carbon dioxide facility, 

19 or 

20 ‘‘(II) integral or functionally re21 lated and subordinate to a process de22 scribed in section 48B(c)(2), deter23 mined by substituting ‘carbon dioxide’ 

24 for ‘carbon monoxide’ in such section. 


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1 ‘‘(B) INDUSTRIAL CARBON DIOXIDE FACIL2 ITY.— 

3 ‘‘(i) IN GENERAL.—Except as pro4 vided in clause (ii), the term ‘industrial 

5 carbon dioxide facility’ means a facility 

6 that emits carbon dioxide (including from 

7 any fugitive emissions source) that is cre8 ated as a result of any of the following 

9 processes: 

10 ‘‘(I) Fuel combustion. 

11 ‘‘(II) Gasification. 

12 ‘‘(III) Bioindustrial. 

13 ‘‘(IV) Fermentation. 

14 ‘‘(V) Any manufacturing industry 

15 described in section 48B(c)(7). 

16 ‘‘(ii) EXCEPTIONS.—For purposes of 

17 clause (i), an industrial carbon dioxide fa18 cility shall not include— 

19 ‘‘(I) any geological gas facility 

20 (as defined in clause (iii)), or 

21 ‘‘(II) any air separation unit 

22 that— 

23 ‘‘(aa) does not qualify as 

24 gasification equipment, or 


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1 ‘‘(bb) is not a necessary 

2 component of an oxy-fuel com3 bustion process. 

4 ‘‘(iii) GEOLOGICAL GAS FACILITY.— 

5 The term ‘geological gas facility’ means a 

6 facility that— 

7 ‘‘(I) produces a raw product con8 sisting of gas or mixed gas and liquid 

9 from a geological formation, 

10 ‘‘(II) transports or removes im11 purities from such product, or 

12 ‘‘(III) separates such product 

13 into its constituent parts. 

14 ‘‘(3) CAPTURE AND STORAGE REQUIREMENT.— 

15 ‘‘(A) IN GENERAL.—Subject to subpara16 graph (B), the eligible components of an indus17 trial carbon dioxide facility shall have a capture 

18 and storage percentage (as determined under 

19 subparagraph (C)) that is equal to or greater 

20 than 65 percent. 

21 ‘‘(B) EXCEPTION.—In the case of an in22 dustrial carbon dioxide facility with a capture 

23 and storage percentage that is less than 65 per24 cent, the percentage of the cost of the eligible 

25 components installed in such facility that may 


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1 be financed with tax-exempt bonds may not be 

2 greater than the capture and storage percent3 age. 

4 ‘‘(C) CAPTURE AND STORAGE PERCENT5 AGE.— 

6 ‘‘(i) IN GENERAL.—Subject to clause 

7 (ii), the capture and storage percentage 

8 shall be an amount, expressed as a per9 centage, equal to the quotient of— 

10 ‘‘(I) the total metric tons of car11 bon dioxide annually captured, trans12 ported, and injected into— 

13 ‘‘(aa) a facility for geologic 

14 storage, or 

15 ‘‘(bb) an enhanced oil or gas 

16 recovery well followed by geologic 

17 storage, divided by 

18 ‘‘(II) the total metric tons of car19 bon dioxide which would otherwise be 

20 released into the atmosphere each 

21 year as industrial emission of green22 house gas if the eligible components 

23 were not installed in the industrial 

24 carbon dioxide facility. 


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1 ‘‘(ii) LIMITED APPLICATION OF ELIGI2 BLE COMPONENTS.—In the case of eligible 

3 components that are designed to capture 

4 carbon dioxide solely from specific sources 

5 of emissions or portions thereof within an 

6 industrial carbon dioxide facility, the cap7 ture and storage percentage under this 

8 subparagraph shall be determined based 

9 only on such specific sources of emissions 

10 or portions thereof.’’. 

11 (b) VOLUME CAP.—Section 146(g)(4) of such Code 

12 is amended by striking ‘‘paragraph (11) of section 142(a) 

13 (relating to high-speed intercity rail facilities)’’ and insert14 ing ‘‘paragraph (11) or (16) of section 142(a)’’. 

15 (c) CLARIFICATION OF PRIVATE BUSINESS USE.— 

16 Section 141(b)(6) of such Code is amended by adding at 

17 the end the following new subparagraph: 

18 ‘‘(C) CLARIFICATION RELATING TO QUALI19 FIED CARBON DIOXIDE CAPTURE FACILITIES.— 

20 For purposes of this subsection, the sale of car21 bon dioxide produced by a qualified carbon di22 oxide capture facility (as defined in section 

23 142(n)) which is owned by a governmental unit 

24 shall not constitute private business use.’’. 


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

2 this section shall apply to obligations issued after Decem3 ber 31, 2019. 

Æ 


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