II 

110TH CONGRESS 

2D SESSION S. 3132 

To amend the Internal Revenue Code of 1986 to allow a credit for the 

capture and sequestration of carbon dioxide from an industrial source. 

IN THE SENATE OF THE UNITED STATES 

JUNE 12, 2008 

Mr. BAUCUS 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 allow a 

credit for the capture and sequestration of carbon dioxide 

from an industrial source. 

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 ‘‘Accelerating Carbon 

5 Capture and Sequestration Act of 2008’’. 

6 SEC. 2. TAX CREDIT FOR CARBON DIOXIDE SEQUESTRA7 TION. 

8 (a) IN GENERAL.—Subpart D of part IV of sub9 chapter A of chapter 1 of the Internal Revenue Code of 


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1 1986 (relating to business credits) is amended by adding 

2 at the end the following new section: 

3 ‘‘SEC. 45Q. CREDIT FOR CARBON DIOXIDE SEQUESTRATION. 

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

5 the carbon dioxide sequestration credit for any taxable 

6 year is an amount equal to the sum of— 

7 ‘‘(1) $20 per metric ton of qualified carbon di8 oxide which is— 

9 ‘‘(A) captured by the taxpayer at a quali10 fied facility, and 

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

12 geological storage, and 

13 ‘‘(2) $10 per metric ton of qualified carbon di14 oxide which is— 

15 ‘‘(A) captured by the taxpayer at a quali16 fied facility, and 

17 ‘‘(B) used by the taxpayer as a tertiary 

18 injectant in a qualified enhanced oil or natural 

19 gas recovery project. 

20 ‘‘(b) QUALIFIED CARBON DIOXIDE.—For purposes of 

21 this section— 

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

23 dioxide’ means carbon dioxide captured from an in24 dustrial source which— 


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1 ‘‘(A) would otherwise be released into the 

2 atmosphere as industrial emission of green3 house gas, and 

4 ‘‘(B) is measured at the source of capture 

5 and verified at the point of disposal or injec6 tion. 

7 ‘‘(2) RECYCLED CARBON DIOXIDE.—The term 

8 ‘qualified carbon dioxide’ includes the initial deposit 

9 of captured carbon dioxide used as a tertiary 

10 injectant. Such term does not include carbon dioxide 

11 that is re-captured, recycled, and re-injected as part 

12 of the enhanced oil and natural gas recovery process. 

13 ‘‘(c) QUALIFIED FACILITY.—For purposes of this 

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

15 facility— 

16 ‘‘(1) which is owned by the taxpayer, 

17 ‘‘(2) at which carbon capture equipment is 

18 placed in service, and 

19 ‘‘(3) which captures not less than 500,000 met20 ric tons of carbon dioxide during the taxable year. 

21 ‘‘(d) SPECIAL RULES AND OTHER DEFINITIONS.— 

22 For purposes of this section— 

23 ‘‘(1) ONLY CARBON DIOXIDE CAPTURED AND

24 STORED OR USED WITHIN THE UNITED STATES

25 TAKEN INTO ACCOUNT.—The credit under this secVerDate Aug 31 2005 00:08 Jun 14, 2008 Jkt 069200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3132.IS S3132

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1 tion shall apply only with respect to qualified carbon 

2 dioxide— 

3 ‘‘(A) the capture of which is within the 

4 United States (within the meaning of section 

5 638(1)) or a possession of the United States 

6 (within the meaning of section 638(2)), and 

7 ‘‘(B) which is stored in secure geological 

8 storage, or used as a tertiary injectant in a 

9 qualified enhanced oil or natural gas recovery 

10 project, located within the United States (as so 

11 defined) or a possession of the United States 

12 (as so defined). 

13 ‘‘(2) SECURE GEOLOGICAL STORAGE.—The Sec14 retary, in consultation with the Administrator of the 

15 Environmental Protection Agency, shall establish 

16 regulations for determining adequate security meas17 ures for the geological storage of carbon dioxide 

18 under subsection (a)(1)(B) such that the carbon di19 oxide does not escape into the atmosphere. Such 

20 term shall include storage at deep saline formations 

21 and unminable coal seems under such conditions as 

22 the Secretary may determine under such regulations. 

23 ‘‘(3) TERTIARY INJECTANT.—The term ‘ter24 tiary injectant’ has the same meaning as when used 

25 within section 193(b)(1). 


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1 ‘‘(4) QUALIFIED ENHANCED OIL OR NATURAL

2 GAS RECOVERY PROJECT.—The term ‘qualified en3 hanced oil or natural gas recovery project’ has the 

4 meaning given the term ‘qualified enhanced oil re5 covery project’ by section 43(c)(2), by substituting 

6 ‘crude oil or natural gas’ for ‘crude oil’ in subpara7 graph (A)(i) thereof. 

8 ‘‘(5) CREDIT ATTRIBUTABLE TO TAXPAYER.— 

9 Any credit under this section shall be attributable to 

10 the person that captures and physically or contrac11 tually ensures the disposal of or the use as a tertiary 

12 injectant of the qualified carbon dioxide, except to 

13 the extent provided in regulations prescribed by the 

14 Secretary. 

15 ‘‘(6) RECAPTURE.—The Secretary shall, by reg16 ulations, provide for recapturing the benefit of any 

17 credit allowable under subsection (a) with respect to 

18 any qualified carbon dioxide which ceases to be cap19 tured, disposed of, or used as a tertiary injectant in 

20 a manner consistent with the requirements of this 

21 section. 

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

23 any taxable year beginning in a calendar year after 

24 2008, there shall be substituted for each dollar 


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1 amount contained in subsection (a) an amount equal 

2 to the product of— 

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

4 ‘‘(B) the inflation adjustment factor for 

5 such calendar year determined under section 

6 43(b)(3)(B) for such calendar year, determined 

7 by substituting ‘2007’ for ‘1990’. 

8 ‘‘(e) APPLICATION OF SECTION.—The credit under 

9 this section shall apply with respect to qualified carbon 

10 dioxide before the end of the calendar year in which the 

11 Secretary, in consultation with the Administrator of the 

12 Environmental Protection Agency, certifies that 

13 75,000,000 metric tons of qualified carbon dioxide have 

14 been captured and disposed of or used as a tertiary 

15 injectant.’’. 

16 (b) CONFORMING AMENDMENT.—Section 38(b) of 

17 the Internal Revenue Code of 1986 (relating to general 

18 business credit) is amended by striking ‘‘plus’’ at the end 

19 of paragraph (32), by striking the period at the end of 

20 paragraph (33) and inserting ‘‘, plus’’, and by adding at 

21 the end of following new paragraph: 

22 ‘‘(34) the carbon dioxide sequestration credit 

23 determined under section 45Q(a).’’. 

24 (c) CLERICAL AMENDMENT.—The table of sections 

25 for subpart B of part IV of subchapter A of chapter 1 


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1 of the Internal Revenue Code of 1986 (relating to other 

2 credits) is amended by adding at the end the following 

3 new section: 

‘‘Sec. 4QO. Credit for carbon dioxide sequestration.’’. 

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

5 this section shall apply carbon dioxide captured after the 

6 date of the enactment of this Act. 

Æ 


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