II 

111TH CONGRESS 

2D SESSION S. 3590 

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

to facilitate the development and early deployment of carbon capture 

and sequestration technologies, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 14, 2010 

Mr. ROCKEFELLER (for himself and Mr. VOINOVICH) 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 

financial incentives to facilitate the development and 

early deployment of carbon capture and sequestration 

technologies, and for other purposes. 

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 and 

5 Sequestration Deployment Revenue Act of 2010’’. 

6 SEC. 2. TABLE OF CONTENTS. 

7 The table of contents for this Act is as follows: 

TITLE I—SEQUESTRATION TAX CREDIT AND CAPACITY 

INCENTIVES 


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Sec. 101. Carbon sequestration tax credit amendments. 

Sec. 102. Federal financial incentives for additional 10 GW of capacity. 

TITLE II—62 GW EARLY ADOPTER PROGRAM; SEQUESTRATION 

BONDS 

Sec. 201. Tax credit for early adoption of CCS. 

Sec. 202. Carbon sequestration bonds. 

1 TITLE I—SEQUESTRATION TAX 

2 CREDIT; CAPACITY INCENTIVES 

3 SEC. 101. CARBON SEQUESTRATION TAX CREDIT AMEND4 MENTS. 

5 (a) IN GENERAL.—Section 45Q of the Internal Rev6 enue Code of 1986 is amended— 

7 (1) by inserting ‘‘or converted to a stable form 

8 in which it is securely and permanently sequestered’’ 

9 after ‘‘secure geological storage’’ in subparagraph 

10 (B) of section 45Q(a)(1); 

11 (2) by striking subsection (a)(2) an inserting 

12 the following: 

13 ‘‘(2) $10 per metric ton of qualified carbon di14 oxide which is captured at a qualified facility and 

15 used as a tertiary injectant in a qualified enhanced 

16 oil or natural gas recovery project, and 

17 ‘‘(A) disposed of in secure geologic storage, 

18 or 

19 ‘‘(B) converted to a stable form to enable 

20 permanent sequestration, including the bene21 ficial use of such converted carbon dioxide.’’; 


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1 (3) by striking the words ‘‘by the taxpayer’’ 

2 each place they appear in subsection (a); 

3 (4) by striking ‘‘would otherwise’’ in subsection 

4 (b)(1)(A) and inserting ‘‘would, but for the capture 

5 and use or sequestration,’’; 

6 (5) by striking paragraph (1) of subsection (c) 

7 and redesignating paragraphs (2) and (3) as para8 graphs (1) and (2), respectively; 

9 (6) by striking paragraph (5) of subsection (d) 

10 and inserting the following: 

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

12 Any credit under this section shall be attributable to 

13 the person that captures the qualified carbon diox14 ide, except to the extent provided in regulations pre15 scribed by the Secretary.’’; 

16 (7) by adding at the end of subsection (d) the 

17 following: 

18 ‘‘(8) PLACED IN SERVICE.—Carbon capture 

19 equipment is placed in service on the date qualified 

20 carbon dioxide is first captured at a qualified facility 

21 and either— 

22 ‘‘(A) injected in secure geologic storage or 

23 converted to a stable form, or 


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1 ‘‘(B) used as an injectant in a qualified en2 hanced hydrocarbon recovery project or con3 verted to a stable form. 

4 ‘‘(9) TRANSFERABILITY OF CREDIT.—The cred5 it under this section may be transferred to any other 

6 person by the person to which the credit is attrib7 utable.’’; 

8 (8) by striking subsection (e) and inserting the 

9 following: 

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

11 this section shall apply with respect to qualified carbon 

12 dioxide captured at a qualified facility at which carbon 

13 capture equipment is placed in service prior to January 

14 1, 2019. The taxpayer may claim the credit for a 10-year 

15 period commencing with the date the carbon capture 

16 equipment is placed in service.’’; and 

17 (9) by inserting ‘‘or conversion to a stable 

18 form’’ after ‘‘geological storage’’ in subsection 

19 (d)(2). 

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

21 subsection (a) shall apply to carbon dioxide captured after 

22 the date of enactment of this Act. 


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1 SEC. 102. FEDERAL FINANCIAL INCENTIVES FOR ADDI2 TIONAL 10 GW OF CAPACITY. 

3 (a) ADDITIONAL AUTHORIZATION.—Section 1704 of 

4 the Energy Policy Act of 2005 (42 U.S.C. 16514) is 

5 amended— 

6 (1) by adding the following at the end of sub7 section (a): ‘‘In addition to other amounts made 

8 available under this section, there are authorized 

9 $20,000,000,000 to be used only for guarantees 

10 under this title for— 

11 ‘‘(1) the construction of new commercial scale 

12 electric generation units, or industrial facility units, 

13 that are eligible units utilizing carbon capture and 

14 sequestration technology; 

15 ‘‘(2) the retrofit of existing commercial scale 

16 electric generation units, or industrial facility units, 

17 that are eligible units providing for carbon capture 

18 and sequestration; and 

19 ‘‘(3) the construction of carbon dioxide trans20 mission pipelines to transport carbon dioxide to se21 questration sites or to sites where such carbon diox22 ide will be used for hydrocarbon recovery.’’; and 

23 (2) by adding at the end thereof the following: 

24 ‘‘(c) DEFINITIONS.—In this section: 

25 ‘‘(1) COMMERCIAL SCALE.—The term ‘commer26 cial scale’ means, with respect to an electric generaVerDate Mar 15 2010 21:45 Jul 15, 2010 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S3590.IS S3590

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1 tion unit, that the unit is designed to generate and 

2 sell electric power directly to consumers, or for re3 sale, with a carbon dioxide capture system having a 

4 useful life of at least 15 years. 

5 ‘‘(2) PERMANENT GEOLOGIC STORAGE SITE.— 

6 The term ‘permanent geologic storage site’ means a 

7 site that the Secretary determines is capable of stor8 ing carbon dioxide in saline or other deep geologic 

9 storage structures. 

10 ‘‘(3) ELIGIBLE UNIT.—The term ‘eligible unit’ 

11 means an electric generation unit or industrial facil12 ity unit located in the United States that— 

13 ‘‘(A) uses coal or petroleum coke for at 

14 least 75 percent of the fuel used by the unit; 

15 ‘‘(B) uses carbon capture technology to 

16 treat at least— 

17 ‘‘(i) 20 percent of the carbon dioxide 

18 emissions of the unit; or 

19 ‘‘(ii) an amount of carbon dioxide 

20 emissions that is attributable to 200 

21 megawatts of the total nameplate gener22 ating capacity of the unit; 

23 ‘‘(C) captures at least 80 percent of the 

24 carbon dioxide emissions from the treated emis25 sions of the unit; 


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1 ‘‘(D) transports such captured carbon di2 oxide to a permanent geologic storage site in 

3 the United States or to a site on the North 

4 American continent for use for hydrocarbon re5 covery; 

6 ‘‘(E) provides for the permanent storage of 

7 such carbon dioxide in such site; and 

8 ‘‘(F) has been approved by the Secretary 

9 as eligible under this subsection. 

10 ‘‘(d) ELIGIBLE UNITS.— 

11 ‘‘(1) CERTIFICATION.—No unit shall be an eli12 gible unit under subsection (c) unless the Secretary 

13 has certified such unit as meeting the requirements 

14 of such subsection (c) pursuant to a certification 

15 process established by the Secretary by rule. 

16 ‘‘(2) LIMITATION.—The Secretary may certify 

17 eligible units under this subsection which total in the 

18 aggregate no more than 10 gigawatts of treated gen19 erating capacity, of which not more than the equiva20 lent of 5 gigawatts of capacity may be for industrial 

21 units. For purposes of determining equivalency 

22 under this subsection, an industrial unit with uncon23 trolled carbon dioxide emissions equal to the uncon24 trolled carbon dioxide emissions of a 500 megawatt 

25 electric generation unit shall be treated as having inVerDate Mar 15 2010 21:45 Jul 15, 2010 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S3590.IS S3590

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1 stalled capacity equivalent to such 500 megawatt 

2 unit.’’. 

3 (b) TAX CREDITS.— 

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

5 subchapter A of chapter 1 of the Internal Revenue 

6 Code of 1986 is amended by adding at the end 

7 thereof the following: 

8 ‘‘SEC. 48E. PIONEER CCS FACILITIES. 

9 ‘‘(a) ADDITIONAL QUALIFYING ADVANCED COAL

10 PROJECT CREDIT.—For purposes of section 46, the quali11 fying advanced coal project credit for any taxable year 

12 shall also include an additional amount equal to 30 per13 cent of the incremental cost for carbon capture and se14 questration systems for eligible units, determined as fol15 lows: 

16 ‘‘(1) For an eligible unit that is a new electric 

17 generation unit, the incremental costs shall be the 

18 amount by which the costs incurred by the taxpayer 

19 for the unit exceed the costs of construction of a 

20 comparable supercritical pulverized coal unit without 

21 carbon capture and sequestration technology. To es22 tablish incremental costs, the taxpayer shall obtain 

23 a certified report of a qualified independent engineer 

24 estimating the differential construction cost between 

25 the eligible unit and a comparably-sized supercritical 


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1 pulverized coal unit without carbon capture and se2 questration. The independent engineer shall utilize 

3 cost estimates for supercritical pulverized coal units 

4 available from Federal agencies, academia and/or the 

5 private sector, appropriately adjusted for size, fuel 

6 source and location. An engineering design of a hy7 pothetical supercritical pulverized coal unit shall not 

8 be required to establish the incremental costs. 

9 ‘‘(2) For an eligible unit that is a new indus10 trial unit, the incremental costs shall be the amount 

11 by which the costs incurred by the taxpayer for the 

12 unit exceed the costs of construction of a comparable 

13 industrial unit without carbon capture and seques14 tration. 

15 ‘‘(3) For an eligible unit that retrofits a carbon 

16 capture, transportation, and sequestration system on 

17 an existing generation or industrial unit, the incre18 mental cost shall be the construction costs incurred 

19 by the taxpayer for the carbon capture and seques20 tration system. 

21 ‘‘(b) DEFINITIONS.—For purposes of this section, the 

22 term ‘eligible unit’ means an electric generation unit or 

23 industrial facility unit located in the United States that— 

24 ‘‘(A) uses coal or petroleum coke for at least 75 

25 percent of the fuel used by the unit; 


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1 ‘‘(B) uses carbon capture technology to treat at 

2 least— 

3 ‘‘(i) 20 percent of the carbon dioxide emis4 sions of the unit; or 

5 ‘‘(ii) an amount of carbon dioxide emis6 sions that is attributable to 200 megawatts of 

7 the total nameplate generating capacity of the 

8 unit; 

9 ‘‘(C) captures at least 80 percent of the carbon 

10 dioxide emissions from the treated emissions of the 

11 unit; 

12 ‘‘(D) transports such captured carbon dioxide 

13 to a permanent geologic storage site in the United 

14 States or to a site on the North American continent 

15 for use for hydrocarbon recovery; and 

16 ‘‘(E) provides for the permanent storage of 

17 such carbon dioxide in such site. 

18 ‘‘(c) ELECTION.—No costs for which a credit has 

19 been provided under section 48A or section 48B shall be 

20 eligible for a credit under this section.’’. 

21 (2) CLERICAL AMENDMENT.—The table of con22 tents for such subpart E is amended by adding at 

23 the end thereof the following: 

‘‘48E. Pioneer CCS facilities.’’. 

24 (3) EFFECTIVE DATE.—The amendments made 

25 by this subsection shall apply with respect to— 


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1 (A) new facilities placed in service after 

2 December 31, 2010, and before January 1, 

3 2025; and 

4 (B) the retrofit of existing facilities that 

5 commence operation with such retrofit after De6 cember 31, 2010, and before January 1, 2025. 

7 TITLE II—62 GW EARLY ADOPT8 ER PROGRAM; SEQUESTRA9 TION BONDS 

10 SEC. 201. TAX CREDIT FOR EARLY ADOPTION OF CCS. 

11 (a) IN GENERAL.—Subpart D of part IV of sub12 chapter A of chapter 1 of the Internal Revenue Code of 

13 1986 is amended by adding at the end thereof the fol14 lowing: 

15 ‘‘SEC. 45S. CREDIT FOR EARLY ADOPTION OF CCS. 

16 ‘‘(a) EARLY ADOPTION CREDIT.—For purposes of 

17 section 38, the carbon dioxide sequestration credit for any 

18 taxable year shall be the amount set forth in subsection 

19 (b), in the case of certified new or retrofit electric utility 

20 units or certified new or retrofit industrial units in pro21 viding for carbon capture and sequestration in secure geo22 logic storage, adjusted as provided in subsection (c). 

23 ‘‘(b) DETERMINATION OF AMOUNT.— 

24 ‘‘(1) 65 PERCENT CAPTURE RATE.—Except as 

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1 section (c), the amount of the credit under sub2 section (a) shall be $67 per ton of carbon dioxide 

3 captured and sequestered in the case of a certified 

4 new or retrofit electric utility unit or a certified new 

5 or retrofit industrial unit that— 

6 ‘‘(A) is placed in service before January 1, 

7 2025, and 

8 ‘‘(B) captures and sequesters at least 65 

9 percent of the carbon dioxide emissions in the 

10 treated portion of the flue gas or fuel gas 

11 stream. 

12 ‘‘(2) HIGHER CAPTURE RATE.—The amount of 

13 credit provided under paragraph (1) shall be in14 creased by $1.15 per ton for each percent of addi15 tional carbon dioxide emissions captured and seques16 tered above such 65 percent capture rate, up to a 

17 maximum credit of $96 per ton for a capture and 

18 sequestration rate of 90 percent or more. 

19 ‘‘(c) ADJUSTMENT FOR LATER COMMENCEMENT.— 

20 The amount of the credit determined under subsection (b) 

21 shall be reduced by $1 per ton of carbon dioxide for each 

22 year after the calendar year 2024 in which the carbon cap23 ture and sequestration equipment is placed in service. 

24 ‘‘(d) PLACED IN SERVICE.—For purposes of this sec25 tion, the term ‘placed in service’ with respect to a certified 


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1 new or retrofit electric utility unit or a certified new or 

2 retrofit industrial unit is the date on which such unit first 

3 captures and sequesters carbon dioxide in secure geologic 

4 storage. 

5 ‘‘(e) CERTIFICATION OF 62 GW.—No credit shall be 

6 allowed under this section unless the electric utility unit 

7 or industrial unit with respect to which a credit is applied 

8 has been certified by the Secretary. Upon application of 

9 any taxpayer for certification under this section, the Sec10 retary shall certify the unit in accordance with the certifi11 cation program under subsection (g). 

12 ‘‘(f) LIMITATION.—The Secretary shall certify eligi13 ble new or retrofit units under this subsection which total 

14 in the aggregate no more than 62 gigawatts of treated 

15 generating capacity, of which not more than 10 percent 

16 of this capacity may be for industrial units. For purposes 

17 of determining gigawatt equivalency under this subsection, 

18 6 million metric tonnes per year of captured and seques19 tered carbon dioxide emissions from industrial units shall 

20 be treated as having the capacity equivalent of 1 gigawatt 

21 of treated generating capacity. 

22 ‘‘(g) CERTIFICATION PROGRAM.— 

23 ‘‘(1) The Secretary shall establish a program 

24 for the certification of new or retrofit electric units 

25 and new or retrofit industrial units utilizing carbon 


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1 capture and sequestration technology eligible to 

2 apply for a credit under this section. A facility shall 

3 be certified only if the owner or operator of the 

4 unit— 

5 ‘‘(A) specifies the capacity of the unit sub6 ject to carbon capture and sequestration, and 

7 ‘‘(B) commits to place the unit, or equip8 ment in the case of a retrofit, in service within 

9 7 years after the date of the certification and 

10 to comply with such interim development mile11 stones (including the issuance of all necessary 

12 Federal, State, and local permits) as the Sec13 retary shall, by rule, prescribe. 

14 ‘‘(2) Failure to comply with the 7-year date set 

15 forth in this subsection or with any significant mile16 stone or other requirement established by the Sec17 retary under paragraph (1) shall result in the termi18 nation of the certification. The 7-year date shall be 

19 extended by the period of any delay caused by chal20 lenges or litigation related to permits required for 

21 the facility. No unit for which a certification has 

22 been terminated shall be eligible for a new certifi23 cation under this section. 

24 ‘‘(h) APPLICATION OF SECTION.—The credit under 

25 this section shall apply to carbon dioxide captured and seVerDate Mar 15 2010 21:45 Jul 15, 2010 Jkt 089200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\S3590.IS S3590

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1 questered in secure geologic storage from a certified new 

2 or retrofit electric utility unit or from a certified new or 

3 retrofit industrial unit. The taxpayer may claim the credit 

4 for a 10-year period commencing on the date the unit is 

5 placed in service. 

6 ‘‘(i) OTHER CREDITS.—Carbon dioxide from equip7 ment for which carbon dioxide storage credit has been al8 lowed under section 45Q or an investment credit has been 

9 allowed under section 48E shall not be eligible for a credit 

10 under this section. 

11 ‘‘(j) DEFINITIONS.—In this section: 

12 ‘‘(1) RETROFIT.—The term ‘retrofit’ means the 

13 application of carbon capture and sequestration 

14 technology to an existing unit, provided that such 

15 technology treats at least— 

16 ‘‘(A) 20 percent of the carbon dioxide 

17 emissions of the unit; or 

18 ‘‘(B) an amount of carbon dioxide emis19 sions that is attributable to 200 megawatts of 

20 the total nameplate generating capacity (or, in 

21 the case of an industrial unit, an equivalent ca22 pacity). 

23 (2) INDUSTRIAL UNIT.—The term ‘industrial 

24 unit’ means a unit that— 


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1 ‘‘(A) is not a qualifying electric generating 

2 unit; 

3 ‘‘(B) uses coal or petroleum coke for at 

4 least 75 percent of the fuel used by the unit; 

5 and 

6 ‘‘(C) absent carbon capture and sequestra7 tion, would emit greater than 500,000 tons per 

8 year of carbon dioxide. 

9 ‘‘(3) TREATED GENERATING CAPACITY.—The 

10 term ‘treated generating capacity’ means the portion 

11 of the total generating capacity of an electric gener12 ating unit (or, in the case of an industrial unit, an 

13 equivalent capacity) for which the flue gas or fuel 

14 gas is treated by carbon capture and sequestration 

15 technology.’’. 

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

17 for subpart D of part IV of subchapter A of chapter 1 

18 of the Internal Revenue Code of 1986 is amended by add19 ing at the end thereof the following: 

‘‘45S. Credit for early adoption of CCS.’’. 

20 SEC. 202. CARBON SEQUESTRATION BONDS. 

21 (a) IN GENERAL.—Part IV of subchapter A of chap22 ter 1 of the Internal Revenue Code of 1986 is amended 

23 by adding at the end the following new subpart: 

24 ‘‘Subpart K—Carbon Sequestration Bonds 

‘‘Sec. 54BB. Carbon Sequestration bonds. 


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1 ‘‘SEC. 54BB. CARBON SEQUESTRATION BONDS. 

2 ‘‘(a) IN GENERAL.—If a taxpayer holds a carbon se3 questration bond on one or more interest payment dates 

4 of the bond during any taxable year, there shall be allowed 

5 as a credit against the tax imposed by this chapter for 

6 the taxable year an amount equal to the sum of the credits 

7 determined under subsection (b) with respect to such 

8 dates. 

9 ‘‘(b) AMOUNT OF CREDIT.—The amount of the credit 

10 determined under this subsection with respect to any in11 terest payment date for a carbon sequestration bond is 

12 70 percent of the amount of interest payable by the issuer 

13 with respect to such date. 

14 ‘‘(c) LIMITATION BASED ON AMOUNT OF TAX.— 

15 ‘‘(1) IN GENERAL.—The credit allowed under 

16 subsection (a) for any taxable year shall not exceed 

17 the excess of— 

18 ‘‘(A) the sum of the regular tax liability 

19 (as defined in section 26(b)) plus the tax im20 posed by section 55, over 

21 ‘‘(B) the sum of the credits allowable 

22 under this part (other than subpart C and this 

23 subpart). 

24 ‘‘(2) CARRYOVER OF UNUSED CREDIT.—If the 

25 credit allowable under subsection (a) exceeds the 

26 limitation imposed by paragraph (1) for such taxable 


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1 year, such excess shall be carried to the succeeding 

2 taxable year and added to the credit allowable under 

3 subsection (a) for such taxable year (determined be4 fore the application of paragraph (1) for such suc5 ceeding taxable year). 

6 ‘‘(d) CARBON SEQUESTRATION BOND.— 

7 ‘‘(1) IN GENERAL.—For purposes of this sec8 tion, the term ‘carbon sequestration bond’ means 

9 any obligation issued as part of an issue if— 

10 ‘‘(A) 95 percent of the available project 

11 proceeds (as defined in section 54A) of such 

12 issue, in excess of the amounts in a reasonably 

13 required reserve (within the meaning of section 

14 150(a)(3)) for such issue, are to be used for 

15 qualified carbon sequestration costs incurred by 

16 public power providers or cooperative electric 

17 companies, 

18 ‘‘(B) the obligation is issued by a qualified 

19 issuer, and 

20 ‘‘(C) the issuer makes an irrevocable elec21 tion to have this section apply. 

22 ‘‘(2) APPLICABLE RULES.—For purposes of ap23 plying paragraph (1)— 

24 ‘‘(A) an issue shall not be treated as meet25 ing the requirements of paragraph (1) unless 


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1 the issue satisfies the requirements of section 

2 148 with respect to the proceeds of the issue, 

3 ‘‘(B) for purposes of applying section 148 

4 to such an issue, the yield on a carbon seques5 tration bond shall be determined without regard 

6 to the credit allowed under subsection (a), 

7 ‘‘(C) an issue shall not be treated as meet8 ing the requirements of this paragraph unless 

9 the issuer of the carbon sequestration bonds 

10 submits reports similar to the reports required 

11 under section 149(e), and 

12 ‘‘(D) a bond shall not be treated as a car13 bon sequestration bond if the issue price has 

14 more than a de minimis amount (determined 

15 under rules similar to the rules of section 

16 1273(a)(3)) of premium over the stated prin17 cipal amount of the bond. 

18 ‘‘(e) LIMITATION ON AMOUNT OF BONDS DES19 IGNATED.— 

20 ‘‘(1) IN GENERAL.—There is a national carbon 

21 sequestration bond limitation of $5,000,000,000. 

22 ‘‘(2) ALLOCATION BY SECRETARY.—The Sec23 retary shall make allocations of the amount of the 

24 national carbon sequestration bond limitation in 


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1 such manner as the Secretary determines appro2 priate. 

3 ‘‘(f) INTEREST PAYMENT DATE.—For purposes of 

4 this section, the term ‘interest payment date’ means any 

5 date on which the holder of record of the carbon sequestra6 tion bond is entitled to a payment of interest under such 

7 bond. 

8 ‘‘(g) SPECIAL RULES.— 

9 ‘‘(1) INTEREST ON CARBON SEQUESTRATION

10 BONDS INCLUDIBLE IN GROSS INCOME FOR FED11 ERAL INCOME TAX PURPOSES.—For purposes of this 

12 title, interest on any carbon sequestration bond shall 

13 be includible in gross income. 

14 ‘‘(2) APPLICATION OF CERTAIN RULES.—Rules 

15 similar to the rules of subsections (f), (g), (h), and 

16 (i) of section 54A shall apply for purposes of the 

17 credit allowed under subsection (a). 

18 ‘‘(h) SPECIAL RULE FOR QUALIFIED CARBON SE19 QUESTRATION BONDS.—In the case of a qualified carbon 

20 sequestration bond— 

21 ‘‘(1) ISSUER ALLOWED REFUNDABLE CRED22 IT.—In lieu of any credit allowed under this section 

23 with respect to such bond, the issuer of such bond 

24 shall be allowed a credit as provided in section 6432. 


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1 ‘‘(2) QUALIFIED CARBON SEQUESTRATION

2 BOND.—In this subsection, the term ‘qualified car3 bon sequestration bond’ means any carbon seques4 tration bond issued as part of an issue if the issuer 

5 makes an irrevocable election to have this subsection 

6 apply. 

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

8 ‘‘(1) QUALIFIED CARBON SEQUESTRATION

9 COSTS.—The term ‘qualified carbon sequestration 

10 costs’ means the incremental costs for carbon cap11 ture and sequestration systems as described in sec12 tion 48E (without regard to any placed in service 

13 date), which systems are owned by a public power 

14 provider or a cooperative electric company. 

15 ‘‘(2) PUBLIC POWER PROVIDER.—The term 

16 ‘public power provider’ means a State utility with a 

17 service obligation, as such terms are defined in sec18 tion 217 of the Federal Power Act (as in effect on 

19 the date of the enactment of the Carbon Capture 

20 and Sequestration Deployment Revenue Act of 

21 2010). 

22 ‘‘(3) COOPERATIVE ELECTRIC COMPANY.—The 

23 term ‘cooperative electric company’ means a mutual 

24 or cooperative electric company described in section 

25 501(c)(12) or section 1381 (a)(2)(C). 


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1 ‘‘(4) QUALIFIED ISSUER.—The term ‘qualified 

2 issuer’ means a public power provider, a cooperative 

3 electric company, a clean renewable energy bond 

4 lender, or a not-for-profit electric utility which has 

5 received a loan or loan guarantee under the Rural 

6 Electrification Act. 

7 ‘‘(j) 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 6431.’’. 

11 (b) CREDIT FOR QUALIFIED CARBON SEQUESTRA12 TION BONDS.—Subchapter B of chapter 65 of such Code 

13 is amended by adding at the end the following new section: 

14 ‘‘SEC. 6432. CREDIT FOR QUALIFIED CARBON SEQUESTRA15 TION BONDS ALLOWED TO ISSUER. 

16 ‘‘(a) IN GENERAL.—In the case of a qualified carbon 

17 sequestration bond, the issuer of such bond shall be al18 lowed a credit with respect to each interest payment under 

19 such bond which shall be payable by the Secretary as pro20 vided in subsection (b). 

21 ‘‘(b) PAYMENT OF CREDIT.—The Secretary shall pay 

22 (contemporaneously with each interest payment date 

23 under such bond) to the issuer of such bond (or to any 

24 person who makes such interest payments on behalf of the 


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1 issuer) 65 percent of the interest payable under such bond 

2 on such date. 

3 ‘‘(c) DEFINITIONS.—In this section: 

4 ‘‘(1) INTEREST PAYMENT DATE.—The term ‘in5 terest payment date’ means each date on which in6 terest is payable by the issuer under the terms of 

7 the bond. 

8 ‘‘(2) QUALIFIED CARBON SEQUESTRATION

9 BOND.—The term ‘qualified carbon sequestration 

10 bond’ has the meaning given such term in section 

11 54BB(h)(2). 

12 ‘‘(d) APPLICATION OF ARBITRAGE RULES.—For pur13 poses of section 148, the yield on a qualified bond shall 

14 be reduced by the credit allowed under this section.’’. 

15 (c) CONFORMING AMENDMENTS.— 

16 (1) Section 1324(b)(2) of title 31, United 

17 States Code, is amended by striking ‘‘or 6431’’ and 

18 inserting ‘‘6431, or 6432,’’. 

19 (2) Section 54A(c)(1)(B) of the Internal Rev20 enue Code of 1986 is amended by striking ‘‘subparts 

21 C and J’’ and inserting ‘‘subparts C, J, and K’’. 

22 (3) Sections 54(c)(2), 1397E(c)(2), and 

23 1400N(l)(3)(B) of such Code are each amended by 

24 striking ‘‘and J’’ and inserting ‘‘J, and K’’. 


srobinson on DSKHWCL6B1PROD with BILLS
24 

•S 3590 IS 

1 (4) Section 6211(b)(4)(A) of such Code is 

2 amended by striking ‘‘and 6431’’ and inserting 

3 ‘‘6431, and 6432’’. 

4 (5) Section 6401(b)(1) of such Code is amend5 ed by striking ‘‘and J’’ and inserting ‘‘J, and K’’. 

6 (6) The table of subparts for part IV of sub7 chapter A of chapter 1 of such Code is amended by 

8 adding at the end the following new item: 

‘‘SUBPART K. CARBON SEQUESTRATION BONDS.’’. 

9 (7) The table of sections for subchapter B of 

10 chapter 65 of such Code is amended by adding at 

11 the end the following new item: 

‘‘Sec. 6432. Credit for qualified carbon sequestration bonds allowed to issuer.’’. 

12 (d) TRANSITIONAL COORDINATION WITH STATE

13 LAW.—Except as otherwise provided by a State after the 

14 date of the enactment of this Act, the interest on any car15 bon sequestration bond (as defined in section 54BB of the 

16 Internal Revenue Code of 1986, as added by this section) 

17 and the amount of any credit determined under such sec18 tion with respect to such bond shall be treated for pur19 poses of the income tax laws of such State as being exempt 

20 from Federal income tax. 

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

22 this section shall apply to obligations issued after the date 

23 of the enactment of this Act. 

Æ 


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