II 

116TH CONGRESS 

1ST SESSION S. 1288 

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 2, 2019 

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

MENENDEZ, Mr. CARPER, Mr. CARDIN, Mr. BENNET, Mr. WHITEHOUSE, 

Ms. HASSAN, Ms. CORTEZ MASTO, Mrs. FEINSTEIN, Mr. DURBIN, Ms. 

KLOBUCHAR, Mrs. SHAHEEN, Mrs. GILLIBRAND, Mr. BLUMENTHAL, Mr. 

SCHATZ, Ms. HIRONO, Mr. HEINRICH, Mr. KING, Mr. KAINE, Mr. BOOKER, Mr. VAN HOLLEN, Ms. SMITH, and Mr. PETERS) 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 amendVerDate Sep 11 2014 00:42 May 10, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1288.IS S1288

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1 ment or repeal is expressed in terms of an amendment 

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

3 shall be considered to be made to a section or other provi4 sion of the Internal Revenue Code of 1986. 

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

6 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, modifications, and terminations 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. 

7 TITLE I—CLEAN ENERGY TAX 

8 CREDITS 

9 SEC. 101. CLEAN ENERGY PRODUCTION CREDIT. 

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

12 the following new section: 

13 ‘‘SEC. 45T. CLEAN ENERGY PRODUCTION CREDIT. 

14 ‘‘(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 sum of— 

4 ‘‘(A) an amount equal to the product of— 

5 ‘‘(i) the applicable credit rate (as de6 termined under paragraph (2)), multiplied 

7 by 

8 ‘‘(ii) the kilowatt hours of elec9 tricity— 

10 ‘‘(I) produced by the taxpayer at 

11 a qualified facility, and 

12 ‘‘(II)(aa) sold by the taxpayer to 

13 an unrelated person during the tax14 able year, or 

15 ‘‘(bb) in the case of a qualified 

16 facility which is equipped with a me17 tering device which is owned and op18 erated by an unrelated person, sold, 

19 consumed, or stored by the taxpayer 

20 during the taxable year, plus 

21 ‘‘(B) the qualified carbon capture and se22 questration amount determined under sub23 section (c). 

24 ‘‘(2) APPLICABLE CREDIT RATE.— 

25 ‘‘(A) IN GENERAL.— 


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1 ‘‘(i) MAXIMUM CREDIT RATE.—Except 

2 as provided in clause (ii), the applicable 

3 credit rate is 1.5 cents. 

4 ‘‘(ii) REDUCTION OF CREDIT BASED

5 ON GREENHOUSE GAS EMISSION RATE.— 

6 The applicable credit rate shall be reduced 

7 (but not below zero) by an amount which 

8 bears the same ratio to the amount in ef9 fect under clause (i) as the greenhouse gas 

10 emissions rate for the qualified facility 

11 bears to 300 grams of CO2e per KWh. 

12 ‘‘(B) ROUNDING.—If any amount deter13 mined under subparagraph (A)(ii) is not a mul14 tiple of 0.1 cent, such amount shall be rounded 

15 to the nearest multiple of 0.1 cent. 

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

17 ‘‘(1) IN GENERAL.—For purposes of this sec18 tion, the term ‘greenhouse gas emissions rate’ means 

19 the amount of greenhouse gases emitted into the at20 mosphere by a qualified facility in the production of 

21 electricity, expressed as grams of CO2e per KWh. 

22 ‘‘(2) NON-FOSSIL FUEL COMBUSTION AND GAS23 IFICATION.—In the case of a qualified facility which 

24 produces electricity through combustion or gasifi25 cation of a non-fossil fuel, the greenhouse gas emisVerDate Sep 11 2014 00:42 May 10, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1288.IS S1288

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1 sions rate for such facility shall be equal to the net 

2 rate of greenhouse gases emitted into the atmos3 phere by such facility (taking into account the 

4 amount of lifecycle greenhouse gas emissions, as de5 scribed in section 211(o)(1)(H) of the Clean Air Act 

6 (42 U.S.C. 7545(o)(1)(H))) in the production of 

7 electricity, expressed as grams of CO2e per KWh. 

8 ‘‘(3) ESTABLISHMENT OF SAFE HARBOR FOR

9 QUALIFIED FACILITIES.— 

10 ‘‘(A) IN GENERAL.—The Secretary, in con11 sultation with the Administrator of the Envi12 ronmental Protection Agency, shall establish 

13 safe-harbor greenhouse gas emissions rates for 

14 types or categories of qualified facilities, which 

15 a taxpayer may elect to use for purposes of this 

16 section. 

17 ‘‘(B) ROUNDING.—In establishing the safe18 harbor greenhouse gas emissions rates for 

19 qualified facilities, the Secretary may round 

20 such rates to the nearest multiple of 30 grams 

21 of CO2e per KWh (or, in the case of a green22 house gas emissions rate which is less than 15 

23 grams of CO2e per KWh, by rounding such rate 

24 to zero). 


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1 ‘‘(C) PUBLISHING SAFE HARBOR EMIS2 SIONS RATES.—The Secretary, in consultation 

3 with the Administrator of the Environmental 

4 Protection Agency, shall publish a table that 

5 sets forth the safe-harbor greenhouse gas emis6 sions rates for similar types or categories of 

7 qualified facilities. 

8 ‘‘(4) CARBON CAPTURE AND SEQUESTRATION

9 EQUIPMENT.—For purposes of this subsection, the 

10 amount of greenhouse gases emitted into the atmos11 phere by a qualified facility in the production of 

12 electricity shall not include any qualified carbon di13 oxide (as defined in section 48D(c)(3)(A)) that is 

14 captured by the taxpayer and— 

15 ‘‘(A) pursuant to any regulations estab16 lished under paragraph (2) of section 45Q(f), 

17 disposed of by the taxpayer in secure geological 

18 storage, or 

19 ‘‘(B) utilized by the taxpayer in a manner 

20 described in paragraph (5) of such section. 

21 ‘‘(c) QUALIFIED CARBON CAPTURE AND SEQUESTRA22 TION AMOUNT.— 

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

24 (a)(1)(B), the qualified carbon capture and sequesVerDate Sep 11 2014 00:42 May 10, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1288.IS S1288

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1 tration amount for any taxable year shall be an 

2 amount equal to the product of— 

3 ‘‘(A) the applicable credit rate (as deter4 mined under subsection (a)(2), determined 

5 without regard to subparagraph (A)(ii) thereof), 

6 multiplied by 

7 ‘‘(B) an amount equal to the product of— 

8 ‘‘(i) the kilowatt hours of electricity 

9 produced and sold, consumed, or stored (as 

10 determined under clause (ii) of subsection 

11 (a)(1)(A)) for such taxable year by any fa12 cility placed in service before January 1, 

13 2021, multiplied by 

14 ‘‘(ii) an amount equal to the quotient 

15 of— 

16 ‘‘(I) the metric tons of qualified 

17 carbon dioxide captured by the tax18 payer during such taxable year using 

19 qualified carbon capture and seques20 tration equipment installed at such fa21 cility and— 

22 ‘‘(aa) pursuant to any regu23 lations established under para24 graph (2) of section 45Q(f), disVerDate Sep 11 2014 00:42 May 10, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1288.IS S1288

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1 posed of by the taxpayer in se2 cure geological storage, or 

3 ‘‘(bb) utilized by the tax4 payer in a manner described in 

5 paragraph (5) of such section, di6 vided by 

7 ‘‘(II) an amount equal to the 

8 sum of— 

9 ‘‘(aa) the amount deter10 mined under subclause (I), plus 

11 ‘‘(bb) the metric tons of car12 bon dioxide emitted into the at13 mosphere by such facility during 

14 such taxable year. 

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

16 ‘‘(A) QUALIFIED CARBON CAPTURE AND

17 SEQUESTRATION EQUIPMENT.—The term 

18 ‘qualified carbon capture and sequestration 

19 equipment’ means property described under 

20 paragraph (2) of section 48D(c) (without re21 gard to subparagraph (F) of such paragraph) 

22 with respect to which no credit has been al23 lowed under section 45Q. 

24 ‘‘(B) QUALIFIED CARBON DIOXIDE.—The 

25 term ‘qualified carbon dioxide’ has the same 


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1 meaning given such term under paragraph (3) 

2 of section 48D(c). 

3 ‘‘(d) INFLATION ADJUSTMENT.— 

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

5 year beginning after 2020, the 1.5 cent amount in 

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

7 by multiplying such amount by the inflation adjust8 ment factor for the calendar year in which the sale 

9 or use of the electricity occurs. If any amount as in10 creased under the preceding sentence is not a mul11 tiple of 0.1 cent, such amount shall be rounded to 

12 the nearest multiple of 0.1 cent. 

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

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

15 determine and publish in the Federal Register the 

16 inflation adjustment factor for such calendar year in 

17 accordance with this subsection. 

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

19 term ‘inflation adjustment factor’ means, with re20 spect to a calendar year, a fraction the numerator 

21 of which is the GDP implicit price deflator for the 

22 preceding calendar year and the denominator of 

23 which is the GDP implicit price deflator for the cal24 endar year 1992. The term ‘GDP implicit price 

25 deflator’ means the most recent revision of the imVerDate Sep 11 2014 00:42 May 10, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1288.IS S1288

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1 plicit price deflator for the gross domestic product 

2 as computed and published by the Department of 

3 Commerce before March 15 of the calendar year. 

4 ‘‘(e) CREDIT PHASE-OUT.— 

5 ‘‘(1) IN GENERAL.—If the Secretary, in con6 sultation with the Secretary of Energy and the Ad7 ministrator of the Environmental Protection Agency, 

8 determines that the annual greenhouse gas emis9 sions from electrical production in the United States 

10 are equal to or less than 50 percent of the annual 

11 greenhouse gas emissions from electrical production 

12 in the United States for calendar year 2019, the 

13 amount of the clean energy production credit under 

14 subsection (a) for any qualified facility placed in 

15 service during a calendar year described in para16 graph (2) shall be equal to the product of— 

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

18 under subsection (a) without regard to this sub19 section, multiplied by 

20 ‘‘(B) the phase-out percentage under para21 graph (2). 

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

23 percentage under this paragraph is equal to— 

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

25 the first calendar year following the calendar 


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1 year in which the determination described in 

2 paragraph (1) is made, 75 percent, 

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

4 the second calendar year following such deter5 mination year, 50 percent, 

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

7 the third calendar year following such deter8 mination year, 25 percent, and 

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

10 any calendar year subsequent to the year de11 scribed in subparagraph (C), 0 percent. 

12 ‘‘(f) DEFINITIONS.—In this section: 

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

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

15 the equivalent carbon dioxide (as determined based 

16 on relative global warming potential) per kilowatt 

17 hour of electricity produced. 

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

19 gas’ has the same meaning given such term under 

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

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

22 the enactment of this section. 

23 ‘‘(3) QUALIFIED FACILITY.— 


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1 ‘‘(A) IN GENERAL.—Subject to subpara2 graphs (B) and (C), the term ‘qualified facility’ 

3 means a facility which is— 

4 ‘‘(i) used for the generation of elec5 tricity, and 

6 ‘‘(ii) originally placed in service after 

7 December 31, 2020. 

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

9 purposes of this section, a facility shall only be 

10 treated as a qualified facility during the 10-year 

11 period beginning on the date the facility was 

12 originally placed in service. 

13 ‘‘(C) EXPANSION OF FACILITY; INCRE14 MENTAL PRODUCTION.—A qualified facility 

15 shall include either of the following in connec16 tion with a facility described in subparagraph 

17 (A)(i) that was placed in service before January 

18 1, 2021, but only to the extent of the increased 

19 amount of electricity produced at the facility by 

20 reason of the following: 

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

22 December 31, 2020. 

23 ‘‘(ii) Any efficiency improvements or 

24 additions of capacity placed in service after 

25 December 31, 2020. 


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1 ‘‘(D) COORDINATION WITH OTHER CRED2 ITS.—The term ‘qualified facility’ shall not in3 clude any facility for which— 

4 ‘‘(i) a renewable electricity production 

5 credit determined under section 45 is al6 lowed under section 38 for the taxable year 

7 or any prior taxable year, 

8 ‘‘(ii) an advanced nuclear power facil9 ity production credit under section 45J is 

10 allowed under section 38 for the taxable 

11 year or any prior taxable year, 

12 ‘‘(iii) an energy credit determined 

13 under section 48 is allowed under section 

14 38 for the taxable year or any prior tax15 able year, or 

16 ‘‘(iv) a clean energy investment credit 

17 determined under section 48D is allowed 

18 under section 38 for the taxable year or 

19 any prior taxable year. 

20 ‘‘(g) FINAL GUIDANCE.—Not later than January 1, 

21 2020, the Secretary, in consultation with the Adminis22 trator of the Environmental Protection Agency, shall issue 

23 final guidance regarding implementation of this section, 

24 including calculation of greenhouse gas emission rates for 


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1 qualified facilities and determination of clean energy pro2 duction credits under this section. 

3 ‘‘(h) SPECIAL RULES.— 

4 ‘‘(1) ONLY PRODUCTION IN THE UNITED

5 STATES TAKEN INTO ACCOUNT.—Consumption or 

6 sales shall be taken into account under this section 

7 only with respect to electricity the production of 

8 which is within— 

9 ‘‘(A) the United States (within the mean10 ing of section 638(1)), or 

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

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

13 ‘‘(2) COMBINED HEAT AND POWER SYSTEM

14 PROPERTY.— 

15 ‘‘(A) IN GENERAL.—For purposes of sub16 section (a)(1)(B), the kilowatt hours of elec17 tricity produced by a taxpayer at a qualified fa18 cility shall include any production in the form 

19 of useful thermal energy by any combined heat 

20 and power system property within such facility. 

21 ‘‘(B) COMBINED HEAT AND POWER SYS22 TEM PROPERTY.—For purposes of this para23 graph, the term ‘combined heat and power sys24 tem property’ has the same meaning given such 


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

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

3 ‘‘(C) CONVERSION FROM BTU TO KWH.— 

4 ‘‘(i) IN GENERAL.—For purposes of 

5 subparagraph (A), the amount of kilowatt 

6 hours of electricity produced in the form of 

7 useful thermal energy shall be equal to the 

8 quotient of— 

9 ‘‘(I) the total useful thermal en10 ergy produced by the combined heat 

11 and power system property within the 

12 qualified facility, divided by 

13 ‘‘(II) the heat rate for such facil14 ity. 

15 ‘‘(ii) HEAT RATE.—For purposes of 

16 this subparagraph, the term ‘heat rate’ 

17 means the amount of energy used by the 

18 qualified facility to generate 1 kilowatt 

19 hour of electricity, expressed as British 

20 thermal units per net kilowatt hour gen21 erated. 

22 ‘‘(3) PRODUCTION ATTRIBUTABLE TO THE TAX23 PAYER.—In the case of a qualified facility in which 

24 more than 1 person has an ownership interest, ex25 cept to the extent provided in regulations prescribed 


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1 by the Secretary, production from the facility shall 

2 be allocated among such persons in proportion to 

3 their respective ownership interests in the gross 

4 sales from such facility. 

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

6 treated as related to each other if such persons 

7 would be treated as a single employer under the reg8 ulations prescribed under section 52(b). In the case 

9 of a corporation which is a member of an affiliated 

10 group of corporations filing a consolidated return, 

11 such corporation shall be treated as selling electricity 

12 to an unrelated person if such electricity is sold to 

13 such a person by another member of such group. 

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

15 TRUSTS.—Under regulations prescribed by the Sec16 retary, rules similar to the rules of subsection (d) of 

17 section 52 shall apply. 

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

19 AGRICULTURAL COOPERATIVE.— 

20 ‘‘(A) ELECTION TO ALLOCATE.— 

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

22 eligible cooperative organization, any por23 tion of the credit determined under sub24 section (a) for the taxable year may, at the 

25 election of the organization, be apportioned 


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1 among patrons of the organization on the 

2 basis of the amount of business done by 

3 the patrons during the taxable year. 

4 ‘‘(ii) FORM AND EFFECT OF ELEC5 TION.—An election under clause (i) for any 

6 taxable year shall be made on a timely 

7 filed return for such year. Such election, 

8 once made, shall be irrevocable for such 

9 taxable year. Such election shall not take 

10 effect unless the organization designates 

11 the apportionment as such in a written no12 tice mailed to its patrons during the pay13 ment period described in section 1382(d). 

14 ‘‘(B) TREATMENT OF ORGANIZATIONS AND

15 PATRONS.—The amount of the credit appor16 tioned to any patrons under subparagraph 

17 (A)— 

18 ‘‘(i) shall not be included in the 

19 amount determined under subsection (a) 

20 with respect to the organization for the 

21 taxable year, and 

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

23 determined under subsection (a) for the 

24 first taxable year of each patron ending on 

25 or after the last day of the payment period 


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1 (as defined in section 1382(d)) for the tax2 able year of the organization or, if earlier, 

3 for the taxable year of each patron ending 

4 on or after the date on which the patron 

5 receives notice from the cooperative of the 

6 apportionment. 

7 ‘‘(C) SPECIAL RULES FOR DECREASE IN

8 CREDITS FOR TAXABLE YEAR.—If the amount 

9 of the credit of a cooperative organization de10 termined under subsection (a) for a taxable 

11 year is less than the amount of such credit 

12 shown on the return of the cooperative organi13 zation for such year, an amount equal to the 

14 excess of— 

15 ‘‘(i) such reduction, over 

16 ‘‘(ii) the amount not apportioned to 

17 such patrons under subparagraph (A) for 

18 the taxable year, 

19 shall be treated as an increase in tax imposed 

20 by this chapter on the organization. Such in21 crease shall not be treated as tax imposed by 

22 this chapter for purposes of determining the 

23 amount of any credit under this chapter. 

24 ‘‘(D) ELIGIBLE COOPERATIVE DEFINED.— 

25 For purposes of this section, the term ‘eligible 


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1 cooperative’ means a cooperative organization 

2 described in section 1381(a) which is owned 

3 more than 50 percent by agricultural producers 

4 or by entities owned by agricultural producers. 

5 For this purpose an entity owned by an agricul6 tural producer is one that is more than 50 per7 cent owned by agricultural producers.’’. 

8 (b) CONFORMING AMENDMENTS.— 

9 (1) Section 38(b) is amended— 

10 (A) in paragraph (31), by striking ‘‘plus’’ 

11 at the end, 

12 (B) in paragraph (32), by striking the pe13 riod at the end and inserting ‘‘, plus’’, and 

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

15 paragraph: 

16 ‘‘(33) the clean energy production credit deter17 mined under section 45T(a).’’. 

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

19 IV of subchapter A of chapter 1 is amended by add20 ing at the end the following new item: 

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

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

22 this section shall apply to facilities placed in service after 

23 December 31, 2020. 

24 SEC. 102. CLEAN ENERGY INVESTMENT CREDIT. 

25 (a) BUSINESS CREDIT.— 


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

2 subchapter A of chapter 1 is amended by inserting 

3 after section 48C the following new section: 

4 ‘‘SEC. 48D. CLEAN ENERGY INVESTMENT CREDIT. 

5 ‘‘(a) INVESTMENT CREDIT FOR QUALIFIED PROP6 ERTY.— 

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

8 the clean energy investment credit for any taxable 

9 year is an amount equal to the sum of— 

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

11 qualified investment for such taxable year with 

12 respect to any qualified facility, plus 

13 ‘‘(B) 30 percent of the qualified invest14 ment for such taxable year with respect to— 

15 ‘‘(i) qualified carbon capture and se16 questration equipment, and 

17 ‘‘(ii) energy storage property. 

18 ‘‘(2) CLEAN ENERGY PERCENTAGE.— 

19 ‘‘(A) MAXIMUM PERCENTAGE.—Except as 

20 provided in subparagraphs (B) and (C), the 

21 clean energy percentage is 30 percent. 

22 ‘‘(B) REDUCTION OF PERCENTAGE BASED

23 ON GREENHOUSE GAS EMISSIONS RATE.—The 

24 clean energy percentage shall be reduced (but 

25 not below zero) by an amount which bears the 


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1 same ratio to 30 percent as the anticipated 

2 greenhouse gas emissions rate for the qualified 

3 facility bears to 300 grams of CO2e per KWh. 

4 ‘‘(C) MICROGRIDS.— 

5 ‘‘(i) IN GENERAL.—In the case of a 

6 microgrid, the clean energy percentage 

7 shall be the amount, expressed as a per8 centage, equal to 30 percent of the relative 

9 avoided emissions rate for the microgrid. 

10 ‘‘(ii) RELATIVE AVOIDED EMISSIONS

11 RATE.—For purposes of clause (i), the rel12 ative avoided emissions rate shall be the 

13 amount equal to the quotient of— 

14 ‘‘(I) the amount equal to the 

15 non-baseload output emissions rate 

16 for the applicable grid region minus 

17 the greenhouse gas emissions rate for 

18 the microgrid, divided by 

19 ‘‘(II) the non-baseload output 

20 emissions rate for the applicable grid 

21 region. 

22 ‘‘(iii) NON-BASELOAD OUTPUT EMIS23 SIONS RATE.— 

24 ‘‘(I) IN GENERAL.—The term 

25 ‘non-baseload output emissions rate’ 


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1 means the amount of greenhouse 

2 gases emitted into the atmosphere by 

3 the applicable grid region for the pro4 duction of electricity (expressed as 

5 grams of CO2e per KWh) above base6 load. 

7 ‘‘(II) DETERMINATION.—The 

8 non-baseload output emissions rate 

9 for any applicable grid region shall be 

10 determined by the Administrator of 

11 the Environmental Protection Agency, 

12 in consultation with the Secretary. 

13 ‘‘(iv) MICROGRID.—The term 

14 ‘microgrid’ means an interconnected sys15 tem of loads and energy resources (includ16 ing distributed energy resources, energy 

17 storage, demand response tools, and other 

18 management, forecasting, and analytical 

19 tools) which— 

20 ‘‘(I) is appropriately sized to 

21 meet the needs of its customers, 

22 ‘‘(II) is contained within a clearly 

23 defined electrical boundary and has 

24 the ability to operate as a single and 

25 controllable entity, 


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1 ‘‘(III) has the ability to— 

2 ‘‘(aa) connect to, disconnect 

3 from, or run in parallel with the 

4 applicable grid region, or 

5 ‘‘(bb) be managed and iso6 lated from the applicable grid re7 gion in order to withstand larger 

8 disturbances and maintain the 

9 supply of electricity to connected 

10 critical infrastructure, and 

11 ‘‘(IV) has no point of inter12 connection to the applicable grid re13 gion with a throughput capacity in ex14 cess of 20 megawatts. 

15 ‘‘(v) APPLICABLE GRID REGION.—The 

16 term ‘applicable grid region’ means a set 

17 of power plants and transmission lines 

18 which are— 

19 ‘‘(I) under the control of a single 

20 grid operator, and 

21 ‘‘(II) interconnected to the 

22 microgrid. 

23 ‘‘(D) ROUNDING.—If any amount deter24 mined under subparagraph (B) or subpara25 graph (C) is not a multiple of 1 percent, such 


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1 amount shall be rounded to the nearest multiple 

2 of 1 percent. 

3 ‘‘(b) QUALIFIED INVESTMENT WITH RESPECT TO

4 ANY QUALIFIED FACILITY.— 

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

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

7 any qualified facility for any taxable year is the 

8 basis of any qualified property placed in service by 

9 the taxpayer during such taxable year which is part 

10 of a qualified facility. 

11 ‘‘(2) QUALIFIED PROPERTY.—The term ‘quali12 fied property’ means property— 

13 ‘‘(A) which is— 

14 ‘‘(i) tangible personal property, or 

15 ‘‘(ii) other tangible property (not in16 cluding a building or its structural compo17 nents), but only if such property is used as 

18 an integral part of the qualified facility, 

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

20 amortization in lieu of depreciation) is allow21 able, 

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

23 erected, or acquired by the taxpayer, and 

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

25 with the taxpayer. 


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1 ‘‘(3) QUALIFIED FACILITY.— 

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

3 section, the term ‘qualified facility’ has the 

4 same meaning given such term under section 

5 45T(f)(3) (without regard to subparagraphs 

6 (B) and (D) thereof). 

7 ‘‘(B) MICROGRIDS.—For purposes of this 

8 section, the term ‘qualified facility’ shall include 

9 any microgrid (as defined in subsection 

10 (a)(2)(C)(iv)). 

11 ‘‘(C) EXCLUSION.—The term ‘qualified fa12 cility’ shall not include any facility for which a 

13 renewable electricity production credit under 

14 section 45, an advanced nuclear power facility 

15 production credit under section 45J, or an en16 ergy credit determined under section 48 is al17 lowed under section 38 for the taxable year or 

18 any prior taxable year. 

19 ‘‘(4) COORDINATION WITH REHABILITATION

20 CREDIT.—The qualified investment with respect to 

21 any qualified facility for any taxable year shall not 

22 include that portion of the basis of any property 

23 which is attributable to qualified rehabilitation ex24 penditures (as defined in section 47(c)(2)). 


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1 ‘‘(c) QUALIFIED INVESTMENT WITH RESPECT TO

2 QUALIFIED CARBON CAPTURE AND SEQUESTRATION

3 EQUIPMENT.— 

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

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

6 qualified carbon capture and sequestration equip7 ment for any taxable year is the basis of any quali8 fied carbon capture and sequestration equipment 

9 placed in service by the taxpayer during such taxable 

10 year. 

11 ‘‘(2) QUALIFIED CARBON CAPTURE AND SE12 QUESTRATION EQUIPMENT.—The term ‘qualified 

13 carbon capture and sequestration equipment’ means 

14 property— 

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

16 before January 1, 2021, which produces elec17 tricity, 

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

19 reduction in the carbon dioxide emissions rate 

20 at the facility, as compared to such rate before 

21 installation of such equipment, through the cap22 ture and disposal or utilization of qualified car23 bon dioxide (as defined in paragraph (3)(A)), 

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

25 allowable, 


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

2 erected, or acquired by the taxpayer, 

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

4 with the taxpayer, and 

5 ‘‘(F) with respect to which— 

6 ‘‘(i) no credit has been allowed under 

7 section 45Q or section 45T, and 

8 ‘‘(ii) the taxpayer makes an irrev9 ocable election to have this subsection 

10 apply. 

11 ‘‘(3) QUALIFIED CARBON DIOXIDE.—The term 

12 ‘qualified carbon dioxide’ means carbon dioxide cap13 tured from an industrial source which— 

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

15 atmosphere as industrial emission of green16 house gas, 

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

18 and verified at the point of disposal or utiliza19 tion, 

20 ‘‘(C)(i) is disposed of by the taxpayer in 

21 secure geological storage (as such term is de22 fined under section 45Q(f)(2)), or 

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

24 described in section 45Q(f)(5), and 


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1 ‘‘(D) is captured and disposed or utilized 

2 within the United States (within the meaning of 

3 section 638(1)) or a possession of the United 

4 States (within the meaning of section 638(2)). 

5 ‘‘(4) COORDINATION WITH OTHER CREDITS.— 

6 No credit shall be allowed under section 45Q or sec7 tion 45T for any taxable year with respect to any 

8 qualified carbon capture and sequestration equip9 ment for which an election described in paragraph 

10 (2)(F)(ii) has been made. 

11 ‘‘(d) QUALIFIED INVESTMENT WITH RESPECT TO

12 ENERGY STORAGE PROPERTY.— 

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

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

15 to energy storage property for any taxable year is 

16 the basis of any energy storage property placed in 

17 service by the taxpayer during such taxable year. 

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

19 ‘energy storage property’ means property— 

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

21 electricity, or energy for conversion to elec22 tricity, provided that such electricity is— 

23 ‘‘(i) sold by the taxpayer to an unre24 lated person, or 


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

2 equipped with a metering device which is 

3 owned and operated by an unrelated per4 son, sold or consumed by the taxpayer, 

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

6 allowable, 

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

8 erected, or acquired by the taxpayer, 

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

10 with the taxpayer, and 

11 ‘‘(E) which is placed in service after De12 cember 31, 2020. 

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

14 ‘‘(1) IN GENERAL.—For purposes of this sec15 tion, the term ‘greenhouse gas emissions rate’ has 

16 the same meaning given such term under subsection 

17 (b) of section 45T. 

18 ‘‘(2) ESTABLISHMENT OF SAFE HARBOR FOR

19 QUALIFIED PROPERTY.— 

20 ‘‘(A) IN GENERAL.—The Secretary, in con21 sultation with the Administrator of the Envi22 ronmental Protection Agency, shall establish 

23 safe-harbor greenhouse gas emissions rates for 

24 types or categories of qualified property which 


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1 are part of a qualified facility, which a taxpayer 

2 may elect to use for purposes of this section. 

3 ‘‘(B) ROUNDING.—In establishing the safe4 harbor greenhouse gas emissions rates for 

5 qualified property, the Secretary may round 

6 such rates to the nearest multiple of 30 grams 

7 of CO2e per KWh (or, in the case of a green8 house gas emissions rate which is less than 15 

9 grams of CO2e per KWh, by rounding such rate 

10 to zero). 

11 ‘‘(C) PUBLISHING SAFE-HARBOR EMIS12 SIONS RATES.—The Secretary, in consultation 

13 with the Administrator of the Environmental 

14 Protection Agency, shall publish a table that 

15 sets forth the safe-harbor greenhouse gas emis16 sions rates for similar types or categories of 

17 qualified property. 

18 ‘‘(f) CERTAIN PROGRESS EXPENDITURE RULES

19 MADE APPLICABLE.—Rules similar to the rules of sub20 sections (c)(4) and (d) of section 46 (as in effect on the 

21 day before the date of the enactment of the Revenue Rec22 onciliation Act of 1990) shall apply for purposes of sub23 section (a). 

24 ‘‘(g) CREDIT PHASE-OUT.— 


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1 ‘‘(1) IN GENERAL.—If the Secretary, in con2 sultation with the Secretary of Energy and the Ad3 ministrator of the Environmental Protection Agency, 

4 determines that the annual greenhouse gas emis5 sions from electrical production in the United States 

6 are equal to or less than 50 percent of the annual 

7 greenhouse gas emissions from electrical production 

8 in the United States for calendar year 2019, the 

9 amount of the clean energy investment credit under 

10 subsection (a) for any qualified facility, qualified 

11 carbon capture and sequestration equipment, or en12 ergy storage property placed in service during a cal13 endar year described in paragraph (2) shall be equal 

14 to the product of— 

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

16 under subsection (a) without regard to this sub17 section, multiplied by 

18 ‘‘(B) the phase-out percentage under para19 graph (2). 

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

21 percentage under this paragraph is equal to— 

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

23 service during the first calendar year following 

24 the calendar year in which the determination 

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


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•S 1288 IS

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

2 service during the second calendar year fol3 lowing such determination year, 50 percent, 

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

5 service during the third calendar year following 

6 such determination year, 25 percent, and 

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

8 service during any calendar year subsequent to 

9 the year described in subparagraph (C), 0 per10 cent. 

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

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

13 KWh’ has the same meaning given such term under 

14 section 45T(f)(1). 

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

16 gas’ has the same meaning given such term under 

17 section 45T(f)(2). 

18 ‘‘(i) RECAPTURE OF CREDIT.—For purposes of sec19 tion 50, if the Secretary, in consultation with the Adminis20 trator of the Environmental Protection Agency, deter21 mines that— 

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

23 qualified facility is significantly higher than the an24 ticipated greenhouse gas emissions rate claimed by 


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•S 1288 IS

1 the taxpayer for purposes of the clean energy invest2 ment credit under this section, or 

3 ‘‘(2) with respect to any qualified carbon cap4 ture and sequestration equipment installed in a facil5 ity, the carbon dioxide emissions from such facility 

6 cease to be captured or disposed of in a manner con7 sistent with the requirements of subsection (c), 

8 the facility or equipment shall cease to be investment cred9 it property in the taxable year in which the determination 

10 is made. 

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

12 2020, the Secretary, in consultation with the Adminis13 trator of the Environmental Protection Agency, shall issue 

14 final guidance regarding implementation of this section, 

15 including calculation of greenhouse gas emission rates for 

16 qualified facilities and determination of clean energy in17 vestment credits under this section.’’. 

18 (2) CONFORMING AMENDMENTS.— 

19 (A) Section 46 is amended— 

20 (i) by striking ‘‘and’’ at the end of 

21 paragraph (5), 

22 (ii) by striking the period at the end 

23 of paragraph (6) and inserting ‘‘, and’’, 

24 and 


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•S 1288 IS

1 (iii) by adding at the end the fol2 lowing new paragraph: 

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

4 (B) Section 49(a)(1)(C) is amended— 

5 (i) by striking ‘‘and’’ at the end of 

6 clause (iv), 

7 (ii) by striking the period at the end 

8 of clause (v) and inserting a comma, and 

9 (iii) by adding at the end the fol10 lowing new clauses: 

11 ‘‘(vi) the basis of any qualified prop12 erty which is part of a qualified facility 

13 under section 48D, 

14 ‘‘(vii) the basis of any qualified carbon 

15 capture and sequestration equipment under 

16 section 48D, and 

17 ‘‘(viii) the basis of any energy storage 

18 property under section 48D.’’. 

19 (C) Section 50(a)(2)(E) is amended by 

20 striking ‘‘or 48C(b)(2)’’ and inserting 

21 ‘‘48C(b)(2), or 48D(e)’’. 

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

23 part IV of subchapter A of chapter 1 is amend24 ed by inserting after the item relating to section 

25 48C the following new item: 

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


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1 (3) EFFECTIVE DATE.—The amendments made 

2 by this subsection shall apply to property placed in 

3 service after December 31, 2020, under rules similar 

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

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

6 date of the enactment of the Revenue Reconciliation 

7 Act of 1990). 

8 (b) INDIVIDUAL CREDIT.— 

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

10 read as follows: 

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

12 ‘‘(a) ALLOWANCE OF CREDIT.— 

13 ‘‘(1) IN GENERAL.—In the case of an indi14 vidual, there shall be allowed as a credit against the 

15 tax imposed by this chapter for the taxable year an 

16 amount equal to the sum of— 

17 ‘‘(A) the clean energy percentage of the ex18 penditures made by the taxpayer for qualified 

19 property which is— 

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

21 is located in the United States and used as 

22 a residence by the taxpayer, and 

23 ‘‘(ii) placed in service during such tax24 able year, plus 


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

2 by the taxpayer for energy storage property 

3 which is— 

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

5 is located in the United States and used as 

6 a residence by the taxpayer, and 

7 ‘‘(ii) placed in service during such tax8 able year. 

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 property 

21 bears to 300 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 ‘‘(C) DEFINITIONS.—For purposes of this 

2 section, the terms ‘greenhouse gas emissions 

3 rate’ and ‘CO2e per KWh’ have the same mean4 ings given such terms under subsections (b) and 

5 (f)(1) of section 45T, respectively. 

6 ‘‘(3) ESTABLISHMENT OF SAFE HARBOR FOR

7 QUALIFIED PROPERTY.— 

8 ‘‘(A) IN GENERAL.—The Secretary, in con9 sultation with the Administrator of the Envi10 ronmental Protection Agency, shall establish 

11 safe-harbor greenhouse gas emissions rates for 

12 types or categories of qualified property which 

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

14 may elect to use for purposes of this section. 

15 ‘‘(B) ROUNDING.—In establishing the safe16 harbor greenhouse gas emissions rates for 

17 qualified property, the Secretary may round 

18 such rates to the nearest multiple of 30 grams 

19 of CO2e per KWh (or, in the case of a green20 house gas emissions rate which is less than 15 

21 grams of CO2e per KWh, by rounding such rate 

22 to zero). 

23 ‘‘(C) PUBLISHING SAFE-HARBOR EMIS24 SIONS RATES.—The Secretary, in consultation 

25 with the Administrator of the Environmental 


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•S 1288 IS

1 Protection Agency, shall publish a table that 

2 sets forth the safe-harbor greenhouse gas emis3 sions rates for similar types or categories of 

4 qualified property. 

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

6 property’ means property— 

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

8 ‘‘(2) which is used for the generation of elec9 tricity, 

10 ‘‘(3) which is constructed, reconstructed, erect11 ed, or acquired by the taxpayer, 

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

13 the taxpayer, and 

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

15 December 31, 2020. 

16 ‘‘(c) ENERGY STORAGE PROPERTY.—The term ‘en17 ergy storage property’ means property which— 

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

19 energy for conversion to electricity which is con20 sumed or sold by the taxpayer, and 

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

22 is owned and operated by an unrelated person. 

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

24 credit allowable under subsection (a) exceeds the limita25 tion imposed by section 26(a) for such taxable year reVerDate Sep 11 2014 00:42 May 10, 2019 Jkt 089200 PO 00000 Frm 00038 Fmt 6652 Sfmt 6201 E:\BILLS\S1288.IS S1288

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•S 1288 IS

1 duced by the sum of the credits allowable under this sub2 part (other than this section), such excess shall be carried 

3 to the succeeding taxable year and added to the credit al4 lowable under subsection (a) for such succeeding taxable 

5 year. 

6 ‘‘(e) CREDIT PHASE-OUT.— 

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

8 that the annual greenhouse gas emissions from elec9 trical production in the United States are equal to 

10 or less than the percentage specified in section 

11 48D(g), the amount of the credit allowable under 

12 subsection (a) for any qualified property or energy 

13 storage property placed in service during a calendar 

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

15 product of— 

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

17 under subsection (a) without regard to this sub18 section, multiplied by 

19 ‘‘(B) the phase-out percentage under para20 graph (2). 

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

22 percentage under this paragraph is equal to— 

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

24 the first calendar year following the calendar 


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•S 1288 IS

1 year in which the determination described in 

2 paragraph (1) is made, 75 percent, 

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

4 the second calendar year following such deter5 mination year, 50 percent, 

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

7 the third calendar year following such deter8 mination year, 25 percent, and 

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

10 any calendar year subsequent to the year de11 scribed in subparagraph (C), 0 percent. 

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

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

14 costs properly allocable to the onsite preparation, as15 sembly, or original installation of the qualified prop16 erty or energy storage property and for piping or 

17 wiring to interconnect such property to the dwelling 

18 unit shall be taken into account for purposes of this 

19 section. 

20 ‘‘(2) TENANT-STOCKHOLDER IN COOPERATIVE

21 HOUSING CORPORATION.—In the case of an indi22 vidual who is a tenant-stockholder (as defined in sec23 tion 216) in a cooperative housing corporation (as 

24 defined in such section), such individual shall be 

25 treated as having made his tenant-stockholder’s proVerDate Sep 11 2014 00:42 May 10, 2019 Jkt 089200 PO 00000 Frm 00040 Fmt 6652 Sfmt 6201 E:\BILLS\S1288.IS S1288

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•S 1288 IS

1 portionate share (as defined in section 216(b)(3)) of 

2 any expenditures of such corporation. 

3 ‘‘(3) CONDOMINIUMS.— 

4 ‘‘(A) IN GENERAL.—In the case of an indi5 vidual who is a member of a condominium man6 agement association with respect to a condo7 minium which the individual owns, such indi8 vidual shall be treated as having made the indi9 vidual’s proportionate share of any expenditures 

10 of such association. 

11 ‘‘(B) CONDOMINIUM MANAGEMENT ASSO12 CIATION.—For purposes of this paragraph, the 

13 term ‘condominium management association’ 

14 means an organization which meets the require15 ments of paragraph (1) of section 528(c) (other 

16 than subparagraph (E) thereof) with respect to 

17 a condominium project substantially all of the 

18 units of which are used as residences. 

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

20 than 80 percent of the use of a property is for non21 business purposes, only that portion of the expendi22 tures for such property which is properly allocable to 

23 use for nonbusiness purposes shall be taken into ac24 count. 


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1 ‘‘(g) BASIS ADJUSTMENT.—For purposes of this sub2 title, if a credit is allowed under this section for any ex3 penditures with respect to any property, the increase in 

4 the basis of such property which would (but for this sub5 section) result from such expenditures shall be reduced by 

6 the amount of the credit so allowed. 

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

8 2020, the Secretary, in consultation with the Adminis9 trator of the Environmental Protection Agency, shall issue 

10 final guidance regarding implementation of this section, 

11 including calculation of greenhouse gas emission rates for 

12 qualified property and determination of residential clean 

13 energy property credits under this section.’’. 

14 (2) CONFORMING AMENDMENTS.— 

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

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

17 follows through the period and inserting the fol18 lowing: ‘‘Such term shall not include any facil19 ity with respect to which any expenditures for 

20 qualified property (as defined in subsection (b) 

21 of section 25D) which uses wind to produce 

22 electricity is taken into account in determining 

23 the credit under such section.’’. 


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

2 amended by striking ‘‘section 25D(f)’’ and in3 serting ‘‘section 25D(h)’’. 

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

5 the table of contents for subpart A of part IV 

6 of subchapter A of chapter 1 is amended to 

7 read as follows: 

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

8 (3) EFFECTIVE DATE.—The amendments made 

9 by this section shall apply to property placed in serv10 ice after December 31, 2020. 

11 SEC. 103. EXTENSIONS, MODIFICATIONS, AND TERMI12 NATIONS OF VARIOUS ENERGY PROVISIONS. 

13 (a) RESIDENTIAL ENERGY EFFICIENT PROPERTY.— 

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

15 25D is amended by striking ‘‘December 31, 2021’’ 

16 and inserting ‘‘December 31, 2020’’. 

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

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

19 (A) in subsection (a), by striking ‘‘the ap20 plicable percentages’’ and inserting ‘‘30 per21 cent’’, 

22 (B) by striking subsection (g), and 

23 (C) by redesignating subsection (h) as sub24 section (g). 


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1 (3) EFFECTIVE DATE.—The amendments made 

2 by this subsection shall apply to property placed in 

3 service after December 31, 2018. 

4 (b) ELECTRICITY PRODUCED FROM CERTAIN RE5 NEWABLE RESOURCES.— 

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

7 section 45(d) are each amended by striking ‘‘the 

8 construction of which begins before January 1, 

9 2018’’ each place it appears and inserting ‘‘origi10 nally placed in service before January 1, 2021’’: 

11 (A) Paragraph (2)(A). 

12 (B) Paragraph (3)(A). 

13 (C) Paragraph (4)(B). 

14 (D) Paragraph (6). 

15 (E) Paragraph (7). 

16 (F) Paragraph (9). 

17 (G) Paragraph (11)(B). 

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

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

20 inserting ‘‘and before 2019’’ after ‘‘after 2003’’. 

21 (3) EFFECTIVE DATE.—The amendments made 

22 by this subsection shall take effect on January 1, 

23 2019. 

24 (c) CREDIT FOR PRODUCTION FROM ADVANCED NU25 CLEAR POWER FACILITIES.— 


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•S 1288 IS

1 (1) IN GENERAL.—Subparagraph (B) of section 

2 45J(d)(1) is amended by striking ‘‘January 1, 

3 2021’’ and inserting ‘‘January 1, 2020’’. 

4 (2) TERMINATION OF ALLOCATION OF UNUTI5 LIZED LIMITATION.—Section 45J(b) is amended by 

6 striking paragraph (5). 

7 (d) CREDIT FOR CARBON DIOXIDE SEQUESTRA8 TION.— 

9 (1) EXCLUSION OF CERTAIN FACILITIES THAT

10 PRODUCE ELECTRICITY.—Section 45Q is amended— 

11 (A) in subsection (d), by striking ‘‘For 

12 purposes of this section’’ and inserting ‘‘Subject 

13 to subsection (h), for purposes of this section’’, 

14 (B) by redesignating subsection (h) as sub15 section (i), and 

16 (C) by inserting after subsection (g) the 

17 following: 

18 ‘‘(h) EXCLUSION OF CERTAIN FACILITIES THAT

19 PRODUCE ELECTRICITY.—The term ‘qualified facility’ 

20 shall not include any facility which— 

21 ‘‘(1) is placed in service before January 1, 

22 2021, and 

23 ‘‘(2) produces electricity.’’. 


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1 (2) EFFECTIVE DATE.—The amendments made 

2 by this subsection shall apply to taxable years begin3 ning after December 31, 2020. 

4 (e) MODIFICATION OF CREDITS FOR WIND FACILI5 TIES AND OTHER ENERGY PROPERTY.— 

6 (1) WIND FACILITIES.— 

7 (A) RENEWABLE ELECTRICITY PRODUC8 TION CREDIT.— 

9 (i) IN GENERAL.—Paragraph (1) of 

10 section 45(d) is amended by striking ‘‘Jan11 uary 1, 2020’’ and inserting ‘‘January 1, 

12 2021’’. 

13 (ii) PHASEOUT.—Subparagraph (C) of 

14 section 45(b)(5) is amended by striking 

15 ‘‘January 1, 2020’’ and inserting ‘‘Janu16 ary 1, 2021’’. 

17 (B) QUALIFIED INVESTMENT CREDIT FA18 CILITY.— 

19 (i) IN GENERAL.—Section 

20 48(a)(5)(C)(ii) is amended by striking 

21 ‘‘January 1, 2018’’ and all that follows 

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

23 ‘‘January 1, 2021’’. 

24 (ii) PHASEOUT.—Clause (iii) of sec25 tion 48(a)(5)(E) is amended by striking 


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•S 1288 IS

1 ‘‘January 1, 2020’’ and inserting ‘‘Janu2 ary 1, 2021’’. 

3 (C) EFFECTIVE DATE.—The amendments 

4 made by this paragraph shall take effect on 

5 January 1, 2019. 

6 (2) OTHER ENERGY PROPERTY.— 

7 (A) SOLAR ENERGY PROPERTY.—Sub8 clause (II) of section 48(a)(2)(A)(i) is amended 

9 by striking ‘‘property the construction of which 

10 begins before January 1, 2022’’ and inserting 

11 ‘‘periods ending before January 1, 2019’’. 

12 (B) PHASEOUTS.—Subsection (a) of sec13 tion 48 is amended by striking paragraphs (6) 

14 and (7). 

15 (C) CONFORMING AMENDMENT.—Subpara16 graph (A) of section 48(a)(2) is amended by 

17 striking ‘‘Except as provided in paragraphs (6) 

18 and (7), the energy percentage’’ and inserting 

19 ‘‘The energy percentage’’. 

20 (D) EFFECTIVE DATE.—The amendments 

21 made by this paragraph shall take effect on 

22 January 1, 2019. 

23 (f) ENERGY CREDIT.— 

24 (1) SOLAR ENERGY PROPERTY.—Section 

25 48(a)(3)(A) is amended— 


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

2 with respect to periods ending before January 

3 1, 2021’’ after ‘‘swimming pool,’’, and 

4 (B) in clause (ii), by striking ‘‘property the 

5 construction of which begins before January 1, 

6 2022’’ and inserting ‘‘periods ending before 

7 January 1, 2021’’. 

8 (2) GEOTHERMAL ENERGY PROPERTY.—Section 

9 48(a)(3)(A)(iii) is amended by inserting ‘‘with re10 spect to periods ending before January 1, 2021, 

11 and’’ after ‘‘but only’’. 

12 (3) THERMAL ENERGY PROPERTY.—Section 

13 48(a)(3)(A)(vii) is amended by striking ‘‘property 

14 the construction of which begins before January 1, 

15 2022’’ and inserting ‘‘periods ending before January 

16 1, 2021’’. 

17 (4) QUALIFIED FUEL CELL PROPERTY.—Sec18 tion 48(c)(1)(D) is amended by striking ‘‘the con19 struction of which does not begin before January 1, 

20 2022’’ and inserting ‘‘for any period after December 

21 31, 2020’’. 

22 (5) QUALIFIED MICROTURBINE PROPERTY.— 

23 Section 48(c)(2)(D) is amended by striking ‘‘the 

24 construction of which does not begin before January 


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1 1, 2022’’ and inserting ‘‘for any period after Decem2 ber 31, 2020’’. 

3 (6) COMBINED HEAT AND POWER SYSTEM

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

5 striking ‘‘the construction of which begins before 

6 January 1, 2022’’ and inserting ‘‘which is placed in 

7 service before January 1, 2021’’. 

8 (7) QUALIFIED SMALL WIND ENERGY PROP9 ERTY.—Section 48(c)(4)(C) is amended by striking 

10 ‘‘the construction of which does not begin before 

11 January 1, 2022’’ and inserting ‘‘for any period 

12 after December 31, 2020’’. 

13 (g) QUALIFYING ADVANCED ENERGY PROJECT

14 CREDIT.— 

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

16 (A) by redesignating subsection (e) as sub17 section (f), and 

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

19 following new subsection: 

20 ‘‘(e) ADDITIONAL QUALIFYING ADVANCED ENERGY

21 PROGRAM.— 

22 ‘‘(1) ESTABLISHMENT.— 

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

24 days after the date of enactment of this sub25 section, the Secretary, in consultation with the 


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1 Secretary of Energy, shall establish an addi2 tional qualifying advanced energy project pro3 gram to consider and award certifications for 

4 qualified investments eligible for credits under 

5 this section to qualifying advanced energy 

6 project sponsors. 

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

8 credits that may be allocated under the pro9 gram described in subparagraph (A) shall not 

10 exceed $5,000,000,000. 

11 ‘‘(2) CERTIFICATION.— 

12 ‘‘(A) APPLICATION PERIOD.—Each appli13 cant for certification under this paragraph shall 

14 submit an application containing such informa15 tion as the Secretary may require during the 2- 

16 year period beginning on the date the Secretary 

17 establishes the program under paragraph (1). 

18 ‘‘(B) TIME TO MEET CRITERIA FOR CER19 TIFICATION.—Each applicant for certification 

20 shall have 1 year from the date of acceptance 

21 by the Secretary of the application during 

22 which to provide to the Secretary evidence that 

23 the requirements of the certification have been 

24 met. 


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

2 which receives a certification shall have 3 years 

3 from the date of issuance of the certification in 

4 order to place the project in service and if such 

5 project is not placed in service by that time pe6 riod, then the certification shall no longer be 

7 valid. 

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

9 which qualifying advanced energy projects to certify 

10 under this section, the Secretary shall consider the 

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

12 ‘‘(4) REVIEW AND REDISTRIBUTION.— 

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

14 after the date of enactment of this subsection, 

15 the Secretary shall review the credits allocated 

16 pursuant to this subsection as of such date. 

17 ‘‘(B) REDISTRIBUTION.—The Secretary 

18 may reallocate credits awarded under this sec19 tion if the Secretary determines that— 

20 ‘‘(i) there is an insufficient quantity 

21 of qualifying applications for certification 

22 pending at the time of the review, or 

23 ‘‘(ii) any certification made pursuant 

24 to paragraph (2) has been revoked pursu25 ant to paragraph (2)(B) because the 


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1 project subject to the certification has been 

2 delayed as a result of third-party opposi3 tion or litigation to the proposed project. 

4 ‘‘(C) REALLOCATION.—If the Secretary de5 termines that credits under this section are 

6 available for reallocation pursuant to the re7 quirements set forth in paragraph (2), the Sec8 retary is authorized to conduct an additional 

9 program for applications for certification. 

10 ‘‘(5) DISCLOSURE OF ALLOCATIONS.—The Sec11 retary shall, upon making a certification under this 

12 subsection, publicly disclose the identity of the appli13 cant and the amount of the credit with respect to 

14 such applicant.’’. 

15 (2) EFFECTIVE DATE.—The amendments made 

16 by this subsection shall apply to periods after the 

17 date of the enactment of this Act, under rules simi18 lar to the rules of section 48(m) of the Internal Rev19 enue Code of 1986 (as in effect on the day before 

20 the date of the enactment of the Revenue Reconcili21 ation Act of 1990). 

22 (h) TERMINATION OF PROVISIONS RELATING TO OIL, 

23 GAS, AND OTHER MATERIALS.— 

24 (1) AMORTIZATION OF GEOLOGICAL AND GEO25 PHYSICAL EXPENDITURES.—Section 167(h) is 


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1 amended by adding at the end the following new 

2 paragraph: 

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

4 apply to any expenses paid or incurred during any 

5 taxable year beginning after the date of the enact6 ment of the Clean Energy for America Act.’’. 

7 (2) ALASKA NATURAL GAS PIPELINES.—Sub8 paragraph (B) of section 168(i)(16) is amended to 

9 read as follows: 

10 ‘‘(B) is— 

11 ‘‘(i)(I) placed in service after Decem12 ber 31, 2013, or 

13 ‘‘(II) treated as placed in service on 

14 January 1, 2014, if the taxpayer who 

15 places such system in service before Janu16 ary 1, 2014, elects such treatment, and 

17 ‘‘(ii) placed in service before the end 

18 of the calendar year in which the Clean 

19 Energy for America Act is enacted.’’. 

20 (3) NATURAL GAS GATHERING LINE.—Para21 graph (17) of section 168(i) is amended— 

22 (A) in subparagraph (A), by inserting 

23 ‘‘which are placed in service before the end of 

24 the calendar year in which the Clean Energy 


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1 for America Act is enacted and are’’ after 

2 ‘‘pipe, equipment, and appurtenances’’, and 

3 (B) in subparagraph (B), by inserting 

4 ‘‘which are placed in service before the end of 

5 the calendar year in which the Clean Energy 

6 for America Act is enacted and are’’ after 

7 ‘‘pipe, equipment, and appurtenances’’. 

8 (4) REPEAL OF DEDUCTION FOR TERTIARY

9 INJECTANTS.—Subsection (c) of section 193 is 

10 amended— 

11 (A) in paragraph (1), by striking ‘‘or’’ at 

12 the end, 

13 (B) in paragraph (2), by striking the pe14 riod at the end and inserting ‘‘, or’’, and 

15 (C) by inserting at the end the following: 

16 ‘‘(3) which is paid or incurred during any tax17 able year beginning after the date of the enactment 

18 of the Clean Energy for America Act.’’. 

19 (5) INTANGIBLE DRILLING AND DEVELOPMENT

20 COSTS.—Subsection (c) of section 263 is amended to 

21 read as follows: 

22 ‘‘(c) INTANGIBLE DRILLING AND DEVELOPMENT

23 COSTS IN THE CASE OF OIL AND GAS WELLS AND GEO24 THERMAL WELLS.— 


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1 ‘‘(1) IN GENERAL.—Notwithstanding subsection 

2 (a), and except as provided in subsection (i), regula3 tions shall be prescribed by the Secretary under this 

4 subtitle corresponding to the regulations which 

5 granted the option to deduct as expenses intangible 

6 drilling and development costs in the case of oil and 

7 gas wells and which were recognized and approved 

8 by the Congress in House Concurrent Resolution 50, 

9 Seventy-ninth Congress. Such regulations shall also 

10 grant the option to deduct as expenses intangible 

11 drilling and development costs in the case of wells 

12 drilled for any geothermal deposit (as defined in sec13 tion 613(e)(2)) to the same extent and in the same 

14 manner as such expenses are deductible in the case 

15 of oil and gas wells. This subsection shall not apply 

16 with respect to any costs to which any deduction is 

17 allowed under section 59(e) or 291. 

18 ‘‘(2) EXCLUSION.— 

19 ‘‘(A) IN GENERAL.—This subsection shall 

20 not apply to amounts paid or incurred by a tax21 payer with regard to any oil or gas well in any 

22 taxable year beginning after the date of the en23 actment of the Clean Energy for America Act. 

24 ‘‘(B) AMORTIZATION OF EXCLUDED

25 AMOUNTS.—The amount not allowable as a deVerDate Sep 11 2014 00:42 May 10, 2019 Jkt 089200 PO 00000 Frm 00055 Fmt 6652 Sfmt 6201 E:\BILLS\S1288.IS S1288

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1 duction for any taxable year by reason of sub2 paragraph (A) shall be allowable as a deduction 

3 ratably over the 60-month period beginning 

4 with the month in which the costs are paid or 

5 incurred. For purposes of section 1254, any de6 duction under this subparagraph shall be treat7 ed as a deduction under this subsection.’’. 

8 (6) PERCENTAGE DEPLETION.— 

9 (A) PERCENTAGE DEPLETION OF OIL AND

10 GAS WELLS, COAL, LIGNITE, AND OIL SHALE.— 

11 Section 613 is amended— 

12 (i) in subsection (a), by striking ‘‘(100 

13 percent in the case of oil and gas prop14 erties)’’, 

15 (ii) in subsection (b)— 

16 (I) by striking paragraph (2) and 

17 inserting the following: 

18 ‘‘(2) 15 PERCENT.—If from deposits in the 

19 United States, gold, silver, copper, and iron ore.’’, 

20 (II) in paragraph (4), by striking 

21 ‘‘coal, lignite,’’, 

22 (III) in paragraph (5), by insert23 ing ‘‘(except oil shale)’’ after ‘‘Clay 

24 and shale’’, and 


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1 (IV) in paragraph (6)(A), by 

2 striking ‘‘(except shale described in 

3 paragraph (2)(B) or (5))’’ and insert4 ing ‘‘(except oil shale and shale de5 scribed in paragraph (5))’’, 

6 (iii) in subsection (c)(4)— 

7 (I) by striking subparagraphs (A) 

8 and (H), 

9 (II) by inserting ‘‘and’’ at the 

10 end of subparagraph (G), 

11 (III) by redesignating subpara12 graphs (B) through (G) as subpara13 graphs (A) through (F), respectively, 

14 and 

15 (IV) by redesignating subpara16 graph (I) as subparagraph (G), 

17 (iv) in subsection (d), by striking ‘‘Ex18 cept as provided in section 613A, in the 

19 case of’’ and inserting ‘‘In the case of’’, 

20 and 

21 (v) in subsection (e)(2), by striking 

22 ‘‘or section 613A’’. 

23 (B) OIL AND GAS WELLS.—Section 613A 

24 is amended by adding at the end the following 

25 new subsection: 


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1 ‘‘(f) TERMINATION.—This section shall not apply to 

2 any taxable year beginning after the date of the enactment 

3 of the Clean Energy for America Act.’’. 

4 (C) EFFECTIVE DATE.—The amendments 

5 made by this section shall apply to taxable 

6 years beginning after the date of the enactment 

7 of this Act. 

8 (7) TERMINATION OF CAPITAL GAINS TREAT9 MENT FOR ROYALTIES FROM COAL.— 

10 (A) IN GENERAL.—Subsection (c) of sec11 tion 631 is amended— 

12 (i) by striking ‘‘coal (including lig13 nite), or iron ore’’ and inserting ‘‘iron 

14 ore’’, 

15 (ii) by striking ‘‘coal or iron ore’’ each 

16 place it appears and inserting ‘‘iron ore’’, 

17 (iii) by striking ‘‘iron ore or coal’’ 

18 each place it appears and inserting ‘‘iron 

19 ore’’, and 

20 (iv) by striking ‘‘COAL OR’’ in the 

21 heading. 

22 (B) CONFORMING AMENDMENT.—The 

23 heading of section 631 of the Internal Revenue 

24 Code of 1986 is amended by striking ‘‘, 

25 COAL,’’. 


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1 (C) EFFECTIVE DATE.—The amendments 

2 made by this paragraph shall apply to taxable 

3 years beginning after the date of the enactment 

4 of this Act. 

5 (8) ENHANCED OIL RECOVERY CREDIT.— 

6 (A) IN GENERAL.—Subpart D of part IV 

7 of subchapter A of chapter 1 is amended by 

8 striking section 43. 

9 (B) CONFORMING AMENDMENTS.— 

10 (i) Section 38(b) is amended by strik11 ing paragraph (6). 

12 (ii) Section 45Q is amended— 

13 (I) by striking ‘‘section 

14 43(b)(3)(B)’’ each place it appears 

15 and inserting ‘‘section 43(b)(3)(B) (as 

16 in effect on the day before the date of 

17 the enactment of the Clean Energy 

18 for America Act)’’, and 

19 (II) in subsection (e)(2), by in20 serting ‘‘(as in effect on the day be21 fore the date of the enactment of the 

22 Clean Energy for America Act)’’ after 

23 ‘‘section 43(c)(2)’’. 

24 (iii) Section 196(c) is amended— 


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1 (I) by striking paragraph (5), 

2 and 

3 (II) by redesignating paragraphs 

4 (6) through (14) as paragraphs (5) 

5 through (13), respectively. 

6 (C) CLERICAL AMENDMENT.—The table of 

7 sections for subpart D of part IV of subchapter 

8 A of chapter 1 is amended by striking the item 

9 relating to section 43. 

10 (D) EFFECTIVE DATE.—The amendments 

11 made by this paragraph shall apply to taxable 

12 years beginning after the date of the enactment 

13 of this Act. 

14 (9) CREDIT FOR PRODUCING OIL AND GAS

15 FROM MARGINAL WELLS.— 

16 (A) IN GENERAL.—Subpart D of part IV 

17 of subchapter A of chapter 1 is amended by 

18 striking section 45I. 

19 (B) CONFORMING AMENDMENT.—Section 

20 38(b) is amended by striking paragraph (19). 

21 (C) CLERICAL AMENDMENT.—The table of 

22 sections for subpart D of part IV of subchapter 

23 A of chapter 1 is amended by striking the item 

24 relating to section 45I. 


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1 (D) EFFECTIVE DATE.—The amendments 

2 made by this paragraph shall apply to taxable 

3 years beginning after the date of the enactment 

4 of this Act. 

5 (10) QUALIFYING ADVANCED COAL PROJECT

6 CREDIT.— 

7 (A) IN GENERAL.—Subpart E of part IV 

8 of subchapter A of chapter 1 is amended by 

9 striking section 48A. 

10 (B) CONFORMING AMENDMENTS.— 

11 (i) Section 46, as amended by section 

12 102 of this Act, is amended by striking 

13 paragraph (3) and redesignating para14 graphs (4) through (7) as paragraphs (3) 

15 through (6), respectively. 

16 (ii) Section 49(a)(1)(C), as amended 

17 by section 102 of this Act, is amended by 

18 striking clause (iii) and redesignating 

19 clauses (iv) through (viii) as clauses (iii) 

20 through (vii), respectively. 

21 (iii) Section 50(a)(2)(E), as amended 

22 by section 102 of this Act, is amended by 

23 striking ‘‘48A(b)(3),’’. 

24 (C) CLERICAL AMENDMENT.—The table of 

25 sections for subpart E of part IV of subchapter 


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1 A of chapter 1 is amended by striking the item 

2 relating to section 48A. 

3 (D) EFFECTIVE DATE.—The amendments 

4 made by this paragraph shall apply to taxable 

5 years beginning after the date of the enactment 

6 of this Act. 

7 (11) QUALIFYING GASIFICATION PROJECT

8 CREDIT.— 

9 (A) IN GENERAL.—Subpart E of part IV 

10 of subchapter A of chapter 1 is amended by 

11 striking section 48B. 

12 (B) CONFORMING AMENDMENTS.— 

13 (i) Section 46, as amended by this 

14 Act, is amended by striking paragraph (3) 

15 and by redesignating paragraphs (4), (5), 

16 and (6) as paragraphs (3), (4), and (5), 

17 respectively. 

18 (ii) Section 49(a)(1)(C), as amended 

19 by this Act, is amended by striking clause 

20 (iii) and redesignating clauses (iv) through 

21 (vii) as clauses (iii) through (vi). 

22 (iii) Section 50(a)(2)(E), as amended 

23 by this Act, is amended by striking 

24 ‘‘48B(b)(3),’’. 


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1 (C) CLERICAL AMENDMENT.—The table of 

2 sections for subpart E of part IV of subchapter 

3 A of chapter 1 is amended by striking the item 

4 relating to section 48B. 

5 (D) EFFECTIVE DATE.—The amendments 

6 made by this paragraph shall apply to taxable 

7 years beginning after the date of the enactment 

8 of this Act. 

9 (12) REINSTATEMENT OF TREATMENT OF FOR10 EIGN BASE COMPANY OIL RELATED INCOME AS FOR11 EIGN BASE COMPANY INCOME.— 

12 (A) IN GENERAL.—Section 954(a) is 

13 amended by striking ‘‘and’’ at the end of para14 graph (2), by striking the period at the end of 

15 paragraph (3) and inserting ‘‘, and’’, and by 

16 adding at the end the following new paragraph: 

17 ‘‘(4) the foreign base company oil related in18 come for the taxable year (determined under sub19 section (g) and reduced as provided in subsection 

20 (b)(5)).’’. 

21 (B) FOREIGN BASE COMPANY OIL RE22 LATED INCOME.—Section 954 is amended by 

23 inserting before subsection (h) the following 

24 new subsection: 


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1 ‘‘(g) FOREIGN BASE COMPANY OIL RELATED IN2 COME.—For purposes of this section— 

3 ‘‘(1) IN GENERAL.—Except as otherwise pro4 vided in this subsection, the term ‘foreign base com5 pany oil related income’ means foreign oil related in6 come (within the meaning of paragraphs (2) and (3) 

7 of section 907(c)) other than income derived from a 

8 source within a foreign country in connection with— 

9 ‘‘(A) oil or gas which was extracted from 

10 an oil or gas well located in such foreign coun11 try, or 

12 ‘‘(B) oil, gas, or a primary product of oil 

13 or gas which is sold by the foreign corporation 

14 or a related person for use or consumption 

15 within such country or is loaded in such coun16 try on a vessel or aircraft as fuel for such vessel 

17 or aircraft. 

18 Such term shall not include any foreign personal 

19 holding company income (as defined in subsection 

20 (c)). 

21 ‘‘(2) PARAGRAPH (1) APPLIES ONLY WHERE

22 CORPORATION HAS PRODUCED 1,000 BARRELS PER

23 DAY OR MORE.— 

24 ‘‘(A) IN GENERAL.—The term ‘foreign 

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1 clude any income of a foreign corporation if 

2 such corporation is not a large oil producer for 

3 the taxable year. 

4 ‘‘(B) LARGE OIL PRODUCER.—For pur5 poses of subparagraph (A), the term ‘large oil 

6 producer’ means any corporation if, for the tax7 able year or for the preceding taxable year, the 

8 average daily production of foreign crude oil 

9 and natural gas of the related group which in10 cludes such corporation equaled or exceeded 

11 1,000 barrels. 

12 ‘‘(C) RELATED GROUP.—The term ‘related 

13 group’ means a group consisting of the foreign 

14 corporation and any other person who is a re15 lated person with respect to such corporation. 

16 ‘‘(D) AVERAGE DAILY PRODUCTION OF

17 FOREIGN CRUDE OIL AND NATURAL GAS.—For 

18 purposes of this paragraph, the average daily 

19 production of foreign crude oil or natural gas of 

20 any related group for any taxable year (and the 

21 conversion of cubic feet of natural gas into bar22 rels) shall be determined under rules similar to 

23 the rules of section 613A except that only crude 

24 oil or natural gas from a well located outside 

25 the United States shall be taken into account.’’. 


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1 (C) CONFORMING AMENDMENTS.— 

2 (i) Section 952(c)(1)(B)(iii) is amend3 ed by redesignating subclauses (I) through 

4 (IV) as subclauses (II) through (V), re5 spectively, and by inserting before sub6 clause (II) (as redesignated) the following 

7 new subclause: 

8 ‘‘(I) foreign base company oil re9 lated income,’’. 

10 (ii) Section 954(b) is amended— 

11 (I) in paragraph (4), by inserting 

12 at the end the following new sentence: 

13 ‘‘The preceding sentence shall not 

14 apply to foreign base company oil-re15 lated income described in subsection 

16 (a)(4).’’, 

17 (II) in paragraph (5), by striking 

18 ‘‘and the foreign base company serv19 ices income’’ and inserting ‘‘the for20 eign base company services income, 

21 and the foreign base company oil re22 lated income’’, and 

23 (III) by adding at the end the 

24 following new paragraph: 


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1 ‘‘(6) FOREIGN BASE COMPANY OIL RELATED IN2 COME NOT TREATED AS ANOTHER KIND OF BASE

3 COMPANY INCOME.—Income of a corporation which 

4 is foreign base company oil related income shall not 

5 be considered foreign base company income of such 

6 corporation under paragraph (2) or (3) of subsection 

7 (a).’’. 

8 (D) EFFECTIVE DATE.—The amendments 

9 made by this paragraph shall apply to taxable 

10 years of foreign corporations beginning after 

11 the date of the enactment of this Act, and to 

12 taxable years of United States shareholders 

13 with or within which such taxable years of for14 eign corporations end. 

15 (13) INCLUSION OF FOREIGN OIL AND GAS EX16 TRACTION INCOME IN TESTED INCOME FOR PUR17 POSE OF DETERMINING GLOBAL INTANGIBLE LOW18 TAXED INCOME.— 

19 (A) IN GENERAL.—Section 

20 951A(c)(2)(A)(i) is amended by inserting ‘‘and’’ 

21 at the end of subclause (III), by striking ‘‘and’’ 

22 at the end of subclause (IV) and inserting 

23 ‘‘over’’, and by striking subclause (V). 

24 (B) EFFECTIVE DATE.—The amendments 

25 made by this paragraph shall apply to taxable 


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1 years of foreign corporations beginning after 

2 the date of the enactment of this Act, and to 

3 taxable years of United States shareholders in 

4 which or with which such tax years of foreign 

5 corporations end. 

6 (14) REPEAL OF CORPORATE INCOME TAX EX7 EMPTION FOR PUBLICLY TRADED PARTNERSHIPS

8 WITH QUALIFYING INCOME AND GAINS FROM ACTIVI9 TIES RELATING TO FOSSIL FUELS.— 

10 (A) IN GENERAL.—Section 7704(d)(1) is 

11 amended— 

12 (i) in subparagraph (E), by striking 

13 ‘‘(including pipelines transporting gas, oil, 

14 or products thereof)’’, and 

15 (ii) in the flush matter at the end, by 

16 inserting ‘‘or any coal, gas, oil, or products 

17 thereof’’ before the period. 

18 (B) EFFECTIVE DATE.—The amendments 

19 made by this paragraph shall apply to taxable 

20 years beginning after the date of the enactment 

21 of this Act. 


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1 TITLE II—CLEAN FUEL TAX 

2 CREDITS 

3 SEC. 201. CLEAN FUEL PRODUCTION CREDIT. 

4 (a) IN GENERAL.—Subpart D of part IV of sub5 chapter A of chapter 1, as amended by section 101, is 

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

7 ‘‘SEC. 45U. CLEAN FUEL PRODUCTION CREDIT. 

8 ‘‘(a) AMOUNT OF CREDIT.— 

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

10 the clean fuel production credit for any taxable year 

11 is an amount equal to the product of— 

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

13 transportation fuel which is— 

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

15 qualified facility, and 

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

17 a manner described in paragraph (2), and 

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

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

20 ‘‘(2) SALE OR USE.—For purposes of para21 graph (1)(A)(ii), the transportation fuel is sold or 

22 used in a manner described in this paragraph if such 

23 fuel is— 

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

25 person— 


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1 ‘‘(i) for use by such person in the pro2 duction of a fuel mixture, 

3 ‘‘(ii) for use by such person in a trade 

4 or business, or 

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

6 another person and places such fuel in the 

7 fuel tank of such other person, or 

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

9 purpose described in subparagraph (A). 

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

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

12 such amount shall be rounded to the nearest mul13 tiple of 0.1 cent. 

14 ‘‘(b) EMISSIONS FACTORS.— 

15 ‘‘(1) EMISSIONS FACTOR.— 

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

17 of a transportation fuel shall be an amount 

18 equal to the quotient of— 

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

20 equal to— 

21 ‘‘(I) 75, minus 

22 ‘‘(II) the emissions rate for such 

23 fuel, divided by 

24 ‘‘(ii) 75. 


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1 ‘‘(B) ESTABLISHMENT OF SAFE HARBOR

2 EMISSIONS RATE.—The Secretary, in consulta3 tion with the Administrator of the Environ4 mental Protection Agency, shall establish the 

5 safe harbor emissions rate for similar types and 

6 categories of transportation fuels based on the 

7 amount of lifecycle greenhouse gas emissions 

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

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

10 effect on the date of the enactment of this sec11 tion) for such fuels, expressed as kilograms of 

12 CO2e per mmBTU, which a taxpayer may elect 

13 to use for purposes of this section. 

14 ‘‘(C) ROUNDING OF SAFE HARBOR EMIS15 SIONS RATE.—The Secretary may round the 

16 safe harbor emissions rates under subparagraph 

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

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

19 an emissions rate that is less than 3.75 kilo20 grams of CO2e per mmBTU, the Secretary may 

21 round such rate to zero. 

22 ‘‘(D) PROVISIONAL SAFE HARBOR EMIS23 SIONS RATE.— 

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

25 transportation fuel for which a safe harbor 


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1 emissions rate has not been established by 

2 the Secretary, a taxpayer producing such 

3 fuel may file a petition with the Secretary 

4 for determination of the safe harbor emis5 sions rate with respect to such fuel. 

6 ‘‘(ii) ESTABLISHMENT OF PROVI7 SIONAL AND FINAL SAFE HARBOR EMIS8 SIONS RATE.—In the case of a transpor9 tation fuel for which a petition described in 

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

11 consultation with the Administrator of the 

12 Environmental Protection Agency, shall— 

13 ‘‘(I) not later than 12 months 

14 after the date on which the petition 

15 was filed, provide a provisional safe 

16 harbor emissions rate for such fuel 

17 which a taxpayer may use for pur18 poses of this section, and 

19 ‘‘(II) not later than 24 months 

20 after the date on which the petition 

21 was filed, establish the safe harbor 

22 emissions rate for such fuel. 

23 ‘‘(E) ROUNDING.—If any amount deter24 mined under subparagraph (A) is not a multiple 


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1 of 0.1, such amount shall be rounded to the 

2 nearest multiple of 0.1. 

3 ‘‘(2) PUBLISHING SAFE HARBOR EMISSIONS

4 RATE.—The Secretary, in consultation with the Ad5 ministrator of the Environmental Protection Agency, 

6 shall publish a table that sets forth the safe harbor 

7 emissions rate (as established pursuant to paragraph 

8 (1)) for similar types and categories of transpor9 tation fuels. 

10 ‘‘(c) INFLATION ADJUSTMENT.— 

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

12 years beginning after 2021, the $1.00 amount in 

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

14 such amount by the inflation adjustment factor for 

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

16 transportation fuel occurs. If any amount as in17 creased under the preceding sentence is not a mul18 tiple of 1 cent, such amount shall be rounded to the 

19 nearest multiple of 1 cent. 

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

21 purposes of paragraph (1), the inflation adjustment 

22 factor shall be the inflation adjustment factor deter23 mined and published by the Secretary pursuant to 

24 section 45T(d), determined by substituting ‘calendar 


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1 year 2020’ for ‘calendar year 1992’ in paragraph (3) 

2 thereof. 

3 ‘‘(d) CREDIT PHASE-OUT.— 

4 ‘‘(1) IN GENERAL.—If the Secretary, in con5 sultation with the Secretary of Energy and the Ad6 ministrator of the Environmental Protection Agency, 

7 determines that the greenhouse gas emissions from 

8 transportation fuel produced and sold at retail annu9 ally in the United States are equal to or less than 

10 50 percent of the greenhouse gas emissions from 

11 transportation fuel produced and sold at retail in the 

12 United States during calendar year 2019, the 

13 amount of the clean fuel production credit under 

14 this section for any qualified facility placed in serv15 ice during a calendar year described in paragraph 

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

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

18 under subsection (a) without regard to this sub19 section, multiplied by 

20 ‘‘(B) the phase-out percentage under para21 graph (2). 

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

23 percentage under this paragraph is equal to— 

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

25 the first calendar year following the calendar 


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1 year in which the determination described in 

2 paragraph (1) is made, 75 percent, 

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

4 the second calendar year following such deter5 mination year, 50 percent, 

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

7 the third calendar year following such deter8 mination year, 25 percent, and 

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

10 any calendar year subsequent to the year de11 scribed in subparagraph (C), 0 percent. 

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

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

14 1,000,000 British thermal units. 

15 ‘‘(2) CO2e.—The term ‘CO2e’ means, with re16 spect to any greenhouse gas, the equivalent carbon 

17 dioxide (as determined based on relative global 

18 warming potential). 

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

20 gas’ has the same meaning given that term under 

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

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

23 the enactment of this section. 

24 ‘‘(4) QUALIFIED FACILITY.— 


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1 ‘‘(A) IN GENERAL.—Subject to subpara2 graphs (B) and (C), the term ‘qualified facility’ 

3 means a facility used for the production of 

4 transportation fuels. 

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

6 purposes of this section, a facility shall only 

7 qualify as a qualified facility— 

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

9 originally placed in service after December 

10 31, 2020, for the 10-year period beginning 

11 on the date such facility is placed in serv12 ice, or 

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

14 originally placed in service before January 

15 1, 2021, for the 10-year period beginning 

16 on January 1, 2021. 

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

18 ‘transportation fuel’ means a fuel which is suitable 

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

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

21 2020, the Secretary, in consultation with the Adminis22 trator of the Environmental Protection Agency, shall issue 

23 final guidance regarding implementation of this section, 

24 including calculation of emissions factors for transpor25 tation fuel, the table described in subsection (b)(2), and 


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1 the determination of clean fuel production credits under 

2 this section. 

3 ‘‘(g) SPECIAL RULES.— 

4 ‘‘(1) ONLY REGISTERED PRODUCTION IN THE

5 UNITED STATES TAKEN INTO ACCOUNT.— 

6 ‘‘(A) IN GENERAL.—No clean fuel produc7 tion credit shall be determined under subsection 

8 (a) with respect to any transportation fuel un9 less— 

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

11 producer of clean fuel under section 4101 

12 at the time of production, and 

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

14 United States. 

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

16 this paragraph, the term ‘United States’ in17 cludes any possession of the United States. 

18 ‘‘(2) PRODUCTION ATTRIBUTABLE TO THE TAX19 PAYER.—In the case of a facility in which more than 

20 1 person has an ownership interest, except to the ex21 tent provided in regulations prescribed by the Sec22 retary, production from the facility shall be allocated 

23 among such persons in proportion to their respective 

24 ownership interests in the gross sales from such fa25 cility. 


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

2 treated as related to each other if such persons 

3 would be treated as a single employer under the reg4 ulations prescribed under section 52(b). In the case 

5 of a corporation which is a member of an affiliated 

6 group of corporations filing a consolidated return, 

7 such corporation shall be treated as selling fuel to 

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

9 person by another member of such group. 

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

11 TRUSTS.—Under regulations prescribed by the Sec12 retary, rules similar to the rules of subsection (d) of 

13 section 52 shall apply. 

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

15 AGRICULTURAL COOPERATIVE.— 

16 ‘‘(A) ELECTION TO ALLOCATE.— 

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

18 eligible cooperative organization, any por19 tion of the credit determined under sub20 section (a) for the taxable year may, at the 

21 election of the organization, be apportioned 

22 among patrons of the organization on the 

23 basis of the amount of business done by 

24 the patrons during the taxable year. 


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1 ‘‘(ii) FORM AND EFFECT OF ELEC2 TION.—An election under clause (i) for any 

3 taxable year shall be made on a timely 

4 filed return for such year. Such election, 

5 once made, shall be irrevocable for such 

6 taxable year. Such election shall not take 

7 effect unless the organization designates 

8 the apportionment as such in a written no9 tice mailed to its patrons during the pay10 ment period described in section 1382(d). 

11 ‘‘(B) TREATMENT OF ORGANIZATIONS AND

12 PATRONS.—The amount of the credit appor13 tioned to any patrons under subparagraph 

14 (A)— 

15 ‘‘(i) shall not be included in the 

16 amount determined under subsection (a) 

17 with respect to the organization for the 

18 taxable year, and 

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

20 determined under subsection (a) for the 

21 first taxable year of each patron ending on 

22 or after the last day of the payment period 

23 (as defined in section 1382(d)) for the tax24 able year of the organization or, if earlier, 

25 for the taxable year of each patron ending 


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1 on or after the date on which the patron 

2 receives notice from the cooperative of the 

3 apportionment. 

4 ‘‘(C) SPECIAL RULES FOR DECREASE IN

5 CREDITS FOR TAXABLE YEAR.—If the amount 

6 of the credit of a cooperative organization de7 termined under subsection (a) for a taxable 

8 year is less than the amount of such credit 

9 shown on the return of the cooperative organi10 zation for such year, an amount equal to the 

11 excess of— 

12 ‘‘(i) such reduction, over 

13 ‘‘(ii) the amount not apportioned to 

14 such patrons under subparagraph (A) for 

15 the taxable year, 

16 shall be treated as an increase in tax imposed 

17 by this chapter on the organization. Such in18 crease shall not be treated as tax imposed by 

19 this chapter for purposes of determining the 

20 amount of any credit under this chapter. 

21 ‘‘(D) ELIGIBLE COOPERATIVE DEFINED.— 

22 For purposes of this section the term ‘eligible 

23 cooperative’ means a cooperative organization 

24 described in section 1381(a) which is owned 

25 more than 50 percent by agricultural producers 


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1 or by entities owned by agricultural producers. 

2 For this purpose an entity owned by an agricul3 tural producer is one that is more than 50 per4 cent owned by agricultural producers.’’. 

5 (b) CONFORMING AMENDMENTS.— 

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

7 is amended— 

8 (A) in paragraph (32), by striking ‘‘plus’’ 

9 at the end, 

10 (B) in paragraph (33), by striking the pe11 riod at the end and inserting ‘‘, plus’’, and 

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

13 paragraph: 

14 ‘‘(34) the clean fuel production credit deter15 mined under section 45U(a).’’. 

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

17 IV of subchapter A of chapter 1, as amended by sec18 tion 101, is amended by adding at the end the fol19 lowing new item: 

‘‘Sec. 45U. Clean fuel production credit.’’. 

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

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

22 fuel production credit (pursuant to section 45U),’’ 

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


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

2 this section shall apply to transportation fuel produced 

3 after December 31, 2020. 

4 SEC. 202. TEMPORARY EXTENSION OF EXISTING FUEL AND 

5 TRANSPORTATION INCENTIVES. 

6 (a) ALTERNATIVE MOTOR VEHICLE CREDIT FOR

7 FUEL CELL MOTOR VEHICLES.— 

8 (1) IN GENERAL.—Section 30B(k) is amend9 ed— 

10 (A) by striking paragraph (1), and 

11 (B) by redesignating paragraphs (2) 

12 through (4) as paragraphs (1) through (3), re13 spectively. 

14 (2) PHASEOUT.—Section 30B is amended by 

15 adding at the end the following: 

16 ‘‘(l) CREDIT PHASE-OUT FOR NEW QUALIFIED FUEL

17 CELL MOTOR VEHICLES.— 

18 ‘‘(1) IN GENERAL.—Following a determination 

19 by the Secretary under section 45U(d)(1) that the 

20 greenhouse gas emissions from transportation fuel 

21 produced and sold at retail annually in the United 

22 States are equal to or less than 50 percent of the 

23 greenhouse gas emissions from transportation fuel 

24 produced and sold at retail in the United States dur25 ing calendar year 2019, the amount of the new 


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1 qualified fuel cell motor vehicle credit under this sec2 tion for any new qualified fuel cell motor vehicle 

3 purchased during a calendar year described in para4 graph (2) shall be equal to the product of— 

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

6 under subsection (b) without regard to this sub7 section, multiplied by 

8 ‘‘(B) the phase-out percentage under para9 graph (2). 

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

11 percentage under this paragraph is equal to— 

12 ‘‘(A) for a vehicle purchased during the 

13 first calendar year following the calendar year 

14 in which the determination described in para15 graph (1) is made, 75 percent, 

16 ‘‘(B) for a vehicle purchased during the 

17 second calendar year following such determina18 tion year, 50 percent, 

19 ‘‘(C) for a vehicle purchased during the 

20 third calendar year following such determina21 tion year, 25 percent, and 

22 ‘‘(D) for a vehicle purchased during any 

23 calendar year subsequent to the year described 

24 in subparagraph (C), 0 percent.’’. 


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1 (3) EFFECTIVE DATE.—The amendments made 

2 by this subsection shall apply to property purchased 

3 after December 31, 2017. 

4 (b) ALTERNATIVE FUEL VEHICLE REFUELING

5 PROPERTY CREDIT.— 

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

7 30C(g) is amended by striking ‘‘December 31, 

8 2017’’ and inserting ‘‘December 31, 2020’’. 

9 (2) EFFECTIVE DATE.—The amendments made 

10 by this subsection shall apply to property placed in 

11 service after December 31, 2017. 

12 (c) NEW QUALIFIED PLUG-IN ELECTRIC DRIVE

13 MOTOR VEHICLES.— 

14 (1) 2- AND 3-WHEELED PLUG-IN ELECTRIC VE15 HICLES.— 

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

17 30D(g)(3)(E) is amended by striking ‘‘in the 

18 case of a vehicle that has 2 wheels, after De19 cember 31, 2014, and before January 1, 2018’’ 

20 and inserting ‘‘after December 31, 2014’’. 

21 (B) EFFECTIVE DATE.—The amendments 

22 made by this paragraph shall apply to vehicles 

23 acquired after December 31, 2017. 

24 (2) ELIMINATION ON LIMITATION ON NUMBER

25 OF VEHICLES ELIGIBLE FOR CREDIT.— 


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1 (A) IN GENERAL.—Section 30D, as 

2 amended by paragraph (1), is amended— 

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

4 (ii) by redesignating subsections (f) 

5 and (g) as subsections (e) and (f), respec6 tively. 

7 (B) CONFORMING AMENDMENT.—Para8 graph (37) of section 1016(a) is amended by 

9 striking ‘‘section 30D(f)(1)’’ and inserting ‘‘sec10 tion 30D(e)(1)’’. 

11 (C) EFFECTIVE DATE.—The amendments 

12 made by this paragraph shall apply to vehicles 

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

14 (3) PHASEOUT.—Section 30D, as amended by 

15 paragraph (2), is amended by adding at the end the 

16 following: 

17 ‘‘(g) CREDIT PHASE-OUT FOR NEW QUALIFIED

18 PLUG-IN ELECTRIC DRIVE MOTOR VEHICLES.— 

19 ‘‘(1) IN GENERAL.—Following a determination 

20 by the Secretary under section 45U(d)(1) that the 

21 greenhouse gas emissions from transportation fuel 

22 produced and sold at retail annually in the United 

23 States are equal to or less than 50 percent of the 

24 greenhouse gas emissions from transportation fuel 

25 produced and sold at retail in the United States durVerDate Sep 11 2014 00:42 May 10, 2019 Jkt 089200 PO 00000 Frm 00085 Fmt 6652 Sfmt 6201 E:\BILLS\S1288.IS S1288

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1 ing calendar year 2019, the amount of the credit al2 lowed under this section for any new qualified plug3 in electric drive motor vehicle sold or qualified 2- or 

4 3-wheeled plug-in electric vehicle acquired during a 

5 calendar year described in paragraph (2) shall be 

6 equal to the product of— 

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

8 under subsection (a) without regard to this sub9 section, multiplied by 

10 ‘‘(B) the phase-out percentage under para11 graph (2). 

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

13 percentage under this paragraph is equal to— 

14 ‘‘(A) for a vehicle sold or acquired during 

15 the first calendar year following the calendar 

16 year in which the determination described in 

17 paragraph (1) is made, 75 percent, 

18 ‘‘(B) for a vehicle sold or acquired during 

19 the second calendar year following such deter20 mination year, 50 percent, 

21 ‘‘(C) for a vehicle sold or acquired during 

22 the third calendar year following such deter23 mination year, 25 percent, and 


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1 ‘‘(D) for a vehicle sold or acquired during 

2 any calendar year subsequent to the year de3 scribed in subparagraph (C), 0 percent.’’. 

4 (d) SECOND GENERATION BIOFUEL PRODUCER

5 CREDIT.— 

6 (1) IN GENERAL.—Section 40(b)(6)(J)(i) is 

7 amended by striking ‘‘2018’’ and inserting ‘‘2021’’. 

8 (2) EFFECTIVE DATE.—The amendments made 

9 by this subsection shall apply to qualified second 

10 generation biofuel production after December 31, 

11 2017. 

12 (e) BIODIESEL AND RENEWABLE DIESEL USED AS

13 FUEL.— 

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

15 by striking ‘‘2017’’ and inserting ‘‘2020’’. 

16 (2) EFFECTIVE DATE.—The amendments made 

17 by this subsection shall apply to fuel sold or used 

18 after December 31, 2017. 

19 (f) CREDIT FOR BIODIESEL AND ALTERNATIVE

20 FUEL MIXTURES.— 

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

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

23 ‘‘2017’’ and inserting ‘‘2020’’, 

24 (B) in subsection (d)— 


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

2 ‘‘liquefied’’, and 

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

4 ‘‘2017’’ and inserting ‘‘2020’’, 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, 2020, 

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 2020, and 

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

19 31, 2017.’’. 

20 (2) CLARIFICATION OF RULES REGARDING AL21 TERNATIVE FUEL MIXTURE CREDIT.—Paragraph (2) 

22 of section 6426(e) of the Internal Revenue Code of 

23 1986 is amended by striking ‘‘mixture of alternative 

24 fuel’’ and inserting ‘‘mixture of alternative fuel 


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1 (other than a fuel described in subparagraph (A), 

2 (C), or (F) of subsection (d)(2))’’. 

3 (3) EFFECTIVE DATE.— 

4 (A) IN GENERAL.—The amendments made 

5 by paragraph (1) shall apply to fuel sold or 

6 used after December 31, 2017. 

7 (B) CLARIFICATION OF RULES REGARDING

8 ALTERNATIVE FUEL MIXTURE CREDIT.—The 

9 amendment made by paragraph (2) shall apply 

10 to— 

11 (i) fuel sold or used on or after the 

12 date of the enactment of this Act, and 

13 (ii) fuel sold or used before such date 

14 of enactment, but only to the extent that 

15 credits and claims of credit under section 

16 6426(e) of the Internal Revenue Code of 

17 1986 with respect to such sale or use have 

18 not been paid or allowed as of such date. 

19 (4) SPECIAL RULE FOR CERTAIN PERIODS.— 

20 Notwithstanding any other provision of law, in the 

21 case of— 

22 (A) any biodiesel mixture credit properly 

23 determined under section 6426(c) of the Inter24 nal Revenue Code of 1986 for the periods after 


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1 December 31, 2017, and before the date of the 

2 enactment of this Act, and 

3 (B) any alternative fuel credit properly de4 termined under section 6426(d) of such Code 

5 for such periods, 

6 such credit shall be allowed, and any refund or pay7 ment attributable to such credit (including any pay8 ment under section 6427(e) of such Code) shall be 

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

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

11 Such Secretary shall issue guidance within 30 days 

12 after the date of the enactment of this Act providing 

13 for a one-time submission of claims covering periods 

14 described in the preceding sentence. Such guidance 

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

16 of such claims (in such manner as prescribed by 

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

18 such guidance is issued. Such claims shall be paid 

19 by such Secretary not later than 60 days after re20 ceipt. If such Secretary has not paid pursuant to a 

21 claim filed under this subsection within 60 days 

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

23 shall be paid with interest from such date deter24 mined by using the overpayment rate and method 

25 under section 6621 of such Code. 


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1 (g) BIODIESEL, BIODIESEL MIXTURES, AND ALTER2 NATIVE FUELS.— 

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

4 amended— 

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

6 ‘‘2017’’ and inserting ‘‘2020’’, and 

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

8 ‘‘2017’’ and inserting ‘‘2020’’. 

9 (2) EFFECTIVE DATE.—The amendments made 

10 by this subsection shall apply to fuel sold or used 

11 after December 31, 2017. 

12 TITLE III—ENERGY EFFICIENCY 

13 INCENTIVES 

14 SEC. 301. CREDIT FOR NEW ENERGY EFFICIENT RESIDEN15 TIAL BUILDINGS. 

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

17 as follows: 

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

19 ‘‘(a) ALLOWANCE OF CREDIT.—For purposes of sec20 tion 38, in the case of an eligible contractor, the new en21 ergy efficient home credit for the taxable year is the appli22 cable amount for each qualified residence which is— 

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


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

2 contractor for use as a residence during the taxable 

3 year. 

4 ‘‘(b) APPLICABLE AMOUNT.— 

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

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

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

8 for every 5 percentage points by which the efficiency 

9 ratio for the qualified residence is certified to be 

10 greater than 25 percent. 

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

12 section, the efficiency ratio of a qualified residence 

13 shall be equal to the quotient, expressed as a per14 centage, obtained by dividing— 

15 ‘‘(A) an amount equal to the difference be16 tween— 

17 ‘‘(i) the annual level of energy con18 sumption of the qualified residence, and 

19 ‘‘(ii) the annual level of energy con20 sumption of the baseline residence, by 

21 ‘‘(B) the annual level of energy consump22 tion of the baseline residence. 

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

24 this section, the baseline residence shall be a resi25 dence which is— 


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

2 and 

3 ‘‘(B) constructed in accordance with the 

4 standards of the 2015 International Energy 

5 Conservation Code, as such Code (including 

6 supplements) is in effect on the date of the en7 actment of the Clean Energy for America Act. 

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

9 ‘‘(1) ELIGIBLE CONTRACTOR.—The term ‘eligi10 ble contractor’ means— 

11 ‘‘(A) the person who constructed the quali12 fied residence, or 

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

14 which is a manufactured home, the manufac15 tured home producer of such residence. 

16 ‘‘(2) QUALIFIED RESIDENCE.—The term ‘quali17 fied residence’ means a dwelling unit— 

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

19 ‘‘(B) the construction of which is substan20 tially completed after the date of the enactment 

21 of this section, and 

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

23 level of energy consumption that is less than 

24 the baseline residence and an efficiency ratio of 

25 not less than 25 percent. 


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

2 does not include substantial reconstruction or reha3 bilitation. 

4 ‘‘(d) CERTIFICATION.— 

5 ‘‘(1) IN GENERAL.— 

6 ‘‘(A) ACCREDITED THIRD PARTY.—A cer7 tification described in this section shall be made 

8 by a third party that is accredited by a certifi9 cation program approved by the Secretary, in 

10 consultation with the Secretary of Energy. 

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

12 in this section shall be made in accordance with 

13 guidance prescribed by the Secretary, in con14 sultation with the Secretary of Energy. Such 

15 guidance shall— 

16 ‘‘(i) specify procedures and methods 

17 for calculating annual energy consumption 

18 levels, and 

19 ‘‘(ii) include requirements to ensure 

20 the safe operation of energy efficiency im21 provements and that all improvements are 

22 installed according to the applicable stand23 ards of such certification program. 

24 ‘‘(2) COMPUTER SOFTWARE.— 


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

2 paragraph (1)(B)(i) shall be prepared by quali3 fied computer software. 

4 ‘‘(B) QUALIFIED COMPUTER SOFTWARE.— 

5 For purposes of this paragraph, the term 

6 ‘qualified computer software’ means software— 

7 ‘‘(i) for which the software designer 

8 has certified that the software meets all 

9 procedures and detailed methods for calcu10 lating energy consumption levels as re11 quired by the Secretary, and 

12 ‘‘(ii) which provides such forms as re13 quired to be filed by the Secretary in con14 nection with energy consumption levels and 

15 the credit allowed under this section. 

16 ‘‘(e) BASIS ADJUSTMENT.—For purposes of this sub17 title, if a credit is allowed under this section in connection 

18 with any expenditure for any property (other than a quali19 fied low-income building, as described in section 42(c)(2)), 

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

21 for this subsection) result from such expenditure shall be 

22 reduced by the amount of the credit so determined. 

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

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1 count under section 25D or 47 shall not be taken into 

2 account under this section.’’. 

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

4 this section shall apply to any qualified residence acquired 

5 after December 31, 2020. 

6 SEC. 302. HEATING AND AIR CONDITIONING REPLACEMENT 

7 CREDIT. 

8 (a) IN GENERAL.—Subpart A of part IV of sub9 chapter A of chapter 1 is amended by adding at the end 

10 the following new section: 

11 ‘‘SEC. 25E. HEATING AND AIR CONDITIONING REPLACE12 MENT CREDIT. 

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

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

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

16 the lesser of— 

17 ‘‘(1) the sum of the applicable qualified prop18 erty amounts for any qualified property placed in 

19 service by the individual during such taxable year, or 

20 ‘‘(2) $1,500. 

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

22 For any qualified property, the applicable qualified prop23 erty amount shall be equal to the lesser of— 

24 ‘‘(1) 50 percent of the amount paid or incurred 

25 by the individual for such qualified property, or 


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1 ‘‘(2) $500. 

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

3 property’ means a furnace, boiler, condensing water heat4 er, central air conditioning unit, heat pump, or biomass 

5 property which— 

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

7 program which are in effect at the time that the 

8 property was placed in service, 

9 ‘‘(2) is installed according to applicable Air 

10 Conditioning Contractors of America Quality Instal11 lation standards which are in effect at the time that 

12 the property was placed in service, 

13 ‘‘(3) is for use in a dwelling unit which is lo14 cated in the United States and used as a residence 

15 by the individual, and 

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

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

18 ‘‘(d) BIOMASS PROPERTY.— 

19 ‘‘(1) IN GENERAL.—For purposes of this sec20 tion, the term ‘biomass property’ means any prop21 erty which— 

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

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

24 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, 2020. 

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, 2020. 

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 

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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, 2020. 

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 48D. 

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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•S 1288 IS

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 48D shall not be taken into account 

23 under this section.’’. 

24 (b) CONFORMING AMENDMENTS.— 

25 (1) Section 263(a) is amended— 


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

2 at the end, 

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

4 period and inserting ‘‘, or’’, and 

5 (C) by inserting at the end the following 

6 new subparagraph: 

7 ‘‘(L) 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’’ each place it 

13 appears and inserting ‘‘179E, or 179F’’. 

14 (3) Section 1016(a) is amended— 

15 (A) in paragraph (37), by striking ‘‘and’’ 

16 at the end, 

17 (B) in paragraph (38), 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 ‘‘(39) 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, 2020. 

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 2017’’ and inserting ‘‘December 31, 2020’’. 

16 (2) EFFECTIVE DATE.—The amendments made 

17 by this subsection shall apply to property placed in 

18 service after December 31, 2017. 

19 (b) NEW ENERGY EFFICIENT HOME CREDIT.— 

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

21 45L is amended by striking ‘‘December 31, 2017’’ 

22 and inserting ‘‘December 31, 2020’’. 

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 2017. 

3 (c) ENERGY EFFICIENT COMMERCIAL BUILDINGS

4 DEDUCTION.— 

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

6 179D is amended by striking ‘‘December 31, 2017’’ 

7 and inserting ‘‘December 31, 2020’’. 

8 (2) EFFECTIVE DATE.—The amendments made 

9 by this section shall apply to property placed in serv10 ice after December 31, 2017. 

11 TITLE IV—CLEAN ELECTRICITY 

12 AND FUEL BONDS 

13 SEC. 401. CLEAN ENERGY BONDS. 

14 (a) IN GENERAL.—Part IV of subchapter A of chap15 ter 1 is amended by inserting after subpart G the following 

16 new subpart: 

17 ‘‘Subpart H—Clean Energy Bonds 

‘‘Sec. 54. Clean energy bonds. 

18 ‘‘SEC. 54. CLEAN ENERGY BONDS. 

19 ‘‘(a) IN GENERAL.—If a taxpayer holds a clean en20 ergy bond on one or more interest payment dates of the 

21 bond during any taxable year, there shall be allowed as 

22 a credit against the tax imposed by this chapter for the 

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


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1 determined under subsection (b) with respect to such 

2 dates. 

3 ‘‘(b) AMOUNT OF CREDIT.— 

4 ‘‘(1) IN GENERAL.—The amount of the credit 

5 determined under this subsection with respect to any 

6 interest payment date for a clean energy bond is the 

7 applicable percentage (as determined under para8 graph (2)) of the amount of interest payable by the 

9 issuer with respect to such date. 

10 ‘‘(2) APPLICABLE PERCENTAGE.— 

11 ‘‘(A) IN GENERAL.— 

12 ‘‘(i) MAXIMUM PERCENTAGE.—Except 

13 as provided in clause (ii), the applicable 

14 percentage is 70 percent. 

15 ‘‘(ii) REDUCTION OF CREDIT BASED

16 ON GREENHOUSE GAS EMISSION RATE.— 

17 The applicable percentage shall be reduced 

18 (but not below zero) by an amount which 

19 bears the same ratio to the percentage in 

20 effect under clause (i) as— 

21 ‘‘(I) in the case of a qualified fa22 cility described in subsection (f)(3) of 

23 section 45T, the greenhouse gas emis24 sions rate for the facility bears to 300 

25 grams of CO2e per KWh (as such 


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1 terms are defined in subsections 

2 (b)(1) and (e)(1) of such section), or 

3 ‘‘(II) in the case of a qualified fa4 cility described in subsection (e)(4) of 

5 section 45U, the average emissions 

6 rate for all transportation fuel pro7 duced by such facility bears to 75 

8 kilograms of CO2e per mmBTU (as 

9 such terms are defined in subsections 

10 (b) and (e) of such section). 

11 ‘‘(B) ROUNDING.—If any applicable per12 centage determined under subparagraph (A) is 

13 not a whole percentage point, such percentage 

14 shall be rounded to the nearest whole percent15 age point. 

16 ‘‘(C) SAFE HARBOR RULES.—Rules similar 

17 to the rules of sections 45T(b)(3) and 45U(b) 

18 shall apply for purposes of this section. 

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

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

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

22 the excess of— 

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

24 (as defined in section 26(b)) plus the tax im25 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 of such issue over the 

18 amounts in a reasonably required reserve (with19 in the meaning of section 150(a)(3)) with re20 spect to such issue are to be used for capital ex21 penditures incurred by an entity described in 

22 subparagraph (B) for— 

23 ‘‘(i) 1 or more qualified facilities, 


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1 ‘‘(ii) qualified carbon capture and se2 questration equipment (as defined in sub3 section (c)(2) of section 48D), or 

4 ‘‘(iii) energy storage property (as de5 fined in subsection (d)(2) of such section), 

6 ‘‘(B) the bond is issued by— 

7 ‘‘(i) a governmental body, 

8 ‘‘(ii) a public power provider, or 

9 ‘‘(iii) a cooperative electric company, 

10 and 

11 ‘‘(C) the issuer makes an irrevocable elec12 tion to have this section apply. 

13 ‘‘(2) APPLICABLE RULES.—For purposes of ap14 plying paragraph (1)— 

15 ‘‘(A) for purposes of section 149(b), a 

16 clean energy bond shall not be treated as feder17 ally guaranteed by reason of the credit allowed 

18 under subsection (a) or section 6431, 

19 ‘‘(B) for purposes of section 148, the yield 

20 on a clean energy bond shall be determined 

21 without regard to the credit allowed under sub22 section (a), and 

23 ‘‘(C) a bond shall not be treated as a clean 

24 energy bond if the issue price has more than a 

25 de minimis amount (determined under rules 


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1 similar to the rules of section 1273(a)(3)) of 

2 premium over the stated principal amount of 

3 the bond. 

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

5 ‘‘(1) AVAILABLE PROJECT PROCEEDS.—The 

6 term ‘available project proceeds’ means— 

7 ‘‘(A) the excess of— 

8 ‘‘(i) the proceeds from the sale of an 

9 issue, over 

10 ‘‘(ii) the issuance costs financed by 

11 the issue (to the extent that such costs do 

12 not exceed 2 percent of such proceeds), 

13 and 

14 ‘‘(B) the proceeds from any investment of 

15 the excess described in subparagraph (A). 

16 ‘‘(2) COOPERATIVE ELECTRIC COMPANY.—The 

17 term ‘cooperative electric company’ means a mutual 

18 or cooperative electric company described in section 

19 501(c)(12) or section 1381(a)(2)(C). 

20 ‘‘(3) GOVERNMENTAL BODY.—The term ‘gov21 ernmental body’ means any State or Indian tribal 

22 government, or any political subdivision thereof. 

23 ‘‘(4) INTEREST PAYMENT DATE.—The term ‘in24 terest payment date’ means any date on which the 


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1 holder of record of the clean energy bond is entitled 

2 to a payment of interest under such bond. 

3 ‘‘(5) QUALIFIED FACILITY.—The term ‘quali4 fied facility’ means a facility— 

5 ‘‘(A) which is described in section 

6 45T(f)(3), or 

7 ‘‘(B) which is described in section 

8 45U(e)(4) and only produces transportation 

9 fuel which has an emissions rate of less than 75 

10 kilograms of CO2e per mmBTU (as such terms 

11 are defined in subsections (b) and (e) of such 

12 section). 

13 ‘‘(6) PUBLIC POWER PROVIDER.—The term 

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

15 service obligation, as such terms are defined in sec16 tion 217 of the Federal Power Act (as in effect on 

17 the date of the enactment of this paragraph). 

18 ‘‘(f) CREDIT PHASE-OUT.— 

19 ‘‘(1) ELECTRICAL PRODUCTION, CARBON CAP20 TURE AND SEQUESTRATION EQUIPMENT, AND EN21 ERGY STORAGE PROPERTY.—In the case of a clean 

22 energy bond for which the proceeds are used for cap23 ital expenditures incurred by an entity for a quali24 fied facility described in subsection (e)(5)(A) or any 

25 property described in clause (ii) or (iii) of subsection 


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1 (d)(1)(A), if the Secretary, in consultation with the 

2 Secretary of Energy and the Administrator of the 

3 Environmental Protection Agency, determines that 

4 the annual greenhouse gas emissions from electrical 

5 production in the United States are equal to or less 

6 than the percentage specified in section 45T(e)(1), 

7 the amount of the credit determined under sub8 section (b) with respect to any clean energy bond 

9 issued during a calendar year described in para10 graph (3) shall be equal to the product of— 

11 ‘‘(A) the amount determined under sub12 section (b) without regard to this subsection, 

13 multiplied by 

14 ‘‘(B) the phase-out percentage under para15 graph (3). 

16 ‘‘(2) FUEL PRODUCTION.—In the case of a 

17 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 (e)(5)(B), 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 transportation fuel 

24 produced and sold at retail annually in the United 

25 States are equal to or less than the percentage speciVerDate Sep 11 2014 00:42 May 10, 2019 Jkt 089200 PO 00000 Frm 00126 Fmt 6652 Sfmt 6201 E:\BILLS\S1288.IS S1288

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1 fied in section 45U(d)(1), the amount of the credit 

2 determined under subsection (b) with respect to any 

3 clean energy bond issued during a calendar year de4 scribed in paragraph (3) shall be equal to the prod5 uct of— 

6 ‘‘(A) the amount determined under sub7 section (b) without regard to this subsection, 

8 multiplied by 

9 ‘‘(B) the phase-out percentage under para10 graph (3). 

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

12 percentage under this paragraph is equal to— 

13 ‘‘(A) for any bond issued during the first 

14 calendar year following the calendar year in 

15 which the determination described in paragraph 

16 (1) or (2) is made, 75 percent, 

17 ‘‘(B) for any bond issued during the sec18 ond calendar year following such determination 

19 year, 50 percent, 

20 ‘‘(C) for any bond issued during the third 

21 calendar year following such determination 

22 year, 25 percent, and 

23 ‘‘(D) for any bond issued during any cal24 endar year subsequent to the year described in 

25 subparagraph (C), 0 percent. 


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1 ‘‘(g) SPECIAL RULES.— 

2 ‘‘(1) INTEREST ON CLEAN ENERGY BONDS IN3 CLUDIBLE IN GROSS INCOME FOR FEDERAL INCOME

4 TAX PURPOSES.—For purposes of this title, interest 

5 on any clean energy bond shall be includible in gross 

6 income. 

7 ‘‘(2) S CORPORATIONS AND PARTNERSHIPS.—In 

8 the case of a clean energy bond held by an S cor9 poration or partnership, the allocation of the credit 

10 allowed by this section to the shareholders of such 

11 corporation or partners of such partnership shall be 

12 treated as a distribution. 

13 ‘‘(3) BONDS HELD BY REAL ESTATE INVEST14 MENT TRUSTS.—If any clean energy bond is held by 

15 a real estate investment trust, the credit determined 

16 under subsection (a) shall be allowed to beneficiaries 

17 of such trust (and any gross income included under 

18 paragraph (1) with respect to such credit shall be 

19 distributed to such beneficiaries) under procedures 

20 prescribed by the Secretary. 

21 ‘‘(4) CREDITS MAY BE STRIPPED.—Under regu22 lations prescribed by the Secretary— 

23 ‘‘(A) IN GENERAL.—There may be a sepa24 ration (including at issuance) of the ownership 

25 of a clean energy bond and the entitlement to 


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1 the credit under this section with respect to 

2 such bond. In case of any such separation, the 

3 credit under this section shall be allowed to the 

4 person who on the credit allowance date holds 

5 the instrument evidencing the entitlement to 

6 the credit and not to the holder of the bond. 

7 ‘‘(B) CERTAIN RULES TO APPLY.—In the 

8 case of a separation described in subparagraph 

9 (A), the rules of section 1286 shall apply to the 

10 clean energy bond as if it were a stripped bond 

11 and to the credit under this section as if it were 

12 a stripped coupon. 

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

14 such regulations and other guidance as may be necessary 

15 or appropriate to carry out this section and section 

16 6431.’’. 

17 (b) CREDIT FOR QUALIFIED CLEAN ENERGY BONDS

18 ALLOWED TO ISSUER.—Subchapter B of chapter 65 of 

19 subtitle F is amended by adding at the end the following 

20 new section: 

21 ‘‘SEC. 6431. CREDIT FOR QUALIFIED CLEAN ENERGY BONDS 

22 ALLOWED TO ISSUER. 

23 ‘‘(a) IN GENERAL.—The issuer of a qualified clean 

24 energy bond shall be allowed a credit with respect to each 


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1 interest payment under such bond which shall be payable 

2 by the Secretary as provided in subsection (b). 

3 ‘‘(b) PAYMENT OF CREDIT.— 

4 ‘‘(1) IN GENERAL.—The Secretary shall pay 

5 (contemporaneously with each interest payment date 

6 under such bond) to the issuer of such bond (or to 

7 any person who makes such interest payments on 

8 behalf of the issuer) the applicable percentage (as 

9 determined under subsection (b) of section 54) of 

10 the interest payable under such bond on such date. 

11 ‘‘(2) INTEREST PAYMENT DATE.—For purposes 

12 of this subsection, the term ‘interest payment date’ 

13 means each date on which interest is payable by the 

14 issuer under the terms of the bond. 

15 ‘‘(c) APPLICATION OF ARBITRAGE RULES.—For pur16 poses of section 148, the yield on a qualified clean energy 

17 bond shall be reduced by the credit allowed under this sec18 tion. 

19 ‘‘(d) QUALIFIED CLEAN ENERGY BOND.—For pur20 poses of this section, the term ‘qualified clean energy 

21 bond’ means a clean energy bond (as defined in section 

22 54(d)) issued as part of an issue if the issuer, in lieu of 

23 any credit allowed under section 54(a) with respect to such 

24 bond, makes an irrevocable election to have this section 

25 apply.’’. 


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1 (c) CONFORMING AMENDMENTS.— 

2 (1) The table of subparts for part IV of sub3 chapter A of chapter 1 is amended by inserting after 

4 the item relating to subpart G the following: 

‘‘SUBPART H—CLEAN ENERGY BONDS’’. 

5 (2) The table of sections for subchapter B of 

6 chapter 65 of subtitle F is amended by adding at 

7 the end the following new item: 

‘‘Sec. 6431. Credit for qualified clean energy bonds allowed to issuer.’’. 

8 (3) Subparagraph (A) of section 6211(b)(4) is 

9 amended by striking ‘‘and 36B, 168(k)(4)’’ and in10 serting ‘‘36B, and 6431’’. 

11 (d) GROSS-UP OF PAYMENT TO ISSUERS IN CASE OF

12 SEQUESTRATION.— 

13 (1) IN GENERAL.—In the case of any payment 

14 under subsection (b) of section 6431 of the Internal 

15 Revenue Code of 1986 (as added by this Act) made 

16 after the date of the enactment of this Act to which 

17 sequestration applies, the amount of such payment 

18 shall be increased to an amount equal to— 

19 (A) such payment (determined before such 

20 sequestration), multiplied by 

21 (B) the quotient obtained by dividing 1 by 

22 the amount by which 1 exceeds the percentage 

23 reduction in such payment pursuant to such se24 questration. 


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1 (2) SEQUESTRATION.—For purposes of this 

2 subsection, the term ‘‘sequestration’’ means any re3 duction in direct spending ordered by the President 

4 under the Balanced Budget and Emergency Deficit 

5 Control Act of 1985 or the Statutory Pay-As-You6 Go Act of 2010. 

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

8 this section shall apply to obligations issued after the date 

9 of the enactment of this Act. 

Æ 


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