Clean Energy for America Act

To amend the Internal Revenue Code of 1986 to provide tax incentives for increased investment in clean energy. 1. Short title; etc (a) Short title This Act may be cited as the Clean Energy for America Act (b) Amendment of 1986 Code Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986. (c) Table of contents The table of contents of this Act is as follows: Sec. 1. Short title; etc. TITLE I—Incentives for Clean Electricity Sec. 101. Clean electricity production credit. Sec. 102. Clean electricity investment credit. Sec. 103. Extensions, modifications, and terminations of various energy provisions. TITLE II—Incentives for Clean Transportation Sec. 201. Clean fuel production credit. Sec. 202. Transportation electrification. Sec. 203. Temporary extensions of existing fuel incentives. TITLE III—Incentives for Energy Efficiency Sec. 301. Credit for new energy efficient residential buildings. Sec. 302. Energy efficient home improvement credit. Sec. 303. Enhancement of energy efficient commercial buildings deduction. Sec. 304. Enhancement of energy credit for geothermal heat pumps. TITLE IV—Clean electricity and fuel bonds Sec. 401. Clean energy bonds. TITLE V—Termination of certain fossil fuel provisions Sec. 501 Termination of provisions relating to oil, gas, and other materials. TITLE VI—Workforce development requirements Sec. 601. Use of qualified apprentices. I Incentives for Clean Electricity 101. Clean electricity production credit (a) In general Subpart D of part IV of subchapter A of chapter 1 45U. Clean electricity production credit (a) Amount of credit For purposes of section 38, the clean electricity production credit for any taxable year is an amount equal to the product of— (1) 1.5 cents, multiplied by (2) the kilowatt hours of electricity— (A) produced by the taxpayer at a qualified facility, and (B) (i) sold by the taxpayer to an unrelated person during the taxable year, or (ii) in the case of a qualified facility which is equipped with a metering device which is owned and operated by an unrelated person, sold, consumed, or stored by the taxpayer during the taxable year. (b) Qualified facility (1) In general (A) Definition Subject to subparagraphs (B), (C), and (D), the term qualified facility (i) which is used for the generation of electricity, (ii) which is originally placed in service after December 31, 2022, (iii) for which the greenhouse gas emissions rate (as determined under paragraph (2)) is not greater than zero, and (iv) in the case of any facility with a total nameplate capacity equal to or greater than 1 megawatt, which— (I) satisfies the requirements under paragraph (3), and (II) with respect to the construction of such facility, satisfies the requirements under section 601 of the Clean Energy for America Act (B) 10-year production credit For purposes of this section, a facility shall only be treated as a qualified facility during the 10-year period beginning on the date the facility was originally placed in service. (C) Expansion of facility; incremental production A qualified facility shall include either of the following in connection with a facility described in subparagraph (A)(i) that was placed in service before January 1, 2023, but only to the extent of the increased amount of electricity produced at the facility by reason of the following: (i) A new unit placed in service after December 31, 2022. (ii) Any efficiency improvements or additions of capacity placed in service after December 31, 2022. (D) Coordination with other credits The term qualified facility (2) Greenhouse gas emissions rate (A) In general For purposes of this section, the term greenhouse gas emissions rate 2 (B) Fuel combustion and gasification In the case of a facility which produces electricity through combustion or gasification, the greenhouse gas emissions rate for such facility shall be equal to the net rate of greenhouse gases emitted into the atmosphere by such facility (taking into account lifecycle greenhouse gas emissions, as described in section 211(o)(1)(H) of the Clean Air Act ( 42 U.S.C. 7545(o)(1)(H) 2 (C) Establishment of emissions rates for facilities (i) In general The Secretary, in consultation with the Administrator of the Environmental Protection Agency, shall establish greenhouse gas emissions rates for types or categories of facilities, which a taxpayer shall use for purposes of this section. (ii) Publishing emissions rates The Secretary shall publish a table that sets forth the greenhouse gas emissions rates for similar types or categories of facilities. (iii) Provisional emissions rate (I) In general In the case of any facility for which an emissions rate has not been established by the Secretary, a taxpayer which owns such facility may file a petition with the Secretary for determination of the emissions rate with respect to such facility. (II) Establishment of provisional and final emissions rate In the case of a facility for which a petition described in subclause (I) has been filed, the Secretary, in consultation with the Administrator of the Environmental Protection Agency, shall— (aa) not later than 12 months after the date on which the petition was filed, provide a provisional emissions rate for such facility which a taxpayer shall use for purposes of this section, and (bb) not later than 24 months after the date on which the petition was filed, establish the emissions rate for such facility. (D) Carbon capture and sequestration equipment For purposes of this subsection, the amount of greenhouse gases emitted into the atmosphere by a facility in the production of electricity shall not include any qualified carbon dioxide that is captured by the taxpayer and— (i) pursuant to any regulations established under paragraph (2) of section 45Q(f), disposed of by the taxpayer in secure geological storage, or (ii) utilized by the taxpayer in a manner described in paragraph (5) of such section. (3) Wage requirements The requirements described in this paragraph with respect to any facility are that the taxpayer shall ensure that any laborers and mechanics employed by contractors and subcontractors in— (A) the construction of such facility, or (B) for any year during the period described in paragraph (1)(B), the alteration or repair of such facility, shall be paid wages at rates not less than the prevailing rates for construction, alteration, or repair of a similar character in the locality as determined by the Secretary of Labor, in accordance with subchapter IV of chapter 31 (c) Inflation adjustment (1) In general In the case of a calendar year beginning after 2021, the 1.5 cent amount in paragraph (1) of subsection (a) shall be adjusted by multiplying such amount by the inflation adjustment factor for the calendar year in which the sale or use of the electricity occurs. If any amount as increased under the preceding sentence is not a multiple of 0.1 cent, such amount shall be rounded to the nearest multiple of 0.1 cent. (2) Annual computation The Secretary shall, not later than April 1 of each calendar year, determine and publish in the Federal Register the inflation adjustment factor for such calendar year in accordance with this subsection. (3) Inflation adjustment factor The term inflation adjustment factor GDP implicit price deflator (d) Credit phase-Out (1) In general If the Secretary, in consultation with the Secretary of Energy and the Administrator of the Environmental Protection Agency, determines that the annual greenhouse gas emissions from the production of electricity in the United States are equal to or less than 25 percent of the annual greenhouse gas emissions from the production of electricity in the United States for calendar year 2021, the amount of the clean electricity production credit under subsection (a) for any qualified facility the construction of which begins during a calendar year described in paragraph (2) shall be equal to the product of— (A) the amount of the credit determined under subsection (a) without regard to this subsection, multiplied by (B) the phase-out percentage under paragraph (2). (2) Phase-out percentage The phase-out percentage under this paragraph is equal to— (A) for a facility the construction of which begins during the first calendar year following the calendar year in which the determination described in paragraph (1) is made, 100 percent, (B) for a facility the construction of which begins during the second calendar year following such determination year, 75 percent, (C) for a facility the construction of which begins during the third calendar year following such determination year, 50 percent, and (D) for a facility placed in service during any calendar year subsequent to the year described in subparagraph (C), 0 percent. (e) Definitions In this section: (1) CO 2 e KWh The term CO 2 (2) Greenhouse gas The term greenhouse gas 42 U.S.C. 7545(o)(1)(G) (3) Qualified carbon dioxide The term qualified carbon dioxide (A) would otherwise be released into the atmosphere as industrial emission of greenhouse gas, (B) is measured at the source of capture and verified at the point of disposal or utilization, and (C) is captured and disposed or utilized within the United States (within the meaning of section 638(1)) or a possession of the United States (within the meaning of section 638(2)). (f) Final guidance Not later than January 1, 2023, the Secretary, in consultation with the Administrator of the Environmental Protection Agency, shall issue final guidance regarding implementation of this section, including calculation of greenhouse gas emission rates for qualified facilities and determination of clean electricity production credits under this section. (g) Special rules (1) Only production in the United States taken into account Consumption or sales shall be taken into account under this section only with respect to electricity the production of which is within— (A) the United States (within the meaning of section 638(1)), or (B) a possession of the United States (within the meaning of section 638(2)). (2) Combined heat and power system property (A) In general For purposes of subsection (a)— (i) the kilowatt hours of electricity produced by a taxpayer at a qualified facility shall include any production in the form of useful thermal energy by any combined heat and power system property within such facility, and (ii) the amount of greenhouse gases emitted into the atmosphere by such facility in the production of such useful thermal energy shall be included for purposes of determining the greenhouse gas emissions rate for such facility. (B) Combined heat and power system property For purposes of this paragraph, the term combined heat and power system property (C) Conversion from BTU to KWh (i) In general For purposes of subparagraph (A)(i), the amount of kilowatt hours of electricity produced in the form of useful thermal energy shall be equal to the quotient of— (I) the total useful thermal energy produced by the combined heat and power system property within the qualified facility, divided by (II) the heat rate for such facility. (ii) Heat rate For purposes of this subparagraph, the term heat rate (3) Production attributable to the taxpayer In the case of a qualified facility in which more than 1 person has an ownership interest, except to the extent provided in regulations prescribed by the Secretary, production from the facility shall be allocated among such persons in proportion to their respective ownership interests in the gross sales from such facility. (4) Related persons Persons shall be treated as related to each other if such persons would be treated as a single employer under the regulations prescribed under section 52(b). In the case of a corporation which is a member of an affiliated group of corporations filing a consolidated return, such corporation shall be treated as selling electricity to an unrelated person if such electricity is sold to such a person by another member of such group. (5) Pass-thru in the case of estates and trusts Under regulations prescribed by the Secretary, rules similar to the rules of subsection (d) of section 52 shall apply. (6) Allocation of credit to patrons of agricultural cooperative (A) Election to allocate (i) In general In the case of an eligible cooperative organization, any portion of the credit determined under subsection (a) for the taxable year may, at the election of the organization, be apportioned among patrons of the organization on the basis of the amount of business done by the patrons during the taxable year. (ii) Form and effect of election An election under clause (i) for any taxable year shall be made on a timely filed return for such year. Such election, once made, shall be irrevocable for such taxable year. Such election shall not take effect unless the organization designates the apportionment as such in a written notice mailed to its patrons during the payment period described in section 1382(d). (B) Treatment of organizations and patrons The amount of the credit apportioned to any patrons under subparagraph (A)— (i) shall not be included in the amount determined under subsection (a) with respect to the organization for the taxable year, and (ii) shall be included in the amount determined under subsection (a) for the first taxable year of each patron ending on or after the last day of the payment period (as defined in section 1382(d)) for the taxable year of the organization or, if earlier, for the taxable year of each patron ending on or after the date on which the patron receives notice from the cooperative of the apportionment. (C) Special rules for decrease in credits for taxable year If the amount of the credit of a cooperative organization determined under subsection (a) for a taxable year is less than the amount of such credit shown on the return of the cooperative organization for such year, an amount equal to the excess of— (i) such reduction, over (ii) the amount not apportioned to such patrons under subparagraph (A) for the taxable year, shall be treated as an increase in tax imposed by this chapter on the organization. Such increase shall not be treated as tax imposed by this chapter for purposes of determining the amount of any credit under this chapter. (D) Eligible cooperative defined For purposes of this section, the term eligible cooperative (h) Election for direct payment (1) In general The amount of any credit determined under subsection (a) with respect to any qualified facility for any taxable year during the period described in subsection (b)(1)(B) shall, at the election of the taxpayer, be treated as a payment equal to such amount which is made by the taxpayer against the tax imposed by chapter 1 for such taxable year. (2) Form and effect of election An election under paragraph (1) shall be made prior to the date on which construction of the qualified facility begins and in such manner as the Secretary may prescribe. Such election, once made, shall— (A) be irrevocable with respect to such qualified facility for the period described in subsection (b)(1)(B), and (B) for any taxable year during such period, reduce the amount of the credit which would (but for this paragraph) be allowable under this section with respect to such qualified facility for such taxable year to zero. (3) Application to partnerships and S corporations In the case of a partnership or S corporation which makes an election under paragraph (1)— (A) such paragraph shall apply with respect to such partnership or corporation without regard to the fact that no tax is imposed by chapter 1 on such partnership or corporation, and (B) (i) in the case of a partnership, each partner's distributive share of the credit determined under subsection (a) with respect to the qualified facility shall be deemed to be zero, and (ii) in the case of a S corporation, each shareholder's pro rata share of the credit determined under subsection (a) with respect to the qualified facility shall be deemed to be zero. . (b) Conforming amendments (1) Section 38(b) (A) in paragraph (32), by striking plus (B) in paragraph (33), by striking the period at the end and inserting , plus (C) by adding at the end the following new paragraph: (34) the clean electricity production credit determined under section 45U(a). . (2) The table of sections for subpart D of part IV of subchapter A of chapter 1 Sec. 45U. Clean electricity production credit. . (c) Effective date The amendments made by this section shall apply to facilities placed in service after December 31, 2022. 102. Clean electricity investment credit (a) Business credit (1) In general Subpart E of part IV of subchapter A of chapter 1 48D. Clean electricity investment credit (a) Investment credit for qualified property (1) In general For purposes of section 46, the clean electricity investment credit for any taxable year is— (A) except as provided in subparagraph (B), an amount equal to 30 percent of the qualified investment for such taxable year with respect to— (i) any qualified facility, and (ii) any grid improvement property, and (B) in the case of a qualified facility which is a microgrid, an amount equal to the product of— (i) 30 percent of the qualified investment for such taxable year with respect to such microgrid, and (ii) the relative avoided emissions rate with respect to such microgrid (as determined under subsection (b)(3)(C)(iv)). (2) Disadvantaged communities (A) In general In the case of any qualified facility (with the exception of any such facility described in section 45U(b)(2)(B)) or energy storage property which is placed in service within a disadvantaged community, paragraph (1) shall be applied by substituting 40 percent 30 percent (B) Disadvantaged community For purposes of this paragraph, the term disadvantaged community low-income community (b) Qualified investment with respect to any qualified facility (1) In general For purposes of subsection (a), the qualified investment with respect to any qualified facility for any taxable year is the basis of any qualified property placed in service by the taxpayer during such taxable year which is part of a qualified facility. (2) Qualified property The term qualified property (A) which is— (i) tangible personal property, or (ii) other tangible property (not including a building or its structural components), but only if such property is used as an integral part of the qualified facility, (B) with respect to which depreciation (or amortization in lieu of depreciation) is allowable, (C) which is constructed, reconstructed, erected, or acquired by the taxpayer, and (D) the original use of which commences with the taxpayer. (3) Qualified facility (A) In general For purposes of this section, the term qualified facility (i) which is used for the generation of electricity, (ii) which is originally placed in service after December 31, 2022, (iii) for which the anticipated greenhouse gas emissions rate (as determined under clause (ii)) is not greater than zero, and (iv) in the case of any facility with a total nameplate capacity equal to or greater than 1 megawatt, which— (I) satisfies the requirements under subparagraph (B)(iii), and (II) with respect to the construction of such facility, satisfies the requirements under section 601 of the Clean Energy for America Act (B) Additional rules (i) Expansion of facility; incremental production Rules similar to the rules of section 45U(b)(1)(B) shall apply for purposes of this paragraph. (ii) Establishment of emissions rates for qualified facilities (I) In general The Secretary, in consultation with the Administrator of the Environmental Protection Agency, shall establish greenhouse gas emissions rates for types or categories of facilities, which a taxpayer shall use for purposes of this section. (II) Publishing emissions rates The Secretary shall publish a table that sets forth the greenhouse gas emissions rates for similar types or categories of facilities. (iii) Wage requirements The requirements described in this clause with respect to any facility are that the taxpayer shall ensure that any laborers and mechanics employed by contractors and subcontractors in— (I) the construction of such facility, or (II) for any year during the 5-year period beginning on the date the facility is originally placed in service, the alteration or repair of such facility, shall be paid wages at rates not less than the prevailing rates for construction, alteration, or repair of a similar character in the locality as determined by the Secretary of Labor, in accordance with subchapter IV of chapter 31 (C) Microgrids (i) In general For purposes of this section, the term qualified facility (ii) Microgrid For purposes of this section, the term microgrid (I) is contained within a clearly defined electrical boundary and has the ability to operate as a single and controllable entity, (II) has the ability to be managed and isolated from the applicable grid region in order to withstand larger disturbances and maintain the supply of electricity to connected critical infrastructure, and (III) has no point of interconnection to the applicable grid region with a throughput capacity in excess of 20 megawatts. (iii) Applicable grid region For purposes of this subparagraph, the term applicable grid region (I) under the control of a single grid operator, and (II) interconnected to the microgrid. (iv) Relative avoided emissions rate (I) In general For purposes of subsection (a)(1)(B)(ii), the relative avoided emissions rate shall be the amount equal to the quotient of— (aa) the amount equal to the non-baseload output emissions rate for the applicable grid region minus the greenhouse gas emissions rate for the microgrid, divided by (bb) the non-baseload output emissions rate for the applicable grid region. (II) Non-baseload output emissions rate (aa) In general For purposes of this subparagraph, the term non-baseload output emissions rate 2 (bb) Determination The non-baseload output emissions rate for any applicable grid region shall be determined by the Administrator of the Environmental Protection Agency, in consultation with the Secretary. (III) Greenhouse gas emissions rate For purposes of this subparagraph, the term greenhouse gas emissions rate (D) Exclusion The term qualified facility (4) Coordination with rehabilitation credit The qualified investment with respect to any qualified facility for any taxable year shall not include that portion of the basis of any property which is attributable to qualified rehabilitation expenditures (as defined in section 47(c)(2)). (c) Qualified investment with respect to grid improvement property (1) In general (A) Qualified investment For purposes of subsection (a), the qualified investment with respect to grid improvement property for any taxable year is the basis of any grid improvement property placed in service by the taxpayer during such taxable year. (B) Grid improvement property For purposes of this section, the term grid improvement property (i) satisfies the requirements under paragraph (4), and (ii) with respect to the construction of such property, satisfies the requirements under section 601 of the Clean Energy for America Act (2) Energy storage property For purposes of this subsection, the term energy storage property (A) which receives, stores, and delivers electricity, or energy for conversion to electricity, provided that such electricity is— (i) sold by the taxpayer to an unrelated person, or (ii) in the case of a facility which is equipped with a metering device which is owned and operated by an unrelated person, sold or consumed by the taxpayer, (B) with respect to which depreciation is allowable, (C) which is constructed, reconstructed, erected, or acquired by the taxpayer, (D) the original use of which commences with the taxpayer, (E) which has a capacity of not less than 5 kilowatt hours, and (F) which is placed in service after December 31, 2021. (3) Qualified transmission property (A) In general For purposes of this subsection, the term qualified transmission property (i) any overhead, submarine, or underground transmission property which is capable of transmitting electricity at a voltage of not less than 275 kilovolts, and (ii) any other equipment necessary for the operation of a new circuit, including equipment listed as transmission plant (B) Exclusion The term qualified transmission property (4) Wage requirements The requirements described in this paragraph with respect to any property are that the taxpayer shall ensure that any laborers and mechanics employed by contractors and subcontractors in— (A) the construction of such property, or (B) for any year during the 5-year period beginning on the date the property is originally placed in service, the alteration or repair of such property, shall be paid wages at rates not less than the prevailing rates for construction, alteration, or repair of a similar character in the locality as determined by the Secretary of Labor, in accordance with subchapter IV of chapter 31 (d) Certain progress expenditure rules made applicable Rules similar to the rules of subsections (c)(4) and (d) of section 46 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) shall apply for purposes of subsection (a). (e) Credit phase-Out (1) In general If the Secretary, in consultation with the Secretary of Energy and the Administrator of the Environmental Protection Agency, determines that the annual greenhouse gas emissions from the production of electricity in the United States are equal to or less than 25 percent of the annual greenhouse gas emissions from the production of electricity in the United States for calendar year 2021, the amount of the clean electricity investment credit under subsection (a) for any qualified property or grid improvement property the construction of which begins during a calendar year described in paragraph (2) shall be equal to the product of— (A) the amount of the credit determined under subsection (a) without regard to this subsection, multiplied by (B) the phase-out percentage under paragraph (2). (2) Phase-out percentage The phase-out percentage under this paragraph is equal to— (A) for property the construction of which begins during the first calendar year following the calendar year in which the determination described in paragraph (1) is made, 100 percent, (B) for property the construction of which begins during the second calendar year following such determination year, 75 percent, (C) for property the construction of which begins during the third calendar year following such determination year, 50 percent, and (D) for property the construction of which begins during any calendar year subsequent to the year described in subparagraph (C), 0 percent. (f) Greenhouse gas In this section, the term greenhouse gas (g) Recapture of credit For purposes of section 50, if the Secretary, in consultation with the Administrator of the Environmental Protection Agency, determines that the greenhouse gas emissions rate for a qualified facility is significantly higher than the anticipated greenhouse gas emissions rate claimed by the taxpayer for purposes of the clean electricity investment credit under this section, the facility or equipment shall cease to be investment credit property in the taxable year in which the determination is made. (h) Final guidance Not later than January 1, 2023, the Secretary, in consultation with the Administrator of the Environmental Protection Agency, shall issue final guidance regarding implementation of this section. (i) Election for direct payment (1) In general In the case of any qualified property or grid improvement property placed in service during any taxable year, the amount of any credit determined under subsection (a) with respect to such property for such taxable year shall, at the election of the taxpayer, be treated as a payment equal to such amount which is made by the taxpayer against the tax imposed by chapter 1 for such taxable year (regardless of whether such tax would have been on such taxpayer). (2) Form and effect of election An election under paragraph (1) shall be made prior to the date on which construction of the qualified property or grid improvement property begins and in such manner as the Secretary may prescribe. Such election, once made, shall— (A) be irrevocable with respect to the qualified property or grid improvement property to which such election applies, and (B) reduce the amount of the credit which would (but for this subsection) be allowable under this section with respect to such property for the taxable year in which such property is placed in service to zero. (3) Application to partnerships and S corporations Rules similar to the rules of section 45U(h)(3) shall apply for purposes of this subsection. . (2) Public utility property Paragraph (2) of section 50(d) (A) by adding after the first sentence the following new sentence: At the election of a taxpayer, this paragraph shall not apply to any grid improvement property (as defined in section 48D(c)(1)(B)), provided— (B) by adding the following new subparagraphs: (A) no election under this paragraph shall be permitted if the making of such election is prohibited by, or required by, a State or political subdivision thereof, by any agency or instrumentality of the United States, or by a public service or public utility commission or other similar body of any State or political subdivision that regulates public utilities as described in section 7701(a)(33)(A), (B) an election under this paragraph shall be made separately with respect to each grid improvement property by the due date (including extensions) of the Federal tax return for the taxable year in which such property is placed in service by the taxpayer, and once made, may be revoked only with the consent of the Secretary, and (C) an election shall not apply with respect to any energy storage property (as defined in section 48D(c)(2)) if such property has a maximum capacity equal to or less than 500 kilowatt hours. . (3) Conforming amendments (A) Section 46 (i) by striking “and” at the end of paragraph (5), (ii) by striking the period at the end of paragraph (6) and inserting “, and”, and (iii) by adding at the end the following new paragraph: (7) the clean electricity investment credit. . (B) Section 49(a)(1)(C) (i) by striking “and” at the end of clause (iv), (ii) by striking the period at the end of clause (v) and inserting a comma, and (iii) by adding at the end the following new clauses: (vi) the basis of any qualified property which is part of a qualified facility under section 48D, and (vii) the basis of any energy storage property under section 48D. . (C) Section 50(a)(2)(E) or 48C(b)(2) 48C(b)(2), or 48D(e) (D) The table of sections for subpart E of part IV of subchapter A of chapter 1 48D. Clean electricity investment credit. . (4) Effective date The amendments made by this subsection shall apply to property placed in service after December 31, 2022, under rules similar to the rules of section 48(m) (b) Individual credit (1) In general Section 25D 25D. Residential clean electricity credit (a) Allowance of credit In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to 30 percent of the expenditures made by the taxpayer for any qualified property and any energy storage property which is— (1) for use in connection with a dwelling unit which is located in the United States and used as a residence by the taxpayer, and (2) placed in service during such taxable year. (b) Qualified property (1) In general The term qualified property (A) which is tangible personal property, (B) which is used for the generation of electricity, (C) which is constructed, reconstructed, erected, or acquired by the taxpayer, (D) the original use of which commences with the taxpayer, (E) which is originally placed in service after December 31, 2022, and (F) for which the anticipated greenhouse gas emissions rate (as determined under paragraph (2)) is not greater than zero. (2) Establishment of emissions rates for qualified property (A) In general The Secretary, in consultation with the Administrator of the Environmental Protection Agency, shall establish greenhouse gas emissions rates for types or categories of qualified property which are for use in a dwelling unit, which a taxpayer shall use for purposes of this section. (B) Publishing emissions rates The Secretary shall publish a table that sets forth the greenhouse gas emissions rates for similar types or categories of qualified property. (c) Energy storage property The term energy storage property (1) receives, stores, and delivers electricity or energy for conversion to electricity which is consumed or sold by the taxpayer, (2) is equipped with a metering device which is owned and operated by an unrelated person, and (3) has a capacity of not less than 3 kilowatt hours. (d) Carryforward of unused credit (1) In general If the credit allowable under subsection (a) exceeds the applicable tax limit, such excess shall be carried to each of the 3 succeeding taxable years and added to the credit allowable under subsection (a) for such succeeding taxable year. (2) Limitation The amount of the unused credit which may be taken into account under paragraph (1) for any taxable year shall not exceed the amount (if any) by which the applicable tax limit for such taxable year exceeds the sum of— (A) the credit allowable under subsection (a) for which such taxable year determined without regard to this subsection, and (B) the amounts which, by reason of this subsection, are carried to such taxable year and are attributable to taxable years before the unused credit year. (3) Applicable tax limit For purposes of this subsection, the term applicable tax limit (e) Credit phase-Out (1) In general If the Secretary determines that the annual greenhouse gas emissions from the production of electricity in the United States are equal to or less than the percentage specified in section 48D(e), the amount of the credit allowable under subsection (a) for any qualified property or energy storage property placed in service during a calendar year described in paragraph (2) shall be equal to the product of— (A) the amount of the credit determined under subsection (a) without regard to this subsection, multiplied by (B) the phase-out percentage under paragraph (2). (2) Phase-out percentage The phase-out percentage under this paragraph is equal to— (A) for property placed in service during the first calendar year following the calendar year in which the determination described in paragraph (1) is made, 100 percent, (B) for property placed in service during the second calendar year following such determination year, 75 percent, (C) for property placed in service during the third calendar year following such determination year, 50 percent, and (D) for property placed in service during any calendar year subsequent to the year described in subparagraph (C), 0 percent. (f) Special rules For purposes of this section: (1) Labor costs Expenditures for labor costs properly allocable to the onsite preparation, assembly, or original installation of the qualified property or energy storage property and for piping or wiring to interconnect such property to the dwelling unit shall be taken into account for purposes of this section. (2) Tenant-stockholder in cooperative housing corporation In the case of an individual who is a tenant-stockholder (as defined in section 216) in a cooperative housing corporation (as defined in such section), such individual shall be treated as having made his tenant-stockholder's proportionate share (as defined in section 216(b)(3)) of any expenditures of such corporation. (3) Condominiums (A) In general In the case of an individual who is a member of a condominium management association with respect to a condominium which the individual owns, such individual shall be treated as having made the individual's proportionate share of any expenditures of such association. (B) Condominium management association For purposes of this paragraph, the term condominium management association (4) Allocation in certain cases If less than 80 percent of the use of a property is for nonbusiness purposes, only that portion of the expenditures for such property which is properly allocable to use for nonbusiness purposes shall be taken into account. (g) Basis adjustment For purposes of this subtitle, if a credit is allowed under this section for any expenditures with respect to any property, the increase in the basis of such property which would (but for this subsection) result from such expenditures shall be reduced by the amount of the credit so allowed. (h) Final guidance Not later than January 1, 2023, the Secretary, in consultation with the Administrator of the Environmental Protection Agency, shall issue final guidance regarding implementation of this section, including calculation of greenhouse gas emission rates for qualified property and determination of residential clean electricity property credits under this section. . (2) Conforming amendments (A) Paragraph (1) of section 45(d) Such term Such term shall not include any facility with respect to which any expenditures for qualified property (as defined in subsection (b) of section 25D) which uses wind to produce electricity is taken into account in determining the credit under such section. (B) Paragraph (34) of section 1016(a) section 25D(f) section 25D(g) (C) The item relating to section 25D in the table of contents for subpart A of part IV of subchapter A of chapter 1 Sec. 25D. Residential clean electricity credit. . (3) Effective date The amendments made by this section shall apply to property placed in service after December 31, 2022. 103. Extensions, modifications, and terminations of various energy provisions (a) Residential energy efficient property (1) In general Section 25D(h) December 31, 2023 December 31, 2022 (2) Elimination of phase-out Section 25D(g) (A) in paragraph (1), by adding and (B) in paragraph (2), by striking , and (C) by striking paragraph (3). (3) Effective date The amendments made by this subsection shall apply to property placed in service after the date of enactment of this Act. (b) Termination of allocation of unutilized limitation for advanced nuclear power facilities Section 45J(b) (c) Modification of credit for carbon dioxide sequestration (1) In general Section 45Q (A) in subsection (a)(4)(B)(i), by inserting subject to subsection (f)(8), used by (B) in subsection (b)(1)— (i) in subparagraph (A), by striking The applicable dollar amount Except as provided in subparagraph (B), the applicable dollar amount (ii) by redesignating subparagraph (B) as subparagraph (C), (iii) by inserting after subparagraph (A) the following: (B) Applicable dollar amount for direct air capture facilities In the case of any qualified facility described in subsection (d)(1) for which construction begins after the date of enactment of the Clean Energy for America Act (i) for any taxable year beginning in a calendar year before 2027— (I) for purposes of paragraph (3) of subsection (a), $175, and (II) for purposes of paragraph (4) of such subsection, $150, and (ii) for any taxable year beginning in a calendar year after 2026— (I) for purposes of paragraph (3) of subsection (a), an amount equal to the product of $175 and the inflation adjustment factor for such calendar year determined under section 43(b)(3)(B) for such calendar year, determined by substituting 2025 1990 (II) for purposes of paragraph (4) of such subsection, an amount equal to the product of $150 and the inflation adjustment factor for such calendar year determined under section 43(b)(3)(B) for such calendar year, determined by substituting 2025 1990 , and (iv) in subparagraph (C), as so redesignated, by inserting or (B) subparagraph (A) (C) by striking subsection (d) and inserting the following: (d) Qualified facility For purposes of this section, the term qualified facility (1) any direct air capture facility, and (2) any industrial facility which captures— (A) in the case of an electricity generating facility, not less than 75 percent of the carbon oxide which would otherwise be released into the atmosphere, or (B) in the case of an industrial facility which is not an electricity generating facility, not less than 50 percent of the carbon oxide which would otherwise be released into the atmosphere. , (D) in subsection (f), by adding at the end the following: (8) Elimination of use of carbon oxide as tertiary injectant In the case of any qualified facility the construction of which begins after the date of enactment of the Clean Energy for America Act , (E) by redesignating subsection (h) as subsection (i), and (F) by inserting after subsection (g) the following: (h) Credit phase-Out (1) In general (A) Reduction based on emissions from production of electricity Subject to subparagraphs (B) and (C), if the Secretary, in consultation with the Secretary of Energy and the Administrator of the Environmental Protection Agency, determines that the annual greenhouse gas emissions from the production of electricity in the United States are equal to or less than 25 percent of the annual greenhouse gas emissions from the production of electricity in the United States for calendar year 2021, the amount of the carbon oxide sequestration credit under subsection (a) for any qualified facility the construction of which begins during a calendar year described in paragraph (2) shall be equal to the product of— (i) the amount of the credit determined under subsection (a) without regard to this subsection, multiplied by (ii) the phase-out percentage under paragraph (2). (B) Other industrial facilities In the case of any qualified facility described in subsection (d)(2)(B) the construction of which begins during a calendar year described in paragraph (2), subparagraph (A) shall be applied by substituting industrial sector production of electricity (C) Direct air capture facilities In the case of any qualified facility described in subsection (d)(1), subparagraph (A) shall not apply. (2) Phase-out percentage The phase-out percentage under this paragraph is equal to— (A) for a facility the construction of which begins during the first calendar year following the calendar year in which the determination described in paragraph (1)(A) is made, 100 percent, (B) for a facility the construction of which begins during the second calendar year following such determination year, 75 percent, (C) for a facility the construction of which begins during the third calendar year following such determination year, 50 percent, and (D) for a facility the construction of which begins during any calendar year subsequent to the year described in subparagraph (C), 0 percent. . (2) Elimination of election for applicable facilities (A) In general Section 45Q(f), as amended by paragraph (1)(C), is amended— (i) by striking paragraph (6), and (ii) by redesignating paragraphs (7) and (8) as paragraphs (6) and (7), respectively. (B) Conforming amendment Section 45Q(a)(4)(B)(i), as amended by paragraph (1)(A), is amended by striking subsection (f)(8) subsection (f)(7) (3) Wage requirements Section 45Q(f), as amended by paragraphs (1)(C) and (2), is amended by adding at the end the following: (8) Wage requirements (A) In general The term qualified facility (i) the requirements under subparagraph (B), and (ii) with respect to— (I) the construction of any facility the construction of which begins after the date of enactment of the Clean Energy for America Act (II) the construction of any carbon capture equipment, the requirements under section 601 of the Clean Energy for America Act (B) Requirements The requirements described in this clause with respect to any facility, and any carbon capture equipment placed in service at such facility, are that the taxpayer shall ensure that any laborers and mechanics employed by contractors and subcontractors in— (i) in the case of any facility the construction of which begins after the date of enactment of the Clean Energy for America Act (ii) during the 12-year period beginning on the date on which carbon capture equipment is originally placed in service at any facility (as described in paragraphs (3)(A) and (4)(A) of subsection (a)), the alteration or repair of such facility or such equipment, shall be paid wages at rates not less than the prevailing rates for construction, alteration, or repair of a similar character in the locality as determined by the Secretary of Labor, in accordance with subchapter IV of chapter 31 . (4) Election for direct payment Section 45Q (A) by redesignating subsection (i) as subsection (j), and (B) by inserting after subsection (h) the following: (i) Election for direct payment (1) In general The amount of any credit determined under paragraph (3) or (4) of subsection (a) with respect to any qualified carbon oxide for any taxable year during the period described in paragraph (3)(A) or (4)(A) of such subsection, respectively, shall, at the election of the taxpayer, be treated as a payment equal to such amount which is made by the taxpayer against the tax imposed by chapter 1 for such taxable year. (2) Form and effect of election An election under paragraph (1) shall be made prior to the date on which construction of the carbon capture equipment begins and in such manner as the Secretary may prescribe. Such election, once made, shall— (A) be irrevocable with respect to such carbon capture equipment for the period described in paragraph (3)(A) or (4)(A) of subsection (a), and (B) for any taxable year during such period, reduce the amount of the credit which would (but for this paragraph) be allowable under this section with respect to such equipment for such taxable year to zero. (3) Application to partnerships and S corporations Rules similar to the rules of section 45U(h)(3) shall apply for purposes of this subsection. . (5) Effective dates (A) In general The amendments made by paragraph (1) shall apply to facilities the construction of which begins after the date of enactment of this Act. (B) Elimination of election for applicable facilities The amendments made by paragraph (2) shall take effect on the date of enactment of this Act. (C) Wage requirements The amendments made by paragraph (3) shall apply to facilities or equipment the construction of which begins after December 31, 2021. (D) Election for direct payment The amendments made by paragraph (4) shall apply to equipment the construction of which begins after December 31, 2021. (d) Modification of credits for energy property (1) Solar energy property Subclause (II) of section 48(a)(2)(A)(i) January 1, 2024 January 1, 2023 (2) Phase-outs Section 48(a) (A) in paragraph (6)— (i) by striking subparagraph (A) and inserting the following: (A) In general Subject to subparagraph (B), in the case of any energy property described in paragraph (3)(A)(i) the construction of which begins after December 31, 2019, before January 1, 2023, the energy percentage determined under paragraph (2) shall be equal to 26 percent. , and (ii) in subparagraph (B), by striking January 1, 2024 January 1, 2023 (B) in paragraph (7), by striking subparagraph (A) and inserting the following: (A) In general Subject to subparagraph (B), in the case of any qualified fuel cell property, qualified small wind property, waste energy recovery property, or energy property described in paragraph (3)(A)(ii) the construction of which begins after December 31, 2019, and before January 1, 2023, the energy percentage determined under paragraph (2) shall be equal to 26 percent. . (3) Effective date The amendments made by this subsection shall take effect on the date of enactment of this Act. (e) Energy credit (1) Solar energy property Section 48(a)(3)(A) (A) in clause (i), by inserting but only with respect to property the construction of which begins before January 1, 2023, swimming pool, (B) in clause (ii), by striking January 1, 2024 January 1, 2023 (2) Geothermal energy property Section 48(a)(3)(A)(iii) with respect to property the construction of which begins before January 1, 2023, and but only (3) Qualified offshore wind facilities Section 48(a)(5)(F) January 1, 2026 January 1, 2023 (4) Qualified fuel cell property Section 48(c)(1)(D) January 1, 2024 January 1, 2023 (5) Qualified microturbine property Section 48(c)(2)(D) January 1, 2024 January 1, 2023 (6) Combined heat and power system property Section 48(c)(3)(A)(iv) January 1, 2024 January 1, 2023 (7) Qualified small wind energy property Section 48(c)(4)(C) January 1, 2024 January 1, 2023 (8) Waste energy recovery property Section 48(c)(5)(D) January 1, 2024 January 1, 2023 (f) Cost recovery for qualified facilities, qualified property, and grid improvement property (1) In general Section 168(e)(3)(B) (A) in clause (vi)(III), by striking and (B) in clause (vii), by striking the period at the end and inserting , and (C) by inserting after clause (vii) the following: (viii) any qualified facility (as defined in section 45U(b)(1)(A)), any qualified property (as defined in subsection (b)(2) of section 48D), or any grid improvement property (as defined in subsection (c)(1)(B) of such section). . (2) Alternative system The table contained in section 168(g)(3)(B) (B)(viii) 30 . (3) Effective date The amendments made by this subsection shall apply to facilities and property placed in service after December 31, 2022. II Incentives for Clean Transportation 201. Clean fuel production credit (a) In general Subpart D of part IV of subchapter A of chapter 1, as amended by section 101, 45V. Clean fuel production credit (a) Amount of credit (1) In general For purposes of section 38, the clean fuel production credit for any taxable year is an amount equal to— (A) for any transportation fuel sold during any calendar year ending before January 1, 2030, and amount equal to the product of— (i) $1.00 per gallon (or gallon equivalent) with respect to any transportation fuel which is— (I) produced by the taxpayer at a qualified facility, and (II) sold by the taxpayer in a manner described in paragraph (3), and (ii) the emissions factor for such fuel (as determined under subsection (b)), and (B) for any transportation fuel sold during any calendar year beginning after December 31, 2029, an amount equal to the applicable amount (as determined under paragraph (2)) per gallon (or gallon equivalent) with respect to any transportation fuel which is— (i) produced by the taxpayer at a qualified facility, and (ii) sold by the taxpayer in a manner described in paragraph (3). (2) Applicable amount For purposes of paragraph (1)(B), the applicable amount with respect to any transportation fuel shall be an amount equal to $1.00 increased by 10 cents for every kilogram of CO 2 (3) Sale For purposes of paragraph (1), the transportation fuel is sold in a manner described in this paragraph if such fuel is sold by the taxpayer to an unrelated person— (A) for use by such person in the production of a fuel mixture, (B) for use by such person in a trade or business, or (C) who sells such fuel at retail to another person and places such fuel in the fuel tank of such other person. (4) Rounding If any amount determined under paragraph (1)(A) or (2) is not a multiple of 0.1 cent, such amount shall be rounded to the nearest multiple of 0.1 cent. (b) Emissions factors (1) Emissions factor (A) Calculation (i) In general The emissions factor of a transportation fuel shall be an amount equal to the quotient of— (I) an amount equal to— (aa) the baseline emissions rate, minus (bb) the emissions rate for such fuel, divided by (II) the baseline emissions rate. (B) Baseline emissions rate For purposes of this paragraph, the term baseline emissions rate (i) for any calendar year ending before January 1, 2026, 75 kilograms of CO 2 (ii) for calendar years 2026 and 2027, 50 kilograms of CO 2 (iii) for calendar years 2028 and 2029, 25 kilograms of CO 2 (C) Establishment of emissions rate The Secretary, in consultation with the Administrator of the Environmental Protection Agency, shall establish the emissions rate for similar types and categories of transportation fuels based on the amount of lifecycle greenhouse gas emissions (as described in section 211(o)(1)(H) of the Clean Air Act ( 42 U.S.C. 7545(o)(1)(H) 2 (D) Rounding of emissions rate The Secretary may round the emissions rates under subparagraph (B) to the nearest multiple of 5 kilograms of CO 2 2 (E) Provisional emissions rate (i) In general In the case of any transportation fuel for which an emissions rate has not been established by the Secretary, a taxpayer producing such fuel may file a petition with the Secretary for determination of the emissions rate with respect to such fuel. (ii) Establishment of provisional and final emissions rate In the case of a transportation fuel for which a petition described in clause (i) has been filed, the Secretary, in consultation with the Administrator of the Environmental Protection Agency, shall— (I) not later than 12 months after the date on which the petition was filed, provide a provisional emissions rate for such fuel which a taxpayer shall use for purposes of this section, and (II) not later than 24 months after the date on which the petition was filed, establish the emissions rate for such fuel. (F) Rounding If any amount determined under subparagraph (A) is not a multiple of 0.1, such amount shall be rounded to the nearest multiple of 0.1. (2) Publishing emissions rate The Secretary shall publish a table that sets forth the emissions rate (as established pursuant to paragraph (1)) for similar types and categories of transportation fuels. (c) Inflation adjustment (1) In general In the case of calendar years beginning after 2023, the $1.00 amount in paragraphs (1)(A)(i) and (2) of subsection (a) shall be adjusted by multiplying such amount by the inflation adjustment factor for the calendar year in which the sale or use of the transportation fuel occurs. If any amount as increased under the preceding sentence is not a multiple of 1 cent, such amount shall be rounded to the nearest multiple of 1 cent. (2) Inflation adjustment factor For purposes of paragraph (1), the inflation adjustment factor shall be the inflation adjustment factor determined and published by the Secretary pursuant to section 45U(c), determined by substituting calendar year 2022 calendar year 1992 (d) Credit phase-Out (1) In general If the Secretary, in consultation with the Secretary of Energy and the Administrator of the Environmental Protection Agency, determines that the greenhouse gas emissions from the transportation of persons and goods annually in the United States are equal to or less than 25 percent of the greenhouse gas emissions from the transportation of persons and goods in the United States during calendar year 2021, the amount of the clean fuel production credit under this section shall be determined by substituting the applicable amount (as determined under paragraph (2)(A)) for the dollar amount in paragraphs (1)(A)(i) and (2) of subsection (a). (2) Applicable dollar amount (A) In general The applicable amount for any taxable year described in subparagraph (B) shall be an amount equal to the product of— (i) the dollar amount in paragraphs (1)(A)(i) and (2) of subsection (a) (as adjusted by subsection (c)), multiplied by (ii) the phase-out percentage under subparagraph (B). (B) Phase-out percentage The phase-out percentage under this subparagraph is equal to— (i) for any taxable year beginning in the first calendar year following the calendar year in which the determination described in paragraph (1) is made, 100 percent, (ii) for any taxable year beginning in the second calendar year following such determination year, 75 percent, (iii) for any taxable year beginning in the third calendar year following such determination year, 50 percent, and (iv) for any taxable year beginning in any calendar year subsequent to the year described in clause (iii), 0 percent. (e) Definitions In this section: (1) mm The term mmBTU (2) CO 2 e The term CO 2 (3) Greenhouse gas The term greenhouse gas 42 U.S.C. 7545(o)(1)(G) (4) Qualified facility (A) In general The term qualified facility (i) used for the production of transportation fuels, and (ii) which— (I) satisfies the requirements under subparagraph (B), and (II) with respect to the construction of such facility, satisfies the requirements under section 601 of the Clean Energy for America Act (B) Wage requirements The requirements described in this subparagraph with respect to any facility are that the taxpayer shall ensure that any laborers and mechanics employed by contractors and subcontractors in— (i) the construction of such facility, or (ii) for any year described in subsection (a)(1) for which the credit under this section is claimed, the alteration or repair of such facility, shall be paid wages at rates not less than the prevailing rates for construction, alteration, or repair of a similar character in the locality as determined by the Secretary of Labor, in accordance with subchapter IV of chapter 31 (5) Transportation fuel The term transportation fuel (f) Final guidance Not later than January 1, 2023, the Secretary, in consultation with the Administrator of the Environmental Protection Agency, shall issue final guidance regarding implementation of this section, including calculation of emissions factors for transportation fuel, the table described in subsection (b)(2), and the determination of clean fuel production credits under this section. (g) Special rules (1) Only registered production in the United States taken into account (A) In general No clean fuel production credit shall be determined under subsection (a) with respect to any transportation fuel unless— (i) the taxpayer is registered as a producer of clean fuel under section 4101 at the time of production, and (ii) such fuel is produced in the United States. (B) United States For purposes of this paragraph, the term United States (2) Production attributable to the taxpayer In the case of a facility in which more than 1 person has an ownership interest, except to the extent provided in regulations prescribed by the Secretary, production from the facility shall be allocated among such persons in proportion to their respective ownership interests in the gross sales from such facility. (3) Related persons Persons shall be treated as related to each other if such persons would be treated as a single employer under the regulations prescribed under section 52(b). In the case of a corporation which is a member of an affiliated group of corporations filing a consolidated return, such corporation shall be treated as selling fuel to an unrelated person if such fuel is sold to such a person by another member of such group. (4) Pass-thru in the case of estates and trusts Under regulations prescribed by the Secretary, rules similar to the rules of subsection (d) of section 52 shall apply. (5) Allocation of credit to patrons of agricultural cooperative (A) Election to allocate (i) In general In the case of an eligible cooperative organization, any portion of the credit determined under subsection (a) for the taxable year may, at the election of the organization, be apportioned among patrons of the organization on the basis of the amount of business done by the patrons during the taxable year. (ii) Form and effect of election An election under clause (i) for any taxable year shall be made on a timely filed return for such year. Such election, once made, shall be irrevocable for such taxable year. Such election shall not take effect unless the organization designates the apportionment as such in a written notice mailed to its patrons during the payment period described in section 1382(d). (B) Treatment of organizations and patrons The amount of the credit apportioned to any patrons under subparagraph (A)— (i) shall not be included in the amount determined under subsection (a) with respect to the organization for the taxable year, and (ii) shall be included in the amount determined under subsection (a) for the first taxable year of each patron ending on or after the last day of the payment period (as defined in section 1382(d)) for the taxable year of the organization or, if earlier, for the taxable year of each patron ending on or after the date on which the patron receives notice from the cooperative of the apportionment. (C) Special rules for decrease in credits for taxable year If the amount of the credit of a cooperative organization determined under subsection (a) for a taxable year is less than the amount of such credit shown on the return of the cooperative organization for such year, an amount equal to the excess of— (i) such reduction, over (ii) the amount not apportioned to such patrons under subparagraph (A) for the taxable year, shall be treated as an increase in tax imposed by this chapter on the organization. Such increase shall not be treated as tax imposed by this chapter for purposes of determining the amount of any credit under this chapter. (D) Eligible cooperative defined For purposes of this section the term eligible cooperative . (b) Conforming amendments (1) Section 38(b), as amended by section 101, (A) in paragraph (33), by striking plus (B) in paragraph (34), by striking the period at the end and inserting , plus (C) by adding at the end the following new paragraph: (35) the clean fuel production credit determined under section 45V(a). . (2) The table of sections for subpart D of part IV of subchapter A of chapter 1, as amended by section 101, Sec. 45V. Clean fuel production credit. . (3) Section 4101(a)(1) every person producing a fuel eligible for the clean fuel production credit (pursuant to section 45V), section 6426(b)(4)(A)), (c) Effective date The amendments made by this section shall apply to transportation fuel produced after December 31, 2022. 202. Transportation electrification (a) Alternative motor vehicle credit for fuel cell motor vehicles (1) In general Section 30B(k) (A) by striking paragraph (1), and (B) by redesignating paragraphs (2) through (4) as paragraphs (1) through (3), respectively. (2) Phase-out Section 30B (l) Credit phase-Out for new qualified fuel cell motor vehicles (1) In general Following a determination by the Secretary, in consultation with the Secretary of Transportation, that total annual sales of new qualified fuel cell motor vehicles and new qualified plug-in electric drive motor vehicles (as defined in section 30D(d)(1)) in the United States are greater than 50 percent of total annual sales of new passenger vehicles in the United States, the amount of the new qualified fuel cell motor vehicle credit under this section for any new qualified fuel cell motor vehicle purchased during a calendar year described in paragraph (2) shall be equal to the product of— (A) the amount of the credit determined under subsection (b) without regard to this subsection, multiplied by (B) the phase-out percentage under paragraph (2). (2) Phase-out percentage The phase-out percentage under this paragraph is equal to— (A) for a vehicle purchased during the first calendar year following the calendar year in which the determination described in paragraph (1) is made, 100 percent, (B) for a vehicle purchased during the second calendar year following such determination year, 75 percent, (C) for a vehicle purchased during the third calendar year following such determination year, 50 percent, and (D) for a vehicle purchased during any calendar year subsequent to the year described in subparagraph (C), 0 percent. . (3) Effective date The amendments made by this subsection shall apply to property purchased after December 31, 2021. (b) Alternative fuel vehicle refueling property credit (1) Extension and modification (A) In general Section 30C (i) in subsection (b)— (I) by striking with respect to all qualified alternative fuel vehicle refueling property placed in service by the taxpayer during the taxable year at a location with respect to any single item of qualified alternative fuel vehicle refueling property placed in service by the taxpayer during the taxable year (II) in paragraph (1), by striking $30,000 $200,000 (ii) in subsection (e), by adding at the end the following: (7) Wage requirements (A) In general The term qualified alternative fuel vehicle refueling property (i) the requirements under subparagraph (B), and (ii) with respect to the construction of such property, the requirements under section 601 of the Clean Energy for America Act (B) Requirements The requirements described in this subparagraph with respect to any property are that the taxpayer shall ensure that any laborers and mechanics employed by contractors and subcontractors in the construction of such property are to be paid wages at rates not less than the prevailing rates for construction of a similar character in the locality as determined by the Secretary of Labor, in accordance with subchapter IV of chapter 31 , and (iii) in subsection (g), by striking December 31, 2021 December 31, 2022 (B) Effective date The amendments made by this paragraph shall apply to property placed in service after December 31, 2021. (2) Additional modification (A) In general Section 30C (i) in subsection (c)(2)— (I) in subparagraph (A), by striking one or more hydrogen or any transportation fuel for which the clean fuel production credit is allowed under section 45V with respect to the production and sale of such fuel. (II) by striking subparagraph (B) and inserting the following: (B) Any mixture— (i) which consists of— (I) any transportation fuel— (aa) for which the clean fuel production credit is allowed under section 45V with respect to the production and sale of such fuel, and (bb) which is a liquid fuel, and (II) any taxable fuel (as defined in section 4083(a)(1)), and (ii) at least 20 percent of the volume of which consists of fuel described in clause (i)(I). , and (ii) by striking subsection (g) and inserting the following: (g) Credit phase-Out (1) In general Following a determination by the Secretary under section 45V(d)(1) that the greenhouse gas emissions from the transportation of persons and goods annually in the United States are equal to or less than 25 percent of the greenhouse gas emissions from the transportation of persons and goods in the United States during calendar year 2021, the amount of the credit under this section for any qualified alternative fuel vehicle refueling property placed in service during a calendar year described in paragraph (2) shall be equal to the product of— (A) the amount of the credit allowed under subsection (a) (as determined without regard to this subsection), multiplied by (B) the phase-out percentage under paragraph (2). (2) Phase-out percentage The phase-out percentage under this paragraph is equal to— (A) for any property placed in service during the first calendar year following the calendar year in which the determination described in paragraph (1) is made, 100 percent, (B) for any property placed in service during the second calendar year following such determination year, 75 percent, (C) for any property placed in service during the third calendar year following such determination year, 50 percent, and (D) for any property placed in service during any calendar year subsequent to the year described in subparagraph (C), 0 percent. . (c) Electric vehicles (1) 2- (A) In general Section 30D(g)(3)(E) (ii) after December 31, 2014. . (B) Effective date The amendments made by this paragraph shall apply to vehicles acquired after December 31, 2020. (2) Elimination on limitation on number of vehicles eligible for credit (A) In general Section 30D (B) Effective date The amendment made by this paragraph shall apply to vehicles sold after the date of the enactment of this Act. (3) Making new qualified plug-in electric drive motor vehicle credit refundable for individuals (A) In general The Internal Revenue Code of 1986 is amended— (i) by redesignating section 30D as section 36C, and (ii) by moving section 36C (as so redesignated) from subpart A of part IV of subchapter A of chapter 1 to the location immediately before section 37 in subpart C of part IV of subchapter A of chapter 1. (B) Conforming amendments (i) Section 36C (I) in subsection (a), by striking There shall be allowed In the case of an individual, there shall be allowed (II) by striking subsection (c), (III) by redesignating subsections (d), (f), and (g) as subsections (c), (d), and (e), respectively, (IV) in subsection (d), as so redesignated— (aa) by striking (determined without regard to subsection (c)) (bb) by striking paragraph (3), and (V) in subsection (e)(3)(B), as so redesignated, by striking subsection (d)(1) subsection (c)(1) (ii) Subsection (l)(1) of section 30B section 30D(d)(1) section 36C(c)(1) (iii) Paragraph (37) of section 1016(a) section 30D(f)(1) section 36C(d)(1) (iv) Section 6501(m) 30D(e)(4) 36C(d)(6) (v) Section 166(b)(5)(A)(ii) of title 23, United States Code, is amended by striking section 30D(d)(1) section 36C(c)(1) (vi) The table of sections for subpart C of part IV of subchapter A of chapter 1 Sec. 36C. New qualified plug-in electric drive motor vehicles. . (C) Effective date The amendments made by this paragraph shall apply to vehicles acquired after December 31, 2021. (4) VIN requirement (A) In general Section 36C(c)(1), as redesignated and moved by paragraph (3), is amended— (i) in subparagraph (E), by striking and (ii) in subparagraph (F)(ii), by striking the period at the end and inserting , and (iii) by adding at the end the following: (G) for which the taxpayer has provided the vehicle identification number on the return of tax for the taxable year. . (B) Mathematical or clerical error Section 6213(g)(2) (i) in subparagraph (P), by striking and (ii) in subparagraph (Q), by striking the period at the end and inserting , and (iii) by adding at the end the following: (R) an omission of a correct vehicle identification number required under section 36C(c)(1)(G) (relating to credit for new qualified plug-in electric drive motor vehicles) to be included on a return. . (C) Effective date The amendments made by this paragraph shall apply to vehicles acquired after December 31, 2021. (5) Phase-out Section 36C, as redesignated, moved, and amended by the preceding paragraphs of this subsection, is amended by adding at the end the following: (f) Credit phase-Out (1) In general Following a determination by the Secretary, in consultation with the Secretary of Transportation, that total annual sales of new qualified fuel cell motor vehicles (as defined in section 30B(b)(3)) and new qualified plug-in electric drive motor vehicles in the United States are greater than 50 percent of total annual sales of new passenger vehicles in the United States, the amount of the credit allowed under this section for any new qualified plug-in electric drive motor vehicle sold or qualified 2- or 3-wheeled plug-in electric vehicle acquired during a calendar year described in paragraph (2) shall be equal to the product of— (A) the amount of the credit determined under subsection (a) without regard to this subsection, multiplied by (B) the phase-out percentage under paragraph (2). (2) Phase-out percentage The phase-out percentage under this paragraph is equal to— (A) for a vehicle sold or acquired during the first calendar year following the calendar year in which the determination described in paragraph (1) is made, 100 percent, (B) for a vehicle sold or acquired during the second calendar year following such determination year, 75 percent, (C) for a vehicle sold or acquired during the third calendar year following such determination year, 50 percent, and (D) for a vehicle sold or acquired during any calendar year subsequent to the year described in subparagraph (C), 0 percent. . (6) Qualified commercial electric vehicles (A) In general Subpart D of part IV of subchapter A of chapter 1, as amended by sections 101 and 201, is amended by adding at the end the following new section: 45W. Credit for qualified commercial electric vehicles (a) In general For purposes of section 38, the qualified commercial electric vehicle credit for any taxable year is an amount equal to the sum of the credit amounts determined under subsection (b) with respect to each qualified commercial electric vehicle placed in service by the taxpayer during the taxable year. (b) Per vehicle amount (1) In general The amount determined under this subsection with respect to any qualified commercial electric vehicle shall be equal the lesser of— (A) 30 percent of the basis of such vehicle, or (B) the incremental cost of such vehicle. (2) Incremental cost (A) In general For purposes of paragraph (1)(B), the incremental cost of any qualified commercial electric vehicle is an amount equal to the excess of the manufacturer's suggested retail price for such vehicle over such price for a comparable vehicle. (B) Comparable vehicle For purposes of this paragraph, the term comparable vehicle (c) Qualified commercial electric vehicle For purposes of this section, the term qualified commercial electric vehicle (1) meets the requirements of subparagraphs (A), (B), (C), (D), and (G) of section 36C(c)(1), (2) is primarily propelled by an electric motor which draws electricity from a battery which— (A) has a capacity of not less than 10 kilowatt hours, and (B) is capable of being recharged from an external source of electricity, and (3) is of a character subject to the allowance for depreciation. (d) Special rules (1) In general Rules similar to the rules under subsections (d) of section 36C shall apply for purposes of this section. (2) Property used by tax-exempt entity In the case of a vehicle the use of which is described in paragraph (3) or (4) of section 50(b) and which is not subject to a lease, the person who sold such vehicle to the person or entity using such vehicle shall be treated as the taxpayer that placed such vehicle in service, but only if such person clearly discloses to such person or entity in a document the amount of any credit allowable under subsection (a) with respect to such vehicle. (e) Credit phase-Out (1) In general Following a determination by the Secretary, in consultation with the Secretary of Transportation, that total annual sales of qualified commercial electric vehicles in the United States are greater than 50 percent of total annual sales of new commercial vehicles in the United States, the amount of the credit allowed under this section for any qualified commercial electric vehicle acquired during a calendar year described in paragraph (2) shall be equal to the product of— (A) the amount of the credit determined under subsection (a) without regard to this subsection, multiplied by (B) the phase-out percentage under paragraph (2). (2) Phase-out percentage The phase-out percentage under this paragraph is equal to— (A) for a vehicle acquired during the first calendar year following the calendar year in which the determination described in paragraph (1) is made, 100 percent, (B) for a vehicle acquired during the second calendar year following such determination year, 75 percent, (C) for a vehicle acquired during the third calendar year following such determination year, 50 percent, and (D) for a vehicle acquired during any calendar year subsequent to the year described in subparagraph (C), 0 percent. . (B) Conforming amendments (i) Section 38(b) (30) the qualified commercial electric vehicle credit determined under section 45W, . (ii) The table of sections for subpart D of part IV of subchapter A of chapter 1, as amended by sections 101 and 102, is amended by adding at the end the following new item: Sec. 45W. Credit for qualified commercial electric vehicles. . (C) Effective date The amendments made by this paragraph shall apply to vehicles acquired after December 31, 2021. 203. Temporary extensions of existing fuel incentives (a) Second generation biofuel producer credit (1) In general Section 40(b)(6)(J)(i) 2022 2023 (2) Effective date The amendments made by this subsection shall apply to qualified second generation biofuel production after December 31, 2021. (b) Credit for alternative fuel mixtures (1) In general Section 6426 (A) in subsection (d)— (i) in paragraph (2)(D), by striking liquefied (ii) in paragraph (5), by striking 2021 2022 (B) in subsection (e)— (i) in paragraph (2), by inserting nonliquid hydrogen or a fuel described (ii) in paragraph (3), by striking 2021 2022 (2) Effective date The amendments made by this subsection shall apply to fuel sold or used after December 31, 2021. (c) Biodiesel, biodiesel mixtures, and alternative fuels (1) In general Section 6427(e)(6)(C) 2021 2022 (2) Effective date The amendments made by this subsection shall apply to fuel sold or used after December 31, 2021. III Incentives for Energy Efficiency 301. Credit for new energy efficient residential buildings (a) In general Section 45L 45L. New energy efficient home credit (a) Allowance of credit For purposes of section 38, in the case of an eligible contractor, the new energy efficient home credit for the taxable year is the applicable amount for each qualified residence which is— (1) constructed by the eligible contractor, and (2) acquired by a person from such eligible contractor for use as a residence during the taxable year. (b) Applicable amount (1) In general For purposes of subsection (a), the applicable amount shall be an amount equal to— (A) in the case of a qualified residence described in subclause (I) of subsection (c)(3)(A)(iii), $2,500, and (B) in the case of a qualified residence described in subclause (II) of such subsection, $5,000. (2) Adjustment for inflation (A) In general In the case of a taxable year beginning after 2022, the dollar amounts in paragraph (1) shall each be increased by an amount equal to— (i) such dollar amount, multiplied by (ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year, determined by substituting calendar year 2021 calendar year 2016 (B) Rounding If any amount as increased under subparagraph (A) is not a multiple of $100, such amount shall be rounded to the nearest multiple of $100. (c) Definitions For purposes of this section: (1) Construction The term construction (2) Eligible contractor The term eligible contractor (A) the person who constructed the qualified residence, or (B) in the case of a qualified residence which is a manufactured home, the manufactured home producer of such residence. (3) Qualified residence (A) In general The term qualified residence (i) located in the United States, (ii) the construction of which is substantially completed after the date of the enactment of this section, (iii) which is certified as satisfying the requirements for new residential construction under— (I) the Energy Star program (or any successor program, as determined by the Secretary), as in effect on January 1 of the year in which construction of the dwelling unit begins, or (II) the Zero Energy Ready Home program (or any successor program, as determined by the Secretary), as in effect on January 1 of the year in which construction of the dwelling unit begins, and (iv) which satisfies the requirements under subparagraph (B). (B) Wage requirements The requirements described in this subparagraph with respect to any dwelling unit are that the eligible contractor shall ensure that any laborers and mechanics employed by such contractor and subcontractors in the construction of such dwelling unit shall be paid wages at rates not less than the prevailing rates for construction of a similar character in the locality as determined by the Secretary of Labor, in accordance with subchapter IV of chapter 31 (d) Certification A certification described in this section shall be made— (1) by a third party which is accredited by a certification program approved by the Secretary, in consultation with the Secretary of Energy, and (2) in accordance with— (A) any applicable rules under the Energy Star or Zero Energy Ready Home programs, as in effect on the date on which construction of the dwelling unit begins, and (B) guidance prescribed by the Secretary, in consultation with the Secretary of Energy. (e) Basis adjustment For purposes of this subtitle, if a credit is allowed under this section in connection with any expenditure for any property (other than a qualified low-income building, as described in section 42(c)(2)), the increase in the basis of such property which would (but for this subsection) result from such expenditure shall be reduced by the amount of the credit so determined. (f) Coordination with investment credits For purposes of this section, expenditures taken into account under section 25D or 47 shall not be taken into account under this section. . (b) Effective date The amendment made by this section shall apply to any qualified residence acquired after December 31, 2021. 302. Energy efficient home improvement credit (a) In general Section 25C 25C. Energy efficient home improvement credit (a) In general In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the lesser of— (1) the sum of the applicable qualified property amounts for any qualified property placed in service by the individual during such taxable year, or (2) $1,500. (b) Applicable qualified property amount (1) In general For any qualified property, the applicable qualified property amount shall be equal to the lesser of— (A) 30 percent of the amount paid or incurred by the individual for such qualified property (including any expenditures for labor costs properly allocable to the onsite preparation, assembly, or original installation of such property), or (B) $600. (2) Adjustment for inflation (A) In general In the case of a taxable year beginning after 2022, the dollar amount in paragraph (1)(B) shall be increased by an amount equal to— (i) such dollar amount, multiplied by (ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year, determined by substituting calendar year 2021 calendar year 2016 (B) Rounding If any amount as increased under subparagraph (A) is not a multiple of $10, such amount shall be rounded to the nearest multiple of $10. (c) Qualified property (1) In general The term qualified property (A) except in the case of a building envelope improvement, meets or exceeds the requirements of the highest efficiency tier (not including any advanced tier) established by the Consortium for Energy Efficiency which are in effect at the time that the property is placed in service, (B) is installed according to applicable Air Conditioning Contractors of America Quality Installation standards which are in effect at the time that the property was placed in service, (C) is for use in a dwelling unit which is located in the United States and used as a residence by the individual, and (D) is reasonably expected to remain in service in such dwelling unit for not less than 5 years. (2) Special rules for certain heat pumps (A) Air-source heat pumps In the case of any air-source heat pump which satisfies the requirements under paragraph (1), subsection (b)(1)(B) shall be applied by substituting $800 $600 (B) Ground source heat pump (i) In general In the case of any qualified geothermal heat pump property which satisfies the requirements under subparagraphs (B) through (D) of paragraph (1)— (I) subsection (b)(1)(B) shall be applied by substituting $10,000 $600 (II) subsection (a)(2) shall not apply. (ii) Qualified geothermal heat pump property For purposes of this subparagraph, the term qualified geothermal heat pump property (I) uses the ground or ground water as a thermal energy source to heat a dwelling unit located in the United States and used as a residence by the taxpayer or as a thermal energy sink to cool such dwelling unit, and (II) meets the requirements of the Energy Star program which are in effect at the time that the expenditure for such equipment is made. (3) Special rule for insulation In the case of any building envelope improvement described in subsection (d)(2)(A) which satisfies the requirements under paragraph (1), subsection (b)(1)(B) shall not apply. (d) Other definitions (1) Biomass property (A) In general For purposes of this section, the term biomass property (i) uses the burning of biomass fuel to heat a dwelling unit or to heat water for use in a dwelling unit, and (ii) using the higher heating value, has a thermal efficiency of not less than 75 percent. (B) Biomass fuel For purposes of subparagraph (A), the term biomass fuel (2) Building envelope improvement For purposes of this section, the term building envelope improvement (A) any insulation material or system which— (i) is specifically and primarily designed to reduce the heat loss or gain of a dwelling unit when installed in or on such dwelling unit, and (ii) meets the prescriptive criteria for such material or system established by the International Energy Conservation Code, as such Code (including supplements) is in effect on January 1 of the calendar year in which such material or system is installed, and (B) exterior doors and windows (including skylights) which received the most efficient certification under applicable Energy Star program requirements which are in effect on January 1 of the calendar year in which the property is placed in service. (3) Manufactured homes included For purposes of this section, the term dwelling unit (e) Denial of double benefit No credit shall be allowed under subsection (a) for any amounts paid or incurred for which a deduction or credit is allowed under any other provision of this chapter. . (b) Clerical amendment The table of sections for subpart A of part IV of subchapter A of chapter 1 25C. Energy efficient home improvement credit. . (c) Effective date The amendments made by this section shall apply to qualified property placed in service after December 31, 2021. 303. Enhancement of energy efficient commercial buildings deduction (a) In general Section 179D (1) by striking subsection (b) and inserting the following: (b) Maximum amount of deduction (1) In general The deduction under subsection (a) with respect to any building for any taxable year shall not exceed the excess (if any) of— (A) the product of— (i) the applicable dollar value, and (ii) the square footage of the building, over (B) the aggregate amount of the deductions under subsection (a) with respect to the building for all prior taxable years. (2) Applicable dollar value For purposes of paragraph (1)(A)(i), the applicable dollar value shall be an amount equal to $2.50 increased (but not above $5.00) by $0.10 for each percentage point by which the total annual energy and power costs for the building are certified to be reduced by a percentage greater than 25 percent. , (2) in subsection (c)(1)— (A) in subparagraph (C)(iii), by striking and (B) in subparagraph (D)— (i) by striking 50 percent 25 percent (ii) by striking the period at the end and inserting , and (C) by adding at the end the following: (E) which satisfies the requirements— (i) under subsection (d)(7), and (ii) with respect to the construction of such property, the requirements under section 601 of the Clean Energy for America Act , (3) in subsection (d)— (A) by striking paragraph (1), (B) by striking paragraph (4) and inserting the following: (4) Allocation of deduction (A) In general In the case of energy efficient commercial building property installed on or in property owned by an eligible entity, the Secretary shall promulgate regulations to allow the allocation of the deduction to the person primarily responsible for designing the property in lieu of the owner of such property, with such person to be treated as the taxpayer for purposes of this section. (B) Eligible entity For purposes of this paragraph, the term eligible entity (i) a Federal, State, or local government or a political subdivision thereof, (ii) an Indian tribe (as defined in section 45A(c)(6)), or (iii) an organization described in section 501(c) and exempt from tax under section 501(a). , and (C) by adding at the end the following: (7) Wage requirements The requirements described in this paragraph with respect to any property are that the taxpayer shall ensure that any laborers and mechanics employed by contractors and subcontractors in the construction of such property shall be paid wages at rates not less than the prevailing rates for construction of a similar character in the locality as determined by the Secretary of Labor, in accordance with subchapter IV of chapter 31 , (4) by striking subsection (f), and (5) in subsection (g)— (A) by striking 2020, each dollar amount in subsection (b) or subsection (d)(1)(A) 2022, each dollar amount in subsection (b)(2) (B) in paragraph (2), by striking 2019 2021 (C) in the flush matter at the end, by striking a multiple of 1 cent shall be rounded to the nearest cent a multiple of 10 cents shall be rounded to the nearest multiple of 10 cents (b) Conforming amendments Section 179D (1) in subsection (c)(1)(D)— (A) by striking subsection (d)(6) subsection (d)(5) (B) by striking subsection (d)(2) subsection (d)(1) (2) in subsection (d)— (A) by redesignating paragraphs (2) through (6) as paragraphs (1) through (5), respectively, (B) in paragraph (2), as so redesignated, by striking paragraph (2) paragraph (1) (C) in paragraph (4), as so redesignated, by striking paragraph (3)(B)(iii) paragraph (2)(B)(iii) (3) by redesignating subsections (g) and (h) as subsections (f) and (g), respectively, and (4) in subsection (g)(2), as so redesignated, by striking or (d)(1)(A) (c) Effective date The amendments made by this section shall apply to any property placed in service after December 31, 2021. 304. Enhancement of energy credit for geothermal heat pumps (a) In general Section 48(a) (1) in paragraph (2)(A)(i)(III), by striking paragraph (3)(A)(ii) clause (ii) or (vii) of paragraph (3)(A) (2) in paragraph (3)(A)(vii), by striking but only with respect to property the construction of which begins before January 1, 2024, (b) Effective date The amendments made by this section shall apply to property the construction of which begins after December 31, 2021. IV Clean electricity and fuel bonds 401. Clean energy bonds (a) In general Part IV of subchapter A of chapter 1 H Clean energy bonds Sec. 54. Clean energy bonds. 54. Clean energy bonds (a) In general If a taxpayer holds a clean energy bond on one or more interest payment dates of the bond during any taxable year, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of the credits determined under subsection (b) with respect to such dates. (b) Amount of credit (1) In general The amount of the credit determined under this subsection with respect to any interest payment date for a clean energy bond is the applicable percentage (as determined under paragraph (2)) of the amount of interest payable by the issuer with respect to such date. (2) Applicable percentage (A) In general (i) Maximum percentage Except as provided in clause (ii), the applicable percentage is 70 percent. (ii) Reduction of credit based on greenhouse gas emission rate In the case of a qualified facility described in subsection (e)(4) of section 45V, the applicable percentage shall be reduced (but not below zero) by an amount which bears the same ratio to the percentage in effect under clause (i) as the anticipated average emissions rate for all transportation fuel produced by such facility bears to the baseline emissions rate (as determined under subsection (b)(1)(B) of such section). (B) Rounding If any applicable percentage determined under subparagraph (A) is not a whole percentage point, such percentage shall be rounded to the nearest whole percentage point. (C) Published emissions rules Rules similar to the rules of section 45V(b) shall apply for purposes of this section. (c) Limitation based on amount of tax (1) In general The credit allowed under subsection (a) for any taxable year shall not exceed the excess of— (A) the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over (B) the sum of the credits allowable under this part (other than subpart C and this subpart). (2) Carryover of unused credit If the credit allowable under subsection (a) exceeds the limitation imposed by paragraph (1) for such taxable year, such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such taxable year (determined before the application of paragraph (1) for such succeeding taxable year). (d) Clean energy bond (1) In general For purposes of this section, the term clean energy bond (A) 100 percent of the excess of the available project proceeds of such issue over the amounts in a reasonably required reserve (within the meaning of section 150(a)(3)) with respect to such issue are to be used for capital expenditures incurred by an entity described in subparagraph (B) for— (i) 1 or more qualified facilities, or (ii) grid improvement property (as defined in section 48D(c)(1)(B)), (B) the bond is issued by— (i) a governmental body, (ii) a public power provider, or (iii) a cooperative electric company, and (C) the issuer makes an irrevocable election to have this section apply. (2) Applicable rules For purposes of applying paragraph (1)— (A) for purposes of section 149(b), a clean energy bond shall not be treated as federally guaranteed by reason of the credit allowed under subsection (a) or section 6431, (B) for purposes of section 148, the yield on a clean energy bond shall be determined without regard to the credit allowed under subsection (a), and (C) a bond shall not be treated as a clean energy bond if the issue price has more than a de minimis amount (determined under rules similar to the rules of section 1273(a)(3)) of premium over the stated principal amount of the bond. (e) Definitions In this section: (1) Available project proceeds The term available project proceeds (A) the excess of— (i) the proceeds from the sale of an issue, over (ii) the issuance costs financed by the issue (to the extent that such costs do not exceed 2 percent of such proceeds), and (B) the proceeds from any investment of the excess described in subparagraph (A). (2) Cooperative electric company The term cooperative electric company (3) Governmental body The term governmental body (4) Interest payment date The term interest payment date (5) Public power provider The term public power provider (6) Qualified facility The term qualified facility (A) is described in section 45U(b)(1)(A) and satisfies the requirements under clause (iv) of such section, or (B) (i) is described in subsection (e)(4) of section 45V and satisfies the requirements under subparagraph (B) of such subsection, and (ii) only produces transportation fuel which has an emissions rate of less than 75 kilograms of CO 2 (f) Credit phase-Out (1) Electrical production and energy storage property In the case of a clean energy bond for which the proceeds are used for capital expenditures incurred by an entity for a qualified facility described in subsection (e)(6)(A) or any property described in subsection (d)(1)(A)(ii), if the Secretary, in consultation with the Secretary of Energy and the Administrator of the Environmental Protection Agency, determines that the annual greenhouse gas emissions from the production of electricity in the United States are equal to or less than the percentage specified in section 45U(d)(1), the amount of the credit determined under subsection (b) with respect to any clean energy bond issued during a calendar year described in paragraph (3) shall be equal to the product of— (A) the amount determined under subsection (b) without regard to this subsection, multiplied by (B) the phase-out percentage under paragraph (3). (2) Fuel production In the case of a clean energy bond for which the proceeds are used for capital expenditures incurred by an entity for a qualified facility described in subsection (e)(6)(B), if the Secretary, in consultation with the Secretary of Energy and the Administrator of the Environmental Protection Agency, determines that the annual greenhouse gas emissions from the transportation of persons and goods annually in the United States are equal to or less than the percentage specified in section 45V(d)(1), the amount of the credit determined under subsection (b) with respect to any clean energy bond issued during a calendar year described in paragraph (3) shall be equal to the product of— (A) the amount determined under subsection (b) without regard to this subsection, multiplied by (B) the phase-out percentage under paragraph (3). (3) Phase-out percentage The phase-out percentage under this paragraph is equal to— (A) for any bond issued during the first calendar year following the calendar year in which the determination described in paragraph (1) or (2) is made, 100 percent, (B) for any bond issued during the second calendar year following such determination year, 75 percent, (C) for any bond issued during the third calendar year following such determination year, 50 percent, and (D) for any bond issued during any calendar year subsequent to the year described in subparagraph (C), 0 percent. (g) Special rules (1) Interest on clean energy bonds includible in gross income for Federal income tax purposes For purposes of this title, interest on any clean energy bond shall be includible in gross income. (2) S corporations and partnerships In the case of a clean energy bond held by an S corporation or partnership, the allocation of the credit allowed by this section to the shareholders of such corporation or partners of such partnership shall be treated as a distribution. (3) Bonds held by real estate investment trusts If any clean energy bond is held by a real estate investment trust, the credit determined under subsection (a) shall be allowed to beneficiaries of such trust (and any gross income included under paragraph (1) with respect to such credit shall be distributed to such beneficiaries) under procedures prescribed by the Secretary. (4) Credits may be stripped Under regulations prescribed by the Secretary— (A) In general There may be a separation (including at issuance) of the ownership of a clean energy bond and the entitlement to the credit under this section with respect to such bond. In case of any such separation, the credit under this section shall be allowed to the person who on the credit allowance date holds the instrument evidencing the entitlement to the credit and not to the holder of the bond. (B) Certain rules to apply In the case of a separation described in subparagraph (A), the rules of section 1286 shall apply to the clean energy bond as if it were a stripped bond and to the credit under this section as if it were a stripped coupon. (h) Regulations The Secretary may prescribe such regulations and other guidance as may be necessary or appropriate to carry out this section and section 6431. . (b) Credit for qualified clean energy bonds allowed to issuer Subchapter B of chapter 65 of subtitle F is amended by adding at the end the following new section: 6431. Credit for qualified clean energy bonds allowed to issuer (a) In general The issuer of a qualified clean energy bond shall be allowed a credit with respect to each interest payment under such bond which shall be payable by the Secretary as provided in subsection (b). (b) Payment of credit (1) In general The Secretary shall pay (contemporaneously with each interest payment date under such bond) to the issuer of such bond (or to any person who makes such interest payments on behalf of the issuer) the applicable percentage (as determined under section 54(b)) of the interest payable under such bond on such date. (2) Interest payment date For purposes of this subsection, the term interest payment date (c) Application of arbitrage rules For purposes of section 148, the yield on a qualified clean energy bond shall be reduced by the credit allowed under this section. (d) Qualified clean energy bond For purposes of this section, the term qualified clean energy bond . (c) Conforming amendments (1) The table of subparts for part IV of subchapter A of chapter 1 Subpart H—Clean Energy Bonds (2) The table of sections for subchapter B of chapter 65 of subtitle F is amended by adding at the end the following new item: Sec. 6431. Credit for qualified clean energy bonds allowed to issuer. . (3) Subparagraph (A) of section 6211(b)(4) and 6428A 6428A, and 6431 (d) Gross-Up of payment to issuers in case of sequestration (1) In general In the case of any payment under subsection (b) of section 6431 (A) such payment (determined before such sequestration), multiplied by (B) the quotient obtained by dividing 1 by the amount by which 1 exceeds the percentage reduction in such payment pursuant to such sequestration. (2) Sequestration For purposes of this subsection, the term sequestration (e) Effective date The amendments made by this section shall apply to obligations issued after December 31, 2022. V Termination of certain fossil fuel provisions 501 Termination of provisions relating to oil, gas, and other materials (a) Amortization of geological and geophysical expenditures Section 167(h) (6) Termination This subsection shall not apply to any expenses paid or incurred during any taxable year beginning after the date of the enactment of the Clean Energy for America Act . (b) Alaska natural gas pipelines Subparagraph (B) of section 168(i)(16) (B) is— (i) (I) placed in service after December 31, 2013, or (II) treated as placed in service on January 1, 2014, if the taxpayer who places such system in service before January 1, 2014, elects such treatment, and (ii) placed in service before the end of the calendar year in which the Clean Energy for America Act . (c) Natural gas gathering line Paragraph (17) of section 168(i) (1) in subparagraph (A), by inserting which are placed in service before the end of the calendar year in which the Clean Energy for America Act pipe, equipment, and appurtenances (2) in subparagraph (B), by inserting which are placed in service before the end of the calendar year in which the Clean Energy for America Act pipe, equipment, and appurtenances (d) Repeal of deduction for tertiary injectants Subsection (c) of section 193 (1) in paragraph (1), by striking or (2) in paragraph (2), by striking the period at the end and inserting , or (3) by inserting at the end the following: (3) which is paid or incurred during any taxable year beginning after the date of the enactment of the Clean Energy for America Act . (e) Intangible drilling and development costs Subsection (c) of section 263 (c) Intangible drilling and development costs in the case of oil and gas wells and geothermal wells (1) In general Notwithstanding subsection (a), and except as provided in subsection (i), regulations shall be prescribed by the Secretary under this subtitle corresponding to the regulations which granted the option to deduct as expenses intangible drilling and development costs in the case of oil and gas wells and which were recognized and approved by the Congress in House Concurrent Resolution 50, Seventy-ninth Congress. Such regulations shall also grant the option to deduct as expenses intangible drilling and development costs in the case of wells drilled for any geothermal deposit (as defined in section 613(e)(2)) to the same extent and in the same manner as such expenses are deductible in the case of oil and gas wells. This subsection shall not apply with respect to any costs to which any deduction is allowed under section 59(e) or 291. (2) Exclusion (A) In general This subsection shall not apply to amounts paid or incurred by a taxpayer with regard to any oil or gas well in any taxable year beginning after the date of the enactment of the Clean Energy for America Act (B) Amortization of excluded amounts The amount not allowable as a deduction for any taxable year by reason of subparagraph (A) shall be allowable as a deduction ratably over the 60-month period beginning with the month in which the costs are paid or incurred. For purposes of section 1254, any deduction under this subparagraph shall be treated as a deduction under this subsection. . (f) Percentage depletion (1) Percentage depletion of oil and gas wells, coal, lignite, and oil shale Section 613 (A) in subsection (a), by striking (100 percent in the case of oil and gas properties) (B) in subsection (b)— (i) by striking paragraph (2) and inserting the following: (2) 15 percent If from deposits in the United States, gold, silver, copper, and iron ore. , (ii) in paragraph (4), by striking coal, lignite, (iii) in paragraph (5), by inserting (except oil shale) Clay and shale (iv) in paragraph (6)(A), by striking (except shale described in paragraph (2)(B) or (5)) (except oil shale and shale described in paragraph (5)) (C) in subsection (c)(4)— (i) by striking subparagraphs (A) and (H), (ii) by inserting and (iii) by redesignating subparagraphs (B) through (G) as subparagraphs (A) through (F), respectively, and (iv) by redesignating subparagraph (I) as subparagraph (G), (D) in subsection (d), by striking Except as provided in section 613A, in the case of In the case of (E) in subsection (e)(2), by striking or section 613A (2) Oil and gas wells Section 613A (f) Termination This section shall not apply to any taxable year beginning after the date of the enactment of the Clean Energy for America Act . (3) Effective date The amendments made by this subsection shall apply to taxable years beginning after the date of the enactment of this Act. (g) Termination of capital gains treatment for royalties from coal (1) In general Subsection (c) of section 631 (A) by striking coal (including lignite), or iron ore iron ore (B) by striking coal or iron ore iron ore (C) by striking iron ore or coal iron ore (D) by striking coal or (2) Conforming amendment The heading of section 631 , coal, (3) Effective date The amendments made by this subsection shall apply to taxable years beginning after the date of the enactment of this Act. (h) Enhanced oil recovery credit (1) In general Subpart D of part IV of subchapter A of chapter 1 (2) Conforming amendments (A) Section 38(b) (B) Section 45Q (i) by striking section 43(b)(3)(B) section 43(b)(3)(B) (as in effect on the day before the date of the enactment of the Clean Energy for America Act (ii) in subsection (e)(2), by inserting (as in effect on the day before the date of the enactment of the Clean Energy for America Act section 43(c)(2) (C) Section 196(c) (i) by striking paragraph (5), and (ii) by redesignating paragraphs (6) through (14) as paragraphs (5) through (13), respectively. (3) Clerical amendment The table of sections for subpart D of part IV of subchapter A of chapter 1 (4) Effective date The amendments made by this subsection shall apply to taxable years beginning after the date of the enactment of this Act. (i) Credit for producing oil and gas from marginal wells (1) In general Subpart D of part IV of subchapter A of chapter 1 (2) Conforming amendment Section 38(b) (3) Clerical amendment The table of sections for subpart D of part IV of subchapter A of chapter 1 (4) Effective date The amendments made by this subsection shall apply to taxable years beginning after the date of the enactment of this Act. (j) Qualifying advanced coal project credit (1) In general Subpart E of part IV of subchapter A of chapter 1 (2) Conforming amendments (A) Section 46 (B) Section 49(a)(1)(C), as amended by section 102 of this Act, is amended by striking clause (iii) and redesignating clauses (iv) through (vii) as clauses (iii) through (vi), respectively. (C) Section 50(a)(2)(E), as amended by section 102 of this Act, is amended by striking 48A(b)(3), (3) Clerical amendment The table of sections for subpart E of part IV of subchapter A of chapter 1 (4) Effective date The amendments made by this subsection shall apply to taxable years beginning after the date of the enactment of this Act. (k) Qualifying gasification project credit (1) In general Subpart E of part IV of subchapter A of chapter 1 (2) Conforming amendments (A) Section 46 (B) Section 49(a)(1)(C), as amended by this Act, is amended by striking clause (iii) and redesignating clauses (iv) through (vi) as clauses (iii) through (v). (C) Section 50(a)(2)(E), as amended by this Act, is amended by striking 48B(b)(3), (3) Clerical amendment The table of sections for subpart E of part IV of subchapter A of chapter 1 (4) Effective date The amendments made by this subsection shall apply to taxable years beginning after the date of the enactment of this Act. (l) Reinstatement of treatment of foreign base company oil related income as foreign base company income (1) In general Section 954(a) and , and (4) the foreign base company oil related income for the taxable year (determined under subsection (g) and reduced as provided in subsection (b)(5)). . (2) Foreign base company oil related income Section 954 (g) Foreign base company oil related income For purposes of this section— (1) In general Except as otherwise provided in this subsection, the term foreign base company oil related income (A) oil or gas which was extracted from an oil or gas well located in such foreign country, or (B) oil, gas, or a primary product of oil or gas which is sold by the foreign corporation or a related person for use or consumption within such country or is loaded in such country on a vessel or aircraft as fuel for such vessel or aircraft. Such term shall not include any foreign personal holding company income (as defined in subsection (c)). (2) Paragraph (1) applies only where corporation has produced 1,000 barrels per day or more (A) In general The term foreign base company oil related income (B) Large oil producer For purposes of subparagraph (A), the term large oil producer (C) Related group The term related group (D) Average daily production of foreign crude oil and natural gas For purposes of this paragraph, the average daily production of foreign crude oil or natural gas of any related group for any taxable year (and the conversion of cubic feet of natural gas into barrels) shall be determined under rules similar to the rules of section 613A except that only crude oil or natural gas from a well located outside the United States shall be taken into account. . (3) Conforming amendments (A) Section 952(c)(1)(B)(iii) (I) foreign base company oil related income, . (B) Section 954(b) (i) in paragraph (4), by inserting at the end the following new sentence: The preceding sentence shall not apply to foreign base company oil-related income described in subsection (a)(4). (ii) in paragraph (5), by striking and the foreign base company services income the foreign base company services income, and the foreign base company oil related income (iii) by adding at the end the following new paragraph: (6) Foreign base company oil related income not treated as another kind of base company income Income of a corporation which is foreign base company oil related income shall not be considered foreign base company income of such corporation under paragraph (2) or (3) of subsection (a). . (4) Effective date The amendments made by this subsection shall apply to taxable years of foreign corporations beginning after the date of the enactment of this Act, and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end. (m) Inclusion of foreign oil and gas extraction income in tested income for purpose of determining global intangible low-Taxed income (1) In general Section 951A(c)(2)(A)(i) and and over (2) Effective date The amendments made by this subsection shall apply to taxable years of foreign corporations beginning after the date of the enactment of this Act, and to taxable years of United States shareholders in which or with which such tax years of foreign corporations end. (n) Repeal of corporate income tax exemption for publicly traded partnerships with qualifying income and gains from activities relating to fossil fuels (1) In general Section 7704(d)(1) (A) in subparagraph (E), by striking (including pipelines transporting gas, oil, or products thereof) (B) in the flush matter at the end, by inserting or any coal, gas, oil, or products thereof (2) Effective date The amendments made by this subsection shall apply to taxable years beginning after the date of the enactment of this Act. VI Workforce development requirements 601. Use of qualified apprentices (a) In general All contractors and subcontractors engaged in the performance of construction, alteration, or repair work on any applicable project shall, subject to subsection (b), ensure that not less than 15 percent of the total labor hours of such work be performed by qualified apprentices. (b) Apprentice-to-Journeyworker ratio The requirement under subsection (a) shall be subject to any applicable requirements for apprentice-to-journeyworker ratios of the Department of Labor or the applicable State apprenticeship agency. (c) Participation Each contractor and subcontractor who employs 4 or more individuals to perform construction, alteration, or repair work on an applicable project shall employ 1 or more qualified apprentices to perform such work. (d) Exception Notwithstanding any other provision in this section, this section shall not apply in the case of a taxpayer who— (1) demonstrates a lack of availability of qualified apprentices in the geographic area of the construction, alteration, or repair work; and (2) makes a good faith effort, and its contractors and subcontractors make a good faith effort, to comply with the requirements of this section. (e) Definitions In this section: (1) Applicable project The term applicable project (A) subsection (e)(7)(A)(ii) of section 30C (B) subsection (f)(8)(A)(ii) of section 45Q of such Code, (C) subsection (b)(1)(A)(iv)(II) of section 45U of such Code, (D) subsections (b)(3)(A)(iv)(II) and (c)(1)(B)(ii) of section 48D of such Code, and (E) subsection 9c)(1)(E)(ii) of section 179D of such Code, any property, equipment, or facility for which a credit is allowed under such sections. (2) Labor hours The term labor hours (A) means the total number of hours devoted to the performance of construction, alteration, or repair work by employees of the contractor or subcontractor; and (B) excludes any hours worked by— (i) foremen; (ii) superintendents; (iii) owners; or (iv) persons employed in a bona fide executive, administrative, or professional capacity (within the meaning of those terms in part 541 of title 29, Code of Federal Regulations). (3) Qualified apprentice The term qualified apprentice section 3131(e)(3)(B)

Summary: Clean Energy for America Act This bill provides tax incentives for investment in clean electricity, clean transportation, clean fuel production, energy efficiency, and sets forth workforce development requirements for the energy sector. The bill also terminates certain fossil fuel provisions and requires contractors on federal energy projects to ensure that not less than 15% of total labor hours be performed by qualified apprentices.