Carbon Capture Act

To amend the Internal Revenue Code of 1986 to improve and make permanent the credit for carbon dioxide sequestration. 1. Short title This Act may be cited as the Carbon Capture Act 2. Carbon dioxide sequestration credit improved and made permanent (a) Credit made permanent Section 45Q (b) Increase in credit for new facilities (1) In general Section 45Q of such Code, as amended by subsection (a), is amended by redesignating subsections (b), (c), and (d) as subsections (c), (d), and (e), respectively, and by inserting after subsection (a) the following new subsection: (b) Credit rates for new qualified facilities (1) In general In the case of a taxable year beginning in a calendar year after 2024 with respect to a qualified facility at which carbon capture equipment is originally placed in service after December 31, 2015— (A) subsection (a)(1) shall be applied by substituting $30 $20 (B) subsection (a)(2) shall be applied by substituting $30 $10 (2) Phase-up In the case of a qualified facility at which carbon capture equipment is originally placed in service during a calendar year after 2015 and before 2025 and any taxable year beginning in such calendar year— (A) subsection (a)(1) shall be applied by substituting for $20 (B) subsection (a)(2) shall be applied by substituting for $10 (3) Inflation adjustment In the case of any taxable year beginning in a calendar year after 2025 with respect to a qualified facility at which carbon capture equipment is originally placed in service after December 31, 2015, there shall be substituted for each $30 amount contained in paragraph (1) an amount equal to the product of— (A) such dollar amount, multiplied by (B) the inflation adjustment factor for such calendar year determined under section 43(b)(3)(B) for such calendar year, determined by substituting 2024 1990 . (2) Conforming amendment Section 45Q(e)(7) of such Code, as redesignated by paragraph (1), is amended by inserting with respect to a qualified facility at which carbon capture equipment is originally placed in service before January 1, 2016 2009 (c) Election To allow credit to person that disposes of, or uses as a tertiary injectant, carbon dioxide Section 45Q(e)(5) of such Code, as redesignated by subsection (b), is amended— (1) by striking Any credit (A) In general Any credit , (2) by inserting subparagraph (B) or except to the extent provided in (3) by adding at the end the following new subparagraph: (B) Election to allow credit to person that disposes of, or uses as tertiary injectant, carbon dioxide If the person described in subparagraph (A) makes an election under this subparagraph (as such time and in such manner as the Secretary may prescribe), the credit determined under this section— (i) shall be allowable to the person that disposes of, or uses as a tertiary injectant, the carbon dioxide, and (ii) shall not be allowable to the person described in subparagraph (A). . (d) Reduction in qualified facility threshold Section 45Q(d)(3) of such Code, as redesignated by subsection (b), is amended by striking 500,000 150,000 (e) Effective dates (1) Credit made permanent The amendment made by subsection (a) shall apply to calendar years beginning after 2015. (2) Increase in credit for new facilities The amendments made by subsection (b) shall apply to facilities at which carbon capture equipment is originally placed in service after December 31, 2015. (3) Election to allow credit to person that disposes of, or uses as a tertiary injectant, carbon dioxide The amendments made by subsection (c) shall apply to taxable years beginning after the date of the enactment of this Act. (4) Reduction in qualified facility threshold The amendments made by subsection (d) shall apply to taxable years beginning after the date of the enactment of this Act.

Summary: Carbon Capture Act This bill amends the Internal Revenue Code, with respect to the tax credit for carbon dioxide sequestration, to: (1) make such credit permanent after 2015; (2) increase such credit after 2024 for a qualified facility originally placed in service after December 31, 2015; (3) allow such credit to a person who disposes of, or uses as a tertiary injectant, the carbon dioxide; and (4) modify the definition of "qualified facility" for purposes of eligibility for such credit to require not less than 150,000 metric tons (currently, 500,000 metric tons) to be captured at such a facility during the taxable year.