I 
117TH CONGRESS 
2D SESSION 
H. R. 9121 
To amend the Internal Revenue Code of 1986 to establish a tax credit 
for abatement and sequestration of carbon dioxide equivalent through 
agricultural methods. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 30, 2022 
Mr. RYAN of Ohio introduced the following bill; which was referred to the 
Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to establish 
a tax credit for abatement and sequestration of carbon 
dioxide equivalent through agricultural methods. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Qualified Agricultural 
Carbon Sequestration Act of 2022’’. 
SEC. 2. QUALIFIED AGRICULTURAL CARBON SEQUESTRA-
TION CREDIT. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
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1986 is amended by inserting after section 45Z the fol-
lowing new section: 
‘‘SEC. 45AA. QUALIFIED AGRICULTURAL CARBON SEQUES-
TRATION CREDIT. 
‘‘(a) IN GENERAL.—For purposes of section 38, in 
the case of a qualified applicant, the qualified agricultural 
carbon sequestration credit for the taxable year is an 
amount equal to the sum of— 
‘‘(1) the carbon dioxide equivalent abatement 
credit, 
‘‘(2) the carbon dioxide equivalent sequestration 
credit, and 
‘‘(3) the early adopter credit. 
‘‘(b) CARBON DIOXIDE EQUIVALENT ABATEMENT 
CREDIT.— 
‘‘(1) IN GENERAL.—The amount of the carbon 
dioxide equivalent abatement credit for the taxable 
year shall be equal to the applicable dollar amount 
per metric ton of qualified carbon dioxide equivalent 
abatement by a qualified applicant. 
‘‘(2) QUALIFIED CARBON DIOXIDE EQUIVALENT 
ABATEMENT.—For purposes of this subsection, the 
term ‘qualified carbon dioxide equivalent abatement’ 
means the amount (not less than zero) equal to— 
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‘‘(A) the amount of carbon dioxide equiva-
lent emitted into the atmosphere by the quali-
fied applicant during the counterfactual base-
line year, minus 
‘‘(B) the amount of carbon dioxide equiva-
lent emitted into the atmosphere by such farm 
during the taxable year. 
‘‘(3) APPLICABLE DOLLAR AMOUNT.— 
‘‘(A) For purposes of this subsection, the 
applicable dollar amount shall be an amount 
equal to— 
‘‘(i) for any taxable year beginning in 
a calendar year after 2022 and before 
2027, the dollar amount established by lin-
ear interpolation between $22.66 and $50 
for each calendar year during such period, 
and 
‘‘(ii) for any taxable year beginning in 
a calendar year after 2026, an amount 
equal to the product of $50 and the infla-
tion adjustment factor determined under 
section 43(b)(3)(B) for such calendar year, 
determined by substituting ‘2025’ for 
‘1990’. 
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‘‘(B) ROUNDING.—The applicable dollar 
amount determined under subparagraph (A) 
shall be rounded to the nearest cent. 
‘‘(4) LIMITATION.—For purposes of this sub-
section, the carbon dioxide equivalent abatement 
credit shall only be allowed in each taxable year sub-
sequent to the counterfactual baseline year. 
‘‘(c) CARBON DIOXIDE EQUIVALENT SEQUESTRA-
TION CREDIT.— 
‘‘(1) IN GENERAL.—The amount of the carbon 
sequestration credit for any taxable year shall be an 
amount equal to the sum of— 
‘‘(A) the qualifying amount, plus 
‘‘(B) an amount equal to the sum of any 
carbon sequestration allotment for such taxable 
year. 
‘‘(2) QUALIFYING AMOUNT.—For purposes of 
this subsection, the term qualifying amount means— 
‘‘(A) in the case of a taxable year for 
which qualified carbon sequestration by a quali-
fied applicant is greater than zero, 10 percent 
of the applicable dollar amount per metric ton 
of such qualified carbon sequestration by such 
applicant, and 
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‘‘(B) in the case of a taxable year for 
which qualified carbon sequestration by a quali-
fied applicant is equal to or less than zero, 0 
percent of such applicable dollar amount. 
‘‘(3) APPLICABLE DOLLAR AMOUNT.— 
‘‘(A) IN GENERAL.—The applicable dollar 
amount shall be an amount equal to— 
‘‘(i) for any taxable year beginning in 
a calendar year after 2022 and before 
2027, the dollar amount established by lin-
ear interpolation between $12.83 and $35 
for each calendar year during such period, 
and 
‘‘(ii) for any taxable year beginning in 
a calendar year after 2026, an amount 
equal to the product of $35 and the infla-
tion adjustment factor for such calendar 
year determined under section 43(b)(3)(B) 
for such calendar year, determined by sub-
stituting ‘2025’ for ‘1990’. 
‘‘(B) ROUNDING.—The applicable dollar 
amount determined under paragraph (1) shall 
be rounded to the nearest cent. 
‘‘(4) CARBON SEQUESTRATION ALLOTMENT.— 
For purposes of this subsection, the term ‘carbon se-
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be sequestered in a manner consistent with the re-
quirements under this section for a period of not less 
than 10 years. 
‘‘(d) EARLY ADOPTER CREDIT.— 
‘‘(1) IN GENERAL.—The amount of the early 
adopter credit for any taxable year shall be an 
amount equal to the applicable dollar amount per 
metric ton of early adopter carbon sequestration. 
‘‘(2) EARLY
ADOPTER
CARBON
SEQUESTRA-
TION.—For purposes of this subsection, the term 
‘early adopter carbon sequestration’ means the 
amount (not less than zero) equal to— 
‘‘(A) the stock of soil organic carbon 
stored in the soil of the qualified farm during 
the taxable year, minus 
‘‘(B) the average stock of soil organic car-
bon stored in the soil of other farms in the 
county in which such qualified farm is located 
during the taxable year. 
‘‘(3) CREDIT MAY BE TAKEN ONLY ONCE.—The 
credit under this subsection may only be taken with 
respect to a qualified farm in the first year a credit 
is allowed to such farm under this section. 
‘‘(4) APPLICABLE DOLLAR AMOUNT.— 
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‘‘(A) IN GENERAL.—The applicable dollar 
amount shall be an amount equal to— 
‘‘(i) for any taxable year beginning in 
a calendar year after 2022 and before 
2027, the dollar amount established by lin-
ear interpolation between $12.83 and $35 
for each calendar year during such period, 
and 
‘‘(ii) for any taxable year beginning in 
a calendar year after 2026, an amount 
equal to the product of $35 and the infla-
tion adjustment factor for such calendar 
year determined under section 43(b)(3)(B) 
for such calendar year, determined by sub-
stituting ‘2025’ for ‘1990’. 
‘‘(B) ROUNDING.—The applicable dollar 
amount determined under paragraph (1) shall 
be rounded to the nearest cent. 
‘‘(e) QUALIFIED APPLICANT.—For purposes of this 
section, the term ‘qualified applicant’ means a farm (in-
cluding the taxpayer with operational control over seques-
tration on such farm, or a third party project developer 
or aggregator acting on the taxpayer’s behalf) which has 
been certified by the Secretary pursuant to subsection (f). 
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‘‘(f) QUALIFIED AGRICULTURAL CARBON SEQUES-
TRATION AND ABATEMENT PROGRAM.— 
‘‘(1) IN GENERAL.—Not later than 180 days 
after the date of enactment of this section, the Sec-
retary, after consultation with the Secretary of Agri-
culture, shall establish a qualified agricultural car-
bon sequestration and abatement program to con-
sider and award certifications for qualified appli-
cants eligible for credits under this section. 
‘‘(2) APPLICATION.—An applicant under this 
subsection shall submit an application containing 
such information as the Secretary may require, in-
cluding information required for the selection de-
scribed in paragraph (3). 
‘‘(3) SELECTION.—In determining which appli-
cants to certify under this subsection, the Secretary 
shall do the following: 
‘‘(A) Certify the manner and methods by 
which the taxpayer will measure the amount of 
carbon dioxide equivalent abatement and se-
questration. Such manner and methods shall be 
consistent with current best practices, with 
measured changes independently verified by the 
Secretary of Agriculture as— 
‘‘(i) real, 
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‘‘(ii) additional, 
‘‘(iii) based on a realistic and credible 
baseline, 
‘‘(iv) quantified, monitored, reported, 
and verified, 
‘‘(v) having a clear and transparent 
chain of custody, 
‘‘(vi) representing permanent emis-
sions reductions, 
‘‘(vii) assessed and mitigated against 
potential increase in emissions elsewhere, 
‘‘(viii) only counted once towards a 
mitigation obligation, and 
‘‘(ix) causing no net harm. 
‘‘(B) Assess and approve independent 
greenhouse gas crediting programs which reg-
ister projects and credits involving qualified 
farms. 
‘‘(4) 5-YEAR
CERTIFICATION.—A certification 
under paragraph (3) shall be valid for a period of 5 
years after the date such certification is issued. 
‘‘(g) COUNTERFACTUAL BASELINE YEAR.—For pur-
poses of this section, the term ‘counterfactual baseline 
year’ means the year in which the Secretary certifies a 
qualified applicant under subsection (f). 
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‘‘(h) REQUIREMENTS REGARDING CARBON DIOXIDE 
EQUIVALENT.—The credit under this section shall apply 
only with respect to carbon dioxide equivalent the abate-
ment or sequester of which is— 
‘‘(1) within the United States or a possession of 
the United States, and 
‘‘(2) measured on a qualified farm and verified 
using the methods or independent greenhouse gas 
crediting programs certified by the Secretary under 
subsection (f)(3). 
‘‘(i) REGULATIONS.—Not later than 14 months after 
the date of enactment of this section, the Secretary shall, 
after consultation with the Secretary of Agriculture, pre-
scribe such regulations and guidance as may be necessary 
or appropriate to carry out this section, including regula-
tions or guidance to— 
‘‘(1) establish the method and frequency by 
which soil samples are taken from qualified farms to 
determine the amount of carbon which is seques-
tered in the soil of such farms, 
‘‘(2) provide rules for the treatment of credits 
in cases where a qualified farm is sold or transferred 
to another person subsequent to the baseline year, 
and 
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‘‘(3) provide rules for the early adopter credit 
in subsection (d).’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 38(b) of such Code is amended by 
striking ‘‘plus’’ at the end of paragraph (37), by 
striking the period at the end of paragraph (38) and 
inserting ‘‘, plus’’, and by adding at the end the fol-
lowing new paragraph: 
‘‘(39) the qualified agricultural carbon seques-
tration credit determined under section 45AA(a).’’. 
(2) The table of sections for subpart D of part 
IV of subchapter A of chapter 1 of such Code is 
amended by inserting after the item relating to sec-
tion 45Z the following new item: 
‘‘Sec. 45AA. Qualified agricultural carbon sequestration credit.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2022. 
Æ 
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