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designated under section 305 of the Older Ameri-
cans Act of 1965. 
‘‘(2) SOCIAL ISOLATION.—The term ‘social iso-
lation’ means objectively being alone, or having few 
relationships or infrequent social contact. 
‘‘(3) 
LONELINESS.—The 
term 
‘loneliness’ 
means subjectively feeling alone, or the discrepancy 
between one’s desired level of social connection and 
one’s actual level of social connection. 
‘‘(4) SOCIAL
CONNECTION.—The term ‘social 
connection’ means the variety of ways one can con-
nect to others socially, through physical, behavioral, 
social–cognitive, and emotional channels. 
‘‘(5) COMMUNITY-BASED ORGANIZATION.—The 
term ‘community-based organization’ includes, ex-
cept as otherwise provided by the Secretary, a non-
profit community-based organization, a consortium 
of nonprofit community-based organizations, a na-
tional nonprofit organization acting as an inter-
mediary for a community-based organization, or a 
community-based organization that has a fiscal 
sponsor that allows the organization to function as 
an organization described in section 501(c)(3) of the 
Internal Revenue Code of 1986 and exempt from 
taxation under section 501(a) of such Code.’’. 
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(e) TECHNICAL AMENDMENT.—Section 2011(12)(A) 
of the Social Security Act (42 U.S.C. 1397j(12)(A)) is 
amended by striking ‘‘450b’’ and inserting ‘‘5304’’. 
SEC. 134202. APPROPRIATION FOR ASSESSMENTS. 
Out of any money in the Treasury not otherwise ap-
propriated, in addition to amounts otherwise available, 
there are appropriated to the Secretary of Health and 
Human Services $5,302,250 for each of fiscal years 2023 
through 2026 to prepare and submit to the Committee on 
Ways and Means of the House of Representatives and the 
Committee on Finance of the Senate, not later than 3 
years after the date of enactment of this Act, and at least 
once after fiscal year 2025, reports on the programs, co-
ordinating bodies, registries, and activities established or 
authorized under subtitle B of title XX of the Social Secu-
rity Act or section 6703(b) of the Patient Protection and 
Affordable Care Act (42 U.S.C. 1395i–3a), which shall as-
sess the extent to which such programs, coordinating bod-
ies, registries, and activities have improved access to, and 
the quality of, resources available to aging Americans and 
their caregivers to ultimately prevent, detect, and treat 
abuse, neglect, and exploitation, and shall include, as ap-
propriate, recommendations to Congress on funding levels 
and policy changes to help these programs, coordinating 
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bodies, registries, and activities better prevent, detect, and 
treat abuse, neglect, and exploitation of aging Americans. 
Subtitle E—Infrastructure Financ-
ing and Community Develop-
ment 
SEC. 135001. AMENDMENT OF 1986 CODE. 
Except as otherwise expressly provided, whenever in 
this subtitle an amendment or repeal is expressed in terms 
of an amendment to, or repeal of, a section or other provi-
sion, the reference shall be considered to be made to a 
section or other provision of the Internal Revenue Code 
of 1986. 
PART 1—LOW INCOME HOUSING CREDIT 
SEC. 135101. INCREASES IN STATE ALLOCATIONS. 
(a) IN GENERAL.—Section 42(h)(3)(I) is amended to 
read as follows: 
‘‘(I) INCREASE IN STATE HOUSING CREDIT 
CEILING AFTER 2021.— 
‘‘(i) IN GENERAL.—In the case of cal-
endar years 2022 through 2025, the dollar 
amounts under subclauses (I) and (II) of 
subparagraph (C)(ii) for any such calendar 
year shall be determined in accordance 
with the following table: 
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‘‘In the case of calendar year: 
The sub-
clause (I) 
amount 
shall be: 
The sub-
clause (II) 
amount 
shall be: 
2022 ........................................................................
$3.14 
$3,629,096 
2023 ........................................................................
$3.54 
$4,081,825 
2024 ........................................................................
$3.97 
$4,582,053 
2025 ........................................................................
$2.65 
$3,120,000 
‘‘(ii) INFLATION ADJUSTMENT AFTER 
2025.—In the case of calendar years after 
2025, the subclause (I) and (II) dollar 
amounts shall be the respective dollar 
amounts corresponding to calendar year 
2025 in the table under clause (i) each in-
creased by an amount equal to— 
‘‘(I) such dollar amount, multi-
plied by 
‘‘(II) the cost-of-living adjust-
ment determined under section 1(f)(3) 
for such calendar year by substituting 
‘calendar year 2024’ for ‘calendar 
year 2016’ in paragraph (A)(ii) there-
of. 
Any increase under this clause shall be 
rounded to the nearest cent in the case of 
the subclause (I) amount and the nearest 
dollar in the case of the subclause (II) 
amount.’’. 
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(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to calendar years beginning after 
December 31, 2021. 
SEC. 135102. TAX-EXEMPT BOND FINANCING REQUIRE-
MENT. 
(a) IN GENERAL.—Section 42(h)(4)(B) is amended 
to read as follows: 
‘‘(B) SPECIAL RULE WHERE A REQUIRED 
PERCENT
OF
BUILDINGS
IS
FINANCED
WITH 
TAX-EXEMPT
BONDS
SUBJECT
TO
VOLUME 
CAP.—For purposes of subparagraph (A), para-
graph (1) shall not apply to any portion of the 
credit allowable under subsection (a) with re-
spect to a building if— 
‘‘(i) 50 percent or more of the aggre-
gate basis of any such building and the 
land on which the building is located is fi-
nanced by any obligation described in sub-
paragraph (A), or 
‘‘(ii) 25 percent or more of the aggre-
gate basis of such building and the land on 
which the building is located is financed by 
any obligation described in subparagraph 
(A) and issued in calendar year 2022, 
2023, 2024, 2025, or 2026.’’. 
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(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to any building some portion of 
which, or of the land on which the building is located, is 
financed by an obligation which is described in section 
42(h)(4)(A) and which is part of an issue the issue date 
of which is after December 31, 2021. 
SEC. 135103. BUILDINGS DESIGNATED TO SERVE EX-
TREMELY LOW-INCOME HOUSEHOLDS. 
(a) RESERVED STATE ALLOCATION.— 
(1) IN GENERAL.—Section 42(h) is amended— 
(A) by redesignating paragraphs (6), (7), 
and (8) as paragraphs (7), (8), and (9), respec-
tively, and 
(B) by inserting after paragraph (5) the 
following new paragraph: 
‘‘(6) PORTION
OF
STATE
CEILING
SET-ASIDE 
FOR PROJECTS DESIGNATED TO SERVE EXTREMELY 
LOW-INCOME HOUSEHOLDS.— 
‘‘(A) IN
GENERAL.—Not more than 92 
percent of the portion of the State housing 
credit ceiling amount described in paragraph 
(3)(C)(ii) for any State for any calendar year 
shall be allocated to buildings other than build-
ings described in subparagraph (B). 
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‘‘(B) BUILDINGS DESCRIBED.—A building 
is described in this subparagraph if 20 percent 
or more of the residential units in such building 
are rent-restricted (determined as if the im-
puted income limitation applicable to such units 
were 30 percent of area median gross income) 
and are designated by the taxpayer for occu-
pancy by households the aggregate household 
income of which does not exceed the greater 
of— 
‘‘(i) 30 percent of area median gross 
income, or 
‘‘(ii) 100 percent of an amount equal 
to the Federal poverty line (within the 
meaning of section 36B(d)(3)). 
‘‘(C) EXCEPTION.—A building shall not be 
treated as described in subparagraph (B) if 
such building is a part of a qualified low-income 
housing project elected by the taxpayer to meet 
the requirements of subsection (f)(1)(C). 
‘‘(D) STATE
MAY
NOT
OVERRIDE
SET- 
ASIDE.—Nothing in subparagraph (F) of para-
graph (3) shall be construed to permit a State 
not to comply with subparagraph (A) of this 
paragraph.’’. 
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(2) 
CONFORMING
AMENDMENT.—Section 
42(b)(4)(C) is amended by striking ‘‘(h)(7)’’ and in-
serting ‘‘(h)(8)’’. 
(b) INCREASE IN CREDIT.—Paragraph (5) of section 
42(d) is amended by adding at the end the following new 
subparagraph: 
‘‘(C) INCREASE IN CREDIT FOR PROJECTS 
DESIGNATED
TO
SERVE
EXTREMELY
LOW-IN-
COME HOUSEHOLDS.— 
‘‘(i) IN GENERAL.—In the case of any 
building— 
‘‘(I) which is described in sub-
section (h)(6)(B), and 
‘‘(II) which is designated by the 
housing credit agency as requiring the 
increase in credit under this subpara-
graph in order for such building to be 
financially feasible as part of a quali-
fied low-income housing project, 
subparagraph (B) shall not apply to the 
portion of such building which is comprised 
of such units, and the eligible basis of such 
portion of the building shall be 150 per-
cent of such basis determined without re-
gard to this subparagraph. 
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‘‘(ii) ALLOCATION RULES APPLICABLE 
TO PROJECTS TO WHICH CLAUSE (i) AP-
PLIES.— 
‘‘(I) STATE
HOUSING
CREDIT 
CEILING.—For any calendar year, the 
housing credit agency shall not allo-
cate more than 13 percent of the por-
tion of the State housing credit ceiling 
amount 
described 
in 
subsection 
(h)(3)(C)(ii) to buildings to which 
clause (i) applies, and 
‘‘(II) PRIVATE
ACTIVITY
BOND 
VOLUME CAP.—In the case of projects 
financed by tax-exempt bonds as de-
scribed in subsection (h)(4), for any 
calendar year, the State shall not 
issue more than 8 percent of the pri-
vate activity bond volume cap as de-
scribed in section 146(d)(1) to build-
ings to which clause (i) applies.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to allocations of housing credit dol-
lar amount after December 31, 2021, and to buildings 
that are described in section 42(h)(4)(B) taking into ac-
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count only obligations that are part of an issue the issue 
date of which is after December 31, 2021. 
SEC. 135104. REPEAL OF QUALIFIED CONTRACT OPTION. 
(a) TERMINATION OF OPTION FOR CERTAIN BUILD-
INGS.— 
(1) IN
GENERAL.—Subclause (II) of section 
42(h)(7)(E)(i), as redesignated by section 135403, is 
amended by inserting ‘‘in the case of a building de-
scribed in clause (iii),’’ before ‘‘on the last day’’. 
(2) 
BUILDINGS
DESCRIBED.—Subparagraph 
(E) of section 42(h)(7), as so redesignated, is 
amended by adding at the end the following new 
clause: 
‘‘(iii) 
BUILDINGS
DESCRIBED.—A 
building described in this clause is a build-
ing— 
‘‘(I) which received its allocation 
of housing credit dollar amount before 
January 1, 2022, or 
‘‘(II) in the case of a building 
any portion of which is financed as 
described in paragraph (4), and which 
received before January 1, 2022, 
under the rules of paragraphs (1) and 
(2) of subsection (m), a determination 
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from the issuer of the tax-exempt 
bonds or the housing credit agency 
that the building would be eligible 
under the qualified allocation plan to 
receive an allocation of housing credit 
dollar amount or that the credits to be 
earned are necessary for financial fea-
sibility of the project and its viability 
as a qualified low-income housing 
project throughout the credit period.’’. 
(b) RULES RELATING TO EXISTING PROJECTS.— 
Subparagraph (F) of section 42(h)(7), as redesignated by 
section 135403, is amended by striking ‘‘the nonlow-in-
come portion’’ and all that follows and inserting ‘‘the 
nonlow-income portion and the low-income portion of the 
building for fair market value (determined by the housing 
credit agency by taking into account the rent restrictions 
required for the low-income portion of the building to con-
tinue to meet the standards of paragraphs (1) and (2) of 
subsection (g)). The Secretary shall prescribe such regula-
tions as may be necessary or appropriate to carry out this 
paragraph.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Paragraph (7) of section 42(h), as redesig-
nated by section 135403, is amended by striking 
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subparagraph (G) and by redesignating subpara-
graphs (H), (I), (J), and (K) as subparagraphs (G), 
(H), (I), and (J), respectively. 
(2) Subclause (II) of section 42(h)(7)(E)(i), as 
so redesignated and as amended by subsection (a), 
is further amended by striking ‘‘subparagraph (I)’’ 
and inserting ‘‘subparagraph (H)’’. 
(d) EFFECTIVE DATES.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall take effect on the date of the enactment of this 
Act. 
(2) SUBSECTION (b).—The amendments made 
by subsection (b) shall apply to buildings with re-
spect to which a written request described in section 
42(h)(7)(H) of the Internal Revenue Code of 1986, 
as redesignated by section 135403 and subsection 
(c), is submitted after the date of the enactment of 
this Act. 
SEC. 
135105. 
MODIFICATION 
AND 
CLARIFICATION 
OF 
RIGHTS RELATING TO BUILDING PURCHASE. 
(a) MODIFICATION OF RIGHT OF FIRST REFUSAL.— 
(1) IN GENERAL.—Subparagraph (A) of section 
42(i)(7) is amended by striking ‘‘a right of 1st re-
fusal’’ and inserting ‘‘an option’’. 
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(2) CONFORMING AMENDMENT.—The heading 
of paragraph (7) of section 42(i) is amended by 
striking ‘‘RIGHT
OF
1ST
REFUSAL’’ and inserting 
‘‘OPTION’’. 
(b) CLARIFICATION WITH RESPECT TO RIGHT OF 
FIRST REFUSAL AND PURCHASE OPTIONS.— 
(1) PURCHASE OF PARTNERSHIP INTEREST.— 
(A) IN
GENERAL.—Subparagraph (A) of 
section 42(i)(7), as amended by subsection (a), 
is amended by striking ‘‘the property’’ and in-
serting ‘‘the property or all of the partnership 
interests (other than interests of the person ex-
ercising such option or a related party thereto 
(within the meaning of section 267(b) or 
707(b)(1))) relating to the property’’. 
(B) APPLICATION
TO S CORPORATIONS 
AND
OTHER
PASS-THROUGH
ENTITIES.—Sub-
paragraph (A) of section 42(i)(7) is amended 
by adding at the end the following: ‘‘Except as 
provided by the Secretary, the rules of this 
paragraph shall apply to S corporations and 
other pass-through entities in the same manner 
as such rules apply to partnerships.’’ 
(C) CONFORMING AMENDMENT.—Subpara-
graph (B) of section 42(i)(7) is amended by 
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adding at the end the following: ‘‘In the case of 
a purchase of all of the partnership interests, 
the minimum purchase price under this sub-
paragraph shall be an amount not less than the 
sum of the interests’ shares of the amount 
which would be determined with respect to the 
property under this subparagraph without re-
gard to this sentence.’’. 
(2) PROPERTY INCLUDES ASSETS RELATING TO 
THE BUILDING.—Paragraph (7) of section 42(i) is 
amended by adding at the end the following new 
subparagraph: 
‘‘(C) PROPERTY.—For purposes of sub-
paragraph (A), the term ‘property’ may include 
all or any of the assets held for the develop-
ment, operation, or maintenance of a build-
ing.’’. 
(3) EXERCISE OF RIGHT OF FIRST REFUSAL 
AND
PURCHASE
OPTIONS.—Subparagraph (A) of 
section 42(i)(7), as amended by subsection (a) and 
paragraph (1)(A), is amended by adding at the end 
the following: ‘‘For purposes of determining whether 
an option, including a right of first refusal, to pur-
chase property or all of the partnership interests 
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holding (directly or indirectly) such property is de-
scribed in the preceding sentence— 
‘‘(i) such option or right of first re-
fusal shall be exercisable with or without 
the approval of any owner of the project 
(including any partner, member, or affili-
ated organization of such an owner), and 
‘‘(ii) a right of first refusal shall be 
exercisable in response to any offer to pur-
chase the property or all of the partnership 
interests, including an offer by a related 
party.’’. 
(c) OTHER CONFORMING AMENDMENT.—Subpara-
graph (B) of section 42(i)(7), as amended by subsection 
(b), is amended by striking ‘‘the sum of’’ and all that fol-
lows through ‘‘application of clause (ii).’’ and inserting the 
following: ‘‘the principal amount of outstanding indebted-
ness secured by the building (other than indebtedness in-
curred within the 5-year period ending on the date of the 
sale to the tenants).’’. 
(d) EFFECTIVE DATES.— 
(1) MODIFICATION
OF
RIGHT
OF
FIRST
RE-
FUSAL.—The amendments made by subsections (a) 
and (c) shall apply to agreements entered into or 
amended after the date of the enactment of this Act. 
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(2) CLARIFICATION.—The amendments made 
by subsection (b) shall apply to agreements among 
the owners of the project (including partners, mem-
bers, and their affiliated organizations) and persons 
described in section 42(i)(7)(A) of the Internal Rev-
enue Code of 1986 entered into before, on, or after 
the date of the enactment of this Act. 
(3) NO EFFECT ON AGREEMENTS.—None of the 
amendments made by this section is intended to su-
persede express language in any agreement with re-
spect to the terms of a right of first refusal or op-
tion permitted by section 42(i)(7) of the Internal 
Revenue Code of 1986 in effect on the date of the 
enactment of this Act. 
PART 2—NEIGHBORHOOD HOMES INVESTMENT 
ACT 
SEC. 135201. NEIGHBORHOOD HOMES CREDIT. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 is amended by inserting after sec-
tion 42 the following new section: 
‘‘SEC. 42A. NEIGHBORHOOD HOMES CREDIT. 
‘‘(a) ALLOWANCE OF CREDIT.—For purposes of sec-
tion 38, the neighborhood homes credit determined under 
this section for the taxable year is, with respect to each 
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qualified residence sold by the taxpayer during such tax-
able year in an affordable sale, the lesser of— 
‘‘(1) the excess (if any) of— 
‘‘(A) the reasonable development costs paid 
or incurred by the taxpayer with respect to such 
qualified residence, over 
‘‘(B) the sale price of such qualified resi-
dence (reduced by any reasonable expenses paid 
or incurred by the taxpayer in connection with 
such sale), or 
‘‘(2) 35 percent of the lesser of— 
‘‘(A) the eligible development costs paid or 
incurred by the taxpayer with respect to such 
qualified residence, or 
‘‘(B) 80 percent of the national median 
sale price for new homes (as determined pursu-
ant to the most recent census data available as 
of the date on which the neighborhood homes 
credit agency makes an allocation for the quali-
fied project). 
‘‘(b) DEVELOPMENT COSTS.—For purposes of this 
section— 
‘‘(1) REASONABLE DEVELOPMENT COSTS.— 
‘‘(A) IN GENERAL.—The term ‘reasonable 
development costs’ means amounts paid or in-
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curred for the acquisition of buildings and land, 
construction, substantial rehabilitation, demoli-
tion of structures, or environmental remedi-
ation, to the extent that the neighborhood 
homes credit agency determines that such 
amounts meet the standards specified pursuant 
to subsection (f)(1)(C) (as of the date on which 
construction or substantial rehabilitation is sub-
stantially complete, as determined by such 
agency) and are necessary to ensure the finan-
cial feasibility of such qualified residence. 
‘‘(B) CONSIDERATIONS IN MAKING DETER-
MINATION.—In making the determination under 
subparagraph (A), the neighborhood homes 
credit agency shall consider— 
‘‘(i) the sources and uses of funds and 
the total financing, 
‘‘(ii) any proceeds or receipts gen-
erated or expected to be generated by rea-
son of tax benefits, and 
‘‘(iii) the reasonableness of the devel-
opmental costs and fees. 
‘‘(2) ELIGIBLE
DEVELOPMENT
COSTS.—The 
term ‘eligible development costs’ means the amount 
which would be reasonable development costs if the 
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amounts taken into account as paid or incurred for 
the acquisition of buildings and land did not exceed 
75 percent of such costs determined without regard 
to any amount paid or incurred for the acquisition 
of buildings and land. 
‘‘(3) 
SUBSTANTIAL
REHABILITATION.—The 
term ‘substantial rehabilitation’ means amounts paid 
or incurred for rehabilitation of a qualified residence 
if such amounts exceed the greater of— 
‘‘(A) $20,000, or 
‘‘(B) 20 percent of the amounts paid or in-
curred by the taxpayer for the acquisition of 
buildings and land with respect to such quali-
fied residence. 
‘‘(4) CONSTRUCTION
AND
REHABILITATION 
ONLY AFTER ALLOCATION TAKEN INTO ACCOUNT.— 
‘‘(A) IN GENERAL.—The terms ‘reasonable 
development costs’ and ‘eligible development 
costs’ shall not include any amount paid or in-
curred before the date on which an allocation is 
made to the taxpayer under subsection (e) with 
respect to the qualified project of which the 
qualified residence is part unless such amount 
is paid or incurred for the acquisition of build-
ings or land. 
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‘‘(B) LAND
AND
BUILDING
ACQUISITION 
COSTS.—Amounts paid or incurred for the ac-
quisition of buildings or land shall be included 
under paragraph (A) only if paid or incurred 
not more than 3 years before the date on which 
the allocation referred to in subparagraph (A) 
is made. If the taxpayer acquired any building 
or land from an entity (or any related party to 
such entity) that holds an ownership interest in 
the taxpayer, then such entity must also have 
acquired such property within such 3-year pe-
riod, and the acquisition cost included under 
subparagraph (A) with respect to the taxpayer 
shall not exceed the amount such entity paid or 
incurred to acquire such property. 
‘‘(c) QUALIFIED RESIDENCE.—For purposes of this 
section— 
‘‘(1) IN GENERAL.—The term ‘qualified resi-
dence’ means a residence that— 
‘‘(A) is real property affixed on a perma-
nent foundation, 
‘‘(B) is— 
‘‘(i) a house which is comprised of 4 
or fewer residential units, 
‘‘(ii) a condominium unit, or 
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‘‘(iii) a house or an apartment owned 
by a cooperative housing corporation (as 
defined in section 216(b)), 
‘‘(C) is part of a qualified project with re-
spect to the neighborhood homes credit agency 
has made an allocation under subsection (e), 
and 
‘‘(D) is located in a qualified census tract 
(determined as of the date of such allocation). 
‘‘(2) QUALIFIED CENSUS TRACT.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
census tract’ means a census tract— 
‘‘(i) which— 
‘‘(I) has a median family income 
which does not exceed 80 percent of 
the median family income for the ap-
plicable area, 
‘‘(II) has a poverty rate that is 
not less than 130 percent of the pov-
erty rate of the applicable area, and 
‘‘(III) has a median value for 
owner-occupied homes that does not 
exceed the median value for owner-oc-
cupied homes in the applicable area, 
‘‘(ii) which— 
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‘‘(I) is located in a city which has 
a population of not less than 50,000 
and such city has a poverty rate that 
is not less than 150 percent of the 
poverty rate of the applicable area, 
‘‘(II) has a median family income 
which does not exceed the median 
family income for the applicable area, 
and 
‘‘(III) has a median value for 
owner-occupied homes that does not 
exceed 80 percent of the median value 
for owner-occupied homes in the ap-
plicable area, 
‘‘(iii) which— 
‘‘(I) is located in a nonmetropoli-
tan county, 
‘‘(II) has a median family income 
which does not exceed the median 
family income for the applicable area, 
and 
‘‘(III) has been designated by a 
neighborhood homes credit agency 
under this clause, or 
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‘‘(iv) which is not otherwise a quali-
fied census tract and is located in a dis-
aster 
area 
(as 
defined 
in 
section 
7508A(d)(3)), but only with respect to 
credits allocated in any period during 
which the President of the United States 
has determined that such area warrants in-
dividual or individual and public assistance 
by the Federal Government under the Rob-
ert T. Stafford Disaster Relief and Emer-
gency Assistance Act. 
‘‘(B) APPLICABLE AREA.—The term ‘appli-
cable area’ means— 
‘‘(i) in the case of a metropolitan cen-
sus tract, the metropolitan area in which 
such census tract is located, and 
‘‘(ii) in the case of a census tract 
other than a census tract described in 
clause (i), the State. 
‘‘(d) AFFORDABLE SALE.—For purposes of this sec-
tion— 
‘‘(1) IN GENERAL.—The term ‘affordable sale’ 
means a sale to a qualified homeowner of a qualified 
residence that the neighborhood homes credit agency 
certifies as meeting the standards promulgated 
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‘‘(B) whose family income (determined as 
of the date that a binding contract for the af-
fordable sale of such residence is entered into) 
is 140 percent or less of the median family in-
come for the applicable area in which the quali-
fied residence is located. 
‘‘(e) CREDIT CEILING AND ALLOCATIONS.— 
‘‘(1) CREDIT LIMITED BASED ON ALLOCATIONS 
TO QUALIFIED PROJECTS.— 
‘‘(A) IN
GENERAL.—The credit allowed 
under subsection (a) to any taxpayer for any 
taxable year with respect to one or more quali-
fied residences which are part of the same 
qualified project shall not exceed the excess (if 
any) of— 
‘‘(i) the amount allocated by the 
neighborhood homes credit agency under 
this paragraph to such taxpayer with re-
spect to such qualified project, over 
‘‘(ii) the aggregate amount of credit 
allowed under subsection (a) to such tax-
payer with respect to qualified residences 
which are a part of such qualified project 
for all prior taxable years. 
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‘‘(B) DEADLINE
FOR
COMPLETION.—No 
credit shall be allowed under subsection (a) 
with respect to any qualified residence unless 
the affordable sale of such residence is during 
the 5-year period beginning on the date of the 
allocation to the qualified project of which such 
residence is a part (or, in the case of a qualified 
residence to which subsection (i) applies, the re-
habilitation of such residence is completed dur-
ing such 5-year period). 
‘‘(2) LIMITATIONS ON ALLOCATIONS TO QUALI-
FIED PROJECTS.— 
‘‘(A) ALLOCATIONS
LIMITED
BY
STATE 
NEIGHBORHOOD HOMES CREDIT CEILING.—The 
aggregate amount allocated to taxpayers with 
respect to qualified projects by the neighbor-
hood homes credit agency of any State for any 
calendar year shall not exceed the State neigh-
borhood homes credit amount of such State for 
such calendar year. 
‘‘(B) SET-ASIDE FOR CERTAIN PROJECTS 
INVOLVING QUALIFIED NONPROFIT ORGANIZA-
TIONS.—Rules similar to the rules of section 
42(h)(5) shall apply for purposes of this sec-
tion. 
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‘‘(3) DETERMINATION
OF
STATE
NEIGHBOR-
HOOD HOMES CREDIT CEILING.— 
‘‘(A) IN GENERAL.—The State neighbor-
hood homes credit amount for a State for a cal-
endar year is an amount equal to the sum of— 
‘‘(i) the greater of— 
‘‘(I) the product of $3 ($6 in the 
case of calendar year 2025), multi-
plied by the State population (deter-
mined in accordance with section 
146(j)), or 
‘‘(II) $4,000,000 ($8,000,000 in 
the case of calendar year 2025), and 
‘‘(ii) any amount previously allocated 
to any taxpayer with respect to any quali-
fied project by the neighborhood homes 
credit agency of such State which can no 
longer be allocated to any qualified resi-
dence because the 5-year period described 
in paragraph (1)(B) expires during cal-
endar year. 
‘‘(B) 
TERMINATION
OF
ADDITIONAL 
AMOUNTS.—The amount determined under sub-
paragraph (A)(i) shall be zero with respect to 
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any calendar year beginning after December 31, 
2025. 
‘‘(C) 3-YEAR CARRYFORWARD OF UNUSED 
LIMITATION.—The State neighborhood homes 
credit amount for a State for a calendar year 
shall be increased by the excess (if any) of the 
State neighborhood homes credit amount for 
such State for the preceding calendar year over 
the aggregate amount allocated by the neigh-
borhood homes credit agency of such State dur-
ing such preceding calendar year. Any amount 
carried forward under the preceding sentence 
shall not be carried past the third calendar year 
after the calendar year in which such credit 
amount originally arose, determined on a first- 
in, first-out basis. 
‘‘(f) RESPONSIBILITIES OF NEIGHBORHOOD HOMES 
CREDIT AGENCIES.— 
‘‘(1) IN GENERAL.—Notwithstanding subsection 
(e), the State neighborhood homes credit dollar 
amount shall be zero for a calendar year unless the 
neighborhood homes credit agency of the State— 
‘‘(A) allocates such amount pursuant to a 
qualified allocation plan of the neighborhood 
homes credit agency, 
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‘‘(B) allocates not more than 20 percent of 
amounts allocated in the previous year (or for 
allocations made in 2022, not more than 20 
percent of the neighborhood homes credit ceil-
ing for such year) to projects with respect to 
qualified residences which— 
‘‘(i) are located in census tracts de-
scribed 
in 
subsection 
(c)(2)(A)(iii), 
(c)(2)(A)(iv), (i)(5), or 
‘‘(ii) are not located in a qualified 
census tract but meet the requirements of 
(i)(8), 
‘‘(C) promulgates standards with respect 
to reasonable qualified development costs and 
fees, 
‘‘(D) promulgates standards with respect 
to construction quality, 
‘‘(E) in the case of any neighborhood 
homes credit agency which makes an allocation 
to a qualified project which includes any quali-
fied residence to which subsection (i) applies, 
promulgates standards with respect to pro-
tecting the owners of such residences, including 
the capacity of such owners to pay rehabilita-
tion costs not covered by the credit provided by 
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this section and providing for the disclosure to 
such owners of their rights and responsibilities 
with respect to the rehabilitation of such resi-
dences, and 
‘‘(F) submits to the Secretary (at such 
time and in such manner as the Secretary may 
prescribe) an annual report specifying— 
‘‘(i) the amount of the neighborhood 
homes credits allocated to each qualified 
project for the previous year, 
‘‘(ii) with respect to each qualified 
residence completed in the preceding cal-
endar year— 
‘‘(I) the census tract in which 
such qualified residence is located, 
‘‘(II) with respect to the qualified 
project that includes such qualified 
residence, the year in which such 
project received an allocation under 
this section, 
‘‘(III) whether such qualified res-
idence was new, substantially rehabili-
tated and sold to a qualified home-
owner, or substantially rehabilitated 
pursuant to subsection (i), 
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‘‘(IV) the eligible development 
costs of such qualified residence, 
‘‘(V) the amount of the neighbor-
hood homes credit with respect to 
such qualified residence, 
‘‘(VI) the sales price of such 
qualified residence, if applicable, and 
‘‘(VII) the family income of the 
qualified homeowner (expressed as a 
percentage of the applicable area me-
dian family income for the location of 
the qualified residence), and 
‘‘(iii) such other information as the 
Secretary may require. 
‘‘(2) QUALIFIED ALLOCATION PLAN.—For pur-
poses of this subsection, the term ‘qualified alloca-
tion plan’ means any plan which— 
‘‘(A) sets forth the selection criteria to be 
used to prioritize qualified projects for alloca-
tions of State neighborhood homes credit dollar 
amounts, including— 
‘‘(i) the need for new or substantially 
rehabilitated owner-occupied homes in the 
area addressed by the project, 
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‘‘(ii) the expected contribution of the 
project to neighborhood stability and revi-
talization, including the impact on neigh-
borhood residents, 
‘‘(iii) the capability and prior perform-
ance of the project sponsor, and 
‘‘(iv) the likelihood the project will re-
sult in long-term homeownership, 
‘‘(B) has been made available for public 
comment, and 
‘‘(C) provides a procedure that the neigh-
borhood homes credit agency (or any agent or 
contractor of such agency) shall follow for pur-
poses of— 
‘‘(i) identifying noncompliance with 
any provisions of this section, and 
‘‘(ii) notifying the Internal Revenue 
Service of any such noncompliance of 
which the agency becomes aware. 
‘‘(g) REPAYMENT.— 
‘‘(1) IN GENERAL.— 
‘‘(A) SOLD DURING 5-YEAR PERIOD.—If a 
qualified residence is sold during the 5-year pe-
riod beginning immediately after the affordable 
sale of such qualified residence referred to in 
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subsection (a), the seller (with respect to the 
sale during such 5-year period) shall transfer 
an amount equal to the repayment amount to 
the relevant neighborhood homes credit agency. 
‘‘(B) USE OF REPAYMENTS.—A neighbor-
hood homes credit agency shall use any amount 
received pursuant to subparagraph (A) only for 
purposes of qualified projects. 
‘‘(2) REPAYMENT AMOUNT.—For purposes of 
paragraph (1)(A), the repayment amount is an 
amount equal to 50 percent of the gain from the 
sale to which the repayment relates, reduced by 20 
percent for each year of the 5-year period referred 
to in paragraph (1)(A) which ends before the date 
of such sale. 
‘‘(3) LIEN
FOR
REPAYMENT
AMOUNT.—A 
neighborhood homes credit agency receiving an allo-
cation under this section shall place a lien on each 
qualified residence that is built or rehabilitated as 
part of a qualified project for an amount such agen-
cy deems necessary to ensure potential repayment 
pursuant to paragraph (1)(A). 
‘‘(4) DENIAL OF DEDUCTIONS IF CONVERTED 
TO RENTAL HOUSING.—If, during the 5-year period 
described in paragraph (1), an individual who owns 
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a qualified residence fails to use such qualified resi-
dence as such individual’s principal residence for any 
period of time, no deduction shall be allowed for ex-
penses paid or incurred by such individual with re-
spect to renting, during such period of time, such 
qualified residence. 
‘‘(5) WAIVER.—The neighborhood homes credit 
agency may waive the repayment required under 
paragraph (1)(A) in the case of homeowner experi-
encing a hardship. 
‘‘(h) OTHER DEFINITIONS AND SPECIAL RULES.— 
For purposes of this section— 
‘‘(1) NEIGHBORHOOD
HOMES
CREDIT
AGEN-
CY.—The term ‘neighborhood homes credit agency’ 
means the agency designated by the governor of a 
State as the neighborhood homes credit agency of 
the State. 
‘‘(2) QUALIFIED PROJECT.—The term ‘qualified 
project’ means a project that a neighborhood homes 
credit agency certifies will build or substantially re-
habilitate one or more qualified residences. 
‘‘(3) DETERMINATIONS OF FAMILY INCOME.— 
Rules similar to the rules of section 143(f)(2) shall 
apply for purposes of this section. 
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‘‘(4) POSSESSIONS TREATED AS STATES.—The 
term ‘State’ includes the District of Columbia and 
the possessions of the United States. 
‘‘(5) SPECIAL RULES RELATED TO CONDOMIN-
IUMS AND COOPERATIVE HOUSING CORPORATIONS.— 
‘‘(A) DETERMINATION OF DEVELOPMENT 
COSTS.—In the case of a qualified residence de-
scribed in clause (ii) or (iii) of subsection 
(c)(1)(A), the reasonable development costs and 
eligible development costs of such qualified resi-
dence shall be an amount equal to such costs, 
respectively, of the entire condominium or coop-
erative housing property in which such qualified 
residence is located, multiplied by a fraction— 
‘‘(i) the numerator of which is the 
total floor space of such qualified resi-
dence, and 
‘‘(ii) the denominator of which is the 
total floor space of all residences within 
such property. 
‘‘(B) TENANT-STOCKHOLDERS OF COOPER-
ATIVE
HOUSING
CORPORATIONS
TREATED
AS 
OWNERS.—In the case of a cooperative housing 
corporation (as such term is defined in section 
216(b)), a tenant-stockholder shall be treated 
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as owning the house or apartment which such 
person is entitled to occupy. 
‘‘(6) RELATED PARTY SALES NOT TREATED AS 
AFFORDABLE SALES.— 
‘‘(A) IN GENERAL.—A sale between related 
persons shall not be treated as an affordable 
sale. 
‘‘(B) RELATED
PERSONS.—For purposes 
of this paragraph, a person (in this subpara-
graph referred to as the ‘related person’) is re-
lated to any person if the related person bears 
a relationship to such person specified in sec-
tion 267(b) or 707(b)(1), or the related person 
and such person are engaged in trades or busi-
nesses under common control (within the mean-
ing of subsections (a) and (b) of section 52). 
For purposes of the preceding sentence, in ap-
plying section 267(b) or 707(b)(1), ‘10 percent’ 
shall be substituted for ‘50 percent’. 
‘‘(7) INFLATION ADJUSTMENT.— 
‘‘(A) IN GENERAL.—In the case of a cal-
endar year after 2022, the dollar amounts in 
subsections 
(b)(3)(A), 
(e)(3)(A)(i)(I), 
(e)(3)(A)(i)(II), and (i)(2)(C) shall each be in-
creased by an amount equal to— 
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‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the cost-of-living adjustment de-
termined under section 1(f)(3) for such 
calendar year by substituting ‘calendar 
year 2021’ for ‘calendar year 2016’ in sub-
paragraph (A)(ii) thereof. 
‘‘(B) ROUNDING.— 
‘‘(i) In the case of the dollar amounts 
in subsection (b)(3)(A) and (i)(2)(C), any 
increase under paragraph (1) which is not 
a multiple of $1,000 shall be rounded to 
the nearest multiple of $1,000. 
‘‘(ii) In the case of the dollar amount 
in subsection (e)(3)(A)(i)(I), any increase 
under paragraph (1) which is not a mul-
tiple of $0.01 shall be rounded to the near-
est multiple of $0.01. 
‘‘(iii) In the case of the dollar amount 
in subsection (e)(3)(A)(i)(II), any increase 
under paragraph (1) which is not a mul-
tiple of $100,000 shall be rounded to the 
nearest multiple of $100,000. 
‘‘(8) REPORT.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
annually issue a report, to be made available to 
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the public, which contains the information sub-
mitted pursuant to subsection (f)(1)(F). 
‘‘(B) DE-IDENTIFICATION.—The Secretary 
shall ensure that any information made public 
pursuant to paragraph (1) excludes any infor-
mation that would allow for the identification of 
qualified homeowners. 
‘‘(9) LIST
OF
QUALIFIED
CENSUS
TRACTS.— 
The Secretary of Housing and Urban Development 
shall, for each year, make publicly available a list of 
qualified census tracts under— 
‘‘(A) on a combined basis, clauses (i) and 
(ii) of subsection (c)(2)(A), 
‘‘(B) clause (iii) of such subsection, and 
‘‘(C) subsection (i)(5)(A). 
‘‘(i) APPLICATION OF CREDIT WITH RESPECT TO 
OWNER-OCCUPIED REHABILITATIONS.— 
‘‘(1) IN GENERAL.—In the case of a qualified 
rehabilitation by the taxpayer of any qualified resi-
dence which is owned (as of the date that the writ-
ten binding contract referred to in paragraph (3) is 
entered into) by a specified homeowner, the rules of 
paragraphs (2) through (7) shall apply. 
‘‘(2) ALTERNATIVE CREDIT DETERMINATION.— 
In the case of any qualified residence described in 
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paragraph (1), the neighborhood homes credit deter-
mined under subsection (a) with respect to such res-
idence shall (in lieu of any credit otherwise deter-
mined under subsection (a) with respect to such res-
idence) be allowed in the taxable year during which 
the qualified rehabilitation is completed (as deter-
mined by the neighborhood homes credit agency) 
and shall be equal to the least of— 
‘‘(A) the excess (if any) of— 
‘‘(i) the amounts paid or incurred by 
the taxpayer for the qualified rehabilitation 
of the qualified residence to the extent that 
such amounts are certified by the neigh-
borhood homes credit agency (at the time 
of the completion of such rehabilitation) as 
meeting the standards specified pursuant 
to subsection (f)(1)(C), over 
‘‘(ii) any amounts paid to such tax-
payer for such rehabilitation, 
‘‘(B) 50 percent of the amounts described 
in subparagraph (A)(i), or 
‘‘(C) $50,000. 
‘‘(3) QUALIFIED REHABILITATION.— 
‘‘(A) IN GENERAL.—For purposes of this 
subsection, the term ‘qualified rehabilitation’ 
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means a rehabilitation or reconstruction per-
formed pursuant to a written binding contract 
between the taxpayer and the qualified home-
owner if the amount paid or incurred by the 
taxpayer in the performance of such rehabilita-
tion or reconstruction exceeds the dollar 
amount in effect under subsection (b)(3)(A). 
‘‘(B) APPLICATION OF LIMITATION TO EX-
PENSES
PAID
OR
INCURRED
AFTER
ALLOCA-
TION.—A rule similar to the rule of section 
(b)(4) shall apply for purposes of this sub-
section. 
‘‘(4) SPECIFIED
HOMEOWNER.—For purposes 
of this subsection, the term ‘qualified homeowner’ 
means, with respect to a qualified residence, an indi-
vidual— 
‘‘(A) who owns and uses such qualified res-
idence as the principal residence of such indi-
vidual as of the date that the written binding 
contract referred to in paragraph (3) is entered 
into, and 
‘‘(B) whose family income (determined as 
of such date) does not exceed the median family 
income for the applicable area (with respect to 
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the census tract in which the qualified residence 
is located). 
‘‘(5) ADDITIONAL CENSUS TRACTS IN WHICH 
OWNER-OCCUPIED RESIDENCES MAY BE LOCATED.— 
In the case of any qualified residence described in 
paragraph (1), the term ‘qualified census tract’ in-
cludes any census tract which— 
‘‘(A) meets the requirements of subsection 
(c)(2)(A)(i) without regard to subclause (III) 
thereof, and 
‘‘(B) is designated by the neighborhood 
homes credit agency for purposes of this para-
graph. 
‘‘(6) MODIFICATION OF REPAYMENT REQUIRE-
MENT.—In the case of any qualified residence de-
scribed in paragraph (1), subsection (g) shall be ap-
plied by beginning the 5-year period otherwise de-
scribed therein on the date on which the qualified 
owner acquired the residence. 
‘‘(7) RELATED PARTIES.—Paragraph (1) shall 
not apply if the taxpayer is the owner of the quali-
fied residence described in paragraph (1) or is re-
lated (within the meaning of subsection (h)(6)(B)) 
to such owner. 
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‘‘(8) PYRRHOTITE REMEDIATION.—The require-
ment of subsection (c)(1)(C) shall not apply to a 
qualified rehabilitation under this subsection of a 
qualified residence that is documented by an engi-
neer’s report and core testing to have a foundation 
that is adversely impacted by pyrrhotite or other 
iron sulfide minerals. 
‘‘(j) REGULATIONS.—The Secretary shall prescribe 
such regulations as may be necessary or appropriate to 
carry out the purposes of this section, including regula-
tions that prevent avoidance of the rules, and abuse of 
the purposes, of this section.’’. 
(b) CREDIT ALLOWED AS PART OF GENERAL BUSI-
NESS CREDIT.—Section 38(b), as amended by the pre-
ceding provisions of this Act, is amended by striking 
‘‘plus’’ at the end of paragraph (34), by striking the period 
at the end of paragraph (35) and inserting ‘‘, plus’’, and 
by adding at the end the following new paragraph: 
‘‘(36) the neighborhood homes credit deter-
mined under section 42A(a),’’. 
(c) CREDIT ALLOWED AGAINST ALTERNATIVE MIN-
IMUM TAX.—Section 38(c)(4)(B), as amended by the pre-
ceding provisions of this Act, is amended by redesginating 
clauses (iv) through (xiii) as clauses (v) through (xiv), re-
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spectively, and by inserting after clause (iii) the following 
new clause: 
‘‘(iv) the credit determined under sec-
tion 42A,’’. 
(d) CONFORMING AMENDMENTS.— 
(1) Subsections (i)(3)(C), (i)(6)(B)(i), and 
(k)(1) of section 469 are each amended by inserting 
‘‘or 42A’’ after ‘‘section 42’’. 
(2) The table of sections for subpart D of part 
IV of subchapter A of chapter 1 is amended by in-
serting after the item relating to section 42 the fol-
lowing new item: 
‘‘Sec. 42A. Neighborhood homes credit.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2021. 
PART 3—INVESTMENTS IN TRIBAL 
INFRASTRUCTURE 
SEC. 135301. TREATMENT OF INDIAN TRIBES AS STATES 
WITH RESPECT TO BOND ISSUANCE. 
(a) IN GENERAL.—Section 7871(c) is amended to 
read as follows: 
‘‘(c) SPECIAL RULES FOR TAX-EXEMPT BONDS.— 
‘‘(1) IN GENERAL.—In applying section 146 to 
bonds issued by Indian Tribal Governments the Sec-
retary shall annually— 
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‘‘(A) establish a national bond volume cap 
based on the greater of— 
‘‘(i) the State population formula ap-
proach in section 146(d)(1)(A) (using na-
tional Tribal population estimates supplied 
annually by the Department of the Interior 
in consultation with the Census Bureau), 
and 
‘‘(ii) 
the 
minimum 
State 
ceiling 
amount in section 146(d)(1)(B) (as ad-
justed in accordance with the cost of living 
provision in section 146(d)(2)), and 
‘‘(B) allocate such national bond volume 
cap among all Indian Tribal Governments seek-
ing such an allocation in a particular year 
under regulations prescribed by the Secretary. 
‘‘(2) APPLICATION
OF
GEOGRAPHIC
RESTRIC-
TION.—In the case of national bond volume cap allo-
cated under paragraph (1), section 146(k)(1) shall 
not apply to the extent that such cap is used with 
respect to financing for a facility located on qualified 
Indian lands. 
‘‘(3) RESTRICTION ON FINANCING OF CERTAIN 
GAMING FACILITIES.—No portion of the volume cap 
allocated under this subsection may be used with re-
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spect to the financing of any portion of a building 
in which class II or class III gaming (as defined in 
section 4 of the Indian Gaming Regulatory Act) is 
conducted or housed or any property actually used 
in the conduct of such gaming. 
‘‘(4) DEFINITIONS AND SPECIAL RULES.—For 
purposes of this subsection— 
‘‘(A) INDIAN TRIBAL GOVERNMENT.—The 
term ‘Indian Tribal Government’ means the 
governing body of an Indian Tribe, band, na-
tion, or other organized group or community, or 
of Alaska Natives, which is recognized as eligi-
ble for the special programs and services pro-
vided by the United States to Indians because 
of their status as Indians, and also includes any 
agencies, instrumentalities or political subdivi-
sions thereof. 
‘‘(B) INTERTRIBAL CONSORTIUMS, ETC.— 
In any case in which an Indian Tribal Govern-
ment has authorized an intertribal consortium, 
a Tribal organization, or an Alaska Native re-
gional or village corporation, as defined in, or 
established pursuant to, the Alaska Native 
Claims Settlement Act, to plan for, coordinate 
or otherwise administer services, finances, func-
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tions, or activities on its behalf under this sub-
section, the authorized entity shall have the 
rights and responsibilities of the authorizing In-
dian Tribal Government only to the extent pro-
vided in the Authorizing resolution. 
‘‘(C) QUALIFIED
INDIAN
LANDS.—The 
term ‘qualified Indian lands’ shall mean an In-
dian reservation as defined in section 3(d) of 
the Indian Financing Act of 1974 (25 U.S.C. 
1452(d)), including lands which are within the 
jurisdictional area of an Oklahoma Indian Tribe 
(as determined by the Secretary of the Interior) 
and shall include lands outside a reservation 
where the facility is to be placed in service in 
connection with— 
‘‘(i) the active conduct of a trade or 
business by an Indian Tribe on, contiguous 
to, within reasonable proximity of, or with 
a substantial connection to, an Indian res-
ervation or Alaska Native village, or 
‘‘(ii) infrastructure (including roads, 
power lines, water systems, railroad spurs, 
and communication facilities) serving an 
Indian reservation or Alaska Native vil-
lage.’’. 
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(b) CONFORMING AMENDMENT.—Subparagraph (B) 
of section 45(c)(9) is amended to read as follows: 
‘‘(B) INDIAN TRIBE.—For purposes of this 
paragraph, the term ‘Indian tribe’ has the 
meaning given the term ‘Indian Tribal Govern-
ment’ by section 7871(c)(3)(A).’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to obligations issued in calendar 
years beginning after the date of the enactment of this 
Act. 
SEC. 135302. NEW MARKETS TAX CREDIT FOR TRIBAL STA-
TISTICAL AREAS. 
(a) ADDITIONAL ALLOCATIONS FOR TRIBAL STATIS-
TICAL AREAS.—Section 45D(f) is amended by adding at 
the end the following new paragraph: 
‘‘(5) ADDITIONAL
ALLOCATIONS
FOR
TRIBAL 
STATISTICAL AREAS.— 
‘‘(A) IN
GENERAL.—In the case of cal-
endar years 2022 through 2025, there is (in ad-
dition to any limitation under any other para-
graph of this subsection) a new markets tax 
credit limitation of $175,000,000 which shall be 
allocated by the Secretary as provided in para-
graph (2) except that such limitation may only 
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be allocated with respect to Tribal Statistical 
Areas. 
‘‘(B) CARRYOVER OF UNUSED TRIBAL STA-
TISTICAL AREA LIMITATION.— 
‘‘(i) IN GENERAL.—If the credit limi-
tation under subparagraph (A) for any cal-
endar year exceeds the amount of such 
limitation allocated by the Secretary for 
such calendar year, such limitation for the 
succeeding calendar year shall be increased 
by the amount of such excess. 
‘‘(ii) LIMITATION
ON
CARRYOVER.— 
No amount of credit limitation may be car-
ried under clause (i) past the 5th calendar 
year following the calendar year in which 
such amount of credit limitation arose. 
‘‘(iii) TRANSFER OF EXPIRED TRIBAL 
STATISTICAL
AREA
LIMITATION
TO
GEN-
ERAL
LIMITATION.—In the case of any 
amount of credit limitation which would 
(but for clause (ii)) be carried under clause 
(i) to the 6th calendar year following the 
calendar year in which such amount of 
credit limitation arose, the new market tax 
credit limitation under paragraph (1) for 
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such 6th calendar year shall be increased 
by the amount of such credit limitation, 
except that no such increase shall be made 
for any calendar year after 2030. 
‘‘(C) TRIBAL
STATISTICAL
AREA.—For 
purposes of this paragraph, the term ‘Tribal 
Statistical Area’ means— 
‘‘(i) any low-income community which 
is located in any Tribal Census Tract, 
Oklahoma Tribal Statistical Area, Tribal- 
Designated Statistical Area, Alaska Native 
Village Statistical Area, or Hawaiian 
Home Land, and 
‘‘(ii) any low-income community de-
scribed in subsection (e)(1)(B).’’. 
(b) ELIGIBILITY OF CERTAIN PROJECTS SERVING 
TRIBAL MEMBERS.—Section 45D(e)(1) is amended to 
read as follows: 
‘‘(1) IN GENERAL.—The term ‘low-income com-
munity’ means any area— 
‘‘(A) comprising a population census tract 
if— 
‘‘(i) the poverty rate for such tract is 
at least 20 percent, or 
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Subparagraph (A)(ii) shall be applied using posses-
sion wide median family income in the case of cen-
sus tracts located within a possession of the United 
States.’’. 
(c) COORDINATION WITH EXISTING CARRYOVER.— 
Section 45D(f)(3) is amended— 
(1) is amended by inserting ‘‘under paragraph 
(1)’’ after ‘‘new markets tax credit limitation’’, and 
(2) by striking ‘‘the aggregate amount allo-
cated’’ and inserting ‘‘the amount of such limitation 
allocated by the Secretary’’. 
(d) REGULATORY AUTHORITY.—Section 45D(i) is 
amended by striking ‘‘and’’ at the end of paragraph (5), 
by striking the period at the end of paragraph (6) and 
inserting ‘‘, and’’, and by adding at the end the following 
new paragraph: 
‘‘(7) which provide documentation requirements 
for the written statement required under subsection 
(e)(1)(B)(ii), and 
‘‘(8) which provide procedures for determining 
which projects under subsection (e)(1)(B) are quali-
fied active low-income community businesses with re-
spect to the populations described in such sub-
section. Such procedures shall take into account the 
location needs of such projects, especially with re-
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spect to projects that serve multiple tribal or Alaska 
Native Village communities.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to new markets tax credit limita-
tion determined for calendar years after December 31, 
2021. 
SEC. 135303. INCLUSION OF INDIAN AREAS AS DIFFICULT 
DEVELOPMENT AREAS FOR PURPOSES OF 
CERTAIN BUILDINGS. 
(a) 
IN
GENERAL.—Subclause 
(I) 
of 
section 
42(d)(5)(B)(iii) is amended by inserting ‘‘, or any Indian 
area’’ before the period at the end. 
(b) 
INDIAN
AREA.—Clause 
(iii) 
of 
section 
42(d)(5)(B) is amended by redesignating subclause (II) 
as subclause (IV) and by inserting after subclause (I) the 
following new subclauses: 
‘‘(II) INDIAN
AREA.—For pur-
poses of subclause (I), the term ‘In-
dian area’ means any Indian area (as 
defined in section 4(11) of the Native 
American Housing Assistance and 
Self Determination Act of 1996 (25 
U.S.C. 4103(11))). 
‘‘(III) 
SPECIAL
RULE
FOR 
BUILDINGS IN INDIAN AREAS.—In the 
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case of an area which is a difficult de-
velopment area solely because it is an 
Indian area, a building shall not be 
treated as located in such area unless 
such building is assisted or financed 
under the Native American Housing 
Assistance and Self Determination 
Act of 1996 (25 U.S.C. 4101 et seq.) 
or the project sponsor is an Indian 
tribe 
(as 
defined 
in 
section 
45A(c)(6)), a tribally designated hous-
ing entity (as defined in section 4(22) 
of such Act (25 U.S.C. 4103(22))), or 
wholly owned or controlled by such an 
Indian tribe or tribally designated 
housing entity.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to buildings placed in service after 
December 31, 2021. 
PART 4—OTHER PROVISIONS 
SEC. 135401. POSSESSIONS ECONOMIC ACTIVITY CREDIT. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1, as amended by the preceding pro-
visions of this Act, is amended by adding at the end the 
following new section: 
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‘‘SEC. 45V. POSSESSIONS ECONOMIC ACTIVITY CREDIT. 
‘‘(a) ALLOWANCE OF CREDIT.—For purposes of sec-
tion 38, in the case of a qualified domestic corporation 
the possessions economic activity credit determined under 
this section for a taxable year is an amount equal to 20 
percent of the sum of the qualified possession wages and 
allocable employee fringe benefit expenses paid or incurred 
by the taxpayer for the taxable year. 
‘‘(b) QUALIFIED DOMESTIC CORPORATION; QUALI-
FIED CORPORATION.—For purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified domes-
tic corporation’ means any domestic corporation 
which is— 
‘‘(A) a qualified corporation, or 
‘‘(B) a United States shareholder of a for-
eign corporation which— 
‘‘(i) is a qualified corporation, and 
‘‘(ii) is wholly owned by the United 
States shareholder together with any cor-
porations which are members of the same 
affiliated group (within the meaning of sec-
tion 1504(a)) as such United States share-
holder. 
‘‘(2) QUALIFIED
CORPORATION.—The term 
‘qualified corporation’ means any corporation if such 
corporation meets the following requirements: 
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‘‘(A) SOURCE QUALIFICATION.—80 percent 
or more of the gross income of the corporation 
for the 3-year period immediately preceding the 
close of the taxable year (or for such part of 
such period immediately preceding the close of 
such taxable year as may be applicable) was de-
rived from sources within a possession of the 
United States (determined without regard to 
section 904(f)). 
‘‘(B) TRADE
OR
BUSINESS
QUALIFICA-
TION.—75 percent or more of the gross income 
of the corporation for such period or such part 
thereof was derived from the active conduct of 
a trade or business within a possession of the 
United States. 
‘‘(3) SPECIAL
RULE
FOR
SEPARATE
AND 
CLEARLY IDENTIFIED UNITS OF FOREIGN CORPORA-
TIONS.— 
‘‘(A) IN
GENERAL.—In the case of a 
United States shareholder of a foreign corpora-
tion which— 
‘‘(i) is not a qualified corporation but 
with respect to which the ownership re-
quirements of paragraph (1)(B)(ii) are 
met, and 
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‘‘(ii) has an eligible foreign business 
unit which, if such unit were a corporation, 
would be a qualified corporation with re-
spect to which such ownership require-
ments would be met, 
then, for purposes of this section, the United 
States shareholder may elect to treat such unit 
as a separate foreign corporation which meets 
the requirements of paragraph (1)(B) and with 
respect to which such shareholder is a United 
States shareholder. 
‘‘(B) 
ELIGIBLE
FOREIGN
BUSINESS 
UNIT.—For purposes of this paragraph, the 
term ‘eligible foreign business unit’ means a 
separate and clearly identified foreign unit of a 
trade or business, including a partnership or an 
entity treated as disregarded as a separate enti-
ty from its owner (under section 7701 or other 
provision under this title), which maintains sep-
arate books and records. 
‘‘(C) SPECIAL ELECTION FOR AFFILIATED 
GROUPS.—In the case of an affiliated group de-
scribed in paragraph (1)(B)(ii), the election 
under subparagraph (A) with respect to any eli-
gible foreign business unit shall be made by the 
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common parent of such group and shall apply 
uniformly to all members of such group which 
are United States shareholders with respect to 
the foreign corporation which has such unit. 
‘‘(c) QUALIFIED POSSESSION WAGES.—For purposes 
of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified posses-
sion wages’ means wages paid or incurred by the 
qualified corporation during the taxable year in con-
nection with the active conduct of a trade or busi-
ness within a possession of the United States to any 
employee for services performed in such possession, 
but only if such services are performed while the 
principal place of employment of such employee is 
within such possession. 
‘‘(2) LIMITATION
ON
AMOUNT
OF
WAGES 
TAKEN INTO ACCOUNT.— 
‘‘(A) IN GENERAL.—The amount of wages 
which may be taken into account under para-
graph (1) with respect to any employee for any 
taxable year shall not exceed $50,000. 
‘‘(B) TREATMENT OF PART-TIME EMPLOY-
EES, ETC.—If— 
‘‘(i) any employee is not employed by 
the qualified corporation on a substantially 
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full-time basis at all times during the tax-
able year, or 
‘‘(ii) the principal place of employ-
ment of any employee with the qualified 
corporation is not within a possession at 
all times during the taxable year, 
the limitation applicable under paragraph (1) 
with respect to such employee shall be the ap-
propriate portion (as determined by the Sec-
retary) of the limitation which would otherwise 
be in effect under paragraph (1). 
‘‘(C) WAGES.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (ii), the term ‘wages’ has 
the meaning given to such term by sub-
section (b) of section 3306 (determined 
without regard to any dollar limitation 
contained in such section). For purposes of 
the preceding sentence, such subsection (b) 
shall be applied as if the term ‘United 
States’ included all possessions of the 
United States. 
‘‘(ii) SPECIAL
RULE
FOR
AGRICUL-
TURAL LABOR AND RAILWAY LABOR.—In 
any case to which subparagraph (A) or (B) 
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of paragraph (1) of section 51(h) applies, 
the term ‘wages’ has the meaning given to 
such term by section 51(h)(2). 
‘‘(3) ALLOCABLE EMPLOYEE FRINGE BENEFIT 
EXPENSES.— 
‘‘(A) IN
GENERAL.—The allocable em-
ployee fringe benefit expenses of any qualified 
corporation for any taxable year is an amount 
which bears the same ratio to the amount de-
termined under subparagraph (B) for such tax-
able year as— 
‘‘(i) the aggregate amount of the 
qualified corporation’s qualified possession 
wages for such taxable year, bears to 
‘‘(ii) the aggregate amount of the 
wages paid or incurred by such qualified 
corporation during such taxable year. 
In no event shall the amount determined under 
the preceding sentence exceed 15 percent of the 
amount referred to in clause (i). 
‘‘(B) EXPENSES TAKEN INTO ACCOUNT.— 
For purposes of subparagraph (A), the amount 
determined under this subparagraph for any 
taxable year is the aggregate amount allowable 
(or, in the case of a foreign corporation, which 
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would be allowable if such foreign corporation 
were a domestic corporation) as a deduction 
under this chapter to the qualified corporation 
for such taxable year with respect to— 
‘‘(i) employer contributions under a 
stock bonus, pension, profit-sharing, or an-
nuity plan, 
‘‘(ii) 
employer-provided 
coverage 
under any accident or health plan for em-
ployees, and 
‘‘(iii) the cost of life or disability in-
surance provided to employees. 
Any amount treated as wages under paragraph 
(2)(C) shall not be taken into account under 
this subparagraph. 
‘‘(d) SPECIAL RULE FOR QUALIFIED SMALL DOMES-
TIC CORPORATION.—For purposes of this section— 
‘‘(1) INCREASED CREDIT PERCENTAGE.—In the 
case of a qualified small domestic corporation, sub-
section (a) shall be applied by substituting ‘50 per-
cent’ for ‘20 percent’. 
‘‘(2) QUALIFIED
SMALL
DOMESTIC
CORPORA-
TION.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
small domestic corporation’ means a qualified 
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domestic corporation that meets the require-
ments of subparagraphs (B) and (C). 
‘‘(B) FULL-TIME EMPLOYMENT.—A quali-
fied domestic corporation meets the require-
ments of this subparagraph if the qualified cor-
poration which is the qualified domestic cor-
poration under subsection (b)(1)(A) or the for-
eign 
corporation 
under 
subsection 
(b)(1)(B)(i)— 
‘‘(i) has at least 5 full-time employees 
in a possession of the United States for 
each year in the 3-year period immediately 
preceding the close of the taxable year (or 
for such part of such period immediately 
preceding the close of such taxable year as 
may be applicable), and 
‘‘(ii) has not more than a total of 30 
full-time employees for each year in such 
3-year period. 
‘‘(C) GROSS
RECEIPTS.—A qualified do-
mestic corporation meets the requirements of 
this subparagraph if the annual gross receipts 
of the qualified domestic corporation (and all 
persons related thereto) for each year in such 
3-year period is not more than $50,000,000. 
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‘‘(3) 
RELATED
PERSONS.—In 
determining 
whether the limitations under subparagraphs (B)(ii) 
and (C) of paragraph (2) are met, all persons who 
are treated as a single employer for purposes of sub-
section (a) or (b) of section 52 shall be taken into 
account. 
‘‘(4) AMOUNT
OF
WAGES
TAKEN
INTO
AC-
COUNT.—Subsection (c)(2)(A) shall be applied by 
substituting ‘$142,800’ for ‘$50,000’. 
‘‘(e) POSSESSION OF THE UNITED STATES.— 
‘‘(1) IN GENERAL.—The term ‘possession of the 
United States’ means American Samoa, the Com-
monwealth of the Northern Mariana Islands, the 
Commonwealth of Puerto Rico, Guam, and the Vir-
gin Islands. 
‘‘(2) MIRROR CODE POSSESSIONS.—In the case 
of any possession of the United States with a mirror 
code tax system (as defined in section 24(k)), this 
section shall not be treated as part of the income tax 
laws of the United States for purposes of deter-
mining the income tax law of such possession unless 
such possession elects to have this section be so 
treated. 
‘‘(f) SEPARATE APPLICATION
TO EACH POSSES-
SION.—For purposes of determining the amount of the 
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credit allowed under this section, this section shall be ap-
plied separately with respect to each possession of the 
United States. 
‘‘(g) TERMINATION.—No credit shall be allowed 
under this section for any taxable year beginning after De-
cember 31, 2031.’’. 
(b) CREDIT MADE PART OF GENERAL BUSINESS 
CREDIT.—Subsection (b) of section 38, as amended by the 
preceding provisions of this Act, is amended by striking 
‘‘plus’’ at the end of paragraph (34), by striking the period 
at the end of paragraph (35) and inserting ‘‘, plus’’, and 
by adding at the end the following new paragraph: 
‘‘(36) the possessions economic activity credit 
determined under section 45V.’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart B of part IV of subchapter A of chapter 1 
is amended by adding at the end the following: 
‘‘Sec. 45V. Possessions economic activity credit.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act, and in the case 
of a qualified corporation that is a foreign corporation, 
to taxable years beginning after the date of enactment and 
to taxable years of United States shareholders in which 
or with which such taxable years of foreign corporations 
end. 
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SEC. 135402. TAX TREATMENT OF CERTAIN ASSISTANCE TO 
FARMERS, ETC. 
(a) IN GENERAL.—For purposes of the Internal Rev-
enue Code of 1986, in the case of any payment described 
in section 1005(b) or 1006(e) of the American Rescue 
Plan Act of 2021 (as amended by this Act)— 
(1) such payment shall not be included in the 
gross income of the person on whose behalf, or to 
whom, such payment is made, 
(2) no deduction shall be denied, no tax at-
tribute shall be reduced, and no basis increase shall 
be denied, by reason of the exclusion from gross in-
come provided by paragraph (1), and 
(3) in the case of a partnership or S corpora-
tion on whose behalf, or to whom, such a payment 
is made— 
(A) any amount excluded from income by 
reason of paragraph (1) shall be treated as tax 
exempt income for purposes of sections 705 and 
1366 of such Code, and 
(B) except as provided by the Secretary of 
the Treasury (or the Secretary’s delegate), any 
increase in the adjusted basis of a partner’s in-
terest in a partnership under section 705 of 
such Code with respect to any amount described 
in subparagraph (A) shall equal the partner’s 
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distributive share of deductions resulting from 
interest that is part of such payment and the 
partner’s share, as determined under section 
752 of such Code, of principal that is part of 
such payment. 
(b) AUTHORITY TO WAIVE CERTAIN INFORMATION 
REPORTING
REQUIREMENTS.—The Secretary of the 
Treasury (or the Secretary’s delegate) may provide an ex-
ception from any requirement to file an information return 
otherwise required by chapter 61 of the Internal Revenue 
Code of 1986 with respect to any amount excluded from 
gross income by reason of subsection (a). 
SEC. 135403. EXCLUSION OF AMOUNTS RECEIVED FROM 
STATE-BASED CATASTROPHE LOSS MITIGA-
TION PROGRAMS. 
(a) IN GENERAL.—Section 139 is amended by redes-
ignating subsection (h) as subsection (i) and by inserting 
after subsection (g) the following new subsection: 
‘‘(h) STATE-BASED CATASTROPHE LOSS MITIGATION 
PROGRAMS.— 
‘‘(1) IN GENERAL.—Gross income shall not in-
clude any amount received by an individual as a 
qualified catastrophe mitigation payment under a 
program established by— 
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‘‘(A) a State, or a political subdivision or 
instrumentality thereof, 
‘‘(B) a joint powers authority, or 
‘‘(C) an entity created under State law to 
ensure the availability of an adequate market of 
last resort for essential property insurance, over 
which a State agency or State department of 
insurance has regulatory oversight. 
‘‘(2) QUALIFIED
CATASTROPHE
MITIGATION 
PAYMENT.—For purposes of this section, the term 
‘qualified catastrophe mitigation payment’ means 
any amount which is received by an individual to 
make improvements to such individual’s residence 
for the sole purpose of reducing the damage that 
would be done to such residence by a windstorm, 
earthquake, or wildfire. 
‘‘(3) NO INCREASE IN BASIS.—Rules similar to 
the rules of subsection (g)(3) shall apply in the case 
of this subsection.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 139(d) is amended by striking ‘‘and 
qualified’’ and inserting ‘‘, qualified catastrophe 
mitigation payments, and qualified’’. 
(2) Section 139(i) (as redesignated by sub-
section (a)) is amended by striking ‘‘or qualified’’ 
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and inserting ‘‘, qualified catastrophe mitigation 
payment, or qualified’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2020. 
Subtitle F—Green Energy 
SEC. 136001. AMENDMENT OF 1986 CODE. 
Except as otherwise expressly provided, whenever in 
this subtitle an amendment or repeal is expressed in terms 
of an amendment to, or repeal of, a section or other provi-
sion, the reference shall be considered to be made to a 
section or other provision of the Internal Revenue Code 
of 1986. 
PART 1—RENEWABLE ELECTRICITY AND 
REDUCING CARBON EMISSIONS 
SEC. 136101. EXTENSION AND MODIFICATION OF CREDIT 
FOR ELECTRICITY PRODUCED FROM CER-
TAIN RENEWABLE RESOURCES. 
(a) IN GENERAL.—The following provisions of sec-
tion 45(d) are each amended by striking ‘‘January 1, 
2022’’ each place it appears and inserting ‘‘January 1, 
2027’’: 
(1) Paragraph (2)(A). 
(2) Paragraph (3)(A). 
(3) Paragraph (4)(B). 
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(4) Paragraph (6). 
(5) Paragraph (7). 
(6) Paragraph (9). 
(7) Paragraph (11)(B). 
(b) BASE CREDIT AMOUNT.—Section 45 is amended 
by striking ‘‘1.5 cents’’ each place it appears and inserting 
‘‘0.3 cents’’. 
(c) APPLICATION OF EXTENSION TO SOLAR.—Sec-
tion 45(d)(4)(A) is amended by striking ‘‘is placed in serv-
ice before January 1, 2006’’ and inserting ‘‘the construc-
tion of which begins before January 1, 2027.’’. 
(d) EXTENSION OF ELECTION TO TREAT QUALIFIED 
FACILITIES
AS
ENERGY
PROPERTY.—Section 
48(a)(5)(C)(ii) is amended by striking ‘‘January 1, 2022’’ 
and inserting ‘‘January 1, 2027’’. 
(e) APPLICATION OF EXTENSION TO WIND FACILI-
TIES.— 
(1) IN GENERAL.—Section 45(d)(1) is amended 
by striking ‘‘January 1, 2022’’ and inserting ‘‘Janu-
ary 1, 2027’’. 
(2) APPLICATION
OF
PHASEOUT
PERCENT-
AGE.— 
(A) RENEWABLE
ELECTRICITY
PRODUC-
TION CREDIT.—Section 45(b)(5) is amended by 
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inserting ‘‘placed in service before January 1, 
2022’’ after ‘‘In the case of any facility’’. 
(B) 
ENERGY
CREDIT.—Section 
48(a)(5)(E) is amended by inserting ‘‘placed in 
service before January 1, 2022’’ after ‘‘In the 
case of any facility’’. 
(3) QUALIFIED
OFFSHORE
WIND
FACILITIES 
UNDER ENERGY CREDIT.—Section 48(a)(5)(F)(i) is 
amended by striking ‘‘offshore wind facility—’’ and 
all that follows and inserting the following: ‘‘offshore 
wind facility, subparagraph (E) shall not apply.’’. 
(f) WAGE AND APPRENTICESHIP REQUIREMENTS.— 
Section 45(b) is amended by adding at the end the fol-
lowing new paragraphs: 
‘‘(6) INCREASED CREDIT AMOUNT FOR QUALI-
FIED FACILITIES.— 
‘‘(A) IN
GENERAL.—In the case of any 
qualified facility which satisfies the require-
ments of subparagraph (B), the amount of the 
credit determined under subsection (a) (deter-
mined after the application of paragraphs (1) 
through (5)) shall be equal to such amount 
multiplied by 5 (determined without regard to 
this sentence). 
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‘‘(B) 
QUALIFIED
FACILITY
REQUIRE-
MENTS.—A qualified facility meets the require-
ments of this subparagraph if it is one of the 
following: 
‘‘(i) A facility with a maximum net 
output of less than 1 megawatt. 
‘‘(ii) A facility the construction of 
which begins prior to the date that is 60 
days after the Secretary publishes guid-
ance with respect to the requirements of 
paragraphs (7) and (8). 
‘‘(iii) A facility which satisfies the re-
quirements of paragraphs (7) and (8). 
‘‘(7) PREVAILING WAGE REQUIREMENTS.— 
‘‘(A) IN GENERAL.—The requirements de-
scribed in this subparagraph with respect to 
any qualified facility are that the taxpayer shall 
ensure that any laborers and mechanics em-
ployed by contractors and subcontractors in— 
‘‘(i) the construction of such facility, 
and 
‘‘(ii) for the period of the taxable year 
which is within the 10-year period begin-
ning on the date the facility was originally 
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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 
most recently determined by the Secretary of 
Labor, in accordance with subchapter IV of 
chapter 31 of title 40, United States Code. For 
purposes of determining an increased credit 
amount under paragraph (6)(A) for a taxable 
year, the requirement under clause (ii) is ap-
plied to such taxable year in which the alter-
ation or repair of the qualified facility occurs.’’ 
‘‘(B) CORRECTION AND PENALTY RELATED 
TO
FAILURE
TO
SATISFY
WAGE
REQUIRE-
MENTS.— 
‘‘(i) IN GENERAL.—In the case of any 
taxpayer which fails to satisfy the require-
ment under subparagraph (A) with respect 
to the construction of any qualified facility 
or with respect to the alteration or repair 
of a facility in any year during the period 
described in subparagraph (A)(ii), such 
taxpayer shall be deemed to have satisfied 
such requirement under such subparagraph 
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with respect to such facility for any year if, 
with respect to any laborer or mechanic 
who was paid wages at a rate below the 
rate described in such subparagraph for 
any period during such year, such tax-
payer— 
‘‘(I) makes payment to such la-
borer or mechanic in an amount equal 
to the sum of— 
‘‘(aa) an amount equal to 
the difference between— 
‘‘(AA) the amount of 
wages paid to such laborer 
or mechanic during such pe-
riod, and 
‘‘(BB) the amount of 
wages required to be paid to 
such laborer or mechanic 
pursuant to such subpara-
graph during such period, 
plus 
‘‘(bb) 
interest 
on 
the 
amount determined under item 
(aa) at the underpayment rate 
established under section 6621 
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(determined by substituting ‘6 
percentage points’ for ‘3 percent-
age points’ in subsection (a)(2) 
of such section) for the period 
described in such item, and 
‘‘(II) makes payment to the Sec-
retary of a penalty in an amount 
equal to the product of— 
‘‘(aa) $5,000, multiplied by 
‘‘(bb) the total number of la-
borers and mechanics who were 
paid wages at a rate below the 
rate described in subparagraph 
(A) for any period during such 
year. 
‘‘(ii) DEFICIENCY
PROCEDURES
NOT 
TO APPLY.—Subchapter B of chapter 63 
(relating to deficiency procedures for in-
come, estate, gift, and certain excise taxes) 
shall not apply with respect to the assess-
ment or collection of any penalty imposed 
by this paragraph. 
‘‘(iii) INTENTIONAL
DISREGARD.—If 
the Secretary determines that any failure 
described in subclause (i) is due to inten-
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tional disregard of the requirements under 
subparagraph (A), subclause (I) shall be 
applied by substituting ‘three times the 
sum’ for ‘the sum’ in item (aa) thereof and 
subclause (II) shall be applied by sub-
stituting ‘$10,000’ for ‘5,000’ in item (aa) 
thereof. 
‘‘(iv) LIMITATION
ON
PERIOD
FOR 
PAYMENT.—Pursuant to rules issued by 
the Secretary which are similar to the 
rules under chapter 63, in the case of a 
final determination by the Secretary with 
respect to any failure by the taxpayer to 
satisfy the requirement under subpara-
graph (A), subparagraph (B)(i) shall not 
apply unless the payments described in 
subclauses (I) and (II) of such clause are 
made by the taxpayer on or before the date 
which is 180 days after the date of such 
determination. 
‘‘(8) APPRENTICESHIP
REQUIREMENTS.—The 
requirements described in this subparagraph with re-
spect to the construction of any qualified facility are 
as follows: 
‘‘(A) LABOR HOURS.— 
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‘‘(i) PERCENTAGE OF TOTAL LABOR 
HOURS.—Taxpayers shall ensure that not 
less than the applicable percentage of the 
total labor hours of the construction, alter-
ation, or repair work (including such work 
performed by any contractor or subcon-
tractor) on any qualified facility shall, sub-
ject to subparagraph (B), be performed by 
qualified apprentices. 
‘‘(ii) APPLICABLE PERCENTAGE.—For 
purposes of clause (i), the applicable per-
centage shall be— 
‘‘(I) in the case of a qualified fa-
cility the construction of which begins 
before January 1, 2023, 10 percent, 
‘‘(II) in the case of a qualified fa-
cility the construction of which begins 
after December 31, 2022, and before 
January 1, 2024, 12.5 percent, and 
‘‘(III) in the case of a qualified 
facility the construction of which be-
gins after December 31, 2023, 15 per-
cent. 
‘‘(B) APPRENTICE
TO
JOURNEYWORKER 
RATIO.—The requirement under subparagraph 
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(A)(i) shall be subject to any applicable require-
ments 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 indi-
viduals to perform construction, alteration, or 
repair work on a qualified facility shall employ 
1 or more qualified apprentices to perform such 
work. 
‘‘(D) EXCEPTION.— 
‘‘(i) IN GENERAL.—A taxpayer shall 
not be treated as failing to satisfy the re-
quirements of this paragraph if such tax-
payer— 
‘‘(I) makes a good faith effort to 
comply with the requirements of this 
paragraph, or 
‘‘(II) subject to clause (iii), in the 
case of any failure by the taxpayer to 
satisfy the requirement under sub-
paragraphs (A) and (C) with respect 
to the construction, alteration, or re-
pair work on any qualified facility to 
which subclause (I) does not apply, 
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makes payment to the Secretary of a 
penalty in an amount equal to the 
product of— 
‘‘(aa) $50, multiplied by 
‘‘(bb) the total labor hours 
for which the requirement de-
scribed in such subparagraph was 
not satisfied with respect to the 
construction, alteration, or repair 
work on such qualified facility. 
‘‘(ii) GOOD FAITH EFFORT.—For pur-
poses of clause (i), a taxpayer shall be 
deemed to have satisfied the requirements 
under such paragraph with respect to a 
qualified facility if such taxpayer has re-
quested qualified apprentices from a reg-
istered apprenticeship program, as defined 
in section 3131(e)(3)(B), and— 
‘‘(I) such request has been de-
nied, provided that such denial is not 
the result of a refusal by the contrac-
tors or subcontractors engaged in the 
performance of construction, alter-
ation, or repair work on such qualified 
facility to comply with the established 
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standards and requirements of the 
registered apprenticeship program, or 
‘‘(II) the registered apprentice-
ship program fails to respond to such 
request within 5 business days after 
the date on which such registered ap-
prenticeship program received such 
request. 
‘‘(iii) INTENTIONAL
DISREGARD.—If 
the Secretary determines that any failure 
described in subclause (i)(II) is due to in-
tentional disregard of the requirements 
under subparagraphs (A) and (C), sub-
clause (i)(II) shall be applied by sub-
stituting ‘$500’ for ‘$50’ in item (aa) 
thereof. 
‘‘(E) DEFINITIONS.—For purposes of this 
paragraph— 
‘‘(i) LABOR HOURS.—The term ‘labor 
hours’— 
‘‘(I) means the total number of 
hours devoted to the performance of 
construction, 
alteration, 
or 
repair 
work by employees of the taxpayer 
(including construction, alteration, or 
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repair work by any contractor or sub-
contractor), and 
‘‘(II) excludes any hours worked 
by— 
‘‘(aa) foremen, 
‘‘(bb) superintendents, 
‘‘(cc) owners, or 
‘‘(dd) persons employed in a 
bona fide executive, administra-
tive, 
or 
professional 
capacity 
(within the meaning of those 
terms in part 541 of title 29, 
Code of Federal Regulations). 
‘‘(ii) QUALIFIED
APPRENTICE.—The 
term ‘qualified apprentice’ means an indi-
vidual who is an employee of the con-
tractor or subcontractor and who is par-
ticipating in a registered apprenticeship 
program, 
as 
defined 
in 
section 
3131(e)(3)(B). 
‘‘(9) DOMESTIC
CONTENT
BONUS
CREDIT 
AMOUNT.— 
‘‘(A) IN
GENERAL.—In the case of any 
qualified facility which satisfies the requirement 
under subparagraph (B), the amount of the 
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credit determined under subsection (a) (deter-
mined after the application of paragraphs (1) 
through (8)) shall be increased by an amount 
equal to 10 percent of the amount otherwise in 
effect under such subsection. 
‘‘(B) REQUIREMENT.— 
‘‘(i) IN GENERAL.—The requirement 
described in this subclause with respect to 
any qualified facility is satisfied if the tax-
payer certifies to the Secretary (at such 
time, and in such form and manner, as the 
Secretary may prescribe) that any steel, 
iron, or manufactured product which is a 
component of such facility (upon comple-
tion of construction) was produced in the 
United States. 
‘‘(ii) STEEL AND IRON.— 
‘‘(I) IN GENERAL.—In the case 
of steel or iron, clause (i) shall be ap-
plied in a manner consistent with sec-
tion 661.5(b) of title 49, Code of Fed-
eral Regulations. 
‘‘(II) EXCEPTION.—Subclause (I) 
shall not apply with respect to any 
steel or iron which is used as a com-
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ponent or subcomponent of a manu-
factured product which is not pri-
marily made of steel or iron. 
‘‘(iii) MANUFACTURED
PRODUCT.— 
For purposes of clause (i), the manufac-
tured products which are components of a 
qualified facility upon completion of con-
struction shall be deemed to have been pro-
duced in the United States if not less than 
the adjusted percentage of the total costs 
across all such manufactured products of 
such facility are attributable to manufac-
tured products (including components) 
which are mined, produced, or manufac-
tured in the United States. 
‘‘(C) ADJUSTED PERCENTAGE.— 
‘‘(i) IN
GENERAL.—Subject to sub-
clause (ii), for purposes of subparagraph 
(B)(iii), the adjusted percentage shall be— 
‘‘(I) in the case of a facility the 
construction of which begins before 
January 1, 2025, 40 percent, 
‘‘(II) in the case of a facility the 
construction of which begins after De-
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cember 31, 2024, and before January 
1, 2026, 45 percent, 
‘‘(III) in the case of a facility the 
construction of which begins after De-
cember 31, 2025, and before January 
1, 2027, 50 percent, and 
‘‘(IV) in the case of a facility the 
construction of which begins after De-
cember 31, 2026, 55 percent. 
‘‘(ii) OFFSHORE
WIND
FACILITY.— 
For purposes of subparagraph (B)(iii), in 
the case of a qualified facility which is an 
offshore wind facility, the adjusted per-
centage shall be— 
‘‘(I) in the case of a facility the 
construction of which begins before 
January 1, 2025, 20 percent, 
‘‘(II) in the case of a facility the 
construction of which begins after De-
cember 31, 2024, and before January 
1, 2026, 27.5 percent, 
‘‘(III) in the case of a facility the 
construction of which begins after De-
cember 31, 2025, and before January 
1, 2027, 35 percent, 
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‘‘(IV) in the case of a facility the 
construction of which begins after De-
cember 31, 2026, and before January 
1, 2028, 45 percent, and 
‘‘(V) in the case of a facility the 
construction of which begins after De-
cember 31, 2027, 55 percent. 
‘‘(10) PHASEOUT FOR ELECTIVE PAYMENT.— 
‘‘(A) IN GENERAL.—In the case of a tax-
payer making an election under section 6417 
with respect to a credit under this section, the 
amount of such credit shall be replaced with— 
‘‘(i) the value of such credit (deter-
mined without regard to this paragraph), 
multiplied by 
‘‘(ii) the applicable percentage. 
‘‘(B) 100 PERCENT APPLICABLE PERCENT-
AGE FOR CERTAIN QUALIFIED FACILITIES.—In 
the case of any qualified facility— 
‘‘(i) which satisfies the requirements 
under paragraph (9) with respect to the 
construction of such facility, or 
‘‘(ii) with a maximum net output of 
less than 1 megawatt, 
the applicable percentage shall be 100 percent. 
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‘‘(C) PHASED
DOMESTIC
CONTENT
RE-
QUIREMENT.—Subject to subparagraph (D), in 
the case of any qualified facility which is not 
described in subparagraph (B), the applicable 
percentage shall be— 
‘‘(i) if construction of such facility 
began before January 1, 2024, 100 per-
cent, 
‘‘(ii) if construction of such facility 
began in calendar year 2024, 90 percent, 
‘‘(iii) if construction of such facility 
began in calendar year 2025, 85 percent, 
and 
‘‘(iv) if construction of such facility 
began after December 31, 2025, 0 percent. 
‘‘(D) EXCEPTION.— 
‘‘(i) IN
GENERAL.—For purposes of 
this paragraph, the Secretary shall provide 
appropriate exceptions to the requirements 
under subparagraph (B) for the construc-
tion of qualified facilities if— 
‘‘(I) the inclusion of domestic 
products increases the overall costs of 
construction of qualified facilities by 
more than 25 percent, or 
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‘‘(II) relevant domestic products 
are not produced in the United States 
in sufficient and reasonably available 
quantities or of a satisfactory quality. 
‘‘(ii) APPLICABLE
PERCENTAGE.—In 
any case in which the Secretary provides 
an exception pursuant to clause (i), the ap-
plicable percentage shall be 100 percent. 
‘‘(11) SPECIAL RULE FOR QUALIFIED FACILITY 
LOCATED IN ENERGY COMMUNITY.— 
‘‘(A) IN GENERAL.—In the case of a quali-
fied facility which is located in an energy com-
munity, the credit determined under subsection 
(a) shall be increased by an amount equal to 10 
percent of the amount otherwise in effect under 
such subsection (without application of sub-
section (b)(9)). 
‘‘(B) ENERGY COMMUNITY.—The term ‘en-
ergy community’ means a census tract or any 
directly adjoining census tract in which— 
‘‘(i) after December 31, 1999, a coal 
mine has closed, or 
‘‘(ii) after December 31, 2009, a coal- 
fired electric generating unit has been re-
tired. 
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‘‘(12) REGULATIONS
AND
GUIDANCE.—The 
Secretary shall issue such regulations or other guid-
ance as the Secretary determines necessary or ap-
propriate to carry out the purposes of this sub-
section, including regulations or other guidance 
which provides for requirements for recordkeeping or 
information reporting for purposes of establishing 
the requirements of this subsection.’’. 
(g) CREDIT REDUCED FOR TAX-EXEMPT BONDS.— 
Section 45(b)(3) is amended to read as follows: 
‘‘(3) CREDIT
REDUCED
FOR
TAX-EXEMPT 
BONDS.—The amount of the credit determined 
under subsection (a) with respect to any facility for 
any taxable year (determined after the application of 
paragraphs (1) and (2)) shall be reduced by the 
amount which is the product of the amount so deter-
mined for such year and the lesser of 15 percent or 
a fraction— 
‘‘(A) the numerator of which is the sum, 
for the taxable year and all prior taxable years, 
of proceeds of an issue of any obligations used 
to provide financing for the qualified facility the 
interest on which is exempt from tax under sec-
tion 103, and 
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‘‘(B) the denominator of which is the ag-
gregate amount of additions to the capital ac-
count for the qualified facility for the taxable 
year and all prior taxable years. 
The amounts under the preceding sentence for any 
taxable year shall be determined as of the close of 
the taxable year.’’. 
(h) ROUNDING ADJUSTMENT.—Section 45(b)(2) is 
amended by striking ‘‘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’’ and inserting ‘‘If the 0.3 cent amount as increased 
under the preceding sentence is not a multiple of 0.05 
cent, such amount shall be rounded to the nearest multiple 
of 0.05 cent. In any other case, if an amount as increased 
under this paragraph is not a multiple of 0.1 cent, such 
amount shall be rounded to the nearest multiple of 0.1 
cent’’. 
(i) CONFORMING AMENDMENT.—Section 45(b)(4)(A) 
is amended by striking ‘‘last sentence’’ and inserting ‘‘last 
two sentences’’. 
(j) EFFECTIVE DATES.— 
(1) The amendments made by subsections (a), 
(b), (c), (d), (e), (f), (h), and (i) of this section shall 
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apply to facilities placed in service after December 
31, 2021. 
(2) The amendment made by subsection (g) 
shall apply to facilities the construction of which be-
gins after December 31, 2021. 
SEC. 136102. EXTENSION AND MODIFICATION OF ENERGY 
CREDIT. 
(a) EXTENSION OF CREDIT.—The following provi-
sions of section 48 are each amended by striking ‘‘January 
1, 2024’’ each place it appears and inserting ‘‘January 
1, 2027’’: 
(1) Subsection (a)(2)(A)(i)(II). 
(2) Subsection (a)(3)(A)(ii). 
(3) Subsection (c)(1)(D). 
(4) Subsection (c)(2)(D). 
(5) Subsection (c)(4)(C). 
(b) FURTHER EXTENSION FOR CERTAIN ENERGY 
PROPERTY.—The following provisions of section 48 are 
each amended by striking ‘‘January 1, 2024’’ each place 
it appears and inserting ‘‘January 1, 2034’’: 
(1) Subsection (a)(3)(A)(vii). 
(2) Subsection (c)(3)(A)(iv). 
(c) PHASEOUT OF CREDIT.—Section 48(a) is amend-
ed by striking paragraphs (6) and (7) and inserting the 
following new paragraph: 
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‘‘(6) PHASEOUT FOR CERTAIN ENERGY PROP-
ERTY.—In the case of any qualified fuel cell prop-
erty, qualified small wind property, or energy prop-
erty described in clause (i) or clause (ii) of para-
graph (3)(A) the construction of which begins after 
December 31, 2019 and which is placed in service 
before January 1, 2022, the energy percentage de-
termined under paragraph (2) shall be equal to 26 
percent.’’. 
(d) BASE ENERGY PERCENTAGE AMOUNT.—Section 
48(a) is amended— 
(1) in paragraph (2)(A)— 
(A) in clause (i), by striking ‘‘30 percent’’ 
and inserting ‘‘6 percent’’, and 
(B) in clause (ii), by striking ‘‘10 percent’’ 
and inserting ‘‘2 percent’’, and 
(2) in paragraph (5)(A)(ii), by striking ‘‘30 per-
cent’’ and inserting ‘‘6 percent’’. 
(e) 6 PERCENT CREDIT FOR GEOTHERMAL.—Section 
48(a)(2)(A)(i)(II) is amended by striking ‘‘paragraph 
(3)(A)(i)’’ and inserting ‘‘clause (i) or (iii) of paragraph 
(3)(A)’’. 
(f) ENERGY STORAGE TECHNOLOGIES; QUALIFIED 
BIOGAS PROPERTY; MICROGRID CONTROLLERS; EXTEN-
SION OF WASTE ENERGY RECOVERY PROPERTY.— 
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(1) IN
GENERAL.—Section 48(a)(3)(A) is 
amended by striking ‘‘or’’ at the end of clause (vii), 
and by adding at the end the following new clauses: 
‘‘(ix) energy storage technology, 
‘‘(x) qualified biogas property, or 
‘‘(xi) microgrid controllers,’’. 
(2) APPLICATION OF 6 PERCENT CREDIT.—Sec-
tion 48(a)(2)(A)(i) is amended by striking ‘‘and’’ at 
the end of subclauses (IV) and (V) and adding at 
the end the following new subclauses: 
‘‘(VI) energy storage technology, 
‘‘(VII) qualified biogas property, 
‘‘(VIII) 
microgrid 
controllers, 
and 
‘‘(IX) energy property described 
in clauses (v) and (vii) of paragraph 
(3)(A), and’’. 
(3) DEFINITIONS.—Section 48(c) is amended 
by adding at the end the following new paragraphs: 
‘‘(6) ENERGY STORAGE TECHNOLOGY.— 
‘‘(A) IN
GENERAL.—The term ‘energy 
storage technology’ means property (other than 
property primarily used in the transportation of 
goods or individuals and not for the production 
of electricity) which receives, stores, and deliv-
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ers energy for conversion to electricity (or, in 
the case of hydrogen, which stores energy), and 
has a nameplate capacity of not less than 5 kil-
owatt hours. 
‘‘(B) MODIFICATIONS OF CERTAIN PROP-
ERTY.—In the case of any equipment which ei-
ther— 
‘‘(i) would be described in subpara-
graph (A) except that such equipment has 
a capacity of less than 5 kilowatt hours 
and is modified such that such equipment 
(after such modification) has a nameplate 
capacity of not less than 5 kilowatt hours, 
or 
‘‘(ii) is described in subparagraph (A) 
and which has a capacity of not less than 
5 kilowatt hours and is modified such that 
such equipment (after such modification) 
has an increased nameplate capacity, 
such equipment shall be treated as described in 
subparagraph (A) except that the basis of any 
property which was part of such equipment be-
fore such modification shall not be taken into 
account for purposes of this section. In the case 
of any property to which this subparagraph ap-
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plies, subparagraph (C) shall be applied by sub-
stituting ‘modification’ for ‘construction’. 
‘‘(C) TERMINATION.—The term ‘energy 
storage technology’ shall not include any prop-
erty the construction of which does not begin 
before January 1, 2027. 
‘‘(7) QUALIFIED BIOGAS PROPERTY.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
biogas property’ means property comprising a 
system which— 
‘‘(i) converts biomass (as defined in 
section 45K(c)(3), as in effect on the date 
of enactment of this paragraph) into a gas 
which— 
‘‘(I) consists of not less than 52 
percent methane by volume, or 
‘‘(II) is concentrated by such sys-
tem into a gas which consists of not 
less than 52 percent methane, and 
‘‘(ii) captures such gas for sale or pro-
ductive use, and not for disposal via com-
bustion. 
‘‘(B) INCLUSION OF CLEANING AND CON-
DITIONING
PROPERTY.—The term ‘qualified 
biogas property’ includes any property which is 
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part of such system which cleans or conditions 
such gas. 
‘‘(C) TERMINATION.—The term ‘qualified 
biogas property’ shall not include any property 
the construction of which does not begin before 
January 1, 2027. 
‘‘(8) MICROGRID CONTROLLER.— 
‘‘(A) IN GENERAL.—The term ‘microgrid 
controller’ means equipment which is— 
‘‘(i) part of a qualified microgrid, and 
‘‘(ii) designed and used to monitor 
and control the energy resources and loads 
on such microgrid. 
‘‘(B) QUALIFIED
MICROGRID.—The term 
‘qualified microgrid’ means an electrical system 
which— 
‘‘(i) includes equipment which is capa-
ble of generating not less than 4 kilowatts 
and not greater than 20 megawatts of elec-
tricity, 
‘‘(ii) is capable of operating— 
‘‘(I) in connection with the elec-
trical grid and as a single controllable 
entity with respect to such grid, and 
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‘‘(II) independently (and discon-
nected) from such grid, and 
‘‘(iii) is not part of a bulk-power sys-
tem (as defined in section 215 of the Fed-
eral Power Act (16 U.S.C. 24o)). 
‘‘(C) TERMINATION.—The term ‘microgrid 
controller’ shall not include any property the 
construction of which does not begin before 
January 1, 2027.’’. 
(4) DENIAL OF DOUBLE BENEFIT FOR QUALI-
FIED BIOGAS PROPERTY.—Section 45(e) is amended 
by adding at the end the following new paragraph: 
‘‘(12) COORDINATION
WITH
ENERGY
CREDIT 
FOR
QUALIFIED
BIOGAS
PROPERTY.—The term 
‘qualified facility’ shall not include any facility which 
produces electricity from gas produced by qualified 
biogas property (as defined in section 48(c)(7)) if a 
credit is determined under section 48 with respect to 
such property for the taxable year or any prior tax-
able year.’’. 
(5) EXTENSION OF WASTE ENERGY RECOVERY 
PROPERTY.—Section 48(c)(5)(D) is amended by 
striking ‘‘January 1, 2024’’ and inserting ‘‘January 
1, 2034’’. 
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(6) PHASEOUT
OF
CERTAIN
OTHER
ENERGY 
PROPERTY.—Section 48(a) is amended by adding at 
the end the following new paragraph: 
‘‘(7) PHASEOUT FOR CERTAIN OTHER ENERGY 
PROPERTY.—In the case of any energy property de-
scribed in clause (v), (vii) or (viii) of paragraph 
(3)(A), the energy percentage determined under 
paragraph (2) shall be equal to— 
‘‘(A) in the case of any property described 
in paragraph (3)(A)(viii) the construction of 
which begins after December 31, 2019, and 
which is placed in service before January 1, 
2022, 26 percent, 
‘‘(B) in the case of any property the con-
struction of which begins before January 1, 
2032, and which is placed in service after De-
cember 31, 2021, 6 percent, 
‘‘(C) in the case of any property the con-
struction of which begins after December 31, 
2031 and before January 1, 2033, 5.2 percent, 
and 
‘‘(D) in the case of any property the con-
struction of which begins after December 31, 
2032 and before January 1, 2034, 4.4 per-
cent.’’. 
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(g) FUEL
CELLS
USING
ELECTROMECHANICAL 
PROCESSES.— 
(1) IN GENERAL.—Section 48(c)(1) is amend-
ed— 
(A) in subparagraph (A)(i)— 
(i) by inserting ‘‘or electromechanical’’ 
after ‘‘electrochemical’’, and 
(ii) by inserting ‘‘(1 kilowatt in the 
case of a fuel cell power plant with a linear 
generator assembly)’’ after ‘‘0.5 kilowatt’’, 
and 
(B) in subparagraph (C)— 
(i) by inserting ‘‘, or linear generator 
assembly,’’ after ‘‘a fuel cell stack assem-
bly’’, and 
(ii) 
by 
inserting 
‘‘or 
electromechanical’’ after ‘‘electrochemical’’. 
(2) LINEAR
GENERATOR
ASSEMBLY
LIMITA-
TION.—Section 48(c)(1) is amended by redesig-
nating subparagraph (D) as subparagraph (E) and 
by inserting after subparagraph (C) the following 
new subparagraph: 
‘‘(D) LINEAR
GENERATOR
ASSEMBLY.— 
The term ‘linear generator assembly’ does not 
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include any assembly which contains rotating 
parts.’’. 
(h) DYNAMIC
GLASS.—Section 48(a)(3)(A)(ii) is 
amended by inserting ‘‘, or electrochromic glass which 
uses electricity to change its light transmittance properties 
in order to heat or cool a structure,’’ after ‘‘sunlight’’. 
(i) COORDINATION WITH LOW INCOME HOUSING 
TAX CREDIT.—Paragraph (3) of section 50(c) of the In-
ternal Revenue Code of 1986 is amended— 
(1) by striking ‘‘and’’ at the end of subpara-
graph (A), 
(2) by striking the period at the end of sub-
paragraph (B) and inserting ‘‘, and’’, and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(C) paragraph (1) shall not apply for pur-
poses of determining eligible basis under section 
42.’’. 
(j) INTERCONNECTION PROPERTY.—Section 48(a) is 
amended by adding at the end the following new para-
graph: 
‘‘(8) INTERCONNECTION PROPERTY.— 
‘‘(A) IN GENERAL.—For purposes of deter-
mining the credit under subsection (a), energy 
property shall include amounts paid or incurred 
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by the taxpayer for qualified interconnection 
property in connection with the installation of 
energy property (described in paragraph (3)(A)) 
which has a maximum net output of not greater 
than 5 megawatts, to provide for the trans-
mission or distribution of the electricity pro-
duced or stored by such property, and which 
are properly chargeable to the capital account 
of the taxpayer. 
‘‘(B) QUALIFIED INTERCONNECTION PROP-
ERTY.—The term ‘qualified interconnection 
property’ means, with respect to an energy 
project which is not a microgrid controller, any 
tangible property— 
‘‘(i) which is part of an addition, 
modification, or upgrade to a transmission 
or distribution system which is required at 
or beyond the point at which the energy 
project interconnects to such transmission 
or distribution system in order to accom-
modate such interconnection, 
‘‘(ii) either— 
‘‘(I) which is constructed, recon-
structed, or erected by the taxpayer, 
or 
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‘‘(II) for which the cost with re-
spect to the construction, reconstruc-
tion, or erection of such property is 
paid or incurred by such taxpayer, 
and 
‘‘(iii) the original use of which, pursu-
ant to an interconnection agreement, com-
mences with a utility. 
‘‘(C) INTERCONNECTION
AGREEMENT.— 
The term ‘interconnection agreement’ means an 
agreement with a utility for the purposes of 
interconnecting the energy property owned by 
such taxpayer to the transmission or distribu-
tion system of such utility. 
‘‘(D) UTILITY.—The term ‘utility’ means 
the owner or operator of an electrical trans-
mission or distribution system which is subject 
to the regulatory authority of a State or polit-
ical subdivision thereof, any agency or instru-
mentality of the United States, a public service 
or public utility commission or other similar 
body of any State or political subdivision there-
of, or the governing or ratemaking body of an 
electric cooperative. 
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‘‘(E) SPECIAL RULE FOR INTERCONNEC-
TION PROPERTY.—In the case of expenses paid 
or 
incurred 
for 
interconnection 
property, 
amounts otherwise chargeable to capital ac-
count with respect to such expenses shall be re-
duced under rules similar to the rules of section 
50(c).’’. 
(k) WAGE AND APPRENTICESHIP REQUIREMENTS.— 
Section 48(a) is amended by adding at the end the fol-
lowing new paragraphs: 
‘‘(9) INCREASED CREDIT AMOUNT FOR ENERGY 
PROJECTS.— 
‘‘(A) IN GENERAL.— 
‘‘(i) RULE.—In the case of any energy 
project which satisfies the requirements of 
subparagraph (B), the amount of the cred-
it determined under this subsection (deter-
mined after the application of paragraphs 
(1) through (8) shall be equal to such 
amount multiplied by 5 (determined with-
out regard to this sentence). 
‘‘(ii) ENERGY
PROJECT
DEFINED.— 
For purposes of this subsection the term 
‘energy project’ means a project consisting 
of one or more energy properties that are 
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part of a single project. The requirements 
of this paragraph shall be applied to such 
project. 
‘‘(B) PROJECT REQUIREMENTS.—A project 
meets the requirements of this subparagraph if 
it is one of the following: 
‘‘(i) A project with a maximum net 
output of less than 1 megawatt of elec-
trical or thermal energy. 
‘‘(ii) A project the construction of 
which begins before the date that is 60 
days after the Secretary publishes guid-
ance with respect to the requirements of 
paragraphs (10) and (11). 
‘‘(iii) A project which satisfies the re-
quirements of paragraphs (10) and (11). 
‘‘(10) PREVAILING WAGE REQUIREMENTS.— 
‘‘(A) IN GENERAL.—The requirements de-
scribed in this subparagraph with respect to 
any energy project are that the taxpayer shall 
ensure that any laborers and mechanics em-
ployed by contractors and subcontractors in— 
‘‘(i) the construction of such energy 
project, and 
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‘‘(ii) for the five-year period beginning 
on the date such project is originally 
placed in service, the alteration or repair of 
such project, 
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 
most recently determined by the Secretary of 
Labor, in accordance with subchapter IV of 
chapter 31 of title 40, United States Code. 
‘‘(B) CORRECTION AND PENALTY RELATED 
TO
FAILURE
TO
SATISFY
WAGE
REQUIRE-
MENTS.—Rules similar to the rules of clauses 
(i) through (iv) of section 45(b)(7)(B) shall 
apply. 
‘‘(C) RECAPTURE.—The Secretary shall, 
by regulations or other guidance, provide for re-
capturing the benefit of any increase in the 
credit allowed under this subsection by reason 
of this paragraph with respect to any project 
which does not satisfy the requirements under 
subparagraph (A) (after application of subpara-
graph (B)) for the period described in clause 
(ii) of subparagraph (A) (but which does not 
cease to be investment credit property within 
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the meaning of section 50(a)). The period and 
percentage of such recapture shall be deter-
mined under rules similar to the rules of section 
50(a). 
‘‘(11) 
APPRENTICESHIP
REQUIREMENTS.— 
Rules similar to the rules of section 45(b)(8) shall 
apply. 
‘‘(12) DOMESTIC
CONTENT
BONUS
CREDIT 
AMOUNT.— 
‘‘(A) IN GENERAL.—In the case of any en-
ergy project which satisfies the requirement 
under subparagraph (B), for purposes of apply-
ing paragraph (2) with respect to such prop-
erty, the energy percentage shall be increased 
by the applicable credit rate increase. 
‘‘(B) REQUIREMENT.—Rules similar to the 
rules of section 45(b)(9)(B) shall apply. 
‘‘(C) 
APPLICABLE
CREDIT
RATE
IN-
CREASE.—For purposes of subparagraph (A), 
the applicable credit rate increase shall be— 
‘‘(i) in the case of an energy project 
that does not satisfy the requirements of 
paragraph (9)(B), 2 percentage points, and 
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‘‘(ii) in the case of an energy project 
that satisfies the requirements of para-
graph (9)(B), 10 percentage points. 
‘‘(13) PHASEOUT FOR ELECTIVE PAYMENT.— 
Rules similar to the rules of section 45(b)(10) shall 
apply. 
‘‘(14) REGULATIONS
AND
GUIDANCE.—The 
Secretary shall issue such regulations or other guid-
ance as the Secretary determines necessary or ap-
propriate to carry out the purposes of this sub-
section, including regulations or other guidance 
which provides for requirements for recordkeeping or 
information reporting for purposes of establishing 
the requirements of this subsection.’’. 
(l) SPECIAL RULE FOR PROPERTY FINANCED BY 
TAX-EXEMPT BONDS.—Section 48(a)(4) is amended to 
read as follows: 
‘‘(4) SPECIAL RULE FOR PROPERTY FINANCED 
BY TAX-EXEMPT BONDS.—Rules similar to the rule 
under section 45(b)(3) shall apply for purposes of 
this section.’’. 
(m) TREATMENT OF CERTAIN CONTRACTS INVOLV-
ING ENERGY STORAGE.—Section 7701(e) is amended— 
(1) in paragraph (3)— 
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(A) in subparagraph (A)(i), by striking 
‘‘or’’ at the end of subclause (II), by striking 
‘‘and’’ at the end of subclause (III) and insert-
ing ‘‘or’’, and by adding at the end the fol-
lowing new subclause: 
‘‘(IV) the operation of a storage 
facility, and’’, and 
(B) by adding at the end the following new 
subparagraph: 
‘‘(F) STORAGE
FACILITY.—For purposes 
of subparagraph (A), the term ‘storage facility’ 
means a facility which uses energy storage tech-
nology within the meaning of section 48(c)(6).’’, 
and 
(2) in paragraph (4), by striking ‘‘or water 
treatment works facility’’ and inserting ‘‘water treat-
ment facility, or storage facility’’. 
(n) INCREASE IN CREDIT RATE FOR ENERGY COM-
MUNITIES.—Section 48(a) is amended by adding at the 
end the following new paragraph: 
‘‘(15) INCREASE IN CREDIT RATE FOR ENERGY 
COMMUNITIES.— 
‘‘(A) IN GENERAL.—In the case of any en-
ergy project that is placed in service within an 
energy community (as defined in section 
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45(b)(11)(B)), for purposes of applying para-
graph (2) with respect to such property, the en-
ergy percentage shall be increased by the appli-
cable credit rate increase. 
‘‘(B) 
APPLICABLE
CREDIT
RATE
IN-
CREASE.—For purposes of subparagraph (A), 
the applicable credit rate increase shall be equal 
to— 
‘‘(i) in the case of any energy project 
that does not satisfy the requirements of 
paragraph (9)(B), 2 percentage points, and 
‘‘(ii) in the case of any energy project 
that satisfies the requirements of para-
graph (9)(B), 10 percentage points.’’. 
(o) EFFECTIVE DATES.— 
(1) The amendments made by subsections (a), 
(b), (c), (d), (h), (i), (j), (l), (m), and (n) of this sec-
tion shall apply to property placed in service after 
December 31, 2021. 
(2) The amendments made by subsections (e), 
(f), and (g) shall apply to property placed in service 
after December 31, 2021, and, for any property the 
construction of which begins prior to January 1, 
2022, only to the extent of the basis thereof attrib-
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utable to the construction, reconstruction, or erec-
tion after December 31, 2021. 
(3) The amendments made by subsection (k) 
shall apply to property the construction of which be-
gins after December 31, 2021. 
SEC. 136103. INCREASE IN ENERGY CREDIT FOR SOLAR FA-
CILITIES PLACED IN SERVICE IN CONNEC-
TION WITH LOW-INCOME COMMUNITIES. 
(a) IN GENERAL.—Section 48 is amended by adding 
at the end the following new subsection: 
‘‘(e) SPECIAL RULES
FOR CERTAIN SOLAR
AND 
WIND FACILITIES PLACED IN SERVICE IN CONNECTION 
WITH LOW-INCOME COMMUNITIES.— 
‘‘(1) IN GENERAL.—In the case of any qualified 
solar and wind facility with respect to which the Sec-
retary makes an allocation of environmental justice 
solar and wind capacity limitation under paragraph 
(4)— 
‘‘(A) the energy percentage otherwise de-
termined under subsection (a)(2) with respect 
to any eligible property which is part of such 
facility shall be increased by— 
‘‘(i) in the case of a facility described 
in subclause (I) of paragraph (2)(A)(iii) 
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and not described in subclause (II) of such 
paragraph, 10 percentage points, and 
‘‘(ii) in the case of a facility described 
in subclause (II) of paragraph (2)(A)(iii), 
20 percentage points, and 
‘‘(B) the increase in the credit determined 
under subsection (a) by reason of this sub-
section for any taxable year with respect to all 
property which is part of such facility shall not 
exceed the amount which bears the same ratio 
to the amount of such increase (determined 
without regard to this subparagraph) as— 
‘‘(i) the environmental justice solar 
and wind capacity limitation allocated to 
such facility, bears to 
‘‘(ii) the total megawatt nameplate ca-
pacity of such facility, as measured in di-
rect current. 
‘‘(2) QUALIFIED SOLAR AND WIND FACILITY.— 
For purposes of this subsection— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
solar and wind facility’ means any facility— 
‘‘(i) which generates electricity solely 
from property described in section 45(d)(1) 
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or in clause (i) or (vi) of subsection 
(a)(3)(A), 
‘‘(ii) which has a maximum net output 
of less than 5 megawatts, and 
‘‘(iii) which— 
‘‘(I) is located in a low-income 
community (as defined in section 
45D(e)) or on Indian land (as defined 
in section 2601(2) of the Energy Pol-
icy Act of 1992 (25 U.S.C. 3501(2))), 
or 
‘‘(II) is part of a qualified low-in-
come residential building project or a 
qualified low-income economic benefit 
project. 
‘‘(B) QUALIFIED
LOW-INCOME
RESIDEN-
TIAL BUILDING PROJECT.—A facility shall be 
treated as part of a qualified low-income resi-
dential building project if— 
‘‘(i) such facility is installed on a resi-
dential rental building which participates 
in a covered housing program (as defined 
in section 41411(a) of the Violence Against 
Women 
Act 
of 
1994 
(34 
U.S.C. 
12491(a)(3)), a Housing Development 
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Fund Corporation cooperative under Arti-
cle XI of the New York State Private 
Housing Finance Law, a housing assist-
ance program administered by the Depart-
ment of Agriculture under title V of the 
Housing Act of 1949, a housing program 
administered by a tribally designated hous-
ing entity (as defined in section 4(22) of 
the Native American Housing Assistance 
and Self-Determination Act of 1996 (25 
U.S.C. 4103(22))) or such other affordable 
housing programs as the Secretary may 
provide, and 
‘‘(ii) the financial benefits of the elec-
tricity produced by such facility are allo-
cated equitably among the occupants of the 
dwelling units of such building. 
‘‘(C) QUALIFIED
LOW-INCOME
ECONOMIC 
BENEFIT PROJECT.—A facility shall be treated 
as part of a qualified low-income economic ben-
efit project if at least 50 percent of the finan-
cial benefits of the electricity produced by such 
facility are provided to households with income 
of— 
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‘‘(i) less than 200 percent of the pov-
erty line applicable to a family of the size 
involved, or 
‘‘(ii) less than 80 percent of area me-
dian gross income (as determined under 
section 142(d)(2)(B)). 
‘‘(D) FINANCIAL BENEFIT.—For purposes 
of subparagraphs (B) and (C), electricity ac-
quired at a below-market rate shall not fail to 
be taken into account as a financial benefit. 
‘‘(3) ELIGIBLE
PROPERTY.—For purposes of 
this section, the term ‘eligible property’ means en-
ergy property which is part of a facility described in 
section 45(d)(1) or in clause (i) or (vi) of subsection 
(a)(3)(A), including energy storage property (de-
scribed in subsection (a)(3)(A)(viii)) installed in con-
nection with such energy property. 
‘‘(4) ALLOCATIONS.— 
‘‘(A) IN
GENERAL.—Not later than 270 
days after the date of enactment of this sub-
section, the Secretary shall establish a program 
to allocate amounts of environmental justice 
solar and wind capacity limitation to qualified 
solar and wind facilities. 
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‘‘(B) LIMITATION.—The amount of envi-
ronmental justice solar and wind capacity limi-
tation allocated by the Secretary under sub-
paragraph (A) during any calendar year shall 
not exceed the annual capacity limitation with 
respect to such year. 
‘‘(C) ANNUAL CAPACITY LIMITATION.—For 
purposes of this paragraph, the term ‘annual 
capacity limitation’ means 1.8 gigawatts of di-
rect current capacity for each of calendar years 
2022 through 2026, and zero thereafter. 
‘‘(D) CARRYOVER
OF
UNUSED
LIMITA-
TION.—If the annual capacity limitation for any 
calendar year exceeds the aggregate amount al-
located for such year under this paragraph, 
such limitation for the succeeding calendar year 
shall be increased by the amount of such excess. 
No amount may be carried under the preceding 
sentence to any calendar year after 2026 except 
as provided in section 48F(i)(4)(D)(ii). 
‘‘(E) PLACED IN SERVICE DEADLINE.— 
‘‘(i) IN
GENERAL.—Paragraph (1) 
shall not apply with respect to any prop-
erty which is placed in service after the 
date that is 4 years after the date of the 
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allocation with respect to the facility of 
which such property is a part. 
‘‘(ii) APPLICATION OF CARRYOVER.— 
Any amount of environmental justice solar 
and wind capacity limitation which expires 
under clause (i) during any calendar year 
shall be taken into account as an excess 
described in subparagraph (D) (or as an 
increase in such excess) for such calendar 
year, subject to the limitation imposed by 
the last sentence of such subparagraph. 
‘‘(F) SELECTION CRITERIA.— 
‘‘(i) IN GENERAL.—In determining to 
which qualified solar and wind facilities to 
allocate environmental justice solar and 
wind capacity limitation under this para-
graph, the Secretary shall take into consid-
eration which facilities will result in— 
‘‘(I) the greatest health and eco-
nomic benefits, including the ability to 
withstand extreme weather events, for 
individuals 
described 
in 
section 
45D(e)(2), 
‘‘(II) the greatest employment 
and wages for such individuals, and 
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‘‘(III) the greatest engagement 
with, outreach to, or ownership by, 
such individuals, including through 
partnerships with local governments, 
community-based 
organizations, 
an 
Indian tribal government (as defined 
in clause (ii)), or any Alaska Native 
Corporation (as defined in section 3 of 
the Alaska Native Claims Settlement 
Act (43 U.S.C. 1602(m)). 
‘‘(ii) INDIAN TRIBAL GOVERNMENT.— 
For purposes of this subparagraph, the 
term ‘Indian tribal government’ means the 
recognized governing body of any Indian or 
Alaska Native tribe, band, nation, pueblo, 
village, community, component band, or 
component reservation, individually identi-
fied (including parenthetically) in the list 
published most recently as of the date of 
enactment of this subsection pursuant to 
section 104 of the Federally Recognized 
Indian Tribe List Act of 1994 (25 U.S.C. 
5131). 
‘‘(G) DISCLOSURE OF ALLOCATIONS.—The 
Secretary shall, upon making an allocation of 
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environmental justice solar and wind capacity 
limitation under this paragraph, publicly dis-
close the identity of the applicant, the amount 
of the environmental justice solar and wind ca-
pacity limitation allocated to such applicant, 
and the location of the facility for which such 
allocation is made. 
‘‘(5) RECAPTURE.—The Secretary shall, by reg-
ulations or other guidance, provide for recapturing 
the benefit of any increase in the credit allowed 
under subsection (a) by reason of this subsection 
with respect to any property which ceases to be 
property eligible for such increase (but which does 
not cease to be investment credit property within the 
meaning of section 50(a)). The period and percent-
age of such recapture shall be determined under 
rules similar to the rules of section 50(a). To the ex-
tent provided by the Secretary, such recapture may 
not apply with respect to any property if, within 12 
months after the date the taxpayer becomes aware 
(or reasonably should have become aware) of such 
property ceasing to be property eligible for such in-
crease, the eligibility of such property for such in-
crease is restored. The preceding sentence shall not 
apply more than once with respect to any facility.’’. 
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(b) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on January 1, 2022. 
SEC. 136104. ELECTIVE PAYMENT FOR ENERGY PROPERTY 
AND ELECTRICITY PRODUCED FROM CER-
TAIN RENEWABLE RESOURCES, ETC. 
(a) IN GENERAL.—Subchapter B of chapter 65 is 
amended by inserting after section 6416 the following new 
section: 
‘‘SEC. 6417. ELECTIVE PAYMENT OF APPLICABLE CREDITS. 
‘‘(a) IN GENERAL.—In the case of a taxpayer making 
an election (at such time and in such manner as the Sec-
retary may provide) under this section with respect to any 
applicable credit determined with respect to such taxpayer, 
such taxpayer shall be treated as making a payment 
against the tax imposed by subtitle A (for the taxable year 
with respect to which such credit was determined) equal 
to the amount of such credit. 
‘‘(b) APPLICABLE CREDIT.—The term ‘applicable 
credit’ means each of the following: 
‘‘(1) So much of the renewable electricity pro-
duction credit determined under section 45 as is at-
tributable to qualified facilities which are originally 
placed in service after December 31, 2021, and with 
respect to which an election is made under sub-
section (c)(3). 
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‘‘(2) The energy credit determined under sec-
tion 48. 
‘‘(3) So much of the credit for carbon oxide se-
questration determined under section 45Q as is at-
tributable to carbon capture equipment which is 
originally placed in service after December 31, 2021, 
and with respect to which an election is made under 
subsection (c)(3). 
‘‘(4) The credit for alternative fuel vehicle re-
fueling property allowed under section 30C. 
‘‘(5) The qualifying advanced energy project 
credit determined under section 48C. 
‘‘(c) SPECIAL RULES.—For purposes of this sec-
tion— 
‘‘(1) APPLICATION TO TAX-EXEMPT AND GOV-
ERNMENTAL ENTITIES.—In the case of any organi-
zation exempt from the tax imposed by subtitle A, 
any State or local government (or political subdivi-
sion thereof), the Tennessee Valley Authority, an In-
dian tribal government (as defined in section 
48(e)(4)(F)(ii)), or any Alaska Native Corporation 
(as defined in section 3 of the Alaska Native Claims 
Settlement Act (43 U.S.C. 1602(m)) which makes 
the election described in subsection (a), any applica-
ble credit shall be determined— 
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‘‘(A) without regard to paragraphs (3) and 
(4)(A)(i) of section 50(b), and 
‘‘(B) by treating any property with respect 
to which such credit is determined as used in 
a trade or business of the taxpayer. 
‘‘(2) APPLICATION
TO
PARTNERSHIPS
AND
S 
CORPORATIONS.— 
‘‘(A) IN GENERAL.—In the case of any ap-
plicable credit determined with respect to any 
facility or property held directly by a partner-
ship or S corporation, if such partnership or S 
corporation makes an election under this sub-
section (in such manner as the Secretary may 
provide) with respect to such credit— 
‘‘(i) the Secretary shall make a pay-
ment to such partnership or S corporation 
equal to the amount of such credit, 
‘‘(ii) subsection (d) shall be applied 
with respect to such credit before deter-
mining any partner’s distributive share, or 
shareholder’s pro rata share, of such cred-
it, 
‘‘(iii) any amount with respect to 
which the election in subsection (a) is 
made shall be treated as tax exempt in-
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come for purposes of sections 705 and 
1366, and 
‘‘(iv) a partner’s distributive share of 
such tax exempt income shall be based on 
such partner’s distributive share of the 
otherwise applicable credit for each taxable 
year. 
‘‘(B) COORDINATION
WITH
APPLICATION 
AT PARTNER OR SHAREHOLDER LEVEL.—In the 
case of any partnership or S corporation, sub-
section (a) shall be applied at the partner or 
shareholder level after application of subpara-
graph (A)(ii). 
‘‘(3) ELECTIONS.— 
‘‘(A) IN
GENERAL.—Any election under 
this subsection shall be made not later than the 
due date (including extensions of time) for the 
return of tax for the taxable year for which the 
election is made, but in no event earlier than 
270 days after the date of the enactment of this 
section. Any such election, once made, shall be 
irrevocable. Except as otherwise provided in this 
paragraph, any election under this subsection 
shall apply with respect to any credit for the 
taxable year for which the election is made. 
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‘‘(B) RENEWABLE ELECTRICITY PRODUC-
TION CREDIT.—In the case of the credit de-
scribed in subsection (b)(1), any election under 
this subsection shall— 
‘‘(i) apply separately with respect to 
each qualified facility, 
‘‘(ii) be made for the taxable year in 
which such qualified facility is originally 
placed in service, and 
‘‘(iii) shall apply to such taxable year 
and all subsequent taxable years with re-
spect to such qualified facility. 
‘‘(C) CREDIT FOR CARBON OXIDE SEQUES-
TRATION.—In the case of the credit described 
in subsection (b)(3), any election under this 
subsection shall— 
‘‘(i) apply separately with respect to 
the carbon capture equipment originally 
placed in service by the taxpayer during a 
taxable year, and 
‘‘(ii) shall apply to such taxable year 
and all subsequent taxable years with re-
spect to such equipment. 
‘‘(4) TIMING.—The payment described in sub-
section (a) shall be treated as made on— 
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‘‘(A) in the case of any government, or po-
litical subdivision, described in paragraph (1) 
and for which no return is required under sec-
tion 6011 or 6033(a), the later of the date that 
a return would be due under section 6033(a) if 
such government or subdivision were described 
in that section or the date on which such gov-
ernment or subdivision submits a claim for 
credit or refund (at such time and in such man-
ner as the Secretary shall provide), and 
‘‘(B) in any other case, the later of the due 
date (determined without regard to extensions) 
of the return of tax for the taxable year or the 
date on which such return is filed. 
‘‘(5) TREATMENT OF PAYMENTS TO PARTNER-
SHIPS AND S CORPORATIONS.—For purposes of sec-
tion 1324 of title 31, United States Code, the pay-
ments under paragraph (2)(A)(ii) shall be treated in 
the same manner as a refund due from a credit pro-
vision referred to in subsection (b)(2) of such sec-
tion. 
‘‘(6) ADDITIONAL INFORMATION.—As a condi-
tion of, and prior to, a payment under this section, 
the Secretary may require such information or reg-
istration as the Secretary deems necessary or appro-
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priate for purposes of preventing duplication, fraud, 
improper payments, or excessive payments under 
this section. 
‘‘(7) EXCESSIVE PAYMENT.— 
‘‘(A) IN GENERAL.—In the case of a pay-
ment made to a taxpayer under this subsection 
or any amount treated as a payment which is 
made by the taxpayer under subsection (a) 
which the Secretary determines constitutes an 
excessive payment, the tax imposed on such tax-
payer by chapter 1 for the taxable year in 
which such determination is made shall be in-
creased by an amount equal to the sum of— 
‘‘(i) the amount of such excessive pay-
ment, plus 
‘‘(ii) an amount equal to 20 percent of 
such excessive payment. 
‘‘(B) REASONABLE CAUSE.—Subparagraph 
(A)(ii) shall not apply if the taxpayer dem-
onstrates to the satisfaction of the Secretary 
that the excessive payment resulted from rea-
sonable cause. 
‘‘(C) EXCESSIVE PAYMENT DEFINED.—For 
purposes of this paragraph, the term ‘excessive 
payment’ means, with respect to a facility for 
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which an election is made under this section for 
any taxable year, an amount equal to the excess 
of— 
‘‘(i) the amount of the payment made 
to the taxpayer under this subsection or 
any amount treated as a payment which is 
made by the taxpayer under subsection (a) 
with respect to such facility for such tax-
able year, over 
‘‘(ii) the amount of the credit which, 
without application of this subsection, 
would be otherwise allowable (determined 
without regard to section 38(c)) under this 
section with respect to such facility for 
such taxable year. 
‘‘(d) DENIAL OF DOUBLE BENEFIT.—In the case of 
a taxpayer making an election under this section with re-
spect to an applicable credit, such credit shall be reduced 
to zero and shall, for any other purposes under this title, 
be deemed to have been allowed to the taxpayer for such 
taxable year. 
‘‘(e) MIRROR CODE POSSESSIONS.—In the case of 
any possession of the United States with a mirror code 
tax system (as defined in section 24(k)), this section shall 
not be treated as part of the income tax laws of the United 
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States for purposes of determining the income tax law of 
such possession unless such possession elects to have this 
section be so treated. 
‘‘(f) BASIS REDUCTION AND RECAPTURE.—Except 
as otherwise provided in subsection (c)(1)(A), rules similar 
to the rules of section 50 shall apply for purposes of this 
section. 
‘‘(g) REGULATIONS.—The Secretary shall issue such 
regulations or other guidance as may be necessary or ap-
propriate to carry out the purposes of this section, includ-
ing— 
‘‘(1) regulations or other guidance providing 
rules for determining a partner’s distributive share 
of the tax exempt income described in subsection 
(c)(2)(A)(iii), and 
‘‘(2) guidance to ensure that the amount of the 
payment or deemed payment made under this sec-
tion is commensurate with the amount of the credit 
that would be otherwise allowable (determined with-
out regard to section 38(c)).’’. 
(b) APPLICATION WITH RESPECT TO REAL ESTATE 
INVESTMENT TRUSTS.—Section 50(d) is amended by add-
ing at the end the following: ‘‘In the case of a real estate 
investment trust making an election under section 6417, 
paragraphs (1)(B) and (2)(B) of the section 46(e) referred 
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to in paragraph (1) of this subsection shall not apply to 
any qualified investment credit property of a real estate 
investment trust.’’. 
(d) CLERICAL AMENDMENT.—The table of sections 
for subchapter B of chapter 65 is amended by inserting 
after the item relating to section 6416 the following new 
item: 
‘‘Sec. 6417. Elective payment of applicable credits.’’. 
(e) IN GENERAL.—The amendments made by this 
section shall apply to taxable years beginning after De-
cember 31, 2021. 
SEC. 136105. INVESTMENT CREDIT FOR ELECTRIC TRANS-
MISSION PROPERTY. 
(a) IN GENERAL.—Subpart E of part IV of sub-
chapter A of chapter 1 is amended by inserting after sec-
tion 48C the following new section: 
‘‘SEC. 48D. QUALIFYING ELECTRIC TRANSMISSION PROP-
ERTY. 
‘‘(a) ALLOWANCE OF CREDIT.—For purposes of sec-
tion 46, the qualifying electric transmission property cred-
it for any taxable year is an amount equal to 6 percent 
of the basis of qualifying electric transmission property 
placed in service by the taxpayer during such taxable year. 
‘‘(b) QUALIFYING ELECTRIC TRANSMISSION PROP-
ERTY.—For purposes of this section— 
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‘‘(1) IN GENERAL.—The term ‘qualifying elec-
tric transmission property’ means tangible prop-
erty— 
‘‘(A) which is a qualifying electric trans-
mission line or related transmission property, 
‘‘(B)(i) the construction, reconstruction, or 
erection of which is completed by the taxpayer, 
or 
‘‘(ii) which is acquired by the taxpayer if 
the original use of such property commences 
with the taxpayer, and 
‘‘(C) with respect to which depreciation (or 
amortization in lieu of depreciation) is allow-
able. 
‘‘(2) QUALIFYING
ELECTRIC
TRANSMISSION 
LINE.— 
‘‘(A) IN GENERAL.—The term ‘qualifying 
electric transmission line’ means an electric 
transmission line which— 
‘‘(i) is capable of transmitting elec-
tricity at a voltage of not less than 275 
kilovolts or is a superconducting line, and 
‘‘(ii) has a transmission capacity of 
not less than 500 megawatts. 
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‘‘(B) SUPERCONDUCTING LINE.—For pur-
poses of subparagraph (A), the term ‘super-
conducting line’ means a transmission line that 
conducts all of its current over a super-
conducting material. 
‘‘(3) RELATED TRANSMISSION PROPERTY.— 
‘‘(A) IN
GENERAL.—The term ‘related 
transmission property’ means, with respect to 
any electric transmission line, any property 
which— 
‘‘(i) is listed as a ‘transmission plant’ 
in the Uniform System of Accounts for the 
Federal Energy Regulatory Commission 
under part 101 of subchapter C of chapter 
I of title 18, Code of Federal Regulations, 
and 
‘‘(ii) is— 
‘‘(I) necessary for the operation 
of such electric transmission line, or 
‘‘(II) conversion equipment along 
such electric transmission line. 
‘‘(B) CREDIT NOT ALLOWED SEPARATELY 
WITH RESPECT TO RELATED PROPERTY.—No 
credit shall be allowed to any taxpayer under 
this section with respect to any related trans-
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