1710 
‘‘(D) EXCEPTIONS.—In order to facilitate 
the use of amounts made available in this sec-
tion, increase the tax incentives for investment 
in clean energy, and grow the domestic supply 
chains, the Secretary shall provide appropriate 
exceptions to the domestic content requirements 
for products under subparagraph (C) for the 
construction of qualified facilities if either the 
inclusion of domestic products increases the 
overall costs of projects by more than 25 per-
cent or relevant manufactured products are not 
produced in the United States in sufficient and 
reasonably available quantities or of a satisfac-
tory quality. 
‘‘(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.’’. 
(g) EFFECTIVE DATE.—The amendments made by 
this section shall apply to facilities placed in service after 
December 31, 2021. 
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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, 2034’’: 
(1) Subsection (a)(3)(A)(ii). 
(2) Subsection (a)(3)(A)(vii). 
(3) Subsection (c)(1)(D). 
(4) Subsection (c)(2)(D). 
(5) Subsection (c)(3)(A)(iv). 
(6) Subsection (c)(4)(C). 
(b) PHASEOUT OF CREDIT.—Section 48(a) is amend-
ed by striking paragraphs (6) and (7) and inserting the 
following new paragraphs: 
‘‘(6) PHASEOUT
FOR
SOLAR
ENERGY
PROP-
ERTY.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), in the case of any energy property 
described in paragraph (3)(A)(i) the construc-
tion of which begins before January 1, 2034, 
the energy percentage determined under para-
graph (2) shall be equal to— 
‘‘(i) in the case of any property the 
construction of which begins after Decem-
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ber 31, 2019, and which is placed in serv-
ice before January 1, 2022, 26 percent, 
‘‘(ii) in the case of any property the 
construction of which begins before Janu-
ary 1, 2032, and which is placed in service 
after December 31, 2021, 30 percent, 
‘‘(iii) in the case of any property the 
construction of which begins after Decem-
ber 31, 2031 and before January 1, 2033, 
26 percent, and 
‘‘(iv) in the case of any property the 
construction of which begins after Decem-
ber 31, 2032 and before January 1, 2034, 
22 percent. 
‘‘(B) PLACED IN SERVICE DEADLINE.—In 
the case of any energy property described in 
paragraph (3)(A)(i) the construction of which 
begins before January 1, 2034, and which is 
not placed in service before January 1, 2036, 
the energy percentage determined under para-
graph (2) shall be equal to 10 percent. 
‘‘(7) PHASEOUT FOR CERTAIN OTHER ENERGY 
PROPERTY.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), in the case of any qualified fuel cell 
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property, qualified small wind property, waste 
energy recovery property, or energy property 
described in paragraph (3)(A)(ii), the energy 
percentage determined under paragraph (2) 
shall be equal to— 
‘‘(i) in the case of any property the 
construction of which begins after Decem-
ber 31, 2019, and which is placed in serv-
ice before January 1, 2022, 26 percent, 
‘‘(ii) in the case of any property the 
construction of which begins before Janu-
ary 1, 2032, and which is placed in service 
after December 31, 2021, 30 percent, 
‘‘(iii) in the case of any property the 
construction of which begins after Decem-
ber 31, 2031 and before January 1, 2033, 
26 percent, and 
‘‘(iv) in the case of any property the 
construction of which begins after Decem-
ber 31, 2032 and before January 1, 2034, 
22 percent. 
‘‘(B) PLACED IN SERVICE DEADLINE.—In 
the case of any energy property described in 
subparagraph (A) which is not placed in service 
before January 1, 2036, the energy percentage 
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determined under paragraph (2) shall be equal 
to 0 percent.’’. 
(c) 30 PERCENT CREDIT
FOR SOLAR
AND GEO-
THERMAL.— 
(1) 
EXTENSION
FOR
SOLAR.—Section 
48(a)(2)(A)(i)(II) is amended by striking ‘‘January 
1, 2024’’ and inserting ‘‘January 1, 2034’’. 
(2) APPLICATION TO GEOTHERMAL.— 
(A) 
IN
GENERAL.—Paragraphs 
(2)(A)(i)(II), (6)(A), and (6)(B) of section 
48(a) are each amended by striking ‘‘paragraph 
(3)(A)(i)’’ and inserting ‘‘clause (i), (iii), or 
(vii) of paragraph (3)(A)’’. 
(B) 
CONFORMING
AMENDMENT.—The 
heading of section 48(a)(6) is amended by in-
serting ‘‘AND GEOTHERMAL’’ after ‘‘SOLAR EN-
ERGY’’. 
(d) ENERGY STORAGE TECHNOLOGIES; QUALIFIED 
BIOGAS PROPERTY; MICROGRID CONTROLLERS; EXTEN-
SION OF WASTE ENERGY RECOVERY PROPERTY.— 
(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: 
‘‘(viii) energy storage technology, 
‘‘(ix) qualified biogas property, or 
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‘‘(x) microgrid controllers,’’. 
(2) APPLICATION
OF
PERCENT
CREDIT.— 
Section 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, 
and 
‘‘(VIII) 
microgrid 
controllers, 
and’’. 
(3) 
APPLICATION
OF
PHASEOUT.—Section 
48(a)(7) is amended by inserting ‘‘energy storage 
technology, qualified biogas property, microgrid 
contollers,’’ after ‘‘waste energy recovery property,’’. 
(4) 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 equipment (other 
than equipment primarily used in the transpor-
tation of goods or individuals and not for the 
production of electricity) which uses batteries, 
compressed air, pumped hydropower, hydrogen 
storage, thermal energy storage, regenerative 
fuel cells, flywheels, capacitors, superconducting 
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magnets, or other technologies identified by the 
Secretary, after consultation with the Secretary 
of Energy, to store energy for conversion to 
electricity (or, in the case of hydrogen storage, 
to store energy), and has a capacity of not less 
than 5 kilowatt 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 is 
modified such that such equipment (after 
such modification) has a 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 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 
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of any property to which this subparagraph ap-
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, 2034. 
‘‘(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, 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 productive 
use. 
‘‘(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, 2034. 
‘‘(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 to maintain acceptable 
frequency, voltage, or economic dispatch. 
‘‘(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, 2034.’’. 
(5) 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.’’. 
(6) 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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(e) 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 kilowatts 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.’’. 
(f) 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’’. 
(g) 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.’’. 
(h) WAGE AND APPRENTICESHIP REQUIREMENTS.— 
Section 48(a) is amended by adding at the end the fol-
lowing new paragraphs: 
‘‘(8) BASE CREDIT AMOUNT AND INCREASED 
CREDIT AMOUNT FOR ENERGY PROJECTS.— 
‘‘(A) IN GENERAL.— 
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‘‘(I) A project with a maximum 
net output of less than 1 megawatt. 
‘‘(II) A project which commences 
construction prior to the date of the 
enactment of this paragraph. 
‘‘(III) A project which satisfies 
the requirements of paragraphs (9) 
and (10). 
‘‘(9) 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 
‘‘(ii) for any year during the period 
beginning on the date any energy property 
of such project is originally placed in serv-
ice, the alteration or repair of such prop-
erty, 
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 
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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.—A taxpayer shall not be treated as 
failing to satisfy the requirements of this para-
graph if such taxpayer meets requirements 
similar 
to 
the 
requirements 
of 
section 
45(b)(8)(B). 
‘‘(10) APPRENTICESHIP REQUIREMENTS.—The 
requirements described in this subparagraph with re-
spect to the construction of any applicable facility 
are as follows: 
‘‘(A) LABOR HOURS.— 
‘‘(i) PERCENTAGE OF TOTAL LABOR 
HOURS.—All contractors and subcontrac-
tors engaged in the performance of con-
struction, alteration, or repair work on any 
applicable facility prior to such facility 
being placed into service shall, subject to 
subparagraph (B), ensure that not less 
than the applicable percentage of the total 
labor hours of such work be performed by 
qualified apprentices. 
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‘‘(ii) APPLICABLE PERCENTAGE.—For 
purposes of paragraph (1), the applicable 
percentage shall be— 
‘‘(I) in the case of any applicable 
project the construction of which be-
gins before January 1, 2023, 5 per-
cent, 
‘‘(II) in the case of any applica-
ble project the construction of which 
begins after December 31, 2022, and 
before January 1, 2024, 10 percent, 
and 
‘‘(III) in the case of any applica-
ble project the construction of which 
begins after December 31, 2023, 15 
percent. 
‘‘(B) APPRENTICE
TO
JOURNEYWORKER 
RATIO.—The requirement under subparagraph 
(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 
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repair work on an applicable project shall em-
ploy 1 or more qualified apprentices to perform 
such work. 
‘‘(D) EXCEPTION.— 
‘‘(i) IN
GENERAL.—Notwithstanding 
any other provision of this paragraph, this 
paragraph shall not apply in the case of a 
taxpayer who— 
‘‘(I) demonstrates a lack of avail-
ability of qualified apprentices in the 
geographic area of the construction, 
alteration, or repair work, and 
‘‘(II) makes a good faith effort to 
comply with the requirements of this 
paragraph. 
‘‘(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 an 
applicable project if such taxpayer has re-
quested qualified apprentices from a reg-
istered apprenticeship program, as defined 
in section 3131(e)(3)(B), and such request 
has been denied, provided that such denial 
is not the result of a refusal by the con-
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tractors or subcontractors engaged in the 
performance of construction, alteration, or 
repair work on such applicable project to 
comply with the established standards and 
requirements of such apprenticeship pro-
gram. 
‘‘(E) DEFINITIONS.—For purposes of this 
paragraph— 
‘‘(i) LABOR HOURS.—The term ‘labor 
hours’ has the meaning given such term in 
section 45(b)(9)(E)(i). 
‘‘(ii) QUALIFIED
APPRENTICE.—The 
term ‘qualified apprentice’ has the mean-
ing 
given 
such 
term 
in 
section 
45(b)(9)(E)(ii). 
‘‘(11) DOMESTIC
CONTENT
BONUS
CREDIT 
AMOUNT.— 
‘‘(A) IN GENERAL.—In the case of any en-
ergy project which satisfies the requirements 
under subparagraph (B), the energy percentage 
in subsection (a)(2) shall be increased by the 
applicable rate in subparagraph (C). 
‘‘(B) REQUIREMENTS.— 
‘‘(i) IN GENERAL.—The requirement 
described in this subclause with respect to 
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1728 
any energy project 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 the facility 
is composed of steel, iron, or manufactured 
products which were produced in the 
United States. 
‘‘(ii) STEEL AND IRON.—In the case 
of steel or iron, clause (i) shall be applied 
in a manner consistent with section 
661.5(b) of title 49, Code of Federal Regu-
lations. 
‘‘(iii) MANUFACTURED
PRODUCT.— 
For purposes of clause (i), a manufactured 
product shall be deemed to have been man-
ufactured in the United States if not less 
than 55 percent of the total cost of the 
components of such product is attributable 
to components which are mined, produced, 
or manufactured in the United States. 
‘‘(C) APPLICABLE
RATE
INCREASE.—For 
purposes of subparagraph (A), the applicable 
credit rate increase shall be an amount equal 
to— 
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‘‘(i) in the case of energy project that 
does not meet the requirements of sub-
clause (I) or (III) of paragraph (8)(B)(ii), 
2 percentage points, and 
‘‘(ii) in the case of energy property 
that meets the requirements of subclause 
(I) or (III) of paragraph (8)(B)(ii), 10 per-
centage points. 
‘‘(D) 
INTERNATIONAL
AGREEMENTS.— 
This paragraph shall be applied in a manner 
which is consistent with the obligations of the 
United States under international agreements. 
‘‘(12) PENALTY FOR DIRECT PAY.— 
‘‘(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 ENERGY PROJECTS.—In the 
case of any energy project— 
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‘‘(i) which satisfies the requirements 
under paragraph (11) with respect to the 
construction of such project, or 
‘‘(ii) with a maximum net output of 
less than 1 megawatt 
the applicable percentage shall be 100 percent. 
‘‘(C) PHASED
DOMESTIC
CONTENT
RE-
QUIREMENT.—Subject to subparagraph (D), in 
the case of any energy project which is not de-
scribed in subparagraph (B), the applicable per-
centage shall be— 
‘‘(i) if construction of such project 
began before January 1, 2024, 100 per-
cent, 
‘‘(ii) if construction of such project 
began in calendar year 2024, 90 percent, 
‘‘(iii) if construction of such project 
began in calendar year 2025, 85 percent, 
and 
‘‘(iv) if construction of such project 
began after December 31, 2025, 0 percent. 
‘‘(D) EXCEPTIONS.—In order to facilitate 
the use of amounts made available in this sec-
tion, increase the tax incentives for investment 
in clean energy, and grow the domestic supply 
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chains, the Secretary shall provide appropriate 
exceptions to the domestic content requirements 
for products under subparagraph (C) for the 
construction of qualified facilities if either the 
inclusion of domestic products increases the 
overall costs of projects by more than 25 per-
cent or relevant manufactured products are not 
produced in the United States in sufficient and 
reasonably available quantities or of a satisfac-
tory quality. 
‘‘(13) 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.’’. 
(i) EFFECTIVE DATES.— 
(1) The amendments made by subsections (a), 
(b), (c), (e), (f), (g), and (h) of this section shall 
apply to property placed in service after December 
31, 2021. 
(2) The amendment made by subsection (d) 
shall apply to periods after December 31, 2021, 
under rules similar to the rules of section 48(m) of 
the Internal Revenue Code of 1986 (as in effect on 
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the day before the date of the enactment of the Rev-
enue Reconciliation Act of 1990). 
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 FACILI-
TIES PLACED IN SERVICE IN CONNECTION WITH LOW- 
INCOME COMMUNITIES.— 
‘‘(1) IN GENERAL.—In the case of any qualified 
solar facility with respect to which the Secretary, 
after consultation with the Secretary of Energy and 
the Administrator of the Environmental Protection 
Agency, makes an allocation of environmental justice 
solar capacity limitation under paragraph (4)— 
‘‘(A) equipment described in paragraph 
(3)(B) shall be treated for purposes of this sec-
tion as energy property described in subsection 
(a)(2)(A)(i), 
‘‘(B) 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— 
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‘‘(i) in the case of a facility described 
in subclause (I) of paragraph (2)(A)(iii) 
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 
‘‘(C) 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 
capacity limitation allocated to such facil-
ity, bears to 
‘‘(ii) the total megawatt nameplate ca-
pacity of such facility, as measured in di-
rect current. 
‘‘(2) QUALIFIED
SOLAR
FACILITY.—For pur-
poses of this subsection— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
solar facility’ means any facility— 
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‘‘(i) which generates electricity solely 
from property described in subsection 
(a)(3)(A)(i), 
‘‘(ii) which has a nameplate capacity 
of 5 megawatts or less, and 
‘‘(iii) which— 
‘‘(I) is located in a low-income 
community (as defined in section 
45D(e)), 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 
Fund Corporation cooperative under Arti-
cle XI of the New York State Private 
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Housing Finance Law, a housing assist-
ance program administered by the Depart-
ment of Agriculture under title V of the 
Housing Act of 1949, or such other afford-
able 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— 
‘‘(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-
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quired at a below-market rate shall not fail to 
be taken into account as a financial benefit. 
‘‘(3) ELIGIBLE PROPERTY.— 
‘‘(A) IN GENERAL.—For purposes of this 
section, the term ‘eligible property’ means— 
‘‘(i) energy property which is de-
scribed in subsection (a)(3)(A)(i), includ-
ing energy storage property (described in 
subsection (a)(3)(A)(viii)) installed in con-
nection with such energy property, and 
‘‘(ii) the amount of any expenditures 
which are paid or incurred by the taxpayer 
for qualified interconnection property in-
stalled in connection with the installation 
of property described in subparagraph (A) 
to provide for the transmission or distribu-
tion of the electricity produced or stored by 
such property, and which are properly 
chargeable to the capital account of the 
taxpayer. 
‘‘(B) DEFINITIONS.—For purposes of sub-
paragraph (A)— 
‘‘(i) QUALIFIED
INTERCONNECTION 
PROPERTY.—The term ‘qualified inter-
connection property’ means, with respect 
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to a qualified facility which is not a 
microgrid, any tangible property— 
‘‘(I) which is part of an addition, 
modification, or upgrade to a trans-
mission or distribution system which 
is required at or beyond the point at 
which the qualified facility intercon-
nects to such transmission or distribu-
tion system in order to accommodate 
such interconnection, 
‘‘(II) either— 
‘‘(aa) which is constructed, 
reconstructed, or erected by the 
taxpayer, or 
‘‘(bb) for which the cost 
with respect to the construction, 
reconstruction, or erection of 
such property is paid or incurred 
by such taxpayer, and 
‘‘(III) the original use of which, 
pursuant to an interconnection agree-
ment, commences with the utility. 
‘‘(ii) 
INTERCONNECTION
AGREE-
MENT.—The term ‘interconnection agree-
ment’ means an agreement with a utility 
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for the purposes of interconnecting the 
qualified facility owned by such taxpayer to 
the transmission or distribution system of 
such utility. 
‘‘(iii) UTILITY.—The term ‘utility’ 
means the owner or operator of an elec-
trical transmission or distribution system 
which is subject to the regulatory authority 
of— 
‘‘(I) the Federal Energy Regu-
latory Commission, or 
‘‘(II) a State or political subdivi-
sion thereof, any agency or instrumen-
tality of the United States, a public 
service or public utility commission or 
other similar body of any State or po-
litical subdivision thereof, or the gov-
erning or ratemaking body of an elec-
tric cooperative. 
‘‘(C) 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-
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duced under rules similar to the rules of section 
50(c). 
‘‘(4) ALLOCATIONS.— 
‘‘(A) IN
GENERAL.—Not later than 180 
days after the date of enactment of this sub-
section, the Secretary shall establish a program 
to allocate amounts of environmental justice 
solar capacity limitation to qualified solar facili-
ties. 
‘‘(B) LIMITATION.—The amount of envi-
ronmental justice solar capacity limitation allo-
cated by the Secretary under subparagraph (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 2031, 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 
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shall be increased by the amount of such excess. 
No amount may be carried under the preceding 
sentence to any calendar year after 2033. 
‘‘(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 
allocation with respect to the facility of 
which such property is a part. 
‘‘(ii) APPLICATION OF CARRYOVER.— 
Any amount of environmental justice solar 
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, sub-
ject to the limitation imposed by the last 
sentence of such subparagraph. 
‘‘(F) SELECTION
CRITERIA.—In deter-
mining to which qualified solar facilities to allo-
cate environmental justice solar capacity limita-
tion under this paragraph, the Secretary shall 
take into consideration which facilities will re-
sult in— 
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‘‘(i) the greatest health and economic 
benefits, including the ability to withstand 
extreme weather events, for individuals de-
scribed in section 45D(e)(2), 
‘‘(ii) the greatest employment and 
wages for such individuals, and 
‘‘(iii) the greatest engagement with, 
outreach to, or ownership by, such individ-
uals, including through partnerships with 
local governments and community-based 
organizations. 
‘‘(G) DISCLOSURE OF ALLOCATIONS.—The 
Secretary shall, upon making an allocation of 
environmental justice solar capacity limitation 
under this paragraph, publicly disclose the iden-
tity of the applicant, the amount of the environ-
mental justice solar capacity limitation allocated 
to such applicant, and the location of the facil-
ity 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 
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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.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to periods after December 31, 
2021, under rules similar to the rules of section 48(m) 
of the Internal Revenue Code of 1986 (as in effect on the 
day before the date of the enactment of the Revenue Rec-
onciliation Act of 1990). 
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: 
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‘‘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) The renewable electricity production credit 
determined under section 45. 
‘‘(2) The energy credit determined under sec-
tion 48. 
‘‘(3) The credit for carbon oxide sequestration 
determined under section 45Q. 
‘‘(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, 
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any State or local government (or political subdivi-
sion thereof), or any Indian tribal government (with-
in the meaning of section 139E), which makes the 
election described in subsection (a), any applicable 
credit shall be determined— 
‘‘(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 
qualified resources, qualified facility, or energy 
property held directly by a partnership or S 
corporation, if such partnership or S corpora-
tion makes an election under this subsection (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-
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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-
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 paragraph 
(2)(A)(ii). 
‘‘(3) IRREVOCABLE
ELECTION.—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 ap-
plicable credit is determined, but in no event earlier 
than 180 days after the date of the enactment of 
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this section. Any such election, once made, shall be 
irrevocable. 
‘‘(4) TIMING.—The payment described in sub-
section (a) shall be treated as made on— 
‘‘(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 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 subparagraph (A)(ii) of paragraph (2) 
shall be treated in the same manner as a refund due 
from a credit provision referred to in subparagraph 
(B) of such paragraph. 
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‘‘(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-
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 
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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 
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 with 
respect to such facility for such taxable 
year, over 
‘‘(ii) the amount of the credit which, 
without application of this subsection, 
would be otherwise allowable 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 such taxpayer shall be deemed to have taken 
such credit. 
‘‘(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 
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not be treated as part of the income tax laws of the United 
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.—Rules 
similar to the rules of subsections (a) and (c) 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.’’. 
(b) 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.’’. 
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(c) IN GENERAL.—The amendments made by this 
section shall apply to property placed in service after the 
December 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 30 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— 
‘‘(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 
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‘‘(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.—The term ‘qualifying electric transmission 
line’ means an electric transmission line which— 
‘‘(A) is capable of transmitting electricity 
at a voltage of not less than 275 kilovolts, and 
‘‘(B) has a transmission capacity of not 
less than 500 megawatts. 
‘‘(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 ‘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 
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‘‘(ii) is necessary for the operation of 
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-
mission property unless such taxpayer is al-
lowed a credit under this section with respect to 
the qualifying electric transmission line to 
which such related transmission property re-
lates. 
‘‘(c) APPLICATION
TO
REPLACEMENT
AND
UP-
GRADED SYSTEMS.— 
‘‘(1) IN GENERAL.—In the case of any quali-
fying electric transmission line (determined without 
regard to this subsection) which replaces any exist-
ing electric transmission line— 
‘‘(A) the 500 megawatts referred to in sub-
section (b)(2)(B) shall be increased by the 
transmission capacity of such existing electric 
transmission line, and 
‘‘(B) in no event shall the basis of such ex-
isting electric transmission line (or related 
transmission property with respect to such ex-
isting electric transmission line) be taken into 
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