I 
115TH CONGRESS 
1ST SESSION H. R. 3761 
To amend the Internal Revenue Code of 1986 to improve and extend the 
credit for carbon dioxide sequestration. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 13, 2017 
Mr. CONAWAY (for himself, Mr. BRADY of Pennsylvania, Mr. COSTELLO of 
Pennsylvania, Mr. MCKINLEY, Mr. CRAMER, Mr. MURPHY of Pennsyl-
vania, Mr. JENKINS of West Virginia, Mr. PETERSON, Mr. TIPTON, Mr. 
COSTA, Mr. RODNEY DAVIS of Illinois, Mr. GENE GREEN of Texas, Mr. 
COLE, Ms. SINEMA, Mr. HURD, Mr. BARR, Mr. BISHOP of Georgia, Mr. 
MOOLENAAR, Mr. MICHAEL F. DOYLE of Pennsylvania, Ms. STEFANIK, 
Mr. HUIZENGA, Mr. BARTON, Mr. PEARCE, Mr. BOST, Mr. JOHNSON of 
Ohio, Mr. VEASEY, Mr. ADERHOLT, Ms. KAPTUR, Mr. CURBELO of Flor-
ida, and Mr. HUDSON) introduced the following bill; which was referred 
to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to improve 
and extend the credit for carbon dioxide sequestration. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Carbon Capture Act’’. 
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SEC. 2. EXTENSION OF ENHANCED CARBON DIOXIDE SE-
QUESTRATION CREDIT. 
(a) IN GENERAL.—Section 45Q of the Internal Rev-
enue Code of 1986 is amended to read as follows: 
‘‘SEC. 45Q. CREDIT FOR CARBON DIOXIDE SEQUESTRATION. 
‘‘(a) GENERAL RULE.—For purposes of section 38, 
the carbon dioxide sequestration credit for any taxable 
year is an amount equal to the sum of— 
‘‘(1) $20 per metric ton of qualified carbon di-
oxide which is— 
‘‘(A) captured by the taxpayer using car-
bon capture equipment which is originally 
placed in service at a qualified facility before 
the date of the enactment of the Carbon Cap-
ture Act, and 
‘‘(B) disposed of by the taxpayer in secure 
geological storage and not used by the taxpayer 
as described in paragraph (2)(B), 
‘‘(2) $10 per metric ton of qualified carbon di-
oxide which is— 
‘‘(A) captured by the taxpayer using car-
bon capture equipment which is originally 
placed in service at a qualified facility before 
the date of the enactment of the Carbon Cap-
ture Act, and 
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‘‘(B)(i) used by the taxpayer as a tertiary 
injectant in a qualified enhanced oil or natural 
gas recovery project and disposed of by the tax-
payer in secure geological storage, or 
‘‘(ii) utilized by the taxpayer in a manner 
described in subsection (e)(7), 
‘‘(3) the applicable dollar amount per metric 
ton of qualified carbon dioxide which is— 
‘‘(A) captured by the taxpayer using car-
bon capture equipment which is originally 
placed in service at a qualified facility on or 
after the date of the enactment of the Carbon 
Capture Act, during the 15-year period begin-
ning on the date the equipment was originally 
placed in service, and 
‘‘(B) disposed of by the taxpayer in secure 
geological storage and not used by the taxpayer 
as described in paragraph (4)(B), and 
‘‘(4) the applicable dollar amount per metric 
ton of qualified carbon dioxide which is— 
‘‘(A) captured by the taxpayer using car-
bon capture equipment which is originally 
placed in service at a qualified facility on or 
after the date of the enactment of the Carbon 
Capture Act, during the 15-year period begin-
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ning on the date the equipment was originally 
placed in service, and 
‘‘(B)(i) used by the taxpayer as a tertiary 
injectant in a qualified enhanced oil or natural 
gas recovery project and disposed of by the tax-
payer in secure geological storage, or 
‘‘(ii) utilized by the taxpayer in a manner 
described in subsection (e)(7). 
A taxpayer that captures qualified carbon dioxide as pro-
vided under paragraph (1), (2), (3) or (4) and that enters 
into contractual arrangements with another person to en-
sure the disposal, use, or utilization required under para-
graph (1), (2), (3) or (4), as the case may be, shall be 
treated as having disposed, captured, or used such quali-
fied carbon dioxide to the extent disposed, captured, or 
used by such other persons pursuant to such contractual 
arrangements. 
‘‘(b) APPLICABLE DOLLAR AMOUNT; ADDITIONAL 
EQUIPMENT; ELECTION.— 
‘‘(1) APPLICABLE DOLLAR AMOUNT.—For pur-
poses of subsection (a)— 
‘‘(A) IN GENERAL.—The applicable dollar 
amount shall be an amount equal to— 
‘‘(i) for taxable years beginning after 
2016 and before 2026, the dollar amount 
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established by linear interpolation between 
$12.83 and $35 for each calendar year 
during such period, and 
‘‘(ii) for taxable years beginning after 
2025, an amount equal to the product of 
$35 and the inflation adjustment factor for 
such calendar year determined under sec-
tion 43(b)(3)(B) for such calendar year, 
determined by substituting ‘2024’ for 
‘1990’. 
‘‘(B) ROUNDING.—The applicable dollar 
amount determined under subparagraph (A) 
shall be rounded to the nearest cent. 
‘‘(2) INSTALLATION
OF
ADDITIONAL
CARBON 
CAPTURE EQUIPMENT ON EXISTING QUALIFIED FA-
CILITY.—In the case of a qualified facility placed in 
service before the date of the enactment of the Car-
bon Capture Storage Act, for which additional car-
bon capture equipment is placed in service on or 
after the date of the enactment of such Act, the 
amount of qualified carbon dioxide which is captured 
by the taxpayer shall be equal to— 
‘‘(A) for purposes of paragraphs (1)(A) 
and (2)(A) of subsection (a), the lesser of— 
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ice at a qualified facility on or after the date of the 
enactment of the Carbon Capture Act. 
‘‘(c) QUALIFIED CARBON DIOXIDE.—For purposes of 
this section: 
‘‘(1) IN GENERAL.—The term ‘qualified carbon 
dioxide’ means carbon dioxide or other carbon oxides 
captured— 
‘‘(A)(i) from an industrial source which 
would otherwise be released into the atmosphere 
as industrial emission of greenhouse gas, or 
would otherwise lead to such release, or 
‘‘(ii) directly from the ambient air, and 
‘‘(B) is measured at the source of capture 
and verified at the point of disposal, injection, 
or utilization. 
‘‘(2) RECYCLED CARBON DIOXIDE.—The term 
‘qualified carbon dioxide’ includes the initial deposit 
of captured carbon dioxide used as a tertiary 
injectant. Such term does not include carbon dioxide 
that is recaptured, recycled, and re-injected as part 
of the enhanced oil and natural gas recovery process. 
‘‘(d) QUALIFIED FACILITY.—For purposes of this 
section, the term ‘qualified facility’ means any industrial 
facility or direct air capture facility— 
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‘‘(1) the construction of which begins before 
January 1, 2024, and— 
‘‘(A) the original planning and design for 
such facility includes installation of carbon cap-
ture equipment, or 
‘‘(B) the construction of carbon capture 
equipment with respect to such facility begins 
before such date, and 
‘‘(2) which captures— 
‘‘(A) in the case of a facility which emits 
not more than 500,000 metric tons of carbon 
dioxide into the atmosphere during the taxable 
year, not less than 25,000 metric tons of quali-
fied carbon dioxide during the taxable year 
which is utilized in a manner described in sub-
section (e)(7), or 
‘‘(B) in the case of a facility not described 
in subparagraph (A), not less than 100,000 
metric tons of qualified carbon dioxide during 
the taxable year. 
‘‘(e) SPECIAL RULES AND OTHER DEFINITIONS.— 
For purposes of this section— 
‘‘(1) ONLY CARBON DIOXIDE CAPTURED AND 
SECURED
OR
USED
WITHIN
THE
UNITED
STATES 
TAKEN INTO ACCOUNT.—The credit under this sec-
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tion shall apply only with respect to qualified carbon 
dioxide the capture and disposal, use, or utilization 
of which is within— 
‘‘(A) the United States (within the mean-
ing of section 638(1)), or 
‘‘(B) a possession of the United States 
(within the meaning of section 638(2)). 
‘‘(2) SECURE GEOLOGICAL STORAGE.—The Sec-
retary, in consultation with the Administrator of the 
Environmental Protection Agency, the Secretary of 
Energy, and the Secretary of the Interior, shall es-
tablish regulations for determining adequate security 
measures for the geological storage of qualified car-
bon dioxide under subsection (a) such that the quali-
fied carbon dioxide does not escape into the atmos-
phere. Such term shall include storage at deep saline 
formations, oil and gas reservoirs, and unminable 
coal seams under such conditions as the Secretary 
may determine under such regulations. 
‘‘(3) TERTIARY
INJECTANT.—The term ‘ter-
tiary injectant’ has the same meaning as when used 
within section 193(b)(1). 
‘‘(4) QUALIFIED ENHANCED OIL OR NATURAL 
GAS RECOVERY PROJECT.—The term ‘qualified en-
hanced oil or natural gas recovery project’ has the 
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meaning given the term ‘qualified enhanced oil re-
covery project’ by section 43(c)(2), by substituting 
‘crude oil or natural gas’ for ‘crude oil’ in subpara-
graph (A)(i) thereof. 
‘‘(5) CREDIT ATTRIBUTABLE TO TAXPAYER.— 
‘‘(A) IN
GENERAL.—Except as provided 
subparagraph (B) or in any regulations pre-
scribed by the Secretary, any credit under this 
section shall be attributable to— 
‘‘(i) in the case of qualified carbon di-
oxide captured using carbon capture equip-
ment which is originally placed in service 
at a qualified facility before the date of the 
enactment of the Carbon Capture Act, the 
person that captures and physically or con-
tractually ensures the disposal, utilization, 
or use as a tertiary injectant of such quali-
fied carbon dioxide, and 
‘‘(ii) in the case of qualified carbon di-
oxide captured using carbon capture equip-
ment which is originally placed in service 
at a qualified facility on or after the date 
of the enactment of the Carbon Capture 
Act, or with regard to which an election 
has been made under subsection (f)(2), the 
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person that owns the carbon capture equip-
ment and physically or contractually en-
sures the capture and disposal, utilization, 
or use as a tertiary injectant of such quali-
fied carbon dioxide. 
‘‘(B) ELECTION.—If the person described 
in subparagraph (A) makes an election under 
this subparagraph at such time and in such 
manner as the Secretary may prescribe by regu-
lations, the credit under this section— 
‘‘(i) shall be allowable to the person 
that disposes of the qualified carbon diox-
ide, utilizes the qualified carbon dioxide, or 
uses the qualified carbon dioxide as a ter-
tiary injectant, and 
‘‘(ii) shall not be allowable to the per-
son described in subparagraph (A). 
‘‘(6) RECAPTURE.—The Secretary shall, by reg-
ulations, provide for recapturing the benefit of any 
credit allowable under subsection (a) with respect to 
any qualified carbon dioxide which ceases to be cap-
tured, disposed of, or used as a tertiary injectant in 
a manner consistent with the requirements of this 
section. 
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‘‘(7) UTILIZATION OF QUALIFIED CARBON DI-
OXIDE.— 
‘‘(A) IN GENERAL.—For purposes of this 
section, utilization of qualified carbon dioxide 
means— 
‘‘(i) the chemical conversion of such 
qualified carbon dioxide to a material or 
chemical compound in which such qualified 
carbon dioxide is securely stored, or 
‘‘(ii) the use of such qualified carbon 
dioxide for any other purpose for which a 
commercial market exists (other than use 
as a tertiary injectant in a qualified en-
hanced oil or natural gas recovery project), 
as determined by the Secretary. 
‘‘(B) MEASUREMENT.—For purposes of 
determining the amount of qualified carbon di-
oxide utilized by the taxpayer under paragraph 
(2)(B)(ii) or (4)(B)(ii) of subsection (a), such 
amount shall be equal to the metric tons of car-
bon dioxide which the taxpayer demonstrates, 
based upon an analysis of lifecycle greenhouse 
gas emissions and subject to such requirements 
as the Secretary, in consultation with the Sec-
retary of Energy and the Administrator of the 
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