1400 
claimed with respect to carbon capture equipment 
which is originally placed in service at a qualified fa-
cility on or after the date of the enactment of the 
Bipartisan Budget Act of 2018 (after application of 
subsection (f)(6) where applicable) if— 
‘‘(A) no taxpayer claimed a credit under 
this section with respect to such carbon capture 
equipment for any prior taxable year, 
‘‘(B) the qualified facility at which such 
carbon capture equipment is placed in service is 
located in an area affected by a federally–de-
clared disaster (as defined by section 165(i) 
(5)(A)) after the carbon capture equipment is 
originally placed in service, and 
‘‘(C) such federally–declared disaster re-
sults in a cessation of the operation of the 
qualified facility after the carbon capture equip-
ment is originally placed in service.’’. 
(i) EFFECTIVE DATES.— 
(1) The amendments made by subsections (a), 
(b), (c), (d), (e), (f), and (g) shall apply to facilities 
or equipment the construction of which begins after 
December 31, 2021.
1401 
(2) The amendments made by subsection (h) 
shall apply to carbon oxide captured and disposed of 
after December 31, 2021. 
SEC. 136107. GREEN ENERGY PUBLICLY TRADED PARTNER-
SHIPS. 
(a) IN GENERAL.—Section 7704(d)(1)(E) is amend-
ed— 
(1) by striking ‘‘income and gains derived from 
the exploration’’ and inserting ‘‘income and gains 
derived from— 
‘‘(i) the exploration’’, 
(2) 
by 
inserting 
‘‘or’’ 
before 
‘‘industrial 
source’’, and 
(3) by striking ‘‘, or the transportation or stor-
age’’ and all that follows and inserting the following: 
‘‘(ii) the generation of electric power 
or thermal energy exclusively using any 
qualified energy resource (as defined in 
section 45(c)(1)), 
‘‘(iii) the operation of energy property 
(as defined in section 48(a)(3), determined 
without regard to any date by which the 
construction of the facility is required to 
begin),
1402 
‘‘(iv) in the case of a facility described 
in paragraph (3) or (7) of section 45(d) 
(determined without regard to any placed 
in service date or date by which construc-
tion of the facility is required to begin), 
the accepting or processing of open-loop 
biomass or municipal solid waste, 
‘‘(v) the transportation or storage of 
any fuel described in subsection (b), (c), 
(d), or (e) of section 6426, 
‘‘(vi) the conversion of renewable bio-
mass (as defined in subparagraph (I) of 
section 211(o)(1) of the Clean Air Act (as 
in effect on the date of the enactment of 
this clause)) into renewable fuel (as de-
fined in subparagraph (J) of such section 
as so in effect), or the storage or transpor-
tation of such fuel, 
‘‘(vii) the production, storage, or 
transportation of any fuel which— 
‘‘(I) uses as its primary feedstock 
carbon oxides captured from an an-
thropogenic source or the atmosphere, 
‘‘(II) does not use as its primary 
feedstock carbon oxide which is delib-
1403 
erately released from naturally occur-
ring subsurface springs, and 
‘‘(III) is determined by the Sec-
retary to achieve a reduction of not 
less than a 60 percent in lifecycle 
greenhouse gas emissions (as defined 
in section 211(o)(1)(H) of the Clean 
Air Act, as in effect on the date of the 
enactment of this clause) compared to 
baseline lifecycle greenhouse gas emis-
sions 
(as 
defined 
in 
section 
211(o)(1)(C) of such Act, as so in ef-
fect), or 
‘‘(viii) a qualified facility (as defined 
in section 45Q(d), without regard to any 
date by which construction of the facility is 
required to begin).’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section apply to taxable years beginning after Decem-
ber 31, 2021. 
SEC. 136108. ZERO-EMISSION NUCLEAR POWER PRODUC-
TION CREDIT. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1404 
1986 is amended by adding at the end the following new 
section: 
‘‘SEC. 45W. ZERO-EMISSION NUCLEAR POWER PRODUCTION 
CREDIT. 
‘‘(a) AMOUNT OF CREDIT.—For purposes of section 
38, the zero-emission nuclear power production credit for 
any taxable year is an amount equal to the amount by 
which— 
‘‘(1) the product of— 
‘‘(A) 0.3 cents, multiplied by 
‘‘(B) the kilowatt hours of electricity— 
‘‘(i) produced by the taxpayer at a 
qualified nuclear power facility, and 
‘‘(ii) sold by the taxpayer to an unre-
lated person during the taxable year, ex-
ceeds 
‘‘(2) the reduction amount for such taxable 
year. 
‘‘(b) DEFINITIONS.— 
‘‘(1) QUALIFIED NUCLEAR POWER FACILITY.— 
For purposes of this section, the term ‘qualified nu-
clear power facility’ means any nuclear facility— 
‘‘(A) which is owned by the taxpayer and 
which uses nuclear energy to produce elec-
tricity,
1405 
‘‘(B) which is not an advanced nuclear 
power facility as defined in subsection (d)(1) of 
section 45J, and 
‘‘(C) which is placed in service before the 
date of the enactment of this section. 
‘‘(2) REDUCTION AMOUNT.— 
‘‘(A) IN GENERAL.—For purposes of this 
section, the term ‘reduction amount’ means, 
with respect to any qualified nuclear power fa-
cility for any taxable year, the amount equal to 
the lesser of— 
‘‘(i) the amount determined under 
subsection (a)(1), or 
‘‘(ii) the amount equal to 16 percent 
of the excess of— 
‘‘(I) subject to subparagraph (B), 
the gross receipts from any electricity 
produced by such facility (including 
any electricity services or products 
provided in conjunction with the elec-
tricity produced by such facility) and 
sold to an unrelated person during 
such taxable year, over 
‘‘(II) the amount equal to the 
product of—
1406 
‘‘(aa) 2.5 cents, multiplied 
by 
‘‘(bb) the amount deter-
mined 
under 
subsection 
(a)(1)(B). 
‘‘(B) 
TREATMENT
OF
CERTAIN
RE-
CEIPTS.— 
‘‘(i) IN GENERAL.—The amount de-
termined under subparagraph (A)(ii)(I) 
shall include any amount received by the 
taxpayer during the taxable year with re-
spect to the qualified nuclear power facility 
from a zero-emission credit program unless 
the amount received by the taxpayer is 
subject to reduction— 
‘‘(I) by the full amount of the 
credit determined under this section, 
or 
‘‘(II) by any lesser amount if 
such amount entirely offsets the 
amount received from a zero-emission 
credit program. 
‘‘(ii) ZERO-EMISSION
CREDIT
PRO-
GRAM.—For purposes of this subpara-
graph, the term ‘zero-emission credit pro-
1407 
gram’ means any payments to a qualified 
nuclear power facility as a result of any 
Federal, State or local government pro-
gram for, in whole or in part, the zero- 
emission, zero-carbon, or air quality at-
tributes of any portion of the electricity 
produced by such facility. 
‘‘(3) ELECTRICITY.—For purposes of this sec-
tion, the term ‘electricity’ means the energy pro-
duced by a qualified nuclear power facility from the 
conversion of nuclear fuel into electric power. 
‘‘(c) OTHER RULES.— 
‘‘(1) INFLATION ADJUSTMENT.—The 0.3 cent 
amount in subsection (a)(1)(A) and the 2.5 cent 
amount in subsection (b)(2)(A)(ii)(II)(aa) shall each 
be adjusted by multiplying such amount by the infla-
tion adjustment factor (as determined under section 
45(e)(2), as applied by substituting ‘calendar year 
2022’ for ‘calendar year 1992’ in subparagraph (B) 
thereof) for the calendar year in which the sale oc-
curs. If the 0.3 cent amount as increased under this 
paragraph is not a multiple of 0.05 cent, such 
amount shall be rounded to the nearest multiple of 
0.05 cent. If the 2.5 cent amount as increased under 
this paragraph is not a multiple of 0.1 cent, such
1408 
amount shall be rounded to the nearest multiple of 
0.1 cent. 
‘‘(2) SPECIAL
RULES.—Rules similar to the 
rules of paragraphs (1), (3), (4), and (5) of section 
45(e) shall apply for purposes of this section. 
‘‘(3) ULTIMATE PURCHASER.—For purposes of 
this section, electricity produced by the taxpayer 
shall be treated as sold to an unrelated person if the 
ultimate purchaser of such electricity is unrelated to 
such taxpayer. 
‘‘(d) WAGE REQUIREMENTS.— 
‘‘(1) INCREASED CREDIT AMOUNT FOR QUALI-
FIED NUCLEAR POWER FACILITIES.—In the case of 
any qualified nuclear power facility which satisfies 
the requirements of paragraph (2), the amount of 
the credit determined under subsection (a) shall be 
equal to such amount multiplied by 5 (determined 
without regard to this sentence). 
‘‘(2) PREVAILING WAGE REQUIREMENTS.— 
‘‘(A) IN GENERAL.—The taxpayer shall en-
sure that any laborers and mechanics employed 
by contractors and subcontractors in the alter-
ation or repair of a facility shall be paid wages 
at rates not less than the prevailing rates for 
alteration or repair of a similar character in the
1409 
locality as most recently determined by the Sec-
retary 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. 
‘‘(3) REGULATIONS AND GUIDANCE.—The Sec-
retary shall issue such regulations or other guidance 
as the Secretary determines necessary or appropriate 
to carry out the purposes of this subsection, includ-
ing regulations or other guidance which provides for 
requirements for recordkeeping or information re-
porting for purposes of establishing the requirements 
of this subsection. 
‘‘(e) TERMINATION.—This section shall not apply to 
taxable years beginning after December 31, 2027.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 38(b) of the Internal Revenue Code 
of 1986 is amended— 
(A) in paragraph (32), by striking ‘‘plus’’ 
at the end,
1410 
(B) in paragraph (33), by striking the pe-
riod at the end and inserting ‘‘, plus’’, and 
(C) by adding at the end the following new 
paragraph: 
‘‘(34) the zero-emission nuclear power produc-
tion credit determined under section 45W(a).’’. 
(2) The table of sections for subpart D of part 
IV of subchapter A of chapter 1 of such Code is 
amended by adding at the end the following new 
item: 
‘‘Sec. 45W. Zero-emission nuclear power production credit.’’. 
(c) ELECTIVE
PAYMENT
OF
CREDIT.—Section 
6417(b), as amended by the preceding provisions of this 
Act, is amended by adding at the end the following new 
paragraph: 
‘‘(7) The zero-emission nuclear power produc-
tion credit determined under section 45W.’’. 
(d) EFFECTIVE DATE.—This section shall apply to 
electricity produced and sold after December 31, 2021, in 
taxable years beginning after such date.
1411 
PART 2—RENEWABLE FUELS 
SEC. 136201. EXTENSION OF INCENTIVES FOR BIODIESEL, 
RENEWABLE 
DIESEL 
AND 
ALTERNATIVE 
FUELS. 
(a) BIODIESEL AND RENEWABLE DIESEL CREDIT.— 
Section 40A(g) is amended by striking ‘‘December 31, 
2022’’ and inserting ‘‘December 31, 2026’’. 
(b) BIODIESEL MIXTURE CREDIT.— 
(1) 
IN
GENERAL.—Section 
6426(c)(6) 
is 
amended by striking ‘‘December 31, 2022’’ and in-
serting ‘‘December 31, 2026’’. 
(2) FUELS
NOT
USED
FOR
TAXABLE
PUR-
POSES.—Section 6427(e)(6)(B) is amended by strik-
ing ‘‘December 31, 2022’’ and inserting ‘‘December 
31, 2026’’. 
(c) 
ALTERNATIVE
FUEL
CREDIT.—Section 
6426(d)(5) is amended by striking ‘‘December 31, 2021’’ 
and inserting ‘‘December 31, 2026’’. 
(d) ALTERNATIVE FUEL MIXTURE CREDIT.—Section 
6426(e)(3) is amended by striking ‘‘December 31, 2021’’ 
and inserting ‘‘December 31, 2026’’. 
(e) PAYMENTS FOR ALTERNATIVE FUELS.—Section 
6427(e)(6)(C) is amended by striking ‘‘December 31, 
2021’’ and inserting ‘‘December 31, 2026’’.
1412 
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to fuel sold or used after December 
31, 2021. 
SEC. 
136202. 
EXTENSION 
OF 
SECOND 
GENERATION 
BIOFUEL INCENTIVES. 
(a) IN GENERAL.—Section 40(b)(6)(J)(i) is amended 
by striking ‘‘2022’’ and inserting ‘‘2027’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to qualified second generation 
biofuel production after December 31, 2021. 
SEC. 136203. SUSTAINABLE AVIATION FUEL CREDIT. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 is amended by inserting after sec-
tion 40A the following new section: 
‘‘SEC. 40B. SUSTAINABLE AVIATION FUEL CREDIT. 
‘‘(a) IN GENERAL.—For purposes of section 38, the 
sustainable aviation fuel credit for the taxable year is, with 
respect to any sale or use of a qualified mixture which 
occurs during such taxable year, an amount equal to the 
product of— 
‘‘(1) the number of gallons of sustainable avia-
tion fuel in such mixture, multiplied by 
‘‘(2) the sum of— 
‘‘(A) $1.25, plus
1413 
‘‘(B) the applicable supplementary amount 
with respect to such sustainable aviation fuel. 
‘‘(b) APPLICABLE SUPPLEMENTARY AMOUNT.—For 
purposes of this section, the term ‘applicable supple-
mentary amount’ means, with respect to any sustainable 
aviation fuel, an amount equal to $0.01 for each percent-
age point by which the lifecycle greehouse gas emissions 
reduction percentage with respect to such fuel exceeds 50 
percent. In no event shall the applicable supplementary 
amount determined under this subsection exceed $0.50. 
‘‘(c) QUALIFIED MIXTURE.—For purposes of this 
section, the term ‘qualified mixture’ means a mixture of 
sustainable aviation fuel and kerosene if— 
‘‘(1) such mixture is produced by the taxpayer 
in the United States, 
‘‘(2) such mixture is used by the taxpayer (or 
sold by the taxpayer for use) in an aircraft, 
‘‘(3) such sale or use is in the ordinary course 
of a trade or business of the taxpayer, and 
‘‘(4) the transfer of such mixture to the fuel 
tank of such aircraft occurs in the United States. 
‘‘(d) SUSTAINABLE AVIATION FUEL.—For purposes 
of this section, the term ‘sustainable aviation fuel’ means 
liquid fuel which— 
‘‘(1) meets the requirements of—
1414 
‘‘(A) 
ASTM 
International 
Standard 
D7566, or 
‘‘(B) the Fischer Tropsch provisions of 
ASTM International Standard D1655, Annex 
A1, 
‘‘(2) is not derived from palm fatty acid dis-
tillates or petroleum, and 
‘‘(3) has been certified in accordance with sub-
section (e) as having a lifecycle greenhouse gas emis-
sions reduction percentage of at least 50 percent. 
‘‘(e) LIFECYCLE GREENHOUSE GAS EMISSIONS RE-
DUCTION PERCENTAGE.—For purposes of this section, the 
term ‘lifecycle greenhouse gas emissions reduction per-
centage’ means, with respect to any sustainable aviation 
fuel, the percentage reduction in lifecycle greenhouse gas 
emissions— 
‘‘(1) as defined in accordance with— 
‘‘(A) the most recent Carbon Offsetting 
and Reduction Scheme for International Avia-
tion which has been adopted by the Inter-
national Civil Aviation Organization with the 
agreement of the United States, or 
‘‘(B) any similar methodology which satis-
fies the criteria under section 211(o)(1)(H) of
1415 
the Clean Air Act (42 U.S.C. 7545(o)(1)(H)), 
and 
‘‘(2) achieved by such fuel as compared with pe-
troleum-based jet fuel. 
‘‘(f) REGISTRATION
OF
SUSTAINABLE
AVIATION 
FUEL PRODUCERS.—No credit shall be allowed under this 
section with respect to any sustainable aviation fuel unless 
the producer of such fuel is registered with the Secretary 
under section 4101 and has provided such other informa-
tion with respect to such fuel as the Secretary may require 
for purposes of carrying out this section. 
‘‘(g) COORDINATION WITH CREDIT AGAINST EXCISE 
TAX.—The amount of the credit determined under this 
section with respect to any sustainable aviation fuel shall, 
under rules prescribed by the Secretary, be properly re-
duced to take into account any benefit provided with re-
spect to such sustainable aviation fuel solely by reason of 
the application of section 6426 or 6427(e). 
‘‘(h) TERMINATION.—This section shall not apply to 
any sale or use after December 31, 2026.’’. 
(b) CREDIT MADE PART OF GENERAL BUSINESS 
CREDIT.— Section 38(b) is amended by striking ‘‘plus’’ 
at the end of paragraph (33), by striking the period at 
the end of paragraph (34) and inserting ‘‘, plus’’, and by
1416 
inserting after paragraph (34) the following new para-
graph: 
‘‘(35) the sustainable aviation fuel credit deter-
mined under section 40B.’’. 
(c) COORDINATION WITH BIODIESEL INCENTIVES.— 
(1) IN GENERAL.—Section 40A(d)(1) is amend-
ed by inserting ‘‘or 40B’’ after ‘‘determined under 
section 40’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
40A(f) is amended by striking paragraph (4). 
(d) SUSTAINABLE AVIATION FUEL ADDED TO CRED-
IT FOR ALCOHOL FUEL, BIODIESEL, AND ALTERNATIVE 
FUEL MIXTURES.— 
(1) IN GENERAL.—Section 6426 is amended by 
adding at the end the following new subsection: 
‘‘(k) SUSTAINABLE AVIATION FUEL CREDIT.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the sustainable aviation fuel credit for the tax-
able year is, with respect to any sale or use of a 
qualified mixture, an amount equal to the product 
of— 
‘‘(A) the number of gallons of sustainable 
aviation fuel in such mixture, multiplied by 
‘‘(B) the sum of— 
‘‘(i) $1.25, plus
1417 
‘‘(ii) the applicable supplementary 
amount with respect to such sustainable 
aviation fuel. 
‘‘(2) APPLICABLE SUPPLEMENTARY AMOUNT.— 
For purposes of this subsection, the term ‘applicable 
supplementary amount’ has the meaning given such 
term in section 40B(b). 
‘‘(3) OTHER DEFINITIONS.—Any term used in 
this subsection which is also used in section 40B 
shall have the meaning given such term by section 
40B. 
‘‘(4) REGISTRATION REQUIREMENT.—For pur-
poses of this subsection, rules similar to the rules of 
section 40B(f) shall apply.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 6426 is amended— 
(i) in subsection (a)(1), by striking 
‘‘and (e)’’ and inserting ‘‘(e), and (k)’’, 
and 
(ii) in subsection (h), by striking 
‘‘under section 40 or 40A’’ and inserting 
‘‘under section 40, 40A, or 40B’’. 
(B) Section 6427(e)(6) is amended by 
striking the ‘‘and’’ at the end of subparagraph 
(C), by striking the period at the end of sub-
1418 
paragraph (D) and inserting ‘‘, and’’, and by 
adding at the end the following new subpara-
graph: 
‘‘(E) any qualified mixture of sustainable 
aviation fuel (as defined in section 6426(k)(3)) 
sold or used after December 31, 2026.’’. 
(C) Section 6427(e) is amended in the 
heading by striking ‘‘OR ALTERNATIVE FUEL’’ 
and inserting, ‘‘ALTERNATIVE FUEL, OR SUS-
TAINABLE AVIATION FUEL’’. 
(D) Section 6427(e)(1) is amended by in-
serting ‘‘or the sustainable aviation fuel mixture 
credit’’ after ‘‘alternative fuel mixture credit’’. 
(E) Section 4101(a)(1) is amended by in-
serting ‘‘every person producing sustainable 
aviation fuel (as defined in section 40B or sec-
tion 6426(k)(3)),’’ before ‘‘and every person 
producing second generation biofuel’’. 
(e) GUIDANCE.—Under rules prescribed by the Sec-
retary of the Treasury (or the Secretary’s delegate), the 
amount of the credit allowed under section 40B of the In-
ternal Revenue Code of 1986 (as added by this subsection) 
shall be properly reduced to take into account any benefit 
provided with respect to sustainable aviation fuel (as de-
1419 
fined in such section 40B) by reason of the application 
of section 6426 or section 6427(e). 
(f) AMOUNT OF CREDIT INCLUDED IN GROSS IN-
COME.—Section 87 is amended by striking ‘‘and’’ in para-
graph (1), by striking the period at the end of paragraph 
(2) and inserting ‘‘, and’’, and by adding at the end the 
following new paragraph: 
‘‘(3) the sustainable aviation fuel credit deter-
mined with respect to the taxpayer for the taxable 
year under section 40B(a).’’. 
(g) EFFECTIVE DATE.—The amendments made by 
this section shall apply to fuel sold or used after December 
31, 2022. 
SEC. 136204. CLEAN HYDROGEN. 
(a) CREDIT FOR PRODUCTION OF CLEAN HYDRO-
GEN.— 
(1) IN GENERAL.—Subpart D of part IV of 
subchapter A of chapter 1 is amended by adding at 
the end the following new section: 
‘‘SEC. 45X. CREDIT FOR PRODUCTION OF CLEAN HYDRO-
GEN. 
‘‘(a) AMOUNT OF CREDIT.—For purposes of section 
38, the clean hydrogen production credit for any taxable 
year is an amount equal to the product of— 
‘‘(1) the applicable amount, multiplied by
1420 
‘‘(2) the kilograms of qualified clean hydrogen 
produced by the taxpayer during such taxable year 
at a qualified clean hydrogen production facility dur-
ing the 10-year period beginning on the date such 
facility was originally placed in service. 
‘‘(b) APPLICABLE AMOUNT.— 
‘‘(1) IN GENERAL.—For purposes of subsection 
(a)(1), the applicable amount shall be an amount 
equal to the applicable percentage of $0.60. If any 
amount as determined 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. 
‘‘(2) APPLICABLE PERCENTAGE.—For purposes 
of paragraph (1), the term ‘applicable percentage’ 
shall be determined as follows: 
‘‘(A) In the case of any qualified clean hy-
drogen which is produced by a facility that is 
placed in service before January 1, 2027 
through a process that results in a lifecycle 
greenhouse gas emissions rate of— 
‘‘(i) not greater than 6 kilograms of 
CO2e per kilogram of hydrogen, and 
‘‘(ii) not less than 4 kilograms of 
CO2e per kilogram of hydrogen, 
the applicable percentage shall be 15 percent.
1421 
‘‘(B) In the case of any qualified clean hy-
drogen which is produced through a process 
that results in a lifecycle greenhouse gas emis-
sions rate of— 
‘‘(i) less than 4 kilograms of CO2e 
per kilogram of hydrogen, and 
‘‘(ii) not less than 2.5 kilograms of 
CO2e per kilogram of hydrogen, 
the applicable percentage shall be 20 percent. 
‘‘(C) In the case of any qualified clean hy-
drogen which is produced through a process 
that results in a lifecycle greenhouse gas emis-
sions rate of— 
‘‘(i) less than 2.5 kilograms of CO2e 
per kilogram of hydrogen, and 
‘‘(ii) not less than 1.5 kilograms of 
CO2e per kilogram of hydrogen, 
the applicable percentage shall be 25 percent. 
‘‘(D) In the case of any qualified clean hy-
drogen which is produced through a process 
that results in a lifecycle greenhouse gas emis-
sions rate of— 
‘‘(i) less than 1.5 kilograms of CO2e 
per kilogram of hydrogen, and
1422 
‘‘(ii) not less than 0.45 kilograms of 
CO2e per kilogram of hydrogen, 
the applicable percentage shall be 33.4 percent. 
‘‘(E) In the case of any qualified clean hy-
drogen which is produced through a process 
that results in a lifecycle greenhouse gas emis-
sions rate of less than 0.45 kilograms of CO2e 
per kilogram of hydrogen, the applicable per-
centage shall be 100 percent. 
‘‘(3) INFLATION
ADJUSTMENT.—The $0.60 
amount in paragraph (1) shall be adjusted by multi-
plying such amount by the inflation adjustment fac-
tor (as determined under section 45(e)(2), deter-
mined by substituting ‘2020’ for ‘1992’ in subpara-
graph (B) thereof) for the calendar year in which 
the qualified clean hydrogen is produced. 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. 
‘‘(c) DEFINITIONS.—For purposes of this section— 
‘‘(1) LIFECYCLE
GREENHOUSE
GAS
EMIS-
SIONS.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), the term ‘lifecycle greenhouse gas 
emissions’ has the same meaning given such
1423 
term under subparagraph (H) of section 
211(o)(1) of the Clean Air Act (42 U.S.C. 
7545(o)(1)), as in effect on the date of enact-
ment of this section. 
‘‘(B) GREET MODEL.—The term ‘lifecycle 
greenhouse gas emissions’ shall only include 
emissions through the point of production (well- 
to-gate), as determined under the most recent 
Greenhouse gases, Regulated Emissions, and 
Energy use in Transportation model (commonly 
referred to as the ‘GREET model’) developed 
by Argonne National Laboratory, or a successor 
model (as determined by the Secretary). 
‘‘(2) QUALIFIED CLEAN HYDROGEN.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
clean hydrogen’ means hydrogen which is pro-
duced through a process that results in a 
lifecycle greenhouse gas emissions rate of not 
greater than 6 kilograms of CO2e per kilogram 
of hydrogen. 
‘‘(B) ADDITIONAL REQUIREMENTS.—Such 
term shall not include any hydrogen unless such 
hydrogen is produced— 
‘‘(i) in the United States (as defined 
in section 638(1) or a possession of the
1424 
United States (as defined in section 
638(2)), 
‘‘(ii) in the ordinary course of a trade 
or business of the taxpayer, and 
‘‘(iii) for sale or use, as verified by an 
unrelated third party of such production 
and sale or use in such form or manner as 
the Secretary may prescribe under sub-
section (f)(2). 
‘‘(3) QUALIFIED
CLEAN
HYDROGEN
PRODUC-
TION FACILITY.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
clean hydrogen production facility’ means a fa-
cility owned by the taxpayer which produces 
qualified clean hydrogen and which meets the 
requirements of subparagraph (B). 
‘‘(B) TERMINATION.—The term ‘qualified 
clean hydrogen production facility’ shall not in-
clude any facility the construction of which be-
gins after December 31, 2028. 
‘‘(d) SPECIAL RULES.— 
‘‘(1) TREATMENT
OF
FACILITIES
OWNED
BY 
MORE
THAN
TAXPAYER.—Rules similar to the 
rules section 45(e)(3) shall apply for purposes of 
this section.
1425 
‘‘(2) COORDINATION WITH CREDIT FOR CARBON 
OXIDE SEQUESTRATION.—No credit shall be allowed 
under this section with respect to any qualified clean 
hydrogen produced at a facility which includes car-
bon capture equipment for which a credit is allowed 
to any taxpayer under section 45Q for the taxable 
year or any prior taxable year. 
‘‘(e) INCREASED CREDIT AMOUNT FOR QUALIFIED 
CLEAN HYDROGEN PRODUCTION FACILITIES.— 
‘‘(1) IN GENERAL.—In the case of any qualified 
clean hydrogen production facility which satisfies the 
requirements of paragraph (2), the amount of the 
credit determined under subsection (a) with respect 
to qualified clean hydrogen described in subsection 
(b)(2) shall be equal to such amount multiplied by 
5 (determined without regard to this sentence). 
‘‘(2) REQUIREMENTS.—A facility meets the re-
quirements of this subparagraph if it is one of the 
following: 
‘‘(A) A facility— 
‘‘(i) the construction of which begins 
prior to the date that is 60 days after the 
Secretary publishes guidance with respect 
to the requirements of paragraphs (3) and 
(4), and
1426 
‘‘(ii) which meets the requirements of 
paragraph (3) with respect to construction, 
alteration, or repair of facilities which oc-
curs after such date. 
‘‘(B) A facility which satisfies the require-
ments of paragraphs (3) and (4). 
‘‘(3) PREVAILING WAGE REQUIREMENTS.— 
‘‘(A) IN GENERAL.—The requirements de-
scribed in this subparagraph with respect to 
any qualified clean hydrogen production facility 
are that the taxpayer shall ensure that any la-
borers and mechanics employed 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 
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
1427 
chapter 31 of title 40, United States Code. For 
purposes of determining an increased credit 
amount under paragraph (1) for a taxable year, 
the requirement under clause (ii) of this para-
graph is applied to such taxable year in which 
the alteration or repair of qualified facility oc-
curs. 
‘‘(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. 
‘‘(4) APPRENTICESHIP REQUIREMENTS.—Rules 
similar to the rules of section 45(b)(8) shall apply. 
‘‘(5) REGULATIONS AND GUIDANCE.—The Sec-
retary shall issue such regulations or other guidance 
as the Secretary determines necessary or appropriate 
to carry out the purposes of this subsection, includ-
ing regulations or other guidance which provides for 
requirements for recordkeeping or information re-
porting for purposes of establishing the requirements 
of this subsection. 
‘‘(f) REGULATIONS.—Not later than 1 year after the 
date of enactment of this section, the Secretary shall issue
1428 
regulations or other guidance to carry out the purposes 
of this section, including regulations or other guidance— 
‘‘(1) for determining lifecycle greenhouse gas 
emissions, and 
‘‘(2) which require verification by unrelated 
third parties of the production and sale or use of 
qualified clean hydrogen with respect to which credit 
is otherwise allowed under this section.’’. 
(2) ELECTIVE PAYMENT OF CREDIT.— 
(A) IN
GENERAL.—Section 6417(b), as 
amended by the preceding provisions of this 
Act, is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(8) So much of the the credit for production 
of clean hydrogen determined under section 45X as 
is attributable to qualified clean hydrogen produc-
tion facilities which are originally placed in service 
after December 31, 2011, and with respect to which 
an election is made under subsection (c)(3).’’. 
(B) ELECTION.—Section 6417(c)(3), as 
amended by the preceding provisions of this 
Act, is amended by adding at the end the fol-
lowing new subparagraph: 
‘‘(D) CREDIT FOR PRODUCTION OF CLEAN 
HYDROGEN.—In the case of the credit described
1429 
in subsection (b)(8), any election under this 
subsection shall— 
‘‘(i) apply separately with respect to 
each qualified clean hydrogen production 
facility, 
‘‘(ii) be made for the taxable year in 
which the facility is placed in service (or 
within 90 days of date of enactment in the 
case of facilities placed in service before 
December 31, 2021), 
‘‘(iii) shall apply to such taxable year 
and all subsequent taxable years with re-
spect to such facility.’’. 
(3) 
CREDIT
REDUCED
FOR
TAX-EXEMPT 
BONDS.—Section 45X(d), as added by this section, 
is amended by adding at the end the following new 
paragraph: 
‘‘(3) CREDIT
REDUCED
FOR
TAX-EXEMPT 
BONDS.—Rules similar to the rule under section 
45(b)(3) shall apply for purposes of this section.’’. 
(4) CONFORMING AMENDMENTS.— 
(A) Section 38(b) is amended— 
(i) in paragraph (34), by striking 
‘‘plus’’ at the end,
1430 
(ii) in paragraph (35), by striking the 
period at the end and inserting ‘‘, plus’’, 
and 
(iii) by adding at the end the fol-
lowing new paragraph: 
‘‘(36) the clean hydrogen production credit de-
termined under section 45X(a).’’. 
(B) The table of sections for subpart D of 
part IV of subchapter A of chapter 1 amended 
by adding at the end the following new item: 
‘‘Sec. 45X. Credit for production of clean hydrogen.’’. 
(5) EFFECTIVE DATES.— 
(A) The amendments made by paragraphs 
(1), (2), and (4) of this subsection shall apply 
to hydrogen produced after December 31, 2021. 
(B) The amendment made by paragraph 
(3) shall apply to facilities the construction of 
which begins after December 31, 2021. 
(b) CREDIT FOR ELECTRICITY PRODUCED FROM RE-
NEWABLE RESOURCES ALLOWED
IF ELECTRICITY IS 
USED TO PRODUCE CLEAN HYDROGEN.— 
(1) IN GENERAL.—Section 45(e) is amended by 
adding at the end the following new paragraph: 
‘‘(13) SPECIAL RULE FOR ELECTRICITY USED 
AT
A
QUALIFIED
CLEAN
HYDROGEN
PRODUCTION 
FACILITY.—Electricity produced by the taxpayer
1431 
shall be treated as sold by such taxpayer to an unre-
lated person during the taxable year if such elec-
tricity is used during such taxable year by the tax-
payer or a person related to the taxpayer at a quali-
fied clean hydrogen production facility (as defined in 
section 45X(c)(3)) to produce qualified clean hydro-
gen (as defined in section 45X(c)(2)) during the 10 
year period after such facility is placed in service. 
The Secretary shall issue such regulations or other 
guidance as the Secretary determines appropriate to 
carry out the purposes of this paragraph, including 
regulations or other guidance to require verification 
by unrelated third parties of the production and use 
of electricity to which this paragraph applies.’’. 
(2) EFFECTIVE DATE.—The amendment made 
by this subsection shall apply to electricity produced 
after December 31, 2021. 
(c) ELECTION TO TREAT CLEAN HYDROGEN PRO-
DUCTION FACILITIES AS ENERGY PROPERTY.— 
(1) IN GENERAL.—Section 48(a) is amended by 
adding at the end the following new paragraph: 
‘‘(16) ELECTION TO TREAT CLEAN HYDROGEN 
PRODUCTION FACILITIES AS ENERGY PROPERTY.— 
‘‘(A) IN
GENERAL.—In the case of any 
qualified property (as defined in paragraph
1432 
(5)(D)) which is part of a specified clean hydro-
gen production facility— 
‘‘(i) such property shall be treated as 
energy property for purposes of this sec-
tion, and 
‘‘(ii) the energy percentage with re-
spect to such property is— 
‘‘(I) in the case of a facility 
which is designed and reasonably ex-
pected to produce qualified clean hy-
drogen which is described in a sub-
paragraph (A) of section 45X(b)(2), 
0.9 percent, 
‘‘(II) in the case of a facility 
which is designed and reasonably ex-
pected to produce qualified clean hy-
drogen which is described in a sub-
paragraph (B) of such section, 1.2 
percent, 
‘‘(III) in the case of a facility 
which is designed and reasonably ex-
pected to produce qualified clean hy-
drogen which is described in a sub-
paragraph (C) of such section, 1.5 
percent,
1433 
‘‘(IV) in the case of a facility 
which is designed and reasonably ex-
pected to produce qualified clean hy-
drogen which is described in a sub-
paragraph (D) of such section, 2 per-
cent, and 
‘‘(V) in the case of a facility 
which is designed and reasonably ex-
pected to produce qualified clean hy-
drogen which is described in subpara-
graph (E) of such section, 6 percent. 
‘‘(B) DENIAL OF PRODUCTION CREDIT.— 
No credit shall be allowed under section 45X or 
section 45Q for any taxable year with respect to 
any specified clean hydrogen production facility 
or any carbon capture equipment included at 
such facility. 
‘‘(C) SPECIFIED CLEAN HYDROGEN PRO-
DUCTION FACILITY.—For purposes of this para-
graph, the term ‘specified clean hydrogen pro-
duction facility’ means any qualified clean hy-
drogen production facility (as defined in section 
45X(c)(3)) or any portion of such facility— 
‘‘(i) which is placed in service after 
December 31, 2021, and
1434 
‘‘(ii) with respect to which— 
‘‘(I) no credit has been allowed 
under section 45X or 45Q, and 
‘‘(II) the taxpayer makes an ir-
revocable election to have this para-
graph apply. 
‘‘(D) QUALIFIED CLEAN HYDROGEN.—For 
purposes of this paragraph, the term ‘qualified 
clean hydrogen’ has the meaning given such 
term by section 45X(c)(2). 
‘‘(E) REGULATIONS.—The Secretary shall 
issue such regulations or other guidance as the 
Secretary determines necessary or appropriate 
to carry out the purposes of this section, includ-
ing regulations or other guidance which— 
‘‘(i) requires verification by one or 
more unrelated third parties that the facil-
ity produces hydrogen which is consistent 
with the hydrogen that such facility was 
designed and expected to produce under 
subparagraph (A)(ii), and 
‘‘(ii) recaptures so much of any credit 
allowed under this section as exceeds the 
amount of the credit which would have 
been allowed if the expected production
1435 
were consistent with the actual verified 
production (or all of the credit so allowed 
in the absence of such verification).’’. 
(2) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to property placed in 
service after December 31, 2021 and, for any prop-
erty the construction of which begins prior to Janu-
ary 1, 2022, only to the extent of the basis thereof 
attributable to the construction, reconstruction, or 
erection after December 31, 2021. 
(d) TERMINATION OF EXCISE TAX CREDIT FOR HY-
DROGEN.— 
(1) 
IN
GENERAL.—Section 
6426(d)(2) 
is 
amended by striking subparagraph (D) and by re-
designating subparagraphs (E), (F), and (G) as sub-
paragraphs (D), (E), and (F), respectively. 
(2) 
CONFORMING
AMENDMENT.—Section 
6426(e)(2) is amended by striking ‘‘(F)’’ and insert-
ing ‘‘(E)’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to fuel sold or used 
after December 31, 2021.
1436 
PART 3—GREEN ENERGY AND EFFICIENCY 
INCENTIVES FOR INDIVIDUALS 
SEC. 136301. EXTENSION, INCREASE, AND MODIFICATIONS 
OF NONBUSINESS ENERGY PROPERTY CRED-
IT. 
(a) EXTENSION OF CREDIT.—Section 25C(g)(2) is 
amended by striking ‘‘December 31, 2021’’ and inserting 
‘‘December 31, 2031’’. 
(b) ALLOWANCE
OF CREDIT.—Section 25C(a) is 
amended to read as follows: 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-
dividual, there shall be allowed as a credit against the tax 
imposed by this chapter for the taxable year an amount 
equal to 30 percent of the sum of— 
‘‘(1) the amount paid or incurred by the tax-
payer for qualified energy efficiency improvements 
installed during such taxable year, and 
‘‘(2) the amount of the residential energy prop-
erty expenditures paid or incurred by the taxpayer 
during such taxable year.’’. 
(c) APPLICATION OF ANNUAL LIMITATION IN LIEU 
OF LIFETIME LIMITATION.—Section 25C(b) is amended 
to read as follows: 
‘‘(b) LIMITATIONS.—
1437 
‘‘(1) IN GENERAL.—The credit allowed under 
this section with respect to any taxpayer for any tax-
able year shall not exceed $1,200. 
‘‘(2) ENERGY PROPERTY.—The credit allowed 
under this subsection by reason of subsection (a)(1) 
with respect to any taxpayer for any taxable year 
shall not exceed, with respect to any item of quali-
fied energy property, $600. 
‘‘(3) WINDOWS.—The credit allowed under this 
section by reason of subsection (a)(1) with respect to 
any taxpayer for any taxable year shall not exceed, 
in the aggregate with respect to all exterior windows 
and skylights, $600. 
‘‘(4) DOORS.—The credit allowed under this 
section by reason of subsection (a)(1) with respect to 
any taxpayer for any taxable year shall not exceed— 
‘‘(A) $250 in the case of any exterior door, 
and 
‘‘(B) $500 in the aggregate with respect to 
all exterior doors. 
‘‘(5) CERTAIN
PROPERTY
EXCLUDED
FROM 
LIMITATION.—Amounts paid or incurred for prop-
erty described in clause (i) or (ii) of subsection 
(d)(2)(A) or subsection (d)(2)(B) shall not be sub-
ject to the limitations in paragraphs (1) and (2) or
1438 
factored in for purposes of calculating the limitation 
under such paragraph.’’. 
(d) MODIFICATIONS RELATED TO QUALIFIED EN-
ERGY EFFICIENCY IMPROVEMENTS.— 
(1) 
STANDARDS
FOR
ENERGY
EFFICIENT 
BUILDING
ENVELOPE
COMPONENTS.—Section 
25C(c)(2) is amended by striking ‘‘meets—’’ and all 
that follows through the period at the end and in-
serting the following: ‘‘meets— 
‘‘(A) in the case of an exterior window or 
skylight, Energy Star most efficient certifi-
cation requirements 
‘‘(B) in the case of any other component, 
the prescriptive criteria for such component es-
tablished by the most recent International En-
ergy Conservation Code standard in effect as of 
the beginning of the calendar year which is 2 
years prior to the calendar year in which such 
component is placed in service.’’. 
(2) ROOFS NOT TREATED AS BUILDING ENVE-
LOPE COMPONENTS.—Section 25C(c)(3) is amended 
by adding ‘‘and’’ at the end of subparagraph (B), by 
striking ‘‘, and’’ at the end of subparagraph (C) and 
inserting a period, and by striking subparagraph 
(D).
1439 
(3) AIR SEALING INSULATION ADDED TO DEFI-
NITION OF BUILDING ENVELOPE COMPONENT.—Sec-
tion 25C(c)(3)(A) is amended by striking ‘‘material 
or system’’ and inserting ‘‘material or system, in-
cluding air sealing material or system,’’. 
(e) MODIFICATION OF RESIDENTIAL ENERGY PROP-
ERTY EXPENDITURES.—Section 25C(d) is amended to 
read as follows: 
‘‘(d) RESIDENTIAL ENERGY PROPERTY EXPENDI-
TURES.—For purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘residential en-
ergy property expenditures’ means expenditures 
made by the taxpayer for qualified energy property 
which is— 
‘‘(A) installed on or in connection with a 
dwelling unit located in the United States and 
used as a residence by the taxpayer, and 
‘‘(B) originally placed in service by the tax-
payer. 
Such term includes expenditures for labor costs 
properly allocable to the onsite preparation, assem-
bly, or original installation of the property. 
‘‘(2) QUALIFIED
ENERGY
PROPERTY.—The 
term ‘qualified energy property’ means:
1440 
‘‘(A) Any of the following which meet or 
exceed the highest efficiency tier (not including 
any advanced tier) established by the Consor-
tium for Energy Efficiency which is in effect as 
of the beginning of the calendar year in which 
the property is placed in service: 
‘‘(i) An electric heat pump water heat-
er. 
‘‘(ii) An electric heat pump. 
‘‘(iii) A central air conditioner. 
‘‘(iv) A natural gas, propane, or oil 
water heater. 
‘‘(v) A natural gas, propane, or oil 
furnace or hot water boiler. 
‘‘(B) A biomass stove— 
‘‘(i) which uses the burning of bio-
mass fuel to heat a dwelling unit located in 
the United States and used as a residence 
by the taxpayer, or to heat water for use 
in such a dwelling unit, and 
‘‘(ii) which has a thermal efficiency 
rating of at least 75 percent (measured by 
the higher heating value of the fuel). 
‘‘(C) Any oil furnace or hot water boiler 
which—
1441 
‘‘(i) is placed in service after Decem-
ber 31, 2021 and before January 1, 2027 
and meets or exceeds 2021 Energy Star ef-
ficiency criteria and is rated by the manu-
facturer for use with eligible fuel blends of 
20 percent or more, or 
‘‘(ii) is placed in service after Decem-
ber 31, 2026 and achieves an annual fuel 
utilization efficiency rate of not less than 
90 and is rated by the manufacturer for 
use with eligible fuel blends of 50 percent 
or more. 
‘‘(3) ELIGIBLE FUEL.—For purposes of para-
graph (2), the term ‘eligible fuel’ means biodiesel 
and renewable diesel (within the meaning of section 
40A) and second generation biofuel (within the 
meaning of section 40).’’. 
(f) HOME ENERGY AUDITS.— 
(1) IN GENERAL.—Section 25C(a) is amended 
by striking ‘‘and’’ at the end of paragraph (1), by 
striking the period at the end of paragraph (2) and 
inserting ‘‘, and’’, and by adding at the end the fol-
lowing new paragraph:
1442 
‘‘(3) 30 percent of the amount paid or incurred 
by the taxpayer during the taxable year for home en-
ergy audits.’’. 
(2) LIMITATION.—Section 25C(b), as amended 
by subsection (c), is amended adding at the end the 
following new paragraph: 
‘‘(5) HOME ENERGY AUDITS.— 
‘‘(A) DOLLAR
LIMITATION.—The amount 
of the credit allowed under this section by rea-
son of subsection (a)(3) shall not exceed $150. 
‘‘(B) SUBSTANTIATION
REQUIREMENT.— 
No credit shall be allowed under this section by 
reason of subsection (a)(3) unless the taxpayer 
includes with the taxpayer’s return of tax such 
information or documentation as the Secretary 
may require.’’. 
(3) HOME ENERGY AUDITS.— 
(A) IN GENERAL.—Section 25C, as amend-
ed by subsection (a), is amended by redesig-
nating subsections (e), (f), and (g), as sub-
sections (f), (g), and (h), respectively, and by 
inserting after subsection (d) the following new 
subsection: 
‘‘(e) HOME ENERGY AUDITS.—For purposes of this 
section, the term ‘home energy audit’ means an inspection
1443 
and written report with respect to a dwelling unit located 
in the United States and owned or used by the taxpayer 
as the taxpayer’s principal residence (within the meaning 
of section 121) which— 
‘‘(1) identifies the most significant and cost-ef-
fective energy efficiency improvements with respect 
to such dwelling unit, including an estimate of the 
energy and cost savings with respect to each such 
improvement, and 
‘‘(2) is conducted and prepared by a home en-
ergy auditor that meets the certification or other re-
quirements specified by the Secretary (not later than 
365 days after the date of the enactment of this 
subsection) in regulations or other guidance.’’. 
(B) CONFORMING
AMENDMENT.—Section 
1016(a)(33) is amended by striking ‘‘section 
25C(f)’’ and inserting ‘‘section 25C(g)’’. 
(4) LACK
OF
SUBSTANTIATION
TREATED
AS 
MATHEMATICAL
OR
CLERICAL
ERROR.—Section 
6213(g)(2) is amended— 
(A) in subparagraph (P), by striking 
‘‘and’’ at the end, 
(B) in subparagraph (Q), by striking the 
period at the end and inserting ‘‘, and’’, and 
(C) by adding at the end the following:
1444 
‘‘(R) an omission of correct information or 
documentation 
required 
under 
section 
25C(b)(5)(B) (relating to home energy audits) 
to be included on a return.’’. 
(g) IDENTIFICATION NUMBER REQUIREMENT.— 
(1) IN GENERAL.—Section 25C, as amended by 
subsections (a) and (f), is amended by redesignating 
subsection (h) as subsection (i) and by inserting 
after subsection (g) the following new subsection: 
‘‘(h) PRODUCT IDENTIFICATION NUMBER REQUIRE-
MENT.— 
‘‘(1) IN GENERAL.—No credit shall be allowed 
under subsection (a) with respect to any item of 
specified property placed in service after December 
31, 2023, unless— 
‘‘(A) such item is produced by a qualified 
manufacturer, and 
‘‘(B) the taxpayer includes the qualified 
product identification number of such item on 
the return of tax for the taxable year. 
‘‘(2) QUALIFIED
PRODUCT
IDENTIFICATION 
NUMBER.—For purposes of this section, the term 
‘qualified product identification number’ means, with 
respect to any item of specified property, the prod-
uct identification number assigned to such item by
1445 
the qualified manufacturer pursuant to the method-
ology referred to in paragraph (3). 
‘‘(3) QUALIFIED
MANUFACTURER.—For pur-
poses of this section, the term ‘qualified manufac-
turer’ means any manufacturer of specified property 
which enters into an agreement with the Secretary 
which provides that such manufacturer will— 
‘‘(A) assign a product identification num-
ber to each item of specified property produced 
by such manufacturer utilizing a methodology 
that will ensure that such number (including 
any alphanumeric) is unique to each such item 
(by utilizing numbers or letters which are 
unique to such manufacturer or by such other 
method as the Secretary may provide), 
‘‘(B) label such item with such number in 
such manner as the Secretary may provide, and 
‘‘(C) make periodic written reports to the 
Secretary (at such times and in such manner as 
the Secretary may provide) of the product iden-
tification numbers so assigned and including 
such information as the Secretary may require 
with respect to the item of specified property to 
which such number was so assigned.
1446 
‘‘(4) SPECIFIED PROPERTY.—For purposes of 
this subsection, the term ‘specified property’ means 
any qualified energy property and any property de-
scribed in subparagraph (B) or (C) of subsection 
(c)(3).’’. 
(2) OMISSION OF CORRECT PRODUCT IDENTI-
FICATION NUMBER TREATED AS MATHEMATICAL OR 
CLERICAL ERROR.—Section 6213(g)(2), as amended 
by the preceding provisions of this Act, is amend-
ed— 
(A) in subparagraph (Q), by striking 
‘‘and’’ at the end, 
(B) in subparagraph (R), by striking the 
period at the end and inserting ‘‘, and’’, and 
(C) by adding at the end the following: 
‘‘(S) an omission of a correct product iden-
tification number required under section 25C(h) 
(relating to credit for nonbusiness energy prop-
erty) to be included on a return.’’. 
(h) EFFECTIVE DATES.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided by this subsection, the amendments made by 
this section shall apply to property placed in service 
after December 31, 2021.
1447 
(2) HOME ENERGY AUDITS.—The amendments 
made by subsection (f) shall apply to amounts paid 
or incurred after December 31, 2021. 
(3) IDENTIFICATION NUMBER REQUIREMENT.— 
The amendments made subsection (g) shall apply to 
property placed in service after December 31, 2023. 
SEC. 136302. RESIDENTIAL ENERGY EFFICIENT PROPERTY. 
(a) EXTENSION OF CREDIT.— 
(1) IN GENERAL.—Section 25D(h) is amended 
by striking ‘‘December 31, 2023’’ and inserting 
‘‘December 31, 2033’’. 
(2) 
APPLICATION
OF
PHASEOUT.—Section 
25D(g) is amended— 
(A) by striking ‘‘before January 1, 2023’’ 
in paragraph (2) and inserting ‘‘before January 
1, 2022’’, 
(B) by striking ‘‘and’’ at the end of para-
graph (2), 
(C) by redesignating paragraph (3) as 
paragraph (5) and by inserting after paragraph 
(2) the following new paragraphs: 
‘‘(3) in the case of property placed in service 
after December 31, 2021, and before January 1, 
2032, 30 percent,
1448 
‘‘(4) in the case of property placed in service 
after December 31, 2031, and before January 1, 
2033, 26 percent, and’’, and 
(D) by striking ‘‘December 31, 2022, and 
before January 1, 2024’’ in paragraph (5) (as 
so redesignated) and inserting ‘‘December 31, 
2032, and before January 1, 2034’’. 
(b) RESIDENTIAL ENERGY EFFICIENT PROPERTY 
CREDIT FOR BATTERY STORAGE TECHNOLOGY.— 
(1) IN GENERAL.—Section 25D(a) is amended 
by striking ‘‘and’’ at the end of paragraph (5) and 
by inserting after paragraph (6) the following new 
paragraph: 
‘‘(7) the qualified battery storage technology ex-
penditures,’’. 
(2) QUALIFIED
BATTERY
STORAGE
TECH-
NOLOGY EXPENDITURE.—Section 25D(d) is amend-
ed by adding at the end the following new para-
graph: 
‘‘(7) QUALIFIED
BATTERY
STORAGE
TECH-
NOLOGY
EXPENDITURE.—The term ‘qualified bat-
tery storage technology expenditure’ means an ex-
penditure for battery storage technology which—
1449 
‘‘(A) is installed in connection with a 
dwelling unit located in the United States and 
used as a residence by the taxpayer, and 
‘‘(B) has a capacity of not less than 3 kilo-
watt hours.’’. 
(c) CREDIT MADE REFUNDABLE; INSTALLER RE-
QUIREMENTS; TREATMENT OF CERTAIN POSSESSIONS.— 
Section 25D is amended by redesignating subsection (h) 
as subsection (k) and by inserting after subsection (g) the 
following new subsections: 
‘‘(h) CREDIT MADE REFUNDABLE
FOR TAXABLE 
YEARS AFTER 2023.—In the case of any taxable year be-
ginning after December 31, 2023, the credit allowed under 
subsection (a) (excluding any credit carried forward from 
a previous taxable year) shall be treated as a credit al-
lowed under subpart C (and not allowed under this sub-
part). 
‘‘(i) REQUIREMENT FOR QUALIFIED INSTALLER.— 
‘‘(1) IN GENERAL.—No credit shall be allowed 
under this section with respect to any property de-
scribed in subsection (a) placed in service after De-
cember 31, 2023 unless— 
‘‘(A) such property is installed by a quali-
fied installer, and
1450 
‘‘(B) the taxpayer includes the qualified in-
stallation identification number described in 
paragraph (3) on the return of tax for the tax-
able year. 
‘‘(2) QUALIFIED INSTALLER.— 
‘‘(A) IN GENERAL.—For purposes of this 
section, the term ‘qualified installer’ means an 
installer who enters into an agreement with the 
Secretary which provides that such installer 
will, with respect to expenditures described in 
subsection (a) in connection with the residence 
of a taxpayer— 
‘‘(i) provide the taxpayer with a quali-
fied installation identification number and 
a written receipt of the purchase and in-
stallation of such property in a manner 
prescribed by the Secretary, and 
‘‘(ii) make periodic written reports to 
the Secretary (in such manner as the Sec-
retary may provide) of installation identi-
fication numbers assigned by the installer 
corresponding to such expenditures, includ-
ing such information as the Secretary may 
require with respect to such expenditures.
1451 
‘‘(B) INSTALLER DEEMED TO MEET RE-
QUIREMENT.—For purposes of subparagraph 
(A), to the extent provided by the Secretary, an 
installer may be deemed to meet the require-
ment under clause (ii) of such subparagraph on 
the basis of information available to the Sec-
retary which the Secretary determines is rea-
sonably reliable for purposes of determining the 
amount of qualified expenditures under sub-
section (a) made by a taxpayer in connection 
with a residence of such taxpayer. 
‘‘(3) QUALIFIED
INSTALLATION
IDENTIFICA-
TION NUMBER.—For purposes of this section, the 
term ‘qualified installation identification number’ 
means a unique identification number with respect 
to expenditures described in subsection (a) in con-
nection with a residence of a taxpayer that is in-
stalled by a qualified installer. 
‘‘(4) REGISTRATION.—The Secretary may re-
quire such information or registration of a qualified 
installer as the Secretary deems necessary or appro-
priate for purposes of preventing duplication, fraud, 
or improper claims with respect to property de-
scribed in subsection (a). Under regulations or other 
guidance prescribed by the Secretary, the registra-
1452 
tion of any person under this section may be denied, 
revoked, or suspended if the Secretary determines 
that such denial, revocation, or suspension is nec-
essary to prevent duplication, fraud, or improper 
claims with respect to property described in sub-
section (a). 
‘‘(j) TREATMENT OF CERTAIN POSSESSIONS.— 
‘‘(1) PAYMENTS TO POSSESSIONS WITH MIRROR 
CODE TAX SYSTEMS.—The Secretary shall pay to 
each possession of the United States which has a 
mirror code tax system amounts equal to the loss (if 
any) to that possession by reason of the application 
of the provisions of this section. Such amounts shall 
be determined by the Secretary based on information 
provided by the government of the respective posses-
sion. 
‘‘(2) PAYMENTS TO OTHER POSSESSIONS.—The 
Secretary shall pay to each possession of the United 
States which does not have a mirror code tax system 
amounts estimated by the Secretary as being equal 
to the aggregate benefits (if any) that would have 
been provided to residents of such possession by rea-
son of the provisions of this section if a mirror code 
tax system had been in effect in such possession. 
The preceding sentence shall not apply unless the re-
1453 
spective possession has a plan which has been ap-
proved by the Secretary under which such possession 
will promptly distribute such payments to its resi-
dents. 
‘‘(3) MIRROR CODE TAX SYSTEM; TREATMENT 
OF PAYMENTS.—Rules similar to the rules of para-
graphs (3), (4), and (5) of section 21(h) shall apply 
for purposes of this section.’’. 
(d) CERTAIN EXPENDITURES DISALLOWED.—Sec-
tion 25D is amended— 
(1) in subsection (a), by adding ‘‘and’’ at the 
end of paragraph (4), by striking the comma at the 
end of paragraph (5) and inserting a period, and by 
striking paragraph (6), and 
(2) in subsection (d), by striking paragraph (6). 
(e) CARRYFORWARD
OF
UNUSED
CREDIT
DIS-
ALLOWED.—Section 25D is amended by striking sub-
section (c). 
(f) CONFORMING AMENDMENT.—Section 6213(g)(2), 
as amended by the preceding provisions of this Act, is 
amended— 
(1) in subparagraph (T), by striking ‘‘and’’ at 
the end, 
(2) in subparagraph (U), by striking the period 
at the end and inserting ‘‘, and’’, and
1454 
(3) by adding at the end the following: 
‘‘(V) an omission of a correct qualified in-
stallation identification number required under 
section 25D (relating to credit for residential 
energy efficient property) to be included on a 
return.’’. 
(g) EFFECTIVE DATES.— 
(1) The amendments made by subsections (a), 
(b), (d), and (f) shall apply to expenditures made 
after December 31, 2021. 
(2) The amendments made by subsections (c) 
and (e) shall apply to expenditures made after De-
cember 31, 2022. 
SEC. 136303. ENERGY EFFICIENT COMMERCIAL BUILDINGS 
DEDUCTION. 
(a) PLACED
IN SERVICE REQUIREMENT.—Section 
179D(c)(2) is amended to read as follows: 
‘‘(2) REFERENCE STANDARD 90.1.—The term 
‘Reference Standard 90.1’ means, with respect to 
any property, the more recent of— 
‘‘(A) Standard 90.1-2007 published by the 
American Society of Heating, Refrigerating, 
and Air Conditioning Engineers and the Illu-
minating Engineering Society of North Amer-
ica, or
1455 
‘‘(B) the most recent Standard 90.1 pub-
lished by the American Society of Heating, Re-
frigerating, and Air Conditioning Engineers and 
the Illuminating Engineering Society of North 
America for which the Department of Energy 
has issued a final determination and which has 
been affirmed by the Secretary for purposes of 
this section not later than the date that is 4 
years before the date such property is placed in 
service.’’. 
(b) TEMPORARY INCREASE IN DEDUCTION, ETC..— 
Section 179D is amended by adding at the end the fol-
lowing: 
‘‘(i) TEMPORARY RULES.— 
‘‘(1) PERIOD OF APPLICATION.—The provisions 
of this subsection shall apply only to taxable years 
beginning after December 31, 2021, and before Jan-
uary 1, 2032. 
‘‘(2) MODIFICATION
OF
EFFICIENCY
STAND-
ARD.—Subsection (c)(1)(D) shall be applied by sub-
stituting ‘25’ for ‘50’. 
‘‘(3) MAXIMUM AMOUNT OF DEDUCTION.— 
‘‘(A) IN GENERAL.—The deduction under 
subsection (a) with respect to any building for
1456 
any taxable year shall not exceed the excess (if 
any) of— 
‘‘(i) the product of— 
‘‘(I) the applicable dollar value, 
and 
‘‘(II) the square footage of the 
building, over 
‘‘(ii) the aggregate amount of the de-
ductions under subsection (a) and para-
graph (6) with respect to the building for 
the 3 taxable years immediately preceding 
such taxable year (or, in the case of any 
such deduction allowable to a person other 
than the taxpayer, for any taxable year 
ending during the 4-taxable-year period 
ending with such taxable year). 
‘‘(B) APPLICABLE
DOLLAR
VALUE.—For 
purposes of paragraph (3)(A)(i), the applicable 
dollar value shall be an amount equal to $0.50 
increased (but not above $1.00) by $0.02 for 
each percentage point by which the total annual 
energy and power costs for the building are cer-
tified to be reduced by a percentage greater 
than 25 percent.
1457 
‘‘(C) APPLICATION OF INFLATION ADJUST-
MENT.—Subsection (g) shall be applied— 
‘‘(i) by substituting ‘2022’ for ‘2020’, 
‘‘(ii) 
by 
substituting 
‘subsection 
(i)(3)(B)’ for ‘subsection (b) or subsection 
(d)(1)(A)’, and 
‘‘(iii) 
by 
substituting 
‘2021’ 
for 
‘2019’. 
‘‘(D) LIMITATION TO APPLY IN LIEU OF 
CURRENT
LIMITATION
AND
PARTIAL
ALLOW-
ANCE.—Subsections (b) and (d)(1) shall not 
apply. 
‘‘(4) INCREASED CREDIT AMOUNT FOR CERTAIN 
PROPERTY.— 
‘‘(A) IN
GENERAL.—In the case of any 
property which satisfies the requirements of 
subparagraph (B), paragraph (3)(B) shall be 
applied by substituting ‘$2.50’ for ‘$0.50’, 
‘$.10’ for ‘$.02’, and ‘$5.00’ for ‘$1.00’. 
‘‘(B) PROJECT REQUIREMENTS.—A project 
meets the requirements of this subparagraph if 
it is one of the following: 
‘‘(i) A building or qualified retrofit 
plan the construction of which begins prior 
to 60 days after the Secretary publishes
1458 
guidance with respect to the requirements 
of paragraphs (5) and (6). 
‘‘(ii) A building or qualified retrofit 
plan the construction of which satisfies the 
requirements of paragraphs (5) and (6). 
‘‘(5) PREVAILING WAGE REQUIREMENTS.— 
‘‘(A) IN GENERAL.—The requirements de-
scribed in this subparagraph with respect to 
any project are that the taxpayer shall ensure 
that any laborers and mechanics employed by 
contractors and subcontractors in the construc-
tion of any property or with respect to building 
modifications made as part of a qualified ret-
rofit plan shall be paid wages at rates not less 
than the prevailing rates for construction, alter-
ation, or repair of a similar character in the lo-
cality as most recently determined by the Sec-
retary 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.
1459 
‘‘(6) APPRENTICESHIP REQUIREMENTS.—Rules 
similar to the rules of section 45(b)(8) shall apply. 
‘‘(7) ALLOCATION OF DEDUCTION BY CERTAIN 
TAX-EXEMPT ENTITIES.— 
‘‘(A) IN
GENERAL.—A specified tax-ex-
empt entity shall be treated in the same manner 
as a Federal, State, or local government for 
purposes of applying subsection (d)(4). 
‘‘(B) SPECIFIED
TAX-EXEMPT
ENTITY.— 
For purposes of this paragraph, the term ‘spec-
ified tax-exempt entity’ means— 
‘‘(i) the United States, any State or 
political subdivision thereof, any possession 
of the United States, or any agency or in-
strumentality of any of the foregoing, 
‘‘(ii) an Indian tribal government (as 
defined in section 48(e)(4)(F)(ii)) or Alas-
ka Native Corporation (as defined in sec-
tion 3 of the Alaska Native Claims Settle-
ment Act (43 U.S.C. 1602(m)), and 
‘‘(iii) any organization exempt from 
tax imposed by this chapter. 
‘‘(8) ALTERNATIVE
DEDUCTION
FOR
ENERGY 
EFFICIENT RETROFIT BUILDING PROPERTY.—
1460 
‘‘(A) IN GENERAL.—In the case of a tax-
payer which elects (at such time and in such 
manner as the Secretary may provide) the ap-
plication of this paragraph with respect to any 
qualified building, there shall be allowed as a 
deduction for the taxable year which includes 
the date of the qualifying final certification with 
respect to the qualified retrofit plan of such 
building, an amount equal to the lesser of— 
‘‘(i) the excess described in paragraph 
(3) (determined by substituting ‘energy 
usage intensity’ for ‘total annual energy 
and power costs’ in subparagraph (B) 
thereof), or 
‘‘(ii) the aggregate adjusted basis (de-
termined after taking into account all ad-
justments with respect to such taxable year 
other than the reduction under subsection 
(e)) of energy efficient retrofit building 
property placed in service by the taxpayer 
pursuant to such qualified retrofit plan. 
‘‘(B) QUALIFIED
RETROFIT
PLAN.—For 
purposes of this paragraph, the term ‘qualified 
retrofit plan’ means a written plan prepared by 
a qualified professional which specifies modi-
1461 
fications to a building which, in the aggregate, 
are expected to reduce such building’s energy 
usage intensity by 25 percent or more in com-
parison to the baseline energy usage intensity of 
such building. Such plan shall provide for a 
qualified professional to— 
‘‘(i) as of any date during the 1-year 
period ending on the date of the first cer-
tification described in clause (ii), certify 
the energy usage intensity of such building 
as of such date, 
‘‘(ii) certify the status of property in-
stalled pursuant to such plan as meeting 
the requirements of clauses (ii) and (iii) 
subparagraph (C), and 
‘‘(iii) as of any date that is more than 
1 year after completion of the plan, certify 
the energy usage intensity of such building 
as of such date. 
‘‘(C) 
ENERGY
EFFICIENT
RETROFIT 
BUILDING
PROPERTY.—For purposes of this 
paragraph, the term ‘energy efficient retrofit 
building property’ means property—
1462 
‘‘(i) with respect to which depreciation 
(or amortization in lieu of depreciation) is 
allowable, 
‘‘(ii) which is installed on or in any 
qualified building, 
‘‘(iii) which is installed as part of— 
‘‘(I) the interior lighting systems, 
‘‘(II) the heating, cooling, ven-
tilation, and hot water systems, or 
‘‘(III) the building envelope, and 
‘‘(iv) which is certified in accordance 
with subparagraph (B)(ii) as meeting the 
requirements of clauses (ii) and (iii). 
‘‘(D) QUALIFIED
BUILDING.—For pur-
poses of this paragraph, the term ‘qualified 
building’ means any building which— 
‘‘(i) is located in the United States, 
and 
‘‘(ii) was originally placed in service 
not less than 5 years before the establish-
ment of the qualified retrofit plan with re-
spect to such building. 
‘‘(E) 
QUALIFYING
FINAL
CERTIFI-
CATION.—For purposes of this paragraph, the 
term ‘qualifying final certification’ means, with
1463 
respect to any qualified retrofit plan, the certifi-
cation described in subparagraph (B)(iii) if the 
energy usage intensity certified in such certifi-
cation is not more than 75 percent of the base-
line energy usage intensity of the building. 
‘‘(F) BASELINE
ENERGY
USAGE
INTEN-
SITY.— 
‘‘(i) IN GENERAL.—The term ‘baseline 
energy usage intensity’ means the energy 
usage intensity certified under subpara-
graph (B)(i), as adjusted to take into ac-
count weather as compared to the energy 
usage intensity determined under subpara-
graph (B)(iii). 
‘‘(ii) DETERMINATION
OF
ADJUST-
MENT.—For purposes of clause (i), the ad-
justments described in such clause shall be 
determined in such manner as the Sec-
retary may provide. 
‘‘(G) OTHER DEFINITIONS.—For purposes 
of this paragraph— 
‘‘(i) ENERGY USAGE INTENSITY.—The 
term ‘energy usage intensity’ means the 
annualized, measured site energy usage in-
tensity determined in accordance with such
1464 
regulations or other guidance as the Sec-
retary may provide and measured in Brit-
ish thermal units. 
‘‘(ii) 
QUALIFIED
PROFESSIONAL.— 
The term ‘qualified professional’ means an 
individual who is a licensed architect or a 
licenced engineer and meets such other re-
quirements as the Secretary may provide. 
‘‘(H) COORDINATION
WITH
DEDUCTION 
OTHERWISE
ALLOWED
UNDER
SUBSECTION 
(a).— 
‘‘(i) IN GENERAL.—In the case of any 
building with respect to which an election 
is made under subparagraph (A), the term 
‘energy efficient commercial building prop-
erty’ shall not include any energy efficient 
retrofit building property with respect to 
which a deduction is allowable under this 
paragraph. 
‘‘(ii) CERTAIN RULES NOT APPLICA-
BLE.— 
‘‘(I) IN
GENERAL.—Except as 
provided in subclause (II), subsection 
(d) shall not apply for purposes of 
this paragraph.
1465 
‘‘(II) ALLOCATION
OF
DEDUC-
TION BY CERTAIN TAX-EXEMPT ENTI-
TIES.—Rules similar to subsection 
(d)(4) (determined after application of 
paragraph (5)) shall apply for pur-
poses of this paragraph.’’. 
(c) APPLICATION
TO REAL ESTATE INVESTMENT 
TRUST EARNINGS AND PROFITS.—Section 312(k)(3)(B) 
is amended— 
(1) by striking ‘‘for purposes of computing the 
earnings and profits of a corporation’’ and inserting 
the following: 
‘‘(i) IN
GENERAL.—For purposes of 
computing the earnings and profits of a 
corporation, except as provided in clause 
(ii)’’, and 
(2) by adding at the end the following new 
clause: 
‘‘(ii) SPECIAL RULE.—In the case of a 
corporation that is a real estate investment 
trust, any amount deductible under section 
179D shall be allowed in the year in which 
the property giving rise to such deduction 
is placed in service.’’.
1466 
(d) 
CONFORMING
AMENDMENT.—Section 
179D(d)(2) is amended by striking ‘‘not later than the 
date that is 2 years before the date that construction of 
such property begins’’ and inserting ‘‘not later than the 
date that is 4 years before the date such property is placed 
in service’’. 
(e) EFFECTIVE DATE.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendment made by 
this section shall apply to taxable years beginning 
after December 31, 2021. 
(2) ALTERNATIVE DEDUCTION FOR ENERGY EF-
FICIENT
RETROFIT
BUILDING
PROPERTY.—Para-
graph (8) of section 179D(i) of the Internal Revenue 
Code of 1986 (as added by this section), and any 
other provision of such section solely for purposes of 
applying such paragraph, shall apply to property 
placed in service after December 31, 2021 (in tax-
able years ending after such date) if such property 
is placed in service pursuant to qualified retrofit 
plan (within the meaning of such section) estab-
lished after such date.
1467 
SEC. 136304. EXTENSION, INCREASE, AND MODIFICATIONS 
OF NEW ENERGY EFFICIENT HOME CREDIT. 
(a) EXTENSION
OF CREDIT.—Section 45L(g) is 
amended by striking ‘‘December 31, 2021’’ and inserting 
‘‘December 31, 2031’’. 
(b) INCREASE
IN
CREDIT
AMOUNTS.—Section 
45L(a)(2) is amended to read as follows: 
‘‘(2) APPLICABLE AMOUNT.—For purposes of 
paragraph (1), the applicable amount is an amount 
equal to— 
‘‘(A) in the case of a dwelling unit which 
is eligible to participate in the Energy Star 
Residential New Construction Program or the 
Energy Star Manufactured New Homes pro-
gram— 
‘‘(i) that is described in subsection 
(c)(1)(A) (and not described in subsection 
(c)(1)(B)), $2,500, and 
‘‘(ii) that is described in subsection 
(c)(1)(B), $5000, and 
‘‘(B) in the case of a dwelling unit which 
is part of a building eligible to participate in 
the Energy Star Multifamily New Construction 
Program—
1468 
‘‘(i) that is described in subsection 
(c)(1)(A) (and not described in subsection 
(c)(1)(B)), $500, and 
‘‘(ii) that is described in subsection 
(c)(1)(B), $1000.’’. 
(c) MODIFICATION OF ENERGY SAVING REQUIRE-
MENTS.—Section 45L(c) is amended to read as follows: 
‘‘(c) ENERGY SAVING REQUIREMENTS.— 
‘‘(1) IN GENERAL.—A dwelling unit meets the 
energy saving requirements of this subsection if— 
‘‘(A) such dwelling unit meets the require-
ments of paragraph (2) or (3) (whichever is ap-
plicable), or 
‘‘(B) such dwelling unit is certified as a 
zero energy ready home under the zero energy 
ready home program of the Department of En-
ergy (or any successor program determined by 
the Secretary) as in effect on January 1, 2022. 
‘‘(2) SINGLE-FAMILY HOME REQUIREMENTS.— 
A dwelling unit meets the requirements of this para-
graph if— 
‘‘(A) such dwelling unit meets— 
‘‘(i) in the case of a dwelling unit ac-
quired before January 1, 2025, the Energy
1469 
Star Single-Family New Homes National 
Program Requirements 3.1, and 
‘‘(ii) in the case of a dwelling unit ac-
quired after December 31, 2024, the En-
ergy Star Single-Family New Homes Na-
tional Program Requirements 3.2, 
‘‘(B) such dwelling unit meets the most re-
cent Energy Star Single-Family New Homes 
Program Requirements applicable to the loca-
tion of such dwelling unit (as in effect on the 
latter of January 1, 2022 or January 1 of two 
calendar years prior to the date the dwelling 
unit was acquired), or 
‘‘(C) such dwelling unit meets the most re-
cent Energy Star Manufactured Home National 
program requirements as in effect on the latter 
of January 1, 2022 or January 1 of two cal-
endar years prior to the date such dwelling unit 
is acquired. 
‘‘(3) MULTI-FAMILY HOME REQUIREMENTS.—A 
dwelling unit meets the requirements of this para-
graph if— 
‘‘(A) such dwelling unit meets the most re-
cent Energy Star Multifamily New Construction 
National Program Requirements (as in effect
1470 
on either January 1, 2022 or January 1 of 
three calendar years prior to the date the dwell-
ing was acquired, whichever is later), and 
‘‘(B) such dwelling unit meets the most re-
cent Energy Star Multifamily New Construction 
Regional Program Requirements applicable to 
the location of such dwelling unit (as in effect 
on either January 1, 2022 or January 1 of 
three calendar years prior to the date the dwell-
ing was acquired, whichever is later).’’. 
(d) PREVAILING
WAGE
REQUIREMENT.—Section 
45L is amended by redesignating subsection (g) as sub-
section (h) and by inserting after subsection (f) the fol-
lowing new subsection: 
‘‘(g) PREVAILING WAGE REQUIREMENT.— 
‘‘(1) IN GENERAL.—In the case of a qualifying 
residence described in subsection (b)(2)(B) meeting 
the prevailing wage requirements of paragraph (2), 
the credit amount allowed with respect to such resi-
dence shall be— 
‘‘(A) $2,500 in the case of a residence de-
scribed in subparagraph (A) of subsection 
(c)(1) (and not described in subparagraph (B) 
of such subsection), and
1471 
‘‘(B) $5,000 in the case of a residence de-
scribed in (c)(1)(B). 
‘‘(2) PREVAILING WAGE REQUIREMENTS.— 
‘‘(A) IN GENERAL.—The requirements de-
scribed in this paragraph with respect to any 
qualified residence are that the taxpayer shall 
ensure that any laborers and mechanics em-
ployed by contractors and subcontractors in the 
construction of such residence shall be paid 
wages at rates not less than the prevailing rates 
for construction, alteration, or repair of a simi-
lar character in the locality as most recently de-
termined by the Secretary of Labor, in accord-
ance 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. 
‘‘(3) REGULATIONS AND GUIDANCE.—The Sec-
retary shall issue such regulations or other guidance 
as the Secretary determines necessary or appropriate 
to carry out the purposes of this subsection, includ-
ing regulations or other guidance which provides for
1472 
requirements for recordkeeping or information re-
porting for purposes of establishing the requirements 
of this subsection.’’. 
(e) EFFECTIVE DATES.—The amendments made by 
this section shall apply to dwelling units acquired after 
December 31, 2021. 
SEC. 136305. MODIFICATIONS TO INCOME EXCLUSION FOR 
CONSERVATION SUBSIDIES. 
(a) IN GENERAL.—Section 136(a) is amended— 
(1) by striking ‘‘any subsidy provided’’ and in-
serting ‘‘any subsidy— 
‘‘(1) provided’’, 
(2) by striking the period at the end and insert-
ing a comma, and 
(3) by adding at the end the following new 
paragraphs: 
‘‘(2) provided (directly or indirectly) by a public 
utility to a customer, or by a State or local govern-
ment to a resident of such State or locality, for the 
purchase or installation of any water conservation or 
efficiency measure, 
‘‘(3) provided (directly or indirectly) by a storm 
water management provider to a customer, or by a 
State or local government to a resident of such State
1473 
or locality, for the purchase or installation of any 
storm water management measure, or 
‘‘(4) provided (directly or indirectly) by a State 
or local government to a resident of such State or 
locality for the purchase or installation of any waste-
water management measure, but only if such meas-
ure is with respect to the taxpayer’s principal resi-
dence.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) DEFINITION OF WATER CONSERVATION OR 
EFFICIENCY MEASURE AND STORM WATER MANAGE-
MENT MEASURE.—Section 136(c) is amended— 
(A) by striking ‘‘ENERGY CONSERVATION 
MEASURE’’ in the heading thereof and inserting 
‘‘DEFINITIONS’’, 
(B) by striking ‘‘IN
GENERAL’’ in the 
heading of paragraph (1) and inserting ‘‘EN-
ERGY CONSERVATION MEASURE’’, and 
(C) by redesignating paragraph (2) as 
paragraph (5) and by inserting after paragraph 
(1) the following: 
‘‘(2) WATER
CONSERVATION
OR
EFFICIENCY 
MEASURE.—For purposes of this section, the term 
‘water conservation or efficiency measure’ means any 
evaluation of water use, or any installation or modi-
1474 
fication of property, the primary purpose of which is 
to reduce consumption of water or to improve the 
management of water demand with respect to one or 
more dwelling units. 
‘‘(3) STORM WATER MANAGEMENT MEASURE.— 
For purposes of this section, the term ‘storm water 
management measure’ means any installation or 
modification of property primarily designed to re-
duce or manage amounts of storm water with re-
spect to one or more dwelling units. 
‘‘(4) WASTEWATER MANAGEMENT MEASURE.— 
For purposes of this section, the term ‘wastewater 
management measure’ means any installation or 
modification of property primarily designed to man-
age wastewater (including septic tanks and cess-
pools) with respect to one or more dwelling units.’’. 
(2) DEFINITION OF PUBLIC UTILITY.—Section 
136(c)(5) (as redesignated by paragraph (1)(C)) is 
amended by striking subparagraph (B) and inserting 
the following: 
‘‘(B) PUBLIC UTILITY.—The term ‘public 
utility’ means a person engaged in the sale of 
electricity, natural gas, or water to residential, 
commercial, or industrial customers for use by 
such customers.
1475 
‘‘(C) STORM
WATER
MANAGEMENT
PRO-
VIDER.—The term ‘storm water management 
provider’ means a person engaged in the provi-
sion of storm water management measures to 
the public. 
‘‘(D) PERSON.—For purposes of subpara-
graphs (B) and (C), the term ‘person’ includes 
the Federal Government, a State or local gov-
ernment or any political subdivision thereof, or 
any instrumentality of any of the foregoing.’’. 
(3) CLERICAL AMENDMENTS.— 
(A) The heading for section 136 is amend-
ed— 
(i) by inserting ‘‘AND WATER’’ after 
‘‘ENERGY’’, and 
(ii) by striking ‘‘PROVIDED BY PUB-
LIC UTILITIES’’. 
(B) The item relating to section 136 in the 
table of sections of part III of subchapter B of 
chapter 1 is amended— 
(i) by inserting ‘‘and water’’ after 
‘‘energy’’, and 
(ii) by striking ‘‘provided by public 
utilities’’.
1476 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to amounts received after Decem-
ber 31, 2018. 
(d) NO INFERENCE.—Nothing in this Act or the 
amendments made by this Act shall be construed to create 
any inference with respect to the proper tax treatment of 
any subsidy received directly or indirectly from a public 
utility, a storm water management provider, or a State 
or local government for any water conservation measure 
or storm water management measure before January 1, 
2019. 
SEC. 136306. CREDIT FOR QUALIFIED WILDFIRE MITIGA-
TION EXPENDITURES. 
(a) IN GENERAL.—Subpart B of part IV of sub-
chapter A of chapter 1 is amended by inserting after sec-
tion 27 the following new section: 
‘‘SEC. 28. QUALIFIED WILDFIRE MITIGATION EXPENDI-
TURES. 
‘‘(a) IN GENERAL.—There shall be allowed as a cred-
it against the tax imposed by this chapter for the taxable 
year an amount equal to 30 percent of the qualified wild-
fire mitigation expenditures paid or incurred by the tax-
payer during such taxable year with respect to real prop-
erty owned or leased by the taxpayer.
1477 
‘‘(b) QUALIFIED WILDFIRE MITIGATION EXPENDI-
TURES.—For purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified wildfire 
mitigation expenditures’ means any specified wildfire 
mitigation expenditure made pursuant to a qualified 
State wildfire mitigation program of a State which 
requires expenditures for wildfire mitigation to be 
paid both by the taxpayer and such State. Such 
term shall not include any item of expenditure un-
less the ratio of the State’s expenditure for such 
item to the sum of the State’s and taxpayer’s ex-
penditures for such item is not less than 25 percent. 
‘‘(2) SPECIFIED
WILDFIRE
MITIGATION
EX-
PENDITURE.—The term ‘specified wildfire mitigation 
expenditure’ means, with respect to any real prop-
erty owned or leased by the taxpayer, any amount 
paid or incurred to reduce the risk of wildfire by re-
moving accumulations of vegetation (including estab-
lishing, expanding, or maintaining fuel breaks to 
serve as fire breaks) on such real property. 
‘‘(3) QUALIFIED STATE WILDFIRE MITIGATION 
PROGRAM.—The term ‘qualified State wildfire miti-
gation program’ means any program of a State the 
primary purpose of which is to mitigate the risk of 
wildfires in such State.
1478 
‘‘(4) TREATMENT OF REIMBURSEMENTS.—Any 
amount originally paid or incurred by the taxpayer 
which is reimbursed by a State under a qualified 
wildfire mitigation program of such State shall be 
treated as paid by such State (and not by such tax-
payer). 
‘‘(c) APPLICATION WITH OTHER CREDITS.— 
‘‘(1) BUSINESS CREDIT TREATED AS PART OF 
GENERAL BUSINESS CREDIT.—So much of the credit 
which would be allowed under subsection (a) for any 
taxable year (determined without regard to this sub-
section) that is attributable to expenditures made in 
the ordinary course of the taxpayer’s trade or busi-
ness (or, in the case of expenditures made by a 
State, would have been expenditures made in the or-
dinary course of the taxpayer’s trade or business if 
made by the taxpayer) shall be treated as a credit 
listed in section 38(b) for taxable year (and not al-
lowed under subsection (a)). 
‘‘(2) PERSONAL CREDIT.—For purposes of this 
title, the credit allowed under subsection (a) for any 
taxable year (determined after application of para-
graph (1)) shall be treated as a credit allowable 
under subpart A for such taxable year.
1479 
‘‘(d) REDUCTION OF CREDIT PERCENTAGE WHERE 
TAXPAYER EXPENDITURES LESS THAN 30 PERCENT.— 
‘‘(1) IN GENERAL.—If the expenditure percent-
age with respect to any item of qualified wildfire 
mitigation expenditure is less than 30 percent, sub-
section (a) shall be applied by substituting ‘the ex-
penditure percentage’ for ‘30 percent’ with respect 
to such item of expenditure. 
‘‘(2) EXPENDITURE
PERCENTAGE.—For pur-
poses of this section, the term ‘expenditure percent-
age’ means, with respect to any item of qualified 
wildfire mitigation expenditure any portion of which 
is paid or incurred by a State, the ratio (expressed 
as a percentage) of— 
‘‘(A) the taxpayer’s expenditure for such 
item, divided by 
‘‘(B) the sum of the taxpayer’s and such 
State’s expenditures for such item. 
‘‘(e) SPECIAL RULES.— 
‘‘(1) TREATMENT OF EXPENDITURES RELATED 
TO MARKETABLE TIMBER.—An expenditure shall not 
be taken into account for purposes of this section 
(whether made by the taxpayer or a State pursuant 
to a qualified State wildfire mitigation program of 
such State) if such expenditure is properly allocable
1480 
to timber which is sold or exchanged by the tax-
payer. The preceding sentence shall not apply to the 
extent that such amount exceeds the gain on such 
sale or exchange. 
‘‘(2) BASIS REDUCTION.—For purposes of this 
subtitle, if the basis of any property would (but for 
this paragraph) be determined by taking into ac-
count any qualified wildfire mitigation expenditure, 
the basis of such property shall be reduced by the 
amount of the credit allowed under subsection (a) 
with respect to such expenditure (determined with-
out regard to subsection (c)). 
‘‘(3) DENIAL
OF
DOUBLE
BENEFIT.—The 
amount of any deduction or other credit allowable 
under this chapter for any expenditure for which a 
credit is allowable under subsection (a) shall be re-
duced by the amount of credit allowed under such 
subsection for such expenditure (determined without 
regard to subsection (c)).’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 38(b), as amended by the preceding 
provisions of this Act, is amended by striking ‘‘plus’’ 
at the end of paragraph (35), by striking the period 
at the end of paragraph (36) and inserting ‘‘, plus’’,
1481 
and by adding at the end the following new para-
graph: 
‘‘(37) the portion of the qualified wildfire miti-
gation expenditures credit to which section 28(c)(1) 
applies.’’. 
(2) Section 1016(a) is amended by redesig-
nating paragraphs (35) through (38) as paragraphs 
(36) through (39), respectively, and by inserting 
after paragraph (34) the following new paragraph: 
‘‘(35) to the extent provided in section 
28(e)(2),’’. 
(3) The table of sections for subpart B of part 
IV of subchapter A of chapter 1 is amended by in-
serting after the item relating to section 27 the fol-
lowing new item: 
‘‘Sec. 28. Qualified wildfire mitigation expenditures.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to expenditures paid or incurred 
after the date of the enactment of this Act, in taxable 
years ending after such date.
1482 
PART 4—GREENING THE FLEET AND 
ALTERNATIVE VEHICLES 
SEC. 136401. REFUNDABLE NEW QUALIFIED PLUG-IN ELEC-
TRIC DRIVE MOTOR VEHICLE CREDIT FOR IN-
DIVIDUALS. 
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1 is amended by inserting after sec-
tion 36B the following new section: 
‘‘SEC. 36C. NEW QUALIFIED PLUG-IN ELECTRIC DRIVE 
MOTOR VEHICLES. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-
dividual, there shall be allowed as a credit against the tax 
imposed by this subtitle for the taxable year an amount 
equal to the credit amount determined under subsection 
(b) with respect to a new qualified plug-in electric drive 
motor vehicle placed in service by the taxpayer during the 
taxable year. 
‘‘(b) CREDIT AMOUNT.— 
‘‘(1) IN
GENERAL.—The amount determined 
under this subsection with respect to any new quali-
fied plug-in electric drive motor vehicle is the sum 
of the amounts determined under paragraphs (2) 
through (5) with respect to such vehicle (not to ex-
ceed 50 percent of the purchase price of such vehi-
cle).
1483 
‘‘(2) BASE AMOUNT.—The amount determined 
under this paragraph is $4,000. 
‘‘(3) BATTERY CAPACITY.—In the case of a new 
qualified plug-in electric drive motor vehicle, the 
amount determined under this paragraph is $3,500 
if— 
‘‘(A) in the case of a vehicle placed in serv-
ice before January 1, 2027, such vehicle draws 
propulsion energy from a battery with not less 
than 40 kilowatt hours of capacity and has a 
gasoline tank capacity not greater than 2.5 gal-
lons, and 
‘‘(B) in the case of a vehicle placed in serv-
ice after December 31, 2026, such vehicle 
draws propulsion energy from a battery with 
not less than 50 kilowatt hours of capacity and 
has a gasoline tank capacity not greater than 
2.5 gallons. 
‘‘(4) DOMESTIC ASSEMBLY.—In the case of a 
new qualified plug-in electric drive motor vehicle 
which satisfies the domestic assembly qualifications, 
the amount determined under this paragraph is 
$4,500. 
‘‘(5) DOMESTIC CONTENT.—In the case of a 
new qualified plug-in electric drive motor vehicle
1484 
which satisfies domestic content qualifications, the 
amount determined under this paragraph is $500. 
‘‘(c) VEHICLE LIMITATION.—The number of new 
qualified plug-in electric drive motor vehicles taken in ac-
count under subsection (a) shall not exceed 1 per taxpayer 
per taxable year. 
‘‘(d) LIMITATION BASED ON MODIFIED ADJUSTED 
GROSS INCOME.— 
‘‘(1) IN GENERAL.—The amount of the credit 
allowable under subsection (a) for any taxable year 
shall be reduced (but not below zero) by $200 for 
each $1,000 (or fraction thereof) by which— 
‘‘(A) the lesser of— 
‘‘(i) the taxpayer’s modified adjusted 
gross income for such taxable year, or 
‘‘(ii) the taxpayer’s modified adjusted 
gross income for the preceding taxable 
year, exceeds 
‘‘(B) the threshold amount. 
For purposes of the preceding sentence, the term 
‘modified adjusted gross income’ means adjusted 
gross income increased by any amount excluded 
from gross income under section 911, 931, or 933. 
‘‘(2) THRESHOLD AMOUNT.—For purposes of 
paragraph (1), the term ‘threshold amount’ means—
1485 
‘‘(A) $500,000 in the case of a joint return 
or surviving spouse (half such amount in the 
case of a married individual filing a separate re-
turn), 
‘‘(B) $375,000 in the case of a head of 
household, and 
‘‘(C) $250,000 in any other case. 
‘‘(e) MANUFACTURER’S SUGGESTED RETAIL PRICE 
LIMITATION.— 
‘‘(1) IN GENERAL.—No credit shall be allowed 
under subsection (a) for a vehicle with a manufac-
turer’s suggested retail price in excess of the appli-
cable limitation. 
‘‘(2) APPLICABLE LIMITATION.—For purposes 
of paragraph (1), the applicable limitation for each 
vehicle classification is as follows: 
‘‘(A) VANS.—In the case of a van, 
$80,000. 
‘‘(B) SPORT UTILITY VEHICLES.—In the 
case of a sport utility vehicle, $80,000. 
‘‘(C) PICKUP TRUCKS.—In the case of a 
pickup truck, $80,000. 
‘‘(D) OTHER.—In the case of any other ve-
hicle, $55,000.
1486 
‘‘(3) REGULATIONS AND GUIDANCE.—For pur-
poses of this subsection, the Secretary shall pre-
scribe such regulations or other guidance as the Sec-
retary determines necessary or appropriate for deter-
mining vehicle classifications using criteria similar to 
that employed by the Environmental Protection 
Agency and the Department of the Energy to deter-
mine size and class of vehicles.’’ 
‘‘(f) NEW QUALIFIED PLUG-IN ELECTRIC DRIVE 
MOTOR VEHICLE.—For purposes of this section— 
‘‘(1) IN
GENERAL.—The term ‘new qualified 
plug-in electric drive motor vehicle’ means a motor 
vehicle— 
‘‘(A) the original use of which commences 
with the taxpayer, 
‘‘(B) which is acquired for use by the tax-
payer and not for resale, 
‘‘(C) which is made by a qualified manu-
facturer, 
‘‘(D) which is treated as a motor vehicle 
for purposes of title II of the Clean Air Act, 
‘‘(E) which has a gross vehicle weight rat-
ing of less than 14,000 pounds,
1487 
‘‘(F) which is propelled to a significant ex-
tent by an electric motor which draws electricity 
from a battery which— 
‘‘(i) has a capacity of not less than 10 
kilowatt hours, and 
‘‘(ii) is capable of being recharged 
from an external source of electricity, 
‘‘(G) with respect to which, in the case of 
a vehicle placed in service after December 31, 
2026, final assembly is within the United 
States, 
‘‘(H) is not of a character subject to an al-
lowance for depreciation, and 
‘‘(I) for which the person who sells or 
leases any new qualified plug-in electric drive 
motor vehicle to the taxpayer furnishes a report 
to the taxpayer and to the Secretary, at such 
time and in such manner as the Secretary shall 
provide, containing— 
‘‘(i) the name and taxpayer identifica-
tion number of the taxpayer, 
‘‘(ii) the vehicle identification number 
of the vehicle, unless, in accordance with 
any applicable rules promulgated by the
1488 
Secretary of Transportation, the vehicle is 
not assigned such a number, 
‘‘(iii) the battery capacity of the vehi-
cle, 
‘‘(iv) in the case of any new qualified 
plug-in 
electric 
drive 
motor 
vehicle, 
verification that original use of the vehicle 
commences with the taxpayer, 
‘‘(v) the maximum credit under this 
section allowable to the taxpayer with re-
spect to the vehicle, and 
‘‘(vi) in the case of a taxpayer who 
makes 
an 
election 
under 
subsection 
(k)(1)— 
‘‘(I) the modified adjusted gross 
income of such taxpayer in the pre-
vious taxable year, as described in 
subsection (k)(6)(A), and 
‘‘(II) any amount described in 
subsection (k)(2)(C) which has been 
provided to such taxpayer. 
‘‘(2) MOTOR VEHICLE.—The term ‘motor vehi-
cle’ means any vehicle which is manufactured pri-
marily for use on public streets, roads, and highways
1489 
(not including a vehicle operated exclusively on a rail 
or rails) and which has at least 4 wheels. 
‘‘(3) QUALIFIED
MANUFACTURER.—The term 
‘qualified manufacturer’ means any manufacturer 
(within the meaning of the regulations prescribed by 
the Administrator of the Environmental Protection 
Agency for purposes of the administration of title II 
of the Clean Air Act (42 U.S.C. 7521 et seq.)) which 
enters into a written agreement with the Secretary 
under which such manufacturer agrees— 
‘‘(A) to ensure that each vehicle manufac-
tured by such manufacturer after the later of 
the date on which such agreement takes effect 
or December 31, 2021, and that meets the re-
quirements of subsection (d), subparagraphs 
(D), (E), and (F) of paragraph (1), and para-
graph (6) of subsection (f) is labeled with a 
unique vehicle identification number, and 
‘‘(B) to make periodic written reports to 
the Secretary (at such times and in such man-
ner as the Secretary may provide) providing 
such vehicle identification numbers and such 
other information related to such vehicle as the 
Secretary may require.
1490 
‘‘(4) BATTERY CAPACITY.—The term ‘capacity’ 
means, with respect to any battery, the quantity of 
electricity which the battery is capable of storing, ex-
pressed in kilowatt hours, as measured from a 100 
percent state of charge to a 0 percent state of 
charge. 
‘‘(g) SPECIAL RULES.— 
‘‘(1) BASIS REDUCTION.—For purposes of this 
subtitle, the basis of any property for which a credit 
is allowable under subsection (a) shall be reduced by 
the amount of such credit so allowed. 
‘‘(2) NO
DOUBLE
BENEFIT.—The amount of 
any deduction or other credit allowable under this 
chapter for a vehicle for which a credit is allowable 
under subsection (a) shall be reduced by the amount 
of credit allowed under such subsection for such ve-
hicle. 
‘‘(3) PROPERTY USED OUTSIDE UNITED STATES 
NOT QUALIFIED.—No credit shall be allowable under 
subsection (a) with respect to any property referred 
to in section 50(b)(1). 
‘‘(4) RECAPTURE.—The Secretary shall, by reg-
ulations or other guidance, provide for recapturing 
the benefit of any credit allowable under subsection
1491 
(a) with respect to any property which ceases to be 
property eligible for such credit. 
‘‘(5) ELECTION
NOT
TO
TAKE
CREDIT.—No 
credit shall be allowed under subsection (a) for any 
vehicle if the taxpayer elects to not have this section 
apply to such vehicle. 
‘‘(6) INTERACTION
WITH
AIR
QUALITY
AND 
MOTOR
VEHICLE
SAFETY
STANDARDS.—A vehicle 
shall not be considered eligible for a credit under 
this section unless such vehicle is in compliance 
with— 
‘‘(A) the applicable provisions of the Clean 
Air Act for the applicable make and model year 
of the vehicle (or applicable air quality provi-
sions of State law in the case of a State which 
has adopted such provision under a waiver 
under section 209(b) of the Clean Air Act), and 
‘‘(B) the motor vehicle safety provisions of 
sections 30101 through 30169 of title 49, 
United States Code. 
‘‘(h) CREDIT ALLOWED
FOR 2 AND 3-WHEELED 
PLUG-IN ELECTRIC VEHICLES.— 
‘‘(1) IN GENERAL.—In the case of a qualified 
2- or 3-wheeled plug-in electric vehicle—
1492 
‘‘(A) there shall be allowed as a credit 
against the tax imposed by this subtitle for the 
taxable year an amount equal to the sum of the 
applicable amount with respect to each such 
qualified 2- or 3-wheeled plug-in electric vehicle 
placed in service by the taxpayer during the 
taxable year, and 
‘‘(B) the amount of the credit allowed 
under subparagraph (A) shall be treated as a 
credit allowed under subsection (a). 
‘‘(2) APPLICABLE AMOUNT.—For purposes of 
paragraph (1), the applicable amount is an amount 
equal to the lesser of— 
‘‘(A) 30 percent of the cost of the qualified 
2- or 3-wheeled plug-in electric vehicle, or 
‘‘(B) $7,500. 
‘‘(3) QUALIFIED
2- OR
3-WHEELED
PLUG-IN 
ELECTRIC VEHICLE.—The term ‘qualified 2- or 3- 
wheeled plug-in electric vehicle’ means any vehicle 
which— 
‘‘(A) has 2 or 3 wheels, 
‘‘(B) meets the requirements of— 
‘‘(i) subparagraphs (A), (B), (C), (E), 
(F), (G), and (I) of subsection (e)(1) (de-
termined by substituting ‘2.5 kilowatt
1493 
hours’ for ‘10 kilowatt hours’ in subpara-
graph (F)(i)), 
‘‘(ii) paragraphs (3) and (4) of sub-
section (e), and 
‘‘(iii) subsections (f), (h), (i), and (k), 
‘‘(C) is manufactured primarily for use on 
public streets, roads, and highways, and 
‘‘(D) is capable of achieving a speed of 45 
miles per hour or greater. 
‘‘(i) VIN NUMBER REQUIREMENT.—No credit shall 
be allowed under this section with respect to any vehicle 
unless the taxpayer includes the vehicle identification 
number of such vehicle on the return of tax for the taxable 
year. 
‘‘(j) TREATMENT OF CERTAIN POSSESSIONS.— 
‘‘(1) PAYMENTS TO POSSESSIONS WITH MIRROR 
CODE TAX SYSTEMS.—The Secretary shall pay to 
each possession of the United States which has a 
mirror code tax system amounts equal to the loss (if 
any) to that possession by reason of the application 
of the provisions of this section (determined without 
regard to this subsection). Such amounts shall be 
determined by the Secretary based on information 
provided by the government of the respective posses-
sion.
1494 
‘‘(2) PAYMENTS TO OTHER POSSESSIONS.—The 
Secretary shall pay to each possession of the United 
States which does not have a mirror code tax system 
amounts estimated by the Secretary as being equal 
to the aggregate benefits (if any) that would have 
been provided to residents of such possession by rea-
son of the provisions of this section if a mirror code 
tax system had been in effect in such possession. 
The preceding sentence shall not apply unless the re-
spective possession has a plan which has been ap-
proved by the Secretary under which such possession 
will promptly distribute such payments to its resi-
dents. 
‘‘(3) MIRROR CODE TAX SYSTEM; TREATMENT 
OF PAYMENTS.—Rules similar to the rules of para-
graphs (3), (4), and (5) of section 21(h) shall apply 
for purposes of this section. 
‘‘(k) ASSEMBLY AND CONTENT QUALIFICATIONS.— 
For purposes of this section— 
‘‘(1) DOMESTIC ASSEMBLY QUALIFICATIONS.— 
The term ‘domestic assembly qualifications’ means, 
with respect to any new qualified plug-in electric ve-
hicle, that the final assembly of such vehicle occurs 
at a plant, factory, or other place which is located 
in the United States and operating under a collective
1495 
bargaining agreement negotiated by an employee or-
ganization (as defined in section 412(c)(4)), deter-
mined 
in 
a 
manner 
consistent 
with 
section 
7701(a)(46). 
‘‘(2) DOMESTIC
CONTENT
QUALIFICATIONS.— 
The term ‘domestic content qualifications’ means, 
with respect to any model of a new qualified plug- 
in electric vehicle, that vehicles of that model are 
powered by battery cells which are manufactured in 
the United States as certified by the manufacturer 
at such time and in such form and manner as the 
Secretary may prescribe. 
‘‘(3) FINAL ASSEMBLY.—The term ‘final assem-
bly’ means the process by which a manufacturer pro-
duces a new qualified plug-in electric drive motor ve-
hicle at, or through the use of, a plant, factory, or 
other place from which the vehicle is delivered to a 
dealer or importer with all component parts nec-
essary for the mechanical operation of the vehicle in-
cluded with the vehicle, whether or not the compo-
nent parts are permanently installed in or on the ve-
hicle. 
‘‘(l) TERMINATION.—No credit shall be allowed under 
this section with respect to any vehicle acquired after De-
cember 31, 2031.’’.
1496 
(b) TRANSFER OF CREDIT.— 
(1) IN GENERAL.—Section 36C, as added by 
subsection (a), is amended by redesignating sub-
section (k) as subsection (l) and by inserting after 
subsection (j) following new subsection: 
‘‘(k) TRANSFER OF CREDIT.— 
‘‘(1) IN GENERAL.—Subject to such regulations 
or other guidance as the Secretary determines nec-
essary or appropriate, if the taxpayer who acquires 
a new plug-in electric drive motor vehicle elects the 
application of this subsection with respect to such 
vehicle, the credit which would (but for this sub-
section) be allowed to such taxpayer with respect to 
such vehicle shall be allowed to the eligible entity 
specified in such election (and not to such taxpayer). 
‘‘(2) ELIGIBLE ENTITY.—For purposes of this 
paragraph, the term ‘eligible entity’ means, with re-
spect to the vehicle for which the credit is allowed 
under subsection (a), the dealer which sold such ve-
hicle to the taxpayer and has— 
‘‘(A) subject to paragraph (4), registered 
with the Secretary for purposes of this para-
graph, at such time, and in such form and 
manner, as the Secretary may prescribe,
1497 
‘‘(B) prior to the election described in 
paragraph (1) and not later than at the time of 
such sale, disclosed to the taxpayer purchasing 
such vehicle— 
‘‘(i) the manufacturer’s suggested re-
tail price, 
‘‘(ii) the value of the credit allowed or 
other incentive available for the purchase 
of such vehicle, 
‘‘(iii) all fees associated with the pur-
chase of such vehicle, and 
‘‘(iv) the amount provided by the deal-
er to such taxpayer as a condition of the 
election described in paragraph (1), 
‘‘(C) made payment to such taxpayer 
(whether in cash or in the form of a partial 
payment or down payment for the purchase of 
such vehicle) in an amount equal to the credit 
otherwise allowable to such taxpayer, and 
‘‘(D) with respect to any incentive other-
wise available for the purchase of a vehicle for 
which a credit is allowed under this section, in-
cluding any incentive in the form of a rebate or 
discount provided by the dealer or manufac-
turer, ensured that—
1498 
‘‘(i) the availability or use of such in-
centive shall not limit the ability of a tax-
payer to make an election described in 
paragraph (1), and 
‘‘(ii) such election shall not limit the 
value or use of such incentive. 
‘‘(3) TIMING.—An election described in para-
graph (1) shall be made by the taxpayer not later 
than the date on which the vehicle for which the 
credit is allowed under subsection (a) is purchased. 
‘‘(4) REVOCATION
OF
REGISTRATION.—Upon 
determination by the Secretary that a dealer has 
failed to comply with the requirements described in 
paragraph (2), the Secretary may revoke the reg-
istration (as described in subparagraph (A) of such 
paragraph) of such dealer. 
‘‘(5) TAX
TREATMENT
OF
PAYMENTS.—With 
respect to any payment described in paragraph 
(2)(C), such payment— 
‘‘(A) shall not be includible in the gross in-
come of the taxpayer, and 
‘‘(B) with respect to the dealer, shall not 
be deductible under this title.
1499 
‘‘(6) APPLICATION
OF
CERTAIN
OTHER
RE-
QUIREMENTS.—In the case of any election under 
paragraph (1) with respect to any vehicle— 
‘‘(A) the amount of the reduction under 
subsection (c) shall be determined with respect 
to the modified adjusted gross income of the 
taxpayer for the taxable year preceding the tax-
able year in which such vehicle was acquired 
(and not with respect to such income for the 
taxable year in which such vehicle was ac-
quired), 
‘‘(B) the requirements of paragraphs (1) 
and (2) of subsection (f) shall apply to the tax-
payer who acquired the vehicle in the same 
manner as if the credit determined under this 
section with respect to such vehicle were al-
lowed to such taxpayer, 
‘‘(C) subsection (f)(5) shall not apply, and 
‘‘(D) the requirement of subsection (h) 
shall be treated as satisfied if the eligible entity 
provides the vehicle identification number of 
such vehicle to the Secretary in such manner as 
the Secretary may provide. 
‘‘(7) ADVANCE
PAYMENT
TO
REGISTERED 
DEALERS.—
1500 
‘‘(A) IN
GENERAL.—The Secretary shall 
establish a program to make advance payments 
to any eligible entity in an amount equal to the 
cumulative amount of the credits allowed under 
subsection (a) with respect to any vehicles sold 
by such entity for which an election described 
in paragraph (1) has been made. 
‘‘(B) EXCESSIVE PAYMENTS.—Rules simi-
lar to the rules of section 6417(c)(7) shall apply 
for purposes of this paragraph. 
‘‘(8) DEALER.—For purposes of this sub-
section, the term ‘dealer’ means a person licensed by 
a State, the District of Columbia, the Common-
wealth of Puerto Rico, any other territory or posses-
sion of the United States, an Indian tribal govern-
ment (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)) to engage in the sale of vehicles.’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
36C(g)(3)(iii), as added by subsection (a), is amend-
ed by striking ‘‘, and (k)’’ and inserting ‘‘(k), and 
(l)’’. 
(c) REPEAL OF NONREFUNDABLE NEW QUALIFIED 
PLUG-IN ELECTRIC DRIVE MOTOR VEHICLE CREDIT.—
1501 
Subpart B of part IV of subchapter A of chapter 1 is 
amended by striking section 30D (and by striking the item 
relating to such section in the table of sections of such 
subpart). 
(d) CONFORMING AMENDMENTS.— 
(1) Section 1016(a)(37) is amended by striking 
‘‘section 
30D(f)(1)’’ 
and 
inserting 
‘‘section 
36C(f)(1)’’. 
(2) Section 6211(b)(4)(A) is amended by insert-
ing ‘‘36C,’’ after ‘‘36B,’’. 
(3) Section 6213(g)(2), as amended by the pre-
ceding provisions of this Act, is amended— 
(A) in subparagraph (R), by striking 
‘‘and’’ at the end, 
(B) in subparagraph (S), by striking the 
period at the end and inserting ‘‘, and’’, and 
(C) by adding at the end the following: 
‘‘(T) an omission of a correct vehicle iden-
tification number required under section 36C(f) 
(relating to credit for new qualified plug-in elec-
tric drive motor vehicles) to be included on a re-
turn.’’. 
(4) Section 6501(m) is amended by striking 
‘‘30D(e)(4)’’ and inserting ‘‘36C(f)(5)’’.
1502 
(5) Section 166(b)(5)(A)(ii) of title 23, United 
States Code, is amended by striking ‘‘section 
30D(d)(1)’’ and inserting ‘‘section 36C(e)(1)’’. 
(6) Section 1324(b)(2) of title 31, United 
States Code, is amended by inserting ‘‘36C,’’ after 
‘‘36B,’’. 
(7) The table of sections for subpart C of part 
IV of subchapter A of chapter 1 is amended by in-
serting after the item relating to section 36B the fol-
lowing new item: 
‘‘Sec. 36C. New qualified plug-in electric drive motor vehicles.’’. 
(e) EFFECTIVE DATES.— 
(1) The amendments made by subsections (a), 
(c), and (d) of this section shall apply to vehicles ac-
quired after December 31, 2021. 
(2) The amendments made by subsection (b) 
shall apply to vehicles acquired after December 31, 
2022. 
SEC. 136402. CREDIT FOR PREVIOUSLY-OWNED QUALIFIED 
PLUG-IN ELECTRIC DRIVE MOTOR VEHICLES. 
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1, as amended by the preceding pro-
visions of this Act, is amended by inserting after section 
36C the following new section:
1503 
‘‘SEC. 36D. PREVIOUSLY-OWNED QUALIFIED PLUG-IN ELEC-
TRIC DRIVE MOTOR VEHICLES. 
‘‘(a) ALLOWANCE
OF CREDIT.—In the case of a 
qualified buyer who during a taxable year places in service 
a previously-owned qualified plug-in electric drive motor 
vehicle, there shall be allowed as a credit against the tax 
imposed by this subtitle for the taxable year an amount 
equal to the sum of— 
‘‘(1) $2,000, plus 
‘‘(2) the supplemental credit amount. 
‘‘(b) SUPPLEMENTAL CREDIT AMOUNT.—For pur-
poses of subsection (a), the term ‘supplemental credit 
amount’ means— 
‘‘(1) $2,000, if— 
‘‘(A) in the case of a vehicle placed in serv-
ice before January 1, 2027, such vehicle draws 
propulsion energy from a battery with not less 
than 40 kilowatt hours of capacity and has a 
gasoline tank capacity not greater than 2.5 gal-
lons, and 
‘‘(B) in the case of a vehicle placed in serv-
ice after December 31, 2026, such vehicle 
draws propulsion energy from a battery with 
not less than 50 kilowatt hours of capacity and 
has a gasoline tank capacity not greater than 
2.5 gallons, and
1504 
‘‘(2) $0 in any other case. 
‘‘(c) LIMITATIONS.— 
‘‘(1) SALE PRICE.—The credit allowed under 
subsection (a) with respect to sale of a vehicle shall 
not exceed 50 percent of the sale price. 
‘‘(2) LIMITATION
BASED
ON
MODIFIED
AD-
JUSTED GROSS INCOME.—The amount which would 
(but for this paragraph) be allowed as a credit under 
subsection (a) shall be reduced (but not below zero) 
by $200 for each $1,000 (or fraction thereof) by 
which the lesser of— 
‘‘(A) the taxpayer’s modified adjusted 
gross income for such taxable year, or 
‘‘(B) the taxpayer’s modified adjusted 
gross income for the preceding taxable year, ex-
ceeds— 
‘‘(i) $150,000 in the case of a joint 
return or a surviving spouse (as defined in 
section 2(a)), 
‘‘(ii) $112,500 in the case of a head 
of household (as defined in section 2(b)), 
and 
‘‘(iii) $75,000 in the case of a tax-
payer not described in paragraph (1) or 
(2).
1505 
‘‘(d) DEFINITIONS.—For purposes of this section— 
‘‘(1) PREVIOUSLY-OWNED QUALIFIED PLUG-IN 
ELECTRIC DRIVE MOTOR VEHICLE.—The term ‘pre-
viously-owned qualified plug-in electric drive motor 
vehicle’ means, with respect to a taxpayer, a motor 
vehicle— 
‘‘(A) the model year of which is at least 2 
years earlier than the calendar year in which 
the taxpayer acquires such vehicle, 
‘‘(B) the original use of which commences 
with a person other than the taxpayer, 
‘‘(C) which is acquired by the taxpayer in 
a qualified sale, and 
‘‘(D) which meets the requirements of sub-
paragraphs (C), (D), (E), (F), (G), (H), and (I) 
of section 36C(e)(1) (determined by applying 
‘previously-owned qualified plug-in electric drive 
motor vehicle’ for ‘new qualified plug-in electric 
drive motor vehicle’), or which is a new quali-
fied fuel cell motor vehicle (as defined in sub-
paragraphs (A) and (B) of section 30B(b)(3)) 
which has a gross vehicle weight rating of less 
than 14,000 pounds. 
‘‘(2) QUALIFIED
SALE.—The term ‘qualified 
sale’ means a sale of a motor vehicle—
1506 
‘‘(A) by a seller who holds such vehicle in 
inventory (within the meaning of section 471) 
for sale or lease, 
‘‘(B) for a sale price not to exceed 
$25,000, and 
‘‘(C) which is the first transfer since the 
date of the enactment of this section to a per-
son other than the person with whom the origi-
nal use of such vehicle commenced. 
‘‘(3) QUALIFIED BUYER.—The term ‘qualified 
buyer’ means, with respect to a sale of a motor vehi-
cle, a taxpayer— 
‘‘(A) who is an individual, 
‘‘(B) who purchases such vehicle for use 
and not for resale, 
‘‘(C) with respect to whom no deduction is 
allowable with respect to another taxpayer 
under section 151, 
‘‘(D) who has not been allowed a credit 
under this section for any sale during the 3- 
year period ending on the date of the sale of 
such vehicle, and 
‘‘(E) who possesses a certificate issued by 
the seller that certifies—
1507 
‘‘(i) that the vehicle is a previously- 
owned qualified plug-in electric drive motor 
vehicle, 
‘‘(ii) the vehicle identification number 
of such vehicle, 
‘‘(iii) the capacity of the battery at 
time of sale, and 
‘‘(iv) such other information as the 
Secretary may require. 
‘‘(4) MOTOR VEHICLE; CAPACITY.—The terms 
‘motor vehicle’ and ‘capacity’ have the meaning 
given such terms in paragraphs (2) and (4) of sec-
tion 36C(e), respectively. 
‘‘(e) VIN NUMBER REQUIREMENT.—No credit shall 
be allowed under subsection (a) with respect to any vehicle 
unless the taxpayer includes the vehicle identification 
number of such vehicle on the return of tax for the taxable 
year. 
‘‘(f) APPLICATION OF CERTAIN RULES.—For pur-
poses of this section, rules similar to the rules of para-
graphs (1), (2), (4), (5), and (6) of section 36C(f) shall 
apply for purposes of this section. 
‘‘(g) CERTIFICATE SUBMISSION REQUIREMENT.— 
The Secretary may require that the issuer of the certifi-
cate described in subsection (c)(3)(E) submit such certifi-
1508 
cate to the Secretary at the time and in the manner re-
quired by the Secretary. 
‘‘(h) TREATMENT OF CERTAIN POSSESSIONS.— 
‘‘(1) PAYMENTS TO POSSESSIONS WITH MIRROR 
CODE TAX SYSTEMS.—The Secretary shall pay to 
each possession of the United States which has a 
mirror code tax system amounts equal to the loss (if 
any) to that possession by reason of the application 
of the provisions of this section. Such amounts shall 
be determined by the Secretary based on information 
provided by the government of the respective posses-
sion. 
‘‘(2) PAYMENTS TO OTHER POSSESSIONS.—The 
Secretary shall pay to each possession of the United 
States which does not have a mirror code tax system 
amounts estimated by the Secretary as being equal 
to the aggregate benefits (if any) that would have 
been provided to residents of such possession by rea-
son of the provisions of this section if a mirror code 
tax system had been in effect in such possession. 
The preceding sentence shall not apply unless the re-
spective possession has a plan which has been ap-
proved by the Secretary under which such possession 
will promptly distribute such payments to its resi-
dents.
1509 
‘‘(3) MIRROR CODE TAX SYSTEM; TREATMENT 
OF PAYMENTS.—Rules similar to the rules of para-
graphs (3), (4), and (5) of section 21(h) shall apply 
for purposes of this section. 
‘‘(i) TRANSFER OF CREDIT.—Rules similar to the 
rules of section 36C(k) shall apply. 
‘‘(j) TERMINATION.—No credit shall be allowed 
under this section with respect to any vehicle acquired 
after December 31, 2031.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 6211(b)(4)(A), as amended by the 
preceding provisions of this Act, is amended by in-
serting ‘‘36D,’’ after ‘‘36C,’’. 
(2) Section 6213(g)(2), as amended by the pre-
ceding provisions of this Act, is amended— 
(A) in subparagraph (S), by striking 
‘‘and’’ at the end, 
(B) in subparagraph (T), by striking the 
period at the end and inserting ‘‘, and’’, and 
(C) by adding at the end the following: 
‘‘(U) an omission of a correct vehicle iden-
tification 
number 
required 
under 
section 
36D(d) (relating to credit for previously-owned 
qualified plug-in electric drive motor vehicles) to 
be included on a return.’’.
1510 
(3) Paragraph (2) of section 1324(b) of title 
31, United States Code, as amended by the pre-
ceding provisions of this Act, is amended by insert-
ing ‘‘36D,’’ after ‘‘36C,’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart C of part IV of subchapter A of chapter 1, 
as amended by the preceding provisions of this Act, is 
amended by inserting after the item relating to section 
36C the following new item: 
‘‘Sec. 36D. Previously-owned qualified plug-in electric drive motor vehicles.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to vehicles acquired after Decem-
ber 31, 2021. 
SEC. 136403. QUALIFIED COMMERCIAL ELECTRIC VEHI-
CLES. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 is amended by adding at the end 
the following new section: 
‘‘SEC. 45Y. CREDIT FOR QUALIFIED COMMERCIAL ELEC-
TRIC VEHICLES. 
‘‘(a) IN GENERAL.—For purposes of section 38, the 
qualified commercial electric vehicle credit for any taxable 
year is an amount equal to the sum of the credit amounts 
determined under subsection (b) with respect to each 
qualified commercial electric vehicle placed in service by 
the taxpayer during the taxable year.
1511 
‘‘(b) PER VEHICLE AMOUNT.— 
‘‘(1) IN
GENERAL.—The amount determined 
under this subsection with respect to any qualified 
commercial electric vehicle shall be equal to the less-
er of— 
‘‘(A) 15 percent of the basis of such vehi-
cle (30 percent in the case of a vehicle not pow-
ered by a gasoline or diesel internal combustion 
engine), or 
‘‘(B) the incremental cost of such vehicle. 
‘‘(2) INCREMENTAL
COST.—For purposes of 
paragraph (1)(B), the incremental cost of any quali-
fied commercial electric vehicle is an amount equal 
to the excess of the purchase price for such vehicle 
over such price of a comparable vehicle. 
‘‘(3) COMPARABLE VEHICLE.—For purposes of 
this paragraph, the term ‘comparable vehicle’ means, 
with respect to any qualified commercial electric ve-
hicle, any vehicle which is powered solely by a gaso-
line or diesel internal combustion engine and which 
is comparable in size and use to such vehicle. 
‘‘(4) VEHICLES FOR LEASE TO INDIVIDUALS.— 
‘‘(A) IN GENERAL.—In the case of a com-
mercial electric vehicle which is acquired by the 
taxpayer for the purpose of leasing such vehicle
1512 
to any individual, the amount determined under 
this subsection with respect to such vehicle 
shall, at the election of such taxpayer, be equal 
to the amount of the credit that would other-
wise be allowed under section 36C(a) with re-
spect to such vehicle, as determined as if such 
vehicle— 
‘‘(i) is a new qualified plug-in electric 
drive motor vehicle, and 
‘‘(ii) has been acquired and placed in 
service by an individual. 
‘‘(B) ELECTION REQUIREMENTS.— 
‘‘(i) IN GENERAL.—An election under 
subparagraph (A) shall be made at such 
time and in such manner as the Secretary 
prescribes by regulations or other guid-
ance. 
‘‘(ii) DISCLOSURE
REQUIREMENT.— 
For purposes of any regulations or other 
guidance prescribed under clause (i), the 
Secretary shall require that, as a condition 
of an election under subparagraph (A), the 
taxpayer making such election shall be re-
quired to disclose to the lessee of the com-
1513 
mercial electric vehicle the value of the 
credit allowed under this section. 
‘‘(c) QUALIFIED
COMMERCIAL
ELECTRIC
VEHI-
CLE.—For purposes of this section, the term ‘qualified 
commercial electric vehicle’ means any vehicle which— 
‘‘(1) meets the requirements of subparagraphs 
(A) and (C) of section 36C(e)(1) without regard to 
any gross vehicle weight rating or the requirements 
of section 36C(d), and is acquired for use or lease 
by the taxpayer and not for resale, 
‘‘(2) either— 
‘‘(A) meets the requirements of subpara-
graph (D) of section 36C(e)(1) and is manufac-
tured primarily for use on public streets, roads, 
and highways (not including a vehicle operated 
exclusively on a rail or rails), or 
‘‘(B) is mobile machinery, as defined in 
section 4053(8) (including vehicles that are not 
designed to perform a function of transporting 
a load over the public highways), 
‘‘(3) either— 
‘‘(A) is propelled to a significant extent by 
an electric motor which draws electricity from a 
battery which has a capacity of not less than 15 
kilowatt hours and is capable of being re-
1514 
charged from an external source of electricity, 
or 
‘‘(B) is a new qualified fuel cell motor ve-
hicle described in subparagraphs (A) and (B) of 
section 30B(b)(3), and 
‘‘(4) is of a character subject to the allowance 
for depreciation. 
‘‘(d) SPECIAL RULES.— 
‘‘(1) IN GENERAL.—Subject to paragraph (2), 
rules similar to the rules under subsection (f) of sec-
tion 36C shall apply for purposes of this section. 
‘‘(2) RECAPTURE.—The Secretary shall, by reg-
ulations or other guidance, provide for recapturing 
the benefit of any credit allowed under subsection 
(a) with respect to any property which ceases to be 
property eligible for such credit, including regula-
tions or other guidance which, in the case of any 
commercial electric vehicle for which an election was 
made under subsection (b)(4)— 
‘‘(A) recaptures the credit allowed under 
subsection (a) if— 
‘‘(i) such vehicle was not leased to an 
individual, or
1515 
‘‘(ii) the taxpayer failed to comply 
with the requirements described in sub-
section (b)(4)(B)(ii), and 
‘‘(B) in the case of a commercial electric 
vehicle which is leased by an individual whose 
modified adjusted gross income exceeds the 
threshold amount under section 36C(c)(2), re-
captures so much of the credit allowed under 
subsection (a) as exceeds the amount of the 
credit which would have otherwise been allow-
able under such subsection if, for purposes of 
subsection (b)(4)(A), the amount of the credit 
that would otherwise be allowed under section 
36C(a) with respect to such vehicle had been 
determined as if such vehicle was acquired and 
placed in service by such individual and subject 
to reduction under section 36C(c). 
‘‘(3) VEHICLES PLACED IN SERVICE BY TAX- 
EXEMPT
ENTITIES.—Subsection (c)(4) shall not 
apply to any vehicle which is not subject to a lease 
and which is placed in service by a tax-exempt entity 
described in clause (i), (ii), or (iv) of section 
168(h)(2)(A). 
‘‘(e) VIN NUMBER REQUIREMENT.—No credit shall 
be determined under subsection (a) with respect to any
1516 
vehicle unless the taxpayer includes the vehicle identifica-
tion number of such vehicle on the return of tax for the 
taxable year. 
‘‘(f) TERMINATION.—No credit shall be determined 
under this section with respect to any vehicle acquired 
after December 31, 2031.’’. 
(b) ELECTIVE PAYMENT OF CREDIT IN CASE OF 
CERTAIN TAX-EXEMPT ENTITIES.—Section 6417(b), as 
amended by the preceding provisions of this Act, is amend-
ed by adding at the end the following new paragraph: 
‘‘(9) In the case of a tax-exempt entity de-
scribed in clause (i), (ii), or (iv) of section 
168(h)(2)(A), the credit for qualified commercial ve-
hicles determined under section 45Y by reason of 
subsection (d)(2) thereof.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 38(b) is amended by striking para-
graph (30) and inserting the following: 
‘‘(30) the qualified commercial electric vehicle 
credit determined under section 45Y,’’. 
(2) Section 6213(g)(2), as amended by the pre-
ceding provisions of this Act, is amended— 
(A) in subparagraph (T), by striking 
‘‘and’’ at the end,
1517 
(B) in subparagraph (U), by striking the 
period at the end and inserting ‘‘, and’’, and 
(C) by adding at the end the following: 
‘‘(V) an omission of a correct vehicle iden-
tification number required under section 45Y(e) 
(relating to commercial electric vehicle credit) 
to be included on a return.’’. 
(3) The table of sections for subpart D of part 
IV of subchapter A of chapter 1 is amended by add-
ing at the end the following new item: 
‘‘Sec. 45Y. Qualified commercial electric vehicle credit.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to vehicles acquired after Decem-
ber 31, 2021. 
SEC. 136404. QUALIFIED FUEL CELL MOTOR VEHICLES. 
(a) IN GENERAL.—Section 30B(k)(1) is amended by 
striking ‘‘December 31, 2021’’ and inserting ‘‘December 
31, 2031’’. 
(b) NEW QUALIFIED FUEL CELL MOTOR VEHI-
CLE.—Section 30B(b) is amended by striking ‘‘and’’ at 
the end of subparagraph (D), by striking the period at 
the end of subparagraph (E) and inserting ‘‘, and’’, and 
by adding at the end the following new subparagraph: 
‘‘(F) which is not property of a character 
subject to an allowance for depreciation.’’.
1518 
(c) CONFORMING AMENDMENT.—Section 30B(g) is 
amended to read as follows: 
‘‘(g) PERSONAL CREDIT.—For purposes of this title, 
the credit allowed under subsection (a) for any taxable 
year (determined after application of paragraph (1)) shall 
be treated as a credit allowable under subpart A for such 
taxable year.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service after 
December 31, 2021. 
SEC. 136405. ALTERNATIVE FUEL REFUELING PROPERTY 
CREDIT. 
(a) IN GENERAL.—Section 30C(g) is amended by 
striking ‘‘December 31, 2021’’ and inserting ‘‘December 
31, 2031’’. 
(b) ADDITIONAL CREDIT FOR CERTAIN ELECTRIC 
CHARGING PROPERTY.— 
(1) IN GENERAL.—Section 30C(a) is amend-
ed— 
(A) by striking ‘‘equal to 30 percent’’ and 
inserting the following: ‘‘equal to the sum of— 
‘‘(1) 30 percent (6 percent in the case of prop-
erty of a character subject to depreciation)’’, 
(B) by striking the period at the end and 
inserting ‘‘, plus’’, and
1519 
(C) by adding at the end the following new 
paragraph: 
‘‘(2) 4 percent of so much of such cost as ex-
ceeds the limitation under subsection (b)(1) that 
does not exceed the amount of cost attributable to 
qualified alternative fuel vehicle refueling property 
(determined without regard to subsection (c)(1) and 
as if only electricity, and fuel at least 85 percent of 
the volume of which consists of hydrogen, were 
treated as clean-burning fuels for purposes of section 
179A(d)) which— 
‘‘(A) is intended for general public use 
with no associated fee or payment arrangement, 
‘‘(B) is intended for general public use and 
accepts payment via a credit card reader, in-
cluding 
a 
credit 
card 
reader 
that 
uses 
contactless technology, or 
‘‘(C) is intended for use exclusively by 
commercial or governmental vehicles.’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
30C(b) is amended— 
(A) by striking ‘‘The credit allowed under 
subsection (a)’’ and inserting ‘‘The amount of 
cost taken into account under subsection 
(a)(1)’’,
1520 
(B) by striking ‘‘$30,000’’ and inserting 
‘‘$100,000’’, and 
(C) by striking ‘‘$1,000’’ and inserting 
‘‘$3,333.33’’. 
(3) BIDIRECTIONAL CHARGING EQUIPMENT IN-
CLUDED AS QUALIFIED ALTERNATIVE FUEL VEHI-
CLE
REFUELING
PROPERTY.—Section 30C(c) is 
amended to read as follows: 
‘‘(c) QUALIFIED ALTERNATIVE FUEL VEHICLE RE-
FUELING PROPERTY.—For purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified alter-
native fuel vehicle refueling property’ has the same 
meaning as the term ‘qualified clean-fuel vehicle re-
fueling property’ would have under section 179A 
if— 
‘‘(A) paragraph (1) of section 179A(d) did 
not apply to property installed on property 
which is used as the principal residence (within 
the meaning of section 121) of the taxpayer, 
and 
‘‘(B) only the following were treated as 
clean-burning fuels for purposes of section 
179A(d): 
‘‘(i) Any fuel at least 85 percent of 
the volume of which consists of one or
1521 
more of the following: ethanol, natural gas, 
compressed natural gas, liquified natural 
gas, liquefied petroleum gas, or hydrogen. 
‘‘(ii) Any mixture— 
‘‘(I) which consists of two or 
more of the following: biodiesel (as de-
fined in section 40A(d)(1)), diesel fuel 
(as defined in section 4083(a)(3)), or 
kerosene, and 
‘‘(II) at least 20 percent of the 
volume of which consists of biodiesel 
(as so defined) determined without re-
gard to any kerosene in such mixture. 
‘‘(iii) Electricity. 
‘‘(2) BIDIRECTIONAL CHARGING EQUIPMENT.— 
Property shall not fail to be treated as qualified al-
ternative fuel vehicle refueling property solely be-
cause such property— 
‘‘(A) is capable of charging the battery of 
a motor vehicle propelled by electricity, and 
‘‘(B) allows discharging electricity from 
such battery to an electric load external to such 
motor vehicle.’’. 
(c) CERTAIN ELECTRIC CHARGING STATIONS IN-
CLUDED AS QUALIFIED ALTERNATIVE FUEL VEHICLE
1522 
REFUELING PROPERTY.—Section 30C is amended by re-
designating subsections (f) and (g) as subsections (g) and 
(h), respectively, and by inserting after subsection (e) the 
following: 
‘‘(f) SPECIAL RULE FOR ELECTRIC CHARGING STA-
TIONS FOR CERTAIN VEHICLES WITH 2 OR 3 WHEELS.— 
For purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified alter-
native fuel vehicle refueling property’ includes any 
property described in subsection (c) for the re-
charging of a motor vehicle described in paragraph 
(2) that is propelled by electricity, but only if the 
property— 
‘‘(A) meets the requirements of subsection 
(a)(2), and 
‘‘(B) is of a character subject to deprecia-
tion. 
‘‘(2) MOTOR VEHICLE.—A motor vehicle is de-
scribed in this paragraph if the motor vehicle— 
‘‘(A) is manufactured primarily for use on 
public streets, roads, or highways (not including 
a vehicle operated exclusively on a rail or rails), 
and 
‘‘(B) has at least 2, but not more than 3, 
wheels.’’.
1523 
(d) WAGE AND APPRENTICESHIP REQUIREMENTS.— 
Section 30C, as amended by this section, is further 
amended by redesignating subsections (g) and (h) as sub-
sections (h) and (i) and by inserting after subsection (f) 
the following new subsection: 
‘‘(g) 
WAGE
AND
APPRENTICESHIP
REQUIRE-
MENTS.— 
‘‘(1) INCREASED CREDIT AMOUNT.— 
‘‘(A) IN
GENERAL.—In the case of any 
qualified 
alternative 
fuel 
vehicle 
refueling 
project which satisfies the requirements of sub-
paragraph (C), the amount of the credit deter-
mined under subsection (a) for property of a 
character subject to an allowance for deprecia-
tion shall be equal to such amount multiplied by 
5 (determined without regard to this sentence). 
‘‘(B) QUALIFIED ALTERNATIVE FUEL VE-
HICLE REFUELING PROJECT.—For purposes of 
this subsection, the term ‘qualified alternative 
fuel vehicle refueling project’ means a project 
consisting of multiple properties that are part 
of a single project. The requirements of this 
paragraph shall be applied to such project.
1524 
‘‘(C) PROJECT REQUIREMENTS.—A project 
meets the requirements of this subparagraph if 
it is one of the following: 
‘‘(i) A project 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 (2) and (3). 
‘‘(ii) A project which satisfies the re-
quirements of paragraphs (2) and (3). 
‘‘(2) PREVAILING WAGE REQUIREMENTS.— 
‘‘(A) IN GENERAL.—The requirements de-
scribed in this subparagraph with respect to 
any qualified alternative fuel vehicle refueling 
project are that the taxpayer shall ensure that 
any laborers and mechanics employed by con-
tractors and subcontractors in the construction 
of such property shall be paid wages at rates 
not less than the prevailing rates for construc-
tion, alteration, or repair of a similar character 
in the locality as most recently determined by 
the Secretary of Labor, in accordance with sub-
chapter IV of chapter 31 of title 40, United 
States Code.
1525 
‘‘(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. 
‘‘(3) APPRENTICESHIP REQUIREMENTS.—Rules 
similar to the rules of section 45(b)(8) shall apply. 
‘‘(4) REGULATIONS AND GUIDANCE.—The Sec-
retary shall issue such regulations or other guidance 
as the Secretary determines necessary or appropriate 
to carry out the purposes of this subsection, includ-
ing regulations or other guidance which provides for 
requirements for recordkeeping or information re-
porting for purposes of establishing the requirements 
of this subsection.’’. 
(e) EFFECTIVE DATE.—The amendment made by 
this section shall apply to property placed in service after 
December 31, 2021. 
SEC. 136406. REINSTATEMENT AND EXPANSION OF EM-
PLOYER-PROVIDED FRINGE BENEFITS FOR 
BICYCLE COMMUTING. 
(a) REPEAL OF SUSPENSION OF EXCLUSION FOR 
QUALIFIED BICYCLE COMMUTING BENEFITS.—Section 
132(f) is amended by striking paragraph (8).
1526 
(b) EXPANSION
OF BICYCLE COMMUTING BENE-
FITS.—Section 132(f)(5)(F) is amended to read as fol-
lows: 
‘‘(F) DEFINITIONS RELATED TO BICYCLE 
COMMUTING BENEFITS.— 
‘‘(i) QUALIFIED BICYCLE COMMUTING 
BENEFIT.—The term ‘qualified bicycle 
commuting benefit’ means, with respect to 
any calendar year— 
‘‘(I) any employer reimbursement 
during the 15-month period beginning 
with the first day of such calendar 
year for reasonable expenses incurred 
by the employee during such calendar 
year for the purchase (including asso-
ciated finance charges), lease, rental 
(including a bikeshare), improvement, 
repair, or storage of qualified com-
muting property, or 
‘‘(II) the direct or indirect provi-
sion by the employer to the employee 
during such calendar year of the use 
(including a bikeshare), improvement, 
repair, or storage of qualified com-
muting property,
1527 
if the employee regularly uses such quali-
fied commuting property for travel between 
the employee’s residence, place of employ-
ment, a qualified parking facility, or a 
mass transit facility that connects the em-
ployee to their residence or place of em-
ployment. 
‘‘(ii) QUALIFIED
COMMUTING
PROP-
ERTY.—The term ‘qualified commuting 
property’ means— 
‘‘(I) any bicycle (other than a bi-
cycle equipped with any motor), 
‘‘(II) any electric bicycle which 
meets the requirements of section 
36E(c)(5), 
‘‘(III) any 2- or 3-wheel scooter 
(other than a scooter equipped with 
any motor), and 
‘‘(IV) any 2- or 3-wheel scooter 
propelled by an electric motor if such 
motor does not provide assistance if 
the speed of such scooter exceeds 20 
miler per hour (or if the speed of such 
scooter is not capable of exceeding 20 
miles per hour) and the weight of
1528 
such scooter does not exceed 100 
pounds. 
‘‘(iii) 
BIKESHARE.—The 
term 
‘bikeshare’ means a rental operation at 
which qualified commuting property is 
made available to customers to pick up and 
drop off for point-to-point use within a de-
fined geographic area.’’. 
(c) 
LIMITATION
ON
EXCLUSION.—Section 
132(f)(2)(C) is amended to read as follows: 
‘‘(C) 30 percent of the dollar amount in ef-
fect under subparagraph (B) per month in the 
case of any qualified bicycle commuting ben-
efit.’’. 
(d) NO CONSTRUCTIVE RECEIPT.—Section 132(f)(4) 
is amended by striking ‘‘(other than a qualified bicycle 
commuting reimbursement)’’. 
(e) CONFORMING AMENDMENTS.— 
(1) Section 132(f)(1)(D) is amended by striking 
‘‘reimbursement’’ and inserting ‘‘benefit’’. 
(2) Section 274(l) is amended by striking para-
graph (2). 
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2021.
1529 
SEC. 136407. CREDIT FOR CERTAIN NEW ELECTRIC BICY-
CLES. 
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1, as amended by the preceding pro-
visions of this Act, is amended by inserting after section 
36D the following new section: 
‘‘SEC. 36E. ELECTRIC BICYCLES. 
‘‘(a) ALLOWANCE OF CREDIT.—There shall be al-
lowed as a credit against the tax imposed by this chapter 
for the taxable year an amount equal to 30 percent of the 
cost of each qualified electric bicycle placed in service by 
the taxpayer during such taxable year. 
‘‘(b) LIMITATIONS.— 
‘‘(1) LIMITATION ON COST PER ELECTRIC BICY-
CLE
TAKEN
INTO
ACCOUNT.—The amount taken 
into account under subsection (a) as the cost of any 
qualified electric bicycle shall not exceed $3,000. 
‘‘(2) BICYCLE LIMITATION WITH RESPECT TO 
CREDIT.— 
‘‘(A) LIMITATION
ON
NUMBER
OF
PER-
SONAL-USE BICYCLES.—In the case of any tax-
payer for any taxable year, the number of per-
sonal-use bicycles taken into account under sub-
section (a) shall not exceed the excess (if any) 
of—
1530 
‘‘(i) 1 (2 in the case of a joint return), 
reduced by 
‘‘(ii) the aggregate number of bicycles 
taken into account by the taxpayer under 
subsection (a) for the 2 preceding taxable 
years. 
‘‘(B) PHASEOUT BASED ON MODIFIED AD-
JUSTED
GROSS
INCOME.—The credit allowed 
under subsection (a) shall be reduced by $200 
for each $1,000 (or fraction thereof) by which 
the taxpayer’s modified adjusted gross income 
exceeds— 
‘‘(i) $150,000 in the case of a joint 
return or a surviving spouse (as defined in 
section 2(a)), 
‘‘(ii) $112,500 in the case of a head 
of household (as defined in section 2(b)), 
and 
‘‘(iii) $75,000 in the case of a tax-
payer not described in clause (i) or (ii). 
‘‘(C) MODIFIED
ADJUSTED
GROSS
IN-
COME.—For purposes of subparagraph (B), the 
term ‘modified adjusted gross income’ means 
adjusted gross income increased by any amount
1531 
excluded from gross income under section 911, 
931, or 933. 
‘‘(D) SPECIAL RULE FOR MODIFIED AD-
JUSTED
GROSS
INCOME
TAKEN
INTO
AC-
COUNT.—The modified adjusted gross income 
of the taxpayer that is taken into account for 
purposes of this paragraph shall be the lesser 
of— 
‘‘(i) the modified adjusted gross in-
come for the taxable year in which the 
credit is claimed, or 
‘‘(ii) the modified adjusted gross in-
come for the immediately preceding taxable 
year. 
‘‘(c) QUALIFIED ELECTRIC BICYCLE.—For purposes 
of this section, the term ‘qualified electric bicycle’ means 
a bicycle— 
‘‘(1) the original use of which commences with 
the taxpayer, 
‘‘(2) which is acquired for use by the taxpayer 
and not for resale, 
‘‘(3) which is made by a qualified manufacturer 
and is labeled with the qualified vehicle identification 
number assigned to such bicycle by such manufac-
turer,
1532 
‘‘(4) with respect to which the aggregate 
amount paid for such acquisition does not exceed 
$4,000, and 
‘‘(5) which is equipped with— 
‘‘(A) fully operable pedals, 
‘‘(B) a saddle or seat for the rider, and 
‘‘(C) an electric motor of less than 750 
watts which is designed to provided assistance 
in propelling the bicycle and— 
‘‘(i) does not provide such assistance 
if the bicycle is moving in excess of 20 
miler per hour, or 
‘‘(ii) if such motor only provides such 
assistance when the rider is pedaling, does 
not provide such assistance if the bicycle is 
moving in excess of 28 miles per hour. 
‘‘(d) VIN NUMBER REQUIREMENT.— 
‘‘(1) IN GENERAL.—No credit shall be allowed 
under subsection (a) with respect to any qualified 
electric bicycle unless the taxpayer includes the 
qualified vehicle identification number of such bicy-
cle on the return of tax for the taxable year. 
‘‘(2) 
QUALIFIED
VEHICLE
IDENTIFICATION 
NUMBER.—For purposes of this section, the term 
‘qualified vehicle identification number’ means, with
1533 
respect to any bicycle, the vehicle identification num-
ber assigned to such bicycle by a qualified manufac-
turer pursuant to the methodology referred to in 
paragraph (3). 
‘‘(3) QUALIFIED
MANUFACTURER.—For pur-
poses of this section, the term ‘qualified manufac-
turer’ means any manufacturer of qualified electric 
bicycles which enters into an agreement with the 
Secretary which provides that such manufacturer 
will— 
‘‘(A) assign a vehicle identification number 
to each qualified electric bicycle produced by 
such manufacturer utilizing a methodology that 
will ensure that such number (including any al-
phanumeric) is unique to such bicycle (by uti-
lizing numbers or letters which are unique to 
such manufacturer or by such other method as 
the Secretary may provide), 
‘‘(B) label such bicycle with such number 
in such manner as the Secretary may provide, 
and 
‘‘(C) make periodic written reports to the 
Secretary (at such times and in such manner as 
the Secretary may provide) of the vehicle identi-
fication numbers so assigned and including
1534 
such information as the Secretary may require 
with respect to the qualified electric bicycle to 
which such number was so assigned. 
‘‘(e) SPECIAL RULES.— 
‘‘(1) BASIS REDUCTION.—For purposes of this 
subtitle, the basis of any property for which a credit 
is allowable under subsection (a) shall be reduced by 
the amount of such credit so allowed. 
‘‘(2) NO
DOUBLE
BENEFIT.—The amount of 
any deduction or other credit allowable under this 
chapter for a qualified electric bicycle for which a 
credit is allowable under subsection (a) shall be re-
duced by the amount of credit allowed under such 
subsection for such bicycle. 
‘‘(3) PROPERTY USED OUTSIDE UNITED STATES 
NOT QUALIFIED.—No credit shall be allowable under 
subsection (a) with respect to any property referred 
to in section 50(b)(1). 
‘‘(4) RECAPTURE.—The Secretary shall, by reg-
ulations or other guidance, provide for recapturing 
the benefit of any credit allowable under subsection 
(a) with respect to any property which ceases to be 
property eligible for such credit. 
‘‘(5) ELECTION
NOT
TO
TAKE
CREDIT.—No 
credit shall be allowed under subsection (a) for any
1535 
bicycle if the taxpayer elects to not have this section 
apply to such bicycle. 
‘‘(f) TREATMENT OF CERTAIN POSSESSIONS.— 
‘‘(1) PAYMENTS TO POSSESSIONS WITH MIRROR 
CODE TAX SYSTEMS.—The Secretary shall pay to 
each possession of the United States which has a 
mirror code tax system amounts equal to the loss (if 
any) to that possession by reason of the application 
of the provisions of this section (determined without 
regard to this subsection). Such amounts shall be 
determined by the Secretary based on information 
provided by the government of the respective posses-
sion. 
‘‘(2) PAYMENTS TO OTHER POSSESSIONS.—The 
Secretary shall pay to each possession of the United 
States which does not have a mirror code tax system 
amounts estimated by the Secretary as being equal 
to the aggregate benefits (if any) that would have 
been provided to residents of such possession by rea-
son of the provisions of this section if a mirror code 
tax system had been in effect in such possession. 
The preceding sentence shall not apply unless the re-
spective possession has a plan which has been ap-
proved by the Secretary under which such possession
1536 
will promptly distribute such payments to its resi-
dents. 
‘‘(3) MIRROR CODE TAX SYSTEM; TREATMENT 
OF PAYMENTS.—Rules similar to the rules of para-
graphs (3), (4), and (5) of section 21(h) shall apply 
for purposes of this section. 
‘‘(g) TRANSFER OF CREDIT.— 
‘‘(1) IN GENERAL.—Subject to such regulations 
or other guidance as the Secretary determines nec-
essary or appropriate, if the taxpayer who acquires 
a qualified electric bicycle after December 31, 2022 
elects the application of this subsection with respect 
to such qualified electric bicycle, the credit which 
would (but for this subsection) be allowed to such 
taxpayer with respect to such qualified electric bicy-
cle shall be allowed to the eligible entity specified in 
such election (and not to such taxpayer). 
‘‘(2) ELIGIBLE ENTITY.—For purposes of this 
paragraph, the term ‘eligible entity’ means, with re-
spect to the qualified electric bicycle for which the 
credit is allowed under subsection (a), the retailer 
which sold such qualified electric bicycle to the tax-
payer and has— 
‘‘(A) subject to paragraph (4), registered 
with the Secretary for purposes of this para-
1537 
graph, at such time, and in such form and 
manner, as the Secretary may prescribe, 
‘‘(B) prior to the election described in 
paragraph (1) and no later than at the time of 
such sale, disclosed to the taxpayer purchasing 
such qualified electric bicycle— 
‘‘(i) the retail price, 
‘‘(ii) the value of the credit allowed or 
other incentive available for the purchase 
of such qualified electric bicycle, 
‘‘(iii) all fees associated with the pur-
chase of such qualified electric bicycle, and 
‘‘(iv) the amount provided by the re-
tailer to such taxpayer as a condition of 
the election described in paragraph (1), 
‘‘(C) made payment to such taxpayer 
(whether in cash or in the form of a partial 
payment or down payment for the purchase of 
such qualified electric bicycle) in an amount 
equal to the credit otherwise allowable to such 
taxpayer, and 
‘‘(D) with respect to any incentive other-
wise available for the purchase of a qualified 
electric bicycle for which a credit is allowed 
under this section, including any incentive in
1538 
the form of a rebate or discount provided by the 
retailer or manufacturer, ensured that— 
‘‘(i) the availability or use of such in-
centive shall not limit the ability of a tax-
payer to make an election described in 
paragraph (1), and 
‘‘(ii) such election shall not limit the 
value or use of such incentive. 
‘‘(3) TIMING.—An election described in para-
graph (1) shall be made by the taxpayer not later 
than the date on which the qualified electric bicycle 
for which the credit is allowed under subsection (a) 
is purchased. 
‘‘(4) REVOCATION
OF
REGISTRATION.—Upon 
determination by the Secretary that a retailer has 
failed to comply with the requirements described in 
paragraph (2), the Secretary may revoke the reg-
istration (as described in subparagraph (A) of such 
paragraph) of such retailer. 
‘‘(5) TAX
TREATMENT
OF
PAYMENTS.—With 
respect to any payment described in paragraph 
(2)(C), such payment— 
‘‘(A) shall not be includible in the gross in-
come of the taxpayer, and
1539 
‘‘(B) with respect to the retailer, shall not 
be deductible under this title. 
‘‘(6) APPLICATION
OF
CERTAIN
OTHER
RE-
QUIREMENTS.—In the case of any election under 
paragraph (1) with respect to any qualified electric 
bicycle— 
‘‘(A) the amount of the reduction under 
subsection (b) shall be determined with respect 
to the modified adjusted gross income of the 
taxpayer for the taxable year preceding the tax-
able year in which such qualified electric bicycle 
was acquired (and not with respect to such in-
come for the taxable year in which such quali-
fied electric bicycle was acquired), 
‘‘(B) the requirements of paragraphs (1) 
and (2) of subsection (e) shall apply to the tax-
payer who acquired the qualified electric bicycle 
in the same manner as if the credit determined 
under this section with respect to such qualified 
electric bicycle were allowed to such taxpayer, 
and 
‘‘(C) subsection (e)(5) shall not apply. 
‘‘(7) ADVANCE PAYMENT TO REGISTERED RE-
TAILERS.—
1540 
‘‘(A) IN
GENERAL.—The Secretary shall 
establish a program to make advance payments 
to any eligible entity in an amount equal to the 
cumulative amount of the credits allowed under 
subsection (a) with respect to any qualified elec-
tric bicycles sold by such entity for which an 
election described in paragraph (1) has been 
made. 
‘‘(B) EXCESSIVE PAYMENTS.—Rules simi-
lar to the rules of section 6417(c)(7) shall apply 
for purposes of this paragraph. 
‘‘(8) RETAILER.—For purposes of this sub-
section, the term ‘retailer’ means a person engaged 
in the trade or business of selling qualified electric 
bicycles in a State, the District of Columbia, the 
Commonwealth of Puerto Rico, any other territory 
or possession of the United States, an Indian tribal 
government (as defined in section 48(e)(4)(F)(ii)), 
or any Alaska Native Corporation (as defined in sec-
tion 3 of the Alaska Native Claims Settlement Act 
(43 U.S.C. 1602(m)). 
‘‘(h) TERMINATION.—This section shall not apply to 
bicycles placed in service after December 31, 2025.’’. 
(b) CONFORMING AMENDMENTS.—
1541 
(1) Section 1016(a) is amended by striking 
‘‘and’’ at the end of paragraph (38), by striking the 
period at the end of paragraph (39) and inserting ‘‘, 
and’’, and by adding at the end the following new 
paragraph: 
‘‘(40) to the extent provided in section 
36E(f)(1).’’. 
(2) Section 6211(b)(4)(A) of such Code is 
amended by inserting ‘‘36E by reason of subsection 
(c)(2) thereof,’’ before ‘‘32,’’. 
(3) Section 6213(g)(2), as amended by the pre-
ceding provisions of this Act, is amended— 
(A) in subparagraph (U), by striking 
‘‘and’’ at the end, 
(B) in subparagraph (V), by striking the 
period at the end and inserting ‘‘, and’’, and 
(C) by adding at the end the following: 
‘‘(W) an omission of a correct vehicle iden-
tification number required under section 36E(d) 
(relating to electric bicycles credit) to be in-
cluded on a return.’’. 
(4) Section 6501(m) is amended by inserting 
‘‘36E(f)(4),’’ after ‘‘35(g)(11),’’.
1542 
(5) Section 1324(b)(2) of title 31, United 
States Code, is amended by inserting ‘‘36E,’’ after 
‘‘36D,’’. 
(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 new item: 
‘‘Sec. 36E. Electric bicycles.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service after 
December 31, 2021, in taxable years ending after such 
date. 
PART 5—INVESTMENT IN THE GREEN 
WORKFORCE AND MANUFACTURING 
SEC. 136501. EXTENSION OF THE ADVANCED ENERGY 
PROJECT CREDIT. 
(a) EXTENSION OF CREDIT.—Section 48C is amend-
ed by redesignating subsection (e) as subsection (f) and 
by inserting after subsection (d) the following new sub-
section: 
‘‘(e) ADDITIONAL ALLOCATIONS.— 
‘‘(1) IN GENERAL.—Not later than 270 days 
after the date of enactment of this subsection, the 
Secretary shall establish a program to consider and 
award certifications for qualified investments eligible 
for credits under this section to qualifying advanced 
energy project sponsors.
1543 
‘‘(2) ANNUAL LIMITATION.— 
‘‘(A) IN GENERAL.—The amount of credits 
that may be allocated under this subsection 
during any calendar year shall not exceed the 
annual credit limitation with respect to such 
year. 
‘‘(B) ANNUAL CREDIT LIMITATION.— 
‘‘(i) IN
GENERAL.—For purposes of 
this subsection, the term ‘annual credit 
limitation’ means $5,000,000,000 for each 
of calendar years 2022 through 2023, 
$1,875,000,000 for each of calendar years 
2024 through 2031, and zero thereafter. 
‘‘(ii) AMOUNT SET ASIDE FOR AUTO-
MOTIVE COMMUNITIES.— 
‘‘(I) IN GENERAL.—For purposes 
of clause (i), $800,000,000 of the an-
nual credit limitation for each of cal-
endar years 2022 through 2023 and 
$300,000,000 for each of calendar 
years 2024 through 2031 shall be al-
located to qualified investments lo-
cated within automotive communities. 
‘‘(II) 
AUTOMOTIVE
COMMU-
NITIES.—For purposes of this clause,
1544 
the term ‘automotive communities’ 
means a census tract and any directly 
adjoining census tract, including a no- 
population census tract, that has ex-
perienced major job losses in the auto-
motive manufacturing sector since 
January 1, 1994, as determined by 
the Secretary. 
‘‘(iii) AMOUNT
SET
ASIDE
FOR
EN-
ERGY
COMMUNITIES.—For purposes of 
clause (i), $800,000,000 of the annual 
credit limitation for each of calendar years 
2022 through 2023 and $300,000,000 for 
each of calendar years 2024 through 2031 
shall be allocated to qualified investments 
located within energy communities (as de-
fined in section 45(b)(11)(B)). 
‘‘(C) CARRYOVER
OF
UNUSED
LIMITA-
TION.—If the annual credit limitation for any 
calendar year exceeds the aggregate amount 
designated for such year under this subsection, 
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 2036.
1545 
‘‘(3) CERTIFICATIONS.— 
‘‘(A) APPLICATION REQUIREMENT.—Each 
applicant for certification under this subsection 
shall submit an application at such time and 
containing such information as the Secretary 
may require. 
‘‘(B) TIME TO MEET CRITERIA FOR CER-
TIFICATION.—Each applicant for certification 
shall have 2 years from the date of acceptance 
by the Secretary of the application during 
which to provide to the Secretary evidence that 
the requirements of the certification have been 
met. 
‘‘(C) PERIOD OF ISSUANCE.—An applicant 
which receives a certification shall have 2 years 
from the date of issuance of the certification in 
order to place the project in service and to no-
tify the Secretary that such project has been so 
placed in service, and if such project is not 
placed in service (and the Secretary so notified) 
by that time period, then the certification shall 
no longer be valid. If any certification is re-
voked under this subparagraph, the amount of 
the annual credit limitation under paragraph 
(2) for the calendar year in which such certifi-
1546 
cation is revoked shall be increased by the 
amount of the credit with respect to such re-
voked certification. 
‘‘(4) SELECTION CRITERIA.—Selection criteria 
similar to those in subsection (d)(3) shall apply, ex-
cept that in determining designations under this 
subsection, the Secretary shall— 
‘‘(A) in addition to the factors described in 
subsection (d)(3)(B), take into consideration 
which projects— 
‘‘(i) will provide the greatest net im-
pact in avoiding or reducing anthropogenic 
emissions of greenhouse gases, as deter-
mined by the Secretary, 
‘‘(ii) will provide the greatest domestic 
job creation (both direct and indirect) dur-
ing the credit period, 
‘‘(iii) will provide the greatest job cre-
ation within the vicinity of the project, par-
ticularly with respect to— 
‘‘(I) low-income communities (as 
described in section 45D(e)), and 
‘‘(II) dislocated workers who 
were previously employed in manufac-
1547 
turing, coal power plants, or coal min-
ing, and 
‘‘(iv) will provide the greatest job cre-
ation in areas with a population that is at 
risk of experiencing higher or more adverse 
human health or environmental effects and 
a significant portion of such population is 
comprised of communities of color, low-in-
come communities, Tribal and Indigenous 
communities, or individuals formerly em-
ployed in the fossil fuel industry, and 
‘‘(B) give the highest priority to projects 
which— 
‘‘(i) manufacture (other than pri-
marily assembly of components) property 
described in a subclause of subsection 
(c)(1)(A)(i) (or components thereof), and 
‘‘(ii) have the greatest potential for 
commercial deployment of new applica-
tions. 
‘‘(5) DISCLOSURE OF ALLOCATIONS.—The Sec-
retary shall, upon allocating a credit under this sub-
section, publicly disclose the identity of the appli-
cant, the amount of the credit with respect to such
1548 
applicant, and the project location for which such 
credit was allocated. 
‘‘(6) CREDIT CONDITIONED UPON WAGE AND 
APPRENTICESHIP REQUIREMENTS.— 
‘‘(A) BASE RATE.—For purposes of alloca-
tions under this subsection, the amount of the 
credit determined under subsection (a) shall be 
determined by substituting ‘6 percent’ for ‘30 
percent’. 
‘‘(B) ALTERNATIVE RATE.—In the case of 
any project which satisfies the requirements of 
paragraphs (7) and (8), the amount of the cred-
it determined under subsection (a) (after appli-
cation of subparagraph (A)) shall be equal to 
such amount multiplied by 5. 
‘‘(7) PREVAILING WAGE REQUIREMENTS.— 
‘‘(A) IN GENERAL.—The requirements de-
scribed in this paragraph with respect to a 
project are that the taxpayer shall ensure that 
any laborers and mechanics employed by con-
tractors and subcontractors in the re-equipping, 
expansion, or establishment of a manufacturing 
facility shall be paid wages at rates not less 
than the prevailing rates for construction, alter-
ation, or repair of a similar character in the lo-
1549 
cality as most recently determined by the Sec-
retary 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.—In the case of any taxpayer which 
fails to satisfy the requirement under subpara-
graph (A) with respect to any project— 
‘‘(i) rules similar to the rules of 
clauses 
(i) 
through 
(iv) 
of 
section 
45(b)(7)(B) shall apply, and 
‘‘(ii) if the failure to satisfy the re-
quirement under subparagraph (A) is not 
corrected pursuant to the rules described 
in clause (i), the certification with respect 
to the re-equipping, expansion, or estab-
lishment of a manufacturing facility shall 
no longer be valid. 
‘‘(8) APPRENTICESHIP REQUIREMENTS.—Rules 
similar to the rules of section 45(b)(8) shall apply.’’. 
(b) MODIFICATION OF QUALIFYING ADVANCED EN-
ERGY PROJECTS.—
1550 
(1) INCLUSION OF WATER AS A RENEWABLE 
RESOURCE.—Section 48C(c)(1)(A)(i)(I) is amended 
by inserting ‘‘water,’’ after ‘‘sun,’’. 
(2) 
ENERGY
STORAGE
SYSTEMS.—Section 
48C(c)(1)(A)(i)(II) is amended by striking ‘‘an en-
ergy storage system for use with electric or hybrid- 
electric motor vehicles’’ and inserting ‘‘energy stor-
age systems and components’’. 
(3) MODIFICATION OF QUALIFYING ELECTRIC 
GRID
PROPERTY.—Section 48C(c)(1)(A)(i)(III) is 
amended to read as follows: 
‘‘(III) electric grid modernization 
equipment or components,’’. 
(4) USE
OF
CAPTURED
CARBON.—Section 
48C(c)(1)(A)(i)(IV) is amended by striking ‘‘seques-
ter’’ and insert ‘‘use or sequester’’. 
(5) ELECTRIC VEHICLES AND BICYCLES.—Sec-
tion 48C(c)(1)(A)(i)(VI) is amended— 
(A) by striking ‘‘new qualified plug-in elec-
tric drive motor vehicles (as defined by section 
30D)’’ and inserting ‘‘vehicles described in sec-
tions 36C and 45Y, and bicycles described in 
section 36E’’, and
1551 
(B) and striking ‘‘and power control units’’ 
and inserting ‘‘power control units, and equip-
ment used for charging or refueling’’. 
(6) PROPERTY
FOR
PRODUCTION
OF
HYDRO-
GEN.—Section 48C(c)(1)(A)(i) is amended by strik-
ing ‘‘or’’ at the end of subclause (VI), by redesig-
nating subclause (VII) as subclause (VIII), an by in-
serting after subclause (VI) the following new sub-
clause: 
‘‘(VII) property designed to be 
used to produce qualified clean hydro-
gen (as defined in section 45X), or’’. 
(7) RECYCLING OF ADVANCED ENERGY PROP-
ERTY.—Section 48C(c)(1) is amended by adding at 
the end the following new subparagraph: 
‘‘(C) SPECIAL RULE FOR CERTAIN RECY-
CLING
FACILITIES.—A facility which recycles 
batteries or similar energy storage property de-
scribed in subparagraph (A)(i) shall be treated 
as part of a manufacturing facility described in 
such subparagraph.’’. 
(c) DENIAL OF DOUBLE BENEFIT.—48C(f), as re-
designated by this section, is amended by striking ‘‘or 
48B’’ and inserting ‘‘48B, 48F, 45Q, or 45X’’.
1552 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on January 1, 2022. 
SEC. 136502. LABOR COSTS OF INSTALLING MECHANICAL 
INSULATION PROPERTY. 
(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 further amended by adding at the 
end the following new section: 
‘‘SEC. 45Z. LABOR COSTS OF INSTALLING MECHANICAL IN-
SULATION PROPERTY. 
‘‘(a) IN GENERAL.—For purposes of section 38, the 
mechanical insulation labor costs credit determined under 
this section for any taxable year is an amount equal to 
2 percent of the mechanical insulation labor costs paid or 
incurred by the taxpayer during such taxable year. 
‘‘(b) MECHANICAL INSULATION LABOR COSTS.—For 
purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘mechanical insu-
lation labor costs’ means the labor cost of installing 
mechanical insulation property with respect to a me-
chanical system referred to in paragraph (2)(A) 
which was originally placed in service not less than 
1 year before the date on which such mechanical in-
sulation property is installed.
1553 
‘‘(2) MECHANICAL
INSULATION
PROPERTY.— 
The term ‘mechanical insulation property’ means in-
sulation materials, and facings and accessory prod-
ucts installed in connection to such insulation mate-
rials— 
‘‘(A) placed in service in connection with a 
mechanical system which— 
‘‘(i) is located in the United States, 
‘‘(ii) is of a character subject to an al-
lowance for depreciation, and 
‘‘(iii) meets the requirements of sec-
tion 434.403 of title 10, Code of Federal 
Regulations (as in effect on the date of en-
actment of this section), and 
‘‘(B) which result in a reduction in energy 
loss from the mechanical system which is great-
er than the expected reduction from the instal-
lation of insulation materials which meet the 
minimum requirements of Reference Standard 
90.1 (as defined in section 179D(c)(2)). 
‘‘(c) 
WAGE
AND
APPRENTICESHIP
REQUIRE-
MENTS.— 
‘‘(1) IN GENERAL.—In the case of any project 
which meets the prevailing wage and apprenticeship 
requirements of this subsection, the amount of credit
1554 
determined under subsection (a) shall be multiplied 
by 5. 
‘‘(2) WAGE REQUIREMENTS.—Rules similar to 
the rules of section 45(b)(7)(A) and clauses (i) 
through (iv) of section 45(b)(7)(B) shall apply. 
‘‘(3) APPRENTICESHIP REQUIREMENTS.—Rules 
similar to the rules of section 45(b)(8) shall apply. 
‘‘(d) TERMINATION.—This section shall not apply to 
mechanical insulation labor costs paid or incurred after 
December 31, 2025.’’. 
(b) CREDIT ALLOWED AS PART OF GENERAL BUSI-
NESS CREDIT.—Section 38(b), as amended by the pre-
ceding provisions of this Act, is further amended by strik-
ing ‘‘plus’’ at the end of paragraph (36), by striking the 
period at the end of paragraph (37) and inserting ‘‘, plus’’, 
and by adding at the end the following new paragraph: 
‘‘(38) the mechanical insulation labor costs 
credit determined under section 45Z(a).’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 280C is amended by adding at the 
end the following new subsection: 
‘‘(i) MECHANICAL INSULATION LABOR COSTS CRED-
IT.— 
‘‘(1) IN GENERAL.—No deduction shall be al-
lowed for that portion of the mechanical insulation
1555 
labor costs (as defined in section 45Z(b)) otherwise 
allowable as deduction for the taxable year which is 
equal to the amount of the credit determined for 
such taxable year under section 45Z(a). 
‘‘(2) SIMILAR
RULE
WHERE
TAXPAYER
CAP-
ITALIZES RATHER THAN DEDUCTS EXPENSES.—If— 
‘‘(A) the amount of the credit determined 
for the taxable year under section 45Z(a), ex-
ceeds 
‘‘(B) the amount of allowable as a deduc-
tion for such taxable year for mechanical insu-
lation labor costs (determined without regard to 
paragraph (1)), 
the amount chargeable to capital account for the 
taxable year for such costs shall be reduced by the 
amount of such excess.’’. 
(2) The table of sections for subpart D of part 
IV of subchapter A of chapter 1, as amended by the 
preceding provisions of this Act, is further amended 
by adding at the end the following new item: 
‘‘Sec. 45Z. Labor costs of installing mechanical insulation property.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to amounts paid or incurred after 
December 31, 2021, in taxable years ending after such 
date.
1556 
SEC. 136503. ADVANCED MANUFACTURING INVESTMENT 
CREDIT. 
(a) IN GENERAL.—Subpart E of part IV of sub-
chapter A of chapter 1 is amended by inserting after sec-
tion 48D the following new section: 
‘‘SEC. 
48E. 
ADVANCED 
MANUFACTURING 
INVESTMENT 
CREDIT. 
‘‘(a) ESTABLISHMENT OF CREDIT.— 
‘‘(1) IN GENERAL.—For purposes of section 46, 
the advanced manufacturing investment credit for 
any taxable year is an amount equal to the applica-
ble percentage of the qualified investment for such 
taxable year with respect to any advanced manufac-
turing facility. 
‘‘(2) APPLICABLE PERCENTAGE.— 
‘‘(A) BASE AMOUNT.—In the case of any 
advanced manufacturing facility which does not 
satisfy the requirements described in clauses (i) 
and (ii) of subparagraph (B), the applicable 
percentage shall be 5 percent. 
‘‘(B) ALTERNATIVE AMOUNT.—In the case 
of any advanced manufacturing facility which— 
‘‘(i) subject to subparagraph (B) of 
subsection (c)(2), satisfies the require-
ments under subparagraph (A) of such 
subsection, and
1557 
‘‘(ii) with respect to the construction 
of such facility, satisfies the apprenticeship 
requirements under subsection (c)(3), 
the applicable percentage shall be 25 percent. 
‘‘(b) QUALIFIED INVESTMENT.— 
‘‘(1) IN GENERAL.—For purposes of subsection 
(a)(1), the qualified investment with respect to any 
advanced manufacturing facility for any taxable year 
is the basis of any qualified property placed in serv-
ice by the taxpayer during such taxable year which 
is part of an advanced manufacturing facility. 
‘‘(2) QUALIFIED PROPERTY.— 
‘‘(A) IN GENERAL.—For purposes of this 
subsection, the term ‘qualified property’ means 
property— 
‘‘(i) which is tangible property, 
‘‘(ii) with respect to which deprecia-
tion (or amortization in lieu of deprecia-
tion) is allowable, 
‘‘(iii) which is— 
‘‘(I) constructed, reconstructed, 
or erected by the taxpayer, or 
‘‘(II) acquired by the taxpayer if 
the original use of such property com-
mences with the taxpayer, and
1558 
‘‘(iv) which is integral to the operation 
of the advanced manufacturing facility. 
‘‘(B) BUILDINGS AND STRUCTURAL COM-
PONENTS.— 
‘‘(i) IN GENERAL.—The term ‘quali-
fied property’ includes any building or its 
structural components which otherwise sat-
isfy the requirements under subparagraph 
(A). 
‘‘(ii) EXCEPTION.—Clause (i) shall 
not apply with respect to a building or por-
tion of a building used for offices, adminis-
trative services or other functions unre-
lated to manufacturing. 
‘‘(3) ADVANCED MANUFACTURING FACILITY.— 
For purposes of this subpart, the term ‘advanced 
manufacturing facility’ means a facility for which 
the primary purpose is the manufacturing of semi-
conductors or semiconductor tooling equipment. 
‘‘(4) COORDINATION
WITH
REHABILITATION 
CREDIT.—The qualified investment with respect to 
any advanced manufacturing facility for any taxable 
year shall not include that portion of the basis of 
any property which is attributable to qualified reha-
1559 
bilitation 
expenditures 
(as 
defined 
in 
section 
47(c)(2)). 
‘‘(c) SPECIAL RULES.— 
‘‘(1) CERTAIN PROGRESS EXPENDITURE RULES 
MADE APPLICABLE.—Rules similar to the rules of 
subsections (c)(4) and (d) of section 46 (as in effect 
on the day before the date of the enactment of the 
Revenue Reconciliation Act of 1990) shall apply for 
purposes of subsection (a). 
‘‘(2) WAGE REQUIREMENTS.— 
‘‘(A) IN GENERAL.—The requirements de-
scribed in this subparagraph with respect to 
any facility are that the taxpayer shall ensure 
that any laborers and mechanics employed by 
contractors and subcontractors in— 
‘‘(i) the construction of such facility, 
and 
‘‘(ii) for any year during the 5-year 
period beginning on the date the facility is 
originally 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
1560 
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 paragraph (2)(B) of sub-
section (a), with respect to any project which 
does not satisfy the requirements under sub-
paragraph (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 
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). 
‘‘(3) APPRENTICESHIP REQUIREMENTS.—Rules 
similar to the rules of section 45(b)(8) shall apply. 
‘‘(4) REGULATIONS AND GUIDANCE.—The Sec-
retary shall issue such regulations or other guidance
1561 
as the Secretary determines necessary or appropriate 
to carry out the purposes of this section, including 
regulations or other guidance which provides for re-
quirements for recordkeeping or information report-
ing for purposes of establishing the requirements of 
this section. 
‘‘(d) TERMINATION OF CREDIT.—The credit allowed 
under this section shall not apply to facilities or property 
the construction of which begins after December 31, 
2025.’’. 
(b) ELECTIVE
PAYMENT
OF
CREDIT.—Section 
6417(b), as amended by the preceding provisions of this 
Act, is amended by adding at the end the following new 
paragraph: 
‘‘(10) The advanced manufacturing investment 
credit determined under section 48E.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 46 is amended— 
(A) by striking ‘‘and’’ at the end of para-
graph (6), 
(B) by striking the period at the end of 
paragraph (7) and inserting ‘‘, and’’, and 
(C) by adding at the end the following new 
paragraph:
1562 
‘‘(8) the advanced manufacturing investment 
credit.’’. 
(2) Section 49(a)(1)(C) is amended— 
(A) by striking ‘‘and’’ at the end of clause 
(vi), 
(B) by striking the period at the end of 
clause (vii) and inserting ‘‘, and’’, and 
(C) by adding at the end the following new 
clause: 
‘‘(viii) the basis of any qualified prop-
erty (as defined in section 48E(b)(2)) 
which is part of an advanced manufac-
turing facility.’’. 
(3) Section 50(a)(2)(E) is amended by striking 
‘‘or 48D(e)’’ and inserting ‘‘48D(e), or 48E(c)(1)’’. 
(4) The table of sections for subpart E of part 
IV of subchapter A of chapter 1 is amended by in-
serting after the item relating to section 48D the 
following new item: 
‘‘48E. Advanced manufacturing investment credit.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section 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 ex-
tent of the basis thereof attributable to the construction, 
reconstruction, or erection after December 31, 2021.
1563 
SEC. 136504. ADVANCED MANUFACTURING PRODUCTION 
CREDIT. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 is amended by adding at the end 
the following new section: 
‘‘SEC. 45AA. ADVANCED MANUFACTURING PRODUCTION 
CREDIT. 
‘‘(a) IN GENERAL.— 
‘‘(1) ALLOWANCE OF CREDIT.—For purposes of 
section 38, the advanced manufacturing production 
credit for any taxable year is an amount equal to the 
sum of the credit amounts determined under sub-
section (b) with respect to each eligible component 
which is— 
‘‘(A) produced by such taxpayer, and 
‘‘(B) during the taxable year, sold by the 
taxpayer to an unrelated person. 
‘‘(2) PRODUCTION
AND
SALE
MUST
BE
IN 
TRADE OR BUSINESS.—Any eligible component pro-
duced and sold by the taxpayer shall be taken into 
account only if the production and sale described in 
paragraph (1) is in a trade or business of the tax-
payer. 
‘‘(3) UNRELATED
PERSON.—For purposes of 
this subsection, a taxpayer shall be treated as selling 
components to an unrelated person if such compo-
1564 
nent is sold to such person by a person related to 
the taxpayer. 
‘‘(b) CREDIT AMOUNT.— 
‘‘(1) IN GENERAL.—Subject to paragraph (3), 
the amount determined under this subsection with 
respect to any eligible component, including any eli-
gible component it incorporates, shall be equal to— 
‘‘(A) in the case of a thin photovoltaic cell 
or a crystalline photovoltaic cell, an amount 
equal to the product of— 
‘‘(i) 4 cents, multiplied by 
‘‘(ii) the capacity of such cell (ex-
pressed on a per direct current watt basis), 
‘‘(B) in the case of a photovoltaic wafer, 
$12 per square meter, 
‘‘(C) in the case of solar grade polysilicon, 
$3 per kilogram, 
‘‘(D) in the case of a solar module, an 
amount equal to the product of— 
‘‘(i) 7 cents, multiplied by 
‘‘(ii) the capacity of such module (ex-
pressed on a per direct current watt basis), 
and 
‘‘(E) in the case of a wind energy compo-
nent, an amount equal to the product of—
1565 
‘‘(i) the applicable amount with re-
spect to such component, multiplied by 
‘‘(ii) the total rated capacity (ex-
pressed on a per watt basis) of the com-
pleted wind turbine for which such compo-
nent is designed. 
‘‘(2) APPLICABLE AMOUNT.—For purposes of 
paragraph (1)(E), the applicable amount with re-
spect to any wind energy component shall be— 
‘‘(A) in the case of a blade, 2 cents, 
‘‘(B) in the case of a nacelle, 5 cents, 
‘‘(C) in the case of a tower, 3 cents, and 
‘‘(D) in the case of an offshore wind foun-
dation— 
‘‘(i) which uses a fixed platform, 2 
cents, or 
‘‘(ii) which uses a floating platform, 4 
cents. 
‘‘(3) PHASE OUT.— 
‘‘(A) IN GENERAL.—In the case of any eli-
gible component sold after December 31, 2026, 
the amount determined under this subsection 
with respect to such component shall be equal 
to the product of—
1566 
‘‘(i) the amount determined under 
paragraph (1) with respect to such compo-
nent, as determined without regard to this 
paragraph, multiplied by 
‘‘(ii) the phase out percentage under 
subparagraph (B). 
‘‘(B) 
PHASE
OUT
PERCENTAGE.—The 
phase out percentage under this subparagraph 
is equal to— 
‘‘(i) in the case of an eligible compo-
nent sold during calendar year 2027, 75 
percent, 
‘‘(ii) in the case of an eligible compo-
nent sold during calendar year 2028, 50 
percent, 
‘‘(iii) in the case of an eligible compo-
nent sold during calendar year 2029, 25 
percent, 
‘‘(iv) in the case of an eligible compo-
nent sold after December 31, 2029, 0 per-
cent. 
‘‘(c) DEFINITIONS.—For purposes of this section— 
‘‘(1) ELIGIBLE COMPONENT.— 
‘‘(A) IN
GENERAL.—The term ‘eligible 
component’ means—
1567 
‘‘(i) any solar energy component, and 
‘‘(ii) any wind energy component. 
‘‘(B) APPLICATION
WITH
OTHER
CRED-
ITS.—The term ‘eligible component’ shall not 
include any property which is produced at a fa-
cility if the basis of any property which is part 
of such facility is taken into account for pur-
poses of the credit allowed under section 48C or 
48E after the date of the enactment of this sec-
tion. 
‘‘(2) SOLAR ENERGY COMPONENT.— 
‘‘(A) IN GENERAL.—The term ‘solar en-
ergy component’ means any of the following: 
‘‘(i) Solar modules. 
‘‘(ii) Photovoltaic cells. 
‘‘(iii) Photovoltaic wafers. 
‘‘(iv) Solar grade polysilicon. 
‘‘(B) ASSOCIATED DEFINITIONS.— 
‘‘(i) PHOTOVOLTAIC CELL.—The term 
‘photovoltaic cell’ means the smallest semi-
conductor element of a solar module which 
performs the immediate conversion of light 
into electricity. 
‘‘(ii) PHOTOVOLTAIC
WAFER.—The 
term ‘photovoltaic wafer’ means a thin
1568 
slice, sheet, or layer of semiconductor ma-
terial of at least 240 square centimeters 
produced by a single manufacturer— 
‘‘(I) either— 
‘‘(aa) directly from molten 
or 
evaporated 
solar 
grade 
polysilicon or deposition of solar 
grade thin film semiconductor 
photon absorber layer, or 
‘‘(bb) through formation of 
an ingot from molten polysilicon 
and subsequent slicing, and 
‘‘(II) which comprises the sub-
strate or absorber layer of one or 
more photovoltaic cells. 
‘‘(iii) SOLAR GRADE POLYSILICON.— 
The term ‘solar grade polysilicon’ means 
silicon which is— 
‘‘(I) suitable for use in photo-
voltaic manufacturing, and 
‘‘(II) purified to a minimum pu-
rity of 99.999999 percent silicon by 
mass. 
‘‘(iv) SOLAR
MODULE.—The term 
‘solar module’ means the connection and
1569 
lamination of photovoltaic cells into an en-
vironmentally protected final assembly 
which is— 
‘‘(I) suitable to generate elec-
tricity when exposed to sunlight, and 
‘‘(II) ready for installation with-
out an additional manufacturing proc-
ess. 
‘‘(3) WIND ENERGY COMPONENT.— 
‘‘(A) IN GENERAL.—The term ‘wind en-
ergy component’ means any of the following: 
‘‘(i) Blades. 
‘‘(ii) Nacelles. 
‘‘(iii) Towers. 
‘‘(iv) Offshore wind foundations. 
‘‘(B) ASSOCIATED DEFINITIONS.— 
‘‘(i) BLADE.—The term ‘blade’ means 
an airfoil-shaped blade which is responsible 
for converting wind energy to low-speed ro-
tational energy. 
‘‘(ii) 
OFFSHORE
WIND
FOUNDA-
TION.—The term ‘offshore wind founda-
tion’ means the component which secures 
an offshore wind tower and any above-
1570 
water turbine components to the seafloor 
using— 
‘‘(I) fixed platforms, such as off-
shore wind monopiles, jackets, or 
gravity-based foundations, or 
‘‘(II) floating platforms and asso-
ciated mooring systems. 
‘‘(iii) NACELLE.—The term ‘nacelle’ 
means the assembly of the drivetrain and 
other tower-top components of a wind tur-
bine (with the exception of the blades and 
the hub) within their cover housing. 
‘‘(iv) 
TOWER.—The 
term 
‘tower’ 
means a tubular or lattice structure which 
supports the nacelle and rotor of a wind 
turbine. 
‘‘(d) SPECIAL RULES.—In this section— 
‘‘(1) RELATED
PERSONS.—Persons shall be 
treated as related to each other if such persons 
would be treated as a single employer under the reg-
ulations prescribed under section 52(b). 
‘‘(2) ONLY
PRODUCTION
IN
THE
UNITED 
STATES
TAKEN
INTO
ACCOUNT.—Sales shall be 
taken into account under this section only with re-
1571 
spect to eligible components the production 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)). 
‘‘(3) PASS-THRU IN THE CASE OF ESTATES AND 
TRUSTS.—Under regulations prescribed by the Sec-
retary, rules similar to the rules of subsection (d) of 
section 52 shall apply. 
‘‘(4) CREDIT EQUAL TO 10 PERCENT OF THE 
CREDIT
AMOUNT
FOR
UNION
FACILITIES.—In the 
case of a facility operating under a collective bar-
gaining agreement negotiated by an employee orga-
nization (as defined in section 412(c)(4)), deter-
mined 
in 
a 
manner 
consistent 
with 
section 
7701(a)(46), for purposes of determining the 
amount of the credit under subsection (a) with re-
spect to eligible components produced by such facil-
ity, the applicable amount under subsection (b) of 
such subsection shall be increased by an amount 
equal to 10 percent of the amount otherwise in ef-
fect under such subsection. 
‘‘(5) SALE
OF
INTEGRATED
COMPONENTS.— 
For purposes of this section, a person shall be treat-
1572 
ed as having sold an eligible component if such com-
ponent is integrated, incorporated, or assembled into 
another eligible component which is sold to an unre-
lated person.’’. 
(b) ELECTIVE
PAYMENT
OF
CREDIT.—Section 
6417(b), as amended by the preceding provisions of this 
Act, is amended by adding at the end the following new 
paragraph: 
‘‘(11) The credit for advanced manufacturing 
production under section 45AA.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 38(b) of the Internal Revenue Code 
of 1986 is amended— 
(A) in paragraph (37), by striking ‘‘plus’’ 
at the end, 
(B) in paragraph (38), by striking the pe-
riod at the end and inserting ‘‘, plus’’, and 
(C) by adding at the end the following new 
paragraph: 
‘‘(39) the advanced manufacturing production 
credit determined under section 45AA(a).’’. 
(2) The table of sections for subpart D of part 
IV of subchapter A of chapter 1 is amended by add-
ing at the end the following new item: 
‘‘Sec. 45AA. Advanced manufacturing production credit.’’.
1573 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to components produced and sold 
after December 31, 2021. 
PART 6—ENVIRONMENTAL JUSTICE 
SEC. 136601. QUALIFIED ENVIRONMENTAL JUSTICE PRO-
GRAM CREDIT. 
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1, as amended by the preceding pro-
visions of this Act, is amended by inserting after section 
36F the following new section: 
‘‘SEC. 36G. QUALIFIED ENVIRONMENTAL JUSTICE PRO-
GRAMS. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an eli-
gible educational institution, there shall be allowed as a 
credit against the tax imposed by this subtitle for any tax-
able year an amount equal to the applicable percentage 
of the amounts paid or incurred by such taxpayer during 
such taxable year which are necessary for a qualified envi-
ronmental justice program. 
‘‘(b) QUALIFIED ENVIRONMENTAL JUSTICE PRO-
GRAM.—For purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified envi-
ronmental justice program’ means a program con-
ducted by one or more eligible educational institu-
tions that is designed to address, or improve data
1574 
about, qualified environmental stressors for the pri-
mary purpose of improving, or facilitating the im-
provement of, health and economic outcomes of indi-
viduals residing in low-income areas or areas that 
experience, or are at risk of experiencing, multiple 
exposures to qualified environmental stressors. 
‘‘(2) QUALIFIED ENVIRONMENTAL STRESSOR.— 
The term ‘qualified environmental stressor’ means, 
with respect to an area, a contamination of the air, 
water, soil, or food with respect to such area or a 
change relative to historical norms of the weather 
conditions of such area, including— 
‘‘(A) toxic pollutants (such as lead, pes-
ticides, or fine particulate matter) in air, soil, 
food, or water, 
‘‘(B) high rates of asthma prevalence and 
incidence, and 
‘‘(C) such other adverse human health or 
environmental effects as are identified by the 
Secretary. 
‘‘(c) ELIGIBLE EDUCATIONAL INSTITUTION.—For 
purposes of this section, the term ‘eligible educational in-
stitution’ means an institution of higher education (as 
such term is defined in section 101 or 102(c) of the High-
1575 
er Education Act of 1965) that is eligible to participate 
in a program under title IV of such Act. 
‘‘(d) APPLICABLE PERCENTAGE.—For purposes of 
this section, the term ‘applicable percentage’ means— 
‘‘(1) in the case of a program involving material 
participation of faculty and students of an institu-
tion described in section 371(a) of the Higher Edu-
cation Act of 1965, 30 percent, and 
‘‘(2) in all other cases, 20 percent. 
‘‘(e) CREDIT ALLOCATION.— 
‘‘(1) ALLOCATION.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
allocate credit dollar amounts under this section 
to eligible educational institutions, for qualified 
environmental justice programs, that— 
‘‘(i) submit applications at such time 
and in such manner as the Secretary may 
provide, and 
‘‘(ii) are selected by the Secretary 
under subparagraph (B). 
‘‘(B) SELECTION
CRITERIA.—The Sec-
retary shall select applications on the basis of 
the following criteria: 
‘‘(i) The extent of participation of fac-
ulty and students of an institution de-
1576 
scribed in section 371(a) of the Higher 
Education Act of 1965. 
‘‘(ii) The extent of the expected effect 
on the health or economic outcomes of in-
dividuals residing in areas within the 
United States that are low-income areas or 
areas that experience, or are at risk of ex-
periencing, multiple exposures to qualified 
environmental stressors. 
‘‘(iii) The creation or significant ex-
pansion of qualified environmental justice 
programs. 
‘‘(2) LIMITATIONS.— 
‘‘(A) IN
GENERAL.—The amount of the 
credit determined under this section for any 
taxable year to any eligible educational institu-
tion for any qualified environmental justice pro-
gram shall not exceed the excess of— 
‘‘(i) the credit dollar amount allocated 
to such institution for such program under 
this subsection, over 
‘‘(ii) the credits previously claimed by 
such institution for such program under 
this section.
1577 
‘‘(B) 
FIVE-YEAR
LIMITATION.—No 
amounts paid or incurred after the 5-year pe-
riod beginning on the date a credit dollar 
amount is allocated to an eligible educational 
institution for a qualified environmental justice 
program shall be taken into account under sub-
section (a) with respect to such institution for 
such program. 
‘‘(C) ALLOCATION LIMITATION.—The total 
amount of credits that may be allocated under 
the program shall not exceed— 
‘‘(i) $1,000,000,000 for each of tax-
able years 2022 through 2031, and 
‘‘(ii) $0 for each subsequent year. 
‘‘(D) CARRYOVER
OF
UNUSED
LIMITA-
TION.—If the annual credit limitation for any 
calendar year exceeds the aggregate amount 
designated for such year under this subsection, 
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 2036. 
‘‘(f) REQUIREMENTS.— 
‘‘(1) IN GENERAL.—An eligible educational in-
stitution that has been allocated credit dollar
1578 
amounts under this section for a qualified environ-
mental justice project for a taxable year shall— 
‘‘(A) make publicly available the applica-
tion submitted to the Secretary under sub-
section (e) with respect to such project, and 
‘‘(B) submit an annual report to the Sec-
retary that describes the amounts paid or in-
curred for, and expected impact of, such 
project. 
‘‘(2) FAILURE TO COMPLY.—In the case of an 
eligible educations institution that has failed to com-
ply with the requirements of this subsection, the 
credit dollar amount allocated to such institution 
under this section is deemed to be $0. 
‘‘(g) PUBLIC DISCLOSURE.—The Secretary, upon 
making an allocation of credit dollar amounts under this 
section, shall publicly disclose— 
‘‘(1) the identity of the eligible educational in-
stitution receiving the allocation, and 
‘‘(2) the amount of such allocation.’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 6211(b)(4)(A), as amended by the 
preceding provisions of this Act, is amended by in-
serting ‘‘36G,’’ after ‘‘36F,’’.
1579 
(2) Paragraph (2) of section 1324(b) of title 
31, United States Code, as amended by the pre-
ceding provisions of this Act, is amended by insert-
ing ‘‘36G,’’ after ‘‘36F,’’. 
(d) CLERICAL AMENDMENT.—The table of sections 
for subpart C of part IV of subchapter A of chapter 1, 
as amended by the preceding provisions of this Act, is 
amended by inserting after the item relating to section 
36F the following new item: 
‘‘Sec. 36G. Qualified environmental justice programs.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on January 1, 2022. 
PART 7—SUPERFUND 
SEC. 136701. REINSTATEMENT OF SUPERFUND. 
(a) HAZARDOUS SUBSTANCE SUPERFUND FINANC-
ING RATE.— 
(1) EXTENSION.—Section 4611(e) is amended 
to read as follows: 
‘‘(e) APPLICATION
OF
HAZARDOUS
SUBSTANCE 
SUPERFUND FINANCING RATE.—The Hazardous Sub-
stance Superfund financing rate under this section shall 
apply after June 30, 2022.’’. 
(2) ADJUSTMENT FOR INFLATION.— 
(A) Section 4611(c)(2)(A) is amended by 
striking ‘‘9.7 cents’’ and inserting ‘‘16.4 cents’’.
1580 
(B) Section 4611(c) is amended by adding 
at the end the following: 
‘‘(3) ADJUSTMENT FOR INFLATION.— 
‘‘(A) IN GENERAL.—In the case of a year 
beginning after 2022, the amount in paragraph 
(2)(A) shall be increased by an amount equal 
to— 
‘‘(i) such amount, multiplied by 
‘‘(ii) the cost-of-living adjustment de-
termined under section 1(f)(3) for the cal-
endar year, determined by substituting 
‘calendar year 2021’ for ‘calendar year 
2016’ in subparagraph (A)(ii) thereof. 
‘‘(B) ROUNDING.—If any amount as ad-
justed under subparagraph (A) is not a multiple 
of $0.01, such amount shall be rounded to the 
next lowest multiple of $0.01.’’. 
(b) 
AUTHORITY
FOR
ADVANCES.—Section 
9507(d)(3)(B) is amended by striking ‘‘December 31, 
1995’’ and inserting ‘‘December 31, 2031’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on July 1, 2022.
1581 
PART 8—INCENTIVES FOR CLEAN ELECTRICITY 
AND CLEAN TRANSPORTATION 
SEC. 136801. CLEAN ELECTRICITY PRODUCTION CREDIT. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 is amended by adding at the end 
the following new section: 
‘‘SEC. 45BB. CLEAN ELECTRICITY PRODUCTION CREDIT. 
‘‘(a) AMOUNT OF CREDIT.— 
‘‘(1) IN GENERAL.—For purposes of section 38, 
the clean electricity production credit for any taxable 
year is an amount equal to the product of— 
‘‘(A) the kilowatt hours of electricity— 
‘‘(i) produced by the taxpayer at a 
qualified facility, and 
‘‘(ii)(I) sold by the taxpayer to an un-
related person during the taxable year, or 
‘‘(II) in the case of a qualified facility 
which is equipped with a metering device 
which is owned and operated by an unre-
lated person, sold, consumed, or stored by 
the taxpayer during the taxable year, mul-
tiplied by 
‘‘(B) the applicable amount with respect to 
such qualified facility. 
‘‘(2) APPLICABLE AMOUNT.—
1582 
‘‘(A) BASE
AMOUNT.—Subject to sub-
section (g)(7), in the case of any qualified facil-
ity which is not described in clause (i) of sub-
paragraph (B) and does not satisfy the require-
ments described in clause (ii) of such subpara-
graph, the applicable amount shall be 0.3 cents. 
‘‘(B) ALTERNATIVE AMOUNT.—Subject to 
subsection (g)(7), in the case of any qualified 
facility— 
‘‘(i) with a maximum net output of 
less than 1 megawatt, or 
‘‘(ii) which— 
‘‘(I) satisfies the requirements 
under paragraph (9) of subsection (g), 
and 
‘‘(II) with respect to the con-
struction of such facility, satisfies the 
requirements under paragraph (10) of 
subsection (g), 
the applicable amount shall be 1.5 cents. 
‘‘(b) QUALIFIED FACILITY.— 
‘‘(1) IN GENERAL.— 
‘‘(A) DEFINITION.—Subject to subpara-
graphs (B), (C), and (D), the term ‘qualified
1583 
facility’ means a facility owned by the tax-
payer— 
‘‘(i) which is used for the generation 
of electricity, 
‘‘(ii) the construction of which begins 
after December 31, 2026, and 
‘‘(iii) for which the greenhouse gas 
emissions rate (as determined under para-
graph (2)) is not greater than zero. 
‘‘(B) 10-YEAR PRODUCTION CREDIT.—For 
purposes of this section, a facility shall only be 
treated as a qualified facility during the 10-year 
period beginning on the date the facility was 
originally placed in service. 
‘‘(C) EXPANSION
OF
FACILITY; INCRE-
MENTAL PRODUCTION.—The term ‘qualified fa-
cility’ shall include either of the following in 
connection with a facility described in subpara-
graph (A) (without regard to clause (ii) of such 
subparagraph) the construction of which begins 
before January 1, 2027, but only to the extent 
of the increased amount of electricity produced 
at the facility by reason of the following: 
‘‘(i) A new unit the construction of 
which begins after December 31, 2026.
1584 
‘‘(ii) Any additions of capacity the 
construction of which begins after Decem-
ber 31, 2026. 
‘‘(D) COORDINATION WITH OTHER CRED-
ITS.—The term ‘qualified facility’ shall not in-
clude any facility for which a credit determined 
under section 45, 45J, 45Q, 48, 48A, or 48F 
is allowed under section 38 for the taxable year 
or any prior taxable year. 
‘‘(2) GREENHOUSE GAS EMISSIONS RATE.— 
‘‘(A) IN GENERAL.—For purposes of this 
section, the term ‘greenhouse gas emissions 
rate’ means the amount of greenhouse gases 
emitted into the atmosphere by a facility in the 
production of electricity, expressed as grams of 
CO2e per KWh. 
‘‘(B) FUEL
COMBUSTION
AND
GASIFI-
CATION.—In the case of a facility which pro-
duces electricity through combustion or gasifi-
cation, the greenhouse gas emissions rate for 
such facility shall be equal to the net rate of 
greenhouse gases emitted into the atmosphere 
by such facility (taking into account lifecycle 
greenhouse gas emissions, as described in sec-
tion 211(o)(1)(H) of the Clean Air Act (42