as oil refining and production of fertilizer, cement, 
and ethanol, can help protect the environment while 
improving the economy and national security of the 
United States. 
(2) The United States is a world leader in the 
field of carbon dioxide capture and long-term stor-
age, as well as the beneficial use of carbon dioxide 
in enhanced oil recovery operations, with many man-
ufacturers and licensors of carbon dioxide capture 
technology based in the United States. 
(3) While the prospects for large-scale carbon 
capture in the United States are promising, costs re-
main relatively high. Lowering the financing costs 
for carbon dioxide capture projects would accelerate 
the deployment of this technology, and if the cap-
tured carbon dioxide is subsequently sold for indus-
trial use, such as for use in enhanced oil recovery 
operations, the economic prospects are further im-
proved. 
(4) Since 1968, tax-exempt private activity 
bonds have been used to provide access to lower-cost 
financing for private businesses that are purchasing 
new capital equipment for certain specified environ-
mental facilities, including facilities that reduce, re-
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cycle, or dispose of waste, pollutants, and hazardous 
substances. 
(5) Allowing tax-exempt financing for the pur-
chase of capital equipment that is used to capture 
carbon dioxide will reduce the costs of developing 
carbon dioxide capture projects, accelerate their de-
ployment, and, in conjunction with carbon dioxide 
utilization and long-term storage, help the United 
States meet critical environmental, economic, and 
national security goals. 
SEC. 3. CARBON DIOXIDE CAPTURE FACILITIES. 
(a) IN GENERAL.—Section 142 of the Internal Rev-
enue Code of 1986 is amended— 
(1) in subsection (a)— 
(A) in paragraph (14), by striking ‘‘or’’ at 
the end, 
(B) in paragraph (15), by striking the pe-
riod at the end and inserting ‘‘, or’’, and 
(C) by adding at the end the following new 
paragraph: 
‘‘(16) qualified carbon dioxide capture facili-
ties.’’, and 
(2) by adding at the end the following new sub-
section: 
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‘‘(n) QUALIFIED CARBON DIOXIDE CAPTURE FACIL-
ITY.— 
‘‘(1) IN GENERAL.—For purposes of subsection 
(a)(16), the term ‘qualified carbon dioxide capture 
facility’ means the eligible components of an indus-
trial carbon dioxide facility. 
‘‘(2) DEFINITIONS.—In this subsection: 
‘‘(A) ELIGIBLE COMPONENT.— 
‘‘(i) IN GENERAL.—The term ‘eligible 
component’ means any equipment installed 
in an industrial carbon dioxide facility that 
satisfies the requirements under paragraph 
(3) and is— 
‘‘(I) used for the purpose of cap-
ture, treatment and purification, com-
pression, transportation, or on-site 
storage of carbon dioxide produced by 
the industrial carbon dioxide facility, 
or 
‘‘(II) integral or functionally re-
lated and subordinate to a process de-
scribed in section 48B(c)(2), deter-
mined by substituting ‘carbon dioxide’ 
for ‘carbon monoxide’ in such section. 
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‘‘(B) INDUSTRIAL CARBON DIOXIDE FACIL-
ITY.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (ii), the term ‘industrial 
carbon dioxide facility’ means a facility 
that emits carbon dioxide (including from 
any fugitive emissions source) that is cre-
ated as a result of any of the following 
processes: 
‘‘(I) Fuel combustion. 
‘‘(II) Gasification. 
‘‘(III) Bioindustrial. 
‘‘(IV) Fermentation. 
‘‘(V) Any manufacturing industry 
described in section 48B(c)(7). 
‘‘(ii) EXCEPTIONS.—For purposes of 
clause (i), an industrial carbon dioxide fa-
cility shall not include— 
‘‘(I) any geological gas facility 
(as defined in clause (iii)), or 
‘‘(II) any air separation unit 
that— 
‘‘(aa) does not qualify as 
gasification equipment, or 
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‘‘(bb) is not a necessary 
component of an oxy-fuel com-
bustion process. 
‘‘(iii) GEOLOGICAL
GAS
FACILITY.— 
The term ‘geological gas facility’ means a 
facility that— 
‘‘(I) produces a raw product con-
sisting of gas or mixed gas and liquid 
from a geological formation, 
‘‘(II) transports or removes im-
purities from such product, or 
‘‘(III) separates such product 
into its constituent parts. 
‘‘(3) CAPTURE AND STORAGE REQUIREMENT.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), the eligible components of an indus-
trial carbon dioxide facility shall have a capture 
and storage percentage (as determined under 
subparagraph (C)) that is equal to or greater 
than 65 percent. 
‘‘(B) EXCEPTION.—In the case of an in-
dustrial carbon dioxide facility with a capture 
and storage percentage that is less than 65 per-
cent, the percentage of the cost of the eligible 
components installed in such facility that may 
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be financed with tax-exempt bonds may not be 
greater than the capture and storage percent-
age. 
‘‘(C) CAPTURE
AND
STORAGE
PERCENT-
AGE.— 
‘‘(i) IN GENERAL.—Subject to clause 
(ii), the capture and storage percentage 
shall be an amount, expressed as a per-
centage, equal to the quotient of— 
‘‘(I) the total metric tons of car-
bon dioxide annually captured, trans-
ported, and injected into— 
‘‘(aa) a facility for geologic 
storage, or 
‘‘(bb) an enhanced oil or gas 
recovery well followed by geologic 
storage, divided by 
‘‘(II) the total metric tons of car-
bon dioxide which would otherwise be 
released into the atmosphere each 
year as industrial emission of green-
house gas if the eligible components 
were not installed in the industrial 
carbon dioxide facility. 
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‘‘(ii) LIMITED APPLICATION OF ELIGI-
BLE COMPONENTS.—In the case of eligible 
components that are designed to capture 
carbon dioxide solely from specific sources 
of emissions or portions thereof within an 
industrial carbon dioxide facility, the cap-
ture and storage percentage under this 
subparagraph shall be determined based 
only on such specific sources of emissions 
or portions thereof.’’. 
(b) VOLUME CAP.—Section 146(g)(4) of such Code 
is amended by striking ‘‘paragraph (11) of section 142(a) 
(relating to high-speed intercity rail facilities)’’ and insert-
ing ‘‘paragraph (11) or (16) of section 142(a)’’. 
(c) CLARIFICATION OF PRIVATE BUSINESS USE.— 
Section 141(b)(6) of such Code is amended by adding at 
the end the following new subparagraph: 
‘‘(C) CLARIFICATION RELATING TO QUALI-
FIED CARBON DIOXIDE CAPTURE FACILITIES.— 
For purposes of this subsection, the sale of car-
bon dioxide produced by a qualified carbon di-
oxide capture facility (as defined in section 
142(n)) which is owned by a governmental unit 
shall not constitute private business use.’’. 
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(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to obligations issued after Decem-
ber 31, 2017. 
Æ 
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