SCALE Act
Bill: H.R.1992 | Sponsor: Rep. Veasey, Marc A. (D-TX)
Policy area: Energy

Summary:
Storing CO2 And Lowering Emissions Act or the SCALE Act
This bill establishes programs within the Department of Energy that provide financial support and incentives to develop infrastructure for carbon dioxide capture, transport, utilization, and storage.

To require the Secretary of Energy to establish programs for carbon 
  dioxide capture, transport, utilization, and storage, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Storing CO2 and 
Lowering Emissions Act'' or the ``SCALE Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
                 TITLE I--UTILIZATION OF CARBON OXIDES

Sec. 101. Carbon utilization program.
              TITLE II--TRANSPORTATION OF CAPTURED CARBON

Sec. 201. Carbon capture technology program.
Sec. 202. Carbon dioxide transportation infrastructure finance and 
                            innovation.
             TITLE III--GEOLOGIC STORAGE OF CAPTURED CARBON

Sec. 301. Carbon storage validation and testing.
Sec. 302. Secure geologic storage permitting.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) the industrial sector is integral to the economy of the 
        United States--
                    (A) providing millions of jobs and essential 
                products; and
                    (B) demonstrating global leadership in 
                manufacturing and innovation;
            (2) carbon capture and storage technologies are necessary 
        for reducing hard-to-abate emissions from the industrial 
        sector, which emits nearly 25 percent of carbon dioxide 
        emissions in the United States;
            (3) carbon removal and storage technologies, including 
        direct air capture, must be deployed at large-scale in the 
        coming decades to remove carbon dioxide directly from the 
        atmosphere;
            (4) large-scale deployment of carbon capture, removal, 
        utilization, transport, and storage--
                    (A) is critical for achieving mid-century climate 
                goals; and
                    (B) will drive regional economic development, 
                technological innovation, and high-wage employment;
            (5) carbon capture, removal, and utilization technologies 
        require a backbone system of shared carbon dioxide transport 
        and storage infrastructure to enable large-scale deployment, 
        realize economies of scale, and create an interconnected carbon 
        management market;
            (6) carbon dioxide transport infrastructure and permanent 
        geological storage are proven and safe technologies with 
        existing Federal and State regulatory frameworks;
            (7) carbon dioxide transport and storage infrastructure 
        share similar barriers to deployment previously faced by other 
        types of critical national infrastructure, such as high capital 
        costs and chicken-and-egg challenges, that require Federal and 
        State support, in combination with private investment, to be 
        overcome; and
            (8) each State should take into consideration, with respect 
        to new carbon dioxide transportation infrastructure--
                    (A) qualifying the infrastructure as pollution 
                control devices under applicable laws (including 
                regulations) of the State; and
                    (B) establishing a waiver of ad valorem and 
                property taxes for the infrastructure for a period of 
                not less than 10 years.

                 TITLE I--UTILIZATION OF CARBON OXIDES

SEC. 101. CARBON UTILIZATION PROGRAM.

    Section 969A of the Energy Policy Act of 2005 (42 U.S.C. 16298a) is 
amended--
            (1) in subsection (a)--
                    (A) by redesignating paragraphs (3) and (4) as 
                paragraphs (4) and (5), respectively; and
                    (B) by inserting after paragraph (2) the following:
            ``(3) to develop or obtain, in coordination with other 
        applicable Federal agencies and standard-setting organizations, 
        standards and certifications, as appropriate, to facilitate the 
        commercialization of the products and technologies described in 
        paragraph (2);'';
            (2) in subsection (b)--
                    (A) by redesignating paragraph (2) as paragraph 
                (3);
                    (B) by inserting after paragraph (1) the following:
            ``(2) Grant program.--
                    ``(A) In general.--Not later than 1 year after the 
                date of enactment of the Storing CO2 and Lowering 
                Emissions Act, the Secretary shall establish a program 
                to provide grants to eligible entities to use in 
                accordance with subparagraph (D).
                    ``(B) Eligible entities.--To be eligible to receive 
                a grant under this paragraph, an entity shall be--
                            ``(i) a State;
                            ``(ii) a unit of local government; or
                            ``(iii) a public utility or agency.
                    ``(C) Applications.--Eligible entities desiring a 
                grant under this paragraph shall submit to the 
                Secretary an application at such time, in such manner, 
                and containing such information as the Secretary 
                determines to be appropriate.
                    ``(D) Use of funds.--An eligible entity shall use a 
                grant received under this paragraph to procure and use 
                commercial or industrial products that--
                            ``(i) use or are derived from anthropogenic 
                        carbon oxides; and
                            ``(ii) demonstrate significant net 
                        reductions in lifecycle greenhouse gas 
                        emissions compared to incumbent technologies, 
                        processes, and products.''; and
                    (C) in paragraph (3) (as so redesignated), by 
                striking ``paragraph (1)'' and inserting ``this 
                subsection''; and
            (3) in subsection (d), by striking paragraphs (1) through 
        (5) and inserting the following:
            ``(1) $64,000,000 for fiscal year 2021;
            ``(2) $65,250,000 for fiscal year 2022;
            ``(3) $66,562,500 for fiscal year 2023;
            ``(4) $67,940,625 for fiscal year 2024; and
            ``(5) $69,387,656 for fiscal year 2025.''.

              TITLE II--TRANSPORTATION OF CAPTURED CARBON

SEC. 201. CARBON CAPTURE TECHNOLOGY PROGRAM.

    Section 962 of the Energy Policy Act of 2005 (42 U.S.C. 16292) is 
amended--
            (1) in subsection (b)(2)--
                    (A) in subparagraph (C), by striking ``and'' at the 
                end;
                    (B) in subparagraph (D), by striking ``program.'' 
                and inserting ``program for carbon capture 
                technologies; and''; and
                    (C) by adding at the end the following:
                    ``(E) a front-end engineering and design program 
                for carbon dioxide transport infrastructure necessary 
                to enable deployment of carbon capture, utilization, 
                and storage technologies.''; and
            (2) in subsection (d)(1)--
                    (A) in subparagraph (C)(ii), by striking ``and'' at 
                the end;
                    (B) in subparagraph (D), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following:
                    ``(E) for activities under the front-end 
                engineering and design program described in subsection 
                (b)(2)(E), $20,000,000 for each of fiscal years 2022 
                through 2025.''.

SEC. 202. CARBON DIOXIDE TRANSPORTATION INFRASTRUCTURE FINANCE AND 
              INNOVATION.

    (a) In General.--Title IX of the Energy Policy Act of 2005 (42 
U.S.C. 16181 et seq.) is amended by adding at the end the following:

``Subtitle J--Carbon Dioxide Transportation Infrastructure Finance and 
                               Innovation

``SEC. 999A. DEFINITIONS.

    ``In this subtitle:
            ``(1) CIFIA program.--The term `CIFIA program' means the 
        carbon dioxide transportation infrastructure finance and 
        innovation program established under section 999B(a).
            ``(2) Common carrier.--The term `common carrier' means a 
        transportation infrastructure operator or owner that--
                    ``(A) publishes a publicly available tariff 
                containing the just and reasonable rates, terms, and 
                conditions of nondiscriminatory service; and
                    ``(B) holds itself out to provide transportation 
                services to the public for a fee.
            ``(3) Contingent commitment.--The term `contingent 
        commitment' means a commitment to obligate funds from future 
        available budget authority that is--
                    ``(A) contingent on those funds being made 
                available in law at a future date; and
                    ``(B) not an obligation of the Federal Government.
            ``(4) Eligible project costs.--The term `eligible project 
        costs' means amounts substantially all of which are paid by, or 
        for the account of, an obligor in connection with a project, 
        including--
                    ``(A) the cost of--
                            ``(i) development-phase activities, 
                        including planning, feasibility analysis, 
                        revenue forecasting, environmental review, 
                        permitting, preliminary engineering and design 
                        work, and other preconstruction activities;
                            ``(ii) construction, reconstruction, 
                        rehabilitation, replacement, and acquisition of 
                        real property (including land relating to the 
                        project and improvements to land), 
                        environmental mitigation, construction 
                        contingencies, and acquisition and installation 
                        of equipment (including labor); and
                            ``(iii) capitalized interest necessary to 
                        meet market requirements, reasonably required 
                        reserve funds, capital issuance expenses, and 
                        other carrying costs during construction; and
                    ``(B) transaction costs associated with financing 
                the project, including--
                            ``(i) the cost of legal counsel and 
                        technical consultants; and
                            ``(ii) any subsidy amount paid in 
                        accordance with section 999B(c)(3)(B)(ii) or 
                        section 999C(b)(6)(B)(ii).
            ``(5) Federal credit instrument.--The term `Federal credit 
        instrument' means a secured loan or loan guarantee authorized 
        to be provided under the CIFIA program with respect to a 
        project.
            ``(6) Lender.--The term `lender' means any non-Federal 
        qualified institutional buyer (as defined in section 
        230.144A(a) of title 17, Code of Federal Regulations (or a 
        successor regulation), commonly known as Rule 144A(a) of the 
        Securities and Exchange Commission and issued under the 
        Securities Act of 1933 (15 U.S.C. 77a et seq.)), including--
                    ``(A) a qualified retirement plan (as defined in 
                section 4974(c) of the Internal Revenue Code of 1986) 
                that is a qualified institutional buyer; and
                    ``(B) a governmental plan (as defined in section 
                414(d) of the Internal Revenue Code of 1986) that is a 
                qualified institutional buyer.
            ``(7) Letter of interest.--The term `letter of interest' 
        means a letter submitted by a potential applicant prior to an 
        application for credit assistance in a format prescribed by the 
        Secretary on the website of the CIFIA program that--
                    ``(A) describes the project and the location, 
                purpose, and cost of the project;
                    ``(B) outlines the proposed financial plan, 
                including the requested credit and grant assistance and 
                the proposed obligor;
                    ``(C) provides a status of environmental review; 
                and
                    ``(D) provides information regarding satisfaction 
                of other eligibility requirements of the CIFIA program.
            ``(8) Loan guarantee.--The term `loan guarantee' means any 
        guarantee or other pledge by the Secretary to pay all or part 
        of the principal of, and interest on, a loan or other debt 
        obligation issued by an obligor and funded by a lender.
            ``(9) Master credit agreement.--The term `master credit 
        agreement' means a conditional agreement that--
                    ``(A) is for the purpose of extending credit 
                assistance for--
                            ``(i) a project of high priority under 
                        section 999B(c)(3)(A); or
                            ``(ii) a project covered under section 
                        999B(c)(3)(B);
                    ``(B) does not provide for a current obligation of 
                Federal funds; and
                    ``(C) would--
                            ``(i) make a contingent commitment of a 
                        Federal credit instrument or grant at a future 
                        date, subject to--
                                    ``(I) the availability of future 
                                funds being made available to carry out 
                                the CIFIA program; and
                                    ``(II) the satisfaction of all 
                                conditions for the provision of credit 
                                assistance under the CIFIA program, 
                                including section 999C(b);
                            ``(ii) establish the maximum amounts and 
                        general terms and conditions of the Federal 
                        credit instruments or grants;
                            ``(iii) identify the 1 or more revenue 
                        sources that will secure the repayment of the 
                        Federal credit instruments;
                            ``(iv) provide for the obligation of funds 
                        for the Federal credit instruments or grants 
                        after all requirements have been met for the 
                        projects subject to the agreement, including--
                                    ``(I) compliance with all 
                                applicable requirements specified under 
                                the CIFIA program, including sections 
                                999B(d) and 999C(b)(1); and
                                    ``(II) the availability of funds to 
                                carry out the CIFIA program; and
                            ``(v) require that contingent commitments 
                        shall result in a financial close and 
                        obligation of credit or grant assistance by not 
                        later than 4 years after the date of entry into 
                        the agreement or release of the commitment, as 
                        applicable, unless otherwise extended by the 
                        Secretary.
            ``(10) Obligor.--The term `obligor' means a corporation, 
        partnership, joint venture, trust, governmental entity, agency, 
        or instrumentality, or other entity that is primarily liable 
        for payment of the principal of, or interest on, a Federal 
        credit instrument.
            ``(11) Produced in the united states.--The term `produced 
        in the United States', with respect to iron and steel, means 
        that all manufacturing processes for the iron and steel, 
        including the application of any coating, occurs within the 
        United States.
            ``(12) Project.--The term `project' means a project for 
        common carrier carbon dioxide transportation infrastructure or 
        associated equipment, including pipeline, shipping, rail, or 
        other transportation infrastructure and associated equipment, 
        that will transport or handle carbon dioxide captured from 
        anthropogenic sources or ambient air, as the Secretary 
        determines to be appropriate.
            ``(13) Project obligation.--The term `project obligation' 
        means any note, bond, debenture, or other debt obligation 
        issued by an obligor in connection with the financing of a 
        project, other than a Federal credit instrument.
            ``(14) Secured loan.--The term `secured loan' means a 
        direct loan or other debt obligation issued by an obligor and 
        funded by the Secretary in connection with the financing of a 
        project under section 999C.
            ``(15) Subsidy amount.--The term `subsidy amount' means the 
        amount of budget authority sufficient to cover the estimated 
        long-term cost to the Federal Government of a Federal credit 
        instrument--
                    ``(A) calculated on a net present value basis; and
                    ``(B) excluding administrative costs and any 
                incidental effects on governmental receipts or outlays 
                in accordance with the Federal Credit Reform Act of 
                1990 (2 U.S.C. 661 et seq.).
            ``(16) Substantial completion.--The term `substantial 
        completion', with respect to a project, means the date--
                    ``(A) on which the project commences transportation 
                of carbon dioxide; or
                    ``(B) of a comparable event to the event described 
                in subparagraph (A), as determined by the Secretary and 
                specified in the project credit agreement.

``SEC. 999B. DETERMINATION OF ELIGIBILITY AND PROJECT SELECTION.

    ``(a) Establishment of Program.--The Secretary shall establish and 
carry out a carbon dioxide transportation infrastructure finance and 
innovation program, under which the Secretary shall provide for 
eligible projects in accordance with this subtitle--
            ``(1) a Federal credit instrument under section 999C;
            ``(2) a grant under section 999D; or
            ``(3) both a Federal credit instrument and a grant.
    ``(b) Eligibility.--
            ``(1) In general.--A project shall be eligible to receive a 
        Federal credit instrument or a grant under the CIFIA program 
        if--
                    ``(A) the entity proposing to carry out the project 
                submits a letter of interest prior to submission of an 
                application under paragraph (3) for the project; and
                    ``(B) the project meets the criteria described in 
                this subsection.
            ``(2) Creditworthiness.--
                    ``(A) In general.--Each project and obligor that 
                receives a Federal credit instrument or a grant under 
                the CIFIA program shall be creditworthy, such that 
                there exists a reasonable prospect of repayment of the 
                principal and interest on the Federal credit 
                instrument, as determined by the Secretary under 
                subparagraph (B).
                    ``(B) Reasonable prospect of repayment.--The 
                Secretary shall base a determination of whether there 
                is a reasonable prospect of repayment under 
                subparagraph (A) on a comprehensive evaluation of 
                whether the obligor has a reasonable prospect of 
                repaying the Federal credit instrument for the eligible 
                project, including evaluation of--
                            ``(i) the strength of the contractual terms 
                        of an eligible project (if available for the 
                        applicable market segment);
                            ``(ii) the forecast of noncontractual cash 
                        flows supported by market projections from 
                        reputable sources, as determined by the 
                        Secretary, and cash sweeps or other structural 
                        enhancements;
                            ``(iii) the projected financial strength of 
                        the obligor--
                                    ``(I) at the time of loan close; 
                                and
                                    ``(II) throughout the loan term, 
                                including after the project is 
                                completed;
                            ``(iv) the financial strength of the 
                        investors and strategic partners of the 
                        obligor, if applicable; and
                            ``(v) other financial metrics and analyses 
                        that are relied on by the private lending 
                        community and nationally recognized credit 
                        rating agencies, as determined appropriate by 
                        the Secretary.
            ``(3) Applications.--To be eligible for assistance under 
        the CIFIA program, an obligor shall submit to the Secretary a 
        project application at such time, in such manner, and 
        containing such information as the Secretary determines to be 
        appropriate.
            ``(4) Eligible project costs.--A project under the CIFIA 
        program shall have eligible project costs that are reasonably 
        anticipated to equal or exceed $100,000,000.
            ``(5) Revenue sources.--The applicable Federal credit 
        instrument shall be repayable, in whole or in part, from--
                    ``(A) user fees;
                    ``(B) payments owing to the obligor under a public-
                private partnership; or
                    ``(C) other revenue sources that also secure or 
                fund the project obligations.
            ``(6) Obligor will be identified later.--A State, local 
        government, agency, or instrumentality of a State or local 
        government, or a public authority, may submit to the Secretary 
        an application under paragraph (3), under which a private party 
        to a public-private partnership will be--
                    ``(A) the obligor; and
                    ``(B) identified at a later date through completion 
                of a procurement and selection of the private party.
            ``(7) Beneficial effects.--The Secretary shall determine 
        that financial assistance for each project under the CIFIA 
        program will--
                    ``(A) attract public or private investment for the 
                project;
                    ``(B) enable the project to proceed at an earlier 
                date than the project would otherwise be able to 
                proceed or reduce the lifecycle costs (including debt 
                service costs) of the project; or
                    ``(C) enable the transportation of carbon dioxide 
                captured from anthropogenic sources or ambient air.
            ``(8) Project readiness.--To be eligible for assistance 
        under the CIFIA program, the applicant shall demonstrate a 
        reasonable expectation that the contracting process for 
        construction of the project can commence by not later than 90 
        days after the date on which a Federal credit instrument or 
        grant is obligated for the project under the CIFIA program.
    ``(c) Selection Among Eligible Projects.--
            ``(1) Establishment of application process.--The Secretary 
        shall establish an application process under which projects 
        that are eligible to receive assistance under subsection (b) 
        may--
                    ``(A) receive credit assistance on terms acceptable 
                to the Secretary, if adequate funds are available 
                (including any funds provided on behalf of an eligible 
                project under paragraph (3)(B)(ii)) to cover the 
                subsidy amount associated with the Federal credit 
                instrument; and
                    ``(B) receive grants under section 999D if--
                            ``(i) adequate funds are available to cover 
                        the amount of the grant; and
                            ``(ii) the Secretary determines that the 
                        project is eligible under subsection (b) of 
                        that section.
            ``(2) Priority.--In selecting projects to receive credit 
        assistance under subsection (b), the Secretary shall give 
        priority to projects that--
                    ``(A) are large-capacity, common carrier 
                infrastructure;
                    ``(B) have demonstrated demand for use of the 
                infrastructure by associated projects that capture 
                carbon dioxide from anthropogenic sources or ambient 
                air;
                    ``(C) enable geographical diversity in associated 
                projects that capture carbon dioxide from anthropogenic 
                sources or ambient air, with the goal of enabling 
                projects in all major carbon dioxide-emitting regions 
                of the United States; and
                    ``(D) are sited within, or adjacent to, existing 
                pipeline or other linear infrastructure corridors, in a 
                manner that minimizes environmental disturbance and 
                other siting concerns.
            ``(3) Master credit agreements.--
                    ``(A) Priority projects.--The Secretary may enter 
                into a master credit agreement for a project that the 
                Secretary determines--
                            ``(i) will likely be eligible for credit 
                        assistance under subsection (b), on obtaining--
                                    ``(I) additional commitments from 
                                associated carbon capture projects to 
                                use the project; or
                                    ``(II) all necessary permits and 
                                approvals; and
                            ``(ii) is a project of high priority, as 
                        determined in accordance with the criteria 
                        described in paragraph (2).
                    ``(B) Adequate funding not available.--If the 
                Secretary fully obligates funding to eligible projects 
                for a fiscal year and adequate funding is not available 
                to fund a Federal credit instrument, a project sponsor 
                (including a unit of State or local government) of an 
                eligible project may elect--
                            ``(i)(I) to enter into a master credit 
                        agreement in lieu of the Federal credit 
                        instrument; and
                            ``(II) to wait to execute a Federal credit 
                        instrument until the fiscal year for which 
                        additional funds are available to receive 
                        credit assistance; or
                            ``(ii) if the lack of adequate funding is 
                        solely with respect to amounts available for 
                        the subsidy amount, to pay the subsidy amount 
                        to fund the Federal credit instrument.
    ``(d) Federal Requirements.--
            ``(1) In general.--Nothing in this subtitle supersedes the 
        applicability of any other requirement under Federal law 
        (including regulations).
            ``(2) NEPA.--Federal credit assistance may only be provided 
        under this subtitle for a project that has received an 
        environmental categorical exclusion, a finding of no 
        significant impact, or a record of decision under the National 
        Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.).
    ``(e) Use of American Iron, Steel, and Manufactured Goods.--
            ``(1) In general.--Except as provided in paragraph (2), no 
        Federal credit instrument or grant provided under the CIFIA 
        program shall be made available for a project unless all iron, 
        steel, and manufactured goods used in the project are produced 
        in the United States.
            ``(2) Exceptions.--Paragraph (1) shall not apply in any 
        case or category of cases with respect to which the Secretary 
        determines that--
                    ``(A) the application would be inconsistent with 
                the public interest;
                    ``(B) iron, steel, or a relevant manufactured good 
                is not produced in the United States in sufficient and 
                reasonably available quantity, or of a satisfactory 
                quality; or
                    ``(C) the inclusion of iron, steel, or a 
                manufactured good produced in the United States will 
                increase the cost of the overall project by more than 
                25 percent.
            ``(3) Waivers.--If the Secretary receives a request for a 
        waiver under this subsection, the Secretary shall--
                    ``(A) make available to the public a copy of the 
                request, together with any information available to the 
                Secretary concerning the request--
                            ``(i) on an informal basis; and
                            ``(ii) by electronic means, including on 
                        the official public website of the Department;
                    ``(B) allow for informal public comment relating to 
                the request for not fewer than 15 days before making a 
                determination with respect to the request; and
                    ``(C) approve or disapprove the request by not 
                later than the date that is 120 days after the date of 
                receipt of the request.
            ``(4) Applicability.--This subsection shall be applied in 
        accordance with any applicable obligations of the United States 
        under international agreements.
    ``(f) Prevailing Rate of Wage.--
            ``(1) In general.--The Secretary shall ensure that each 
        laborer and mechanic employed by a contractor or subcontractor 
        for a project financed, in whole or in part, by a Federal 
        credit instrument or grant provided under the CIFIA program 
        shall be paid wages at rates not less than those prevailing on 
        the same type of work on similar construction projects in the 
        applicable locality, as determined by the Secretary of Labor 
        under subchapter IV of chapter 31 of part A of subtitle II of 
        title 40, United States Code (commonly referred to as the 
        `Davis-Bacon Act').
            ``(2) Authority of secretary of labor.--With respect to the 
        labor standards described in paragraph (1), the Secretary of 
        Labor shall have the authority and functions described in 
        Reorganization Plan Numbered 14 of 1950 (64 Stat. 1267; 5 
        U.S.C. App.) and section 3145 of title 40, United States Code.
    ``(g) Application Processing Procedures.--
            ``(1) Notice of complete application.--Not later than 30 
        days after the date of receipt of an application under this 
        section, the Secretary shall provide to the applicant a written 
        notice describing whether--
                    ``(A) the application is complete; or
                    ``(B) additional information or materials are 
                needed to complete the application.
            ``(2) Approval or denial of application.--Not later than 60 
        days after the date of issuance of a written notice under 
        paragraph (1), the Secretary shall provide to the applicant a 
        written notice informing the applicant whether the Secretary 
        has approved or disapproved the application.
    ``(h) Development-Phase Activities.--Any Federal credit instrument 
provided under the CIFIA program may be used to finance up to 100 
percent of the cost of development-phase activities, as described in 
section 999A(4)(A).

``SEC. 999C. SECURED LOANS.

    ``(a) Agreements.--
            ``(1) In general.--Subject to paragraph (2), the Secretary 
        may enter into agreements with 1 or more obligors to make 
        secured loans, the proceeds of which shall be used--
                    ``(A) to finance eligible project costs of any 
                project selected under section 999B;
                    ``(B) to refinance interim construction financing 
                of eligible project costs of any project selected under 
                section 999B; or
                    ``(C) to refinance long-term project obligations or 
                Federal credit instruments, if the refinancing provides 
                additional funding capacity for the completion, 
                enhancement, or expansion of any project that--
                            ``(i) is selected under section 999B; or
                            ``(ii) otherwise meets the requirements of 
                        that section.
            ``(2) Risk assessment.--Before entering into an agreement 
        under this subsection, the Secretary, in consultation with the 
        Director of the Office of Management and Budget, shall 
        determine an appropriate credit subsidy amount for each secured 
        loan, taking into account all relevant factors, including the 
        creditworthiness factors under section 999B(b)(2).
    ``(b) Terms and Limitations.--
            ``(1) In general.--A secured loan under this section with 
        respect to a project shall be on such terms and conditions and 
        contain such covenants, representations, warranties, and 
        requirements (including requirements for audits) as the 
        Secretary determines to be appropriate.
            ``(2) Maximum amount.--The amount of a secured loan under 
        this section shall not exceed an amount equal to 80 percent of 
        the reasonably anticipated eligible project costs.
            ``(3) Payment.--A secured loan under this section shall be 
        payable, in whole or in part, from--
                    ``(A) user fees;
                    ``(B) payments owing to the obligor under a public-
                private partnership; or
                    ``(C) other revenue sources that also secure or 
                fund the project obligations.
            ``(4) Interest rate.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the interest rate on a secured loan 
                under this section shall be not less than the yield on 
                United States Treasury securities of a similar maturity 
                to the maturity of the secured loan on the date of 
                execution of the loan agreement.
                    ``(B) Limited buydowns.--
                            ``(i) In general.--Subject to clause (ii), 
                        the Secretary may lower the interest rate of a 
                        secured loan under this section if the interest 
                        rate has increased between the period--
                                    ``(I) beginning on, as applicable--
                                            ``(aa) the date on which an 
                                        application acceptable to the 
                                        Secretary is submitted for the 
                                        applicable project; or
                                            ``(bb) the date on which 
                                        the Secretary entered into a 
                                        master credit agreement for the 
                                        applicable project; and
                                    ``(II) ending on the date on which 
                                the Secretary executes the Federal 
                                credit instrument for the applicable 
                                project.
                            ``(ii) Limitation.--The interest rate of a 
                        secured loan may not be lowered pursuant to 
                        clause (i) by more than the lower of--
                                    ``(I) 1\1/2\ percentage points (150 
                                basis points); and
                                    ``(II) an amount equal to the 
                                amount of the increase in the interest 
                                rate described in that clause.
            ``(5) Maturity date.--The final maturity date of the 
        secured loan shall be the earlier of--
                    ``(A) the date that is 35 years after the date of 
                substantial completion of the project; and
                    ``(B) if the useful life of the capital asset being 
                financed is of a lesser period, the date that is the 
                end of the useful life of the asset.
            ``(6) Nonsubordination.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the secured loan shall not be 
                subordinated to the claims of any holder of project 
                obligations in the event of bankruptcy, insolvency, or 
                liquidation of the obligor.
                    ``(B) Preexisting indenture.--
                            ``(i) In general.--The Secretary shall 
                        waive the requirement under subparagraph (A) 
                        for a public agency borrower that is financing 
                        ongoing capital programs and has outstanding 
                        senior bonds under a preexisting indenture, 
                        if--
                                    ``(I) the secured loan is rated in 
                                the A category or higher; and
                                    ``(II) the secured loan is secured 
                                and payable from pledged revenues not 
                                affected by project performance, such 
                                as a tax-backed revenue pledge or a 
                                system-backed pledge of project 
                                revenues.
                            ``(ii) Limitation.--If the Secretary waives 
                        the nonsubordination requirement under this 
                        subparagraph--
                                    ``(I) the maximum credit subsidy 
                                amount to be paid by the Federal 
                                Government shall be not more than 10 
                                percent of the principal amount of the 
                                secured loan; and
                                    ``(II) the obligor shall be 
                                responsible for paying the remainder of 
                                the subsidy amount, if any.
            ``(7) Fees.--The Secretary may collect a fee on or after 
        the date of the financial close of a Federal credit instrument 
        under this section in an amount equal to not more than 
        $1,000,000 to cover all or a portion of the costs to the 
        Federal Government of providing the Federal credit instrument.
            ``(8) Maximum federal involvement.--The total Federal 
        assistance provided for a project under the CIFIA program, 
        including any grant provided under section 999D, shall not 
        exceed an amount equal to 80 percent of the eligible project 
        costs.
    ``(c) Repayment.--
            ``(1) Schedule.--The Secretary shall establish a repayment 
        schedule for each secured loan under this section based on--
                    ``(A) the projected cash flow from project revenues 
                and other repayment sources; and
                    ``(B) the useful life of the project.
            ``(2) Commencement.--Scheduled loan repayments of principal 
        or interest on a secured loan under this section shall commence 
        not later than 5 years after the date of substantial completion 
        of the project.
            ``(3) Deferred payments.--
                    ``(A) In general.--If, at any time after the date 
                of substantial completion of a project, the project is 
                unable to generate sufficient revenues in excess of 
                reasonable and necessary operating expenses to pay the 
                scheduled loan repayments of principal and interest on 
                the secured loan, the Secretary may, subject to 
                subparagraph (C), allow the obligor to add unpaid 
                principal and interest to the outstanding balance of 
                the secured loan.
                    ``(B) Interest.--Any payment deferred under 
                subparagraph (A) shall--
                            ``(i) continue to accrue interest in 
                        accordance with subsection (b)(4) until fully 
                        repaid; and
                            ``(ii) be scheduled to be amortized over 
                        the remaining term of the loan.
                    ``(C) Criteria.--
                            ``(i) In general.--Any payment deferral 
                        under subparagraph (A) shall be contingent on 
                        the project meeting criteria established by the 
                        Secretary.
                            ``(ii) Repayment standards.--The criteria 
                        established pursuant to clause (i) shall 
                        include standards for the reasonable prospect 
                        of repayment.
            ``(4) Prepayment.--
                    ``(A) Use of excess revenues.--Any excess revenues 
                that remain after satisfying scheduled debt service 
                requirements on the project obligations and secured 
                loan and all deposit requirements under the terms of 
                any trust agreement, bond resolution, or similar 
                agreement securing project obligations may be applied 
                annually to prepay the secured loan, without penalty.
                    ``(B) Use of proceeds of refinancing.--A secured 
                loan may be prepaid at any time without penalty from 
                the proceeds of refinancing from non-Federal funding 
                sources.
    ``(d) Sale of Secured Loans.--
            ``(1) In general.--Subject to paragraph (2), as soon as 
        practicable after substantial completion of a project and after 
        notifying the obligor, the Secretary may sell to another entity 
        or reoffer into the capital markets a secured loan for the 
        project if the Secretary determines that the sale or reoffering 
        can be made on favorable terms.
            ``(2) Consent of obligor.--In making a sale or reoffering 
        under paragraph (1), the Secretary may not change any original 
        term or condition of the secured loan without the written 
        consent of the obligor.
    ``(e) Loan Guarantees.--
            ``(1) In general.--The Secretary may provide a loan 
        guarantee to a lender in lieu of making a secured loan under 
        this section if the Secretary determines that the budgetary 
        cost of the loan guarantee is substantially the same as, or 
        less than, that of a secured loan.
            ``(2) Terms.--The terms of a loan guarantee under paragraph 
        (1) shall be consistent with the terms required under this 
        section for a secured loan, except that the rate on the 
        guaranteed loan and any prepayment features shall be negotiated 
        between the obligor and the lender, with the consent of the 
        Secretary.

``SEC. 999D. FUTURE GROWTH GRANTS.

    ``(a) Establishment.--The Secretary may provide grants to pay a 
portion of the cost differential, with respect to any projected future 
increase in demand for carbon dioxide transportation by an 
infrastructure project described in subsection (b), between--
            ``(1) the cost of constructing the infrastructure asset 
        with the capacity to transport an increased flow rate of carbon 
        dioxide, as made practicable under the project; and
            ``(2) the cost of constructing the infrastructure asset 
        with the capacity to transport carbon dioxide at the flow rate 
        initially required, based on commitments for the use of the 
        asset.
    ``(b) Eligibility.--To be eligible to receive a grant under this 
section, an entity shall--
            ``(1) be eligible to receive credit assistance under the 
        CIFIA program;
            ``(2) carry out, or propose to carry out, a project for 
        large-capacity, common carrier infrastructure with a probable 
        future increase in demand for carbon dioxide transportation; 
        and
            ``(3) submit to the Secretary an application at such time, 
        in such manner, and containing such information as the 
        Secretary determines to be appropriate.
    ``(c) Use of Funds.--A grant provided under this section may be 
used only to pay the costs of any additional flow rate capacity of a 
carbon dioxide transportation infrastructure asset that the project 
sponsor demonstrates to the satisfaction of the Secretary can 
reasonably be expected to be used during the 20-year period beginning 
on the date of substantial completion of the project described in 
subsection (b)(2).
    ``(d) Maximum Amount.--The amount of a grant provided under this 
section may not exceed an amount equal to 80 percent of the cost of the 
additional capacity described in subsection (a).

``SEC. 999E. PROGRAM ADMINISTRATION.

    ``(a) Requirement.--The Secretary shall establish a uniform system 
to service the Federal credit instruments provided under the CIFIA 
program.
    ``(b) Fees.--The Secretary may collect fees on or after the date of 
the financial close of a Federal credit instrument provided under the 
CIFIA program, contingent on authority being provided in appropriations 
Acts, at a level that is sufficient to cover--
            ``(1) the costs of services of expert firms retained 
        pursuant to subsection (d); and
            ``(2) all or a portion of the costs to the Federal 
        Government of servicing the Federal credit instruments.
    ``(c) Servicer.--
            ``(1) In general.--The Secretary may appoint a financial 
        entity to assist the Secretary in servicing the Federal credit 
        instruments.
            ``(2) Duties.--A servicer appointed under paragraph (1) 
        shall act as the agent for the Secretary.
            ``(3) Fee.--A servicer appointed under paragraph (1) shall 
        receive a servicing fee, subject to approval by the Secretary.
    ``(d) Assistance From Expert Firms.--The Secretary may retain the 
services of expert firms, including counsel, in the field of municipal 
and project finance to assist in the underwriting and servicing of 
Federal credit instruments.
    ``(e) Expedited Processing.--The Secretary shall implement 
procedures and measures to economize the time and cost involved in 
obtaining approval and the issuance of credit assistance under the 
CIFIA program.

``SEC. 999F. STATE AND LOCAL PERMITS.

    ``The provision of credit assistance under the CIFIA program with 
respect to a project shall not--
            ``(1) relieve any recipient of the assistance of any 
        project obligation to obtain any required State or local permit 
        or approval with respect to the project;
            ``(2) limit the right of any unit of State or local 
        government to approve or regulate any rate of return on private 
        equity invested in the project; or
            ``(3) otherwise supersede any State or local law (including 
        any regulation) applicable to the construction or operation of 
        the project.

``SEC. 999G. REGULATIONS.

    ``The Secretary may promulgate such regulations as the Secretary 
determines to be appropriate to carry out the CIFIA program.

``SEC. 999H. FUNDING.

    ``(a) Funding.--
            ``(1) In general.--There are authorized to be appropriated 
        to the Secretary to carry out this subtitle, to remain 
        available until expended--
                    ``(A) $600,000,000 for each of fiscal years 2022 
                and 2023; and
                    ``(B) $300,000,000 for each of fiscal years 2024 
                through 2026.
            ``(2) Spending and borrowing authority.--Spending and 
        borrowing authority for a fiscal year to enter into Federal 
        credit instruments shall be promptly apportioned to the 
        Secretary on a fiscal-year basis.
            ``(3) Reestimates.--If the subsidy amount of a Federal 
        credit instrument is reestimated, the cost increase or decrease 
        of the reestimate shall be borne by, or benefit, the general 
        fund of the Treasury, consistent with section 504(f) of the 
        Congressional Budget Act of 1974 (2 U.S.C. 661c(f)).
            ``(4) Administrative costs.--Of the amounts made available 
        to carry out the CIFIA program, the Secretary may use not more 
        than $9,000,000 (as indexed for United States dollar inflation 
        from the date of enactment of the Storing CO2 and Lowering 
        Emissions Act (as measured by the Consumer Price Index)) each 
        fiscal year for the administration of the CIFIA program.
    ``(b) Contract Authority.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, execution of a term sheet by the Secretary of a Federal 
        credit instrument that uses amounts made available under the 
        CIFIA program shall impose on the United States a contractual 
        obligation to fund the Federal credit investment.
            ``(2) Availability.--Amounts made available to carry out 
        the CIFIA program for a fiscal year shall be available for 
        obligation on October 1 of the fiscal year.''.
    (b) Technical Amendments.--The table of contents for the Energy 
Policy Act of 2005 (Public Law 109-58; 119 Stat. 600) is amended--
            (1) in the item relating to section 917, by striking 
        ``Efficiency'';
            (2) by striking the items relating to subtitle J of title 
        IX (relating to ultra-deepwater and unconventional natural gas 
        and other petroleum resources) and inserting the following:

``Subtitle J--Carbon Dioxide Transportation Infrastructure Finance and 
                               Innovation

``Sec. 999A. Definitions.
``Sec. 999B. Determination of eligibility and project selection.
``Sec. 999C. Secured loans.
``Sec. 999D. Future growth grants.
``Sec. 999E. Program administration.
``Sec. 999F. State and local permits.
``Sec. 999G. Regulations.
``Sec. 999H. Funding.'';
        and
            (3) by striking the item relating to section 969B and 
        inserting the following:

``Sec. 969B. High efficiency turbines.''.

             TITLE III--GEOLOGIC STORAGE OF CAPTURED CARBON

SEC. 301. CARBON STORAGE VALIDATION AND TESTING.

    Section 963 of the Energy Policy Act of 2005 (42 U.S.C. 16293) is 
amended--
            (1) in subsection (a)(1)(B), by striking ``over a 10-year 
        period'';
            (2) in subsection (b)--
                    (A) in paragraph (1), by striking ``and 
                demonstration'' and inserting ``demonstration, and 
                commercialization''; and
                    (B) in paragraph (2)--
                            (i) in subparagraph (G), by striking 
                        ``and'' at the end;
                            (ii) in subparagraph (H), by striking the 
                        period at the end and inserting ``; and''; and
                            (iii) by adding at the end the following:
                                    ``(I) evaluating the quantity, 
                                location, and timing of geologic carbon 
                                storage deployment that may be needed, 
                                and developing strategies and resources 
                                to enable the deployment.'';
            (3) by redesignating subsections (e) through (g) as 
        subsections (f) through (h), respectively;
            (4) by inserting after subsection (d) the following:
    ``(e) Large-Scale Carbon Storage Commercialization Program.--
            ``(1) In general.--The Secretary shall establish a 
        commercialization program under which the Secretary shall 
        provide funding for the development of new or expanded 
        commercial large-scale carbon sequestration projects and 
        associated carbon dioxide transport infrastructure, including 
        funding for the feasibility, site characterization, permitting, 
        and construction stages of project development.
            ``(2) Applications; selection.--
                    ``(A) In general.--To be eligible to enter into an 
                agreement with the Secretary for funding under 
                paragraph (1), an entity shall submit to the Secretary 
                an application at such time, in such manner, and 
                containing such information as the Secretary determines 
                to be appropriate.
                    ``(B) Application process.--The Secretary shall 
                establish an application process that, to the maximum 
                extent practicable--
                            ``(i) is open to projects at any stage of 
                        development described in paragraph (1); and
                            ``(ii) facilitates expeditious development 
                        of projects described in that paragraph.
                    ``(C) Project selection.--In selecting projects for 
                funding under paragraph (1), the Secretary shall give 
                priority to--
                            ``(i) projects with substantial carbon 
                        dioxide storage capacity; or
                            ``(ii) projects that will store carbon 
                        dioxide from multiple carbon capture 
                        facilities.'';
            (5) in subsection (f) (as so redesignated), in paragraph 
        (1), by inserting ``with respect to the research, development, 
        demonstration program components described in subsections (b) 
        through (d)'' before ``give preference''; and
            (6) in subsection (h) (as so redesignated)--
                    (A) in paragraph (5), by striking the period at the 
                end and inserting ``; and'';
                    (B) by redesignating paragraphs (1) through (5) as 
                subparagraphs (A) through (E), respectively, and 
                indenting appropriately;
                    (C) by inserting before subparagraph (A) (as so 
                redesignated) the following:
            ``(1) for activities under the research, development, 
        demonstration program components described in subsections (b) 
        through (d)--''; and
                    (D) by adding at the end the following:
            ``(2) for activities under the commercialization program 
        component described in subsection (e), to remain available 
        until expended, $500,000,000 for each of fiscal years 2022 
        through 2026.''.

SEC. 302. SECURE GEOLOGIC STORAGE PERMITTING.

    (a) Definitions.--In this section:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Environmental Protection Agency.
            (2) Class vi well.--The term ``Class VI well'' means a well 
        described in section 144.6(f) of title 40, Code of Federal 
        Regulations (or successor regulations).
    (b) Geologic Sequestration Permitting.--For the permitting of Class 
VI wells by the Administrator for the injection of carbon dioxide for 
the purpose of geologic sequestration in accordance with the 
requirements of the Safe Drinking Water Act (42 U.S.C. 300f et seq.) 
and the final rule of the Administrator entitled ``Federal Requirements 
Under the Underground Injection Control (UIC) Program for Carbon 
Dioxide (CO<INF>2</INF>) Geologic Sequestration (GS) Wells'' (75 Fed. 
Reg. 77230 (December 10, 2010)), there is authorized to be appropriated 
for each of fiscal years 2022 through 2026, $5,000,000.
    (c) State Permitting Program Grants.--
            (1) Establishment.--The Administrator shall award grants to 
        States that, pursuant to section 1422 of the Safe Drinking 
        Water Act (42 U.S.C. 300h-1), receive the approval of the 
        Administrator for a State underground injection control program 
        for permitting Class VI wells for the injection of carbon 
        dioxide.
            (2) Use of funds.--A State that receives a grant under 
        paragraph (1) shall use the amounts received under the grant to 
        defray the expenses of the State related to the establishment 
        and operation of a State underground injection control program 
        described in paragraph (1).
            (3) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this subsection, for the period 
        of fiscal years 2022 through 2026, $50,000,000.
                                 <all>