Clean Energy for America Act
Bill: S.2118 | Sponsor: Sen. Wyden, Ron (D-OR)
Policy area: Taxation

Summary:
Clean Energy for America Act
This bill provides for tax incentives for investments in clean electricity, clean transportation, energy efficiency, and the termination of certain provisions relating to oil, gas, and other fossil fuels.
Among other provisions, the bill

To amend the Internal Revenue Code of 1986 to provide tax incentives 
   for increased investment in clean energy, 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; ETC.

    (a) Short Title.--This Act may be cited as the ``Clean Energy for 
America Act''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.
    (c) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; etc.
               TITLE I--INCENTIVES FOR CLEAN ELECTRICITY

Sec. 101. Clean electricity production credit.
Sec. 102. Clean electricity investment credit.
Sec. 103. Extensions, modifications, and terminations of various energy 
                            provisions.
             TITLE II--INCENTIVES FOR CLEAN TRANSPORTATION

Sec. 201. Clean fuel production credit.
Sec. 202. Transportation electrification.
Sec. 203. Credit for production of clean hydrogen.
Sec. 204. Temporary extensions of existing fuel incentives.
              TITLE III--INCENTIVES FOR ENERGY EFFICIENCY

Sec. 301. Credit for new energy efficient residential buildings.
Sec. 302. Energy efficient home improvement credit.
Sec. 303. Enhancement of energy efficient commercial buildings 
                            deduction.
Sec. 304. Enhancement of energy credit for geothermal heat pumps.
        TITLE IV--TERMINATION OF CERTAIN FOSSIL FUEL PROVISIONS

Sec. 401. Termination of provisions relating to oil, gas, and other 
                            materials.
Sec. 402. Modification of certain provisions relating to oil, gas, and 
                            other fossil fuels.
              TITLE V--WORKFORCE DEVELOPMENT REQUIREMENTS

Sec. 501. Use of qualified apprentices.
                        TITLE VI--MISCELLANEOUS

Sec. 601. Adjustment of qualifying advanced energy project credit.
Sec. 602. Issuance of exempt facility bonds for qualified carbon 
                            dioxide capture facilities.
Sec. 603. Limitation on importation of certain energy equipment and 
                            components.
Sec. 604. Elimination of negative effects on small businesses and 
                            certain individual taxpayers.

               TITLE I--INCENTIVES FOR CLEAN ELECTRICITY

SEC. 101. CLEAN ELECTRICITY PRODUCTION CREDIT.

    (a) 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. 45U. CLEAN ELECTRICITY PRODUCTION CREDIT.

    ``(a) Amount of Credit.--For purposes of section 38, the clean 
electricity production credit for any taxable year is an amount equal 
to the product of--
            ``(1) subject to subsection (g)(7), 1.5 cents, multiplied 
        by
            ``(2) the kilowatt hours of electricity--
                    ``(A) produced by the taxpayer at a qualified 
                facility, and
                    ``(B)(i) sold by the taxpayer to an unrelated 
                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 unrelated person, sold, consumed, or 
                stored by the taxpayer during the taxable year.
    ``(b) Qualified Facility.--
            ``(1) In general.--
                    ``(A) Definition.--Subject to subparagraphs (B), 
                (C), and (D), the term `qualified facility' means a 
                facility owned by the taxpayer--
                            ``(i) which is used for the generation of 
                        electricity,
                            ``(ii) which is originally placed in 
                        service after December 31, 2022,
                            ``(iii) for which the greenhouse gas 
                        emissions rate (as determined under paragraph 
                        (2)) is not greater than zero, and
                            ``(iv) in the case of any facility with a 
                        maximum net output equal to or greater than 1 
                        megawatt, which--
                                    ``(I) subject to subparagraph (B) 
                                of paragraph (3), satisfies the 
                                requirements under subparagraph (A) of 
                                such paragraph, and
                                    ``(II) with respect to the 
                                construction of such facility, 
                                satisfies the requirements under 
                                section 501 of the Clean Energy for 
                                America Act.
                    ``(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; incremental 
                production.--The term `qualified facility' shall 
                include either of the following in connection with a 
                facility described in subparagraph (A) (without regard 
                to clause (ii) of such subparagraph) that was placed in 
                service before January 1, 2023, but only to the extent 
                of the increased amount of electricity produced at the 
                facility by reason of the following:
                            ``(i) A new unit placed in service after 
                        December 31, 2022.
                            ``(ii) Any efficiency improvements or 
                        additions of capacity placed in service after 
                        December 31, 2022.
                    ``(D) Coordination with other credits.--The term 
                `qualified facility' shall not include any facility for 
                which a credit determined under section 45, 45J, 45Q, 
                48, or 48D 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 CO<INF>2</INF>e per KWh.
                    ``(B) Fuel combustion and gasification.--In the 
                case of a facility which produces electricity through 
                combustion or gasification, 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 
                section 211(o)(1)(H) of the Clean Air Act (42 U.S.C. 
                7545(o)(1)(H))) in the production of electricity, 
                expressed as grams of CO<INF>2</INF>e per KWh.
                    ``(C) Establishment of emissions rates for 
                facilities.--
                            ``(i) In general.--The Secretary and the 
                        Administrator of the Environmental Protection 
                        Agency shall establish greenhouse gas emissions 
                        rates for types or categories of facilities, 
                        which a taxpayer shall use for purposes of this 
                        section.
                            ``(ii) Publishing emissions rates.--The 
                        Secretary shall annually publish a table that 
                        sets forth the greenhouse gas emissions rates 
                        for similar types or categories of facilities.
                            ``(iii) Provisional emissions rate.--
                                    ``(I) In general.--In the case of 
                                any facility for which an emissions 
                                rate has not been established by the 
                                Secretary and the Administrator of the 
                                Environmental Protection Agency, a 
                                taxpayer which owns such facility may 
                                file a petition with the Secretary and 
                                the Administrator of the Environmental 
                                Protection Agency for determination of 
                                the emissions rate with respect to such 
                                facility.
                                    ``(II) Establishment of provisional 
                                and final emissions rate.--In the case 
                                of a facility for which a petition 
                                described in subclause (I) has been 
                                filed, the Secretary and the 
                                Administrator of the Environmental 
                                Protection Agency shall--
                                            ``(aa) not later than 12 
                                        months after the date on which 
                                        the petition was filed, provide 
                                        a provisional emissions rate 
                                        for such facility which a 
                                        taxpayer shall use for purposes 
                                        of this section, and
                                            ``(bb) not later than 24 
                                        months after the date on which 
                                        the petition was filed, 
                                        establish the emissions rate 
                                        for such facility.
                    ``(D) Carbon capture and sequestration equipment.--
                For purposes of this subsection, the amount of 
                greenhouse gases emitted into the atmosphere by a 
                facility in the production of electricity shall not 
                include any qualified carbon dioxide that is captured 
                by the taxpayer and--
                            ``(i) pursuant to any regulations 
                        established under paragraph (2) of section 
                        45Q(f), disposed of by the taxpayer in secure 
                        geological storage, or
                            ``(ii) utilized by the taxpayer in a manner 
                        described in paragraph (5) of such section.
            ``(3) Wage requirements.--
                    ``(A) In general.--The requirements described 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, or
                            ``(ii) for any year during the period 
                        described in paragraph (1)(B), 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 
                determined by the Secretary of Labor, in accordance 
                with subchapter IV of chapter 31 of title 40, United 
                States Code.
                    ``(B) Failure to satisfy wage requirements.--
                            ``(i) In general.--In the case of any 
                        taxpayer which fails to satisfy the requirement 
                        under subparagraph (A) with respect to any 
                        facility for any year during the period 
                        described in paragraph (1)(B), the amount of 
                        the credit which would (but for this 
                        subparagraph) be allowable under this section 
                        with respect to such facility for such year 
                        shall be reduced to zero.
                            ``(ii) Correction and penalty.--Clause (i) 
                        shall not apply with respect to any failure by 
                        the taxpayer to satisfy the requirement under 
                        subparagraph (A) with respect to any facility 
                        for any year if, with respect to any laborer or 
                        mechanic who was paid wages at a rate below the 
                        rate described in such subparagraph for any 
                        period during such year, such taxpayer--
                                    ``(I) makes payment to such laborer 
                                or mechanic in an amount equal to the 
                                sum of--
                                            ``(aa) an amount equal to 
                                        the difference between--

                                                    ``(AA) the amount 
                                                of wages paid to such 
                                                laborer or mechanic 
                                                during such period, and

                                                    ``(BB) the amount 
                                                of wages required to be 
                                                paid to such laborer or 
                                                mechanic pursuant to 
                                                such subparagraph 
                                                during such period, 
                                                plus

                                            ``(bb) interest on the 
                                        amount determined under item 
                                        (aa) at the underpayment rate 
                                        established under section 6621 
                                        for the period described in 
                                        such item, and
                                    ``(II) makes payment to the 
                                Secretary of a penalty in an amount 
                                equal to the product of--
                                            ``(aa) $5,000, multiplied 
                                        by
                                            ``(bb) the total number of 
                                        laborers and mechanics who were 
                                        paid wages at a rate below the 
                                        rate described in subparagraph 
                                        (A) for any period during such 
                                        year.
    ``(c) Inflation Adjustment.--
            ``(1) In general.--In the case of a calendar year beginning 
        after 2021, the 1.5 cent amount in paragraph (1) of subsection 
        (a) shall be adjusted by multiplying such amount by the 
        inflation adjustment factor for the calendar year in which the 
        sale or use of the electricity occurs. 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.
            ``(2) Annual computation.--The Secretary shall, not later 
        than April 1 of each calendar year, determine and publish in 
        the Federal Register the inflation adjustment factor for such 
        calendar year in accordance with this subsection.
            ``(3) Inflation adjustment factor.--The term `inflation 
        adjustment factor' means, with respect to a calendar year, a 
        fraction the numerator of which is the GDP implicit price 
        deflator for the preceding calendar year and the denominator of 
        which is the GDP implicit price deflator for the calendar year 
        1992. The term `GDP implicit price deflator' means the most 
        recent revision of the implicit price deflator for the gross 
        domestic product as computed and published by the Department of 
        Commerce before March 15 of the calendar year.
    ``(d) Credit Phase-Out.--
            ``(1) In general.--If the Secretary, the Secretary of 
        Energy, and the Administrator of the Environmental Protection 
        Agency determine that the annual greenhouse gas emissions from 
        the production of electricity in the United States are equal to 
        or less than 25 percent of the annual greenhouse gas emissions 
        from the production of electricity in the United States for 
        calendar year 2021, the amount of the clean electricity 
        production credit under subsection (a) for any qualified 
        facility the construction of which begins during a calendar 
        year described in paragraph (2) shall be equal to the product 
        of--
                    ``(A) the amount of the credit determined under 
                subsection (a) without regard to this subsection, 
                multiplied by
                    ``(B) the phase-out percentage under paragraph (2).
            ``(2) Phase-out percentage.--The phase-out percentage under 
        this paragraph is equal to--
                    ``(A) for a facility the construction of which 
                begins during the first calendar year following the 
                calendar year in which the determination described in 
                paragraph (1) is made, 100 percent,
                    ``(B) for a facility the construction of which 
                begins during the second calendar year following such 
                determination year, 75 percent,
                    ``(C) for a facility the construction of which 
                begins during the third calendar year following such 
                determination year, 50 percent, and
                    ``(D) for a facility the construction of which 
                begins during any calendar year subsequent to the year 
                described in subparagraph (C), 0 percent.
    ``(e) Definitions.--For purposes of this section:
            ``(1) CO<INF>2</INF>e per KWh.--The term `CO<INF>2</INF>e 
        per KWh' means, with respect to any greenhouse gas, the 
        equivalent carbon dioxide (as determined based on global 
        warming potential) per kilowatt hour of electricity produced.
            ``(2) Greenhouse gas.--The term `greenhouse gas' has the 
        same meaning given such term under section 211(o)(1)(G) of the 
        Clean Air Act (42 U.S.C. 7545(o)(1)(G)), as in effect on the 
        date of the enactment of this section.
            ``(3) Qualified carbon dioxide.--The term `qualified carbon 
        dioxide' means carbon dioxide captured from an industrial 
        source which--
                    ``(A) would otherwise be released into the 
                atmosphere as industrial emission of greenhouse gas,
                    ``(B) is measured at the source of capture and 
                verified at the point of disposal or utilization, and
                    ``(C) is captured and disposed or utilized within 
                the United States (within the meaning of section 
                638(1)) or a possession of the United States (within 
                the meaning of section 638(2)).
    ``(f) Final Guidance.--Not later than January 1, 2023, the 
Secretary and the Administrator of the Environmental Protection Agency 
shall issue final guidance regarding implementation of this section, 
including calculation of greenhouse gas emission rates for qualified 
facilities and determination of clean electricity production credits 
under this section.
    ``(g) Special Rules.--
            ``(1) Only production in the united states taken into 
        account.--Consumption or sales shall be taken into account 
        under this section only with respect to electricity the 
        production of which is within--
                    ``(A) the United States (within the meaning of 
                section 638(1)), or
                    ``(B) a possession of the United States (within the 
                meaning of section 638(2)).
            ``(2) Combined heat and power system property.--
                    ``(A) In general.--For purposes of subsection (a)--
                            ``(i) the kilowatt hours of electricity 
                        produced by a taxpayer at a qualified facility 
                        shall include any production in the form of 
                        useful thermal energy by any combined heat and 
                        power system property within such facility, and
                            ``(ii) the amount of greenhouse gases 
                        emitted into the atmosphere by such facility in 
                        the production of such useful thermal energy 
                        shall be included for purposes of determining 
                        the greenhouse gas emissions rate for such 
                        facility.
                    ``(B) Combined heat and power system property.--For 
                purposes of this paragraph, the term `combined heat and 
                power system property' has the same meaning given such 
                term by section 48(c)(3) (without regard to 
                subparagraphs (A)(iv), (B), and (D) thereof).
                    ``(C) Conversion from btu to kwh.--
                            ``(i) In general.--For purposes of 
                        subparagraph (A)(i), the amount of kilowatt 
                        hours of electricity produced in the form of 
                        useful thermal energy shall be equal to the 
                        quotient of--
                                    ``(I) the total useful thermal 
                                energy produced by the combined heat 
                                and power system property within the 
                                qualified facility, divided by
                                    ``(II) the heat rate for such 
                                facility.
                            ``(ii) Heat rate.--For purposes of this 
                        subparagraph, the term `heat rate' means the 
                        amount of energy used by the qualified facility 
                        to generate 1 kilowatt hour of electricity, 
                        expressed as British thermal units per net 
                        kilowatt hour generated.
            ``(3) Production attributable to the taxpayer.--In the case 
        of a qualified facility in which more than 1 person has an 
        ownership interest, except to the extent provided in 
        regulations prescribed by the Secretary, production from the 
        facility shall be allocated among such persons in proportion to 
        their respective ownership interests in the gross sales from 
        such facility.
            ``(4) Related persons.--Persons shall be treated as related 
        to each other if such persons would be treated as a single 
        employer under the regulations prescribed under section 52(b). 
        In the case of a corporation which is a member of an affiliated 
        group of corporations filing a consolidated return, such 
        corporation shall be treated as selling electricity to an 
        unrelated person if such electricity is sold to such a person 
        by another member of such group.
            ``(5) Pass-thru in the case of estates and trusts.--Under 
        regulations prescribed by the Secretary, rules similar to the 
        rules of subsection (d) of section 52 shall apply.
            ``(6) Allocation of credit to patrons of agricultural 
        cooperative.--
                    ``(A) Election to allocate.--
                            ``(i) In general.--In the case of an 
                        eligible cooperative organization, any portion 
                        of the credit determined under subsection (a) 
                        for the taxable year may, at the election of 
                        the organization, be apportioned among patrons 
                        of the organization on the basis of the amount 
                        of business done by the patrons during the 
                        taxable year.
                            ``(ii) Form and effect of election.--An 
                        election under clause (i) for any taxable year 
                        shall be made on a timely filed return for such 
                        year. Such election, once made, shall be 
                        irrevocable for such taxable year. Such 
                        election shall not take effect unless the 
                        organization designates the apportionment as 
                        such in a written notice mailed to its patrons 
                        during the payment period described in section 
                        1382(d).
                    ``(B) Treatment of organizations and patrons.--The 
                amount of the credit apportioned to any patrons under 
                subparagraph (A)--
                            ``(i) shall not be included in the amount 
                        determined under subsection (a) with respect to 
                        the organization for the taxable year, and
                            ``(ii) shall be included in the amount 
                        determined under subsection (a) for the first 
                        taxable year of each patron ending on or after 
                        the last day of the payment period (as defined 
                        in section 1382(d)) for the taxable year of the 
                        organization or, if earlier, for the taxable 
                        year of each patron ending on or after the date 
                        on which the patron receives notice from the 
                        cooperative of the apportionment.
                    ``(C) Special rules for decrease in credits for 
                taxable year.--If the amount of the credit of a 
                cooperative organization determined under subsection 
                (a) for a taxable year is less than the amount of such 
                credit shown on the return of the cooperative 
                organization for such year, an amount equal to the 
                excess of--
                            ``(i) such reduction, over
                            ``(ii) the amount not apportioned to such 
                        patrons under subparagraph (A) for the taxable 
                        year,
                shall be treated as an increase in tax imposed by this 
                chapter on the organization. Such increase shall not be 
                treated as tax imposed by this chapter for purposes of 
                determining the amount of any credit under this 
                chapter.
                    ``(D) Eligible cooperative defined.--For purposes 
                of this section, the term `eligible cooperative' means 
                a cooperative organization described in section 1381(a) 
                which is owned more than 50 percent by agricultural 
                producers or by entities owned by agricultural 
                producers. For this purpose an entity owned by an 
                agricultural producer is one that is more than 50 
                percent owned by agricultural producers.
            ``(7) Increase in credit in certain cases.--
                    ``(A) Nascent clean energy technology.--
                            ``(i) In general.--In the case of any 
                        qualified facility which generates electricity 
                        using a nascent clean energy technology, for 
                        purposes of determining the amount of the 
                        credit under subsection (a) with respect to any 
                        electricity produced by the taxpayer at such 
                        facility using such technology during the 
                        taxable year, the amount under paragraph (1) of 
                        such subsection shall be increased by an amount 
                        equal to 10 percent of the amount otherwise in 
                        effect under such paragraph (without 
                        application of subparagraph (B) or (C)).
                            ``(ii) Definition.--For purposes of this 
                        subparagraph, the term `nascent clean energy 
                        technology' means any technology or method used 
                        for the production of electricity which, in the 
                        calendar year preceding the calendar year in 
                        which construction of the qualified facility 
                        began, achieved a market penetration level of 
                        less than 3 percent.
                            ``(iii) Market penetration level.--For 
                        purposes of this subparagraph, the term `market 
                        penetration level' means, with respect to any 
                        calendar year, the amount equal to the greater 
                        of--
                                    ``(I) the amount (expressed as a 
                                percentage) equal to the quotient of--
                                            ``(aa) the sum of all 
                                        electricity produced (expressed 
                                        in terawatt hours) from the 
                                        technology or method used for 
                                        the production of electricity 
                                        by all electricity generating 
                                        facilities in the United States 
                                        during such calendar year (as 
                                        determined by the Secretary on 
                                        the basis of data reported by 
                                        the Energy Information 
                                        Administration), divided by
                                            ``(bb) the total domestic 
                                        power sector electricity 
                                        production (expressed in 
                                        terawatt hours) for such 
                                        calendar year, or
                                    ``(II) the amount determined under 
                                this clause for the preceding calendar 
                                year with respect to such technology or 
                                method.
                    ``(B) Energy communities.--
                            ``(i) In general.--In the case of any 
                        qualified facility which is located in an 
                        energy community, for purposes of determining 
                        the amount of the credit under subsection (a) 
                        with respect to any electricity produced by the 
                        taxpayer at such facility during the taxable 
                        year, the amount under paragraph (1) of such 
                        subsection shall be increased by an amount 
                        equal to 10 percent of the amount otherwise in 
                        effect under such paragraph (without 
                        application of subparagraph (A) or (C)).
                            ``(ii) Energy community.--For purposes of 
                        this subparagraph, the term `energy community' 
                        means a census tract--
                                    ``(I) in which--
                                            ``(aa) for the calendar 
                                        year in which construction of 
                                        the qualified facility began--

                                                    ``(AA) not less 
                                                than 5 percent of the 
                                                employment in such 
                                                tract is within the oil 
                                                and gas sector, or

                                                    ``(BB) an 
                                                industrial facility is 
                                                located which is 
                                                mandated to report 
                                                emissions of greenhouse 
                                                gases under the 
                                                Greenhouse Gas 
                                                Reporting Program 
                                                established under part 
                                                98 of title 40, Code of 
                                                Federal Regulations,

                                            ``(bb) after December 31, 
                                        1999, a coal mine has closed, 
                                        or
                                            ``(cc) after December 31, 
                                        2009, a coal-fired electric 
                                        generating unit has been 
                                        retired, or
                                    ``(II) which is immediately 
                                adjacent to any census tract described 
                                in subclause (I).
                    ``(C) Domestic content.--
                            ``(i) In general.--In the case of any 
                        qualified facility which satisfies the 
                        requirement under clause (ii)(I), for purposes 
                        of determining the amount of the credit under 
                        subsection (a) with respect to any electricity 
                        produced by the taxpayer at such facility 
                        during the taxable year, the amount under 
                        paragraph (1) of such subsection shall be 
                        increased by an amount equal to 10 percent of 
                        the amount otherwise in effect under such 
                        paragraph (without application of subparagraph 
                        (A) or (B)).
                            ``(ii) Requirement.--
                                    ``(I) In general.--Subject to 
                                clause (iii), the requirement described 
                                in this subclause with respect to any 
                                qualified facility is that, prior to 
                                the end of the taxable year in which 
                                such facility is placed in service, the 
                                taxpayer shall certify to the Secretary 
                                that, any steel, iron, or manufactured 
                                product used in the construction of 
                                such facility was produced in the 
                                United States.
                                    ``(II) Steel and iron.--In the case 
                                of steel or iron, subclause (I) shall 
                                be applied in a manner consistent with 
                                section 661.5(b) of title 49, Code of 
                                Federal Regulations.
                                    ``(III) Manufactured product.--For 
                                purposes of subclause (I), a 
                                manufactured product shall be deemed to 
                                have been manufactured in the United 
                                States if not less than 55 percent of 
                                the total cost of the components of 
                                such product is attributable to 
                                components which are mined, produced, 
                                or manufactured in the United States.
                            ``(iii) International agreements.--This 
                        subparagraph shall be applied in a manner which 
                        is consistent with the obligations of the 
                        United States under international agreements.
            ``(8) Credit reduced for grants, tax-exempt bonds, 
        subsidized energy financing, and other credits.--Rules similar 
        to the rules under section 45(b)(3) shall apply for purposes of 
        this section.
    ``(h) Election for Direct Payment.--
            ``(1) In general.--The applicable percentage of the amount 
        of any credit determined under subsection (a) with respect to 
        any qualified facility for any taxable year during the period 
        described in subsection (b)(1)(B) shall, at the election of the 
        taxpayer, be treated as a payment equal to such amount which is 
        made by the taxpayer against the tax imposed by chapter 1 for 
        such taxable year.
            ``(2) Form and effect of election.--
                    ``(A) In general.--An election under paragraph (1) 
                shall be made prior to the date on which the qualified 
                facility is placed in service and in such manner as the 
                Secretary may prescribe. Such election, once made, 
                shall--
                            ``(i) be irrevocable with respect to such 
                        qualified facility for the period described in 
                        subsection (b)(1)(B), and
                            ``(ii) for any taxable year during such 
                        period, reduce the amount of the credit which 
                        would (but for this subsection) be allowable 
                        under this section with respect to such 
                        qualified facility for such taxable year to 
                        zero.
                    ``(B) Additional information.--For purposes of an 
                election under paragraph (1), the Secretary may require 
                such information as the Secretary deems necessary for 
                purposes of preventing duplication, fraud, or any 
                improper payments under this subsection.
            ``(3) Application to partnerships and s corporations.--In 
        the case of a partnership or S corporation which makes an 
        election under paragraph (1)--
                    ``(A) such paragraph shall apply with respect to 
                such partnership or corporation without regard to the 
                fact that no tax is imposed by chapter 1 on such 
                partnership or corporation, and
                    ``(B)(i) in the case of a partnership, each 
                partner's distributive share of the credit determined 
                under subsection (a) with respect to the qualified 
                facility shall be deemed to be zero, and
                    ``(ii) in the case of a S corporation, each 
                shareholder's pro rata share of the credit determined 
                under subsection (a) with respect to the qualified 
                facility shall be deemed to be zero.
            ``(4) Certain entities treated as taxpayers.--In the case 
        of an election under this subsection--
                    ``(A) any State utility with a service obligation, 
                as such terms are defined in section 217 of the Federal 
                Power Act (as in effect on the date of the enactment of 
                this subsection),
                    ``(B) any mutual or cooperative electric company 
                described in section 501(c)(12) or section 
                1381(a)(2)(C), or
                    ``(C) an Indian tribal government (as defined in 
                section 139E(c)(1)),
        shall be treated as a taxpayer for purposes of this subsection 
        and determining the amount of any credit under subsection (a).
            ``(5) Excess payment.--
                    ``(A) In general.--In the case of any payment made 
                to a taxpayer under this subsection which the Secretary 
                determines constitutes an excessive payment, the tax 
                imposed on such taxpayer by chapter 1 for the taxable 
                year in which such determination is made shall be 
                increased by an amount equal to the sum of--
                            ``(i) the amount of the excessive payment, 
                        plus
                            ``(ii) an amount equal to 20 percent of the 
                        excessive payment.
                    ``(B) Reasonable cause.--Subparagraph (A)(ii) shall 
                not apply if the taxpayer demonstrates to the 
                satisfaction of the Secretary that the excessive 
                payment resulted from reasonable cause.
                    ``(C) Definition.--For purposes of this paragraph, 
                the term `excessive payment' means, with respect to a 
                qualified facility for any taxable year, an amount 
                equal to the excess of--
                            ``(i) the amount of the payment made to the 
                        taxpayer under this subsection with respect to 
                        such facility for such taxable year, over
                            ``(ii) the amount of the credit which 
                        (without application of this subsection) is 
                        otherwise allowable under this section with 
                        respect to such facility for such taxable year.
            ``(6) Applicable percentage.--For purposes of paragraph 
        (1)--
                    ``(A) In general.--In the case of any qualified 
                facility which satisfies the requirements under 
                subsection (g)(7)(C)(ii) with respect to the 
                construction of such facility, the applicable 
                percentage shall be 100 percent.
                    ``(B) Phased domestic content requirement.--Subject 
                to subparagraph (C), in the case of any qualified 
                facility which fails to satisfy the requirements under 
                such subsection with respect to the construction of 
                such facility, the applicable percentage shall be--
                            ``(i) if construction of such facility 
                        began before January 1, 2024, 100 percent,
                            ``(ii) if construction of such facility 
                        began in calendar year 2024, 90 percent,
                            ``(iii) if construction of such facility 
                        began in calendar year 2025, 85 percent, and
                            ``(iv) if construction of such facility 
                        began after December 31, 2025, 0 percent.
                    ``(C) Exception.--If the Secretary determines that, 
                for purposes of application of the requirements under 
                subsection (g)(7)(C)(ii) with respect to the 
                construction of the qualified facility--
                            ``(i) their application would be 
                        inconsistent with the public interest,
                            ``(ii) such materials and products are not 
                        produced in the United States in sufficient and 
                        reasonably available quantities and of a 
                        satisfactory quality, or
                            ``(iii) inclusion of domestic material will 
                        increase the cost of the construction of the 
                        qualified facility by more than 25 percent,
                the applicable percentage shall be 100 percent.''.
    (b) Conforming Amendments.--
            (1) Section 38(b) is amended--
                    (A) in paragraph (32), by striking ``plus'' at the 
                end,
                    (B) in paragraph (33), by striking the period at 
                the end and inserting ``, plus'', and
                    (C) by adding at the end the following new 
                paragraph:
            ``(34) the clean electricity production credit determined 
        under section 45U(a).''.
            (2) The table of sections for subpart D of part IV of 
        subchapter A of chapter 1 is amended by adding at the end the 
        following new item:

``Sec. 45U. Clean electricity production credit.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to facilities placed in service after December 31, 2022.

SEC. 102. CLEAN ELECTRICITY INVESTMENT CREDIT.

    (a) Business Credit.--
            (1) In general.--Subpart E of part IV of subchapter A of 
        chapter 1 is amended by inserting after section 48C the 
        following new section:

``SEC. 48D. CLEAN ELECTRICITY INVESTMENT CREDIT.

    ``(a) Investment Credit for Qualified Property.--
            ``(1) In general.--For purposes of section 46, the clean 
        electricity investment credit for any taxable year is--
                    ``(A) except as provided in subparagraph (B), an 
                amount equal to 30 percent of the qualified investment 
                for such taxable year with respect to--
                            ``(i) any qualified facility, and
                            ``(ii) any grid improvement property, and
                    ``(B) in the case of a qualified facility which is 
                a microgrid, an amount equal to the product of--
                            ``(i) 30 percent of the qualified 
                        investment for such taxable year with respect 
                        to such microgrid, and
                            ``(ii) the relative avoided emissions rate 
                        with respect to such microgrid (as determined 
                        under subsection (b)(3)(C)(iv)).
            ``(2) Increase in credit rate in certain cases.--
                    ``(A) Disadvantaged and energy communities.--
                            ``(i) In general.--In the case of--
                                    ``(I) any energy storage property 
                                or any qualified investment with 
                                respect to a qualified facility (with 
                                the exception of any such facility 
                                described in section 45U(b)(2)(B))--
                                            ``(aa) which is placed in 
                                        service within a disadvantaged 
                                        community or an energy 
                                        community (as defined in 
                                        section 45U(g)(7)(B)(ii)), and
                                            ``(bb) has a maximum net 
                                        output of less than 5 
                                        megawatts, or
                                    ``(II) any qualified property which 
                                is not described in subclause (I) and 
                                is placed in service within an energy 
                                community,
                        for purposes applying paragraph (1) with 
                        respect to such property or investment, the 
                        percentage under subparagraph (A) of such 
                        paragraph (or, in the case of a microgrid, 
                        subparagraph (B)(i) of such paragraph), shall 
                        be increased by 10 percentage points.
                            ``(ii) Disadvantaged community.--For 
                        purposes of this subparagraph, the term 
                        `disadvantaged community' has the same meaning 
                        given the term `low-income community' in 
                        section 45D(e)(1), as applied by substituting 
                        `60 percent' for `80 percent' each place it 
                        appears in subparagraph (B) thereof.
                    ``(B) Nascent clean energy technology.--In the case 
                of any qualified facility which generates electricity 
                using a nascent clean energy technology (as defined in 
                section 45U(g)(7)(A)(ii)), for purposes applying 
                paragraph (1) with respect to any qualified investment 
                with respect to such facility, the percentage under 
                subparagraph (A) of such paragraph (or, in the case of 
                a microgrid, subparagraph (B)(i) of such paragraph), 
                shall be increased by 10 percentage points.
                    ``(C) Domestic content.--
                            ``(i) In general.--In the case of any 
                        qualified investment with respect to a 
                        qualified facility or with respect to grid 
                        improvement property which satisfies the 
                        requirement under clause (ii)(I), for purposes 
                        of applying paragraph (1) with respect to such 
                        qualified investment, the percentage under 
                        subparagraph (A) of such paragraph (or, in the 
                        case of a qualified investment with respect to 
                        a microgrid, subparagraph (B)(i) of such 
                        paragraph), shall be increased by 10 percentage 
                        points.
                            ``(ii) Requirements.--
                                    ``(I) In general.--The requirement 
                                described in this subclause with 
                                respect to any qualified investment 
                                with respect to a qualified facility or 
                                with respect to grid improvement 
                                property is satisfied if the taxpayer 
                                certifies to the Secretary that--
                                            ``(aa) in the case of a 
                                        qualified investment with 
                                        respect to a qualified 
                                        facility, any property used at 
                                        such facility is composed of 
                                        steel, iron, or manufactured 
                                        products which were produced in 
                                        the United States, and
                                            ``(bb) in the case of a 
                                        qualified investment with 
                                        respect to any grid improvement 
                                        property, such property is 
                                        composed of steel, iron, or 
                                        manufactured products which 
                                        were produced in the United 
                                        States.
                                    ``(II) Steel and iron.--In the case 
                                of steel or iron, subclause (I) shall 
                                be applied in a manner consistent with 
                                section 661.5(b) of title 49, Code of 
                                Federal Regulations.
                                    ``(III) Manufactured product.--For 
                                purposes of subclause (I), a 
                                manufactured product shall be deemed to 
                                have been manufactured in the United 
                                States if not less than 55 percent of 
                                the total cost of the components of 
                                such product is attributable to 
                                components which are mined, produced, 
                                or manufactured in the United States.
                            ``(iii) International agreements.--This 
                        subparagraph shall be applied in a manner which 
                        is consistent with the obligations of the 
                        United States under international agreements.
                    ``(D) Maximum credit rate.--Notwithstanding any 
                adjustment or increase pursuant to this paragraph, the 
                percentage under subparagraph (A) or (B)(i) of 
                paragraph (1) shall not exceed 50 percent.
    ``(b) Qualified Investment With Respect to Any Qualified 
Facility.--
            ``(1) In general.--For purposes of subsection (a), the 
        qualified investment with respect to any qualified facility for 
        any taxable year is the sum of--
                    ``(A) the basis of any qualified property placed in 
                service by the taxpayer during such taxable year which 
                is part of a qualified facility, plus
                    ``(B) the amount of any expenditures which are--
                            ``(i) paid or incurred by the taxpayer for 
                        qualified interconnection property--
                                    ``(I) in connection with a 
                                qualified facility which has a maximum 
                                net output of not greater than 5 
                                megawatts, and
                                    ``(II) placed in service during the 
                                taxable year of the taxpayer, and
                            ``(ii) properly chargeable to capital 
                        account of the taxpayer.
            ``(2) Qualified property.--The term `qualified property' 
        means property--
                    ``(A) which is--
                            ``(i) tangible personal property, or
                            ``(ii) other tangible property (not 
                        including a building or its structural 
                        components), but only if such property is used 
                        as an integral part of the qualified facility,
                    ``(B) with respect to which depreciation (or 
                amortization in lieu of depreciation) is allowable, and
                    ``(C)(i) the construction, reconstruction, or 
                erection of which is completed by the taxpayer, or
                    ``(ii) which is acquired by the taxpayer if the 
                original use of such property commences with the 
                taxpayer.
            ``(3) Qualified facility.--
                    ``(A) In general.--For purposes of this section, 
                the term `qualified facility' means a facility--
                            ``(i) which is used for the generation of 
                        electricity,
                            ``(ii) which is originally placed in 
                        service after December 31, 2022,
                            ``(iii) for which the anticipated 
                        greenhouse gas emissions rate (as determined 
                        under subparagraph (B)(ii)) is not greater than 
                        zero, and
                            ``(iv) in the case of any facility with a 
                        maximum net output equal to or greater than 1 
                        megawatt, which--
                                    ``(I) satisfies the requirements of 
                                subparagraph (B)(iii), and
                                    ``(II) with respect to the 
                                construction of such facility, 
                                satisfies the requirements under 
                                section 501 of the Clean Energy for 
                                America Act.
                    ``(B) Additional rules.--
                            ``(i) Expansion of facility; incremental 
                        production.--Rules similar to the rules of 
                        section 45U(b)(1)(C) shall apply for purposes 
                        of this paragraph.
                            ``(ii) Greenhouse gas emissions rate.--
                        Rules similar to the rules of section 45U(b)(2) 
                        shall apply for purposes of this paragraph.
                            ``(iii) Wage requirements.--
                                    ``(I) In general.--The requirements 
                                described in this subclause with 
                                respect to any facility are that the 
                                taxpayer shall ensure that any laborers 
                                and mechanics employed by contractors 
                                and subcontractors in--
                                            ``(aa) the construction of 
                                        such facility, or
                                            ``(bb) 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 
                                determined by the Secretary of Labor, 
                                in accordance with subchapter IV of 
                                chapter 31 of title 40, United States 
                                Code.
                                    ``(II) Correction and penalty 
                                related to failure to satisfy wage 
                                requirements.--For purposes of section 
                                50(a), a taxpayer shall not be treated 
                                as failing to satisfy the requirements 
                                of this clause if such taxpayer meets 
                                requirements similar to the 
                                requirements of section 
                                45U(b)(3)(B)(ii).
                    ``(C) Microgrids.--
                            ``(i) In general.--For purposes of this 
                        section, the term `qualified facility' shall 
                        include any microgrid which satisfies the 
                        requirements under clauses (i), (ii), and (iv) 
                        of subparagraph (A).
                            ``(ii) Microgrid.--For purposes of this 
                        section, the term `microgrid' means an 
                        interconnected system of distributed energy 
                        resources used for the generation of 
                        electricity which--
                                    ``(I) is contained within a clearly 
                                defined electrical boundary and has the 
                                ability to operate as a single and 
                                controllable entity,
                                    ``(II) has the ability to be 
                                managed and isolated from the 
                                applicable grid region in order to 
                                withstand larger disturbances and 
                                maintain the supply of electricity to 
                                connected infrastructure, and
                                    ``(III) has a maximum net output of 
                                not greater than 20 megawatts.
                            ``(iii) Applicable grid region.--For 
                        purposes of this subparagraph, the term 
                        `applicable grid region' means a set of power 
                        plants and transmission lines which are--
                                    ``(I) under the control of a single 
                                grid operator, and
                                    ``(II) interconnected to the 
                                microgrid.
                            ``(iv) Relative avoided emissions rate.--
                                    ``(I) In general.--For purposes of 
                                subsection (a)(1)(B)(ii), the relative 
                                avoided emissions rate shall be the 
                                amount equal to the quotient of--
                                            ``(aa) the amount equal to 
                                        the non-baseload output 
                                        emissions rate for the 
                                        applicable grid region minus 
                                        the greenhouse gas emissions 
                                        rate for the microgrid, divided 
                                        by
                                            ``(bb) the non-baseload 
                                        output emissions rate for the 
                                        applicable grid region.
                                    ``(II) Non-baseload output 
                                emissions rate.--
                                            ``(aa) In general.--For 
                                        purposes of this subparagraph, 
                                        the term `non-baseload output 
                                        emissions rate' means the 
                                        amount of greenhouse gases 
                                        emitted into the atmosphere by 
                                        the applicable grid region for 
                                        the production of electricity 
                                        (expressed as grams of 
                                        CO<INF>2</INF>e per KWh) above 
                                        baseload.
                                            ``(bb) Determination.--The 
                                        non-baseload output emissions 
                                        rate for any applicable grid 
                                        region shall be determined by 
                                        the Administrator of the 
                                        Environmental Protection Agency 
                                        and the Secretary.
                    ``(D) Exclusion.--The term `qualified facility' 
                shall not include any facility for which--
                            ``(i) a renewable electricity production 
                        credit determined under section 45,
                            ``(ii) an advanced nuclear power facility 
                        production credit determined under section 45J,
                            ``(iii) a carbon oxide sequestration credit 
                        determined under section 45Q,
                            ``(iv) a clean electricity production 
                        credit determined under section 45U, or
                            ``(v) an energy credit determined under 
                        section 48,
                is allowed under section 38 for the taxable year or any 
                prior taxable year.
            ``(4) Qualified interconnection property.--For purposes of 
        this paragraph--
                    ``(A) In general.--The term `qualified 
                interconnection property' means, with respect to a 
                qualified facility which is not a microgrid, any 
                tangible property--
                            ``(i) which is part of an addition, 
                        modification, or upgrade to a transmission 
                        system which is required at or beyond the point 
                        at which the qualified facility interconnects 
                        to such transmission system in order to 
                        accommodate such interconnection,
                            ``(ii)(I) which is constructed, 
                        reconstructed, or erected by the taxpayer, or
                            ``(II) for which the cost with respect to 
                        the construction, reconstruction, or erection 
                        of such property is paid or incurred by such 
                        taxpayer, and
                            ``(iii) the original use of which, pursuant 
                        to an interconnection agreement, commences with 
                        the utility.
                    ``(B) Interconnection agreement.--The term 
                `interconnection agreement' means an agreement entered 
                into by a utility and the taxpayer for the purposes of 
                interconnecting the qualified facility owned by such 
                taxpayer to the transmission system of such utility.
                    ``(C) Transmission system.--The term `transmission 
                system' means the facilities owned, controlled, or 
                operated by a utility which are used to provide 
                electric transmission service.
                    ``(D) Utility.--The term `utility' means the owner 
                or operator of an electrical transmission or 
                distribution system which is subject to the regulatory 
                authority of--
                            ``(i) the Federal Energy Regulatory 
                        Commission, or
                            ``(ii) a State public utility commission or 
                        other appropriate State agency.
            ``(5) Coordination with rehabilitation credit.--The 
        qualified investment with respect to any qualified facility for 
        any taxable year shall not include that portion of the basis of 
        any property which is attributable to qualified rehabilitation 
        expenditures (as defined in section 47(c)(2)).
            ``(6) Definitions.--For purposes of this subsection, the 
        terms `CO2e per KWh' and `greenhouse gas emissions rate' have 
        the same meaning given such terms under section 45U(b).
    ``(c) Qualified Investment With Respect to Grid Improvement 
Property.--
            ``(1) In general.--
                    ``(A) Qualified investment.--For purposes of 
                subsection (a), the qualified investment with respect 
                to grid improvement property for any taxable year is 
                the basis of any grid improvement property placed in 
                service by the taxpayer during such taxable year.
                    ``(B) Grid improvement property.--For purposes of 
                this section, the term `grid improvement property' 
                means any energy storage property or qualified 
                transmission property which--
                            ``(i) satisfies the requirements of 
                        paragraph (4), and
                            ``(ii) with respect to the construction of 
                        such property, satisfies the requirements under 
                        section 501 of the Clean Energy for America 
                        Act.
            ``(2) Energy storage property.--For purposes of this 
        subsection, the term `energy storage property' means property--
                    ``(A) which receives, stores, and delivers 
                electricity, or energy for conversion to electricity, 
                provided that such electricity is--
                            ``(i) sold by the taxpayer to an unrelated 
                        person, or
                            ``(ii) stored by the taxpayer for an 
                        unrelated person,
                    ``(B) with respect to which depreciation (or 
                amortization in lieu of depreciation) is allowable,
                    ``(C)(i) the construction, reconstruction, or 
                erection of which is completed by the taxpayer, or
                    ``(ii) which is acquired by the taxpayer if the 
                original use of such property commences with the 
                taxpayer,
                    ``(D) which has a capacity of not less than 5 
                kilowatt hours, and
                    ``(E) which is placed in service after December 31, 
                2021.
            ``(3) Qualified transmission property.--
                    ``(A) In general.--For purposes of this subsection, 
                the term `qualified transmission property' means 
                property--
                            ``(i) which is--
                                    ``(I) an overhead, submarine, or 
                                underground transmission property which 
                                is capable of transmitting electricity 
                                at a voltage of not less than 275 
                                kilovolts, and
                                    ``(II) other equipment necessary 
                                for the operation of property described 
                                in clause (i), including equipment 
                                listed as `transmission plant' in the 
                                Uniform System of Accounts for the 
                                Federal Energy Regulatory Commission 
                                under part 101 of subchapter C of 
                                chapter I of title 18, Code of Federal 
                                Regulations,
                            ``(ii) which satisfies the requirements 
                        under subparagraphs (B), (C), and (E) of 
                        paragraph (2).
                    ``(B) Exclusion.--The term `qualified transmission 
                property' shall not include any property used for 
                distribution of electricity between substations and 
                end-use customers.
            ``(4) Wage requirements.--
                    ``(A) In general.--The requirements described in 
                this subparagraph with respect to any property are that 
                the taxpayer shall ensure that any laborers and 
                mechanics employed by contractors and subcontractors 
                in--
                            ``(i) the construction of such property, or
                            ``(ii) for any year during the 5-year 
                        period beginning on the date the property is 
                        originally placed in service, the alteration or 
                        repair of such property,
                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 
                determined by the Secretary 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 requirements.--For purposes of section 
                50(a), a taxpayer shall not be treated as failing to 
                satisfy the requirements of this clause if such 
                taxpayer meets requirements similar to the requirements 
                of section 45U(b)(3)(B)(ii).
    ``(d) 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) Special rule for property financed by subsidized 
        energy financing or industrial development bonds.--Rules 
        similar to the rules of section 48(a)(4) shall apply for 
        purposes of this section.
    ``(e) Credit Phase-Out.--
            ``(1) In general.--If the Secretary, the Secretary of 
        Energy, and the Administrator of the Environmental Protection 
        Agency determine that the annual greenhouse gas emissions from 
        the production of electricity in the United States are equal to 
        or less than 25 percent of the annual greenhouse gas emissions 
        from the production of electricity in the United States for 
        calendar year 2021, the amount of the clean electricity 
        investment credit under subsection (a) for any qualified 
        investment with respect to any qualified facility or grid 
        improvement property the construction of which begins during a 
        calendar year described in paragraph (2) shall be equal to the 
        product of--
                    ``(A) the amount of the credit determined under 
                subsection (a) without regard to this subsection, 
                multiplied by
                    ``(B) the phase-out percentage under paragraph (2).
            ``(2) Phase-out percentage.--The phase-out percentage under 
        this paragraph is equal to--
                    ``(A) for any qualified investment with respect to 
                any qualified facility or grid improvement property the 
                construction of which begins during the first calendar 
                year following the calendar year in which the 
                determination described in paragraph (1) is made, 100 
                percent,
                    ``(B) for any qualified investment with respect to 
                any qualified facility or grid improvement property the 
                construction of which begins during the second calendar 
                year following such determination year, 75 percent,
                    ``(C) for any qualified investment with respect to 
                any qualified facility or grid improvement property the 
                construction of which begins during the third calendar 
                year following such determination year, 50 percent, and
                    ``(D) for any qualified investment with respect to 
                any qualified facility or grid improvement property the 
                construction of which begins during any calendar year 
                subsequent to the year described in subparagraph (C), 0 
                percent.
    ``(f) Greenhouse Gas.--In this section, the term `greenhouse gas' 
has the same meaning given such term under section 45U(e)(2).
    ``(g) Recapture of Credit.--For purposes of section 50, if the 
Secretary and the Administrator of the Environmental Protection Agency 
determine that the greenhouse gas emissions rate for a qualified 
facility is significantly higher than the anticipated greenhouse gas 
emissions rate claimed by the taxpayer for purposes of the clean 
electricity investment credit under this section, the facility or 
equipment shall cease to be investment credit property in the taxable 
year in which the determination is made.
    ``(h) Final Guidance.--Not later than January 1, 2023, the 
Secretary and the Administrator of the Environmental Protection Agency 
shall issue final guidance regarding implementation of this section.
    ``(i) Election for Direct Payment.--
            ``(1) In general.--In the case of any qualified property or 
        grid improvement property placed in service during any taxable 
        year, the applicable percentage of the amount of any credit 
        determined under subsection (a) with respect to such property 
        for such taxable year shall, at the election of the taxpayer, 
        be treated as a payment equal to such amount which is made by 
        the taxpayer against the tax imposed by chapter 1 for such 
        taxable year (regardless of whether such tax would have been on 
        such taxpayer).
            ``(2) Form and effect of election.--
                    ``(A) In general.--An election under paragraph (1) 
                shall be made prior to the date on which the qualified 
                property or grid improvement property is placed in 
                service and in such manner as the Secretary may 
                prescribe. Such election, once made, shall--
                            ``(i) be irrevocable with respect to the 
                        qualified property or grid improvement property 
                        to which such election applies, and
                            ``(ii) reduce the amount of the credit 
                        which would (but for this subsection) be 
                        allowable under this section with respect to 
                        such property for the taxable year in which 
                        such property is placed in service to zero.
                    ``(B) Additional information.--For purposes of an 
                election under paragraph (1), the Secretary may require 
                such information as the Secretary deems necessary for 
                purposes of preventing duplication, fraud, or any 
                improper payments under this subsection.
            ``(3) Application to partnerships and s corporations; 
        excess payments.--Rules similar to the rules of paragraphs (3) 
        and (5) of section 45U(h) shall apply for purposes of this 
        subsection.
            ``(4) Special rules for certain entities.--
                    ``(A) Eligibility of certain property.--For 
                purposes of this subsection, paragraphs (3) and (4) of 
                section 50(b) shall not apply with respect to--
                            ``(i) any State utility with a service 
                        obligation, as such terms are defined in 
                        section 217 of the Federal Power Act (as in 
                        effect on the date of the enactment of this 
                        subsection),
                            ``(ii) any mutual or cooperative electric 
                        company described in section 501(c)(12) or 
                        section 1381(a)(2)(C), or
                            ``(iii) an Indian tribal government (as 
                        defined in section 139E(c)(1)).
                    ``(B) Certain entities treated as taxpayers.--In 
                the case of an election under this subsection, any 
                entity described in clause (i), (ii), or (iii) of 
                subparagraph (A) shall be treated as a taxpayer for 
                purposes of this subsection and determining the amount 
                of any credit under subsection (a).
            ``(5) Applicable percentage.--For purposes of paragraph 
        (1)--
                    ``(A) In general.--In the case of any property 
                which satisfies the requirements under subsection 
                (a)(2)(C)(ii) with respect to the construction of such 
                property, the applicable percentage shall be 100 
                percent.
                    ``(B) Phased domestic content requirement.--Subject 
                to subparagraph (C), in the case of any property which 
                fails to satisfy the requirements under such subsection 
                with respect to the construction of such property, the 
                applicable percentage shall be--
                            ``(i) if construction of such property 
                        began before January 1, 2024, 100 percent,
                            ``(ii) if construction of such property 
                        began in calendar year 2024, 90 percent,
                            ``(iii) if construction of such property 
                        began in calendar year 2025, 85 percent, and
                            ``(iv) if construction of such property 
                        began after December 31, 2025, 0 percent.
                    ``(C) Exception.--If the Secretary determines that, 
                for purposes of application of the requirements under 
                subsection (a)(2)(C)(ii) with respect to the 
                construction of such property--
                            ``(i) their application would be 
                        inconsistent with the public interest,
                            ``(ii) such materials and products are not 
                        produced in the United States in sufficient and 
                        reasonably available quantities and of a 
                        satisfactory quality, or
                            ``(iii) inclusion of domestic material will 
                        increase the cost of the construction of the 
                        property by more than 25 percent,
                the applicable percentage shall be 100 percent.''.
            (2) Public utility property.--Section 50(d) is amended--
                    (A) in paragraph (2)--
                            (i) by adding after the first sentence the 
                        following new sentence: ``At the election of a 
                        taxpayer, this paragraph shall not apply to any 
                        grid improvement property (as defined in 
                        section 48D(c)(1)(B)), provided--'', and
                            (ii) by adding the following new 
                        subparagraphs:
                    ``(A) no election under this paragraph shall be 
                permitted if the making of such election is prohibited 
                by a State or political subdivision thereof, by any 
                agency or instrumentality of the United States, or by a 
                public service or public utility commission or other 
                similar body of any State or political subdivision that 
                regulates public utilities as described in section 
                7701(a)(33)(A),
                    ``(B) an election under this paragraph shall be 
                made separately with respect to each grid improvement 
                property by the due date (including extensions) of the 
                Federal tax return for the taxable year in which such 
                property is placed in service by the taxpayer, and once 
                made, may be revoked only with the consent of the 
                Secretary, and
                    ``(C) an election shall not apply with respect to 
                any energy storage property (as defined in section 
                48D(c)(2)) if such property has a maximum capacity 
                equal to or less than 500 kilowatt hours.'', and
                    (B) by adding at the end the following: 
                ``Paragraphs (1)(B) and (2)(B) of the section 46(e) 
                referred to in paragraph (1) of this subsection shall 
                not apply to any qualified investment described in 
                section 48D of a real estate investment trust.''
            (3) Conforming amendments.--
                    (A) Section 46 is amended--
                            (i) by striking ``and'' at the end of 
                        paragraph (5),
                            (ii) by striking the period at the end of 
                        paragraph (6) and inserting ``, and'', and
                            (iii) by adding at the end the following 
                        new paragraph:
            ``(7) the clean electricity investment credit.''.
                    (B) Section 49(a)(1)(C) is amended--
                            (i) by striking ``and'' at the end of 
                        clause (iv),
                            (ii) by striking the period at the end of 
                        clause (v) and inserting a comma, and
                            (iii) by adding at the end the following 
                        new clauses:
                            ``(vi) the basis of any qualified property 
                        which is part of a qualified facility under 
                        section 48D, and
                            ``(vii) the basis of any energy storage 
                        property under section 48D.''.
                    (C) Section 50(a)(2)(E) is amended by striking ``or 
                48C(b)(2)'' and inserting ``48C(b)(2), or 48D(e)''.
                    (D) The table of sections for subpart E of part IV 
                of subchapter A of chapter 1 is amended by inserting 
                after the item relating to section 48C the following 
                new item:

``48D. Clean electricity investment credit.''.
            (4) Effective date.--The amendments made by this subsection 
        shall apply to property placed in service after December 31, 
        2021, under rules similar to the rules of section 48(m) of the 
        Internal Revenue Code of 1986 (as in effect on the day before 
        the date of the enactment of the Revenue Reconciliation Act of 
        1990).
    (b) Individual Credit.--
            (1) In general.--Subpart A of part IV of subchapter A of 
        chapter 1 is amended by inserting after section 25D the 
        following:

``SEC. 25E. RESIDENTIAL CLEAN ELECTRICITY CREDIT.

    ``(a) Allowance of Credit.--In the case of an individual, 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 expenditures 
made by the taxpayer for any qualified property and any energy storage 
property which is--
            ``(1) for use in connection with a dwelling unit which is 
        located in the United States and used as a residence by the 
        taxpayer, and
            ``(2) placed in service during such taxable year.
    ``(b) Qualified Property.--
            ``(1) In general.--The term `qualified property' means 
        property--
                    ``(A) which is tangible personal property,
                    ``(B) which is used for the generation of 
                electricity,
                    ``(C) which is constructed, reconstructed, erected, 
                or acquired by the taxpayer,
                    ``(D) the original use of which commences with the 
                taxpayer,
                    ``(E) which is originally placed in service after 
                December 31, 2022, and
                    ``(F) for which the anticipated greenhouse gas 
                emissions rate (as determined under paragraph (2)) is 
                not greater than zero.
            ``(2) Establishment of emissions rates for qualified 
        property.--
                    ``(A) In general.--The Secretary and the 
                Administrator of the Environmental Protection Agency, 
                shall establish greenhouse gas emissions rates for 
                types or categories of qualified property which are for 
                use in a dwelling unit, which a taxpayer shall use for 
                purposes of this section.
                    ``(B) Publishing emissions rates.--The Secretary 
                shall publish a table that sets forth the greenhouse 
                gas emissions rates for similar types or categories of 
                qualified property.
    ``(c) Energy Storage Property.--The term `energy storage property' 
means property which--
            ``(1) receives, stores, and delivers electricity or energy 
        for conversion to electricity which is consumed or sold by the 
        taxpayer,
            ``(2) is equipped with a metering device which is owned and 
        operated by an unrelated person,
            ``(3) has a capacity of not less than 3 kilowatt hours, and
            ``(4) satisfies the requirements under subparagraphs (A), 
        (C), (D), and (E) of subsection (b)(1).
    ``(d) Carryforward of Unused Credit.--
            ``(1) In general.--If the credit allowable under subsection 
        (a) exceeds the applicable tax limit, such excess shall be 
        carried to each of the 3 succeeding taxable years and added to 
        the credit allowable under subsection (a) for such succeeding 
        taxable year.
            ``(2) Limitation.--The amount of the unused credit which 
        may be taken into account under paragraph (1) for any taxable 
        year shall not exceed the amount (if any) by which the 
        applicable tax limit for such taxable year exceeds the sum of--
                    ``(A) the credit allowable under subsection (a) for 
                which such taxable year determined without regard to 
                this subsection, and
                    ``(B) the amounts which, by reason of this 
                subsection, are carried to such taxable year and are 
                attributable to taxable years before the unused credit 
                year.
            ``(3) Applicable tax limit.--For purposes of this 
        subsection, the term `applicable tax limit' means the 
        limitation imposed by section 26(a) for such taxable year 
        reduced by the sum of the credits allowable under this subpart 
        (other than this section).
    ``(e) Credit Phase-Out.--
            ``(1) In general.--If the Secretary, the Secretary of 
        Energy, and the Administrator of the Environmental Protection 
        Agency determine that the annual greenhouse gas emissions from 
        the production of electricity in the United States are equal to 
        or less than the percentage specified in section 48D(e), the 
        amount of the credit allowable under subsection (a) for any 
        qualified property or energy storage property placed in service 
        during a calendar year described in paragraph (2) shall be 
        equal to the product of--
                    ``(A) the amount of the credit determined under 
                subsection (a) without regard to this subsection, 
                multiplied by
                    ``(B) the phase-out percentage under paragraph (2).
            ``(2) Phase-out percentage.--The phase-out percentage under 
        this paragraph is equal to--
                    ``(A) for property placed in service during the 
                first calendar year following the calendar year in 
                which the determination described in paragraph (1) is 
                made, 100 percent,
                    ``(B) for property placed in service during the 
                second calendar year following such determination year, 
                75 percent,
                    ``(C) for property placed in service during the 
                third calendar year following such determination year, 
                50 percent, and
                    ``(D) for property placed in service during any 
                calendar year subsequent to the year described in 
                subparagraph (C), 0 percent.
    ``(f) Special Rules.--For purposes of this section:
            ``(1) Labor costs.--Expenditures for labor costs properly 
        allocable to the onsite preparation, assembly, or original 
        installation of the qualified property or energy storage 
        property and for piping or wiring to interconnect such property 
        to the dwelling unit shall be taken into account for purposes 
        of this section.
            ``(2) Tenant-stockholder in cooperative housing 
        corporation.--In the case of an individual who is a tenant-
        stockholder (as defined in section 216) in a cooperative 
        housing corporation (as defined in such section), such 
        individual shall be treated as having made his tenant-
        stockholder's proportionate share (as defined in section 
        216(b)(3)) of any expenditures of such corporation.
            ``(3) Condominiums.--
                    ``(A) In general.--In the case of an individual who 
                is a member of a condominium management association 
                with respect to a condominium which the individual 
                owns, such individual shall be treated as having made 
                the individual's proportionate share of any 
                expenditures of such association.
                    ``(B) Condominium management association.--For 
                purposes of this paragraph, the term `condominium 
                management association' means an organization which 
                meets the requirements of paragraph (1) of section 
                528(c) (other than subparagraph (E) thereof) with 
                respect to a condominium project substantially all of 
                the units of which are used as residences.
            ``(4) Allocation in certain cases.--If less than 80 percent 
        of the use of a property is for nonbusiness purposes, only that 
        portion of the expenditures for such property which is properly 
        allocable to use for nonbusiness purposes shall be taken into 
        account.
            ``(5) Coordination with other credits.--The terms 
        `qualified property' and `energy storage property' shall not 
        include any property for which a credit is allowed under 
        section 25D for any expenditure with respect to such property.
    ``(g) Basis Adjustment.--For purposes of this subtitle, if a credit 
is allowed under this section for any expenditures with respect to any 
property, the increase in the basis of such property which would (but 
for this subsection) result from such expenditures shall be reduced by 
the amount of the credit so allowed.
    ``(h) Final Guidance.--Not later than January 1, 2023, the 
Secretary and the Administrator of the Environmental Protection Agency 
shall issue final guidance regarding implementation of this section, 
including calculation of greenhouse gas emission rates for qualified 
property and determination of residential clean electricity property 
credits under this section.''.
            (2) Conforming amendments.--
                    (A) Section 23(c)(1) is amended by striking ``and 
                section 25D'' and inserting ``, section 25D, and 
                section 25E''.
                    (B) Section 25(e)(1)(C) is amended by striking 
                ``and 25D'' and inserting ``25D, and 25E''.
                    (C) Paragraph (1) of section 45(d) is amended by 
                striking ``with respect to which'' and all that follows 
                through the period and inserting the following: ``with 
                respect to which--
                    ``(A) any qualified small wind energy property 
                expenditure (as defined in subsection (d)(4) of section 
                25D) is taken into account in determining the credit 
                under such section, or
                    ``(B) any expenditures for qualified property (as 
                defined in subsection (b) of section 25E) which uses 
                wind to produce electricity is taken into account in 
                determining the credit under such section.''.
                    (D) Section 1016(a) is amended--
                            (i) by redesignating paragraphs (35) 
                        through (38) as paragraphs (36) through (39), 
                        respectively, and
                            (ii) by inserting after paragraph (34) the 
                        following:
            ``(35) to the extent provided in section 25E(g), in the 
        case of amounts with respect to which a credit has been allowed 
        under section 25E,''.
                    (E) The table of contents for subpart A of part IV 
                of subchapter A of chapter 1 is amended by inserting 
                after the item relating to section 25D the following 
                new item:

``Sec. 25E. Residential clean electricity credit.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to property placed in service after December 31, 
        2022.

SEC. 103. EXTENSIONS, MODIFICATIONS, AND TERMINATIONS OF VARIOUS ENERGY 
              PROVISIONS.

    (a) Residential Energy Efficient Property.--
            (1) Elimination of phaseout.--Section 25D(g) is amended to 
        read as follows:
    ``(g) Applicable Percentage.--For purposes of subsection (a), the 
applicable percentage shall be 30 percent.''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to property placed in service after December 31, 
        2020.
    (b) Renewable Electricity Production Credit.--
            (1) Carryforward of credit.--
                    (A) In general.--Section 39(a) is amended by adding 
                at the end the following:
            ``(4) 25-year carryforward for renewable electricity 
        production credit.--In the case of the renewable electricity 
        production credit--
                    ``(A) this section shall be applied separately from 
                the business credit (other than the renewable 
                electricity production credit), and
                    ``(B) paragraph (2) shall be applied--
                            ``(i) by substituting `26 taxable years' 
                        for `21 taxable years' in subparagraph (A) 
                        thereof, and
                            ``(ii) by substituting `25 taxable years' 
                        for `20 taxable years' in subparagraph (B) 
                        thereof.''.
                    (B) Effective date.--The amendment made by this 
                paragraph shall apply to credit carryforwards carried 
                to taxable years beginning after the date of enactment 
                of this Act.
            (2) Election for direct payment for renewable electricity 
        production credit.--Section 45 is amended by adding at the end 
        the following:
    ``(f) Election for Direct Payment.--
            ``(1) In general.--The amount of any credit determined 
        under subsection (a) with respect to any qualified facility for 
        any taxable year during the period described in subsection 
        (a)(2)(A)(ii) shall, at the election of the taxpayer, be 
        treated as a payment equal to such amount which is made by the 
        taxpayer against the tax imposed by chapter 1 for such taxable 
        year.
            ``(2) Form and effect of election.--
                    ``(A) In general.--An election under paragraph (1) 
                shall be made prior to the applicable date on and in 
                such manner as the Secretary may prescribe. Such 
                election, once made, shall--
                            ``(i) be irrevocable with respect to such 
                        qualified facility for the period described in 
                        subsection (a)(2)(A)(ii), and
                            ``(ii) for any taxable year during such 
                        period, reduce the amount of the credit which 
                        would (but for this paragraph) be allowable 
                        under this section with respect to such 
                        qualified facility for such taxable year to 
                        zero.
                    ``(B) Additional information.--For purposes of an 
                election under paragraph (1), the Secretary may require 
                such information as the Secretary deems necessary for 
                purposes of preventing duplication, fraud, or any 
                improper payments under this subsection.
                    ``(C) Applicable date.--For purposes of this 
                paragraph, the term `applicable date' means--
                            ``(i) in the case of any qualified facility 
                        which is placed in service after December 31, 
                        2020, and before the date of enactment of the 
                        Clean Energy for America Act, the earlier of--
                                    ``(I) the date which is 180 days 
                                after the date of enactment of such 
                                Act, or
                                    ``(II) the end of the taxable year 
                                in which such facility is placed in 
                                service,
                            ``(ii) in the case of any qualified 
                        facility the construction of which begins 
                        before the date of enactment of the Clean 
                        Energy for America Act and which is not placed 
                        in service before such date, the later of--
                                    ``(I) the date on which such 
                                facility is placed in service, or
                                    ``(II) the date which is 180 days 
                                after the date of enactment of such 
                                Act, or
                            ``(iii) in the case of any qualified 
                        facility the construction of which begins on or 
                        after the date of enactment of the Clean Energy 
                        for America Act, the date on which such 
                        facility is placed in service.
            ``(3) Application to partnerships and s corporations; 
        excess payment.--Rules similar to the rules of paragraphs (3) 
        and (5) of section 45U(h) shall apply for purposes of this 
        subsection.
            ``(4) Certain entities treated as taxpayers.--In the case 
        of an election under this subsection--
                    ``(A) any State utility with a service obligation, 
                as such terms are defined in section 217 of the Federal 
                Power Act (as in effect on the date of the enactment of 
                this subsection),
                    ``(B) any mutual or cooperative electric company 
                described in section 501(c)(12) or section 
                1381(a)(2)(C), or
                    ``(C) an Indian tribal government (as defined in 
                section 139E(c)(1)),
        shall be treated as a taxpayer for purposes of this subsection 
        and determining the amount of any credit under subsection 
        (a).''.
    (c) Termination of Allocation of Unutilized Limitation for Advanced 
Nuclear Power Facilities.--
            (1) In general.--Section 45J(b) is amended by striking 
        paragraph (5).
            (2) Effective date.--The amendment made by this subsection 
        shall apply to facilities the construction of which begins 
        after the date of enactment of this Act.
    (d) Modification of Credit for Carbon Dioxide Sequestration.--
            (1) In general.--Section 45Q is amended--
                    (A) in subsection (a)(4)(B)(i), by inserting 
                ``subject to subsection (f)(8),'' before ``used by'',
                    (B) in subsection (b)(1)--
                            (i) in subparagraph (A), by striking ``The 
                        applicable dollar amount'' and inserting 
                        ``Except as provided in subparagraph (B), the 
                        applicable dollar amount'',
                            (ii) by redesignating subparagraph (B) as 
                        subparagraph (C),
                            (iii) by inserting after subparagraph (A) 
                        the following:
                    ``(B) Applicable dollar amount for direct air 
                capture facilities.--In the case of any qualified 
                facility described in subsection (d)(1)(A) for which 
                construction begins after the date of enactment of the 
                Clean Energy for America Act, the applicable dollar 
                amount shall be an amount equal to--
                            ``(i) for any taxable year beginning in a 
                        calendar year before 2027--
                                    ``(I) for purposes of paragraph (3) 
                                of subsection (a), $175, and
                                    ``(II) for purposes of paragraph 
                                (4) of such subsection, $150, and
                            ``(ii) for any taxable year beginning in a 
                        calendar year after 2026--
                                    ``(I) for purposes of paragraph (3) 
                                of subsection (a), an amount equal to 
                                the product of $175 and the inflation 
                                adjustment factor for such calendar 
                                year determined under section 
                                43(b)(3)(B) for such calendar year, 
                                determined by substituting `2025' for 
                                `1990', and
                                    ``(II) for purposes of paragraph 
                                (4) of such subsection, an amount equal 
                                to the product of $150 and the 
                                inflation adjustment factor for such 
                                calendar year determined under section 
                                43(b)(3)(B) for such calendar year, 
                                determined by substituting `2025' for 
                                `1990'.'', and
                            (iv) in subparagraph (C), as so 
                        redesignated, by inserting ``or (B)'' after 
                        ``subparagraph (A)'',
                    (C) by striking subsection (d) and inserting the 
                following:
    ``(d) Qualified Facility.--
            ``(1) In general.--For purposes of this section, the term 
        `qualified facility' means--
                    ``(A) any direct air capture facility, and
                    ``(B) any industrial facility which captures--
                            ``(i) in the case of an electricity 
                        generating facility, not less than 75 percent 
                        of the carbon oxide which would otherwise be 
                        released into the atmosphere, or
                            ``(ii) in the case of an industrial 
                        facility which is not an electricity generating 
                        facility, not less than 50 percent of the 
                        carbon oxide which would otherwise be released 
                        into the atmosphere.
            ``(2) Coordination with other credits.--The term `qualified 
        facility' shall not include any facility for which a credit 
        determined under section 45U or 48D is allowed under section 38 
        for the taxable year or any prior taxable year.'',
                    (D) in subsection (f), by adding at the end the 
                following:
            ``(8) Elimination of use of carbon oxide as tertiary 
        injectant.--In the case of any qualified facility the 
        construction of which begins after December 31, 2026, 
        subsection (a)(4)(B)(i) shall not apply.'',
                    (E) by redesignating subsection (h) as subsection 
                (i), and
                    (F) by inserting after subsection (g) the 
                following:
    ``(h) Credit Phase-Out.--
            ``(1) In general.--
                    ``(A) Reduction based on emissions from production 
                of electricity.--Subject to subparagraphs (B) and (C), 
                if the Secretary and the Administrator of the 
                Environmental Protection Agency determine that the 
                annual greenhouse gas emissions from the production of 
                electricity in the United States are equal to or less 
                than 25 percent of the annual greenhouse gas emissions 
                from the production of electricity in the United States 
                for calendar year 2021, the amount of the carbon oxide 
                sequestration credit under subsection (a) for any 
                qualified facility the construction of which begins 
                during a calendar year described in paragraph (2) shall 
                be equal to the product of--
                            ``(i) the amount of the credit determined 
                        under subsection (a) without regard to this 
                        subsection, multiplied by
                            ``(ii) the phase-out percentage under 
                        paragraph (2).
                    ``(B) Other industrial facilities.--In the case of 
                any qualified facility described in subsection 
                (d)(1)(B)(ii) the construction of which begins during a 
                calendar year described in paragraph (2), subparagraph 
                (A) shall be applied by substituting `industrial 
                sector' for `production of electricity' each place it 
                appears.
                    ``(C) Direct air capture facilities.--In the case 
                of any qualified facility described in subsection 
                (d)(1)(A), subparagraph (A) shall not apply.
            ``(2) Phase-out percentage.--The phase-out percentage under 
        this paragraph is equal to--
                    ``(A) for a facility the construction of which 
                begins during the first calendar year following the 
                calendar year in which the determination described in 
                paragraph (1)(A) is made, 100 percent,
                    ``(B) for a facility the construction of which 
                begins during the second calendar year following such 
                determination year, 75 percent,
                    ``(C) for a facility the construction of which 
                begins during the third calendar year following such 
                determination year, 50 percent, and
                    ``(D) for a facility the construction of which 
                begins during any calendar year subsequent to the year 
                described in subparagraph (C), 0 percent.''.
            (2) Wage requirements.--Section 45Q(f), as amended by 
        paragraph (1)(D), is amended by adding at the end the 
        following:
            ``(9) Wage requirements.--
                    ``(A) In general.--The term `qualified facility' 
                shall not include any facility which fails to satisfy--
                            ``(i) subject to clause (ii) of 
                        subparagraph (B), the requirements under clause 
                        (i) of such subparagraph, and
                            ``(ii) with respect to--
                                    ``(I) the construction of any 
                                facility the construction of which 
                                begins after the date of enactment of 
                                the Clean Energy for America Act, and
                                    ``(II) the construction of any 
                                carbon capture equipment,
                        the requirements under section 501 of the Clean 
                        Energy for America Act.
                    ``(B) Requirements.--
                            ``(i) In general.--The requirements 
                        described in this clause with respect to any 
                        facility, and any carbon capture equipment 
                        placed in service at such facility, are that 
                        the taxpayer shall ensure that any laborers and 
                        mechanics employed by contractors and 
                        subcontractors in--
                                    ``(I) in the case of any facility 
                                the construction of which begins after 
                                the date of enactment of the Clean 
                                Energy for America Act, the 
                                construction of such facility, or
                                    ``(II) during the 12-year period 
                                beginning on the date on which carbon 
                                capture equipment is originally placed 
                                in service at any facility (as 
                                described in paragraphs (3)(A) and 
                                (4)(A) of subsection (a)), the 
                                alteration or repair of such facility 
                                or such equipment,
                        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 determined by the Secretary of 
                        Labor, in accordance with subchapter IV of 
                        chapter 31 of title 40, United States Code.
                            ``(ii) Failure to satisfy wage 
                        requirements; correction and penalty.--In the 
                        case of any taxpayer which fails to satisfy the 
                        requirement under clause (i) with respect to 
                        the construction of any facility or the 
                        alteration or repair of a facility or carbon 
                        capture equipment in any year during the period 
                        described in clause (i)(II), rules similar to 
                        the rules of clauses (i) and (ii) of section 
                        45U(b)(3)(B) shall apply for purposes of this 
                        subparagraph.''.
            (3) Election for direct payment.--Section 45Q, as amended 
        by the preceding paragraphs of this subsection, is amended--
                    (A) by redesignating subsection (i) as subsection 
                (j), and
                    (B) by inserting after subsection (h) the 
                following:
    ``(i) Election for Direct Payment.--
            ``(1) In general.--The amount of any credit determined 
        under paragraph (3) or (4) of subsection (a) with respect to 
        any qualified carbon oxide for any taxable year during the 
        period described in paragraph (3)(A) or (4)(A) of such 
        subsection, respectively, shall, at the election of the 
        taxpayer, be treated as a payment equal to such amount which is 
        made by the taxpayer against the tax imposed by chapter 1 for 
        such taxable year.
            ``(2) Form and effect of election.--
                    ``(A) In general.--An election under paragraph (1) 
                shall be made prior to the applicable date and in such 
                manner as the Secretary may prescribe. Such election, 
                once made, shall--
                            ``(i) be irrevocable with respect to such 
                        carbon capture equipment for the period 
                        described in paragraph (3)(A) or (4)(A) of 
                        subsection (a), and
                            ``(ii) for any taxable year during such 
                        period, reduce the amount of the credit which 
                        would (but for this paragraph) be allowable 
                        under this section with respect to such 
                        equipment for such taxable year to zero.
                    ``(B) Additional information.--For purposes of an 
                election under paragraph (1), the Secretary may require 
                such information as the Secretary deems necessary for 
                purposes of preventing duplication, fraud, or any 
                improper payments under this subsection.
                    ``(C) Applicable date.--For purposes of this 
                paragraph, the term `applicable date' means--
                            ``(i) in the case of any carbon capture 
                        equipment which is placed in service after 
                        December 31, 2020, and before the date of 
                        enactment of the Clean Energy for America Act, 
                        the earlier of--
                                    ``(I) the date which is 180 days 
                                after the date of enactment of such 
                                Act, or
                                    ``(II) the end of the taxable year 
                                in which such equipment is placed in 
                                service,
                            ``(ii) in the case of any carbon capture 
                        equipment the construction of which began 
                        before the date of enactment of the Clean 
                        Energy for America Act and which has not placed 
                        in service before such date, the later of--
                                    ``(I) the date on which such 
                                equipment is placed in service, or
                                    ``(II) the date which is 180 days 
                                after the date of enactment of such 
                                Act, and
                            ``(iii) in the case of any carbon capture 
                        equipment the construction of which begins on 
                        or after the date of enactment of the Clean 
                        Energy for America Act, the date on which such 
                        equipment is placed in service.
            ``(3) Application to partnerships and s corporations; 
        excess payment.--Rules similar to the rules of paragraphs (3) 
        and (5) of section 45U(h) shall apply for purposes of this 
        subsection.
            ``(4) Certain entities treated as taxpayers.--In the case 
        of an election under this subsection--
                    ``(A) any State utility with a service obligation, 
                as such terms are defined in section 217 of the Federal 
                Power Act (as in effect on the date of the enactment of 
                this subsection),
                    ``(B) any mutual or cooperative electric company 
                described in section 501(c)(12) or section 
                1381(a)(2)(C), or
                    ``(C) an Indian tribal government (as defined in 
                section 139E(c)(1)),
        shall be treated as a taxpayer for purposes of this subsection 
        and determining the amount of any credit under subsection 
        (a).''.
            (4) Credit reduced for grants, tax-exempt bonds, subsidized 
        energy financing, and other credits.--Section 45Q(f), as 
        amended by paragraphs (1)(D) and (2), is amended by adding at 
        the end the following:
            ``(10) Credit reduced for grants, tax-exempt bonds, 
        subsidized energy financing, and other credits.--Rules similar 
        to the rules under section 45(b)(3) shall apply for purposes of 
        this section.''.
            (5) Effective dates.--
                    (A) In general.--The amendments made by paragraph 
                (1) (with the exception of the amendment made under 
                subparagraph (D) of such paragraph) shall apply to 
                facilities the construction of which begins after the 
                date of enactment of this Act.
                    (B) Elimination of use of carbon oxide as tertiary 
                injectant.--The amendment made by paragraph (1)(D) 
                shall apply to facilities the construction of which 
                begins after December 31, 2026.
                    (C) Wage requirements.--The amendments made by 
                paragraph (2) shall apply to facilities or equipment 
                the construction of which begins after December 31, 
                2021.
                    (D) Election for direct payment.--The amendments 
                made by paragraph (3) shall apply to carbon capture 
                equipment which is placed in service after December 31, 
                2020.
                    (E) Credit reduced for grants, tax-exempt bonds, 
                subsidized energy financing, and other credits.--The 
                amendments made by paragraph (4) shall apply to taxable 
                years beginning after the date of enactment of this 
                Act.
    (e) Modification of Credits for Energy Property.--
            (1) Termination.--
                    (A) Solar energy property.--Section 48(a)(3)(A)(i) 
                is amended by inserting ``but only with respect to 
                property the construction of which begins before 
                January 1, 2024,'' after ``swimming pool,''.
                    (B) Geothermal energy property.--Section 
                48(a)(3)(A)(iii) is amended by inserting ``with respect 
                to property the construction of which begins before 
                January 1, 2024, and'' after ``but only''.
                    (C) Qualified offshore wind facilities.--Section 
                48(a)(5)(F) is amended by striking ``January 1, 2026'' 
                each place it appears and inserting ``January 1, 
                2024''.
            (2) Elimination of phaseouts.--
                    (A) In general.--Section 48 is amended by striking 
                paragraphs (6) and (7).
                    (B) Effective date.--The amendments made by this 
                paragraph shall apply to property the construction of 
                which begins after December 31, 2020.
            (3) Increase in credit rate for geothermal deposits.--
                    (A) In general.--Section 48(a)(2)(A)(i)(II) is 
                amended by striking ``paragraph (3)(A)(i)'' and 
                inserting ``clause (i) or (iii) of paragraph (3)(A)''.
                    (B) Effective date.--The amendments made by this 
                paragraph shall apply to property the construction of 
                which begins after December 31, 2020.
            (4) Election for direct payment.--
                    (A) In general.--Section 48, as amended by 
                paragraph (1), is amended by adding at the end the 
                following:
    ``(e) Election for Direct Payment.--
            ``(1) In general.--In the case of any energy property 
        placed in service during any taxable year, the amount of any 
        credit determined under subsection (a) with respect to such 
        property for such taxable year shall, at the election of the 
        taxpayer, be treated as a payment equal to such amount which is 
        made by the taxpayer against the tax imposed by chapter 1 for 
        such taxable year (regardless of whether such tax would have 
        been on such taxpayer).
            ``(2) Form and effect of election.--
                    ``(A) In general.--An election under paragraph (1) 
                shall be made prior to the applicable date and in such 
                manner as the Secretary may prescribe. Such election, 
                once made, shall--
                            ``(i) be irrevocable with respect to the 
                        energy property to which such election applies, 
                        and
                            ``(ii) reduce the amount of the credit 
                        which would (but for this subsection) be 
                        allowable under this section with respect to 
                        such property for the taxable year in which 
                        such property is placed in service to zero.
                    ``(B) Additional information.--For purposes of an 
                election under paragraph (1), the Secretary may require 
                such information as the Secretary deems necessary for 
                purposes of preventing duplication, fraud, or any 
                improper payments under this subsection.
                    ``(C) Applicable date.--For purposes of this 
                paragraph, the term `applicable date' means--
                            ``(i) in the case of any energy property 
                        which is placed in service after December 31, 
                        2020, and before the date of enactment of the 
                        Clean Energy for America Act, the earlier of--
                                    ``(I) the date which is 180 days 
                                after the date of enactment of such 
                                Act, or
                                    ``(II) the end of the taxable year 
                                in which such property is placed in 
                                service,
                            ``(ii) in the case of any energy property 
                        the construction of which began before the date 
                        of enactment of the Clean Energy for America 
                        Act and which has not been placed in service 
                        before such date, the later of--
                                    ``(I) the date on which such 
                                property is placed in service, or
                                    ``(II) the date which is 180 days 
                                after the date of enactment of such 
                                Act, or
                            ``(iii) in the case of any energy property 
                        the construction of which begins on or after 
                        the date of enactment of the Clean Energy for 
                        America Act, the date on which such property is 
                        placed in service.
            ``(3) Application to partnerships and s corporations; 
        excess payment.--Rules similar to the rules of paragraphs (3) 
        and (5) of section 45U(h) shall apply for purposes of this 
        subsection.
            ``(4) Special rules for certain entities.--
                    ``(A) Eligibility of certain property.--For 
                purposes of this subsection, paragraphs (3) and (4) of 
                section 50(b) shall not apply with respect to--
                            ``(i) any State utility with a service 
                        obligation, as such terms are defined in 
                        section 217 of the Federal Power Act (as in 
                        effect on the date of the enactment of this 
                        subsection),
                            ``(ii) any mutual or cooperative electric 
                        company described in section 501(c)(12) or 
                        section 1381(a)(2)(C), or
                            ``(iii) an Indian tribal government (as 
                        defined in section 139E(c)(1)).
                    ``(B) Certain entities treated as taxpayers.--In 
                the case of an election under this subsection, any 
                entity described in clause (i), (ii), or (iii) of 
                subparagraph (A) shall be treated as a taxpayer for 
                purposes of this subsection and determining the amount 
                of any credit under subsection (a).''.
                    (B) Effective date.--The amendment made by this 
                paragraph shall apply to property placed in service 
                after December 31, 2020.
            (5) Energy credit for qualified biogas property and 
        qualified manure resource recovery property.--
                    (A) In general.--Section 48(a)(3)(A) is amended by 
                striking ``or'' at the end of clause (vii) and by 
                adding at the end the following new clauses:
                            ``(ix) qualified biogas property, or
                            ``(x) qualified manure resource recovery 
                        property,''.
                    (B) 30-percent credit.--Section 48(a)(2)(A)(i) is 
                amended by striking ``and'' at the end of subclause 
                (IV), by striking ``and'' at the end of subclause (V), 
                and by adding at the end the following new subclauses:
                                    ``(VI) qualified biogas property, 
                                and
                                    ``(VII) qualified manure resource 
                                recovery property, and''.
                    (C) Definitions.--Section 48(c) is amended by 
                adding at the end the following new paragraphs:
            ``(6) Qualified biogas property.--
                    ``(A) In general.--The term `qualified biogas 
                property' means property comprising a system which--
                            ``(i) uses anaerobic digesters, or other 
                        biological, chemical, thermal, or mechanical 
                        processes (alone or in combination), to convert 
                        biomass (as defined in section 45K(c)(3)) into 
                        a gas which consists of not less than 52 
                        percent methane, and
                            ``(ii) captures such gas for use as a fuel.
                    ``(B) Inclusion of certain cleaning and 
                conditioning equipment.--Such term shall include any 
                property which cleans and conditions the gas referred 
                to in subparagraph (A) for use as a fuel.
                    ``(C) Termination.--No credit shall be determined 
                under this section with respect to any qualified biogas 
                property for any period after December 31, 2023.
            ``(7) Qualified manure resource recovery property.--
                    ``(A) In general.--The term `qualified manure 
                resource recovery property' means property comprising a 
                system which uses physical, biological, chemical, 
                thermal, or mechanical processes to recover the 
                nutrients nitrogen and phosphorus from a non-treated 
                digestate or animal manure by reducing or separating at 
                least 50 percent of the concentration of such 
                nutrients, excluding any reductions during the 
                incineration, storage, composting, or field application 
                of the non-treated digestate or animal manure.
                    ``(B) Inclusion of certain processing equipment.--
                Such term shall include--
                            ``(i) any property which is used to recover 
                        the nutrients referred to in subparagraph (A), 
                        such as--
                                    ``(I) biological reactors,
                                    ``(II) crystallizers,
                                    ``(III) water filtration membrane 
                                systems and other water purifiers,
                                    ``(IV) evaporators,
                                    ``(V) distillers,
                                    ``(VI) decanter centrifuges, and
                                    ``(VII) equipment that facilitates 
                                the process of removing and dewatering 
                                suspended and dissolved solids, ammonia 
                                stripping, gasification, or ozonation, 
                                and
                            ``(ii) any thermal drier which treats the 
                        nutrients recovered by the processes referred 
                        to in subparagraph (A).
                    ``(C) Termination.--No credit shall be determined 
                under this section with respect to any qualified manure 
                resource recovery property for any period after 
                December 31, 2023.''.
                    (D) Denial of double benefit for qualified biogas 
                property.--Section 45(e) is amended by adding at the 
                end the following new paragraph:
            ``(12) Coordination with energy credit for qualified biogas 
        property.--The term `qualified facility' shall not include any 
        facility which produces electricity from gas produced by 
        qualified biogas property (as defined in section 48(c)(6)) if a 
        credit is determined under section 48 with respect to such 
        property for the taxable year or any prior taxable year.''.
                    (E) Effective date.--The amendments made by this 
                paragraph shall apply to property placed in service 
                after December 31, 2020, under rules similar to the 
                rules of section 48(m) of such Code (as in effect on 
                the day before the date of the enactment of the Revenue 
                Reconciliation Act of 1990).
            (6) Expansion of energy credit to include clean hydrogen 
        production facilities.--
                    (A) In general.--Section 48(a)(5) is amended--
                            (i) in subparagraph (A)(ii), by inserting 
                        ``subject to subparagraph (G)(i),'' before 
                        ``the energy percentage'',
                            (ii) in subparagraph (B), by inserting ``or 
                        45X'' after ``section 45'',
                            (iii) in subparagraph (C)--
                                    (I) in clause (i), by inserting 
                                ``or, subject to subparagraph (G)(ii), 
                                a qualified clean hydrogen production 
                                facility (as defined in section 
                                45X(d)(3))'' after ``section 45(d)'',
                                    (II) in clause (ii), by inserting 
                                ``(or, in the case of a qualified clean 
                                hydrogen production facility, which is 
                                placed in service after 2020 and the 
                                construction of which begins before 
                                January 1, 2030)'' after ``January 1, 
                                2022'', and
                                    (III) in clause (iii)(I), by 
                                inserting ``or 45X'' after ``section 
                                45'', and
                            (iv) by adding at the end the following:
                    ``(G) Qualified clean hydrogen production 
                facilities.--
                            ``(i) Energy percentage.--
                                    ``(I) In general.--For purposes of 
                                subparagraph (A)(ii), in the case of a 
                                qualified investment credit facility 
                                which is a qualified clean hydrogen 
                                production facility, the energy 
                                percentage with respect to such 
                                facility shall be an amount (expressed 
                                as a percentage) equal to--
                                            ``(aa) in the case of a 
                                        facility which is estimated to 
                                        produce qualified clean 
                                        hydrogen (as defined in 
                                        described in section 45X(d)(2)) 
                                        which is described in 
                                        subparagraph (A) of section 
                                        45X(b)(2), 20 percent of the 
                                        energy percentage otherwise 
                                        applicable under subparagraph 
                                        (A)(ii),
                                            ``(bb) in the case of a 
                                        facility which is estimated to 
                                        produce qualified clean 
                                        hydrogen which is described in 
                                        subparagraph (B) of section 
                                        45X(b)(2), 25 percent of the 
                                        energy percentage otherwise 
                                        applicable under subparagraph 
                                        (A)(ii),
                                            ``(cc) in the case of a 
                                        facility which is estimated to 
                                        produce qualified clean 
                                        hydrogen which is described in 
                                        subparagraph (C) of section 
                                        45X(b)(2), 34 percent of the 
                                        energy percentage otherwise 
                                        applicable under subparagraph 
                                        (A)(ii), and
                                            ``(dd) in the case of a 
                                        facility which is estimated to 
                                        produce qualified clean 
                                        hydrogen which is described in 
                                        subparagraph (D) of section 
                                        45X(b)(2), 100 percent of the 
                                        energy percentage otherwise 
                                        applicable under subparagraph 
                                        (A)(ii).
                                    ``(II) Recapture.--The Secretary 
                                shall, by regulations, provide for 
                                recapturing the benefit of any credit 
                                allowable under this section with 
                                respect to any qualified clean hydrogen 
                                production facility which fails to 
                                produce qualified clean hydrogen 
                                consistent with the applicable 
                                percentage reduction in lifecycle 
                                greenhouse gas emissions described in 
                                section 45X(b)(2) which were estimated 
                                for such facility pursuant to subclause 
                                (I).
                            ``(ii) No double benefit.--For purposes of 
                        this paragraph, the term `qualified investment 
                        credit facility' shall not include any 
                        qualified clean hydrogen production facility 
                        for which a credit is allowed under section 38 
                        for the taxable year or any prior taxable year 
                        which is properly allocable to any credit 
                        determined under--
                                    ``(I) this section (other than 
                                pursuant to this paragraph), or
                                    ``(II) section 45, 45J, 45Q, 45U, 
                                45V, or 48D.''.
                    (B) Effective date.--The amendments made by this 
                paragraph shall apply to property placed in service 
                after December 31, 2020.
            (7) Fuel cells using electromechanical processes.--
                    (A) In general.--Section 48(c)(1) is amended--
                            (i) in subparagraph (A)(i)--
                                    (I) by inserting ``or 
                                electromechanical'' after 
                                ``electrochemical'', and
                                    (II) by inserting ``(1 kilowatts in 
                                the case of a fuel cell power plant 
                                with a linear generator assembly)'' 
                                after ``0.5 kilowatt'', and
                            (ii) in subparagraph (C)--
                                    (I) by inserting ``, or linear 
                                generator assembly,'' after ``a fuel 
                                cell stack assembly'', and
                                    (II) by inserting ``or 
                                electromechanical'' after 
                                ``electrochemical''.
                    (B) Linear generator assembly limitation.--Section 
                48(c)(1) is amended by redesignating subparagraph (D) 
                as subparagraph (E) and by inserting after subparagraph 
                (C) the following new subparagraph:
                    ``(D) Linear generator assembly.--The term `linear 
                generator assembly' does not include any assembly which 
                contains rotating parts.''.
                    (C) Effective date.--The amendments made by this 
                paragraph shall apply to property the construction of 
                which begins after December 31, 2020.
    (f) Cost Recovery for Qualified Facilities, Qualified Property, and 
Grid Improvement Property.--
            (1) In general.--Section 168(e)(3)(B) is amended--
                    (A) in clause (vi)(III), by striking ``and'' at the 
                end,
                    (B) in clause (vii), by striking the period at the 
                end and inserting ``, and'', and
                    (C) by inserting after clause (vii) the following:
                            ``(viii) any qualified facility (as defined 
                        in section 45U(b)(1)(A)), any qualified 
                        property (as defined in subsection (b)(2) of 
                        section 48D), or any grid improvement property 
                        (as defined in subsection (c)(1)(B) of such 
                        section).''.
            (2) Alternative system.--The table contained in section 
        168(g)(3)(B) is amended by inserting after the item relating to 
        subparagraph (B)(vii) the following new item:

``(B)(viii) ................................................      30''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to facilities and property placed in service after 
        December 31, 2022.

             TITLE II--INCENTIVES FOR CLEAN TRANSPORTATION

SEC. 201. CLEAN FUEL PRODUCTION CREDIT.

    (a) In General.--
            (1) Allowance of credit.--Subpart D of part IV of 
        subchapter A of chapter 1, as amended by section 101, is 
        amended by adding at the end the following new section:

``SEC. 45V. CLEAN FUEL PRODUCTION CREDIT.

    ``(a) Amount of Credit.--
            ``(1) In general.--For purposes of section 38, the clean 
        fuel production credit for any taxable year is an amount equal 
        to--
                    ``(A) for any transportation fuel sold during any 
                calendar year ending before January 1, 2030, an amount 
                equal to the product of--
                            ``(i) $1.00 per gallon (or gallon 
                        equivalent) with respect to any transportation 
                        fuel which is--
                                    ``(I) produced by the taxpayer at a 
                                qualified facility, and
                                    ``(II) sold by the taxpayer in a 
                                manner described in paragraph (4), and
                            ``(ii) the emissions factor for such fuel 
                        (as determined under subsection (b)), and
                    ``(B) for any transportation fuel which is sold 
                during any calendar year beginning after December 31, 
                2029, and which has an emissions rate equal to or less 
                than zero, an amount equal to the applicable amount (as 
                determined under paragraph (2)) per gallon (or gallon 
                equivalent) with respect to any transportation fuel 
                which is--
                            ``(i) produced by the taxpayer at a 
                        qualified facility, and
                            ``(ii) sold by the taxpayer in a manner 
                        described in paragraph (4).
            ``(2) Applicable amount.--For purposes of paragraph (1)(B), 
        the applicable amount with respect to any transportation fuel 
        shall be an amount equal to $1.00 increased by 10 cents for 
        every kilogram of CO<INF>2</INF>e per mmBTU (or fraction 
        thereof) for which the emissions rate for such fuel is below 
        zero.
            ``(3) Special rate for sustainable aviation fuel.--
                    ``(A) In general.--In the case of an transportation 
                fuel which is sustainable aviation fuel, paragraphs 
                (1)(A)(i) and (2) shall each be applied by substituting 
                `$2.00' for `$1.00'.
                    ``(B) Sustainable aviation fuel.--For purposes of 
                this subparagraph (A), the term `sustainable aviation 
                fuel' means liquid fuel which is sold for use in, or 
                used in, an aircraft and which--
                            ``(i) consists of synthesized hydrocarbons,
                            ``(ii) meets the requirements of--
                                    ``(I) ASTM International Standard 
                                D7566, or
                                    ``(II) the Fischer Tropsch 
                                provisions of ASTM International 
                                Standard D1655, Annex A1,
                            ``(iii) is derived from--
                                    ``(I) biomass (as such term is 
                                defined in section 45K(c)(3)), or
                                    ``(II) electrolysis powered by 
                                renewable energy resources, or
                                    ``(III) carbon oxides captured from 
                                an industrial source or from the 
                                ambient air, and
                            ``(iv) is not derived from palm fatty acid 
                        distillates.
            ``(4) Sale.--For purposes of paragraph (1), the 
        transportation fuel is sold in a manner described in this 
        paragraph if such fuel is sold by the taxpayer to an unrelated 
        person--
                    ``(A) for use by such person in the production of a 
                fuel mixture,
                    ``(B) for use by such person in a trade or 
                business, or
                    ``(C) who sells such fuel at retail to another 
                person and places such fuel in the fuel tank of such 
                other person.
            ``(5) Rounding.--If any amount determined under paragraph 
        (1)(A) or (2) is not a multiple of 0.1 cent, such amount shall 
        be rounded to the nearest multiple of 0.1 cent.
    ``(b) Emissions Factors.--
            ``(1) Emissions factor.--
                    ``(A) Calculation.--
                            ``(i) In general.--The emissions factor of 
                        a transportation fuel shall be an amount equal 
                        to the quotient of--
                                    ``(I) an amount equal to--
                                            ``(aa) the baseline 
                                        emissions rate, minus
                                            ``(bb) the emissions rate 
                                        for such fuel, divided by
                                    ``(II) the baseline emissions rate.
                    ``(B) Baseline emissions rate.--For purposes of 
                this paragraph, the term `baseline emissions rate' 
                means--
                            ``(i) for any calendar year ending before 
                        January 1, 2026, 75 kilograms of 
                        CO<INF>2</INF>e per mmBTU,
                            ``(ii) for calendar years 2026 and 2027, 50 
                        kilograms of CO<INF>2</INF>e per mmBTU, and
                            ``(iii) for calendar years 2028 and 2029, 
                        25 kilograms of CO<INF>2</INF>e per mmBTU.
                    ``(C) Establishment of emissions rate.--The 
                Secretary and the Secretary of Energy shall establish 
                the emissions rate for similar types and categories of 
                transportation fuels based on the amount of lifecycle 
                greenhouse gas emissions (as described in section 
                211(o)(1)(H) of the Clean Air Act (42 U.S.C. 
                7545(o)(1)(H)), as in effect on the date of the 
                enactment of this section) for such fuels, expressed as 
                kilograms of CO<INF>2</INF>e per mmBTU, which a 
                taxpayer shall use for purposes of this section.
                    ``(D) Rounding of emissions rate.--The Secretary 
                may round the emissions rates under subparagraph (B) to 
                the nearest multiple of 5 kilograms of CO<INF>2</INF>e 
                per mmBTU, except that, in the case of an emissions 
                rate that is less than 2.5 kilograms of CO<INF>2</INF>e 
                per mmBTU, the Secretary may round such rate to zero.
                    ``(E) Provisional emissions rate.--
                            ``(i) In general.--In the case of any 
                        transportation fuel for which an emissions rate 
                        has not been established by under subparagraph 
                        (C), a taxpayer producing such fuel may file a 
                        petition with the Secretary and the Secretary 
                        of Energy for determination of the emissions 
                        rate with respect to such fuel.
                            ``(ii) Establishment of provisional and 
                        final emissions rate.--In the case of a 
                        transportation fuel for which a petition 
                        described in clause (i) has been filed, the 
                        Secretary and the Secretary of Energy shall--
                                    ``(I) not later than 12 months 
                                after the date on which the petition 
                                was filed, provide a provisional 
                                emissions rate for such fuel which a 
                                taxpayer shall use for purposes of this 
                                section, and
                                    ``(II) not later than 24 months 
                                after the date on which the petition 
                                was filed, establish the emissions rate 
                                for such fuel.
                    ``(F) Rounding.--If any amount determined under 
                subparagraph (A) is not a multiple of 0.1, such amount 
                shall be rounded to the nearest multiple of 0.1.
            ``(2) Publishing emissions rate.--The Secretary shall 
        publish annually a table that sets forth the emissions rate (as 
        established pursuant to paragraph (1)) for similar types and 
        categories of transportation fuels.
    ``(c) Inflation Adjustment.--
            ``(1) In general.--In the case of calendar years beginning 
        after 2023, the $1.00 amount in paragraphs (1)(A)(i) and (2) of 
        subsection (a) and the $2.00 amount in subsection (a)(3) shall 
        each be adjusted by multiplying such amount by the inflation 
        adjustment factor for the calendar year in which the sale or 
        use of the transportation fuel occurs. If any amount as 
        increased under the preceding sentence is not a multiple of 1 
        cent, such amount shall be rounded to the nearest multiple of 1 
        cent.
            ``(2) Inflation adjustment factor.--For purposes of 
        paragraph (1), the inflation adjustment factor shall be the 
        inflation adjustment factor determined and published by the 
        Secretary pursuant to section 45U(c), determined by 
        substituting `calendar year 2022' for `calendar year 1992' in 
        paragraph (3) thereof.
    ``(d) Credit Phase-Out.--
            ``(1) In general.--If the Secretary and the Administrator 
        of the Environmental Protection Agency determine that the 
        greenhouse gas emissions from the transportation of persons and 
        goods annually in the United States are equal to or less than 
        25 percent of the greenhouse gas emissions from the 
        transportation of persons and goods in the United States during 
        calendar year 2021, the amount of the clean fuel production 
        credit under this section shall be determined by substituting 
        the applicable amount (as determined under paragraph (2)(A)) 
        for the dollar amount applicable under paragraphs (1)(A)(i) and 
        (2) of subsection (a).
            ``(2) Applicable dollar amount.--
                    ``(A) In general.--The applicable amount for any 
                taxable year described in subparagraph (B) shall be an 
                amount equal to the product of--
                            ``(i) the dollar amount applicable under 
                        paragraphs (1)(A)(i) and (2) of subsection (a) 
                        (as adjusted by subsection (c)), 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) for any taxable year beginning in the 
                        first calendar year following the calendar year 
                        in which the determination described in 
                        paragraph (1) is made, 100 percent,
                            ``(ii) for any taxable year beginning in 
                        the second calendar year following such 
                        determination year, 75 percent,
                            ``(iii) for any taxable year beginning in 
                        the third calendar year following such 
                        determination year, 50 percent, and
                            ``(iv) for any taxable year beginning in 
                        any calendar year subsequent to the year 
                        described in clause (iii), 0 percent.
    ``(e) Definitions.--In this section:
            ``(1) mmBTU.--The term `mmBTU' means 1,000,000 British 
        thermal units.
            ``(2) CO<INF>2</INF>e.--The term `CO<INF>2</INF>e' means, 
        with respect to any greenhouse gas, the equivalent carbon 
        dioxide (as determined based on relative global warming 
        potential).
            ``(3) Greenhouse gas.--The term `greenhouse gas' has the 
        same meaning given that term under section 211(o)(1)(G) of the 
        Clean Air Act (42 U.S.C. 7545(o)(1)(G)), as in effect on the 
        date of the enactment of this section.
            ``(4) Qualified facility.--
                    ``(A) In general.--The term `qualified facility' 
                means a facility--
                            ``(i) used for the production of 
                        transportation fuels, and
                            ``(ii) which--
                                    ``(I) subject to clause (ii) of 
                                subparagraph (B), satisfies the 
                                requirements under clause (i) of such 
                                subparagraph, and
                                    ``(II) with respect to the 
                                construction of such facility, 
                                satisfies the requirements under 
                                section 501 of the Clean Energy for 
                                America Act.
                        Clause (ii)(II) shall not apply to any facility 
                        placed in service before January 1, 2023.
                    ``(B) Wage requirements.--
                            ``(i) In general.--The requirements 
                        described 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, or
                                    ``(II) for any year described in 
                                subsection (a)(1) for which the credit 
                                under this section is claimed, 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 determined by the Secretary of 
                        Labor, in accordance with subchapter IV of 
                        chapter 31 of title 40, United States Code.
                            ``(ii) Failure to satisfy wage 
                        requirements; correction and penalty.--In the 
                        case of any taxpayer which fails to satisfy the 
                        requirement under clause (i) with respect to 
                        the construction of any facility or the 
                        alteration or repair of such facility in any 
                        year during the period described in clause 
                        (i)(II), rules similar to the rules of clauses 
                        (i) and (ii) of section 45U(b)(3)(B) shall 
                        apply for purposes of this subparagraph.
                            ``(iii) Special rule for facilities placed 
                        in service before january 1, 2023.--In the case 
                        of any facility placed in service before 
                        January 1, 2023--
                                    ``(I) clause (i)(I) shall not 
                                apply, and
                                    ``(II) clause (ii) shall be applied 
                                without regard to the phrase `the 
                                construction of any facility or'.
            ``(5) Transportation fuel.--The term `transportation fuel' 
        means a fuel which is suitable for use as a fuel in a highway 
        vehicle or aircraft.
    ``(f) Final Guidance.--Not later than January 1, 2023, the 
Secretary and the Secretary of Energy shall jointly issue final 
guidance regarding implementation of this section, including 
calculation of emissions factors for transportation fuel, the table 
described in subsection (b)(2), and the determination of clean fuel 
production credits under this section.
    ``(g) Special Rules.--
            ``(1) Only registered production in the united states taken 
        into account.--
                    ``(A) In general.--No clean fuel production credit 
                shall be determined under subsection (a) with respect 
                to any transportation fuel unless--
                            ``(i) the taxpayer is registered as a 
                        producer of clean fuel under section 4101 at 
                        the time of production, and
                            ``(ii) such fuel is produced in the United 
                        States.
                    ``(B) United states.--For purposes of this 
                paragraph, the term `United States' includes any 
                possession of the United States.
            ``(2) Production attributable to the taxpayer.--In the case 
        of a facility in which more than 1 person has an ownership 
        interest, except to the extent provided in regulations 
        prescribed by the Secretary, production from the facility shall 
        be allocated among such persons in proportion to their 
        respective ownership interests in the gross sales from such 
        facility.
            ``(3) Related persons.--Persons shall be treated as related 
        to each other if such persons would be treated as a single 
        employer under the regulations prescribed under section 52(b). 
        In the case of a corporation which is a member of an affiliated 
        group of corporations filing a consolidated return, such 
        corporation shall be treated as selling fuel to an unrelated 
        person if such fuel is sold to such a person by another member 
        of such group.
            ``(4) Pass-thru in the case of estates and trusts.--Under 
        regulations prescribed by the Secretary, rules similar to the 
        rules of subsection (d) of section 52 shall apply.
            ``(5) Allocation of credit to patrons of agricultural 
        cooperative.--
                    ``(A) Election to allocate.--
                            ``(i) In general.--In the case of an 
                        eligible cooperative organization, any portion 
                        of the credit determined under subsection (a) 
                        for the taxable year may, at the election of 
                        the organization, be apportioned among patrons 
                        of the organization on the basis of the amount 
                        of business done by the patrons during the 
                        taxable year.
                            ``(ii) Form and effect of election.--An 
                        election under clause (i) for any taxable year 
                        shall be made on a timely filed return for such 
                        year. Such election, once made, shall be 
                        irrevocable for such taxable year. Such 
                        election shall not take effect unless the 
                        organization designates the apportionment as 
                        such in a written notice mailed to its patrons 
                        during the payment period described in section 
                        1382(d).
                    ``(B) Treatment of organizations and patrons.--The 
                amount of the credit apportioned to any patrons under 
                subparagraph (A)--
                            ``(i) shall not be included in the amount 
                        determined under subsection (a) with respect to 
                        the organization for the taxable year, and
                            ``(ii) shall be included in the amount 
                        determined under subsection (a) for the first 
                        taxable year of each patron ending on or after 
                        the last day of the payment period (as defined 
                        in section 1382(d)) for the taxable year of the 
                        organization or, if earlier, for the taxable 
                        year of each patron ending on or after the date 
                        on which the patron receives notice from the 
                        cooperative of the apportionment.
                    ``(C) Special rules for decrease in credits for 
                taxable year.--If the amount of the credit of a 
                cooperative organization determined under subsection 
                (a) for a taxable year is less than the amount of such 
                credit shown on the return of the cooperative 
                organization for such year, an amount equal to the 
                excess of--
                            ``(i) such reduction, over
                            ``(ii) the amount not apportioned to such 
                        patrons under subparagraph (A) for the taxable 
                        year,
                shall be treated as an increase in tax imposed by this 
                chapter on the organization. Such increase shall not be 
                treated as tax imposed by this chapter for purposes of 
                determining the amount of any credit under this 
                chapter.
                    ``(D) Eligible cooperative defined.--For purposes 
                of this section the term `eligible cooperative' means a 
                cooperative organization described in section 1381(a) 
                which is owned more than 50 percent by agricultural 
                producers or by entities owned by agricultural 
                producers. For this purpose an entity owned by an 
                agricultural producer is one that is more than 50 
                percent owned by agricultural producers.''.
            (2) Conforming amendments.--
                    (A) Section 38(b), as amended by section 101, is 
                amended
                            (i) in paragraph (33), by striking ``plus'' 
                        at the end,
                            (ii) in paragraph (34), by striking the 
                        period at the end and inserting ``, plus'', and
                            (iii) by adding at the end the following 
                        new paragraph:
            ``(35) the clean fuel production credit determined under 
        section 45V(a).''.
                    (B) The table of sections for subpart D of part IV 
                of subchapter A of chapter 1, as amended by section 
                101, is amended by adding at the end the following new 
                item:

``Sec. 45V. Clean fuel production credit.''.
                    (C) Section 4101(a)(1) is amended by inserting 
                ``every person producing a fuel eligible for the clean 
                fuel production credit (pursuant to section 45V),'' 
                after ``section 6426(b)(4)(A)),''.
            (3) Effective date.--The amendments made by this section 
        shall apply to transportation fuel produced after December 31, 
        2022.
    (b) Sustainable Aviation Fuel Credit.--
            (1) In general.--Subpart D of part IV of subchapter A of 
        chapter 1 is amended by inserting after section 40A the 
        following new section:

``SEC. 40B. SUSTAINABLE AVIATION FUEL CREDIT.

    ``(a) In General.--
            ``(1) Credit amount.--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--
                    ``(A) the number of gallons of sustainable aviation 
                fuel in such mixture, multiplied by
                    ``(B) the sum of--
                            ``(i) $1.50, plus
                            ``(ii) the applicable supplementary credit 
                        amount with respect to the sustainable aviation 
                        fuel.
            ``(2) Applicable supplementary credit amount.--
                    ``(A) In general.--For purposes of this section, 
                the applicable supplementary credit amount means, with 
                respect to any sustainable aviation fuel, an amount 
                equal to $0.01 for every percentage point by which the 
                lifecycle greenhouse gas emissions reduction percentage 
                with respect to such fuel exceeds 50 percent.
                    ``(B) Limitation.--In no event shall the applicable 
                supplementary credit amount exceed $0.50.
    ``(b) Qualified Mixture.--For purposes of this section--
            ``(1) In general.--The term `qualified mixture' means a 
        mixture of sustainable aviation fuel and kerosene if--
                    ``(A) such mixture is produced in the United States 
                by a taxpayer, and
                    ``(B) such mixture is--
                            ``(i) sold for use in an aircraft, or
                            ``(ii) used by the taxpayer in an aircraft.
            ``(2) Sale or use must be in trade or business, etc.--
        Sustainable aviation fuel used in the production of a qualified 
        mixture shall be taken into account--
                    ``(A) only if the sale or use described in 
                paragraph (1) is in a trade or business of the 
                taxpayer, and
                    ``(B) for the taxable year in which such sale or 
                use occurs.
            ``(3) Fueling must be in the united states.--A qualified 
        mixture shall not be treated as used or sold for use in an 
        aircraft unless the transfer of such mixture to the fuel tank 
        of such aircraft occurs in the United States.
            ``(4) United states.--For purposes of this subsection, the 
        term `United States' includes any possession of the United 
        States.
    ``(c) Sustainable Aviation Fuel.--For purposes of this section, the 
term `sustainable aviation fuel' means liquid fuel--
            ``(1) which--
                    ``(A) consists of synthesized hydrocarbons,
                    ``(B) meets the requirements of--
                            ``(i) ASTM International Standard D7566, or
                            ``(ii) the Fischer Tropsch provisions of 
                        ASTM International Standard D1655, Annex A1,
                    ``(C) is derived from--
                            ``(i) biomass (as such term is defined in 
                        section 45K(c)(3)), or
                            ``(ii) electrolysis powered by renewable 
                        energy resources, or
                            ``(iii) carbon oxides captured from an 
                        industrial source or from the ambient air, and
                    ``(D) is not derived from palm fatty acid 
                distillates, and
            ``(2) which has been certified by the producer of such fuel 
        in accordance with subsection (d) as having lifecycle 
        greenhouse gas emissions that are equal to or less than 50 
        percent of the lifecycle greenhouse gas emissions for 
        petroleum-based jet fuel.
    ``(d) Certification Requirements.--A certification meet the 
requirements of this subsection if such certification is based on a 
method which--
            ``(1) demonstrates that the fuel conforms with--
                    ``(A) the sustainability criteria of the Carbon 
                Offsetting and Reduction Scheme for International 
                Aviation, and
                    ``(B) the traceability and information transmission 
                requirements approved by the International Civil 
                Aviation Organization with the agreement of the United 
                States,
            ``(2) takes into account all elements used to determine 
        lifecycle emissions by the International Civil Aviation 
        Organization, and
            ``(3) is approved by--
                    ``(A) the International Civil Aviation 
                Organization, or
                    ``(B) the Secretary and Administrator of the 
                Environmental Protection Agency.
    ``(e) Time Limit for Adoption of New Sustainable Aviation Fuel 
Emissions Reduction Test.--For purposes of subparagraph (B) of 
subsection (d)(3), the Secretary and the Administrator of the 
Environmental Protection Agency shall, within 24 months after the date 
of the enactment of this section, adopt at least one method for testing 
lifecycle greenhouse gas emissions that meets the requirements of such 
subsection.
    ``(f) Certification of Sustainable Aviation Fuel.--No credit shall 
be allowed under this section with respect to any sustainable aviation 
fuel unless the taxpayer obtains a certification (in such form and 
manner as prescribed by the Secretary) from the producer or importer of 
the sustainable aviation fuel which identifies the product produced and 
the percentage of sustainable aviation fuel in the product.
    ``(g) Termination.--This section shall not apply to any sale or use 
after December 31, 2022.''.
            (2) Credit made part of general business credit.-- Section 
        38(b), as amended by this Act, is amended--
                    (A) in paragraph (34), by striking ``plus'' at the 
                end,
                    (B) in paragraph (35), by striking the period at 
                the end and inserting ``, plus'', and
                    (C) by adding at the end the following new 
                paragraph:
            ``(36) the sustainable aviation fuel credit determined 
        under section 40B.''.
            (3) Coordination with renewable diesel.--
                    (A) In general.--Section 40A(f) is amended by 
                striking paragraph (4).
                    (B) Other coordination rules.--
                            (i) The last sentence of section 40A(d)(1) 
                        is amended by inserting ``or 40B'' after 
                        ``40''.
                            (ii) The second sentence of section 
                        40A(f)(3) is amended by inserting ``or 40B'' 
                        after ``40''.
                    (C) Regulations.--Under rules prescribed by the 
                Secretary of the Treasury (or the Secretary's 
                delegate), the amount of the credit allowed under 
                section 40B of the Internal 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 defined in such section 
                40B) by reason of the application of section 6426 or 
                section 6427(e).
            (4) Effective date.--
                    (A) In general.--The amendments made by this 
                subsection shall apply to taxable years ending after 
                the date of the enactment of this Act.
                    (B) Special rule.--The Secretary of the Treasury 
                (or the Secretary's delegate) shall establish rules for 
                the application of the amendments made by paragraph 
                (3)(A) with respect to credits under section 6426 and 
                payments under section 6427(e) for calendar quarters 
                ending after the date of the enactment of this Act and 
                before the last taxable year of a taxpayer which ends 
                after such date of enactment.

SEC. 202. TRANSPORTATION ELECTRIFICATION.

    (a) Alternative Motor Vehicle Credit for Fuel Cell Motor 
Vehicles.--
            (1) In general.--Section 30B(k) is amended--
                    (A) by striking paragraph (1), and
                    (B) by redesignating paragraphs (2) through (4) as 
                paragraphs (1) through (3), respectively.
            (2) Phaseout.--Section 30B is amended by adding at the end 
        the following:
    ``(l) Credit Phase-out for New Qualified Fuel Cell Motor 
Vehicles.--
            ``(1) In general.--Following a determination by the 
        Secretary and the Secretary of Transportation that total annual 
        sales of new qualified fuel cell motor vehicles and new 
        qualified plug-in electric drive motor vehicles (as defined in 
        section 30D(d)(1)) in the United States are greater than 50 
        percent of total annual sales of new passenger vehicles in the 
        United States, the amount of the new qualified fuel cell motor 
        vehicle credit under this section for any new qualified fuel 
        cell motor vehicle purchased during a calendar year described 
        in paragraph (2) shall be equal to the product of--
                    ``(A) the amount of the credit determined under 
                subsection (b) without regard to this subsection, 
                multiplied by
                    ``(B) the phase-out percentage under paragraph (2).
            ``(2) Phase-out percentage.--The phase-out percentage under 
        this paragraph is equal to--
                    ``(A) for a vehicle purchased during the first 
                calendar year following the calendar year in which the 
                determination described in paragraph (1) is made, 100 
                percent,
                    ``(B) for a vehicle purchased during the second 
                calendar year following such determination year, 75 
                percent,
                    ``(C) for a vehicle purchased during the third 
                calendar year following such determination year, 50 
                percent, and
                    ``(D) for a vehicle purchased during any calendar 
                year subsequent to the year described in subparagraph 
                (C), 0 percent.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to property purchased after December 31, 2021.
    (b) Alternative Fuel Vehicle Refueling Property Credit.--
            (1) Credit phase-out.--Section 30C is amended by striking 
        subsection (g) and inserting the following:
    ``(g) Credit Phase-out.--
            ``(1) In general.--Following a determination by the 
        Secretary, the Secretary of Transportation, and the 
        Administrator of the Environmental Protection Agency under 
        section 45V(d)(1) that the greenhouse gas emissions from the 
        transportation of persons and goods annually in the United 
        States are equal to or less than 25 percent of the greenhouse 
        gas emissions from the transportation of persons and goods in 
        the United States during calendar year 2021, the amount of the 
        credit under this section for any qualified alternative fuel 
        vehicle refueling property placed in service during a calendar 
        year described in paragraph (2) shall be equal to the product 
        of--
                    ``(A) the amount of the credit allowed under 
                subsection (a) (as determined without regard to this 
                subsection), multiplied by
                    ``(B) the phase-out percentage under paragraph (2).
            ``(2) Phase-out percentage.--The phase-out percentage under 
        this paragraph is equal to--
                    ``(A) for any property placed in service during the 
                first calendar year following the calendar year in 
                which the determination described in paragraph (1) is 
                made, 100 percent,
                    ``(B) for any property placed in service during the 
                second calendar year following such determination year, 
                75 percent,
                    ``(C) for any property placed in service during the 
                third calendar year following such determination year, 
                50 percent, and
                    ``(D) for any property placed in service during any 
                calendar year subsequent to the year described in 
                subparagraph (C), 0 percent.''.
            (2) Modification.--
                    (A) In general.--Section 30C(b) is amended--
                            (i) by striking ``with respect to all 
                        qualified alternative fuel vehicle refueling 
                        property placed in service by the taxpayer 
                        during the taxable year at a location'' and 
                        inserting ``with respect to any single item of 
                        qualified alternative fuel vehicle refueling 
                        property placed in service by the taxpayer 
                        during the taxable year'', and
                            (ii) in paragraph (1), by striking 
                        ``$30,000'' and inserting ``$200,000''.
                    (B) Effective date.--The amendments made by this 
                paragraph shall apply to property placed in service 
                after December 31, 2021.
            (3) Additional modification.--
                    (A) In general.--Section 30C, as amended by 
                paragraphs (1) and (2), is amended--
                            (i) in subsection (c)(2)--
                                    (I) in subparagraph (A), by 
                                striking ``one or more'' and all that 
                                follows through the period and 
                                inserting the following: ``hydrogen or 
                                any transportation fuel for which the 
                                clean fuel production credit is allowed 
                                under section 45V with respect to the 
                                production and sale of such fuel.'', 
                                and
                                    (II) by striking subparagraph (B) 
                                and inserting the following:
                    ``(B) Any mixture--
                            ``(i) which consists of--
                                    ``(I) any transportation fuel--
                                            ``(aa) for which the clean 
                                        fuel production credit is 
                                        allowed under section 45V with 
                                        respect to the production and 
                                        sale of such fuel, and
                                            ``(bb) which is a liquid 
                                        fuel, and
                                    ``(II) any taxable fuel (as defined 
                                in section 4083(a)(1)), and
                            ``(ii) at least 20 percent of the volume of 
                        which consists of fuel described in clause 
                        (i)(I).'', and
                            (ii) in subsection (e), by adding at the 
                        end the following:
            ``(7) Wage requirements.--
                    ``(A) In general.--The term `qualified alternative 
                fuel vehicle refueling property' shall not include any 
                property which fails to satisfy--
                            ``(i) subject to clause (ii) of 
                        subparagraph (B), the requirements under clause 
                        (i) of such subparagraph, and
                            ``(ii) with respect to the construction of 
                        such property, the requirements under section 
                        501 of the Clean Energy for America Act.
                    ``(B) Requirements.--
                            ``(i) In general.--The requirements 
                        described in this clause with respect to any 
                        property are that the taxpayer shall ensure 
                        that any laborers and mechanics employed by 
                        contractors and subcontractors in the 
                        construction of such property are to be paid 
                        wages at rates not less than the prevailing 
                        rates for construction of a similar character 
                        in the locality as determined by the Secretary 
                        of Labor, in accordance with subchapter IV of 
                        chapter 31 of title 40, United States Code.
                            ``(ii) Correction and penalty related to 
                        failure to satisfy wage requirements.--In the 
                        case of any taxpayer which fails to satisfy the 
                        requirement under clause (i) with respect to 
                        any property, rules similar to the rules of 
                        section 45U(b)(3)(B)(ii) shall apply for 
                        purposes of this subparagraph.''.
                    (B) Effective date.--The amendments made by this 
                paragraph shall apply to property placed in service 
                after December 31, 2022.
    (c) Electric Vehicles.--
            (1) 2- and 3-wheeled plug-in electric vehicles.--
                    (A) In general.--Section 30D(g)(3)(E) is amended by 
                striking clause (ii) and inserting the following:
                            ``(ii) after December 31, 2014.''.
                    (B) Effective date.--The amendments made by this 
                paragraph shall apply to vehicles acquired after 
                December 31, 2020.
            (2) Elimination on limitation on number of vehicles 
        eligible for credit.--
                    (A) In general.--Section 30D is amended by striking 
                subsection (e).
                    (B) Effective date.--The amendment made by this 
                paragraph shall apply to vehicles sold after May 24, 
                2021.
            (3) Making new qualified plug-in electric drive motor 
        vehicle credit refundable for individuals.--
                    (A) In general.--The Internal Revenue Code of 1986 
                is amended--
                            (i) by redesignating section 30D as section 
                        36C, and
                            (ii) by moving section 36C (as so 
                        redesignated) from subpart A of part IV of 
                        subchapter A of chapter 1 to the location 
                        immediately before section 37 in subpart C of 
                        part IV of subchapter A of chapter 1.
                    (B) Conforming amendments.--
                            (i) Section 36C, as amended by paragraph 
                        (2) and as redesignated and moved by 
                        subparagraph (A), is amended--
                                    (I) in subsection (a), by striking 
                                ``There shall be allowed'' and 
                                inserting ``In the case of an 
                                individual, there shall be allowed'',
                                    (II) by striking subsection (c),
                                    (III) by redesignating subsections 
                                (d), (f), and (g) as subsections (c), 
                                (d), and (e), respectively,
                                    (IV) in subsection (d), as so 
                                redesignated--
                                            (aa) by striking 
                                        ``(determined without regard to 
                                        subsection (c))'' each place it 
                                        appears, and
                                            (bb) by striking paragraph 
                                        (3), and
                                    (V) in subsection (e)(3)(B), as so 
                                redesignated, by striking ``subsection 
                                (d)(1)'' and inserting ``subsection 
                                (c)(1)''.
                            (ii) Subsection (l)(1) of section 30B, as 
                        added by subsection (a)(2), is amended by 
                        striking ``section 30D(d)(1)'' and inserting 
                        ``section 36C(c)(1)''.
                            (iii) Paragraph (37) of section 1016(a) is 
                        amended by striking ``section 30D(f)(1)'' and 
                        inserting ``section 36C(d)(1)''.
                            (iv) Section 6501(m) is amended by striking 
                        ``30D(e)(4)'' and inserting ``36C(d)(6)''.
                            (v) Section 166(b)(5)(A)(ii) of title 23, 
                        United States Code, is amended by striking 
                        ``section 30D(d)(1)'' and inserting ``section 
                        36C(c)(1)''.
                            (vi) The table of sections for subpart C of 
                        part IV of subchapter A of chapter 1 is amended 
                        by inserting after the item relating to section 
                        36B the following new item:

``Sec. 36C. New qualified plug-in electric drive motor vehicles.''.
                    (C) Effective date.--The amendments made by this 
                paragraph shall apply to vehicles acquired after 
                December 31, 2021.
            (4) VIN requirement.--
                    (A) In general.--Section 36C(c)(1), as redesignated 
                and moved by paragraph (3), is amended--
                            (i) in subparagraph (E), by striking 
                        ``and'' at the end,
                            (ii) in subparagraph (F)(ii), by striking 
                        the period at the end and inserting ``, and'', 
                        and
                            (iii) by adding at the end the following:
                    ``(G) for which the taxpayer has provided the 
                vehicle identification number on the return of tax for 
                the taxable year, unless, in accordance with applicable 
                rules promulgated by the Secretary of Transportation, 
                the vehicle is not assigned such a number.''.
                    (B) Mathematical or clerical error.--Section 
                6213(g)(2) is amended--
                            (i) in subparagraph (P), by striking 
                        ``and'' at the end,
                            (ii) in subparagraph (Q), by striking the 
                        period at the end and inserting ``, and'', and
                            (iii) by adding at the end the following:
                    ``(R) an omission of a correct vehicle 
                identification number required under section 
                36C(c)(1)(G) (relating to credit for new qualified 
                plug-in electric drive motor vehicles) to be included 
                on a return, or the inclusion of any information with 
                respect to the credit under section 36C which is 
                inconsistent with the report provided under section 
                36C(g).''.
                    (C) Effective date.--The amendments made by this 
                paragraph shall apply to vehicles acquired after 
                December 31, 2021.
            (5) Phaseout.--Section 36C, as redesignated, moved, and 
        amended by the preceding paragraphs of this subsection, is 
        amended by adding at the end the following:
    ``(f) Credit Phase-out.--
            ``(1) In general.--Following a determination by the 
        Secretary and the Secretary of Transportation that total annual 
        sales of new qualified fuel cell motor vehicles (as defined in 
        section 30B(b)(3)) and new qualified plug-in electric drive 
        motor vehicles in the United States are greater than 50 percent 
        of total annual sales of new passenger vehicles in the United 
        States, the amount of the credit allowed under this section for 
        any new qualified plug-in electric drive motor vehicle sold or 
        qualified 2- or 3-wheeled plug-in electric vehicle acquired 
        during a calendar year described in paragraph (2) shall be 
        equal to the product of--
                    ``(A) the amount of the credit determined under 
                subsection (a) without regard to this subsection, 
                multiplied by
                    ``(B) the phase-out percentage under paragraph (2).
            ``(2) Phase-out percentage.--The phase-out percentage under 
        this paragraph is equal to--
                    ``(A) for a vehicle sold or acquired during the 
                first calendar year following the calendar year in 
                which the determination described in paragraph (1) is 
                made, 100 percent,
                    ``(B) for a vehicle sold or acquired during the 
                second calendar year following such determination year, 
                75 percent,
                    ``(C) for a vehicle sold or acquired during the 
                third calendar year following such determination year, 
                50 percent, and
                    ``(D) for a vehicle sold or acquired during any 
                calendar year subsequent to the year described in 
                subparagraph (C), 0 percent.''.
            (6) Credit increase.--
                    (A) In general.--Subsection (b) of section 36C, as 
                redesignated and moved by the preceding paragraphs of 
                this subsection, is amended--
                            (i) by adding at the end the following new 
                        paragraphs:
            ``(4) Vehicles produced by labor organization facility.--In 
        the case of a vehicle the final assembly of which is at a 
        facility whose production workers are members of or represented 
        by a labor organization, the amount determined under this 
        paragraph is $2,500.
            ``(5) Assembly in united states.--In the case of a 
        vehicle--
                    ``(A) the final assembly of which is at a facility 
                which is located in the United States, and
                    ``(B) which is acquired before January 1, 2026,
        the amount determined under this paragraph is $2,500.'',
                            (ii) by striking ``is $2,500.'' in 
                        paragraph (2) and inserting ``is--
                            ``(i) $2,500, in the case of a vehicle sold 
                        before January 1, 2026, and
                            ``(ii) $5,000, in the case of a vehicle 
                        sold after December 31, 2025.'' and
                            (iii) by striking ``paragraphs (2) and 
                        (3)'' in paragraph (1) and inserting 
                        ``paragraphs (2), (3), (4), and (5)''.
                    (B) Effective date.--The amendments made by this 
                paragraph shall apply to vehicles acquired after 
                December 31, 2021.
            (7) Limitation based on place of assembly.--
                    (A) In general.--Paragraph (1) of section 36C(c), 
                as redesignated, moved, and amended by the preceding 
                paragraphs of this subsection, is further amended--
                            (i) by striking ``and'' at the end of 
                        subparagraph (F)(ii),
                            (ii) by striking the period at the end of 
                        subparagraph (G) and inserting ``, and'', and
                            (iii) by adding at the end the following 
                        new subparagraph:
                    ``(H) in the case of a vehicle sold after December 
                31, 2025, the final assembly of which is at a facility 
                which is located in the United States.''.
                    (B) Effective date.--The amendments made by this 
                paragraph shall apply to vehicles acquired after 
                December 31, 2021.
            (8) Limitation based on manufacturer's suggested retail 
        price.--
                    (A) In general.--Paragraph (1) of section 36C(c), 
                as redesignated, moved, and amended by the preceding 
                paragraphs of this subsection, is further amended--
                            (i) by striking ``and'' at the end of 
                        subparagraph (G),
                            (ii) by striking the period at the end of 
                        subparagraph (H) and inserting ``, and'', and
                            (iii) by adding at the end the following 
                        new subparagraph:
                    ``(I) the manufacturer's suggested retail price for 
                which is not in excess of $80,000.''.
                    (B) Effective date.--The amendments made by this 
                paragraph shall apply to vehicles acquired after 
                December 31, 2021.
            (9) Reporting requirement.--
                    (A) In general.--Section 36C, as redesignated, 
                moved, and amended by the preceding paragraphs of this 
                subsection, is further amended by adding at the end the 
                following new subsection:
    ``(g) Reporting Requirement.--The person who sells or leases any 
new qualified plug-in electric drive motor vehicle to the taxpayer 
shall furnish a report to the taxpayer and to the Secretary, at such 
time and in such manner as the Secretary shall provide, containing--
            ``(1) the taxpayer's name and taxpayer identification 
        number,
            ``(2) the vehicle identification number of the vehicle, 
        unless, in accordance with applicable rules promulgated by the 
        Secretary of Transportation, the vehicle is not assigned such a 
        number,
            ``(3) the battery capacity of the vehicle,
            ``(4) verification that original use of the vehicle 
        commences with the taxpayer, and
            ``(5) the maximum credit under this section allowable to 
        the taxpayer with respect to the vehicle.''.
                    (B) Effective date.--The amendments made by this 
                paragraph shall apply to vehicles acquired after 
                December 31, 2021.
            (10) Limitation to non-business vehicles.--
                    (A) In general.--Paragraph (1) of section 36C(c), 
                as redesignated, moved, and amended by the preceding 
                paragraphs of this subsection, is further amended--
                            (i) by striking ``and'' at the end of 
                        subparagraph (H),
                            (ii) by striking the period at the end of 
                        subparagraph (I) and inserting ``, and'', and
                            (iii) by adding at the end the following 
                        new subparagraph:
                    ``(J) which is not of a character subject to the 
                allowance for depreciation.''.
                    (B) Effective date.--The amendments made by this 
                paragraph shall apply to vehicles acquired after 
                December 31, 2021.
            (11) Qualified commercial electric vehicles.--
                    (A) In general.--Subpart D of part IV of subchapter 
                A of chapter 1, as amended by sections 101 and 201, is 
                amended by adding at the end the following new section:

``SEC. 45W. CREDIT FOR QUALIFIED COMMERCIAL ELECTRIC 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.
    ``(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 lesser of--
                    ``(A) 30 percent of the basis of such vehicle, or
                    ``(B) the incremental cost of such vehicle.
            ``(2) Incremental cost.--
                    ``(A) In general.--For purposes of paragraph 
                (1)(B), the incremental cost of any qualified 
                commercial electric vehicle is an amount equal to the 
                excess of the purchase price for such vehicle over such 
                price for a comparable vehicle.
                    ``(B) Comparable vehicle.--For purposes of this 
                paragraph, the term `comparable vehicle' means, with 
                respect to any qualified commercial electric vehicle, 
                any vehicle which is powered solely by a gasoline or 
                diesel internal combustion engine and which is 
                comparable in weight, size, and use to such vehicle.
                    ``(C) Comparative price.-- For purposes of 
                subparagraph (A), the Secretary and the Secretary of 
                Transportation shall publish an annual list of prices 
                of various types and classes of commercial vehicles 
                described in subparagraph (B).
            ``(3) Exclusion.--For purposes of paragraph (1)(A), the 
        basis of any qualified commercial electric vehicle which is a 
        qualified electric transportation option shall not include any 
        cost relating to any component or feature which--
                    ``(A) is not integral to the vehicle, or
                    ``(B) does not contribute to improving the 
                efficiency or range of the electric propulsion of the 
                vehicle.
    ``(c) Qualified Commercial Electric Vehicle.--For purposes of this 
section--
            ``(1) In general.--The term `qualified commercial electric 
        vehicle' means--
                    ``(A) any vehicle which--
                            ``(i) meets the requirements of 
                        subparagraphs (A), (B), (C), (D), and (G) of 
                        section 36C(c)(1),
                            ``(ii) is primarily propelled 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, and
                            ``(iii) is of a character subject to the 
                        allowance for depreciation, and
                    ``(B) any qualified electric transportation option.
            ``(2) Qualified electric transportation option.--
                    ``(A) In general.--The term `qualified electric 
                transportation option' means any vehicle used in any 
                manner of transportation--
                            ``(i) the original use of which commences 
                        with the taxpayer,
                            ``(ii) which is acquired for use or lease 
                        by the taxpayer and not for resale,
                            ``(iii) which is capable of moving 
                        passengers, cargo, or property,
                            ``(iv) which is powered by an integrated, 
                        on-board electric propulsion system which--
                                    ``(I) is the primary source of 
                                propulsion,
                                    ``(II) is capable of powering the 
                                vehicle (including any of its 
                                components and accessories) for not 
                                less than \2/3\ of the maximum 
                                operating period between recharging or 
                                refueling of such vehicle, and
                                    ``(III) in the case of a vehicle 
                                which derives any of its power from the 
                                on-board combustion of a fuel, uses a 
                                renewable fuel,
                            ``(v) which was manufactured for sale in 
                        commercial quantities with a reasonable 
                        expectation of profit,
                            ``(vi) which is in compliance with any 
                        applicable safety or air quality standards, as 
                        determined by the Secretary, the Secretary of 
                        Transportation, the Secretary of Homeland 
                        Security, and the Administrator of the 
                        Environmental Protection Agency, and
                            ``(vii) which is of a character subject to 
                        the allowance for depreciation.
                    ``(B) On-board electric propulsion system.--For 
                purposes of this paragraph, the term `on-board electric 
                propulsion system' means--
                            ``(i) 1 or more on-board traction batteries 
                        which--
                                    ``(I) are integrated or swappable, 
                                and
                                    ``(II) have an aggregate capacity 
                                (as defined in subsection (d)(4)) of 
                                not less than 10 kilowatt hours, or
                            ``(ii) an on-board power source other than 
                        a battery with an electrical output capacity 
                        equivalent of not less than 10 kilowatt hours, 
                        as determined by the Secretary.
                    ``(C) Renewable fuel.--For purposes of this 
                paragraph, the term `renewable fuel' means any fuel at 
                least 85 percent of the volume of which consists of one 
                or more of the following:
                            ``(i) Ethanol.
                            ``(ii) Biodiesel (as defined in section 
                        40A(d)(1)).
                            ``(iii) Advanced biofuel (as defined in 
                        section 211(o)(1)(B) of the Clean Air Act (42 
                        U.S.C. 7545(o)(1)(B))).
                            ``(iv) Renewable natural gas.
                            ``(v) Hydrogen.
    ``(d) Special Rules.--
            ``(1) In general.--Rules similar to the rules under 
        subsection (d) of section 36C shall apply for purposes of this 
        section.
            ``(2) Property used by tax-exempt entity.--In the case of a 
        vehicle the use of which is described in paragraph (3) or (4) 
        of section 50(b) and which is not subject to a lease, the 
        person who sold such vehicle to the person or entity using such 
        vehicle shall be treated as the taxpayer that placed such 
        vehicle in service, but only if such person clearly discloses 
        to such person or entity in a document the amount of any credit 
        allowable under subsection (a) with respect to such vehicle.
    ``(e) Credit Phase-out.--
            ``(1) In general.--Following a determination by the 
        Secretary and the Secretary of Transportation that total annual 
        sales of qualified commercial electric vehicles in the United 
        States are greater than 50 percent of total annual sales of new 
        commercial vehicles in the United States, the amount of the 
        credit allowed under this section for any qualified commercial 
        electric vehicle acquired during a calendar year described in 
        paragraph (2) shall be equal to the product of--
                    ``(A) the amount of the credit determined under 
                subsection (a) without regard to this subsection, 
                multiplied by
                    ``(B) the phase-out percentage under paragraph (2).
            ``(2) Phase-out percentage.--The phase-out percentage under 
        this paragraph is equal to--
                    ``(A) for a vehicle acquired during the first 
                calendar year following the calendar year in which the 
                determination described in paragraph (1) is made, 100 
                percent,
                    ``(B) for a vehicle acquired during the second 
                calendar year following such determination year, 75 
                percent,
                    ``(C) for a vehicle acquired during the third 
                calendar year following such determination year, 50 
                percent, and
                    ``(D) for a vehicle acquired during any calendar 
                year subsequent to the year described in subparagraph 
                (C), 0 percent.
    ``(f) Reporting Requirement.--The person who sells or leases any 
qualified commercial electric vehicle to the taxpayer shall furnish a 
report to the taxpayer and to the Secretary, at such time and in such 
manner as the Secretary shall provide, containing--
            ``(1) the taxpayer's name and taxpayer identification 
        number,
            ``(2) the vehicle identification number of the vehicle, 
        unless, in accordance with applicable rules promulgated by the 
        Secretary of Transportation, the vehicle is not assigned such a 
        number,
            ``(3) the battery capacity of the vehicle,
            ``(4) verification that original use of the vehicle 
        commences with the taxpayer, and
            ``(5) the maximum credit under this section allowable to 
        the taxpayer with respect to the vehicle.''.
                    (B) Mathematical or clerical error.--Section 
                6213(g)(2), as amended by paragraph (4), is further 
                amended--
                            (i) in subparagraph (Q), by striking 
                        ``and'' at the end,
                            (ii) in subparagraph (R), by striking the 
                        period at the end and inserting ``, and'', and
                            (iii) by adding at the end the following:
                    ``(S) the inclusion of any information for purposes 
                of the credit under section 45W which is inconsistent 
                with the report provided under section 45W(f).''.
                    (C) Conforming amendments.--
                            (i) Section 38(b), as amended by section 
                        201, is further amended by striking paragraph 
                        (30) and inserting the following:
            ``(30) the qualified commercial electric vehicle credit 
        determined under section 45W,''.
                            (ii) The table of sections for subpart D of 
                        part IV of subchapter A of chapter 1, as 
                        amended by sections 101 and 102, is amended by 
                        adding at the end the following new item:

``Sec. 45W. Qualified commercial electric vehicle credit.''.
                    (D) Effective date.--The amendments made by this 
                paragraph shall apply to vehicles acquired after 
                December 31, 2021.
            (12) Certification by secretary.--No credit shall be 
        allowed under section 36C or section 45W of the Internal 
        Revenue Code of 1986 for any vehicle acquired after December 
        31, 2021, unless the Secretary of the Treasury certifies that 
        no credit under either such section will be allowed with 
        respect to any new qualified plug-in electric drive motor 
        vehicle, any qualified 2- or 3-wheeled plug-in electric 
        vehicle, or any qualified commercial electric vehicle the final 
        assembly of which is in the People's Republic of China.

SEC. 203. CREDIT FOR PRODUCTION OF CLEAN HYDROGEN.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1, 
as amended by sections 101, 201, and 202, is amended by adding at the 
end the following new section:

``SEC. 45X. CREDIT FOR PRODUCTION OF CLEAN HYDROGEN.

    ``(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
            ``(2) the kilograms of qualified clean hydrogen--
                    ``(A) produced by the taxpayer at a qualified clean 
                hydrogen production facility during the 10-year period 
                beginning on the date the facility was placed in 
                service, and
                    ``(B) sold by the taxpayer to an unrelated person, 
                or used by the taxpayer, during the taxable year.
    ``(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 $3.00. 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' means--
                    ``(A) in the case of any qualified clean hydrogen 
                which is produced through a process that, as compared 
                to hydrogen produced by steam-methane reforming, 
                achieves a percentage reduction in lifecycle greenhouse 
                gas emissions which is less than 75 percent, 20 
                percent,
                    ``(B) in the case of any qualified clean hydrogen 
                which is produced through a process that, as compared 
                to hydrogen produced by steam-methane reforming, 
                achieves a percentage reduction in lifecycle greenhouse 
                gas emissions which is not less than 75 percent and 
                less than 85 percent, 25 percent,
                    ``(C) in the case of any qualified clean hydrogen 
                which is produced through a process that, as compared 
                to hydrogen produced by steam-methane reforming, 
                achieves a percentage reduction in lifecycle greenhouse 
                gas emissions which is not less than 85 percent and 
                less than 95 percent, 34 percent, and
                    ``(D) in the case of any qualified clean hydrogen 
                which is produced through a process that, as compared 
                to hydrogen produced by steam-methane reforming, 
                achieves a percentage reduction in lifecycle greenhouse 
                gas emissions which is not less than 95 percent, 100 
                percent.
            ``(3) Inflation adjustment.--The $3.00 amount in paragraph 
        (1) shall be adjusted by multiplying such amount by the 
        inflation adjustment factor (as determined under section 
        45(e)(2), determined by substituting `2020' for `1992' in 
        subparagraph (B) thereof) for the calendar year in which the 
        sale or use of the qualified clean hydrogen occurs. 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) Credit Reduced for Grants, Tax-exempt Bonds, Subsidized 
Energy Financing, and Other Credits.--The amount of the credit 
determined under subsection (a) with respect to any qualified clean 
hydrogen production facility for any taxable year shall be reduced in a 
manner similar to the reduction applied under section 45(b)(3).
    ``(d) Definitions.--For purposes of this section--
            ``(1) Lifecycle greenhouse gas emissions.--For purposes of 
        this section, the term `lifecycle greenhouse gas emissions' has 
        the same meaning given such 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 enactment of this section.
            ``(2) Qualified clean hydrogen.--
                    ``(A) In general.--The term `qualified clean 
                hydrogen' means hydrogen which is produced through a 
                process that, as compared to hydrogen produced by 
                steam-methane reforming of non-renewable natural gas, 
                achieves a percentage reduction in lifecycle greenhouse 
                gas emissions which is not less than 50 percent.
                    ``(B) Exclusion.--The term `qualified clean 
                hydrogen' shall not include any hydrogen for which a 
                credit is allowed for the taxable year--
                            ``(i) under section 38 which is properly 
                        allocable to any credit determined under this 
                        part (other than this section), or
                            ``(ii) under subchapter B of chapter 65 of 
                        subtitle F.
            ``(3) Qualified clean hydrogen production facility.--
                    ``(A) In general.--The term `qualified clean 
                hydrogen production facility' means--
                            ``(i) a facility owned by the taxpayer--
                                    ``(I) which produces qualified 
                                clean hydrogen which, with respect to 
                                any taxable year, is sold by the 
                                taxpayer to an unrelated person or used 
                                by the taxpayer, and
                                    ``(II) which--
                                            ``(aa) subject to clause 
                                        (ii) of subparagraph (B), 
                                        satisfies the requirements 
                                        under clause (i) of such 
                                        subparagraph, and
                                            ``(bb) with respect to the 
                                        construction of such facility, 
                                        satisfies the requirements 
                                        under section 501 of the Clean 
                                        Energy for America Act, and
                            ``(ii) in connection with any facility 
                        described in clause (i), any property used to 
                        convert feedstock to hydrogen, including any 
                        equipment or supporting facility which--
                                    ``(I) accepts or receives 
                                feedstock,
                                    ``(II) conditions or stores 
                                feedstock or hydrogen, or
                                    ``(III) distributes or 
                                redistributes hydrogen.
                    ``(B) Wage requirements.--
                            ``(i) In general.--The requirements 
                        described 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, or
                                    ``(II) for any year described in 
                                subsection (a)(2)(A) for which the 
                                credit under this section is claimed, 
                                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 determined by the Secretary of 
                        Labor, in accordance with subchapter IV of 
                        chapter 31 of title 40, United States Code.
                            ``(ii) Failure to satisfy wage 
                        requirements; correction and penalty.--In the 
                        case of any taxpayer which fails to satisfy the 
                        requirement under clause (i) with respect to 
                        the construction of any facility or the 
                        alteration or repair of such facility in any 
                        year during the period described in clause 
                        (i)(II), rules similar to the rules of clauses 
                        (i) and (ii) of section 45U(b)(3)(B) shall 
                        apply for purposes of this subparagraph.
            ``(4) Steam-methane reforming.--The term `steam-methane 
        reforming' means a hydrogen production process in which high-
        temperature steam is used to produce hydrogen from natural gas, 
        without carbon capture and sequestration.
    ``(e) Special Rules.--
            ``(1) In general.--Rules similar to the rules of paragraphs 
        (3) and (4) of section 45(e) shall apply for purposes of this 
        section.
            ``(2) Production in the united states.--No credit shall be 
        allowed under this section with respect to any qualified clean 
        hydrogen which is produced outside of the United States (as 
        defined in section 638(1) or any possession of the United 
        States (as defined in section 638(2)).
    ``(f) Credit Phase-Out.--
            ``(1) In general.--If the Secretary and the Administrator 
        of the Environmental Protection Agency determine that the 
        greenhouse gas emissions from the transportation of persons and 
        goods annually in the United States are equal to or less than 
        25 percent of the greenhouse gas emissions from the 
        transportation of persons and goods in the United States during 
        calendar year 2021, the amount of the clean hydrogen production 
        credit under this section shall be determined by substituting 
        the applicable amount (as determined under paragraph (2)(A)) 
        for the dollar amount in subsection (b)(1).
            ``(2) Applicable dollar amount.--
                    ``(A) In general.--The applicable amount for any 
                taxable year described in subparagraph (B) shall be an 
                amount equal to the product of--
                            ``(i) the dollar amount in paragraphs (1) 
                        of subsection (b) (as adjusted by paragraph (3) 
                        of such subsection), 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) for any taxable year beginning in the 
                        first calendar year following the calendar year 
                        in which the determination described in 
                        paragraph (1) is made, 100 percent,
                            ``(ii) for any taxable year beginning in 
                        the second calendar year following such 
                        determination year, 75 percent,
                            ``(iii) for any taxable year beginning in 
                        the third calendar year following such 
                        determination year, 50 percent, and
                            ``(iv) for any taxable year beginning in 
                        any calendar year subsequent to the year 
                        described in clause (iii), 0 percent.
    ``(g) Guidance.--Not later than 1 year after the date of enactment 
of this section, the Secretary, the Secretary of Energy, and 
Administrator of the Environmental Protection Agency shall publish 
guidance prescribing methods for determining the credit based on 
lifecycle greenhouse gas emissions.''.
    (b) Conforming Amendments.--
            (1) Section 38(b) of the Internal Revenue Code of 1986, as 
        amended by section 101, 201, and 202, is amended--
                    (A) in paragraph (35), by striking ``plus'' at the 
                end,
                    (B) in paragraph (36), by striking the period at 
                the end and inserting ``, plus'', and
                    (C) by adding at the end the following new 
                paragraph:
            ``(37) the clean hydrogen production credit determined 
        under section 45X(a).''.
            (2) The table of sections for subpart D of part IV of 
        subchapter A of chapter 1, as amended by sections 101, 201, and 
        202, is amended by adding at the end the following new item:

``Sec. 45X. Clean hydrogen production credit.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to hydrogen used or sold after December 31, 2020.

SEC. 204. TEMPORARY EXTENSIONS OF EXISTING FUEL INCENTIVES.

    (a) Second Generation Biofuel Producer Credit.--
            (1) In general.--Section 40(b)(6)(J)(i) is amended by 
        striking ``2022'' and inserting ``2023''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to qualified second generation biofuel production 
        after December 31, 2021.
    (b) Credit for Alternative Fuel Mixtures.--
            (1) In general.--Section 6426 is amended--
                    (A) in subsection (d)--
                            (i) in paragraph (2)(D), by striking 
                        ``liquefied'', and
                            (ii) in paragraph (5), by striking ``2021'' 
                        and inserting ``2022'', and
                    (B) in subsection (e)--
                            (i) in paragraph (2), by inserting 
                        ``nonliquid hydrogen or'' before ``a fuel 
                        described'', and
                            (ii) in paragraph (3), by striking ``2021'' 
                        and inserting ``2022''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to fuel sold or used after December 31, 2021.
    (c) Alternative Fuels.--
            (1) In general.--Section 6427(e)(6)(C) is amended by 
        striking ``2021'' and inserting ``2022''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to fuel sold or used after December 31, 2021.

              TITLE III--INCENTIVES FOR ENERGY EFFICIENCY

SEC. 301. CREDIT FOR NEW ENERGY EFFICIENT RESIDENTIAL BUILDINGS.

    (a) In General.--Section 45L is amended to read as follows:

``SEC. 45L. NEW ENERGY EFFICIENT HOME CREDIT.

    ``(a) Allowance of Credit.--For purposes of section 38, in the case 
of an eligible contractor, the new energy efficient home credit for the 
taxable year is the applicable amount for each qualified residence 
which is--
            ``(1) constructed by the eligible contractor, and
            ``(2) acquired by a person from such eligible contractor 
        for use as a residence during the taxable year.
    ``(b) Applicable Amount.--
            ``(1) In general.--For purposes of subsection (a), the 
        applicable amount shall be an amount equal to--
                    ``(A) in the case of a qualified residence 
                described in subclause (I) of subsection 
                (c)(3)(A)(iii), $2,500, and
                    ``(B) in the case of a qualified residence 
                described in subclause (II) of such subsection, $5,000.
            ``(2) Adjustment for inflation.--
                    ``(A) In general.--In the case of a taxable year 
                beginning after 2022, the dollar amounts in paragraph 
                (1) shall each be increased by an amount equal to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for the 
                        calendar year, determined by substituting 
                        `calendar year 2021' for `calendar year 2016' 
                        in subparagraph (A)(ii) thereof.
                    ``(B) Rounding.--If any amount as increased under 
                subparagraph (A) is not a multiple of $100, such amount 
                shall be rounded to the nearest multiple of $100.
    ``(c) Definitions.--For purposes of this section:
            ``(1) Construction.--The term `construction' does not 
        include substantial reconstruction or rehabilitation.
            ``(2) Eligible contractor.--The term `eligible contractor' 
        means--
                    ``(A) the person who constructed the qualified 
                residence, or
                    ``(B) in the case of a qualified residence which is 
                a manufactured home, the manufactured home producer of 
                such residence.
            ``(3) Qualified residence.--
                    ``(A) In general.--The term `qualified residence' 
                means a dwelling unit--
                            ``(i) located in the United States,
                            ``(ii) the construction of which is 
                        substantially completed after the date of the 
                        enactment of this section,
                            ``(iii) which is certified as satisfying 
                        the applicable national program requirements 
                        under--
                                    ``(I) the Energy Star Residential 
                                New Construction program (or any 
                                successor program, as determined by the 
                                Secretary), as in effect on January 1 
                                of the year in which construction of 
                                the dwelling unit begins, or
                                    ``(II) the Zero Energy Ready Home 
                                program (or any successor program, as 
                                determined by the Secretary), as in 
                                effect on January 1 of the year in 
                                which construction of the dwelling unit 
                                begins, and
                            ``(iv) in the case of a multifamily 
                        dwelling unit, subject to clause (ii) of 
                        subparagraph (B), which satisfies the 
                        requirements under clause (i) of such 
                        subparagraph.
                    ``(B) Wage requirements.--
                            ``(i) In general.--The requirements 
                        described in this clause with respect to any 
                        dwelling unit are that the eligible contractor 
                        shall ensure that any laborers and mechanics 
                        employed by such contractor and subcontractors 
                        in the construction of such dwelling unit shall 
                        be paid wages at rates not less than the 
                        prevailing rates for construction of a similar 
                        character in the locality as determined by the 
                        Secretary of Labor, in accordance with 
                        subchapter IV of chapter 31 of title 40, United 
                        States Code.
                            ``(ii) Correction and penalty related to 
                        failure to satisfy wage requirements.--In the 
                        case of any taxpayer which fails to satisfy the 
                        requirement under clause (i) with respect to 
                        any dwelling unit, rules similar to the rules 
                        of section 45U(b)(3)(B)(ii) shall apply for 
                        purposes of this subparagraph.
                    ``(C) Denial of double benefit.--The term 
                `qualified residence' does not include any dwelling 
                unit for which a deduction determined under section 
                179D is allowed for the taxable year in which the 
                dwelling unit is acquired as provided in subsection 
                (a)(2).
    ``(d) Certification.--A certification described in this section 
shall be made--
            ``(1) by a third party which is accredited by a 
        certification program approved by the Secretary and the 
        Secretary of Energy, and
            ``(2) in accordance with--
                    ``(A) any applicable rules under the national 
                program requirements of the Energy Star Residential New 
                Construction or Zero Energy Ready Home programs, as in 
                effect on the date on which construction of the 
                dwelling unit begins, and
                    ``(B) guidance prescribed by the Secretary and the 
                Secretary of Energy.
    ``(e) Basis Adjustment.--For purposes of this subtitle, if a credit 
is allowed under this section in connection with any expenditure for 
any property (other than a qualified low-income building, as described 
in section 42(c)(2)), the increase in the basis of such property which 
would (but for this subsection) result from such expenditure shall be 
reduced by the amount of the credit so determined.
    ``(f) Coordination With Investment Credits.--For purposes of this 
section, expenditures taken into account under section 25D or 47 shall 
not be taken into account under this section.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to any qualified residence acquired after December 31, 2021.

SEC. 302. ENERGY EFFICIENT HOME IMPROVEMENT CREDIT.

    (a) In General.--Section 25C is amended to read as follows:

``SEC. 25C. ENERGY EFFICIENT HOME IMPROVEMENT CREDIT.

    ``(a) In General.--In the case of an individual, there shall be 
allowed as a credit against the tax imposed by this chapter for the 
taxable year an amount equal to the lesser of--
            ``(1) the sum of the applicable qualified property amounts 
        for any qualified property placed in service by the individual 
        during such taxable year, or
            ``(2) $1,500.
    ``(b) Applicable Qualified Property Amount.--
            ``(1) In general.--For any qualified property, the 
        applicable qualified property amount shall be equal to the 
        lesser of--
                    ``(A) 30 percent of the amount paid or incurred by 
                the individual for such qualified property (including 
                any expenditures for labor costs properly allocable to 
                the onsite preparation, assembly, or original 
                installation of such property), or
                    ``(B) $600.
            ``(2) Adjustment for inflation.--
                    ``(A) In general.--In the case of a taxable year 
                beginning after 2022, each of the dollar amounts in 
                paragraph (1)(B) (after application of subsection 
                (c)(2)) and subsections (a)(2), (c)(2)(A), and 
                (c)(2)(B)(i)(I) shall be increased by an amount equal 
                to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for the 
                        calendar year, determined by substituting 
                        `calendar year 2021' for `calendar year 2016' 
                        in subparagraph (A)(ii) thereof.
                    ``(B) Rounding.--If any amount as increased under 
                subparagraph (A) is not a multiple of $10, such amount 
                shall be rounded to the nearest multiple of $10.
    ``(c) Qualified Property.--
            ``(1) In general.--The term `qualified property' means a 
        furnace, boiler, condensing water heater, central air 
        conditioning unit, heat pump, biomass property, or building 
        envelope improvement which--
                    ``(A) except as provided in subparagraph (B), meets 
                or exceeds the requirements of--
                            ``(i) the highest efficiency tier (not 
                        including any advanced tier) established by the 
                        Consortium for Energy Efficiency which are in 
                        effect at the time that the property is placed 
                        in service, or
                            ``(ii) if no standard established by the 
                        Consortium for Energy Efficiency applies to 
                        such property, an equivalent standard as 
                        established by the Secretary and the 
                        Administrator of the Environmental Protection 
                        Agency,
                    ``(B) in the case of a building envelope 
                improvement--
                            ``(i) except as provided in clause (ii) or 
                        (iii), meets or exceeds the latest applicable 
                        requirements of the Energy Star program (or any 
                        successor program, as determined by the 
                        Secretary), as in effect on January 1 of the 
                        year in which the property is placed in 
                        service,
                            ``(ii) in the case of a window treatment, 
                        meets or exceeds the applicable certification 
                        requirements for such product under the 
                        Attachments Energy Rating Council certification 
                        program, or
                            ``(iii) in the case of insulation described 
                        in subsection (d)(2)(A), meets the prescriptive 
                        criteria for such material or system 
                        established by the International Energy 
                        Conservation Code, as such Code (including 
                        supplements) is in effect on January 1 of the 
                        calendar year in which such material or system 
                        is installed,
                    ``(C) is installed according to applicable Air 
                Conditioning Contractors of America Quality 
                Installation standards which are in effect at the time 
                that the property was placed in service,
                    ``(D) is for use in a dwelling unit which is 
                located in the United States and used as a residence by 
                the individual, and
                    ``(E) is reasonably expected to remain in service 
                in such dwelling unit for not less than 5 years.
            ``(2) Special rules for certain heat pumps.--
                    ``(A) Air-source heat pumps.--In the case of any 
                air-source heat pump which satisfies the requirements 
                under paragraph (1), subsection (b)(1)(B) shall be 
                applied by substituting `$800' for `$600'.
                    ``(B) Ground source heat pump.--
                            ``(i) In general.--In the case of any 
                        qualified geothermal heat pump property which 
                        satisfies the requirements under subparagraphs 
                        (C) through (E) of paragraph (1)--
                                    ``(I) subsection (b)(1)(B) shall be 
                                applied by substituting `$10,000' for 
                                `$600', and
                                    ``(II) subsection (a)(2) shall be 
                                applied without regard to the 
                                applicable qualified property amount 
                                for such property.
                            ``(ii) Qualified geothermal heat pump 
                        property.--For purposes of this subparagraph, 
                        the term `qualified geothermal heat pump 
                        property' means any equipment which--
                                    ``(I) uses the ground or ground 
                                water as a thermal energy source to 
                                heat a dwelling unit located in the 
                                United States and used as a residence 
                                by the taxpayer or as a thermal energy 
                                sink to cool such dwelling unit, and
                                    ``(II) meets the requirements of 
                                the Energy Star program which are in 
                                effect as of January 1 of the calendar 
                                year in which the expenditure for such 
                                equipment is made.
            ``(3) Special rule for insulation.--In the case of any 
        building envelope improvement described in subsection (d)(2)(A) 
        which satisfies the applicable requirements under paragraph 
        (1), subsection (b)(1) shall be applied without regard to `the 
        lesser of' and without regard to subparagraph (B).
    ``(d) Other Definitions.--
            ``(1) Biomass property.--
                    ``(A) In general.--For purposes of this section, 
                the term `biomass property' means any property which--
                            ``(i) uses the burning of biomass fuel to 
                        heat a dwelling unit or to heat water for use 
                        in a dwelling unit, and
                            ``(ii) using the higher heating value, has 
                        a thermal efficiency of not less than 75 
                        percent.
                    ``(B) Biomass fuel.--For purposes of subparagraph 
                (A), the term `biomass fuel' means any plant-derived 
                fuel which is available on a renewable or recurring 
                basis, including any such fuel which has been subject 
                to a densification process (such as wood pellets).
            ``(2) Building envelope improvement.--For purposes of this 
        section, the term `building envelope improvement' means--
                    ``(A) any insulation material or system, including 
                air barrier insulation, which is specifically and 
                primarily designed to reduce the heat loss or gain of a 
                dwelling unit when installed in or on such dwelling 
                unit, and
                    ``(B) exterior doors and windows (including 
                skylights).
            ``(3) Manufactured homes included.--For purposes of this 
        section, the term `dwelling unit' includes a manufactured home 
        which conforms to Federal Manufactured Home Construction and 
        Safety Standards (part 3280 of title 24, Code of Federal 
        Regulations).
    ``(e) Denial of Double Benefit.--No credit shall be allowed under 
subsection (a) for any amounts paid or incurred for which a deduction 
or credit is allowed under any other provision of this chapter.''.
    (b) Clerical Amendment.--The table of sections for subpart A of 
part IV of subchapter A of chapter 1 is amended by striking the item 
relating to section 25C and inserting after the item relating to 
section 25B the following item:

``25C. Energy efficient home improvement credit.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to qualified property placed in service after December 31, 2021.

SEC. 303. ENHANCEMENT OF ENERGY EFFICIENT COMMERCIAL BUILDINGS 
              DEDUCTION.

    (a) Maximum Amount of Deduction.--
            (1) In general.--Section 179D is amended--
                    (A) by striking subsection (b) and inserting the 
                following:
    ``(b) Maximum Amount of Deduction.--
            ``(1) In general.--The deduction under subsection (a) with 
        respect to any building for any taxable year shall not exceed 
        the excess (if any) of--
                    ``(A) the product of--
                            ``(i) the applicable dollar value, and
                            ``(ii) the square footage of the building, 
                        over
                    ``(B) the aggregate amount of the deductions under 
                subsection (a) with respect to the building for the 3 
                years immediately preceding such taxable year.
            ``(2) Applicable dollar value.--For purposes of paragraph 
        (1)(A)(i), the applicable dollar value shall be an amount equal 
        to $2.50 increased (but not above $5.00) by $0.10 for each 
        percentage point by which the total annual energy and power 
        costs for the building are certified to be reduced by a 
        percentage greater than 25 percent.'', and
                    (B) in subsection (d)(1)(A)--
                            (i) by striking ``subsection (b)'' and 
                        inserting ``subsection (b)(2)'', and
                            (ii) by striking ``$1.80'' and inserting 
                        ``$2.50''.
            (2) Inflation adjustment.--Section 179D(g) is amended to 
        read as follows:
    ``(g) Inflation Adjustment.--
            ``(1) In general.--In the case of a taxable year beginning 
        after 2022, each dollar amount in subsection (b)(2) (and the 
        $2.50 amount in subsection (d)(1)(A)) shall be increased by an 
        amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, determined by substituting 
                `calendar year 2021' for `calendar year 2016' in 
                subparagraph (A)(ii) thereof.
        Any increase determined under the preceding sentence which is 
        not a multiple of 10 cents shall be rounded to the nearest 
        multiple of 10 cents.
            ``(2) Partial allowance.--In the case of a taxable year 
        beginning after 2020, the $.60 amount in (d)(1)(A) shall be 
        increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, determined by substituting 
                `calendar year 2019' for `calendar year 2016' in 
                subparagraph (A)(ii) thereof.
        Any increase determined under the preceding sentence which is 
        not a multiple of 1 cent shall be rounded to the nearest 
        cent.''.
    (b) Definition of Energy Efficient Building Property.--
            (1) Energy reduction standard.--Section 179D(c)(1)(D) is 
        amended by striking ``50 percent'' and inserting ``25 
        percent''.
            (2) Inclusion of multifamily buildings.--
                    (A) In general.--Subparagraph (B) of section 
                179D(c)(1) is amended to read as follows:
                    ``(B) which is installed on or in any commercial 
                building or multifamily building which is located 
                within the United States,''.
                    (B) Application of standards.--Subparagraph (D) of 
                section 179D(c) is amended--
                            (i) by striking ``meets the minimum 
                        requirements of Reference Standard 90.1 using 
                        methods of calculation under subsection 
                        (d)(2)'' and inserting ``meets--
                            ``(i) in the case of any property within 
                        the scope of Reference Standard 90.1, the 
                        minimum requirements of Reference Standard 90.1 
                        using methods of calculation under subsection 
                        (d)(2), and
                            ``(ii) in the case of any other property, 
                        the minimum requirements of a comparable 
                        standard to Reference Standard 90.1 which shall 
                        be determined by the Secretary and the 
                        Secretary of Energy using methods of 
                        calculation under subsection (d)(2).''.
                    (C) Definitions.--Subsection (c) of section 179D is 
                amended by adding at the end the following new 
                paragraphs:
            ``(3) Commercial building.--The term `commercial building' 
        means a building with a primary use or purpose other than as 
        residential housing.
            ``(4) Multifamily building.--The term `multifamily 
        building' means a structure of 5 or more dwelling units with a 
        primary use as residential housing, and includes such buildings 
        owned and operated as a condominium, cooperative, or other 
        common interest community.''.
            (3) Wage and workforce requirements.--
                    (A) In general.--Section 179D(c)(1), as amended by 
                paragraph (2), is amended--
                            (i) in subparagraph (C)(iii), by striking 
                        ``and'' at the end,
                            (ii) in subparagraph (D), by striking the 
                        period at the end and inserting ``, and'', and
                            (iii) by adding at the end the following:
                    ``(E) which satisfies the requirements--
                            ``(i) subject to subparagraph (B) of 
                        subsection (d)(7), under subparagraph (A) of 
                        such subsection, and
                            ``(ii) with respect to the construction of 
                        such property, the requirements under section 
                        501 of the Clean Energy for America Act.''.
                    (B) Requirements.--Section 179(d) is amended by 
                adding at the end the following new paragraph:
            ``(7) Wage requirements.--
                    ``(A) In general.--The requirements described in 
                this subparagraph with respect to any property are that 
                the taxpayer shall ensure that any laborers and 
                mechanics employed by contractors and subcontractors in 
                the construction of such property shall be paid wages 
                at rates not less than the prevailing rates for 
                construction of a similar character in the locality as 
                determined by the Secretary 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 requirements.--In the case of any taxpayer 
                which fails to satisfy the requirement under 
                subparagraph (A) with respect to any property, rules 
                similar to the rules of section 45U(b)(3)(B)(ii) shall 
                apply for purposes of this paragraph.''.
            (4) Election to use different standards for retrofits.--
        Section 179D is amended by redesignating subsection (h) as 
        subsection (i) and by inserting after subsection (g) the 
        following new subsection:
    ``(h) Alternative Method for Energy Efficient Retrofit Building 
Property.--
            ``(1) In general.--In the case of a taxpayer which elects 
        (at such time and in such manner as the Secretary may provide) 
        the application of this subsection with respect to any 
        qualified building, the amount of the deduction allowed under 
        subsection (a)--
                    ``(A) shall be determined--
                            ``(i) by substituting `energy usage 
                        intensity' for `total annual energy and power 
                        costs' in subsection (b)(2), and
                            ``(ii) without regard to subsection 
                        (c)(1)(D), and
                    ``(B) shall be allowed for the taxable year which 
                includes the date of the qualifying final certification 
                with respect to the qualified retrofit plan of such 
                building in lieu of the taxable year in which the 
                property is placed in service.
            ``(2) Qualified building.--For purposes of this subsection, 
        the term `qualified building' means a commercial building or 
        multifamily building--
                    ``(A) which is located in the United States,
                    ``(B) with respect to which a qualified retrofit 
                plan has been established, and
                    ``(C) which was originally placed in service not 
                less than 5 years before the establishment of the 
                qualified retrofit plan with respect to such building.
            ``(3) Qualified retrofit plan.--For purposes of this 
        subsection, the term `qualified retrofit plan' means a written 
        plan prepared by a qualified professional which specifies 
        specific modifications to a building which, in the aggregate, 
        are expected to reduce such building's energy usage intensity 
        by 25 percent or more in comparison to the baseline energy 
        usage intensity of such building. Such plan shall provide for a 
        qualified professional to--
                    ``(A) as of any date during the 1-year period 
                ending on the date of the first certification described 
                in subparagraph (B), certify the energy usage intensity 
                of such building as of such date,
                    ``(B) certify the status of property installed 
                pursuant to such plan as meeting the requirements of 
                subparagraphs (B) and (C) of subsection (c)(1), and
                    ``(C) as of any date following completion of the 
                plan, certify--
                            ``(i) the energy usage intensity of such 
                        building as of such date, and
                            ``(ii) the portfolio manager score of such 
                        building as of such date.
            ``(4) Qualifying final certification.--For purposes of this 
        subsection, the term `qualifying final certification' means, 
        with respect to any qualified retrofit plan, the certification 
        described in paragraph (3)(C) if--
                    ``(A) the energy usage intensity certified in such 
                certification is not more than 75 percent of the 
                baseline energy usage intensity of the building, and
                    ``(B) the portfolio manager score certified in such 
                certification is not less than 50.
            ``(5) Other definitions.--For purposes of this subsection--
                    ``(A) Baseline energy usage intensity.--The term 
                `baseline energy usage intensity' means the energy 
                usage intensity certified under paragraph (3)(A).
                    ``(B) Portfolio manager score.--The term `portfolio 
                manager score' means the score determined under the 
                methodology (as in effect on the date of the enactment 
                of this Act) developed by the Administrator of the 
                Environmental Protection Agency for rating a building's 
                energy efficiency for purposes of the Energy Star 
                program. Modifications after the date of the enactment 
                of this paragraph to such methodology shall be taken 
                into account under this paragraph as provided by the 
                Secretary and such Administrator.
                    ``(C) Energy usage intensity.--The term `energy 
                usage intensity' means energy usage intensity 
                determined in accordance with such regulations or other 
                guidance as the Secretary may provide and measured in 
                British thermal units.
                    ``(D) Qualified professional.--The term `qualified 
                professional' means an individual who is a licenced 
                architect or a licenced engineer and meets such other 
                requirements as the Secretary may provide.
            ``(6) Certain rules not applicable.--Paragraphs (1), (5), 
        and (6)(B) of subsection (d) shall not apply for purposes of 
        this subsection.''.
    (c) Other Rules.--
            (1) Allocation of deduction.--Section 179D(d)(4) is amended 
        to read as follows:
            ``(4) Allocation of deduction.--
                    ``(A) In general.--In the case of energy efficient 
                commercial building property installed on or in 
                property owned by an eligible entity, the Secretary 
                shall promulgate regulations to allow the allocation of 
                the deduction to the person primarily responsible for 
                designing the property in lieu of the owner of such 
                property, with such person to be treated as the 
                taxpayer for purposes of this section.
                    ``(B) Eligible entity.--For purposes of this 
                paragraph, the term `eligible entity' means--
                            ``(i) a Federal, State, or local government 
                        or a political subdivision thereof,
                            ``(ii) an Indian tribe (as defined in 
                        section 45A(c)(6)), or
                            ``(iii) an organization described in 
                        section 501(c) and exempt from tax under 
                        section 501(a).''.
            (2) Elimination of interim rule for lighting systems.--
        Section 179D, as amended by subsections (a)(2) and (b)(4), is 
        amended by striking subsection (f) and by redesignating 
        subsections (g), (h), and (i) as subsections (f), (g), and (h), 
        respectively.
            (3) Application to real estate investment trust earnings 
        and profits.--Section 312(k)(3)(B) is amended--
                    (A) 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
                    (B) 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.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to any property placed in service after December 31, 2021.

SEC. 304. ENHANCEMENT OF ENERGY CREDIT FOR GEOTHERMAL HEAT PUMPS.

    (a) In General.--Section 48(a) is amended--
            (1) in paragraph (2)(A)(i)(III), by striking ``paragraph 
        (3)(A)(ii)'' and inserting ``clause (ii) or (vii) of paragraph 
        (3)(A)'', and
            (2) in paragraph (3)(A)(vii), by striking ``but only with 
        respect to property the construction of which begins before 
        January 1, 2024,''.
    (b) Effective Date.--The amendments made by this section shall 
apply to property the construction of which begins after December 31, 
2021.

        TITLE IV--TERMINATION OF CERTAIN FOSSIL FUEL PROVISIONS

SEC. 401. TERMINATION OF PROVISIONS RELATING TO OIL, GAS, AND OTHER 
              MATERIALS.

    (a) Amortization of Geological and Geophysical Expenditures.--
Section 167(h) is amended by adding at the end the following new 
paragraph:
            ``(6) Termination.--This subsection shall not apply to any 
        expenses paid or incurred during any taxable year beginning 
        after the date of the enactment of the Clean Energy for America 
        Act.''.
    (b) Alaska Natural Gas Pipelines.--Subparagraph (B) of section 
168(i)(16) is amended to read as follows:
                    ``(B) is--
                            ``(i)(I) placed in service after December 
                        31, 2013, or
                            ``(II) treated as placed in service on 
                        January 1, 2014, if the taxpayer who places 
                        such system in service before January 1, 2014, 
                        elects such treatment, and
                            ``(ii) placed in service before the end of 
                        the calendar year in which the date of the 
                        enactment of the Clean Energy for America Act 
                        occurs.''.
    (c) Natural Gas Gathering Line.--Paragraph (17) of section 168(i) 
is amended--
            (1) in subparagraph (A), by inserting ``which are placed in 
        service before the end of the calendar year in which the date 
        of the enactment of the Clean Energy for America Act occurs and 
        are'' after ``pipe, equipment, and appurtenances'', and
            (2) in subparagraph (B), by inserting ``which are placed in 
        service before the end of the calendar year in which the date 
        of the enactment of the Clean Energy for America Act occurs and 
        are'' after ``pipe, equipment, and appurtenances''.
    (d) Repeal of Deduction for Tertiary Injectants.--Subsection (c) of 
section 193 is amended--
            (1) in paragraph (1), by striking ``or'' at the end,
            (2) in paragraph (2), by striking the period at the end and 
        inserting ``, or'', and
            (3) by inserting at the end the following:
            ``(3) which is paid or incurred during any taxable year 
        beginning after the date of the enactment of the Clean Energy 
        for America Act.''.
    (e) Intangible Drilling and Development Costs.--
            (1) In general.--Subsection (c) of section 263 is amended 
        to read as follows:
    ``(c) Intangible Drilling and Development Costs in the Case of Oil 
and Gas Wells and Geothermal Wells.--
            ``(1) In general.--Notwithstanding subsection (a), and 
        except as provided in subsection (i), regulations shall be 
        prescribed by the Secretary under this subtitle corresponding 
        to the regulations which granted the option to deduct as 
        expenses intangible drilling and development costs in the case 
        of oil and gas wells and which were recognized and approved by 
        the Congress in House Concurrent Resolution 50, Seventy-ninth 
        Congress. Such regulations shall also grant the option to 
        deduct as expenses intangible drilling and development costs in 
        the case of wells drilled for any geothermal deposit (as 
        defined in section 613(e)(2)) to the same extent and in the 
        same manner as such expenses are deductible in the case of oil 
        and gas wells. This subsection shall not apply with respect to 
        any costs to which any deduction is allowed under section 59(e) 
        or 291.
            ``(2) Exclusion.--
                    ``(A) In general.--This subsection shall not apply 
                to amounts paid or incurred by a taxpayer with regard 
                to any oil or gas well in any taxable year beginning 
                after the date of the enactment of the Clean Energy for 
                America Act.
                    ``(B) Amortization of excluded amounts.--The amount 
                not allowable as a deduction for any taxable year by 
                reason of subparagraph (A) shall be allowable as a 
                deduction ratably over the 60-month period beginning 
                with the month in which the costs are paid or incurred. 
                For purposes of section 1254, any deduction under this 
                subparagraph shall be treated as a deduction under this 
                subsection.''.
            (2) Conforming amendments.--
                    (A) Section 291(b) is amended--
                            (i) in paragraph (1), by striking ``without 
                        regard to this section)'' and all that follows 
                        and inserting ``without regard to this section) 
                        under section 616(a) or 617(a) shall be reduced 
                        by 30 percent.'',
                            (ii) in paragraph (2), by striking 
                        ``section 263(c), 616(a), or 617(a)'' and 
                        inserting ``section 616(a) or 617(a)'',
                            (iii) by striking paragraph (4), and
                            (iv) by redesignating paragraph (5) as 
                        paragraph (4).
                    (B) Section 57(a) is amended by striking paragraph 
                (2).
    (f) Percentage Depletion.--
            (1) Percentage depletion of oil and gas wells, coal, 
        lignite, and oil shale.--
                    (A) In general.--Section 613 is amended--
                            (i) in subsection (a), by striking ``(100 
                        percent in the case of oil and gas 
                        properties)'',
                            (ii) in subsection (b)--
                                    (I) by striking paragraph (2) and 
                                inserting the following:
            ``(2) 15 percent.--If from deposits in the United States, 
        gold, silver, copper, and iron ore.'',
                                    (II) in paragraph (4), by striking 
                                ``coal, lignite,'',
                                    (III) in paragraph (5), by 
                                inserting ``(except oil shale)'' after 
                                ``clay and shale'',
                                    (IV) in paragraph (6)(A), by 
                                striking ``(except shale described in 
                                paragraph (2)(B) or (5))'' and 
                                inserting ``(except oil shale and shale 
                                described in paragraph (5))'', and
                                    (V) in paragraph (7), by striking 
                                ``or'' at the end of subparagraph (B), 
                                by striking the period at the end of 
                                subparagraph (C) and inserting ``; 
                                or'', and by adding at the end the 
                                following new subparagraph:
                    ``(D) coal, lignite, and oil shale.'',
                            (iii) in subsection (c)(1), striking 
                        ``other than an oil or gas well and'',
                            (iv) in subsection (c)(4)--
                                    (I) by striking subparagraphs (A) 
                                and (H),
                                    (II) by inserting ``and'' at the 
                                end of subparagraph (G),
                                    (III) by redesignating 
                                subparagraphs (B) through (G) as 
                                subparagraphs (A) through (F), 
                                respectively, and
                                    (IV) by redesignating subparagraph 
                                (I) as subparagraph (G),
                            (v) in subsection (d), by striking ``Except 
                        as provided in section 613A, in the case of'' 
                        and inserting ``In the case of'', and
                            (vi) in subsection (e)(2), by striking ``or 
                        section 613A''.
                    (B) Conforming amendments.--
                            (i) Section 291(a)(2) is amended by 
                        striking ``and coal (including lignite)''.
                            (ii)(I) Part I of subchapter I of chapter 1 
                        is amended by striking section 613A (and the 
                        item relating to such section in the table of 
                        sections).
                            (II) Section 45H(d) is amended by striking 
                        ``section 613A(d)(3)'' and inserting ``section 
                        167(h)(5)(C)''.
                            (III) Section 57(a)(1) is amended by 
                        striking the last sentence.
                            (IV) Section 167(h)(5) is amended--
                                    (aa) by striking subparagraph 
                                (B)(iii) and inserting the following:
                            ``(iii) which--
                                    ``(I) engages (by itself or with a 
                                related person) in the refining of 
                                crude oil, and
                                    ``(II) together with related 
                                persons, has average daily refinery 
                                runs for the taxable year (determined 
                                by dividing the aggregate refinery runs 
                                for the taxable year by the number of 
                                days in the taxable year) in excess of 
                                75,000 barrels.'', and
                                    (bb) by adding at the end the 
                                following new subparagraph:
                    ``(C) Related person.--For purposes of subparagraph 
                (B)(iii), a person is a related person with respect to 
                the taxpayer if a significant ownership interest in 
                either the taxpayer or such person is held by the 
                other, or if a third person has a significant ownership 
                interest in both the taxpayer and such person. For 
                purposes of the preceding sentence, the term 
                `significant ownership interest' means--
                            ``(i) with respect to any corporation, 15 
                        percent or more in value of the outstanding 
                        stock of such corporation,
                            ``(ii) with respect to a partnership, 15 
                        percent or more interest in the profits or 
                        capital of such partnership, and
                            ``(iii) with respect to an estate or trust, 
                        15 percent or more of the beneficial interests 
                        in such estate or trust.
                For purposes of determining a significant ownership 
                interest, an interest owned by or for a corporation, 
                partnership, trust, or estate shall be considered as 
                owned directly both by itself and proportionately by 
                its shareholders, partners, or beneficiaries, as the 
                case may be.''.
                            (V) Section 703(a)(2) is amended by 
                        inserting ``and'' at the end of subparagraph 
                        (D), by striking ``, and'' at the end of 
                        subparagraph (E) and inserting a period, and by 
                        striking subparagraph (F).
                            (VI) Section 705(a) is amended by inserting 
                        ``and'' at the end of paragraph (1)(C), by 
                        striking ``; and'' at the end of paragraph 
                        (2)(B) and inserting a period, and by striking 
                        paragraph (3).
                            (VII) Section 1202(e)(3)(D) is amended by 
                        striking ``or 613A''.
                            (VIII) Section 1367(a)(2) is amended by 
                        inserting ``and'' at the end of subparagraph 
                        (C), by striking ``, and'' at the end of 
                        subparagraph (D) and inserting a period, and by 
                        striking subparagraph (E).
                            (iii) Section 993(c)(2)(C) is amended by 
                        striking ``(including oil, gas, coal, or 
                        uranium products) under section 613 or 613A'' 
                        and inserting ``(including uranium products) 
                        under section 613''.
                            (iv) Section 1446(c)(2) is amended by 
                        striking ``but the amount of such deduction 
                        shall be determined without regard to sections 
                        613 and 613A''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning after the date of the 
        enactment of this Act.
    (g) Termination of Capital Gains Treatment for Royalties From 
Coal.--
            (1) In general.--Subsection (c) of section 631 is amended--
                    (A) by striking ``coal (including lignite), or iron 
                ore'' and inserting ``iron ore'',
                    (B) by striking ``coal or iron ore'' each place it 
                appears and inserting ``iron ore'',
                    (C) by striking ``iron ore or coal'' each place it 
                appears and inserting ``iron ore'', and
                    (D) by striking ``Coal or'' in the heading.
            (2) Conforming amendments.--
                    (A) Section 272 is amended by striking ``coal or'' 
                each place it appears.
                    (B) Section 1402(a)(3)(B) is amended by striking 
                ``coal,''.
                    (C)(i) The heading of section 631 is amended by 
                striking ``, coal,''.
                    (ii) The item relating to section 631 in the table 
                of sections for part III of subchapter I of chapter 1 
                is amended by striking ``, coal,''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to dispositions after the date of the enactment of 
        this Act.
    (h) Enhanced Oil Recovery Credit.--
            (1) In general.--Subpart D of part IV of subchapter A of 
        chapter 1 is amended by striking section 43.
            (2) Conforming amendments.--
                    (A) Section 38(b) is amended by striking paragraph 
                (6).
                    (B)(i) Section 45Q(e) is amended by adding at the 
                end the following new paragraph:
            ``(4) Inflation adjustment factor.--The term `inflation 
        adjustment factor' means, with respect to any calendar year, a 
        fraction the numerator of which is the GNP implicit price 
        deflator for the preceding calendar year and the denominator of 
        which is the GNP implicit price deflator for 2008. For purposes 
        of the preceding sentence, the term `GNP implicit price 
        deflator' means the first revision of the implicit price 
        deflator for the gross national product as computed and 
        published by the Secretary of Commerce. Not later than April 1 
        of any calendar year, the Secretary shall publish the inflation 
        adjustment factor for the preceding calendar year.''.
                            (ii) Section 45Q, as amended by this Act, 
                        is amended in subsection (b)(1) by striking 
                        ``determined under section 43(b)(3)(B) for such 
                        calendar year, determined by substituting 
                        `2025' for `1990''' each place it appears in 
                        subparagraph (A)(ii) and (B)(ii) and inserting 
                        ``determined under subsection (e)(4) by 
                        substituting `2025' for `2008'''.
                    (C) Section 196(c) is amended--
                            (i) by striking paragraph (5), and
                            (ii) by redesignating paragraphs (6) 
                        through (14) as paragraphs (5) through (13), 
                        respectively.
            (3) Clerical amendment.--The table of sections for subpart 
        D of part IV of subchapter A of chapter 1 is amended by 
        striking the item relating to section 43.
            (4) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning after the date of the 
        enactment of this Act.
    (i) Credit for Producing Oil and Gas From Marginal Wells.--
            (1) In general.--Subpart D of part IV of subchapter A of 
        chapter 1 is amended by striking section 45I.
            (2) Conforming amendment.--Section 38(b) is amended by 
        striking paragraph (19).
            (3) Clerical amendment.--The table of sections for subpart 
        D of part IV of subchapter A of chapter 1 is amended by 
        striking the item relating to section 45I.
            (4) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning after the date of the 
        enactment of this Act.
    (j) Qualifying Advanced Coal Project Credit.--
            (1) In general.--Subpart E of part IV of subchapter A of 
        chapter 1 is amended by striking section 48A.
            (2) Conforming amendments.--
                    (A) Section 46, as amended by section 102 of this 
                Act, is amended by striking paragraph (3) and 
                redesignating paragraphs (4) through (7) as paragraphs 
                (3) through (6), respectively.
                    (B) Section 49(a)(1)(C), as amended by section 102 
                of this Act, is amended by striking clause (iii) and 
                redesignating clauses (iv) through (vii) as clauses 
                (iii) through (vi), respectively.
                    (C) Section 50(a)(2)(E), as amended by section 102 
                of this Act, is amended by striking ``48A(b)(3),''.
            (3) Clerical amendment.--The table of sections for subpart 
        E of part IV of subchapter A of chapter 1 is amended by 
        striking the item relating to section 48A.
            (4) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning after the date of the 
        enactment of this Act.
    (k) Qualifying Gasification Project Credit.--
            (1) In general.--Subpart E of part IV of subchapter A of 
        chapter 1 is amended by striking section 48B.
            (2) Conforming amendments.--
                    (A) Section 46, as amended by this Act, is amended 
                by striking paragraph (3) and by redesignating 
                paragraphs (4), (5), and (6) as paragraphs (3), (4), 
                and (5), respectively.
                    (B) Section 49(a)(1)(C), as amended by this Act, is 
                amended by striking clause (iii) and redesignating 
                clauses (iv) through (vi) as clauses (iii) through (v).
                    (C) Section 50(a)(2)(E), as amended by this Act, is 
                amended by striking ``48B(b)(3),''.
            (3) Clerical amendment.--The table of sections for subpart 
        E of part IV of subchapter A of chapter 1 is amended by 
        striking the item relating to section 48B.
            (4) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning after the date of the 
        enactment of this Act.
    (l) Repeal of Passive Loss Exception for Oil and Gas Interests.--
            (1) In general.--Section 469(c)(3)(A) is amended--
                    (A) by striking ``The term'' and inserting the 
                following:
                            ``(i) Exception.--The term''.
                    (B) by adding at the end the following new clause:
                            ``(ii) Termination.--Clause (i) shall not 
                        apply to any taxable year beginning after the 
                        date of the enactment of the Clean Energy for 
                        America Act.''.
            (2) Conforming amendment.--Section 469(c)(4) is amended by 
        striking ``Paragraphs (2) and (3)'' and inserting ``Paragraphs 
        (2) and (3)(A)(i)''.
    (m) Repeal of Corporate Income Tax Exemption for Publicly Traded 
Partnerships With Qualifying Income and Gains From Activities Relating 
to Fossil Fuels.--
            (1) In general.--Section 7704(d)(1) is amended--
                    (A) in subparagraph (E), by striking ``(including 
                pipelines transporting gas, oil, or products 
                thereof)'', and
                    (B) in the flush matter at the end, by inserting 
                ``or any coal, gas, oil, or products thereof'' before 
                the period.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning after the date of the 
        enactment of this Act.

SEC. 402. MODIFICATION OF CERTAIN PROVISIONS RELATING TO OIL, GAS, AND 
              OTHER FOSSIL FUELS.

    (a) Modifications of Foreign Tax Credit Rules Applicable to Major 
Integrated Oil Companies Which Are Dual Capacity Taxpayers.--
            (1) In general.--Section 901 is amended by redesignating 
        subsection (n) as subsection (o) and by inserting after 
        subsection (m) the following new subsection:
    ``(n) Special Rules Relating to Major Integrated Oil Companies 
Which Are Dual Capacity Taxpayers.--
            ``(1) General rule.--Notwithstanding any other provision of 
        this chapter, any amount paid or accrued by a dual capacity 
        taxpayer which is a major integrated oil company (within the 
        meaning of section 167(h)(5)) to a foreign country or 
        possession of the United States for any period shall not be 
        considered a tax--
                    ``(A) if, for such period, the foreign country or 
                possession does not impose a generally applicable 
                income tax, or
                    ``(B) to the extent such amount exceeds the amount 
                (determined in accordance with regulations) which--
                            ``(i) is paid by such dual capacity 
                        taxpayer pursuant to the generally applicable 
                        income tax imposed by the country or 
                        possession, or
                            ``(ii) would be paid if the generally 
                        applicable income tax imposed by the country or 
                        possession were applicable to such dual 
                        capacity taxpayer.
        Nothing in this paragraph shall be construed to imply the 
        proper treatment of any such amount not in excess of the amount 
        determined under subparagraph (B).
            ``(2) Dual capacity taxpayer.--For purposes of this 
        subsection, the term `dual capacity taxpayer' means, with 
        respect to any foreign country or possession of the United 
        States, a person who--
                    ``(A) is subject to a levy of such country or 
                possession, and
                    ``(B) receives (or will receive) directly or 
                indirectly a specific economic benefit (as determined 
                in accordance with regulations) from such country or 
                possession.
            ``(3) Generally applicable income tax.--For purposes of 
        this subsection--
                    ``(A) In general.--The term `generally applicable 
                income tax' means an income tax (or a series of income 
                taxes) which is generally imposed under the laws of a 
                foreign country or possession on income derived from 
                the conduct of a trade or business within such country 
                or possession.
                    ``(B) Exceptions.--Such term shall not include a 
                tax unless it has substantial application, by its terms 
                and in practice, to--
                            ``(i) persons who are not dual capacity 
                        taxpayers, and
                            ``(ii) persons who are citizens or 
                        residents of the foreign country or 
                        possession.''.
            (2) Effective date.--
                    (A) In general.--The amendments made by this 
                subsection shall apply to taxes paid or accrued in 
                taxable years beginning after the date of the enactment 
                of this Act.
                    (B) Contrary treaty obligations upheld.--The 
                amendments made by this subsection shall not apply to 
                the extent contrary to any treaty obligation of the 
                United States.
    (b) Reinstatement of Treatment of Foreign Base Company Oil Related 
Income as Foreign Base Company Income.--
            (1) In general.--Section 954(a) is amended by striking 
        ``and'' at the end of paragraph (2), by striking the period at 
        the end of paragraph (3) and inserting ``, and'', and by adding 
        at the end the following new paragraph:
            ``(4) the foreign base company oil related income for the 
        taxable year (determined under subsection (g) and reduced as 
        provided in subsection (b)(5)).''.
            (2) Foreign base company oil related income.--Section 954 
        is amended by inserting before subsection (h) the following new 
        subsection:
    ``(g) Foreign Base Company Oil Related Income.--For purposes of 
this section--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the term `foreign base company oil related income' 
        means foreign oil related income (within the meaning of 
        paragraphs (2) and (3) of section 907(c)) other than income 
        derived from a source within a foreign country in connection 
        with--
                    ``(A) oil or gas which was extracted from an oil or 
                gas well located in such foreign country, or
                    ``(B) oil, gas, or a primary product of oil or gas 
                which is sold by the foreign corporation or a related 
                person for use or consumption within such country or is 
                loaded in such country on a vessel or aircraft as fuel 
                for such vessel or aircraft.
        Such term shall not include any foreign personal holding 
        company income (as defined in subsection (c)).
            ``(2) Paragraph (1) applies only where corporation has 
        produced 1,000 barrels per day or more.--
                    ``(A) In general.--The term `foreign base company 
                oil related income' shall not include any income of a 
                foreign corporation if such corporation is not a large 
                oil producer for the taxable year.
                    ``(B) Large oil producer.--For purposes of 
                subparagraph (A), the term `large oil producer' means 
                any corporation if, for the taxable year or for the 
                preceding taxable year, the average daily production of 
                foreign crude oil and natural gas of the related group 
                which includes such corporation equaled or exceeded 
                1,000 barrels.
                    ``(C) Related group.--The term `related group' 
                means a group consisting of the foreign corporation and 
                any other person who is a related person with respect 
                to such corporation.
                    ``(D) Average daily production of foreign crude oil 
                and natural gas.--For purposes of this paragraph, the 
                average daily production of foreign crude oil or 
                natural gas of any related group for any taxable year 
                (and the conversion of cubic feet of natural gas into 
                barrels) shall be determined under rules similar to the 
                rules of section 613A (as in effect on the day before 
                the date of enactment of the Clean Energy for America 
                Act) except that only crude oil or natural gas from a 
                well located outside the United States shall be taken 
                into account.''.
            (3) Conforming amendments.--
                    (A) Section 952(c)(1)(B)(iii) is amended by 
                redesignating subclauses (I) through (IV) as subclauses 
                (II) through (V), respectively, and by inserting before 
                subclause (II) (as redesignated) the following new 
                subclause:
                                    ``(I) foreign base company oil 
                                related income,''.
                    (B) Section 954(b) is amended--
                            (i) in paragraph (4), by inserting at the 
                        end the following new sentence: ``The preceding 
                        sentence shall not apply to foreign base 
                        company oil-related income described in 
                        subsection (a)(4).'',
                            (ii) in paragraph (5), by striking ``and 
                        the foreign base company services income'' and 
                        inserting ``the foreign base company services 
                        income, and the foreign base company oil 
                        related income'', and
                            (iii) by adding at the end the following 
                        new paragraph:
            ``(6) Foreign base company oil related income not treated 
        as another kind of base company income.--Income of a 
        corporation which is foreign base company oil related income 
        shall not be considered foreign base company income of such 
        corporation under paragraph (2) or (3) of subsection (a).''.
            (4) Effective date.--The amendments made by this subsection 
        shall apply to taxable years of foreign corporations beginning 
        after the date of the enactment of this Act, and to taxable 
        years of United States shareholders with or within which such 
        taxable years of foreign corporations end.
    (c) Inclusion of Foreign Oil and Gas Extraction Income in Tested 
Income for Purpose of Determining Global Intangible Low-taxed Income.--
            (1) In general.--Section 951A(c)(2)(A)(i) is amended by 
        inserting ``and'' at the end of subclause (III), by striking 
        ``and'' at the end of subclause (IV) and inserting ``over'', 
        and by striking subclause (V).
            (2) Effective date.--The amendments made by this subsection 
        shall apply to taxable years of foreign corporations beginning 
        after the date of the enactment of this Act, and to taxable 
        years of United States shareholders in which or with which such 
        tax years of foreign corporations end.
    (d) Clarification of Tar Sands as Crude Oil for Excise Tax 
Purposes.--
            (1) In general.--Paragraph (1) of section 4612(a) is 
        amended to read as follows:
            ``(1) Crude oil.--The term `crude oil' includes crude oil 
        condensates, natural gasoline, any bitumen or bituminous 
        mixture, any oil derived from a bitumen or bituminous mixture 
        (including oil derived from tar sands), and any oil derived 
        from kerogen-bearing sources (including oil derived from oil 
        shale).''.
            (2) Technical amendment.--Paragraph (2) of section 4612(a) 
        is amended by striking ``from a well located''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to oil and petroleum products received, entered, 
        used, or exported after December 31, 2021.

              TITLE V--WORKFORCE DEVELOPMENT REQUIREMENTS

SEC. 501. USE OF QUALIFIED APPRENTICES.

    (a) In General.--All contractors and subcontractors engaged in the 
performance of construction, alteration, or repair work on any 
applicable project shall, subject to subsection (b), ensure that not 
less than 15 percent of the total labor hours of such work be performed 
by qualified apprentices.
    (b) Apprentice-to-journeyworker Ratio.--The requirement under 
subsection (a) shall be subject to any applicable requirements for 
apprentice-to-journeyworker ratios of the Department of Labor or the 
applicable State apprenticeship agency.
    (c) Participation.--Each contractor and subcontractor who employs 4 
or more individuals to perform construction, alteration, or repair work 
on an applicable project shall employ 1 or more qualified apprentices 
to perform such work.
    (d) Exception.--Notwithstanding any other provision in this 
section, this section shall not apply in the case of a taxpayer who--
            (1)(A) demonstrates a lack of availability of qualified 
        apprentices in the geographic area of the construction, 
        alteration, or repair work; and
            (B) makes a good faith effort to comply with the 
        requirements of this section; or
            (2) in the case of any failure by the taxpayer to satisfy 
        the requirement under subsection (a) with respect to the 
        construction, alteration, or repair work on any applicable 
        project to which paragraph (1) does not apply, makes payment to 
        the Secretary of the Treasury (or the Secretary's delegate) of 
        a penalty in an amount equal to the product of--
                    (A) $500, multiplied by
                    (B) the total labor hours for which the requirement 
                described in such subsection was not satisfied with 
                respect to the construction, alteration, or repair work 
                on such applicable project.
    (e) Definitions.--In this section:
            (1) Applicable project.--The term ``applicable project'' 
        means, with respect to--
                    (A) subsection (e)(7)(A)(ii) of section 30C of the 
                Internal Revenue Code of 1986,
                    (B) subsection (f)(9)(A)(ii) of section 45Q of such 
                Code,
                    (C) subsection (b)(1)(A)(iv)(II) of section 45U of 
                such Code,
                    (D) subsection (e)(4)(A)(ii)(II) of section 45V of 
                such Code,
                    (E) subsection (d)(3)(A)(i)(II)(bb) of section 45X 
                of such Code,
                    (F) subsection (d)(3)(A)(ii)(II) of section 48C of 
                such Code,
                    (G) subsections (b)(3)(A)(iv)(II) and (c)(1)(B)(ii) 
                of section 48D of such Code, and
                    (H) subsection (c)(1)(E)(ii) of section 179D of 
                such Code,
        any property, equipment, or facility for which a credit is 
        allowed or determined under such sections.
            (2) Labor hours.--The term ``labor hours''--
                    (A) means the total number of hours devoted to the 
                performance of construction, alteration, or repair work 
                by employees of the contractor or subcontractor; and
                    (B) excludes any hours worked by--
                            (i) foremen;
                            (ii) superintendents;
                            (iii) owners; or
                            (iv) persons employed in a bona fide 
                        executive, administrative, or professional 
                        capacity (within the meaning of those terms in 
                        part 541 of title 29, Code of Federal 
                        Regulations).
            (3) Qualified apprentice.--The term ``qualified 
        apprentice'' means an individual who is an employee of the 
        contractor or subcontractor and who is participating in a 
        registered apprenticeship program, as defined in section 
        3131(e)(3)(B) of the Internal Revenue Code of 1986.

                        TITLE VI--MISCELLANEOUS

SEC. 601. ADJUSTMENT OF QUALIFYING ADVANCED ENERGY PROJECT CREDIT.

    (a) In General.--Section 48C is amended--
            (1) in subsection (c)(1)--
                    (A) in subparagraph (A)--
                            (i) by inserting ``, any portion of the 
                        qualified investment of which is certified by 
                        the Secretary under subsection (d) as eligible 
                        for a credit under this section'' after ``means 
                        a project'',
                            (ii) in clause (i)--
                                    (I) by striking ``a manufacturing 
                                facility for the production of'' and 
                                inserting ``an industrial or 
                                manufacturing facility for the 
                                production or recycling of'',
                                    (II) in clause (I), by inserting 
                                ``water,'' after ``sun,'',
                                    (III) in clause (II), by striking 
                                ``an energy storage system for use with 
                                electric or hybrid-electric motor 
                                vehicles'' and inserting ``energy 
                                storage systems and components'',
                                    (IV) in clause (III), by striking 
                                ``grids to support the transmission of 
                                intermittent sources of renewable 
                                energy, including storage of such 
                                energy'' and inserting ``grid 
                                modernization equipment or 
                                components'',
                                    (V) in subclause (IV), by striking 
                                ``and sequester carbon dioxide 
                                emissions'' and inserting ``, remove, 
                                use, or sequester carbon oxide 
                                emissions'',
                                    (VI) by striking subclause (V) and 
                                inserting the following:
                                    ``(V) equipment designed to refine, 
                                electrolyze, or blend any fuel, 
                                chemical, or product which is--
                                            ``(aa) renewable, or
                                            ``(bb) low-carbon and low-
                                        emission,'',
                                    (VII) by striking subclause (VI),
                                    (VIII) by redesignating subclause 
                                (VII) as subclause (IX),
                                    (IX) by inserting after subclause 
                                (V) the following new subclauses:
                                    ``(VI) property designed to produce 
                                energy conservation technologies 
                                (including residential, commercial, and 
                                industrial applications),
                                    ``(VII) light-, medium-, or heavy-
                                duty electric or fuel cell vehicles, as 
                                well as--
                                            ``(aa) technologies, 
                                        components, or materials for 
                                        such vehicles, and
                                            ``(bb) associated charging 
                                        or refueling infrastructure,
                                    ``(VIII) hybrid vehicles with a 
                                gross vehicle weight rating of not less 
                                than 14,000 pounds, as well as 
                                technologies, components, or materials 
                                for such vehicles, or'', and
                                    (X) in subclause (IX), as so 
                                redesignated, by striking ``and'' at 
                                the end and inserting ``or'', and
                            (iii) by striking clause (ii) and inserting 
                        the following:
                            ``(ii) which re-equips an industrial or 
                        manufacturing facility with equipment designed 
                        to reduce its greenhouse gas emissions well 
                        below current best practices through the 
                        installation of--
                                    ``(I) low- or zero-carbon process 
                                heat systems,
                                    ``(II) carbon capture, transport, 
                                utilization and storage systems,
                                    ``(III) energy efficiency and 
                                reduction in waste from industrial 
                                processes, or
                                    ``(IV) any industrial technology 
                                which significantly reduces greenhouse 
                                gas emissions, as determined by the 
                                Secretary.''.
                    (B) by redesignating subparagraph (B) as 
                subparagraph (C), and
                    (C) by inserting after subparagraph (A) the 
                following new subparagraph:
                    ``(B) Additional qualifying advanced energy 
                projects.--The term `qualifying advanced energy 
                project' shall also include any project described in 
                subparagraph (A) which is located in a census tract--
                            ``(i) which, prior to the date of enactment 
                        of the Clean Energy for America Act, had no 
                        projects which received a certification and 
                        allocation of credits under subsection (d), and
                            ``(ii)(I) in which, after December 31, 
                        1999, a coal mine has closed,
                            ``(II) in which, after December 31, 2009, a 
                        coal-fired electric generating unit has been 
                        retired, or
                            ``(III) which is immediately adjacent to a 
                        census tract described in subclause (I) or 
                        (II).'',
            (2) in subsection (d)--
                    (A) in paragraph (1)--
                            (i) in subparagraph (A), by striking ``this 
                        section'' and inserting ``the Clean Energy for 
                        America Act'', and
                            (ii) by striking subparagraph (B) and 
                        inserting the following:
                    ``(B) Limitations.--
                            ``(i) Initial allocation.--The total amount 
                        of credits that may be allocated under the 
                        program prior to the date of enactment of the 
                        Clean Energy for America Act shall not exceed 
                        $2,300,000,000.
                            ``(ii) Additional allocation.--The total 
                        amount of credits that may be allocated under 
                        the program on or after to the date of 
                        enactment of the Clean Energy for America Act 
                        shall not exceed $8,000,000,000, of which not 
                        greater than $4,000,000,000 may be allocated to 
                        projects which are not located in a census 
                        tract described in subparagraph (B) of 
                        subsection (c)(1).'',
                    (B) in paragraph (2)--
                            (i) in subparagraph (A), by striking ``2-
                        year'' and inserting ``3-year'',
                            (ii) in subparagraph (B)--
                                    (I) by striking ``1 year'' and 
                                inserting ``18 months'', and
                                    (II) by adding at the end the 
                                following new sentence: ``Not later 
                                than 180 days after the date on which 
                                such evidence was provided by the 
                                applicant, the Secretary shall 
                                determine whether the requirements of 
                                the certification have been met.'', and
                            (iii) by adding at the end the following 
                        new subparagraph:
                    ``(D) Location of project.--In the case of an 
                applicant which receives a certification, if the 
                Secretary determines that the project has been placed 
                in service at a location which is materially different 
                than the location specified in the application for such 
                project, the certification shall no longer be valid.'',
                    (C) in paragraph (3)--
                            (i) by striking subparagraph (A) and 
                        inserting the following:
                    ``(A) shall take into consideration only those 
                projects--
                            ``(i) for which there is a reasonable 
                        expectation of commercial viability, and
                            ``(ii) which--
                                    ``(I) satisfies the requirements 
                                under paragraph (6), and
                                    ``(II) with respect to the re-
                                equipping, expansion, or establishment 
                                of an industrial or manufacturing 
                                facility, satisfies the requirements 
                                under section 501 of the Clean Energy 
                                for America Act, and'', and
                            (ii) in subparagraph (B)--
                                    (I) by striking clauses (i) and 
                                (ii) and inserting the following:
                            ``(i) will provide the greatest net impact 
                        in avoiding or reducing anthropogenic emissions 
                        of greenhouse gases (or, in the case of a 
                        project described in subsection (c)(1)(A)(ii), 
                        will provide the greatest reduction of 
                        greenhouse gas emissions as compared to current 
                        best practices),
                            ``(ii) will provide the greatest domestic 
                        job creation (both direct and indirect) during 
                        the credit period,'',
                                    (II) by redesignating clauses (iii) 
                                through (v) as clauses (iv) through 
                                (vi), respectively, and
                                    (III) by inserting after clause 
                                (ii) the following new clause:
                            ``(iii) will provide the greatest job 
                        creation within the vicinity of the project, 
                        particularly with respect to--
                                    ``(I) low-income communities (as 
                                defined in section 45D(e)), and
                                    ``(II) dislocated workers who were 
                                previously employed in manufacturing, 
                                coal power plants, or coal mining,'',
                    (D) in paragraph (4)--
                            (i) by striking subparagraph (A) and 
                        inserting the following:
                    ``(A) Review and report.--Not later than 4 years 
                after the date of enactment of the Clean Energy for 
                America Act, the Secretary shall--
                            ``(i) review the credits allocated under 
                        this section as of such date, and
                            ``(ii) submit a report regarding the 
                        allocation of such credits to--
                                    ``(I) the Committee on Finance and 
                                the Committee on Energy and Natural 
                                Resources of the Senate, and
                                    ``(II) the Committee on Ways and 
                                Means and the Committee on Energy and 
                                Commerce of the House of 
                                Representatives.'', and
                            (ii) by adding at the end the following new 
                        subparagraph:
                    ``(D) Special rule.--For purposes of reallocating 
                credits pursuant to this paragraph, the limitation 
                under paragraph (1)(B)(ii) with respect to allocation 
                of credits to projects which are not located in a 
                census tract described in subparagraph (B) of 
                subsection (c)(1) shall not apply.'', and
                    (E) by adding at the end the following:
            ``(6) Wage requirements.--
                    ``(A) In general.--The requirements described 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 re-equipping, expansion, or establishment of an 
                industrial or manufacturing facility shall be paid 
                wages at rates not less than the prevailing rates for 
                construction or alteration of a similar character in 
                the locality as determined by the Secretary 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 requirements.--In the case of any taxpayer 
                which fails to satisfy the requirement under 
                subparagraph (A) with respect to any project--
                            ``(i) rules similar to the rules of section 
                        45U(b)(3)(B)(ii) shall apply for purposes of 
                        this paragraph, and
                            ``(ii) if the failure to satisfy the 
                        requirement under subparagraph (A) is not 
                        corrected pursuant to the rules described in 
                        clause (i), the certification with respect to 
                        such project shall no longer be valid.'',
            (3) in subsection (e), by striking ``48, 48A, or 48B'' and 
        inserting ``45Q, 48, 48A, 48B, or 48D'', and
            (4) by adding at the end the following:
    ``(f) Special Rule for Property Financed by Subsidized Energy 
Financing or Industrial Development Bonds.--Rules similar to the rules 
in section 48(a)(4) shall apply for purposes of this section.
    ``(g) Technical Assistance.--For purposes of assisting with 
applications for certification under subsection (d), the Secretary of 
Energy shall provide technical assistance to any State (or political 
subdivision thereof), tribe, or economic development organization 
which, prior to the date of enactment of the Clean Energy for America 
Act--
            ``(1) had no applicants for certification under such 
        subsection, or
            ``(2) had less than 2 qualifying advanced energy projects 
        which received an allocation of credits under such subsection.
    ``(h) Election for Direct Payment.--
            ``(1) In general.--In the case of any eligible property 
        placed in service during any taxable year which is part of a 
        qualifying advanced energy project, the amount of any credit 
        determined under subsection (a) with respect to such property 
        for such taxable year shall, at the election of the taxpayer, 
        be treated as a payment equal to such amount which is made by 
        the taxpayer against the tax imposed by chapter 1 for such 
        taxable year (regardless of whether such tax would have been on 
        such taxpayer).
            ``(2) Form and effect of election.--
                    ``(A) In general.--An election under paragraph (1) 
                shall be made as part of the application for 
                certification under subsection (d)(2)(A) and in such 
                manner as the Secretary may prescribe. Such election, 
                once made, shall--
                            ``(i) be irrevocable with respect to the 
                        eligible property to which such election 
                        applies, and
                            ``(ii) reduce the amount of the credit 
                        which would (but for this subsection) be 
                        allowable under this section with respect to 
                        such property for the taxable year in which 
                        such property is placed in service to zero.
                    ``(B) Additional information.--For purposes of an 
                election under paragraph (1), the Secretary may require 
                such information as the Secretary deems necessary for 
                purposes of preventing duplication, fraud, or any 
                improper payments under this subsection.
            ``(3) Application to partnerships and s corporations; 
        excess payments.--Rules similar to the rules of paragraphs (3) 
        and (5) of section 45U(h) shall apply for purposes of this 
        subsection.
            ``(4) Special rules for certain entities.--
                    ``(A) Eligibility of certain property.--For 
                purposes of this subsection, paragraphs (3) and (4) of 
                section 50(b) shall not apply with respect to--
                            ``(i) any State utility with a service 
                        obligation, as such terms are defined in 
                        section 217 of the Federal Power Act (as in 
                        effect on the date of the enactment of this 
                        subsection),
                            ``(ii) any mutual or cooperative electric 
                        company described in section 501(c)(12) or 
                        section 1381(a)(2)(C), or
                            ``(iii) an Indian tribal government (as 
                        defined in section 139E(c)(1)).
                    ``(B) Certain entities treated as taxpayers.--In 
                the case of an election under this subsection, any 
                entity described in clause (i), (ii), or (iii) of 
                subparagraph (A) shall be treated as a taxpayer for 
                purposes of this subsection and determining the amount 
                of any credit under subsection (a).''.
    (b) Authorization of Appropriations.--To carry out subsection (f) 
of section 48C of the Internal Revenue Code of 1986 (as added by 
subsection (a)(4)), there is authorized to be appropriated to the State 
Energy Program of the Department of Energy, out of moneys in the 
Treasury not otherwise appropriated, $500,000, to remain available 
until expended.
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after December 31, 2021.

SEC. 602. ISSUANCE OF EXEMPT FACILITY BONDS FOR QUALIFIED CARBON 
              DIOXIDE CAPTURE FACILITIES.

    (a) In General.--Section 142 is amended--
            (1) in subsection (a)--
                    (A) in paragraph (14), by striking ``or'' at the 
                end,
                    (B) in paragraph (15), by striking the period at 
                the end and inserting ``, or'', and
                    (C) by adding at the end the following new 
                paragraph:
            ``(16) qualified carbon dioxide capture facilities.'', and
            (2) by adding at the end the following new subsection:
    ``(n) Qualified Carbon Dioxide Capture Facility.--
            ``(1) In general.--For purposes of subsection (a)(16), the 
        term `qualified carbon dioxide capture facility' means--
                    ``(A) the eligible components of an industrial 
                carbon dioxide facility, and
                    ``(B) a direct air capture facility (as defined in 
                section 45Q(e)(1)).
            ``(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 which is--
                                    ``(I) used for the purpose of 
                                capture, treatment and purification, 
                                compression, transportation, or on-site 
                                storage of carbon dioxide produced by 
                                the industrial carbon dioxide facility, 
                                or
                                    ``(II) integral or functionally 
                                related and subordinate to a process 
                                which converts a solid or liquid 
                                product from coal, petroleum residue, 
                                biomass, or other materials which are 
                                recovered for their energy or feedstock 
                                value into a synthesis gas composed 
                                primarily of carbon dioxide and 
                                hydrogen for direct use or subsequent 
                                chemical or physical conversion.
                            ``(ii) Definitions.--For purposes of this 
                        subparagraph--
                                    ``(I) Biomass.--
                                            ``(aa) In general.--The 
                                        term `biomass' means any--

                                                    ``(AA) agricultural 
                                                or plant waste,

                                                    ``(BB) byproduct of 
                                                wood or paper mill 
                                                operations, including 
                                                lignin in spent pulping 
                                                liquors, and

                                                    ``(CC) other 
                                                products of forestry 
                                                maintenance.

                                            ``(bb) Exclusion.--The term 
                                        `biomass' does not include 
                                        paper which is commonly 
                                        recycled.
                                    ``(II) Coal.--The term `coal' means 
                                anthracite, bituminous coal, 
                                subbituminous coal, lignite, and peat.
                    ``(B) Industrial carbon dioxide facility.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the term `industrial carbon 
                        dioxide facility' means a facility that emits 
                        carbon dioxide (including from any fugitive 
                        emissions source) that is created as a result 
                        of any of the following processes:
                                    ``(I) Fuel combustion.
                                    ``(II) Gasification.
                                    ``(III) Bioindustrial.
                                    ``(IV) Fermentation.
                                    ``(V) Any manufacturing industry 
                                relating to--
                                            ``(aa) chemicals,
                                            ``(bb) fertilizers,
                                            ``(cc) glass,
                                            ``(dd) steel,
                                            ``(ee) petroleum residues,
                                            ``(ff) forest products,
                                            ``(gg) agriculture, 
                                        including feedlots and dairy 
                                        operations, and
                                            ``(hh) transportation grade 
                                        liquid fuels.
                            ``(ii) Exceptions.--For purposes of clause 
                        (i), an industrial carbon dioxide facility 
                        shall not include--
                                    ``(I) any geological gas facility, 
                                or
                                    ``(II) any air separation unit 
                                that--
                                            ``(aa) does not qualify as 
                                        gasification equipment, or
                                            ``(bb) is not a necessary 
                                        component of an oxy-fuel 
                                        combustion process.
                            ``(iii) Definitions.--In this 
                        subparagraph--
                                    ``(I) Petroleum residue.--The term 
                                `petroleum residue' means the 
                                carbonized product of high-boiling 
                                hydrocarbon fractions obtained in 
                                petroleum processing.
                                    ``(II) Geological gas facility.--
                                The term `geological gas facility' 
                                means a facility that--
                                            ``(aa) produces a raw 
                                        product consisting of gas or 
                                        mixed gas and liquid from a 
                                        geological formation,
                                            ``(bb) transports or 
                                        removes impurities from such 
                                        product, or
                                            ``(cc) separates such 
                                        product into its constituent 
                                        parts.
            ``(3) Special rule for facilities with less than 65 percent 
        capture and storage percentage.--
                    ``(A) In general.--An eligible component of an 
                industrial carbon dioxide facility with a capture and 
                storage percentage that is less than 65 percent shall 
                only be treated as a qualified carbon dioxide facility 
                with respect to the percentage of the costs 
                attributable to such eligible component which is equal 
                to the capture and storage percentage of such facility.
                    ``(B) Capture and storage percentage.--
                            ``(i) In general.--Subject to clause (ii), 
                        the capture and storage percentage shall be an 
                        amount, expressed as a percentage, equal to the 
                        quotient of--
                                    ``(I) the total metric tons of 
                                carbon dioxide annually captured, 
                                transported, 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 
                                carbon dioxide which would otherwise be 
                                released into the atmosphere each year 
                                as industrial emission of greenhouse 
                                gas if the eligible components were not 
                                installed in the industrial carbon 
                                dioxide facility.
                            ``(ii) Limited application of eligible 
                        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 capture and storage 
                        percentage under this subparagraph shall be 
                        determined based only on such specific sources 
                        of emissions or portions thereof.
            ``(4) Regulations.--The Secretary shall issue such 
        regulations or other guidance as are necessary to carry out the 
        provisions of this subsection, including methods for 
        determining costs attributable to an eligible component for 
        purposes of paragraph (3)(A).''.
    (b) Volume Cap.--Section 146(g)(4) is amended by striking 
``paragraph (11) of section 142(a) (relating to high-speed intercity 
rail facilities)'' and inserting ``paragraph (11) or (16) of section 
142(a)''.
    (c) Clarification of Private Business Use.--Section 141(b)(6) is 
amended by adding at the end the following new subparagraph:
                    ``(C) Clarification relating to qualified carbon 
                dioxide capture facilities.--For purposes of this 
                subsection, the sale of carbon dioxide produced by a 
                qualified carbon dioxide capture facility (as defined 
                in section 142(n)) which is owned by a governmental 
                unit shall not constitute private business use.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to obligations issued after December 31, 2021.

SEC. 603. LIMITATION ON IMPORTATION OF CERTAIN ENERGY EQUIPMENT AND 
              COMPONENTS.

    (a) In General.--The importation of an article described in 
subsection (b) is prohibited unless the United Nations certifies that 
the article is not mined or otherwise produced using forced labor or 
child labor.
    (b) Articles Described.--An article described in this subsection is 
a solar cell, a wind turbine, energy storage equipment, or a component 
for such equipment.

SEC. 604. ELIMINATION OF NEGATIVE EFFECTS ON SMALL BUSINESSES AND 
              CERTAIN INDIVIDUAL TAXPAYERS.

    (a) In General.--In the case of any taxable year beginning after 
the date of the enactment of this Act, the Secretary of the Treasury 
(or the Secretary's delegate) shall pay to each applicable eligible 
taxpayer an amount equal to the excess (if any) of--
            (1) the tax imposed under chapter 1 of the Internal Revenue 
        Code of 1986 (determined after the application of the 
        amendments made by this Act which are in effect for such 
        taxable year), over
            (2) the tax imposed under such chapter on such taxpayer for 
        such taxable year (determined without regard to the amendments 
        made by this Act).
    (b) Applicable Eligible Taxpayer.--For purposes of this section--
            (1) In general.--The term ``applicable eligible taxpayer'' 
        means, with respect to any taxable year, any eligible taxpayer 
        who establishes to the satisfaction of the Secretary of the 
        Treasury (or the Secretary's delegate) that there is an excess 
        described in subsection (a) with respect to such taxpayer.
            (2) Eligible taxpayer.--
                    (A) In general.--The term ``eligible taxpayer'' 
                means, with respect to any taxable year--
                            (i) an individual with an adjusted gross 
                        income of not more than $400,000, and
                            (ii) any employer that has an average 
                        number of fewer than 500 employees for the 
                        taxable year.
                    (B) Aggregation rules.--For purposes of 
                subparagraph (A)(ii), all persons treated as a single 
                employer under subsection (b), (c), (m), or (o) of 
                section 414 of the Internal Revenue Code of 1986 shall 
                be treated as one employer.
                    (C) Special rule for pass-thru entities.--In the 
                case of a partnership, S corporation, or other pass-
                thru entity that is described in subparagraph (A)(ii)--
                            (i) any partner, shareholder, or other 
                        applicable individual who is not described in 
                        subparagraph (A)(i) shall be treated as an 
                        eligible taxpayer, and
                            (ii) the amount of the excess described 
                        under subsection (a) of such partner, 
                        shareholder, or other applicable individual 
                        shall be determined by only taking into account 
                        the income, gain, loss, deduction, or credit of 
                        such partnership, S corporation, or other pass-
                        thru entity.
                For purposes of the preceding sentence, the term 
                ``applicable individual'' means, with respect to any 
                pass-thru entity, any individual to whom the income, 
                gain, loss, or deduction of such entity is attributed 
                for tax purposes.
    (c) Treatment of Payments.--The amount of any payment under 
subsection (a) shall be treated as a refund of taxes due from a 
provision described in section 1324(b)(2) of title 31, United States 
Code.
    (d) Regulations.--The Secretary of the Treasury (or the Secretary's 
delegate) shall issue such regulations or other guidance as are 
necessary to carry out the provisions of this section.
                                                        Calendar No. 78

117th CONGRESS

  1st Session

                                S. 2118

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