Hydrogen Utilization and Sustainability Act
Bill: S.1266 | Sponsor: Sen. Young, Todd (R-IN)
Policy area: Taxation

Summary:
Hydrogen Utilization and Sustainability Act
This bill expands the tax credit for producing electricity from renewable resources to include qualified hydrogen. The bill defines qualified hydrogen as hydrogen fuel certified as having a carbon intensity of not greater than 75 grams of CO2e (carbon dioxide equivalent) per kilowatt hour of electricity produced, as determined based on a lifecycle analysis.

To amend the Internal Revenue Code of 1986 to expand the renewable 
  electricity production credit to include electricity produced from 
                               hydrogen.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Hydrogen Utilization and 
Sustainability Act''.

SEC. 2. EXPANSION OF RENEWABLE ELECTRICITY PRODUCTION CREDIT TO INCLUDE 
              ELECTRICITY PRODUCED FROM HYDROGEN.

    (a) In General.--Section 45 of the Internal Revenue Code of 1986 is 
amended--
            (1) in subsection (c)--
                    (A) in paragraph (1)--
                            (i) in subparagraph (H), by striking 
                        ``and'' at the end;
                            (ii) in subparagraph (I), by striking the 
                        period at the end and inserting ``, and''; and
                            (iii) by adding at the end the following 
                        new subparagraph:
                    ``(J) qualified hydrogen.''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(11) Qualified hydrogen.--The term `qualified hydrogen' 
        means, with respect to any taxable year, hydrogen fuel which 
        has been certified prior to such year by the Secretary of 
        Energy (in consultation with the Secretary) as having a carbon 
        intensity of not greater than 75 grams of CO<INF>2</INF>e per 
        kilowatt hour of electricity produced, as determined based on a 
        lifecycle analysis.''; and
            (2) in subsection (d), by adding at the end the following 
        new paragraph:
            ``(12) Hydrogen facility.--
                    ``(A) In general.--In the case of a facility using 
                qualified hydrogen to produce electricity, the term 
                `qualified facility' means any facility owned by the 
                taxpayer--
                            ``(i) for which not less than 70 percent of 
                        the electricity produced at such facility 
                        during any taxable year is attributable to the 
                        use of qualified hydrogen, and
                            ``(ii)(I) the construction of which begins 
                        before January 1, 2024, or
                            ``(II) which--
                                    ``(aa) was originally placed in 
                                service before the date of enactment of 
                                this paragraph and, prior to the 
                                modification described in item (bb), 
                                did not use hydrogen to produce 
                                electricity, and
                                    ``(bb) before January 1, 2024, is 
                                modified to use qualified hydrogen to 
                                produce electricity.
                    ``(B) Modification.--For purposes of subparagraph 
                (A)(ii)(II)(bb), a facility shall be treated as 
                modified before January 1, 2024, if the construction of 
                such modification begins before such date.
                    ``(C) Election.--If the owner of the facility 
                described in subparagraph (A) makes an election under 
                this subparagraph in such time and manner as the 
                Secretary may prescribe by regulations, the credit 
                under this section--
                            ``(i) shall be allowable to the person that 
                        leases and operates such facility, and
                            ``(ii) shall not be allowable to the owner 
                        of such facility.
                    ``(D) Special rules.--
                            ``(i) Exclusion of electricity not produced 
                        from qualified hydrogen.--For purposes of 
                        subsection (a)(2), the total amount of kilowatt 
                        hours of electricity produced by the taxpayer 
                        at a qualified facility described in 
                        subparagraph (A) for any taxable year shall be 
                        equal to the product of--
                                    ``(I) the total amount of kilowatt 
                                hours of electricity produced by the 
                                taxpayer at such facility for such 
                                taxable year, multiplied by
                                    ``(II) an amount equal to the 
                                quotient of--
                                            ``(aa) the amount of 
                                        qualified hydrogen used at such 
                                        facility to produce such 
                                        electricity (as determined on 
                                        the basis of Btu content), 
                                        divided by
                                            ``(bb) the total amount of 
                                        fuel used at such facility to 
                                        produce such electricity (as 
                                        determined on the basis of Btu 
                                        content).
                            ``(ii) Adjustment for negative carbon 
                        intensity.--
                                    ``(I) In general.--For purposes of 
                                subsection (a)(2), the total amount of 
                                kilowatt hours of electricity produced 
                                by the taxpayer at a qualified facility 
                                described in subparagraph (A) for any 
                                taxable year (as determined after 
                                application of clause (i)) shall be 
                                increased by an amount equal to the 
                                applicable percentage of such total 
                                amount.
                                    ``(II) Applicable percentage.--For 
                                purposes of subclause (I), the 
                                applicable percentage for a qualified 
                                facility for any taxable year is the 
                                amount (expressed as a percentage) 
                                equal to the product of--
                                            ``(aa) 1 percentage point, 
                                        multiplied by
                                            ``(bb) an amount equal to 
                                        the quotient of--

                                                    ``(AA) the total 
                                                amount of carbon 
                                                dioxide (expressed in 
                                                metric tons) which is 
                                                removed from the 
                                                atmosphere during such 
                                                taxable year through 
                                                the use of qualified 
                                                hydrogen (as determined 
                                                pursuant to a 
                                                certification of 
                                                negative carbon 
                                                intensity for such 
                                                hydrogen under 
                                                subsection (c)(11)) at 
                                                such qualified 
                                                facility, divided by

                                                    ``(BB) 1,000.''.

    (b) Effective Date.--The amendments made by this section shall take 
effect on the date of enactment of this Act.
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