Title: Tax Extender Act of 2017
Policy area: Taxation

Summary:
Tax Extender Act of 2017
This bill amends the Internal Revenue Code to extend various expiring tax deductions, credits, and rules.
The bill extends tax credits relating to:
The bill extends and modifies the tax credits for:
The bill also extends provisions relating to:

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 2256 Introduced in Senate (IS)]

<DOC>






115th CONGRESS
  1st Session
                                S. 2256

     To amend the Internal Revenue Code of 1986 to extend expiring 
                  provisions, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           December 20, 2017

   Mr. Hatch (for himself, Mr. Grassley, Mr. Crapo, Mr. Roberts, Mr. 
 Thune, and Mr. Isakson) introduced the following bill; which was read 
             twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
     To amend the Internal Revenue Code of 1986 to extend expiring 
                  provisions, 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 ``Tax Extender Act 
of 2017''.
    (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.

            TITLE I--TAX RELIEF FOR FAMILIES AND INDIVIDUALS

SEC. 101. EXTENSION OF EXCLUSION FROM GROSS INCOME OF DISCHARGE OF 
              QUALIFIED PRINCIPAL RESIDENCE INDEBTEDNESS.

    (a) In General.--Section 108(a)(1)(E) is amended by striking 
``January 1, 2017'' each place it appears and inserting ``January 1, 
2019''.
    (b) Effective Date.--The amendments made by this section shall 
apply to discharges of indebtedness after December 31, 2016.

SEC. 102. EXTENSION OF MORTGAGE INSURANCE PREMIUMS TREATED AS QUALIFIED 
              RESIDENCE INTEREST.

    (a) In General.--Subclause (I) of section 163(h)(3)(E)(iv) is 
amended by striking ``December 31, 2016'' and inserting ``December 31, 
2018''.
    (b) Effective Date.--The amendment made by this section shall apply 
to amounts paid or accrued after December 31, 2016.

SEC. 103. EXTENSION OF ABOVE-THE-LINE DEDUCTION FOR QUALIFIED TUITION 
              AND RELATED EXPENSES.

    (a) In General.--Section 222(e) is amended by striking ``December 
31, 2016'' and inserting ``December 31, 2018''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2016.

   TITLE II--INCENTIVES FOR GROWTH, JOBS, INVESTMENT, AND INNOVATION

SEC. 201. EXTENSION OF INDIAN EMPLOYMENT TAX CREDIT.

    (a) In General.--Section 45A(f) is amended by striking ``December 
31, 2016'' and inserting ``December 31, 2018''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2016.

SEC. 202. EXTENSION OF RAILROAD TRACK MAINTENANCE CREDIT.

    (a) In General.--Section 45G(f) is amended by striking ``January 1, 
2017'' and inserting ``January 1, 2019''.
    (b) Effective Date.--The amendment made by this section shall apply 
to expenditures paid or incurred in taxable years beginning after 
December 31, 2016.

SEC. 203. EXTENSION OF MINE RESCUE TEAM TRAINING CREDIT.

    (a) In General.--Section 45N(e) is amended by striking ``December 
31, 2016'' and inserting ``December 31, 2018''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2016.

SEC. 204. EXTENSION OF QUALIFIED ZONE ACADEMY BONDS.

    (a) In General.--Section 54E(c)(1) is amended by striking ``and 
2016'' and inserting ``2016, and 2017''.
    (b) Effective Date.--The amendment made by this section shall apply 
to obligations issued after December 31, 2016.

SEC. 205. EXTENSION OF CLASSIFICATION OF CERTAIN RACE HORSES AS 3-YEAR 
              PROPERTY.

    (a) In General.--Section 168(e)(3)(A)(i) is amended--
            (1) by striking ``January 1, 2017'' in subclause (I) and 
        inserting ``January 1, 2019'', and
            (2) by striking ``December 31, 2016'' in subclause (II) and 
        inserting ``December 31, 2018''.
    (b) Effective Date.--The amendments made by this section shall 
apply to property placed in service after December 31, 2016.

SEC. 206. EXTENSION OF 7-YEAR RECOVERY PERIOD FOR MOTORSPORTS 
              ENTERTAINMENT COMPLEXES.

    (a) In General.--Section 168(i)(15)(D) is amended by striking 
``December 31, 2016'' and inserting ``December 31, 2018''.
    (b) Effective Date.--The amendment made by this section shall apply 
to property placed in service after December 31, 2016.

SEC. 207. EXTENSION OF ACCELERATED DEPRECIATION FOR BUSINESS PROPERTY 
              ON AN INDIAN RESERVATION.

    (a) In General.--Section 168(j)(9) is amended by striking 
``December 31, 2016'' and inserting ``December 31, 2018''.
    (b) Effective Date.--The amendment made by this section shall apply 
to property placed in service after December 31, 2016.

SEC. 208. EXTENSION OF ELECTION TO EXPENSE MINE SAFETY EQUIPMENT.

    (a) In General.--Section 179E(g) is amended by striking ``December 
31, 2016'' and inserting ``December 31, 2018''.
    (b) Effective Date.--The amendment made by this section shall apply 
to property placed in service after December 31, 2016.

SEC. 209. EXTENSION OF SPECIAL EXPENSING RULES FOR CERTAIN PRODUCTIONS.

    (a) In General.--Section 181(g) is amended by striking ``December 
31, 2016'' and inserting ``December 31, 2017''.
    (b) Effective Date.--The amendment made by this section shall apply 
to productions commencing after December 31, 2016.

SEC. 210. EXTENSION OF DEDUCTION ALLOWABLE WITH RESPECT TO INCOME 
              ATTRIBUTABLE TO DOMESTIC PRODUCTION ACTIVITIES IN PUERTO 
              RICO.

    (a) In General.--Section 199(d)(8)(C) is amended--
            (1) by striking ``first 11 taxable years'' and inserting 
        ``first 12 taxable years'', and
            (2) by striking ``January 1, 2017'' and inserting ``January 
        1, 2018''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2016.

SEC. 211. EXTENSION OF SPECIAL RULE RELATING TO QUALIFIED TIMBER GAIN.

    (a) In General.--Section 1201(b) is amended by striking ``2016'' 
and inserting ``2016 or 2017''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2016.

SEC. 212. EXTENSION OF EMPOWERMENT ZONE TAX INCENTIVES.

    (a) In General.--
            (1) Extension.--Section 1391(d)(1)(A)(i) is amended by 
        striking ``December 31, 2016'' and inserting ``December 31, 
        2018''.
            (2) Treatment of certain termination dates specified in 
        nominations.--In the case of a designation of an empowerment 
        zone the nomination for which included a termination date which 
        is contemporaneous with the date specified in subparagraph 
        (A)(i) of section 1391(d)(1) of the Internal Revenue Code of 
        1986 (as in effect before the enactment of this Act), 
        subparagraph (B) of such section shall not apply with respect 
        to such designation if, after the date of the enactment of this 
        section, the entity which made such nomination amends the 
        nomination to provide for a new termination date in such manner 
        as the Secretary of the Treasury (or the Secretary's designee) 
        may provide.
    (b) Effective Date.--The amendment made by subsection (a)(1) shall 
apply to taxable years beginning after December 31, 2016.

SEC. 213. EXTENSION OF TEMPORARY INCREASE IN LIMIT ON COVER OVER OF RUM 
              EXCISE TAXES TO PUERTO RICO AND THE VIRGIN ISLANDS.

    (a) In General.--Section 7652(f)(1) is amended by striking 
``January 1, 2017'' and inserting ``January 1, 2019''.
    (b) Effective Date.--The amendment made by this section shall apply 
to distilled spirits brought into the United States after December 31, 
2016.

SEC. 214. EXTENSION OF AMERICAN SAMOA ECONOMIC DEVELOPMENT CREDIT.

    (a) In General.--Section 119(d) of division A of the Tax Relief and 
Health Care Act of 2006 is amended--
            (1) by striking ``January 1, 2017'' each place it appears 
        and inserting ``January 1, 2018'',
            (2) by striking ``first 11 taxable years'' in paragraph (1) 
        and inserting ``first 12 taxable years'', and
            (3) by striking ``first 5 taxable years'' in paragraph (2) 
        and inserting ``first 6 taxable years''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2016.

      TITLE III--INCENTIVES FOR ENERGY PRODUCTION AND CONSERVATION

SEC. 301. EXTENSION OF CREDIT FOR NONBUSINESS ENERGY PROPERTY.

    (a) In General.--Section 25C(g)(2) is amended by striking 
``December 31, 2016'' and inserting ``December 31, 2018''.
    (b) Effective Date.--The amendment made by this section shall apply 
to property placed in service after December 31, 2016.

SEC. 302. EXTENSION AND MODIFICATION OF CREDIT FOR RESIDENTIAL ENERGY 
              PROPERTY.

    (a) In General.--Section 25D(h) is amended by striking ``December 
31, 2016'' and all that follows and inserting ``December 31, 2021.''.
    (b) Phaseout.--
            (1) In general.--Section 25D(a) is amended by striking 
        ``the sum of--'' and all that follows and inserting ``the sum 
        of the applicable percentages of--
            ``(1) the qualified solar electric property expenditures,
            ``(2) the qualified solar water heating property 
        expenditures,
            ``(3) the qualified fuel cell property expenditures,
            ``(4) the qualified small wind energy property 
        expenditures, and
            ``(5) the qualified geothermal heat pump property 
        expenditures,
made by the taxpayer during such year.''.
            (2) Conforming amendment.--Section 25D(g) is amended by 
        striking ``paragraphs (1) and (2) of''.
    (c) Effective Date.--The amendment made by this section shall apply 
to property placed in service after December 31, 2016.

SEC. 303. EXTENSION OF CREDIT FOR NEW QUALIFIED FUEL CELL MOTOR 
              VEHICLES.

    (a) In General.--Section 30B(k)(1) is amended by striking 
``December 31, 2016'' and inserting ``December 31, 2018''.
    (b) Effective Date.--The amendment made by this section shall apply 
to property purchased after December 31, 2016.

SEC. 304. EXTENSION OF CREDIT FOR ALTERNATIVE FUEL VEHICLE REFUELING 
              PROPERTY.

    (a) In General.--Section 30C(g) is amended by striking ``December 
31, 2016'' and inserting ``December 31, 2018''.
    (b) Effective Date.--The amendment made by this section shall apply 
to property placed in service after December 31, 2016.

SEC. 305. EXTENSION OF CREDIT FOR 2-WHEELED PLUG-IN ELECTRIC VEHICLES.

    (a) In General.--Section 30D(g)(3)(E)(ii) is amended by striking 
``January 1, 2017'' and inserting ``January 1, 2019''.
    (b) Effective Date.--The amendment made by this section shall apply 
to vehicles acquired after December 31, 2016.

SEC. 306. EXTENSION OF SECOND GENERATION BIOFUEL PRODUCER CREDIT.

    (a) In General.--Section 40(b)(6)(J)(i) is amended by striking 
``January 1, 2017'' and inserting ``January 1, 2019''.
    (b) Effective Date.--The amendment made by this section shall apply 
to qualified second generation biofuel production after December 31, 
2016.

SEC. 307. EXTENSION OF BIODIESEL AND RENEWABLE DIESEL INCENTIVES.

    (a) Income Tax Credit.--
            (1) In general.--Subsection (g) of section 40A is amended 
        by striking ``December 31, 2016'' and inserting ``December 31, 
        2018''.
            (2) Effective date.--The amendment made by this subsection 
        shall apply to fuel sold or used after December 31, 2016.
    (b) Excise Tax Incentives.--
            (1) In general.--Section 6426(c)(6) is amended by striking 
        ``December 31, 2016'' and inserting ``December 31, 2018''.
            (2) Payments.--Section 6427(e)(6)(B) is amended by striking 
        ``December 31, 2016'' and inserting ``December 31, 2018''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to fuel sold or used after December 31, 2016.
            (4) Special rule for 2017.--Notwithstanding any other 
        provision of law, in the case of any biodiesel mixture credit 
        properly determined under section 6426(c) of the Internal 
        Revenue Code of 1986 for the period beginning on January 1, 
        2017, and ending on December 31, 2017, such credit shall be 
        allowed, and any refund or payment attributable to such credit 
        (including any payment under section 6427(e) of such Code) 
        shall be made, only in such manner as the Secretary of the 
        Treasury (or the Secretary's delegate) shall provide. Such 
        Secretary shall issue guidance within 30 days after the date of 
        the enactment of this Act providing for a one-time submission 
        of claims covering periods described in the preceding sentence. 
        Such guidance shall provide for a 180-day period for the 
        submission of such claims (in such manner as prescribed by such 
        Secretary) to begin not later than 30 days after such guidance 
        is issued. Such claims shall be paid by such Secretary not 
        later than 60 days after receipt. If such Secretary has not 
        paid pursuant to a claim filed under this subsection within 60 
        days after the date of the filing of such claim, the claim 
        shall be paid with interest from such date determined by using 
        the overpayment rate and method under section 6621 of such 
        Code.

SEC. 308. EXTENSION OF PRODUCTION CREDIT FOR INDIAN COAL FACILITIES.

    (a) In General.--Section 45(e)(10)(A) is amended by striking ``11-
year period'' each place it appears and inserting ``13-year period''.
    (b) Effective Date.--The amendment made by this section shall apply 
to coal produced after December 31, 2016.

SEC. 309. EXTENSION OF CREDITS WITH RESPECT TO FACILITIES PRODUCING 
              ENERGY FROM CERTAIN RENEWABLE RESOURCES.

    (a) In General.--The following provisions of section 45(d) are each 
amended by striking ``January 1, 2017'' each place it appears and 
inserting ``January 1, 2019'':
            (1) Paragraph (2)(A).
            (2) Paragraph (3)(A).
            (3) Paragraph (4)(B).
            (4) Paragraph (6).
            (5) Paragraph (7).
            (6) Paragraph (9).
            (7) Paragraph (11)(B).
    (b) Extension of Election To Treat Qualified Facilities as Energy 
Property.--Section 48(a)(5)(C)(ii) is amended by striking ``January 1, 
2017'' and inserting ``January 1, 2019''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on January 1, 2017.

SEC. 310. EXTENSION OF CREDIT FOR ENERGY-EFFICIENT NEW HOMES.

    (a) In General.--Section 45L(g) is amended by striking ``December 
31, 2016'' and inserting ``December 31, 2018''.
    (b) Effective Date.--The amendment made by this section shall apply 
to homes acquired after December 31, 2016.

SEC. 311. EXTENSION AND PHASEOUT OF ENERGY CREDIT.

    (a) Credit Percentage for Geothermal Energy Property.--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) Extension of Solar and Thermal Energy Property.--Section 
48(a)(3)(A) is amended--
            (1) by striking ``periods ending before January 1, 2017'' 
        in clause (ii) and inserting ``property the construction of 
        which begins before January 1, 2022'', and
            (2) by striking ``periods ending before January 1, 2017'' 
        in clause (vii) and inserting ``property the construction of 
        which begins before January 1, 2022''.
    (c) Phaseout of 30-Percent Credit Rate for Geothermal Energy 
Property.--Section 48(a)(6) is amended--
            (1) by inserting ``and geothermal'' after ``solar'' in the 
        heading,
            (2) by striking ``paragraph (3)(A)(i)'' in subparagraph (A) 
        and inserting ``clause (i) or (iii) of paragraph (3)(A)'', and
            (3) by striking ``property energy property described in 
        paragraph (3)(A)(i)'' in subparagraph (B) and inserting 
        ``energy property described in clause (i) or (iii) of paragraph 
        (3)(A)''.
    (d) Phaseout of 30-Percent Credit Rate for Fiber-Optic Solar, 
Qualified Fuel Cell, and Qualified Small Wind Energy Property.--
            (1) In general.--Section 48(a) is amended by adding at the 
        end the following new paragraph:
            ``(7) Phaseout for fiber-optic solar, qualified fuel cell, 
        and qualified small wind energy property.--
                    ``(A) In general.--In the case of any qualified 
                fuel cell property, qualified small wind property, or 
                energy property described in paragraph (3)(A)(ii), the 
                energy percentage determined under paragraph (2) shall 
                be equal to--
                            ``(i) in the case of any property the 
                        construction of which begins after December 31, 
                        2019, and before January 1, 2021, 26 percent, 
                        and
                            ``(ii) in the case of any property the 
                        construction of which begins after December 31, 
                        2020, and before January 1, 2022, 22 percent.
                    ``(B) Placed in service deadline.--In the case of 
                any energy property described in subparagraph (A) which 
                is not placed in service before January 1, 2024, the 
                energy percentage determined under paragraph (2) shall 
                be equal to 0 percent.''.
            (2) Conforming amendment.--Section 48(a)(2)(A) is amended 
        by striking ``paragraph (6)'' and inserting ``paragraphs (6) 
        and (7)''.
            (3) Clarification relating to phaseout for wind 
        facilities.--Section 48(a)(5)(E) is amended by inserting 
        ``which is treated as energy property by reason of this 
        paragraph'' after ``using wind to produce electricity''.
    (e) Extension of Qualified Fuel Cell Property.--Section 48(c)(1)(D) 
is amended by striking ``for any period after December 31, 2016'' and 
inserting ``the construction of which does not begin before January 1, 
2022''.
    (f) Extension of Qualified Microturbine Property.--Section 
48(c)(2)(D) is amended by striking ``for any period after December 31, 
2016'' and inserting ``the construction of which does not begin before 
January 1, 2022''.
    (g) Extension of Combined Heat and Power System Property.--Section 
48(c)(3)(A)(iv) is amended by striking ``which is placed in service 
before January 1, 2017'' and inserting ``the construction of which 
begins before January 1, 2022''.
    (h) Extension of Qualified Small Wind Energy Property.--Section 
48(c)(4)(C) is amended by striking ``for any period after December 31, 
2016'' and inserting ``the construction of which does not begin before 
January 1, 2022''.
    (i) Effective Date.--The amendments made by this section shall take 
effect on January 1, 2017.

SEC. 312. EXTENSION OF SPECIAL ALLOWANCE FOR SECOND GENERATION BIOFUEL 
              PLANT PROPERTY.

    (a) In General.--Section 168(l)(2)(D) is amended by striking 
``January 1, 2017'' and inserting ``January 1, 2019''.
    (b) Effective Date.--The amendment made by this section shall apply 
to property placed in service after December 31, 2016.

SEC. 313. EXTENSION OF ENERGY EFFICIENT COMMERCIAL BUILDINGS DEDUCTION.

    (a) In General.--Section 179D(h) is amended by striking ``December 
31, 2016'' and inserting ``December 31, 2018''.
    (b) Effective Date.--The amendment made by this section shall apply 
to property placed in service after December 31, 2016.

SEC. 314. EXTENSION OF SPECIAL RULE FOR SALES OR DISPOSITIONS TO 
              IMPLEMENT FERC OR STATE ELECTRIC RESTRUCTURING POLICY FOR 
              QUALIFIED ELECTRIC UTILITIES.

    (a) In General.--Section 451(i)(3) is amended by striking ``January 
1, 2017'' and inserting ``January 1, 2019''.
    (b) Effective Date.--The amendment made by this section shall apply 
to dispositions after December 31, 2016.

SEC. 315. EXTENSION OF EXCISE TAX CREDITS RELATING TO ALTERNATIVE 
              FUELS.

    (a) Extension of Alternative Fuels Excise Tax Credits.--
            (1) In general.--Sections 6426(d)(5) and 6426(e)(3) are 
        each amended by striking ``December 31, 2016'' and inserting 
        ``December 31, 2018''.
            (2) Outlay payments for alternative fuels.--Section 
        6427(e)(6)(C) is amended by striking ``December 31, 2016'' and 
        inserting ``December 31, 2018''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to fuel sold or used after December 31, 2016.
    (b) Special Rule for 2017.--Notwithstanding any other provision of 
law, in the case of any alternative fuel credit properly determined 
under section 6426(d) of the Internal Revenue Code of 1986 for the 
period beginning on January 1, 2017, and ending on December 31, 2017, 
such credit shall be allowed, and any refund or payment attributable to 
such credit (including any payment under section 6427(e) of such Code) 
shall be made, only in such manner as the Secretary of the Treasury (or 
the Secretary's delegate) shall provide. Such Secretary shall issue 
guidance within 30 days after the date of the enactment of this Act 
providing for a one-time submission of claims covering periods 
described in the preceding sentence. Such guidance shall provide for a 
180-day period for the submission of such claims (in such manner as 
prescribed by such Secretary) to begin not later than 30 days after 
such guidance is issued. Such claims shall be paid by such Secretary 
not later than 60 days after receipt. If such Secretary has not paid 
pursuant to a claim filed under this subsection within 60 days after 
the date of the filing of such claim, the claim shall be paid with 
interest from such date determined by using the overpayment rate and 
method under section 6621 of such Code.

SEC. 316. EXTENSION OF OIL SPILL LIABILITY TRUST FUND FINANCING RATE.

    (a) In General.--Section 4611(f)(2) is amended by striking 
``December 31, 2017'' and inserting ``December 31, 2018''.
    (b) Effective Date.--The amendment made by this section shall apply 
on and after January 1, 2018.

              TITLE IV--MODIFICATIONS OF ENERGY INCENTIVES

SEC. 401. MODIFICATIONS OF CREDIT FOR PRODUCTION FROM ADVANCED NUCLEAR 
              POWER FACILITIES.

    (a) Treatment of Unutilized Limitation Amounts.--Section 45J(b) is 
amended--
            (1) by inserting ``or any amendment to'' after ``enactment 
        of'' in paragraph (4), and
            (2) by adding at the end the following new paragraph:
            ``(5) Allocation of unutilized limitation.--
                    ``(A) In general.--Any unutilized national megawatt 
                capacity limitation shall be allocated by the Secretary 
                under paragraph (3) as rapidly as is practicable after 
                December 31, 2020--
                            ``(i) first to facilities placed in service 
                        on or before such date to the extent that such 
                        facilities did not receive an allocation equal 
                        to their full nameplate capacity, and
                            ``(ii) then to facilities placed in service 
                        after such date in the order in which such 
                        facilities are placed in service.
                    ``(B) Unutilized national megawatt capacity 
                limitation.--The term `unutilized national megawatt 
                capacity limitation' means the excess (if any) of--
                            ``(i) 6,000 megawatts, over
                            ``(ii) the aggregate amount of national 
                        megawatt capacity limitation allocated by the 
                        Secretary before January 1, 2021, reduced by 
                        any amount of such limitation which was 
                        allocated to a facility which was not placed in 
                        service before such date.
                    ``(C) Coordination with other provisions.--In the 
                case of any unutilized national megawatt capacity 
                limitation allocated by the Secretary pursuant to this 
                paragraph--
                            ``(i) such allocation shall be treated for 
                        purposes of this section in the same manner as 
                        an allocation of national megawatt capacity 
                        limitation, and
                            ``(ii) subsection (d)(1)(B) shall not apply 
                        to any facility which receives such 
                        allocation.''.
    (b) Transfer of Credit by Certain Public Entities.--
            (1) In general.--Section 45J is amended--
                    (A) by redesignating subsection (e) as subsection 
                (f), and
                    (B) by inserting after subsection (d) the following 
                new subsection:
    ``(e) Transfer of Credit by Certain Public Entities.--
            ``(1) In general.--If, with respect to a credit under 
        subsection (a) for any taxable year--
                    ``(A) a qualified public entity would be the 
                taxpayer (but for this paragraph), and
                    ``(B) such entity elects the application of this 
                paragraph for such taxable year with respect to all (or 
                any portion specified in such election) of such credit,
        the eligible project partner specified in such election, and 
        not the qualified public entity, shall be treated as the 
        taxpayer for purposes of this title with respect to such credit 
        (or such portion thereof).
            ``(2) Definitions.--For purposes of this subsection--
                    ``(A) Qualified public entity.--The term `qualified 
                public entity' means--
                            ``(i) a Federal, State, or local government 
                        entity, or any political subdivision, agency, 
                        or instrumentality thereof,
                            ``(ii) a mutual or cooperative electric 
                        company described in section 501(c)(12) or 
                        1381(a)(2), or
                            ``(iii) a not-for-profit electric utility 
                        which had or has received a loan or loan 
                        guarantee under the Rural Electrification Act 
                        of 1936.
                    ``(B) Eligible project partner.--The term `eligible 
                project partner' means any person who--
                            ``(i) is responsible for, or participates 
                        in, the design or construction of the advanced 
                        nuclear power facility to which the credit 
                        under subsection (a) relates,
                            ``(ii) participates in the provision of the 
                        nuclear steam supply system to such facility,
                            ``(iii) participates in the provision of 
                        nuclear fuel to such facility,
                            ``(iv) is a financial institution providing 
                        financing for the construction or operation of 
                        such facility, or
                            ``(v) has an ownership interest in such 
                        facility.
            ``(3) Special rules.--
                    ``(A) Application to partnerships.--In the case of 
                a credit under subsection (a) which is determined at 
                the partnership level--
                            ``(i) for purposes of paragraph (1)(A), a 
                        qualified public entity shall be treated as the 
                        taxpayer with respect to such entity's 
                        distributive share of such credit, and
                            ``(ii) the term `eligible project partner' 
                        shall include any partner of the partnership.
                    ``(B) Taxable year in which credit taken into 
                account.--In the case of any credit (or portion 
                thereof) with respect to which an election is made 
                under paragraph (1), such credit shall be taken into 
                account in the first taxable year of the eligible 
                project partner ending with, or after, the qualified 
                public entity's taxable year with respect to which the 
                credit was determined.
                    ``(C) Treatment of transfer under private use 
                rules.--For purposes of section 141(b)(1), any benefit 
                derived by an eligible project partner in connection 
                with an election under this subsection shall not be 
                taken into account as a private business use.''.
            (2) Special rule for proceeds of transfers for mutual or 
        cooperative electric companies.--Section 501(c)(12) is amended 
        by adding at the end the following new subparagraph:
                    ``(I) In the case of a mutual or cooperative 
                electric company described in this paragraph or an 
                organization described in section 1381(a)(2), income 
                received or accrued in connection with an election 
                under section 45J(e)(1) shall be treated as an amount 
                collected from members for the sole purpose of meeting 
                losses and expenses.''.
    (c) Effective Dates.--
            (1) Treatment of unutilized limitation amounts.--The 
        amendment made by subsection (a) shall take effect on the date 
        of the enactment of this Act.
            (2) Transfer of credit by certain public entities.--The 
        amendments made by subsection (b) shall apply to taxable years 
        beginning after the date of the enactment of this Act.

SEC. 402. ENHANCEMENT OF CARBON DIOXIDE SEQUESTRATION CREDIT.

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

``SEC. 45Q. CREDIT FOR CARBON OXIDE SEQUESTRATION.

    ``(a) General Rule.--For purposes of section 38, the carbon oxide 
sequestration credit for any taxable year is an amount equal to the sum 
of--
            ``(1) $20 per metric ton of qualified carbon oxide which 
        is--
                    ``(A) captured by the taxpayer using carbon capture 
                equipment which is originally placed in service at a 
                qualified facility before the date of the enactment of 
                the Tax Extender Act of 2017, and
                    ``(B) disposed of by the taxpayer in secure 
                geological storage and not used by the taxpayer as 
                described in paragraph (2)(B),
            ``(2) $10 per metric ton of qualified carbon oxide which 
        is--
                    ``(A) captured by the taxpayer using carbon capture 
                equipment which is originally placed in service at a 
                qualified facility before the date of the enactment of 
                the Tax Extender Act of 2017, and
                    ``(B)(i) used by the taxpayer as a tertiary 
                injectant in a qualified enhanced oil or natural gas 
                recovery project and disposed of by the taxpayer in 
                secure geological storage, or
                    ``(ii) utilized by the taxpayer in a manner 
                described in subsection (f)(5),
            ``(3) the applicable dollar amount per metric ton of 
        qualified carbon oxide which is--
                    ``(A) captured by the taxpayer using carbon capture 
                equipment which is originally placed in service at a 
                qualified facility on or after the date of the 
                enactment of the Tax Extender Act of 2017, during the 
                12-year period beginning on the date the equipment was 
                originally placed in service, and
                    ``(B) disposed of by the taxpayer in secure 
                geological storage and not used by the taxpayer as 
                described in paragraph (4)(B), and
            ``(4) the applicable dollar amount per metric ton of 
        qualified carbon oxide which is--
                    ``(A) captured by the taxpayer using carbon capture 
                equipment which is originally placed in service at a 
                qualified facility on or after the date of the 
                enactment of the Tax Extender Act of 2017, during the 
                12-year period beginning on the date the equipment was 
                originally placed in service, and
                    ``(B)(i) used by the taxpayer as a tertiary 
                injectant in a qualified enhanced oil or natural gas 
                recovery project and disposed of by the taxpayer in 
                secure geological storage, or
                    ``(ii) utilized by the taxpayer in a manner 
                described in subsection (f)(5).
    ``(b) Applicable Dollar Amount; Additional Equipment; Election.--
            ``(1) Applicable dollar amount.--
                    ``(A) In general.--For purposes of this section, 
                the applicable dollar amount shall be an amount equal 
                to--
                            ``(i) for any taxable year beginning in a 
                        calendar year after 2016 and ending before 
                        2027--
                                    ``(I) for purposes of paragraph (3) 
                                of subsection (a), the dollar amount 
                                established by linear interpolation 
                                between $22.66 and $50 for each 
                                calendar year during such period, and
                                    ``(II) for purposes of paragraph 
                                (4) of such subsection, the dollar 
                                amount established by linear 
                                interpolation between $12.83 and $35 
                                for each calendar year during such 
                                period, 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 $50 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 $35 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'.
                    ``(B) Rounding.--The applicable dollar amount 
                determined under subparagraph (A) shall be rounded to 
                the nearest cent.
            ``(2) Installation of additional carbon capture equipment 
        on existing qualified facility.--In the case of a qualified 
        facility placed in service before the date of the enactment of 
        the Tax Extender Act of 2017, for which additional carbon 
        capture equipment is placed in service on or after the date of 
        the enactment of such Act, the amount of qualified carbon oxide 
        which is captured by the taxpayer shall be equal to--
                    ``(A) for purposes of paragraphs (1)(A) and (2)(A) 
                of subsection (a), the lesser of--
                            ``(i) the total amount of qualified carbon 
                        oxide captured at such facility for the taxable 
                        year, or
                            ``(ii) the total amount of the carbon 
                        dioxide capture capacity of the carbon capture 
                        equipment in service at such facility on the 
                        day before the date of the enactment of the Tax 
                        Extender Act of 2017, and
                    ``(B) for purposes of paragraphs (3)(A) and (4)(A) 
                of such subsection, an amount (not less than zero) 
                equal to the excess of--
                            ``(i) the amount described in clause (i) of 
                        subparagraph (A), over
                            ``(ii) the amount described in clause (ii) 
                        of such subparagraph.
            ``(3) Election.--For purposes of determining the carbon 
        oxide sequestration credit under this section, a taxpayer may 
        elect to have the dollar amounts applicable under paragraph (1) 
        or (2) of subsection (a) apply in lieu of the dollar amounts 
        applicable under paragraph (3) or (4) of such subsection for 
        each metric ton of qualified carbon oxide which is captured by 
        the taxpayer using carbon capture equipment which is originally 
        placed in service at a qualified facility on or after the date 
        of the enactment of the Tax Extender Act of 2017.
    ``(c) Qualified Carbon Oxide.--For purposes of this section--
            ``(1) In general.--The term `qualified carbon oxide' 
        means--
                    ``(A) any carbon dioxide which--
                            ``(i) is captured from an industrial source 
                        by carbon capture equipment which is originally 
                        placed in service before the date of the 
                        enactment of the Tax Extender Act of 2017,
                            ``(ii) would otherwise be released into the 
                        atmosphere as industrial emission of greenhouse 
                        gas or lead to such release, and
                            ``(iii) is measured at the source of 
                        capture and verified at the point of disposal, 
                        injection, or utilization,
                    ``(B) any carbon dioxide or other carbon oxide 
                which--
                            ``(i) is captured from an industrial source 
                        by carbon capture equipment which is originally 
                        placed in service on or after the date of the 
                        enactment of the Tax Extender Act of 2017,
                            ``(ii) would otherwise be released into the 
                        atmosphere as industrial emission of greenhouse 
                        gas or lead to such release, and
                            ``(iii) is measured at the source of 
                        capture and verified at the point of disposal, 
                        injection, or utilization, or
                    ``(C) in the case of a direct air capture facility, 
                any carbon dioxide which--
                            ``(i) is captured directly from the ambient 
                        air, and
                            ``(ii) is measured at the source of capture 
                        and verified at the point of disposal, 
                        injection, or utilization.
            ``(2) Recycled carbon oxide.--The term `qualified carbon 
        oxide' includes the initial deposit of captured carbon oxide 
        used as a tertiary injectant. Such term does not include carbon 
        oxide that is recaptured, recycled, and re-injected as part of 
        the enhanced oil and natural gas recovery process.
    ``(d) Qualified Facility.--For purposes of this section, the term 
`qualified facility' means any industrial facility or direct air 
capture facility--
            ``(1) the construction of which begins before January 1, 
        2024, and--
                    ``(A) construction of carbon capture equipment 
                begins before such date, or
                    ``(B) the original planning and design for such 
                facility includes installation of carbon capture 
                equipment, and
            ``(2) which captures--
                    ``(A) in the case of a facility which emits not 
                more than 500,000 metric tons of carbon oxide into the 
                atmosphere during the taxable year, not less than 
                25,000 metric tons of qualified carbon oxide during the 
                taxable year which is utilized in a manner described in 
                subsection (f)(5),
                    ``(B) in the case of an electricity generating 
                facility which is not described in subparagraph (A), 
                not less than 500,000 metric tons of qualified carbon 
                oxide during the taxable year, or
                    ``(C) in the case of a direct air capture facility 
                or any facility not described in subparagraph (A) or 
                (B), not less than 100,000 metric tons of qualified 
                carbon oxide during the taxable year.
    ``(e) Definitions.--For purposes of this section--
            ``(1) Direct air capture facility.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                term `direct air capture facility' means any facility 
                which uses carbon capture equipment to capture carbon 
                dioxide directly from the ambient air.
                    ``(B) Exception.--The term `direct air capture 
                facility' shall not include any facility which captures 
                carbon dioxide--
                            ``(i) which is deliberately released from 
                        naturally occurring subsurface springs, or
                            ``(ii) using natural photosynthesis.
            ``(2) Qualified enhanced oil or natural gas recovery 
        project.--The term `qualified enhanced oil or natural gas 
        recovery project' has the meaning given the term `qualified 
        enhanced oil recovery project' by section 43(c)(2), 
        determined--
                    ``(A) by substituting `crude oil or natural gas' 
                for `crude oil' in subparagraph (A)(i) thereof, and
                    ``(B) without regard to subparagraph (A)(iii) 
                thereof.
            ``(3) Tertiary injectant.--The term `tertiary injectant' 
        has the same meaning as when used within section 193(b)(1).
    ``(f) Special Rules.--
            ``(1) Only qualified carbon oxide captured and disposed of 
        or used within the united states taken into account.--The 
        credit under this section shall apply only with respect to 
        qualified carbon oxide the capture and disposal, use, or 
        utilization 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) Secure geological storage.--
                    ``(A) In general.--Not later than December 31, 
                2018, the Secretary, in consultation with the 
                Administrator of the Environmental Protection Agency, 
                the Secretary of Energy, and the Secretary of the 
                Interior, shall establish regulations for determining 
                adequate security measures for the geological storage 
                of carbon dioxide under subsection (a) such that the 
                carbon dioxide does not escape into the atmosphere. 
                Such term shall include storage at deep saline 
                formations, oil and gas reservoirs, and unmineable coal 
                seams under such conditions as the Secretary may 
                determine under such regulations.
                    ``(B) Requirements.--The regulations established 
                pursuant to subparagraph (A) shall provide that--
                            ``(i) for purposes of paragraph (1)(B) or 
                        (3)(B) of subsection (a), carbon dioxide shall 
                        be considered disposed of in secure geological 
                        storage if such carbon dioxide is stored in 
                        compliance with rules promulgated by the 
                        Environmental Protection Agency under subpart 
                        RR of part 98 of title 40, Code of Federal 
                        Regulations (as in effect on the date of the 
                        enactment of this paragraph), under the Clean 
                        Air Act (42 U.S.C. 7401 et seq.) and rules 
                        under the Safe Drinking Water Act (42 U.S.C. 
                        300f et seq.) which are applicable to carbon 
                        dioxide disposed of in secure geological 
                        storage and not used as a tertiary injectant in 
                        a qualified enhanced oil or natural gas 
                        recovery project, and
                            ``(ii) for purposes of paragraph (2)(B)(i) 
                        or (4)(B)(i) of subsection (a), carbon dioxide 
                        shall be considered disposed of in secure 
                        geological storage if such carbon dioxide is 
                        stored in compliance with rules promulgated by 
                        the Environmental Protection Agency which are 
                        applicable to carbon dioxide used as a tertiary 
                        injectant in a qualified enhanced oil or 
                        natural gas recovery project under--
                                    ``(I) subpart UU of part 98 of 
                                title 40, Code of Federal Regulations 
                                (as in effect on the date of the 
                                enactment of this paragraph), under the 
                                Clean Air Act, and
                                    ``(II) subpart C of part 146 of 
                                title 40, Code of Federal Regulations 
                                (as in effect on the date of the 
                                enactment of this paragraph), under the 
                                Safe Drinking Water Act, to the extent 
                                such rules are applicable to Class II 
                                wells.
            ``(3) Credit attributable to taxpayer.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B) or in any regulations prescribed by 
                the Secretary, any credit under this section shall be 
                attributable to--
                            ``(i) in the case of qualified carbon oxide 
                        captured using carbon capture equipment which 
                        is originally placed in service at a qualified 
                        facility before the date of the enactment of 
                        the Tax Extender Act of 2017, the person that 
                        captures and physically or contractually 
                        ensures the disposal, utilization, or use as a 
                        tertiary injectant of such qualified carbon 
                        oxide, and
                            ``(ii) in the case of qualified carbon 
                        oxide captured using carbon capture equipment 
                        which is originally placed in service at a 
                        qualified facility on or after the date of the 
                        enactment of the Tax Extender Act of 2017, the 
                        person that owns the carbon capture equipment 
                        and physically or contractually ensures the 
                        capture and disposal, utilization, or use as a 
                        tertiary injectant of such qualified carbon 
                        oxide.
                    ``(B) Election.--If the person 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 
                        disposes of the qualified carbon oxide, 
                        utilizes the qualified carbon oxide, or uses 
                        the qualified carbon oxide as a tertiary 
                        injectant, and
                            ``(ii) shall not be allowable to the person 
                        described in subparagraph (A).
            ``(4) Recapture.--The Secretary shall, by regulations, 
        provide for recapturing the benefit of any credit allowable 
        under subsection (a) with respect to any qualified carbon oxide 
        which ceases to be captured, disposed of, or used as a tertiary 
        injectant in a manner consistent with the requirements of this 
        section.
            ``(5) Utilization of qualified carbon oxide.--
                    ``(A) In general.--For purposes of this section, 
                utilization of qualified carbon oxide means--
                            ``(i) the fixation of such qualified carbon 
                        oxide through photosynthesis or chemosynthesis, 
                        such as through the growing of algae or 
                        bacteria,
                            ``(ii) the chemical conversion of such 
                        qualified carbon oxide to a material or 
                        chemical compound in which such qualified 
                        carbon oxide is securely stored, or
                            ``(iii) the use of such qualified carbon 
                        oxide for any other purpose for which a 
                        commercial market exists (with the exception of 
                        use as a tertiary injectant in a qualified 
                        enhanced oil or natural gas recovery project), 
                        as determined by the Secretary.
                    ``(B) Measurement.--
                            ``(i) In general.--For purposes of 
                        determining the amount of qualified carbon 
                        oxide utilized by the taxpayer under paragraph 
                        (2)(B)(ii) or (4)(B)(ii) of subsection (a), 
                        such amount shall be equal to the metric tons 
                        of qualified carbon oxide which the taxpayer 
                        demonstrates, based upon an analysis of 
                        lifecycle greenhouse gas emissions and subject 
                        to such requirements as the Secretary, in 
                        consultation with the Secretary of Energy and 
                        the Administrator of the Environmental 
                        Protection Agency, determines appropriate, 
                        were--
                                    ``(I) captured and permanently 
                                isolated from the atmosphere, or
                                    ``(II) displaced from being emitted 
                                into the atmosphere,
                        through use of a process described in 
                        subparagraph (A).
                            ``(ii) Lifecycle greenhouse gas 
                        emissions.--For purposes of clause (i), 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 the enactment of the Tax 
                        Extender Act of 2017, except that `product' 
                        shall be substituted for `fuel' each place it 
                        appears in such subparagraph.
            ``(6) Election for applicable facilities.--
                    ``(A) In general.--For purposes of this section, in 
                the case of an applicable facility, for any taxable 
                year in which such facility captures not less than 
                500,000 metric tons of qualified carbon oxide during 
                the taxable year, the person described in paragraph 
                (3)(A)(ii) may elect to have such facility, and any 
                carbon capture equipment placed in service at such 
                facility, deemed as having been placed in service on 
                the date of the enactment of the Tax Extender Act of 
                2017.
                    ``(B) Applicable facility.--For purposes of this 
                paragraph, the term `applicable facility' means a 
                qualified facility--
                            ``(i) which was placed in service before 
                        the date of the enactment of the Tax Extender 
                        Act of 2017, and
                            ``(ii) for which no taxpayer claimed a 
                        credit under this section in regards to such 
                        facility for any taxable year ending before the 
                        date of the enactment of such Act.
            ``(7) Inflation adjustment.--In the case of any taxable 
        year beginning in a calendar year after 2009, there shall be 
        substituted for each dollar amount contained in paragraphs (1) 
        and (2) of subsection (a) an amount equal to the product of--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the inflation adjustment factor for such 
                calendar year determined under section 43(b)(3)(B) for 
                such calendar year, determined by substituting `2008' 
                for `1990'.
    ``(g) Application of Section for Certain Carbon Capture 
Equipment.--In the case of any carbon capture equipment placed in 
service before the date of the enactment of the Tax Extender Act of 
2017, the credit under this section shall apply with respect to 
qualified carbon oxide captured using such equipment before the end of 
the calendar year in which the Secretary, in consultation with the 
Administrator of the Environmental Protection Agency, certifies that, 
during the period beginning after October 3, 2008, a total of 
75,000,000 metric tons of qualified carbon oxide have been taken into 
account in accordance with--
            ``(1) subsection (a) of this section, as in effect on the 
        day before the date of the enactment of the Tax Extender Act of 
        2017, and
            ``(2) paragraphs (1) and (2) of subsection (a) of this 
        section.
    ``(h) Regulations.--The Secretary may prescribe such regulations 
and other guidance as may be necessary or appropriate to carry out this 
section, including regulations or other guidance to--
            ``(1) ensure proper allocation under subsection (a) for 
        qualified carbon oxide captured by a taxpayer during the 
        taxable year ending after the date of the enactment of the Tax 
        Extender Act of 2017, and
            ``(2) determine whether a facility satisfies the 
        requirements under subsection (d)(1) during such taxable 
        year.''.
    (b) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.
                                 <all>