Title: 45Q Carbon Capture, Utilization, and Storage Tax Credit Amendments Act of 2020
Policy area: Taxation

Summary:
45Q Carbon Capture, Utilization, and Storage Tax Credit Amendments Act of 2020
This bill extends the tax credi for carbon oxide sequestration through 2028 and allows taxpayers an election to receive payments in lieu of the credit and the credit for qualifying advanced coal projects.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 4966 Introduced in Senate (IS)]

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116th CONGRESS
  2d Session
                                S. 4966

  To amend the Internal Revenue Code of 1986 to provide for a 5-year 
   extension of the carbon oxide sequestration credit, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            December 7, 2020

Mrs. Capito (for herself, Mr. Whitehouse, Mr. Barrasso, Mr. Cramer, Mr. 
  Hoeven, Ms. Smith, and Mr. Manchin) 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 provide for a 5-year 
   extension of the carbon oxide sequestration credit, 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.

    This Act may be cited as the ``45Q Carbon Capture, Utilization, and 
Storage Tax Credit Amendments Act of 2020''.

SEC. 2. EXTENSION OF CREDIT FOR CARBON OXIDE SEQUESTRATION.

    Section 45Q(d)(1) of the Internal Revenue Code of 1986 is amended 
by striking ``January 1, 2024'' and inserting ``January 1, 2029''.

SEC. 3. ELECTIVE PAYMENT FOR CARBON OXIDE SEQUESTRATION AND QUALIFYING 
              ADVANCED COAL PROJECTS.

    (a) In General.--Subchapter B of chapter 65 of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new section:

``SEC. 6431. ELECTIVE PAYMENT FOR CARBON OXIDE SEQUESTRATION AND 
              QUALIFYING ADVANCED COAL PROJECTS.

    ``(a) Energy Property.--In the case of a taxpayer making an 
election (at such time and in such manner as the Secretary may provide) 
under this section with respect to any portion of--
            ``(1) a carbon oxide sequestration credit which would 
        (without regard to this section) be determined under section 
        45Q with respect to such taxpayer, or
            ``(2) a qualifying advanced coal project credit which would 
        (without regard to this section) be determined under section 
        48A with respect to such taxpayer,
such taxpayer shall be treated as making a payment against the tax 
imposed by subtitle A for the taxable year equal to the amount of such 
portion.
    ``(b) Timing.--The payment described in subsection (a) shall be 
treated as made on the later of the due date of the return of tax for 
such taxable year or the date on which such return is filed.
    ``(c) Exclusion From Gross Income.--Gross income of the taxpayer 
shall be determined without regard to this section.
    ``(d) Denial of Double Benefit.--Solely for purposes of section 38, 
in the case of a taxpayer making an election under this section, the 
carbon oxide sequestration credit determined under section 45Q or the 
qualifying advanced coal project credit determined under section 48A 
shall be reduced by the amount of the portion of such credit with 
respect to which the taxpayer makes such election.
    ``(e) Special Rules.--In the case of a taxpayer making an election 
under this section with respect to the qualifying advanced coal project 
credit determined under section 48A, the credit subject to such an 
election shall be determined notwithstanding--
            ``(1) section 50(b)(3), and
            ``(2) in the case of any entity described in section 
        50(b)(4)(A)(i), section 50(b)(4).''.
    (b) Special Rule for Proceeds of Transfers for Mutual or 
Cooperative Electric Companies.--Section 501(c)(12)(I) of the Internal 
Revenue Code of 1986 is amended by inserting ``or 6431(a)'' after 
``section 45J(e)(1)''.
    (c) Clerical Amendment.--The table of sections for subchapter B of 
chapter 65 of such Code is amended by adding at the end the following 
new item:

``Sec. 6431. Elective payment for carbon oxide sequestration and 
                            qualifying advanced coal projects.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to property originally placed in service after the date of the 
enactment of this Act.

SEC. 4. ALLOWANCE OF CERTAIN CARBON SEQUESTRATION CREDITS AGAINST THE 
              BASE EROSION MINIMUM TAX.

    (a) In General.--Section 59A(b)(1)(B)(ii) of the Internal Revenue 
Code of 1986 is amended by striking ``plus'' and the end of subclause 
(I), by redesignating subclause (II) as subclause (IV), and by 
inserting after subclause (I) the following new subclauses:
                                    ``(II) the credit allowed under 
                                section 38 for the taxable year which 
                                is properly allocable to the carbon 
                                dioxide sequestration credit determined 
                                under section 45Q(a),
                                    ``(III) the credit allowed under 
                                section 38 for the taxable year which 
                                is properly allocable to the investment 
                                credit determined under section 46, but 
                                only to the extent properly allocable 
                                to the qualifying advanced coal project 
                                credit determined under section 48A, 
                                plus''.
    (b) Application to Taxable Years Beginning After 2025.--
Subparagraph (B) of section 59A(b)(2) of the Internal Revenue Code of 
1986 is amended to read as follows:
                    ``(B) by applying subparagraph (B)(ii) thereof 
                without regard to subclauses (I) and (IV).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to base erosion payments (as defined in section 59A(d) of the 
Internal Revenue Code of 1986) paid or incurred in taxable years 
beginning after December 31, 2017.
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