Title: Offshore Wind American Manufacturing Act of 2021
Policy area: Taxation

Summary:
Offshore Wind American Manufacturing Act of 2021
This bill provides tax credits for investment in manufacturing facilities that produce offshore wind turbine components.

[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 2766 Introduced in Senate (IS)]

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117th CONGRESS
  1st Session
                                S. 2766

 To amend the Internal Revenue Code of 1986 to provide a manufacturing 
  investment tax credit and a production tax credit for manufacturing 
       facilities that produce offshore wind turbine components.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 21, 2021

Mr. Markey (for himself, Mr. Booker, Mr. Menendez, Ms. Warren, Mr. Van 
 Hollen, and Mr. Ossoff) 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 a manufacturing 
  investment tax credit and a production tax credit for manufacturing 
       facilities that produce offshore wind turbine components.

    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 ``Offshore Wind American Manufacturing 
Act of 2021''.

SEC. 2. OFFSHORE WIND MANUFACTURING CREDIT.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code is amended by inserting after section 36B 
the following new section:

``SEC. 36C. OFFSHORE WIND MANUFACTURING CREDIT.

    ``(a) Allowance of Credit.--There shall be allowed as a credit 
against the tax imposed by this subtitle for any taxable year an amount 
equal to the sum of--
            ``(1) the offshore wind manufacturing investment credit, 
        and
            ``(2) the offshore wind manufacturing production credit.
    ``(b) Credit Amounts.--For purposes of this section--
            ``(1) Manufacturing investment credit.--
                    ``(A) In general.--The offshore wind manufacturing 
                investment credit for any taxable year is an amount 
                equal to 30 percent of the qualified investment for 
                such taxable year.
                    ``(B) Qualified investment.--The qualified 
                investment for any taxable year is the basis of any 
                advanced offshore wind manufacturing property placed in 
                service in the United States by the taxpayer during 
                such taxable year.
                    ``(C) Advanced offshore wind manufacturing 
                property.--The term `advanced offshore wind 
                manufacturing property' means property--
                            ``(i) which is used predominantly to 
                        manufacture or process any qualified offshore 
                        wind component,
                            ``(ii) which respect to which depreciation 
                        (or amortization in lieu of depreciation) is 
                        allowable, and
                            ``(iii) which--
                                    ``(I) is constructed, 
                                reconstructed, or erected by the 
                                taxpayer, or
                                    ``(II) which is acquired by the 
                                taxpayer, if the original use of such 
                                property commences with the taxpayer.
            ``(2) Manufacturing production credit.--
                    ``(A) In general.--The offshore wind manufacturing 
                production credit is an amount equal to the applicable 
                rate with respect to any qualified offshore wind 
                component or related vessel which--
                            ``(i) is produced by the taxpayer at a 
                        qualified manufacturing facility, and
                            ``(ii) during the taxable year--
                                    ``(I) is sold by the taxpayer to--
                                            ``(aa) an unrelated person, 
                                        or
                                            ``(bb) a related person for 
                                        the use of such person in their 
                                        trade or business (with the 
                                        exception of any trade or 
                                        business related to resale of 
                                        such offshore wind component 
                                        without any subsequent 
                                        modification, assembly, or 
                                        integration into a project), or
                                    ``(II) if not sold, is placed in 
                                service or operation by the taxpayer or 
                                any other person.
                    ``(B) Applicable rate.--The applicable rate is--
                            ``(i) with respect to any qualified 
                        offshore wind component, the total rated 
                        capacity (expressed on a per direct current 
                        watt basis) of the completed offshore wind 
                        turbine for which the component is designed, 
                        multiplied by--
                                    ``(I) in the case of any blade, 
                                gearbox, generator, or foundation (or 
                                dedicated subcomponent described in 
                                subsection (c)(1)(A)(ii) thereof), 2 
                                cents,
                                    ``(II) in the case of any tower (or 
                                such a dedicated subcomponent thereof), 
                                3 cents, and
                                    ``(III) in the case of any nacelle 
                                (or such a dedicated subcomponent 
                                thereof), 5 cents, and
                            ``(ii) with respect to any related vessel, 
                        an amount equal to 10 percent of the sale price 
                        of such vessel.
                    ``(C) Qualified manufacturing facility.--The term 
                `qualified manufacturing facility' means any new or 
                existing facility--
                            ``(i) which is located in the United 
                        States, and
                            ``(ii) which manufactures or assembles 
                        qualified offshore wind components, 
                        subcomponents, and related vessels.
                    ``(D) Production and sale must be in trade or 
                business.--Any qualified offshore wind component 
                produced and sold by the taxpayer shall be taken into 
                account under subparagraph (A)(ii)(I) only if the 
                production and sale described in subparagraph (A) is in 
                a trade or business of the taxpayer.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Qualified offshore wind component.--
                    ``(A) In general.--The term `qualified offshore 
                wind component' means--
                            ``(i) any blade, tower, nacelle, generator, 
                        gearbox, or foundation, and
                            ``(ii) any dedicated subcomponent necessary 
                        to the production, construction, and operation 
                        of any such property.
                    ``(B) Definitions.--
                            ``(i) Blade.--The term `blade' means an 
                        airfoil-shaped blade which is responsible for 
                        converting offshore wind energy to low speed 
                        rotational energy.
                            ``(ii) Tower.--The term `tower' means a 
                        tubular steel, concrete, or steel lattice which 
                        supports the structure of an offshore wind 
                        turbine.
                            ``(iii) Nacelle.--The term `nacelle' means 
                        the assembly of the cover housing for drive 
                        train and other tower-top components of an 
                        offshore wind turbine.
                            ``(iv) Generator.--The term `generator' 
                        means the component which is housed in the 
                        nacelle and converts the mechanical energy from 
                        the rotor to electrical energy.
                            ``(v) Gearbox.--The term `gearbox' means 
                        the component housed in the nacelle which 
                        converts the low-speed, high-torque rotation of 
                        the rotor for input into the generator.
                            ``(vi) Foundation.--The term `foundation' 
                        means the component which secures an offshore 
                        wind tower and above-water turbine components 
                        to the sea floor using offshore wind monopiles, 
                        jackets, gravity-based foundations, fixed, or 
                        floating platforms.
            ``(2) Related vessel.--The term `related vessel' means any 
        vessel which is purpose-built or retrofitted for purposes of 
        the transport, installation, or maintenance of offshore wind 
        components and offshore wind turbines.
    ``(d) Special Rules.--For purposes of this section--
            ``(1) Secretary.--Any reference to the Secretary means the 
        Secretary in consultation with the Secretary of Energy.
            ``(2) Labor conditions.--Any property shall be treated as 
        advanced offshore wind manufacturing property, and any facility 
        shall be treated as a qualified manufacturing facility, only if 
        all laborers and mechanics employed by all contractors and 
        subcontractors in the manufacture of such property or at such 
        facility are paid wages at rates not less than the prevailing 
        rates for work of a similar character in the locality as 
        determined by the Secretary of Labor, in accordance with 
        sections 3141 through 3144, 3146, and 3147 of title 40, United 
        States Code.
            ``(3) Certain rules made applicable for investment 
        credit.--For purposes of the offshore wind manufacturing 
        investment credit determined under subsection (b)(1), rules 
        similar to the rules of subsections (a) and (c) of section 50 
        shall apply.
            ``(4) Coordination with general investment credit.--No 
        credit shall be allowed under section 48C with respect to any 
        facility taken into account for purposes of the credit under 
        subsection (b)(2), or any facility with respect to which any 
        qualified investment is taken into account for purposes of the 
        credit under subsection (b)(1). The credit under this section 
        shall be allowed without regard to whether any qualified 
        investment (as defined in section 48C(b)) with respect to a 
        facility has been taken into account for purposes of section 
        48C in any preceding taxable year.
    ``(e) Registration.--
            ``(1) In general.--No credit shall be allowed under this 
        section unless the taxpayer registers with the Secretary, at 
        such time, in such form and manner, and subject to such terms 
        and conditions, as the Secretary may by regulations prescribe. 
        Such registration shall include a demonstration of compliance 
        with the requirements of subsection (d)(2).
            ``(2) Registration in event of change in ownership.--Under 
        regulations prescribed by the Secretary, the taxpayer (other 
        than a corporation the stock of which is regularly traded on an 
        established securities market) shall be required to re-register 
        under this subsection if after a transaction (or series of 
        related transactions) more than 50 percent of ownership 
        interests in, or assets of, the taxpayer are held by persons 
        other than persons (or persons related thereto) who held more 
        than 50 percent of such interests or assets before the 
        transaction (or series of related transactions).
            ``(3) Denial, revocation, or suspension of registration.--
        Rules similar to the rules of section 4222(c) shall apply to 
        registration under this section.
            ``(4) Information reporting.--The Secretary may require--
                    ``(A) information reporting by any person 
                registered under this subsection, and
                    ``(B) information reporting by such other persons 
                as the Secretary deems necessary to carry out this 
                section.
    ``(f) Termination.--
            ``(1) Offshore wind manufacturing investment tax credit.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), in the case of any qualified 
                investment with respect to advanced offshore wind 
                manufacturing property which is placed in service after 
                December 31, 2028, the amount of the credit determined 
                under subsection (b)(1) (without regard to this 
                subsection) shall be reduced by--
                            ``(i) in the case of property placed in 
                        service in calendar year 2029, 30 percent,
                            ``(ii) in the case of property placed in 
                        service in calendar year 2030, 65 percent, and
                            ``(iii) in the case of property placed in 
                        service after December 31, 2030, 100 percent.
                    ``(B) 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 
                subparagraph (A).
            ``(2) Offshore wind manufacturing production tax credit.--
        No credit shall be allowed under subsection (b)(2) in the case 
        of any qualified offshore wind component first sold or placed 
        in service after December 31, 2030.''.
    (b) Clerical Amendment.--The table of sections for subpart C of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code is 
amended by inserting after the item relating to section 36B the 
following new item:

``Sec. 36C. Offshore wind manufacturing credit.''.
    (c) Conforming Amendment.--Paragraph (2) of section 1324(b) of 
title 31, United States Code, is amended by inserting ``, 36C'' after 
``36B''.
    (d) Effective Date.--The amendments made by this section shall 
apply to--
            (1) any qualified investment (as defined in section 
        36C(b)(1)(B) of the Internal Revenue Code of 1986, as added by 
        this section) with respect to property placed in service 
        beginning after August 1, 2021, and
            (2) qualified offshore wind components (as defined in 
        section 36C(c)(1) of such Code, as so added) first sold or 
        placed in service after August 1, 2021.
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