Section 1 Short title
This Act may be cited as the “Carbon Capture Act”.
Carbon Capture Act
A BILL
To amend the Internal Revenue Code of 1986 to improve and make permanent the credit for carbon dioxide sequestration.
Sec. 2 Carbon dioxide sequestration credit improved and made permanent
Credit made permanent— Section 45Q of the Internal Revenue Code of 1986 is amended by striking subsection (e).
Increase in credit for new facilities—
In general— Section 45Q of such Code, as amended by subsection (a), is amended by redesignating subsections (b), (c), and (d) as subsections (c), (d), and (e), respectively, and by inserting after subsection (a) the following new subsection:
“(b) Credit rates for new qualified facilities
“(1) In general—In the case of a taxable year beginning in a calendar year after 2024 with respect to a qualified facility at which carbon capture equipment is originally placed in service after December 31, 2015—
“(A) subsection (a)(1) shall be applied by substituting “$30” for “$20”, and
“(B) subsection (a)(2) shall be applied by substituting “$30” for “$10”.
“(2) Phase-up—In the case of a qualified facility at which carbon capture equipment is originally placed in service during a calendar year after 2015 and before 2025 and any taxable year beginning in such calendar year—
“(A) subsection (a)(1) shall be applied by substituting for “$20” the dollar amount with respect to each calendar year determined by ratably increasing such dollar amount annually from $21.85 with respect to calendar year 2015 to $30 with respect to calendar year 2025, and
“(B) subsection (a)(2) shall be applied by substituting for “$10” the dollar amount with respect to each calendar year determined by ratably increasing such dollar amount annually from $10.92 with respect to calendar year 2015 to $30 with respect to calendar year 2025.
“(3) Inflation adjustment—In the case of any taxable year beginning in a calendar year after 2025 with respect to a qualified facility at which carbon capture equipment is originally placed in service after December 31, 2015, there shall be substituted for each $30 amount contained in paragraph (1) 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 “2024” for “1990”.”
Conforming amendment— Section 45Q(e)(7) of such Code, as redesignated by paragraph (1), is amended by inserting “with respect to a qualified facility at which carbon capture equipment is originally placed in service before January 1, 2016” after “2009”.
Election To allow credit to person that disposes of, or uses as a tertiary injectant, carbon dioxide— Section 45Q(e)(5) of such Code, as redesignated by subsection (b), is amended—
by striking “Any credit” and inserting the following:
“(A) In general—Any credit”
by inserting “subparagraph (B) or” after “except to the extent provided in”, and
by adding at the end the following new subparagraph:
“(B) Election to allow credit to person that disposes of, or uses as tertiary injectant, carbon dioxide—If the person described in subparagraph (A) makes an election under this subparagraph (as such time and in such manner as the Secretary may prescribe), the credit determined under this section—
“(i) shall be allowable to the person that disposes of, or uses as a tertiary injectant, the carbon dioxide, and
“(ii) shall not be allowable to the person described in subparagraph (A).”
Reduction in qualified facility threshold— Section 45Q(d)(3) of such Code, as redesignated by subsection (b), is amended by striking “500,000” and inserting “150,000”.
Effective dates—
Credit made permanent— The amendment made by subsection (a) shall apply to calendar years beginning after 2015.
Increase in credit for new facilities— The amendments made by subsection (b) shall apply to facilities at which carbon capture equipment is originally placed in service after December 31, 2015.
Election to allow credit to person that disposes of, or uses as a tertiary injectant, carbon dioxide— The amendments made by subsection (c) shall apply to taxable years beginning after the date of the enactment of this Act.
Reduction in qualified facility threshold— The amendments made by subsection (d) shall apply to taxable years beginning after the date of the enactment of this Act.