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| TITLE I—COMMITTEE ON FINANCE
Subtitle A—Deficit Reduction
SECTION 10001. AMENDMENT OF 1986 CODE.
Except as otherwise expressly provided, whenever in this subtitle 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.
Subtitle A—Deficit Reduction
SECTION 10001. AMENDMENT OF 1986 CODE.
Except as otherwise expressly provided, whenever in this subtitle 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.
PART 1—CORPORATE TAX REFORM
—
‘‘(I) the corporation meets the requirements
of clause (i) for such taxable year (determined after
the application of paragraph (2)), and
‘‘(II) the average annual adjusted financial
statement income of such corporation (determined
without regard to the application of paragraph
(2) and without regard to section 56A(d)) for the
3-taxable-year-period ending with such taxable
year is $100,000,000 or more.
‘‘(C) EXCEPTION.—Notwithstanding subparagraph (A),
the term ‘applicable corporation’ shall not include any corporation which otherwise meets the requirements of
subparagraph (A) if—
‘‘(i) such corporation—
‘‘(I) has a change in ownership, or
‘‘(II) has a specified number (to be determined
by the Secretary and which shall, as appropriate,
take into account the facts and circumstances of
the taxpayer) of consecutive taxable years,
including the most recent taxable year, in which
the corporation does not meet the average annual
adjusted financial statement income test of
subparagraph (B), and
‘‘(ii) the Secretary determines that it would not
be appropriate to continue to treat such corporation
as an applicable corporation.
The preceding sentence shall not apply to any corporation
if, after the Secretary makes the determination described
in clause (ii), such corporation meets the average annual
adjusted financial statement income test of subparagraph
(B) for any taxable year beginning after the first taxable
year for which such determination applies.
‘‘(D) SPECIAL RULES FOR DETERMINING APPLICABLE CORPORATION STATUS.—
‘‘(i) IN GENERAL.—Solely for purposes of determining whether a corporation is an applicable corporation under this paragraph, all adjusted financial statement income of persons treated as a single employer
with such corporation under subsection (a) or (b) of
section 52 (determined with the modifications described
in clause (ii)) shall be treated as adjusted financial
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PART 1—CORPORATE TAX REFORM
statement income of such corporation, and adjusted
financial statement income of such corporation shall
be determined without regard to paragraphs (2)(D)(i)
and (11) of section 56A(c).
‘‘(ii) MODIFICATIONS.—For purposes of this
subparagraph—
‘‘(I) section 52(a) shall be applied by substituting ‘component members’ for ‘members’, and
‘‘(II) for purposes of applying section 52(b),
the term ‘trade or business’ shall include any
activity treated as a trade or business under paragraph (5) or (6) of section 469(c) (determined without regard to the phrase ‘To the extent provided
in regulations’ in such paragraph (6)).
‘‘(iii) COMPONENT MEMBER.—For purposes of this
subparagraph, the term ‘component member’ has the
meaning given such term by section 1563(b), except
that the determination shall be made without regard
to section 1563(b)(2).
‘‘(E) OTHER SPECIAL RULES.—
‘‘(i) CORPORATIONS IN EXISTENCE FOR LESS THAN
3 YEARS.—If the corporation was in existence for less
than 3-taxable years, subparagraph (B) shall be applied
on the basis of the period during which such corporation was in existence.
‘‘(ii) SHORT TAXABLE YEARS.—Adjusted financial
statement income for any taxable year of less than
12 months shall be annualized by multiplying the
adjusted financial statement income for the short
period by 12 and dividing the result by the number
of months in the short period.
‘‘(iii) TREATMENT OF PREDECESSORS.—Any reference in this subparagraph to a corporation shall
include a reference to any predecessor of such corporation.
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PART 1—CORPORATE TAX REFORM
‘‘(2) SPECIAL RULE FOR FOREIGN-PARENTED MULTINATIONAL
GROUPS.—
‘‘(A) IN GENERAL.—If a corporation is a member of
a foreign-parented multinational group for any taxable
year, then, solely for purposes of determining whether such
corporation meets the average annual adjusted financial
statement income test under paragraph (1)(B)(ii)(I) for such
taxable year, the adjusted financial statement income of
such corporation for such taxable year shall include the
adjusted financial statement income of all members of such
group. Solely for purposes of this subparagraph, adjusted
financial statement income shall be determined without
regard to paragraphs (2)(D)(i), (3), (4), and (11) of section
56A(c).
‘‘(B) FOREIGN-PARENTED MULTINATIONAL GROUP.—For
purposes of subparagraph (A), the term ‘foreign-parented
multinational group’ means, with respect to any taxable
year, two or more entities if—
‘‘(i) at least one entity is a domestic corporation
and another entity is a foreign corporation ‘‘(ii) such entities are included in the same
applicable financial statement with respect to such
year, and
‘‘(iii) either—
‘‘(I) the common parent of such entities is a
foreign corporation, or
‘‘(II) if there is no common parent, the entities
are treated as having a common parent which
is a foreign corporation under subparagraph (D).
‘‘(C) FOREIGN CORPORATIONS ENGAGED IN A TRADE OR
BUSINESS WITHIN THE UNITED STATES.—For purposes of this
paragraph, if a foreign corporation is engaged in a trade
or business within the United States, such trade or business shall be treated as a separate domestic corporation
that is wholly owned by the foreign corporation.
‘‘(D) OTHER RULES.—The Secretary shall, applying the
principles of this section, prescribe rules for the application
of this paragraph, including rules for the determination
of
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PART 1—CORPORATE TAX REFORM
‘‘(i) the entities (if any) which are to be to be
treated under subparagraph (B)(iii)(II) as having a
common parent which is a foreign corporation,
‘‘(ii) the entities to be included in a foreignparented multinational group, and
‘‘(iii) the common parent of a foreign-parented
multinational group.
‘‘(3) REGULATIONS OR OTHER GUIDANCE.—The Secretary
shall provide regulations or other guidance for the purposes
of carrying out this subsection, including regulations or other
guidance—
‘‘(A) providing a simplified method for determining
whether a corporation meets the requirements of paragraph
(1), and
‘‘’(B) addressing the application of this subsection to
a corporation that experiences a change in ownership.’’.
(3) REDUCTION FOR BASE EROSION AND ANTI-ABUSE TAX.—
Section 55(a)(2) is amended by inserting ‘‘plus, in the case
of an applicable corporation, the tax imposed by section 59A’’
before the period at the end.
(4) CONFORMING AMENDMENTS.—
(A) Section 55(a) is amended by striking ‘‘In the case
of a taxpayer other than a corporation, there’’ and inserting
‘‘There’’.
(B)(i) Section 55(b)(1) is amended—
(I) by striking so much as precedes subparagraph
(A) and inserting the following:
‘‘(1) NONCORPORATE TAXPAYERS.—In the case of a taxpayer
other than a corporation—’’, and
(II) by adding at the end the following new
subparagraph:
‘‘(D) ALTERNATIVE MINIMUM TAXABLE INCOME.—The
term ‘alternative minimum taxable income’ means the taxable income of the taxpayer for the taxable year—
‘‘(i) determined with the adjustments provided in
section 56 and section 58, and
‘‘(ii) increased by the amount of the items of tax
preference described in section 57.
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PART 1—CORPORATE TAX REFORM
If a taxpayer is subject to the regular tax, such taxpayer
shall be subject to the tax imposed by this section (and,
if the regular tax is determined by reference to an amount
other than taxable income, such amount shall be treated
as the taxable income of such taxpayer for purposes of
the preceding sentence).’’.
(ii) Section 860E(a)(4) is amended by striking ‘‘55(b)(2)’’
and inserting ‘‘55(b)(1)(D)’’.
(iii) Section 897(a)(2)(A)(i) is amended by striking
‘‘55(b)(2)’’ and inserting ‘‘55(b)(1)(D)’’.
(C) Section 11(d) is amended by striking ‘‘the tax
imposed by subsection (a)’’ and inserting ‘‘the taxes imposed
by subsection (a) and section 55’’.
(D) Section 12 is amended by adding at the end the
following new paragraph:
‘‘(5) For alternative minimum tax, see section 55.’’.
(E) Section 882(a)(1) is amended by inserting ‘‘, 55,’’
after ‘‘section 11’’.
(F) Section 6425(c)(1)(A) is amended to read as follows:
‘‘(A) the sum of—
‘‘(i) the tax imposed by section 11 or subchapter
L of chapter 1, whichever is applicable, plus
‘‘(ii) the tax imposed by section 55, plus
‘‘(iii) the tax imposed by section 59A, over’’.
(G) Section 6655(e)(2) is amended by inserting ‘‘,
adjusted financial statement income (as defined in section
56A),’’ before ‘‘and modified taxable income’’ each place
it appears in subparagraphs (A)(i) and (B)(i).
(H) Section 6655(g)(1)(A) is amended by redesignating
clauses (ii) and (iii) as clauses (iii) and (iv), respectively,
and by inserting after clause (i) the following new clause:
‘‘(ii) the tax imposed by section 55,’’.
(b) ADJUSTED FINANCIAL STATEMENT INCOME.—
(1) IN GENERAL.—Part VI of subchapter A of chapter 1
is amended by inserting after section 56 the following new
section:
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PART 1—CORPORATE TAX REFORM
‘‘SEC. 56A. ADJUSTED FINANCIAL STATEMENT INCOME.
‘‘(a) IN GENERAL.—For purposes of this part, the term ‘adjusted
financial statement income’ means, with respect to any corporation
for any taxable year, the net income or loss of the taxpayer set
forth on the taxpayer’s applicable financial statement for such taxable year, adjusted as provided in this section.
‘‘(b) APPLICABLE FINANCIAL STATEMENT.—For purposes of this
section, the term ‘applicable financial statement’ means, with
respect to any taxable year, an applicable financial statement (as
defined in section 451(b)(3) or as specified by the Secretary in
regulations or other guidance) which covers such taxable year.
‘‘(c) GENERAL ADJUSTMENTS.—
‘‘(1) STATEMENTS COVERING DIFFERENT TAXABLE YEARS.—
Appropriate adjustments shall be made in adjusted financial
statement income in any case in which an applicable financial
statement covers a period other than the taxable year.
‘‘(2) SPECIAL RULES FOR RELATED ENTITIES.—
‘‘(A) CONSOLIDATED FINANCIAL STATEMENTS.—If the
financial results of a taxpayer are reported on the applicable financial statement for a group of entities, rules
similar to the rules of section 451(b)(5) shall apply.
‘‘(B) CONSOLIDATED RETURNS.—Except as provided in
regulations prescribed by the Secretary, if the taxpayer
is part of an affiliated group of corporations filing a consolidated return for any taxable year, adjusted financial statement income for such group for such taxable year shall
take into account items on the group’s applicable financial
statement which are properly allocable to members of such
group.
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PART 1—CORPORATE TAX REFORM
‘‘(C) TREATMENT OF DIVIDENDS AND OTHER AMOUNTS.— In the case of any corporation which is not included on
a consolidated return with the taxpayer, adjusted financial
statement income of the taxpayer with respect to such
other corporation shall be determined by only taking into
account the dividends received from such other corporation
(reduced to the extent provided by the Secretary in regulations or other guidance) and other amounts which are
includible in gross income or deductible as a loss under
this chapter (other than amounts required to be included
under sections 951 and 951A or such other amounts as
provided by the Secretary) with respect to such other corporation.
‘‘(D) TREATMENT OF PARTNERSHIPS.—
‘‘(i) IN GENERAL.—Except as provided by the Secretary, if the taxpayer is a partner in a partnership,
adjusted financial statement income of the taxpayer
with respect to such partnership shall be adjusted
to only take into account the taxpayer’s distributive
share of adjusted financial statement income of such
partnership.
‘‘(ii) ADJUSTED FINANCIAL STATEMENT INCOME OF
PARTNERSHIPS.—For the purposes of this part, the
adjusted financial statement income of a partnership
shall be the partnership’s net income or loss set forth
on such partnership’s applicable financial statement
(adjusted under rules similar to the rules of this section).
‘‘(3) ADJUSTMENTS TO TAKE INTO ACCOUNT CERTAIN ITEMS
OF FOREIGN INCOME.—
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PART 1—CORPORATE TAX REFORM
IGN INCOME.—
‘‘(A) IN GENERAL.—If, for any taxable year, a taxpayer
is a United States shareholder of one or more controlled
foreign corporations, the adjusted financial statement
income of such taxpayer with respect to such controlled
foreign corporation (as determined under paragraph (2)(C))
shall be adjusted to also take into account such taxpayer’s
pro rata share (determined under rules similar to the rules
under section 951(a)(2)) of items taken into account in
computing the net income or loss set forth on the applicable
financial statement (as adjusted under rules similar to
those that apply in determining adjusted financial statement income) of each such controlled foreign corporation
with respect to which such taxpayer is a United States
shareholder.
‘‘(B) NEGATIVE ADJUSTMENTS.—In any case in which
the adjustment determined under subparagraph (A) would
result in a negative adjustment for such taxable year ‘‘(i) no adjustment shall be made under this paragraph for such taxable year, and
‘‘(ii) the amount of the adjustment determined
under this paragraph for the succeeding taxable year
(determined without regard to this paragraph) shall
be reduced by an amount equal to the negative adjustment for such taxable year.
‘‘(4) EFFECTIVELY CONNECTED INCOME.—In the case of a
foreign corporation, to determine adjusted financial statement
income, the principles of section 882 shall apply.
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PART 1—CORPORATE TAX REFORM
‘‘(5) ADJUSTMENTS FOR CERTAIN TAXES.—Adjusted financial
statement income shall be appropriately adjusted to disregard
any Federal income taxes, or income, war profits, or excess
profits taxes (within the meaning of section 901) with respect
to a foreign country or possession of the United States, which
are taken into account on the taxpayer’s applicable financial
statement. To the extent provided by the Secretary, the preceding sentence shall not apply to income, war profits, or excess
profits taxes (within the meaning of section 901) that are
imposed by a foreign country or possession of the United States
and taken into account on the taxpayer’s applicable financial
statement if the taxpayer does not choose to have the benefits
of subpart A of part III of subchapter N for the taxable year.
The Secretary shall prescribe such regulations or other guidance as may be necessary and appropriate to provide for the
proper treatment of current and deferred taxes for purposes
of this paragraph, including the time at which such taxes
are properly taken into account.
‘‘(6) ADJUSTMENT WITH RESPECT TO DISREGARDED ENTITIES.—Adjusted financial statement income shall be adjusted
to take into account any adjusted financial statement income
of a disregarded entity owned by the taxpayer.
‘‘(7) SPECIAL RULE FOR COOPERATIVES.—In the case of a
cooperative to which section 1381 applies, the adjusted financial
statement income (determined without regard to this paragraph) shall be reduced by the amounts referred to in section
1382(b) (relating to patronage dividends and per-unit retain
allocations) to the extent such amounts were not otherwise
taken into account in determining adjusted financial statement
income.
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PART 1—CORPORATE TAX REFORM
‘‘(8) RULES FOR ALASKA NATIVE CORPORATIONS.—Adjusted
financial statement income shall be appropriately adjusted to
allow—
‘‘(A) cost recovery and depletion attributable to property the basis of which is determined under section 21(c)
of the Alaska Native Claims Settlement Act (43 U.S.C.
1620(c)), and
‘‘(B) deductions for amounts payable made pursuant
to section 7(i) or section 7(j) of such Act (43 U.S.C. 1606(i)
and 1606(j)) only at such time as the deductions are allowed
for tax purposes.
‘‘(9) AMOUNTS ATTRIBUTABLE TO ELECTIONS FOR DIRECT PAYMENT OF CERTAIN CREDITS.—Adjusted financial statement
income shall be appropriately adjusted to disregard any amount
treated as a payment against the tax imposed by subtitle A
pursuant to an election under section 48D(d) or 6417, to the extent such amount was not otherwise taken into account under
paragraph (5).
‘‘(10) CONSISTENT TREATMENT OF MORTGAGE SERVICING
INCOME OF TAXPAYER OTHER THAN A REGULATED INVESTMENT
COMPANY.—
‘‘(A) IN GENERAL.—Adjusted financial statement income
shall be adjusted so as not to include any item of income
in connection with a mortgage servicing contract any earlier
than when such income is included in gross income under
any other provision of this chapter.
‘‘(B) RULES FOR AMOUNTS NOT REPRESENTING REASONABLE COMPENSATION.—The Secretary shall provide regulations to prevent the avoidance of taxes imposed by this
chapter with respect to amounts not representing reasonable compensation (as determined by the Secretary) with
respect to a mortgage servicing contract.
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PART 1—CORPORATE TAX REFORM
respect to a mortgage servicing contract.
‘‘(11) ADJUSTMENT WITH RESPECT TO DEFINED BENEFIT PENSIONS.—
‘‘(A) IN GENERAL.—Except as otherwise provided in
rules prescribed by the Secretary in regulations or other
guidance, adjusted financial statement income shall be—
‘‘(i) adjusted to disregard any amount of income,
cost, or expense that would otherwise be included on
the applicable financial statement in connection with
any covered benefit plan,
‘‘(ii) increased by any amount of income in connection with any such covered benefit plan that is included
in the gross income of the corporation under any other
provision of this chapter, and
‘‘(iii) reduced by deductions allowed under any
other provision of this chapter with respect to any
such covered benefit plan.
‘‘(B) COVERED BENEFIT PLAN.—For purposes of this
paragraph, the term ‘covered benefit plan’ means—
‘‘(i) a defined benefit plan (other than a multiemployer plan described in section 414(f)) if the trust
which is part of such plan is an employees’ trust
described in section 401(a) which is exempt from tax
under section 501(a),
‘‘(ii) any qualified foreign plan (as defined in section 404A(e)), or
‘‘(iii) any other defined benefit plan which provides
post-employment benefits other than pension benefits.
‘‘(12) TAX-EXEMPT ENTITIES.—In the case of an organization
subject to tax under section 511, adjusted financial statement
income shall be appropriately adjusted to only take into account
any adjusted financial statement income—
‘‘(A) of an unrelated trade or business (as defined in
section 513) of such organization, or
‘‘(B) derived from debt-financed property (as defined
in section 514) to the extent that income from such property
is treated as unrelated business taxable income.
‘‘(13) DEPRECIATION.—Adjusted financial statement income
shall be
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PART 1—CORPORATE TAX REFORM
‘‘(A) reduced by depreciation deductions allowed under
section 167 with respect to property to which section 168 applies to the extent of the amount allowed as deductions
in computing taxable income for the taxable year, and
‘‘(B) appropriately adjusted—
‘‘(i) to disregard any amount of depreciation
expense that is taken into account on the taxpayer’s
applicable financial statement with respect to such
property, and
‘‘(ii) to take into account any other item specified
by the Secretary in order to provide that such property
is accounted for in the same manner as it is accounted
for under this chapter.
‘‘(14) QUALIFIED WIRELESS SPECTRUM.— ‘‘(A) IN GENERAL.—Adjusted financial statement income
shall be—
‘‘(i) reduced by amortization deductions allowed
under section 197 with respect to qualified wireless
spectrum to the extent of the amount allowed as deductions in computing taxable income for the taxable year,
and
‘‘(ii) appropriately adjusted—
‘‘(I) to disregard any amount of amortization
expense that is taken into account on the taxpayer’s applicable financial statement with respect
to such qualified wireless spectrum, and
‘‘(II) to take into account any other item specified by the Secretary in order to provide that such
qualified wireless spectrum is accounted for in the
same manner as it is accounted for under this
chapter.
‘‘(B) QUALIFIED WIRELESS SPECTRUM.—For purposes of
this paragraph, the term ‘qualified wireless spectrum’
means wireless spectrum which—
‘‘(i) is used in the trade or business of a wireless
telecommunications carrier, and
‘‘(ii) was acquired after December 31, 2007, and
before the date of enactment of this section.
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‘‘(15) SECRETARIAL AUTHORITY TO ADJUST ITEMS.—The Secretary shall issue regulations or other guidance to provide
for such adjustments to adjusted financial statement income
as the Secretary determines necessary to carry out the purposes
of this section, including adjustments—
‘‘(A) to prevent the omission or duplication of any item,
and
‘‘(B) to carry out the principles of part II of subchapter
C of this chapter (relating to corporate liquidations), part
III of subchapter C of this chapter (relating to corporate
organizations and reorganizations), and part II of subchapter K of this chapter (relating to partnership contributions and distributions).
‘‘(d) DEDUCTION FOR FINANCIAL STATEMENT NET OPERATING
LOSS.— ‘‘(1) IN GENERAL.—Adjusted financial statement income
(determined after application of subsection (c) and without
regard to this subsection) shall be reduced by an amount equal
to the lesser of—
‘‘(A) the aggregate amount of financial statement net
operating loss carryovers to the taxable year, or ‘‘(B) 80 percent of adjusted financial statement income
computed without regard to the deduction allowable under
this subsection.
‘‘(2) FINANCIAL STATEMENT NET OPERATING LOSS CARRYOVER.—A financial statement net operating loss for any taxable
year shall be a financial statement net operating loss carryover
to each taxable year following the taxable year of the loss.
The portion of such loss which shall be carried to subsequent
taxable years shall be the amount of such loss remaining (if
any) after the application of paragraph (1).
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‘‘(3) FINANCIAL STATEMENT NET OPERATING LOSS DEFINED.—
For purposes of this subsection, the term ‘financial statement
net operating loss’ means the amount of the net loss (if any)
set forth on the corporation’s applicable financial statement
(determined after application of subsection (c) and without
regard to this subsection) for taxable years ending after
December 31, 2019.
‘‘(e) REGULATIONS AND OTHER GUIDANCE.—The Secretary shall
provide for such regulations and other guidance as necessary to
carry out the purposes of this section, including regulations and
other guidance relating to the effect of the rules of this section
on partnerships with income taken into account by an applicable
corporation.’’.
(2) CLERICAL AMENDMENT.—The table of sections for part
VI of subchapter A of chapter 1 is amended by inserting after
the item relating to section 56 the following new item:
‘‘Sec. 56A. Adjusted financial statement income.’’.
(c) CORPORATE AMT FOREIGN TAX CREDIT.—Section 59, as
amended by this section, is amended by adding at the end the
following new subsection:
‘‘(l) CORPORATE AMT FOREIGN TAX CREDIT.—
‘‘(1) IN GENERAL.—For purposes of this part, if an applicable
corporation chooses to have the benefits of subpart A of part
III of subchapter N for any taxable year, the corporate AMT
foreign tax credit for the taxable year of the applicable corporation is an amount equal to sum of—
‘‘(A) the lesser of—
‘‘(i) the aggregate of the applicable corporation’s
pro rata share (as determined under section 56A(c)(3))
of the amount of income, war profits, and excess profits
taxes (within the meaning of section 901) imposed
by any foreign country or possession of the United
States which are—
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PART 1—CORPORATE TAX REFORM
‘‘(I) taken into account on the applicable financial statement of each controlled foreign corporation with respect to which the applicable corporation is a United States shareholder, and
‘‘(II) paid or accrued (for Federal income tax
purposes) by each such controlled foreign corporation, or
‘‘(ii) the product of the amount of the adjustment
under section 56A(c)(3) and the percentage specified
in section 55(b)(2)(A)(i), and
‘‘(B) in the case of an applicable corporation that is
a domestic corporation, the amount of income, war profits,
and excess profits taxes (within the meaning of section 901) imposed by any foreign country or possession of the
United States to the extent such taxes are—
‘‘(i) taken into account on the applicable corporation’s applicable financial statement, and
‘‘(ii) paid or accrued (for Federal income tax purposes) by the applicable corporation.
‘‘(2) CARRYOVER OF EXCESS TAX PAID.—For any taxable
year for which an applicable corporation chooses to have the
benefits of subpart A of part III of subchapter N, the excess
of the amount described in paragraph (1)(A)(i) over the amount
described in paragraph (1)(A)(ii) shall increase the amount
described in paragraph (1)(A)(i) in any of the first 5 succeeding
taxable years to the extent not taken into account in a prior
taxable year.
‘‘(3) REGULATIONS OR OTHER GUIDANCE.—The Secretary
shall provide for such regulations or other guidance as is necessary to carry out the purposes of this subsection.’’.
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PART 1—CORPORATE TAX REFORM
(d) TREATMENT OF GENERAL BUSINESS CREDIT.—Section
38(c)(6)(E) is amended to read as follows:
‘‘(E) CORPORATIONS.—In the case of a corporation—
‘‘(i) the first sentence of paragraph (1) shall be
applied by substituting ‘25 percent of the taxpayer’s
net income tax as exceeds $25,000’ for ‘the greater
of’ and all that follows,
‘‘(ii) paragraph (2)(A) shall be applied without
regard to clause (ii)(I) thereof, and
‘‘(iii) paragraph (4)(A) shall be applied without
regard to clause (ii)(I) thereof.’’.
(e) CREDIT FOR PRIOR YEAR MINIMUM TAX LIABILITY.—
(1) IN GENERAL.—Section 53(e) is amended to read as follows:
‘‘(e) APPLICATION TO APPLICABLE CORPORATIONS.—In the case
of a corporation—
‘‘(1) subsection (b)(1) shall be applied by substituting ‘the
net minimum tax for all prior taxable years beginning after
2022’ for ‘the adjusted net minimum tax imposed for all prior
taxable years beginning after 1986’, and
‘‘(2) the amount determined under subsection (c)(1) shall
be increased by the amount of tax imposed under section 59A
for the taxable year.’’.
(2) CONFORMING AMENDMENTS.—Section 53(d) is
amended—
(A) in paragraph (2), by striking ‘‘, except that in
the case’’ and all that follows through ‘‘treated as zero’’,
and
(B) by striking paragraph (3).
(f) EFFECTIVE DATE.—The amendments made by this section
shall apply to taxable years beginning after December 31, 2022.
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PART 2—EXCISE TAX ON REPURCHASE OF CORPORATE STOCK
SEC. 10201. EXCISE TAX ON REPURCHASE OF CORPORATE STOCK.
(a) IN GENERAL.—Subtitle D is amended by inserting after
chapter 36 the following new chapter: ‘‘CHAPTER 37—REPURCHASE OF CORPORATE STOCK
‘‘Sec. 4501. Repurchase of corporate stock.
‘‘SEC. 4501. REPURCHASE OF CORPORATE STOCK.
‘‘(a) GENERAL RULE.—There is hereby imposed on each covered
corporation a tax equal to 1 percent of the fair market value
of any stock of the corporation which is repurchased by such corporation during the taxable year.
‘‘(b) COVERED CORPORATION.—For purposes of this section, the
term ‘covered corporation’ means any domestic corporation the stock
of which is traded on an established securities market (within
the meaning of section 7704(b)(1)).
‘‘(c) REPURCHASE.—For purposes of this section—
‘‘(1) IN GENERAL.—The term ‘repurchase’ means—
‘‘(A) a redemption within the meaning of section 317(b)
with regard to the stock of a covered corporation, and
‘‘(B) any transaction determined by the Secretary to
be economically similar to a transaction described in
subparagraph (A).
‘‘(2) TREATMENT OF PURCHASES BY SPECIFIED AFFILIATES.—
‘‘(A) IN GENERAL.—The acquisition of stock of a covered
corporation by a specified affiliate of such covered corporation, from a person who is not the covered corporation
or a specified affiliate of such covered corporation, shall
be treated as a repurchase of the stock of the covered
corporation by such covered corporation.
‘‘(B) SPECIFIED AFFILIATE.—For purposes of this section,
the term ‘specified affiliate’ means, with respect to any
corporation—
‘‘(i) any corporation more than 50 percent of the
stock of which is owned (by vote or by value), directly
or indirectly, by such corporation, and
‘‘(ii) any partnership more than 50 percent of the
capital interests or profits interests of which is held,
directly or indirectly, by such corporation.
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PART 2—EXCISE TAX ON REPURCHASE OF CORPORATE STOCK
‘‘(3) ADJUSTMENT.—The amount taken into account under
subsection (a) with respect to any stock repurchased by a covered corporation shall be reduced by the fair market value
of any stock issued by the covered corporation during the taxable year, including the fair market value of any stock issued
or provided to employees of such covered corporation or
employees of a specified affiliate of such covered corporation
during the taxable year, whether or not such stock is issued
or provided in response to the exercise of an option to purchase
such stock.
‘‘(d) SPECIAL RULES FOR ACQUISITION OF STOCK OF CERTAIN
FOREIGN CORPORATIONS.—
‘‘(1) IN GENERAL.—In the case of an acquisition of stock
of an applicable foreign corporation by a specified affiliate of
such corporation (other than a foreign corporation or a foreign
partnership (unless such partnership has a domestic entity
as a direct or indirect partner)) from a person who is not
the applicable foreign corporation or a specified affiliate of
such applicable foreign corporation, for purposes of this section— ‘‘(A) such specified affiliate shall be treated as a covered
corporation with respect to such acquisition,
‘‘(B) such acquisition shall be treated as a repurchase
of stock of a covered corporation by such covered corporation, and
‘‘(C) the adjustment under subsection (c)(3) shall be
determined only with respect to stock issued or provided
by such specified affiliate to employees of the specified
affiliate.
‘‘(2) SURROGATE FOREIGN CORPORATIONS.—In the case of
a repurchase of stock of a covered surrogate foreign corporation
by such covered surrogate foreign corporation, or an acquisition
of stock of a covered surrogate foreign corporation by a specified
affiliate of such corporation, for purposes of this section—
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PART 2—EXCISE TAX ON REPURCHASE OF CORPORATE STOCK
‘‘(A) the expatriated entity with respect to such covered
surrogate foreign corporation shall be treated as a covered
corporation with respect to such repurchase or acquisition,
‘‘(B) such repurchase or acquisition shall be treated
as a repurchase of stock of a covered corporation by such
covered corporation, and
‘‘(C) the adjustment under subsection (c)(3) shall be
determined only with respect to stock issued or provided
by such expatriated entity to employees of the expatriated
entity.
‘‘(3) DEFINITIONS.—For purposes of this subsection—
‘‘(A) APPLICABLE FOREIGN CORPORATION.—The term
‘applicable foreign corporation’ means any foreign corporation the stock of which is traded on an established securities market (within the meaning of section 7704(b)(1)).
‘‘(B) COVERED SURROGATE FOREIGN CORPORATION.—The
term ‘covered surrogate foreign corporation’ means any
surrogate foreign corporation (as determined under section
7874(a)(2)(B) by substituting ‘September 20, 2021’ for
‘March 4, 2003’ each place it appears) the stock of which
is traded on an established securities market (within the
meaning of section 7704(b)(1)), but only with respect to
taxable years which include any portion of the applicable
period with respect to such corporation under section
7874(d)(1).
‘‘(C) EXPATRIATED ENTITY.—The term ‘expatriated
entity’ has the meaning given such term by section
7874(a)(2)(A).
‘‘(e) EXCEPTIONS.—Subsection (a) shall not apply—
‘‘(1) to the extent that the repurchase is part of a reorganization (within the meaning of section 368(a)) and no gain
or loss is recognized on such repurchase by the shareholder
under chapter 1 by reason of such reorganization,
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PART 2—EXCISE TAX ON REPURCHASE OF CORPORATE STOCK
‘‘(2) in any case in which the stock repurchased is, or
an amount of stock equal to the value of the stock repurchased
is, contributed to an employer-sponsored retirement plan,
employee stock ownership plan, or similar plan,
‘‘(3) in any case in which the total value of the stock
repurchased during the taxable year does not exceed
$1,000,000,
‘‘(4) under regulations prescribed by the Secretary, in cases
in which the repurchase is by a dealer in securities in the
ordinary course of business, ‘‘(5) to repurchases by a regulated investment company
(as defined in section 851) or a real estate investment trust,
or
‘‘(6) to the extent that the repurchase is treated as a
dividend for purposes of this title.
‘‘(f) REGULATIONS AND GUIDANCE.—The Secretary shall prescribe such regulations and other guidance as are necessary or
appropriate to carry out, and to prevent the avoidance of, the
purposes of this section, including regulations and other guidance—
‘‘(1) to prevent the abuse of the exceptions provided by
subsection (e),
‘‘(2) to address special classes of stock and preferred stock,
and
‘‘(3) for the application of the rules under subsection (d).’’.
(b) TAX NOT DEDUCTIBLE.—Paragraph (6) of section 275(a) is
amended by inserting ‘‘37,’’ before ‘‘41’’.
(c) CLERICAL AMENDMENT.—The table of chapters for subtitle
D is amended by inserting after the item relating to chapter 36
the following new item:
‘‘CHAPTER 37—REPURCHASE OF CORPORATE STOCK’’.
(d) EFFECTIVE DATE.—The amendments made by this section
shall apply to repurchases (within the meaning of section 4501(c)
of the Internal Revenue Code of 1986, as added by this section)
of stock after December 31, 2022.
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PART 3—FUNDING THE INTERNAL REVENUE SERVICE AND IMPROVING TAXPAYER COMPLIANCE
SEC. 10301. ENHANCEMENT OF INTERNAL REVENUE SERVICE
RESOURCES.
IN GENERAL.—The following sums are appropriated, out of any
money in the Treasury not otherwise appropriated, for the fiscal
year ending September 30, 2022:
(1) INTERNAL REVENUE SERVICE.—
(A) IN GENERAL.—
(i) TAXPAYER SERVICES.—For necessary expenses
of the Internal Revenue Service to provide taxpayer
services, including pre-filing assistance and education,
filing and account services, taxpayer advocacy services,
and other services as authorized by 5 U.S.C. 3109,
at such rates as may be determined by the Commissioner, $3,181,500,000, to remain available until September 30, 2031: Provided, That these amounts shall
be in addition to amounts otherwise available for such
purposes.
(ii) ENFORCEMENT.—For necessary expenses for tax
enforcement activities of the Internal Revenue Service
to determine and collect owed taxes, to provide legal
and litigation support, to conduct criminal investigations (including investigative technology), to provide
digital asset monitoring and compliance activities, to
enforce criminal statutes related to violations of
internal revenue laws and other financial crimes, to
purchase and hire passenger motor vehicles (31 U.S.C.1343(b)), and to provide other services as authorized
by 5 U.S.C. 3109, at such rates as may be determined
by the Commissioner, $45,637,400,000, to remain available until September 30, 2031: Provided, That these
amounts shall be in addition to amounts otherwise
available for such purposes
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PART 3—FUNDING THE INTERNAL REVENUE SERVICE AND IMPROVING TAXPAYER COMPLIANCE
(iii) OPERATIONS SUPPORT.—For necessary
expenses of the Internal Revenue Service to support
taxpayer services and enforcement programs, including
rent payments; facilities services; printing; postage;
physical security; headquarters and other IRS-wide
administration activities; research and statistics of
income; telecommunications; information technology
development, enhancement, operations, maintenance,
and security; the hire of passenger motor vehicles (31
U.S.C. 1343(b)); the operations of the Internal Revenue
Service Oversight Board; and other services as authorized by 5 U.S.C. 3109, at such rates as may be determined by the Commissioner, $25,326,400,000, to
remain available until September 30, 2031: Provided,
That these amounts shall be in addition to amounts
otherwise available for such purposes.
(iv) BUSINESS SYSTEMS MODERNIZATION.—For necessary expenses of the Internal Revenue Service’s business systems modernization program, including
development of callback technology and other technology to provide a more personalized customer service
but not including the operation and maintenance of
legacy systems, $4,750,700,000, to remain available
until September 30, 2031: Provided, That these
amounts shall be in addition to amounts otherwise
available for such purposes.
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PART 3—FUNDING THE INTERNAL REVENUE SERVICE AND IMPROVING TAXPAYER COMPLIANCE
(B) TASK FORCE TO DESIGN AN IRS-RUN FREE ‘‘DIRECT
EFILE’’ TAX RETURN SYSTEM.—For necessary expenses of
the Internal Revenue Service to deliver to Congress, within
nine months following the date of the enactment of this
Act, a report on (I) the cost (including options for differential coverage based on taxpayer adjusted gross income and
return complexity) of developing and running a free direct
efile tax return system, including costs to build and administer each release, with a focus on multi-lingual and mobilefriendly features and safeguards for taxpayer data; (II)
taxpayer opinions, expectations, and level of trust, based
on surveys, for such a free direct efile system; and (III)
the opinions of an independent third-party on the overall
feasibility, approach, schedule, cost, organizational design,
and Internal Revenue Service capacity to deliver such a
direct efile tax return system, $15,000,000, to remain available until September 30, 2023: Provided, That these
amounts shall be in addition to amounts otherwise available for such purposes.
(2) TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION.—For necessary expenses of the Treasury Inspector General for Tax Administration in carrying out the Inspector General Act of 1978, as amended, including purchase and hire
of passenger motor vehicles (31 U.S.C. 1343(b)); and services authorized by 5 U.S.C. 3109, at such rates as may be determined by the Inspector General for Tax Administration,
$403,000,000, to remain available until September 30, 2031:
Provided, That these amounts shall be in addition to amounts
otherwise available for such purposes.
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PART 3—FUNDING THE INTERNAL REVENUE SERVICE AND IMPROVING TAXPAYER COMPLIANCE
(3) OFFICE OF TAX POLICY.—For necessary expenses of the
Office of Tax Policy of the Department of the Treasury to
carry out functions related to promulgating regulations under
the Internal Revenue Code of 1986, $104,533,803, to remain
available until September 30, 2031: Provided, That these
amounts shall be in addition to amounts otherwise available
for such purposes.
(4) UNITED STATES TAX COURT.—For necessary expenses
of the United States Tax Court, including contract reporting
and other services as authorized by 5 U.S.C. 3109;
$153,000,000, to remain available until September 30, 2031:
Provided, That these amounts shall be in addition to amounts
otherwise available for such purposes.
(5) TREASURY DEPARTMENTAL OFFICES.—For necessary
expenses of the Departmental Offices of the Department of
the Treasury to provide for oversight and implementation support for actions by the Internal Revenue Service to implement
this Act and the amendments made by this Act, $50,000,000,
to remain available until September 30, 2031: Provided, That
these amounts shall be in addition to amounts otherwise available for such purposes.
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Subtitle D—Energy Security
SEC. 13001. AMENDMENT OF 1986 CODE.
Except as otherwise expressly provided, whenever in this subtitle 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.
Subtitle D—Energy Security
SEC. 13001. AMENDMENT OF 1986 CODE.
Except as otherwise expressly provided, whenever in this subtitle 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.
PART 1—CLEAN ELECTRICITY AND REDUCING CARBON EMISSIONS
SEC. 13101. EXTENSION AND MODIFICATION OF CREDIT FOR ELECTRICITY PRODUCED FROM CERTAIN RENEWABLE
RESOURCES.
(a) IN GENERAL.—The following provisions of section 45(d) are
each amended by striking ‘‘January 1, 2022’’ each place it appears
and inserting ‘‘January 1, 2025’’:
(1) Paragraph (2)(A).
(2) Paragraph (3)(A).
(3) Paragraph (6).
(4) Paragraph (7).
(5) Paragraph (9).
(6) Paragraph (11)(B).
(b) BASE CREDIT AMOUNT.—Section 45 is amended—
(1) in subsection (a)(1), by striking ‘‘1.5 cents’’ and inserting
‘‘0.3 cents’’, and
(2) in subsection (b)(2), by striking ‘‘1.5 cent’’ and inserting
‘‘0.3 cent’’.
(c) APPLICATION OF EXTENSION TO GEOTHERMAL AND SOLAR.— Section 45(d)(4) is amended by striking ‘‘and which’’ and all that
follows through ‘‘January 1, 2022’’ and inserting ‘‘and the construction of which begins before January 1, 2025’’.
(d) EXTENSION OF ELECTION TO TREAT QUALIFIED FACILITIES
AS ENERGY PROPERTY.—Section 48(a)(5)(C)(ii) is amended by
striking ‘‘January 1, 2022’’ and inserting ‘‘January 1, 2025’’.
(e) APPLICATION OF EXTENSION TO WIND FACILITIES.—
(1) IN GENERAL.—Section 45(d)(1) is amended by striking
‘‘January 1, 2022’’ and inserting ‘‘January 1, 2025’’.
(2) APPLICATION OF PHASEOUT PERCENTAGE.—
(A) RENEWABLE ELECTRICITY PRODUCTION CREDIT.—
Section 45(b)(5) is amended by inserting ‘‘which is placed
in service before January 1, 2022’’ after ‘‘using wind to
produce electricity’’.
(B) ENERGY CREDIT.—Section 48(a)(5)(E) is amended
by inserting ‘‘placed in service before January 1, 2022,
and’’ before ‘‘treated as energy property’’.
(3) QUALIFIED OFFSHORE WIND FACILITIES UNDER ENERGY
CREDIT.—Section 48(a)(5)(F)(i) is amended by striking ‘‘offshore
wind facility’’ and all that follows and inserting the following:
‘‘offshore wind facility, subparagraph (E) shall not apply.’’.
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PART 1—CLEAN ELECTRICITY AND REDUCING CARBON EMISSIONS
(f) WAGE AND APPRENTICESHIP REQUIREMENTS.—Section 45(b)
is amended by adding at the end the following new paragraphs:
‘‘(6) INCREASED CREDIT AMOUNT FOR QUALIFIED FACILITIES.—
‘‘(A) IN GENERAL.—In the case of any qualified facility
which satisfies the requirements of subparagraph (B), the
amount of the credit determined under subsection (a)
(determined after the application of paragraphs (1) through
(5) and without regard to this paragraph) shall be equal
to such amount multiplied by 5.
‘‘(B) QUALIFIED FACILITY REQUIREMENTS.—A qualified
facility meets the requirements of this subparagraph if
it is one of the following:
‘‘(i) A facility with a maximum net output of less
than 1 megawatt (as measured in alternating current).
‘‘(ii) A facility the construction of which begins
prior to the date that is 60 days after the Secretary
publishes guidance with respect to the requirements
of paragraphs (7)(A) and (8).
‘‘(iii) A facility which satisfies the requirements
of paragraphs (7)(A) and (8).
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PART 1—CLEAN ELECTRICITY AND REDUCING CARBON EMISSIONS
‘‘(7) PREVAILING WAGE REQUIREMENTS.—
‘‘(A) IN GENERAL.—The requirements described in this
subparagraph with respect to any qualified facility are
that the taxpayer shall ensure that any laborers and
mechanics employed by the taxpayer or any contractor
or subcontractor in—
‘‘(i) the construction of such facility, and
‘‘(ii) with respect to any taxable year, for any portion of such taxable year which is within the period
described in subsection (a)(2)(A)(ii), the alteration or
repair of such facility,
shall be paid wages at rates not less than the prevailing
rates for construction, alteration, or repair of a similar
character in the locality in which such facility is located
as most recently determined by the Secretary of Labor,
in accordance with subchapter IV of chapter 31 of title
40, United States Code. For purposes of determining an
increased credit amount under paragraph (6)(A) for a taxable year, the requirement under clause (ii) is applied
to such taxable year in which the alteration or repair
of the qualified facility occurs.’’
‘‘(B) CORRECTION AND PENALTY RELATED TO FAILURE
TO SATISFY WAGE REQUIREMENTS.—
‘‘(i) IN GENERAL.—In the case of any taxpayer
which fails to satisfy the requirement under subparagraph (A) with respect to the construction of any qualified facility or with respect to the alteration or repair
of a facility in any year during the period described
in subparagraph (A)(ii), such taxpayer shall be deemed
to have satisfied such requirement under such subparagraph with respect to such facility for any year if,
with respect to any laborer or mechanic who was paid
wages at a rate below the rate described in such
subparagraph for any period during such year, such
taxpayer—
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PART 1—CLEAN ELECTRICITY AND REDUCING CARBON EMISSIONS
‘‘(I) makes payment to such laborer or
mechanic in an amount equal to the sum of—
‘‘(aa) an amount equal to the difference
between—
‘‘(AA) the amount of wages paid to
such laborer or mechanic during such
period, and
‘‘(BB) the amount of wages required
to be paid to such laborer or mechanic
pursuant to such subparagraph during
such period, plus
‘‘(bb) interest on the amount determined
under item (aa) at the underpayment rate
established under section 6621 (determined by
substituting ‘6 percentage points’ for ‘3
percentage points’ in subsection (a)(2) of such
section) for the period described in such item,
and
‘‘(II) makes payment to the Secretary of a penalty in an amount equal to the product of—
‘‘(aa) $5,000, multiplied by
‘‘(bb) the total number of laborers and
mechanics who were paid wages at a rate
below the rate described in subparagraph (A)
for any period during such year.
‘‘(ii) DEFICIENCY PROCEDURES NOT TO APPLY.—Subchapter B of chapter 63 (relating to deficiency procedures for income, estate, gift, and certain excise taxes)
shall not apply with respect to the assessment or collection of any penalty imposed by this paragraph.
‘‘(iii) INTENTIONAL DISREGARD.—If the Secretary
determines that any failure described in clause (i) is
due to intentional disregard of the requirements under
subparagraph (A), such clause shall be applied—
‘‘(I) in subclause (I), by substituting ‘three
times the sum’ for ‘the sum’, and
‘‘(II) in subclause (II), by substituting ‘$10,000’
for ‘5,000’ in item (aa) thereof.
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PART 1—CLEAN ELECTRICITY AND REDUCING CARBON EMISSIONS
‘‘(iv) LIMITATION ON PERIOD FOR PAYMENT.—Pursuant to rules issued by the Secretary, in the case of
a final determination by the Secretary with respect
to any failure by the taxpayer to satisfy the requirement under subparagraph (A), subparagraph (B)(i)
shall not apply unless the payments described in subclauses (I) and (II) of such subparagraph are made
by the taxpayer on or before the date which is 180
days after the date of such determination.
‘‘(8) APPRENTICESHIP REQUIREMENTS.—The requirements
described in this paragraph with respect to the construction
of any qualified facility are as follows:
‘‘(A) LABOR HOURS.— ‘‘(i) PERCENTAGE OF TOTAL LABOR HOURS.—Taxpayers shall ensure that, with respect to the construction of any qualified facility, not less than the
applicable percentage of the total labor hours of the
construction, alteration, or repair work (including such
work performed by any contractor or subcontractor) with respect to such facility shall, subject to subparagraph (B), be performed by qualified apprentices.
‘‘(ii) APPLICABLE PERCENTAGE.—For purposes of
clause (i), the applicable percentage shall be—
‘‘(I) in the case of a qualified facility the
construction of which begins before January 1,
2023, 10 percent,
‘‘(II) in the case of a qualified facility the
construction of which begins after December 31,
2022, and before January 1, 2024, 12.5 percent,
and
‘‘(III) in the case of a qualified facility the
construction of which begins after December 31,
2023, 15 percent.
‘‘(B) APPRENTICE TO JOURNEYWORKER RATIO.—The
requirement under subparagraph (A)(i) shall be subject
to any applicable requirements for apprentice-tojourneyworker ratios of the Department of Labor or the
applicable State apprenticeship agency.
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PART 1—CLEAN ELECTRICITY AND REDUCING CARBON EMISSIONS
‘‘(C) PARTICIPATION.—Each taxpayer, contractor, or
subcontractor who employs 4 or more individuals to perform
construction, alteration, or repair work with respect to
the construction of a qualified facility shall employ 1 or
more qualified apprentices to perform such work.
‘‘(D) EXCEPTION.—
‘‘(i) IN GENERAL.—A taxpayer shall not be treated
as failing to satisfy the requirements of this paragraph
if such taxpayer—
‘‘(I) satisfies the requirements described in
clause (ii), or
‘‘(II) subject to clause (iii), in the case of any
failure by the taxpayer to satisfy the requirement
under subparagraphs (A) and (C) with respect to
the construction, alteration, or repair work on any
qualified facility to which subclause (I) does not
apply, makes payment to the Secretary of a penalty
in an amount equal to the product of—
‘‘(aa) $50, multiplied by
‘‘(bb) the total labor hours for which the
requirement described in such subparagraph
was not satisfied with respect to the construction, alteration, or repair work on such qualified facility.
‘‘(ii) GOOD FAITH EFFORT.—For purposes of clause
(i), a taxpayer shall be deemed to have satisfied the
requirements under this paragraph with respect to
a qualified facility if such taxpayer has requested qualified apprentices from a registered apprenticeship program, as defined in section 3131(e)(3)(B), and—
‘‘(I) such request has been denied, provided
that such denial is not the result of a refusal
by the taxpayer or any contractors or subcontractors engaged in the performance of construction,
alteration, or repair work with respect to such
qualified facility to comply with the established
standards and requirements of the registered
apprenticeship program, or
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PART 1—CLEAN ELECTRICITY AND REDUCING CARBON EMISSIONS
fails to respond to such request within 5 business
days after the date on which such registered
apprenticeship program received such request.
‘‘(iii) INTENTIONAL DISREGARD.—If the Secretary
determines that any failure described in subclause
(i)(II) is due to intentional disregard of the requirements under subparagraphs (A) and (C), subclause
(i)(II) shall be applied by substituting ‘$500’ for ‘$50’
in item (aa) thereof.
‘‘(E) DEFINITIONS.—For purposes of this paragraph—
‘‘(i) LABOR HOURS.—The term ‘labor hours’—
‘‘(I) means the total number of hours devoted
to the performance of construction, alteration, or
repair work by any individual employed by the
taxpayer or by any contractor or subcontractor,
and
‘‘(II) excludes any hours worked by—
‘‘(aa) foremen,
‘‘(bb) superintendents,
‘‘(cc) owners, or
‘‘(dd) persons employed in a bona fide
executive, administrative, or professional
capacity (within the meaning of those terms
in part 541 of title 29, Code of Federal Regulations).
‘‘(ii) QUALIFIED APPRENTICE.—The term ‘qualified
apprentice’ means an individual who is employed by
the taxpayer or by any contractor or subcontractor
and who is participating in a registered apprenticeship
program, as defined in section 3131(e)(3)(B).
‘‘(9) REGULATIONS AND GUIDANCE.—The Secretary shall
issue such regulations or other guidance as the Secretary determines necessary to carry out the purposes of this subsection,
including regulations or other guidance which provides for
requirements for recordkeeping or information reporting for
purposes of administering the requirements of this subsection.’’.
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PART 1—CLEAN ELECTRICITY AND REDUCING CARBON EMISSIONS
(g) DOMESTIC CONTENT, PHASEOUT, AND ENERGY COMMUNITIES.—Section 45(b), as amended by subsection (f), is amended—
(1) by redesignating paragraph (9) as paragraph (12), and
(2) by inserting after paragraph (8) the following:
‘‘(9) DOMESTIC CONTENT BONUS CREDIT AMOUNT.—
‘‘(A) IN GENERAL.—In the case of any qualified facility
which satisfies the requirement under subparagraph (B)(i),
the amount of the credit determined under subsection (a)
(determined after the application of paragraphs (1) through
(8)) shall be increased by an amount equal to 10 percent
of the amount so determined.
‘‘(B) REQUIREMENT.—
‘‘(i) IN GENERAL.—The requirement described in
this clause is satisfied with respect to any qualified
facility if the taxpayer certifies to the Secretary (at
such time, and in such form and manner, as the Secretary may prescribe) that any steel, iron, or manufactured product which is a component of such facility
(upon completion of construction) was produced in the United States (as determined under section 661 of
title 49, Code of Federal Regulations).
‘‘(ii) STEEL AND IRON.—In the case of steel or iron,
clause (i) shall be applied in a manner consistent with
section 661.5 of title 49, Code of Federal Regulations.
‘‘(iii) MANUFACTURED PRODUCT.—For purposes of
clause (i), the manufactured products which are components of a qualified facility upon completion of
construction shall be deemed to have been produced
in the United States if not less than the adjusted
percentage (as determined under subparagraph (C))
of the total costs of all such manufactured products
of such facility are attributable to manufactured products (including components) which are mined, produced, or manufactured in the United States.
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PART 1—CLEAN ELECTRICITY AND REDUCING CARBON EMISSIONS
‘‘(C) ADJUSTED PERCENTAGE.—
‘‘(i) IN GENERAL.—Subject to subclause (ii), for purposes of subparagraph (B)(iii), the adjusted percentage
shall be 40 percent.
‘‘(ii) OFFSHORE WIND FACILITY.—For purposes of
subparagraph (B)(iii), in the case of a qualified facility
which is an offshore wind facility, the adjusted percentage shall be 20 percent.
‘‘(10) PHASEOUT FOR ELECTIVE PAYMENT.—
‘‘(A) IN GENERAL.—In the case of a taxpayer making
an election under section 6417 with respect to a credit
under this section, the amount of such credit shall be
replaced with—
‘‘(i) the value of such credit (determined without
regard to this paragraph), multiplied by
‘‘(ii) the applicable percentage.
‘‘(B) 100 PERCENT APPLICABLE PERCENTAGE FOR CERTAIN QUALIFIED FACILITIES.—In the case of any qualified
facility—
‘‘(i) which satisfies the requirements under paragraph (9)(B), or
‘‘(ii) with a maximum net output of less than 1
megawatt (as measured in alternating current),
the applicable percentage shall be 100 percent.
‘‘(C) PHASED DOMESTIC CONTENT REQUIREMENT.—Subject to subparagraph (D), in the case of any qualified facility
which is not described in subparagraph (B), the applicable
percentage shall be—
‘‘(i) if construction of such facility began before
January 1, 2024, 100 percent, and
‘‘(ii) if construction of such facility began in calendar year 2024, 90 percent.
‘‘(D) EXCEPTION.—
‘‘(i) IN GENERAL.—For purposes of this paragraph,
the Secretary shall provide exceptions to the requirements under this paragraph if—
‘‘(I) the inclusion of steel, iron, or manufactured products which are produced in the United
States increases the overall costs of construction
of qualified facilities by more than 25 percent,
or
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PART 1—CLEAN ELECTRICITY AND REDUCING CARBON EMISSIONS
‘‘(II) relevant steel, iron, or manufactured
products are not produced in the United States
in sufficient and reasonably available quantities
or of a satisfactory quality.
‘‘(ii) APPLICABLE PERCENTAGE.—In any case in
which the Secretary provides an exception pursuant
to clause (i), the applicable percentage shall be 100
percent.
‘‘(11) SPECIAL RULE FOR QUALIFIED FACILITY LOCATED IN
ENERGY COMMUNITY.—
‘‘(A) IN GENERAL.—In the case of a qualified facility
which is located in an energy community, the credit determined under subsection (a) (determined after the application of paragraphs (1) through (10), without the application
of paragraph (9)) shall be increased by an amount equal
to 10 percent of the amount so determined.
‘‘(B) ENERGY COMMUNITY.—For purposes of this paragraph, the term ‘energy community’ means—
‘‘(i) a brownfield site (as defined in subparagraphs
(A), (B), and (D)(ii)(III) of section 101(39) of the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980 (42 U.S.C. 9601(39))),
‘‘(ii) a metropolitan statistical area or non-metropolitan statistical area which—
‘‘(I) has (or, at any time during the period
beginning after December 31, 2009, had) 0.17 percent or greater direct employment or 25 percent
or greater local tax revenues related to the extraction, processing, transport, or storage of coal, oil,
or natural gas (as determined by the Secretary),
and
‘‘(II) has an unemployment rate at or above
the national average unemployment rate for the
previous year (as determined by the Secretary),
or
‘‘(iii) a census tract—
‘‘(I) in which—
‘‘(aa) after December 31, 1999, a coal mine
has closed, or
‘‘(bb) after December 31, 2009, a coal-fired
electric generating unit has been retired, or
‘‘(II) which is directly adjoining to any census
tract described in subclause (I).’’
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(h) CREDIT REDUCED FOR TAX-EXEMPT BONDS.—Section 45(b)(3)
is amended to read as follows:
‘‘(3) CREDIT REDUCED FOR TAX-EXEMPT BONDS.—The amount
of the credit determined under subsection (a) with respect to
any facility for any taxable year (determined after the application of paragraphs (1) and (2)) shall be reduced by the amount
which is the product of the amount so determined for such
year and the lesser of 15 percent or a fraction—
‘‘(A) the numerator of which is the sum, for the taxable
year and all prior taxable years, of proceeds of an issue
of any obligations the interest on which is exempt from
tax under section 103 and which is used to provide
financing for the qualified facility, and ‘‘(B) the denominator of which is the aggregate amount
of additions to the capital account for the qualified facility
for the taxable year and all prior taxable years.
The amounts under the preceding sentence for any taxable
year shall be determined as of the close of the taxable year.’’.
(i) ROUNDING ADJUSTMENT.— (1) IN GENERAL.—Section 45(b)(2) is amended by striking
the second sentence and inserting the following: ‘‘If the 0.3
cent amount as increased under the preceding sentence is not
a multiple of 0.05 cent, such amount shall be rounded to the
nearest multiple of 0.05 cent. In any other case, if an amount
as increased under this paragraph is not a multiple of 0.1
cent, such amount shall be rounded to the nearest multiple
of 0.1 cent.’’.
(2) CONFORMING AMENDMENT.—Section 45(b)(4)(A) is
amended by striking ‘‘last sentence’’ and inserting ‘‘last two
sentences’’.
(j) HYDROPOWER.—
(1) ELIMINATION OF CREDIT RATE REDUCTION FOR QUALIFIED
HYDROELECTRIC PRODUCTION AND MARINE AND HYDROKINETIC
RENEWABLE ENERGY.—Section 45(b)(4)(A), as amended by the
preceding provisions of this section, is amended by striking
‘‘(7), (9), or (11)’’ and inserting ‘‘or (7)’’.
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(2) MARINE AND HYDROKINETIC RENEWABLE ENERGY.—Section 45 is amended—
(A) in subsection (c)(10)(A)—
(i) in clause (iii), by striking ‘‘or’’,
(ii) in clause (iv), by striking the period at the
end and inserting ‘‘, or’’ and
(iii) by adding at the end the following:
‘‘(v) pressurized water used in a pipeline (or similar
man-made water conveyance) which is operated—
‘‘(I) for the distribution of water for agricultural, municipal, or industrial consumption, and
‘‘(II) not primarily for the generation of electricity.’’, and
(B) in subsection (d)(11)(A), by striking ‘‘150’’ and
inserting ‘‘25’’.
(k) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in paragraphs (2)
and (3), the amendments made by this section shall apply
to facilities placed in service after December 31, 2021.
(2) CREDIT REDUCED FOR TAX-EXEMPT BONDS.—The amendment made by subsection (h) shall apply to facilities the
construction of which begins after the date of enactment of
this Act.
(3) DOMESTIC CONTENT, PHASEOUT, ENERGY COMMUNITIES,
AND HYDROPOWER.—The amendments made by subsections (g)
and (j) shall apply to facilities placed in service after December
31, 2022.
SEC. 13102. EXTENSION AND MODIFICATION OF ENERGY CREDIT.
(a) EXTENSION OF CREDIT.—The following provisions of section
48 are each amended by striking ‘‘January 1, 2024’’ each place
it appears and inserting ‘‘January 1, 2025’’:
(1) Subsection (a)(2)(A)(i)(II).
(2) Subsection (a)(3)(A)(ii).
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(3) Subsection (c)(1)(D).
(4) Subsection (c)(2)(D).
(5) Subsection (c)(3)(A)(iv).
(6) Subsection (c)(4)(C).
(7) Subsection (c)(5)(D).
(b) FURTHER EXTENSION FOR CERTAIN ENERGY PROPERTY.—
Section 48(a)(3)(A)(vii) is amended by striking ‘‘January 1, 2024’’
and inserting ‘‘January 1, 2035’’.
(c) PHASEOUT OF CREDIT.—Section 48(a) is amended by striking
paragraphs (6) and (7) and inserting the following new paragraph:
‘‘(6) PHASEOUT FOR CERTAIN ENERGY PROPERTY.—In the
case of any qualified fuel cell property, qualified small wind
property, or energy property described in clause (i) or clause
(ii) of paragraph (3)(A) the construction of which begins after
December 31, 2019, and which is placed in service before
January 1, 2022, the energy percentage determined under paragraph (2) shall be equal to 26 percent.’’.
(d) BASE ENERGY PERCENTAGE AMOUNT; PHASEOUT OF CERTAIN
ENERGY PROPERTY.—
(1) BASE ENERGY PERCENTAGE AMOUNT.—Section 48(a) is
amended—
(A) in paragraph (2)(A)—
(i) in clause (i), by striking ‘‘30 percent’’ and
inserting ‘‘6 percent’’, and
(ii) in clause (ii), by striking ‘‘10 percent’’ and
inserting ‘‘2 percent’’, and
(B) in paragraph (5)(A)(ii), by striking ‘‘30 percent’’
and inserting ‘‘6 percent’’.
(2) PHASEOUT OF CERTAIN ENERGY PROPERTY.—Section
48(a), as amended by the preceding provisions of this Act,
is amended by adding at the end the following new paragraph:
‘‘(7) PHASEOUT FOR CERTAIN ENERGY PROPERTY.—In the
case of any energy property described in clause (vii) of paragraph (3)(A), the energy percentage determined under paragraph (2) shall be equal to
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‘‘(A) in the case of any property the construction of
which begins before January 1, 2033, and which is placed
in service after December 31, 2021, 6 percent,
‘‘(B) in the case of any property the construction of
which begins after December 31, 2032, and before January
1, 2034, 5.2 percent, and
‘‘(C) in the case of any property the construction of
which begins after December 31, 2033, and before January
1, 2035, 4.4 percent.’’.
(e) 6 PERCENT CREDIT FOR GEOTHERMAL.—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)’’.
(f) ENERGY STORAGE TECHNOLOGIES; QUALIFIED BIOGAS PROPERTY; MICROGRID CONTROLLERS; EXTENSION OF OTHER PROPERTY.—
(1) IN GENERAL.—Section 48(a)(3)(A) is amended by striking
‘‘or’’ at the end of clause (vii), and by adding at the end the
following new clauses:
‘‘(ix) energy storage technology,
‘‘(x) qualified biogas property, or
‘‘(xi) microgrid controllers,’’. (2) APPLICATION OF 6 PERCENT CREDIT.—Section
48(a)(2)(A)(i) is amended by striking ‘‘and’’ at the end of subclauses (IV) and (V) and adding at the end the following new
subclauses:
‘‘(VI) energy storage technology,
‘‘(VII) qualified biogas property,
‘‘(VIII) microgrid controllers, and
‘‘(IX) energy property described in clauses (v)
and (vii) of paragraph (3)(A), and’’.
(3) DEFINITIONS.—Section 48(c) is amended by adding at
the end the following new paragraphs:
‘‘(6) ENERGY STORAGE TECHNOLOGY.—
‘‘(A) IN GENERAL.—The term ‘energy storage technology’
means—
‘‘(i) property (other than property primarily used
in the transportation of goods or individuals and not
for the production of electricity) which receives, stores,
and delivers energy for conversion to electricity (or,
in the case of hydrogen, which stores energy), and
has a nameplate capacity of not less than 5 kilowatt
hours, and
‘‘(ii) thermal energy storage property.
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‘‘(B) MODIFICATIONS OF CERTAIN PROPERTY.—In the
case of any property which either—
‘‘(i) was placed in service before the date of enactment of this section and would be described in subparagraph (A)(i), except that such property has a capacity
of less than 5 kilowatt hours and is modified in a
manner that such property (after such modification)
has a nameplate capacity of not less than 5 kilowatt
hours, or
‘‘(ii) is described in subparagraph (A)(i) and is
modified in a manner that such property (after such
modification) has an increase in nameplate capacity
of not less than 5 kilowatt hours,
such property shall be treated as described in subparagraph
(A)(i) except that the basis of any existing property prior
to such modification shall not be taken into account for
purposes of this section. In the case of any property to
which this subparagraph applies, subparagraph (D) shall
be applied by substituting ‘modification’ for ‘construction’.
‘‘(C) THERMAL ENERGY STORAGE PROPERTY.—
‘‘(i) IN GENERAL.—Subject to clause (ii), for purposes of this paragraph, the term ‘thermal energy storage property’ means property comprising a system
which—
‘‘(I) is directly connected to a heating, ventilation, or air conditioning system,
‘‘(II) removes heat from, or adds heat to, a
storage medium for subsequent use, and
‘‘(III) provides energy for the heating or cooling
of the interior of a residential or commercial
building.
‘‘(ii) EXCLUSION.—The term ‘thermal energy storage property’ shall not include—
‘‘(I) a swimming pool, ‘‘(II) combined heat and power system property, or
‘‘(III) a building or its structural components.
‘‘(D) TERMINATION.—The term ‘energy storage technology’ shall not include any property the construction
of which begins after December 31, 2024.
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‘‘(7) QUALIFIED BIOGAS PROPERTY.—
‘‘(A) IN GENERAL.—The term ‘qualified biogas property’
means property comprising a system which—
‘‘(i) converts biomass (as defined in section
45K(c)(3), as in effect on the date of enactment of
this paragraph) into a gas which—
‘‘(I) consists of not less than 52 percent
methane by volume, or
‘‘(II) is concentrated by such system into a
gas which consists of not less than 52 percent
methane, and
‘‘(ii) captures such gas for sale or productive use,
and not for disposal via combustion.
‘‘(B) INCLUSION OF CLEANING AND CONDITIONING PROPERTY.—The term ‘qualified biogas property’ includes any
property which is part of such system which cleans or
conditions such gas.
‘‘(C) TERMINATION.—The term ‘qualified biogas property’ shall not include any property the construction of
which begins after December 31, 2024.
‘‘(8) MICROGRID CONTROLLER.—
‘‘(A) IN GENERAL.—The term ‘microgrid controller’
means equipment which is—
‘‘(i) part of a qualified microgrid, and
‘‘(ii) designed and used to monitor and control the
energy resources and loads on such microgrid.
‘‘(B) QUALIFIED MICROGRID.—The term ‘qualified
microgrid’ means an electrical system which—
‘‘(i) includes equipment which is capable of generating not less than 4 kilowatts and not greater than
20 megawatts of electricity,
‘‘(ii) is capable of operating—
‘‘(I) in connection with the electrical grid and
as a single controllable entity with respect to such
grid, and
‘‘(II) independently (and disconnected) from
such grid, and
‘‘(iii) is not part of a bulk-power system (as defined
in section 215 of the Federal Power Act (16 U.S.C.
824o)).
‘‘(C) TERMINATION.—The term ‘microgrid controller’
shall not include any property the construction of which
begins after December 31, 2024.’’.
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(4) DENIAL OF DOUBLE BENEFIT FOR QUALIFIED BIOGAS PROPERTY.—Section 45(e) is amended by adding at the end the
following new paragraph:
‘‘(12) COORDINATION WITH ENERGY CREDIT FOR QUALIFIED
BIOGAS PROPERTY.—The term ‘qualified facility’ shall not include
any facility which produces electricity from gas produced by
qualified biogas property (as defined in section 48(c)(7)) if a credit is allowed under section 48 with respect to such property
for the taxable year or any prior taxable year.’’.
(5) PUBLIC UTILITY PROPERTY.—Paragraph (2) of section
50(d) is amended—
(A) by adding after the first sentence the following
new sentence: ‘‘At the election of a taxpayer, this paragraph
shall not apply to any energy storage technology (as defined
in section 48(c)(6)), provided—’’, and
(B) by adding the following new subparagraphs:
‘‘(A) no election under this paragraph shall be permitted if the making of such election is prohibited by
a State or political subdivision thereof, by any agency or
instrumentality of the United States, or by a public service
or public utility commission or other similar body of any
State or political subdivision that regulates public utilities
as described in section 7701(a)(33)(A),
‘‘(B) an election under this paragraph shall be made
separately with respect to each energy storage technology
by the due date (including extensions) of the Federal tax
return for the taxable year in which the energy storage
technology is placed in service by the taxpayer, and once
made, may be revoked only with the consent of the Secretary, and
‘‘(C) an election shall not apply with respect to any
energy storage technology if such energy storage technology
has a maximum capacity equal to or less than 500 kilowatt
hours.’’.
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(g) FUEL CELLS USING ELECTROMECHANICAL PROCESSES.—
(1) IN GENERAL.—Section 48(c)(1) is amended—
(A) in subparagraph (A)(i)—
(i) by inserting ‘‘or electromechanical’’ after
‘‘electrochemical’’, and
(ii) by inserting ‘‘(1 kilowatt in the case of a fuel
cell power plant with a linear generator assembly)’’
after ‘‘0.5 kilowatt’’, and
(B) in subparagraph (C)—
(i) by inserting ‘‘, or linear generator assembly,’’
after ‘‘a fuel cell stack assembly’’, and
(ii) by inserting ‘‘or electromechanical’’ after
‘‘electrochemical’’.
(2) LINEAR GENERATOR ASSEMBLY LIMITATION.—Section
48(c)(1) is amended by redesignating subparagraph (D) as
subparagraph (E) and by inserting after subparagraph (C) the
following new subparagraph:
‘‘(D) LINEAR GENERATOR ASSEMBLY.—The term ‘linear
generator assembly’ does not include any assembly which
contains rotating parts.’’.
(h) DYNAMIC GLASS.—Section 48(a)(3)(A)(ii) is amended by
inserting ‘‘, or electrochromic glass which uses electricity to change
its light transmittance properties in order to heat or cool a structure,’’ after ‘‘sunlight’’.
(i) COORDINATION WITH LOW INCOME HOUSING TAX CREDIT.—
Paragraph (3) of section 50(c) is amended—
(1) by striking ‘‘and’’ at the end of subparagraph (A),
(2) by striking the period at the end of subparagraph (B)
and inserting ‘‘, and’’, and
(3) by adding at the end the following new subparagraph:
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‘‘(C) paragraph (1) shall not apply for purposes of determining eligible basis under section 42.’’.
(j) INTERCONNECTION PROPERTY.—Section 48(a), as amended
by the preceding provisions of this Act, is amended by adding
at the end the following new paragraph:
‘‘(8) INTERCONNECTION PROPERTY.— ‘‘(A) IN GENERAL.—For purposes of determining the
credit under subsection (a), energy property shall include
amounts paid or incurred by the taxpayer for qualified
interconnection property in connection with the installation
of energy property (as defined in paragraph (3)) which
has a maximum net output of not greater than 5 megawatts
(as measured in alternating current), to provide for the
transmission or distribution of the electricity produced or
stored by such property, and which are properly chargeable
to the capital account of the taxpayer.
‘‘(B) QUALIFIED INTERCONNECTION PROPERTY.—The
term ‘qualified interconnection property’ means, with
respect to an energy project which is not a microgrid controller, any tangible property—
‘‘(i) which is part of an addition, modification, or
upgrade to a transmission or distribution system which
is required at or beyond the point at which the energy
project interconnects to such transmission or distribution system in order to accommodate such interconnection,
‘‘(ii) either—
‘‘(I) which is constructed, reconstructed, or
erected by the taxpayer, or
‘‘(II) for which the cost with respect to the
construction, reconstruction, or erection of such
property is paid or incurred by such taxpayer,
and
‘‘(iii) the original use of which, pursuant to an
interconnection agreement, commences with a utility.
‘‘(C) INTERCONNECTION AGREEMENT.—The term ‘interconnection agreement’ means an agreement with a utility
for the purposes of interconnecting the energy property
owned by such taxpayer to the transmission or distribution
system of such utility.
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‘‘(D) UTILITY.—For purposes of this paragraph, the
term ‘utility’ means the owner or operator of an electrical
transmission or distribution system which is subject to
the regulatory authority of a State or political subdivision
thereof, any agency or instrumentality of the United States,
a public service or public utility commission or other similar
body of any State or political subdivision thereof, or the
governing or ratemaking body of an electric cooperative.
‘‘(E) SPECIAL RULE FOR INTERCONNECTION PROPERTY.—
In the case of expenses paid or incurred for interconnection
property, amounts otherwise chargeable to capital account
with respect to such expenses shall be reduced under rules
similar to the rules of section 50(c).’’.
(k) ENERGY PROJECTS, WAGE REQUIREMENTS, AND APPRENTICESHIP REQUIREMENTS.—Section 48(a), as amended by the preceding
provisions of this Act, is amended by adding at the end the following
new paragraphs: ‘‘(9) INCREASED CREDIT AMOUNT FOR ENERGY PROJECTS.— ‘‘(A) IN GENERAL.— ‘‘(i) RULE.—In the case of any energy project which
satisfies the requirements of subparagraph (B), the
amount of the credit determined under this subsection
(determined after the application of paragraphs (1)
through (8) and without regard to this clause) shall
be equal to such amount multiplied by 5.
‘‘(ii) ENERGY PROJECT DEFINED.—For purposes of
this subsection, the term ‘energy project’ means a
project consisting of one or more energy properties
that are part of a single project.
‘‘(B) PROJECT REQUIREMENTS.—A project meets the
requirements of this subparagraph if it is one of the following:
‘‘(i) A project with a maximum net output of less
than 1 megawatt of electrical (as measured in alternating current) or thermal energy.
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that are part of a single project.
‘‘(B) PROJECT REQUIREMENTS.—A project meets the
requirements of this subparagraph if it is one of the following:
‘‘(i) A project with a maximum net output of less
than 1 megawatt of electrical (as measured in alternating current) or thermal energy.
‘‘(ii) A project the construction of which begins
before the date that is 60 days after the Secretary
publishes guidance with respect to the requirements
of paragraphs (10)(A) and (11).
‘‘(iii) A project which satisfies the requirements
of paragraphs (10)(A) and (11).
‘‘(10) PREVAILING WAGE REQUIREMENTS.—
‘‘(A) IN GENERAL.—The requirements described in this
subparagraph with respect to any energy project are that
the taxpayer shall ensure that any laborers and mechanics
employed by the taxpayer or any contractor or subcontractor in—
‘‘(i) the construction of such energy project, and
‘‘(ii) for the 5-year period beginning on the date
such project is originally placed in service, the alteration or repair of such project,
shall be paid wages at rates not less than the prevailing
rates for construction, alteration, or repair of a similar
character in the locality in which such project is located
as most recently determined by the Secretary of Labor,
in accordance with subchapter IV of chapter 31 of title
40, United States Code. Subject to subparagraph (C), for
purposes of any determination under paragraph (9)(A)(i)
for the taxable year in which the energy project is placed
in service, the taxpayer shall be deemed to satisfy the
requirement under clause (ii) at the time such project is
placed in service.
‘‘(B) CORRECTION AND PENALTY RELATED TO FAILURE
TO SATISFY WAGE REQUIREMENTS.—Rules similar to the
rules of section 45(b)(7)(B) shall apply.
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‘‘(C) RECAPTURE.—The Secretary shall, by regulations
or other guidance, provide for recapturing the benefit of
any increase in the credit allowed under this subsection
by reason of this paragraph with respect to any project
which does not satisfy the requirements under subparagraph (A) (after application of subparagraph (B)) for the
period described in clause (ii) of subparagraph (A) (but
which does not cease to be investment credit property
within the meaning of section 50(a)). The period and percentage of such recapture shall be determined under
rules similar to the rules of section 50(a).
‘‘(11) APPRENTICESHIP REQUIREMENTS.—Rules similar to the
rules of section 45(b)(8) shall apply.’’.
(l) DOMESTIC CONTENT; PHASEOUT FOR ELECTIVE PAYMENT.—
Section 48(a), as amended by the preceding provisions of this Act,
is amended by adding at the end the following new paragraphs:
‘‘(12) DOMESTIC CONTENT BONUS CREDIT AMOUNT.—
‘‘(A) IN GENERAL.—In the case of any energy project
which satisfies the requirement under subparagraph (B),
for purposes of applying paragraph (2) with respect to
such property, the energy percentage shall be increased
by the applicable credit rate increase.
‘‘(B) REQUIREMENT.—Rules similar to the rules of section 45(b)(9)(B) shall apply.
‘‘(C) APPLICABLE CREDIT RATE INCREASE.—For purposes
of subparagraph (A), the applicable credit rate increase
shall be—
‘‘(i) in the case of an energy project which does
not satisfy the requirements of paragraph (9)(B), 2
percentage points, and
‘‘(ii) in the case of an energy project which satisfies
the requirements of paragraph (9)(B), 10 percentage
points.
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‘‘(13) PHASEOUT FOR ELECTIVE PAYMENT.—In the case of
a taxpayer making an election under section 6417 with respect
to a credit under this section, rules similar to the rules of
section 45(b)(10) shall apply.’’.
(m) SPECIAL RULE FOR PROPERTY FINANCED BY TAX-EXEMPT
BONDS.—Section 48(a)(4) is amended to read as follows:
‘‘(4) SPECIAL RULE FOR PROPERTY FINANCED BY TAX-EXEMPT
BONDS.—Rules similar to the rule under section 45(b)(3) shall
apply for purposes of this section.’’.
(n) TREATMENT OF CERTAIN CONTRACTS INVOLVING ENERGY
STORAGE.—Section 7701(e) is amended—
(1) in paragraph (3)—
(A) in subparagraph (A)(i), by striking ‘‘or’’ at the end
of subclause (II), by striking ‘‘and’’ at the end of subclause
(III) and inserting ‘‘or’’, and by adding at the end the
following new subclause:
‘‘(IV) the operation of a storage facility, and’’,
and
(B) by adding at the end the following new subparagraph:
‘‘(F) STORAGE FACILITY.—For purposes of subparagraph
(A), the term ‘storage facility’ means a facility which uses
energy storage technology within the meaning of section
48(c)(6).’’, and
(2) in paragraph (4), by striking ‘‘or water treatment works
facility’’ and inserting ‘‘water treatment works facility, or storage facility’’.
(o) INCREASE IN CREDIT RATE FOR ENERGY COMMUNITIES.—
Section 48(a), as amended by the preceding provisions of this Act,
is amended by adding at the end the following new paragraph:
‘‘(14) INCREASE IN CREDIT RATE FOR ENERGY COMMUNITIES.—
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‘‘(A) IN GENERAL.—In the case of any energy project
that is placed in service within an energy community (as
defined in section 45(b)(11)(B), as applied by substituting
‘energy project’ for ‘qualified facility’ each place it appears),
for purposes of applying paragraph (2) with respect to
energy property which is part of such project, the energy
percentage shall be increased by the applicable credit rate
increase.
‘‘(B) APPLICABLE CREDIT RATE INCREASE.—For purposes
of subparagraph (A), the applicable credit rate increase
shall be equal to—
‘‘(i) in the case of any energy project which does
not satisfy the requirements of paragraph (9)(B), 2
percentage points, and
‘‘(ii) in the case of any energy project which satisfies the requirements of paragraph (9)(B), 10 percentage points.’’.
(p) REGULATIONS.—Section 48(a), as amended by the preceding
provisions of this Act, is amended by adding at the end the following
new paragraph:
‘‘(15) REGULATIONS AND GUIDANCE.—The Secretary shall
issue such regulations or other guidance as the Secretary determines necessary to carry out the purposes of this subsection,
including regulations or other guidance which provides for
requirements for recordkeeping or information reporting for
purposes of administering the requirements of this subsection.’’.
(q) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in paragraphs (2)
and (3), the amendments made by this section shall apply
to property placed in service after December 31, 2021.
(2) OTHER PROPERTY.—The amendments made by subsections (f), (g), (h), (i), (j), (l), (n), and (o) shall apply to
property placed in service after December 31, 2022.
(3) SPECIAL RULE FOR PROPERTY FINANCED BY TAX-EXEMPT
BONDS.—The amendments made by subsection (m) shall apply
to property the construction of which begins after the date
of enactment of this Act.
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SEC. 13103. INCREASE IN ENERGY CREDIT FOR SOLAR AND WIND
FACILITIES PLACED IN SERVICE IN CONNECTION WITH
LOW-INCOME COMMUNITIES.
(a) IN GENERAL.—Section 48 is amended by adding at the
end the following new subsection:
‘‘(e) SPECIAL RULES FOR CERTAIN SOLAR AND WIND FACILITIES
PLACED IN SERVICE IN CONNECTION WITH LOW-INCOME COMMUNITIES.—
‘‘(1) IN GENERAL.—In the case of any qualified solar and
wind facility with respect to which the Secretary makes an
allocation of environmental justice solar and wind capacity
limitation under paragraph (4)—
‘‘(A) the energy percentage otherwise determined under
paragraph (2) or (5) of subsection (a) with respect to any
eligible property which is part of such facility shall be
increased by— ‘(i) in the case of a facility described in subclause
(I) of paragraph (2)(A)(iii) and not described in subclause (II) of such paragraph, 10 percentage points,
and
‘‘(ii) in the case of a facility described in subclause
(II) of paragraph (2)(A)(iii), 20 percentage points, and
‘‘(B) the increase in the credit determined under subsection (a) by reason of this subsection for any taxable
year with respect to all property which is part of such
facility shall not exceed the amount which bears the same
ratio to the amount of such increase (determined without
regard to this subparagraph) as—
‘‘(i) the environmental justice solar and wind
capacity limitation allocated to such facility, bears to
‘‘(ii) the total megawatt nameplate capacity of such
facility, as measured in direct current.
‘‘(2) QUALIFIED SOLAR AND WIND FACILITY.—For purposes
of this subsection—
‘‘(A) IN GENERAL.—The term ‘qualified solar and wind
facility’ means any facility—
‘‘(i) which generates electricity solely from property
described in section 45(d)(1) or in clause (i) or (vi)
of subsection (a)(3)(A),
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PART 1—CLEAN ELECTRICITY AND REDUCING CARBON EMISSIONS
‘‘(ii) which has a maximum net output of less than
5 megawatts (as measured in alternating current), and
‘‘(iii) which—
‘‘(I) is located in a low-income community (as
defined in section 45D(e)) or on Indian land (as
defined in section 2601(2) of the Energy Policy
Act of 1992 (25 U.S.C. 3501(2))), or
‘‘(II) is part of a qualified low-income residential building project or a qualified low-income economic benefit project.
‘‘(B) QUALIFIED LOW-INCOME RESIDENTIAL BUILDING
PROJECT.—A facility shall be treated as part of a qualified
low-income residential building project if—
‘‘(i) such facility is installed on a residential rental
building which participates in a covered housing program (as defined in section 41411(a) of the Violence
Against Women Act of 1994 (34 U.S.C. 12491(a)(3)),
a housing assistance program administered by the
Department of Agriculture under title V of the Housing
Act of 1949, a housing program administered by a
tribally designated housing entity (as defined in section
4(22) of the Native American Housing Assistance and
Self-Determination Act of 1996 (25 U.S.C. 4103(22)))
or such other affordable housing programs as the Secretary may provide, and
‘‘(ii) the financial benefits of the electricity produced by such facility are allocated equitably among
the occupants of the dwelling units of such building.
‘‘(C) QUALIFIED LOW-INCOME ECONOMIC BENEFIT
PROJECT.—A facility shall be treated as part of a qualified
low-income economic benefit project if at least 50 percent
of the financial benefits of the electricity produced by such
facility are provided to households with income of—
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