Sec. 201. Modifications to carbon dioxide sequestration credit
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Subsection
(e)of section 45Q of the Internal Revenue Code of 1986 is amended to read as follows: No credit shall be allowed under subsection
(a)with respect to qualified carbon dioxide captured by carbon capture equipment at a qualified facility for the amount of qualified carbon dioxide captured by such carbon capture equipment in excess of— the portion of the national limitation allocated with respect to such carbon capture equipment under subsection (f), over the amount of qualified carbon dioxide captured by such carbon capture equipment during periods before August 1, 2015, for which a credit under subsection
(a)was allowed. For purposes of paragraph (1)(A), the national limitation is the excess of— 75,000,000 metric tons of qualified carbon dioxide, over the number of metric tons of qualified carbon dioxide captured before August 1, 2015, for which a credit under subsection
(a)was allowed. . Section 45Q of such Code is amended by adding at the end the following new subsection: Not later than July 1, 2015, the Secretary shall establish, by regulation, processes and procedures— for allocating the national limitation under subsection (e)(2) to projects for placing carbon capture equipment in service at qualified facilities, and for certifying projects for which an allocation has been made under subparagraph (A). Each applicant for an allocation under this subsection shall submit an application to the Secretary under such terms and conditions as are established by the Secretary in regulations. The Secretary shall rank applications received under subparagraph
(A)in the following order: Applicants with applications received by the Secretary on an earlier date shall be given higher priority than applicants with applications received on a later date. For purposes of this clause, any application received before the date that is 30 days after the procedures and processes described in paragraph
(1)are established shall be considered to have been received on such date. In the case of applications received on the same date, those applicants concurrently applying for certification shall be given higher priority. In the case of applications received on the same date and concurrently applying for certification, those projects with the earlier date by which construction commenced shall be given higher priority. Subject to subparagraph (D), the Secretary shall allocate tonnage to each applicant— based on the amount requested on the application, and in order of the rank of the application under subparagraph (B), until the amount of tonnage available under this section is exhausted. Projects for which no or a partial allocation is made shall retain their ranking and shall be eligible to receive an allocation of tonnage previously allocated that is forfeited or recaptured. The Secretary may not allocate to any project more than the lesser of— the number of metric tons of qualified carbon dioxide projected to be captured at the qualified facility under the project during the 10-year period beginning on the date on which such project is placed in service, the number of metric tons of qualified carbon dioxide projected to be captured at the qualified facility under the project— which are subject to a written, binding contract for disposal in secure geological storage (whether or not used as a tertiary injectant), or for which there is a plan for such disposal by the applicant, or 15,000,000 metric tons of qualified carbon dioxide. The amount of any allocation under subparagraph
(C)to any project shall be reduced by the number of metric tons of carbon dioxide captured by the carbon capture equipment with respect to such project before August 1, 2015, for which a credit was allowed under subsection (a). No credit shall be allowed under subsection
(a)with respect to any project for using carbon capture equipment to capture qualified carbon dioxide at a qualified facility before the date on which such project is certified under this paragraph. Each project which is allocated a portion of the national limitation shall submit an application for certification to the Secretary containing such information as the Secretary may require. Such application shall be submitted— not later than— 6 months after the date on which such project receives an allocation, and 30 days after the later of the date on which the regulations, processes, and procedures are established under paragraph
(1)or the construction start date, and not earlier than the construction start date. For purposes of this subparagraph, the term construction start date means the earlier of the first date on which physical work on the project of a significant nature is undertaken or the date by which 5 percent or more of the total cost of the project has been spent. The Secretary may revoke a certification under this paragraph if the Secretary determines that an applicant has made a materially inaccurate representation with respect to the project. A certification under this paragraph shall be revoked in any case in which carbon capture equipment with respect to the project is not placed in service— before the date which is 5 years after the date on which the allocation was issued, in the case of a new industrial facility, or before the date which is 3 years after the date on which the allocation was issued, in the case of a modification of an existing industrial facility. In any case— in which a certification is revoked under subparagraph (C), or in which a taxpayer to whom an allocation is made under paragraph
(2)fails to obtain certification for a project under this paragraph, the amount of national limitation which was allocated to such project under paragraph
(2)shall be reallocated under such rules as established by the Secretary under regulations. The Secretary shall, within 30 days of making any allocation, certification, revocation, or change in the ranking of projects, publicly disclose the amount of such allocation, a description of the project for which such allocation, certification, or revocation was made, and the change in the ranking of projects, as the case may be. The Secretary shall issue an annual report summarizing credits allocated and available for allocation. . Paragraph
(2)of section 45Q(c) of such Code is amended by inserting which is part of a project which is certified under subsection (f)(3) after carbon capture equipment . Paragraph
(3)of section 45Q(c) of such Code is amended by striking which and inserting at which such carbon capture equipment . Section 45Q(a) of the Internal Revenue Code of 1986 is amended— in paragraph (1)(A), by inserting during the 10-year period beginning on the later of the date on which the carbon capture equipment described in subsection (c)(1) is placed in service or the date on which the project with respect to such carbon capture equipment was certified under subsection (f)(3) after qualified facility , and in paragraph (2)(A), by inserting during the 10-year period beginning on the later of the date on which the carbon capture equipment described in subsection (c)(1) is placed in service or the date on which the project with respect to such carbon capture equipment was certified under subsection (f)(3) after qualified facility . Section 45Q(d) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: The term carbon capture equipment means equipment to capture and pressurize qualified carbon dioxide. . Paragraph
(5)of section 45Q(d) of the Internal Revenue Code of 1986 is amended to read as follows: Except as provided in subparagraph
(B)or in regulations prescribed by the Secretary, any credit under this section shall be allowed to the taxpayer who— captures the qualified carbon dioxide, and through contract or otherwise, disposes of the qualified carbon dioxide in a manner meeting the requirements of paragraph (1)(B) or (2)(C) of subsection (a), as the case may be. If the person described in subparagraph
(A)makes an election under this subparagraph in such manner as the Secretary may prescribe by regulations, the credit under this section— shall be allowable to the person that disposes of qualified carbon dioxide in a manner meeting the requirements of paragraph (1)(B) or (2)(C) of subsection (a), as the case may be, and shall not be allowable to the person described in subparagraph (A). . Section 45Q(a) of such Code is amended by striking by the taxpayer each place it appears in paragraphs (1)(B), (2)(B), and (2)(C). Section 45Q(c) of such Code, as amended by subsection (a), is amended by striking paragraph
(1)and redesignating paragraphs
(2)and
(3)as paragraphs
(1)and (2), respectively. Paragraph
(6)of section 45Q(d) of the Internal Revenue Code of 1986 is amended by adding at the end the following new sentence: Notwithstanding section 7805(b), any regulation issued pursuant to this paragraph shall apply only with respect to qualified carbon dioxide captured or disposed of after the date on which such regulation is filed with the Federal Register. . The amendments made by this section shall apply to carbon dioxide captured after July 31, 2015.