Sec. 5011. Clean energy production credit
2,042 words·~9 min read·
/bill/114/s/2089/pcs/section-5011A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Subpart D of part IV of subchapter A of chapter 1 is amended by adding at the end the following new section: For purposes of section 38, the clean energy production credit for any taxable year is an amount equal to the product of— the applicable credit rate (as determined under paragraph (2)), multiplied by the kilowatt hours of electricity— produced by the taxpayer at a qualified facility, and sold by the taxpayer to an unrelated person during the taxable year, or in the case of a qualified facility which is equipped with a metering device which is owned and operated by an unrelated person, sold, consumed, or stored by the taxpayer during the taxable year.
Except as provided in clause (ii), the applicable credit rate is 1.5 cents. The applicable credit rate shall be reduced (but not below zero) by an amount which bears the same ratio to the amount in effect under clause
(i)as the greenhouse gas emissions rate for the qualified facility bears to 372 grams of CO 2 e per KWh. If any amount determined under subparagraph (A)(ii) is not a multiple of 0.1 cent, such amount shall be rounded to the nearest multiple of 0.1 cent. For purposes of this section, the term greenhouse gas emissions rate means the amount of greenhouse gases emitted into the atmosphere by a qualified facility in the production of electricity, expressed as grams of CO 2 e per KWh. In the case of a qualified facility which produces electricity through combustion or gasification of a non-fossil fuel, the greenhouse gas emissions rate for such facility shall be equal to the net rate of greenhouse gases emitted into the atmosphere by such facility in the production of electricity, expressed as grams of CO 2 e per KWh. The Secretary, in consultation with the Administrator of the Environmental Protection Agency, shall, by regulation, establish safe-harbor greenhouse gas emissions rates for types or categories of qualified facilities, which a taxpayer may elect to use for purposes of this section. In establishing the safe-harbor greenhouse gas emissions rates for qualified facilities, the Secretary may round such rates to the nearest multiple of 37.2 grams of CO 2 e per KWh (or, in the case of a greenhouse gas emissions rate which is less than 18.6 grams of CO 2 e per KWh, by rounding such rate to zero). For purposes of this subsection, the amount of greenhouse gases emitted into the atmosphere by a qualified facility in the production of electricity shall not include any qualified carbon dioxide (as defined in section 48E(c)(3)(A)) that is captured and disposed of by the taxpayer. In the case of a calendar year beginning after 2018, the 1.5 cent amount in clause
(i)of subsection (a)(2)(A) shall be adjusted by multiplying such amount by the inflation adjustment factor for the calendar year in which the sale or use of the electricity occurs. If any amount as increased under the preceding sentence is not a multiple of 0.1 cent, such amount shall be rounded to the nearest multiple of 0.1 cent. The Secretary shall, not later than April 1 of each calendar year, determine and publish in the Federal Register the inflation adjustment factor for such calendar year in accordance with this subsection. The term inflation adjustment factor means, with respect to a calendar year, a fraction the numerator of which is the GDP implicit price deflator for the preceding calendar year and the denominator of which is the GDP implicit price deflator for the calendar year 1992. The term GDP implicit price deflator means the most recent revision of the implicit price deflator for the gross domestic product as computed and published by the Department of Commerce before March 15 of the calendar year. Subject to paragraph (3), if the Secretary, in consultation with the Secretary of Energy and the Administrator of the Environmental Protection Agency, determines that the annual greenhouse gas emissions from electrical production in the United States are equal to or less than 72 percent of the annual greenhouse gas emissions from electrical production in the United States for calendar year 2005, the amount of the clean energy production credit under subsection
(a)for any qualified facility placed in service during a calendar year described in paragraph
(2)shall be equal to the product of— the amount of the credit determined under subsection
(a)without regard to this subsection, multiplied by the phase-out percentage under paragraph (2). The phase-out percentage under this paragraph is equal to— for a facility placed in service during the first calendar year following the calendar year in which the determination described in paragraph
(1)is made, 75 percent, for a facility placed in service during the second calendar year following such determination year, 50 percent, for a facility placed in service during the third calendar year following such determination year, 25 percent, and for a facility placed in service during any calendar year subsequent to the year described in subparagraph (C), 0 percent. If the Secretary, in consultation with the Secretary of Energy and the Administrator of the Environmental Protection Agency, determines that the annual greenhouse gas emissions from electrical production in the United States for each year before calendar year 2026 are greater than the percentage specified in paragraph (1), then the determination described in such paragraph shall be deemed to have been made for calendar year 2025. In this section: 2 e per KW h The term CO means, with respect to any greenhouse gas, the equivalent carbon dioxide per kilowatt hour of electricity produced. 2 e per KWh The term greenhouse gas has the same meaning given such term under section 211(o)(1)(G) of the Clean Air Act ( 42 U.S.C. 7545(o)(1)(G) ), as in effect on the date of the enactment of this section. Subject to subparagraphs
(B)and (C), the term qualified facility means a facility which is— used for the generation of electricity, and originally placed in service after December 31, 2017. For purposes of this section, a facility shall only be treated as a qualified facility during the 10-year period beginning on the date the facility was originally placed in service. A qualified facility shall include either of the following in connection with a facility described in subparagraph (A)(i) that was previously placed in service, but only to the extent of the increased amount of electricity produced at the facility by reason of the following: A new unit placed in service after December 31, 2017. Any efficiency improvements or additions of capacity placed in service after December 31, 2017. The term qualified facility shall not include any facility for which— a renewable electricity production credit determined under section 45 is allowed under section 38 for the taxable year or any prior taxable year, an energy credit determined under section 48 is allowed under section 38 for the taxable year or any prior taxable year, or a clean energy investment credit determined under section 48E is allowed under section 38 for the taxable year or any prior taxable year. Not later than January 1, 2017, the Secretary, in consultation with the Administrator of the Environmental Protection Agency, shall issue final guidance regarding implementation of this section, including calculation of greenhouse gas emission rates for qualified facilities and determination of clean energy production credits under this section. Consumption or sales shall be taken into account under this section only with respect to electricity the production of which is within— the United States (within the meaning of section 638(1)), or a possession of the United States (within the meaning of section 638(2)). For purposes of subsection (a)(1)(B), the kilowatt hours of electricity produced by a taxpayer at a qualified facility shall include any production in the form of useful thermal energy by any combined heat and power system property within such facility. For purposes of this paragraph, the term combined heat and power system property has the same meaning given such term by section 48(c)(3) (without regard to subparagraphs (A)(iv), (B), and
(D)thereof). For purposes of subparagraph (A), the amount of kilowatt hours of electricity produced in the form of useful thermal energy shall be equal to the quotient of— the total useful thermal energy produced by the combined heat and power system property within the qualified facility, divided by the heat rate for such facility. For purposes of this subparagraph, the term heat rate means the amount of energy used by the qualified facility to generate 1 kilowatt hour of electricity, expressed as British thermal units per net kilowatt hour generated. In the case of a qualified facility in which more than 1 person has an ownership interest, except to the extent provided in regulations prescribed by the Secretary, production from the facility shall be allocated among such persons in proportion to their respective ownership interests in the gross sales from such facility. Persons shall be treated as related to each other if such persons would be treated as a single employer under the regulations prescribed under section 52(b). In the case of a corporation which is a member of an affiliated group of corporations filing a consolidated return, such corporation shall be treated as selling electricity to an unrelated person if such electricity is sold to such a person by another member of such group. Under regulations prescribed by the Secretary, rules similar to the rules of subsection
(d)of section 52 shall apply. In the case of an eligible cooperative organization, any portion of the credit determined under subsection
(a)for the taxable year may, at the election of the organization, be apportioned among patrons of the organization on the basis of the amount of business done by the patrons during the taxable year. An election under clause
(i)for any taxable year shall be made on a timely filed return for such year. Such election, once made, shall be irrevocable for such taxable year. Such election shall not take effect unless the organization designates the apportionment as such in a written notice mailed to its patrons during the payment period described in section 1382(d). The amount of the credit apportioned to any patrons under subparagraph (A)— shall not be included in the amount determined under subsection
(a)with respect to the organization for the taxable year, and shall be included in the amount determined under subsection
(a)for the first taxable year of each patron ending on or after the last day of the payment period (as defined in section 1382(d)) for the taxable year of the organization or, if earlier, for the taxable year of each patron ending on or after the date on which the patron receives notice from the cooperative of the apportionment. If the amount of the credit of a cooperative organization determined under subsection
(a)for a taxable year is less than the amount of such credit shown on the return of the cooperative organization for such year, an amount equal to the excess of— such reduction, over the amount not apportioned to such patrons under subparagraph
(A)for the taxable year, shall be treated as an increase in tax imposed by this chapter on the organization. Such increase shall not be treated as tax imposed by this chapter for purposes of determining the amount of any credit under this chapter. For purposes of this section, the term eligible cooperative means a cooperative organization described in section 1381(a) which is owned more than 50 percent by agricultural producers or by entities owned by agricultural producers. For this purpose an entity owned by an agricultural producer is one that is more than 50 percent owned by agricultural producers. . Section 38(b) is amended— in paragraph (35), by striking plus at the end, in paragraph (36), by striking the period at the end and inserting , plus , and by adding at the end the following new paragraph: the clean energy production credit determined under section 45S(a). . The table of sections for subpart D of part IV of subchapter A of chapter 1 is amended by adding at the end the following new item: Sec. 45S. Clean energy production credit. . The amendments made by this section shall apply to facilities placed in service after December 31, 2017.
Connectionstraces to 1
Traces to 1 document
U.S. Code
Citation graph
cites case law
Sec. 5011
Clean energy production credit
Cites 1Cited by 0 across 0 sources