Sec. 4. Production credit for emerging energy technology
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Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section: For purposes of section 38, the emerging energy technology production credit determined under this section for any taxable year beginning in the credit period with respect to a qualified production facility of the taxpayer is an amount equal to the applicable percentage of the lesser of— the annual gross receipts of the taxpayer from the sale of electricity generated at the qualified production facility to an unrelated person (within the meaning of section 45(e)(4)) during such taxable year, or the product of— 150 percent of the national average wholesale price of a kilowatt hour of electricity in the calendar year which began 2 years prior to the calendar year in which such taxable year begins, multiplied by the number of kilowatt hours of electricity produced at the qualified production facility and sold to an unrelated person (within the meaning of section 45(e)(4)) during such taxable year.
For purposes of subsection (a), the applicable percentage is— in the case of a tier 1 facility, 60 percent, in the case of a tier 2 facility, 45 percent, in the case of a tier 3 facility, 30 percent, in the case of a tier 4 facility, 15 percent, and in the case of any other facility, zero percent. For purposes of this section— The term tier 1 facility means any qualified production facility which generates electricity from an individual energy production technology— described in subsection (d)(2)(A), and for which the market penetration level for the calendar year preceding the calendar year in which construction of such facility began is less than 0.75 percent.
The term tier 2 facility has the same meaning given the term tier 1 facility under clause (i), except that at least 0.75 percent but less than 1.5 percent shall be substituted for less than 0.75 percent . The term tier 3 facility has the same meaning given the term tier 1 facility under clause (i), except that at least 1.5 percent but less than 2.25 percent shall be substituted for less than 0.75 percent . The term tier 4 facility has the same meaning given the term tier 1 facility under clause (i), except that at least 2.25 percent but less than 3 percent shall be substituted for less than 0.75 percent .
For purposes of this paragraph, the term market penetration level means, with respect to any calendar year, the amount equal to the greater of— the amount (expressed as a percentage) equal to the quotient of— the sum of all electricity produced (expressed in terawatt hours) from the individual energy production technology by all qualified production facilities (as defined in subsection (d)(1), except that subparagraph
(D)of such subsection shall not apply) during such calendar year (as determined by the Secretary on the basis of data reported by the Energy Information Administration), divided by the total domestic power sector electricity production (expressed in terawatt hours) for such calendar year, or the amount determined under this subparagraph for the preceding calendar year. For purposes of this subsection and section 48D, the determination as to whether a facility qualifies as a tier 1, 2, 3, or 4 facility shall be— made during the calendar year in which construction of such facility begins, based on the determinations included in the report described in subparagraph (D)(i)(II) with respect to such calendar year, and contingent on the taxpayer maintaining a continuous program of construction or continuous efforts to advance towards completion of the facility. During the month of December of the calendar year which includes the date of enactment of this section, and during the month of December of each subsequent year, the Secretary of Energy (in consultation with the Secretary) shall publish an annual report which contains estimates with respect to the applicable market penetration level and tier for each individual energy production technology described in subsection (d)(2)(A) which has been used to generate electricity by any qualified production facility (as defined in subsection (d)(1), except that subparagraph
(D)of such subsection shall not apply) during such calendar year. During the month of February of each calendar year beginning after the date of enactment of this section, the Secretary of Energy (in consultation with the Secretary) shall publish an annual report which provides the final determination with respect to the applicable market penetration level and tier for each individual energy production technology described in subsection (d)(2)(A) which has been used to generate electricity by any qualified production facility (as defined in subsection (d)(1), except that subparagraph
(D)of such subsection shall not apply) during the preceding calendar year. In the case of a facility which began construction during a calendar year preceding the calendar year which includes the date of enactment of this section, for purposes of determining whether such facility qualifies as a tier 1, 2, 3, or 4 facility under subparagraph (C), the Secretary of Energy (in consultation with the Secretary) shall include, as part of the first report described in subclause
(II)which is published after the date of enactment of this section, the final determination with respect to the applicable market penetration level and tier for each individual energy production technology described in subsection (d)(2)(A) which has been used to generate electricity by any qualified production facility (as defined in subsection (d)(1), except that subparagraph
(D)of such subsection shall not apply) during such preceding calendar years as are determined by the Secretary to be relevant for purposes of the administration of this section. The Secretary of Energy (in consultation with the Secretary) shall issue such regulations or other guidance (as well as any subsequent updates to such regulations or guidance) as the Secretary of Energy determines necessary or appropriate to ensure that any qualified production facility or technology used for the production of electricity is classified within a single energy production technology for purposes of subsection (d)(2). In the case of any technology used for the production of electricity which may be classified within 2 or more different categories of energy production technology under such subsection, the Secretary of Energy shall make the determination as to the correct category with respect to such technology as rapidly as possible, with such determinations to be included in any report described in clause (i). For purposes of determining the amount applicable under subsection (a)(2)(A) with respect to any calendar year, the Secretary of Energy (in consultation with the Secretary) shall include in any report described in clause
(i)a determination with respect to the national average wholesale price of a kilowatt hour of electricity during such calendar year. For purposes of this section, the credit period with respect to any qualified production facility is the 10-year period beginning with the date the facility was originally placed in service. For purposes of this section, the term qualified production facility means any electric generating facility which— is located in the United States or a possession of the United States (as such terms are used in section 638), generates electricity using energy production technology, produces such electricity with an emissions rate less than 100g CO2-e per kWh, and is placed in service after the date of enactment of this section. For purposes of paragraph (1), each of the following shall be treated as an individual energy production technology: Traditional nuclear fission. Light water reactor-based advanced nuclear fission. Non-light water reactor-based advanced nuclear fission. Nuclear fusion. Concentrating solar thermal power. Silicon photovoltaic. Cadmium telluride and copper indium gallium selenide solar. Emerging photovoltaics. Enhanced geothermal. Hydrothermal. Marine energy. Fixed bottom offshore wind. Floating offshore wind. Traditional onshore wind. New onshore wind. Coal. Natural gas. Petroleum. Open-loop biomass. Closed-loop biomass. Hydropower. For purposes of clause
(i)of subparagraph (A), the term traditional nuclear fission means any nuclear fission which is not described in subclause
(II)or (III). For purposes of clause
(ii)of such subparagraph, the term light water reactor-based advanced nuclear fission shall include small modular light water reactors. For purposes of clause
(iii)of such subparagraph, the term non-light water reactor-based advanced nuclear fission means any advanced nuclear fission which is not included under clause
(ii)of such subparagraph. For purposes of clause
(iv)of subparagraph (A), only nuclear fusion for which net power is produced from the fusion reaction shall be included. For purposes of clause
(viii)of such subparagraph, the term emerging photovoltaics includes perovskite-based and perovskite-enhanced solar, quantum dots, organic photovoltaics, multi-junction tandem devices, and any photovoltaic solar technology not included under clause
(vii)of such subparagraph. For purposes of clause
(xi)of such subparagraph, the term marine energy has the same meaning given such term under section 632 of the Energy Independence and Security Act of 2007 ( 42 U.S.C. 17211 ). For purposes of clause
(xiv)of subparagraph (A), the term traditional onshore wind means any energy production technology of a design which is the same as or substantially similar to wind technology that has achieved megawatt scale or larger deployment in the United States as of the date of enactment of this section. For purposes of clause
(xv)of such subparagraph, the term new onshore wind means any energy production technology which is not included in clause
(xiv)of such subparagraph. For purposes of clause
(xix)of such subparagraph, the term open-loop biomass has the same meaning given such term under section 45(c)(3). For purposes of clause
(xx)of such subparagraph, the term closed-loop biomass has the same meaning given such term under section 45(c)(2). For purposes of paragraph (1)(C), the emissions rate shall not include— any emissions which are captured using carbon capture equipment, provided that any carbon oxide captured using such equipment is disposed of, used, or utilized in a manner consistent with the requirements under section 45Q, or in the case of electricity generated from any fossil fuel, any upstream or fugitive emissions, such as emissions related to the extraction, transportation, storage of such fuel. For purposes of paragraph (1)(C), in the case of any facility which generates electricity through combustion of a non-fossil fuel, the emissions rate shall be determined based on a lifecycle analysis. The term qualified production facility shall not include any facility for which, for the taxable year or any prior taxable year— electricity produced from such facility is taken into account for purposes of the credit allowed under section 45 or 45J, qualified carbon oxide captured by such facility is taken into account for purposes of the credit allowed under section 45Q, the basis of any property which is part of such facility is taken into account for purposes of the credit allowed under section 48, 48A, 48B, 48C, or 48D, or hydrogen produced from such facility is taken into account for purposes of the credit allowed under section 45V. With respect to any section described in clause (i), (ii), (iii), or
(iv)of subparagraph (A), no credit shall be allowed under such section for any taxable year with respect to any property for which a credit is allowed under this section for such taxable year or any prior taxable year. O2-e In this section, the term CO2-e means the quantity of a greenhouse gas that has a global warming potential equivalent to 1 metric ton of carbon dioxide, as determined under table A–1 of subpart A of part 98 of title 40, Code of Federal Regulations, as in effect on the date of enactment of this section. For purposes of this section, construction of a facility begins when— physical work of a significant nature begins, or during the year in which the taxpayer begins physical work, a facility has invested not less than— 2 percent of construction costs, or $50,000,000. For purposes of paragraph (1), any work performed— by the taxpayer, or for the taxpayer by other persons under a binding written contract which is entered into prior to the manufacture, construction, or production of the property for use by the taxpayer in the taxpayer’s trade or business (or for the taxpayer’s production of income), shall be taken into account in determining whether construction has begun. For purposes of this section, the term continuous program of construction means continuing physical work of a significant nature, as determined by the Secretary based upon relevant facts and circumstances. For purposes of this section, the term continuous efforts means making continuous efforts towards completion of the facility, as determined by the Secretary based upon relevant facts and circumstances. Rules similar to the rules of subsection (d)(2) of section 48D shall apply for purposes of this section. Not later than 18 months after the date of the enactment of this section, the Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section. . Section 38(b) of the Internal Revenue Code of 1986 is amended by striking plus at the end of paragraph (32), by striking the period at the end of paragraph
(33)and inserting , plus , and by adding at the end the following new paragraph: the emerging energy technology production credit determined under section 45U(a). . Section 501(c)(12)(I) of such Code, as amended by section 3(b), is amended by striking or 48D(d)(2) and inserting , 45U(f), or 48D(d)(2) . The table of sections for subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item: Sec. 45U. Electricity produced from emerging energy technology. . The amendments made by this section shall apply to electricity produced and sold in taxable years beginning after the date of the enactment of this Act.
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Sec. 4
Production credit for emerging energy technology
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