Sec. 13103. Increase in energy credit for solar and wind facilities placed in service in connection with low-income communities
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Section 48 is amended by adding at the end the following new subsection: 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)— 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— 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 in the case of a facility described in subclause
(II)of paragraph (2)(A)(iii), 20 percentage points, and 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— the environmental justice solar and wind capacity limitation allocated to such facility, bears to the total megawatt nameplate capacity of such facility, as measured in direct current. For purposes of this subsection— The term qualified solar and wind facility means any facility— which generates electricity solely from property described in section 45(d)(1) or in clause
(i)or
(vi)of subsection (a)(3)(A), which has a maximum net output of less than 5 megawatts (as measured in alternating current), and which— 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 is part of a qualified low-income residential building project or a qualified low-income economic benefit project. A facility shall be treated as part of a qualified low-income residential building project if— 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 the financial benefits of the electricity produced by such facility are allocated equitably among the occupants of the dwelling units of such building. 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— less than 200 percent of the poverty line (as defined in section 36B(d)(3)(A)) applicable to a family of the size involved, or less than 80 percent of area median gross income (as determined under section 142(d)(2)(B)). For purposes of subparagraphs
(B)and (C), electricity acquired at a below-market rate shall not fail to be taken into account as a financial benefit. For purposes of this section, the term eligible property means energy property which— is part of a facility described in section 45(d)(1) for which an election was made under subsection (a)(5), or is described in clause
(i)or
(vi)of subsection (a)(3)(A), including energy storage technology (as described in subsection (a)(3)(A)(ix)) installed in connection with such energy property. Not later than 180 days after the date of enactment of this subsection, the Secretary shall establish a program to allocate amounts of environmental justice solar and wind capacity limitation to qualified solar and wind facilities. In establishing such program and to carry out the purposes of this subsection, the Secretary shall provide procedures to allow for an efficient allocation process, including, when determined appropriate, consideration of multiple projects in a single application if such projects will be placed in service by a single taxpayer. The amount of environmental justice solar and wind capacity limitation allocated by the Secretary under subparagraph
(A)during any calendar year shall not exceed the annual capacity limitation with respect to such year. For purposes of this paragraph, the term annual capacity limitation means 1.8 gigawatts of direct current capacity for each of calendar years 2023 and 2024, and zero thereafter. If the annual capacity limitation for any calendar year exceeds the aggregate amount allocated for such year under this paragraph, such limitation for the succeeding calendar year shall be increased by the amount of such excess. No amount may be carried under the preceding sentence to any calendar year after 2024 except as provided in section 48E(h)(4)(D)(ii). Paragraph
(1)shall not apply with respect to any property which is placed in service after the date that is 4 years after the date of the allocation with respect to the facility of which such property is a part. Any amount of environmental justice solar and wind capacity limitation which expires under clause
(i)during any calendar year shall be taken into account as an excess described in subparagraph
(D)(or as an increase in such excess) for such calendar year, subject to the limitation imposed by the last sentence of such subparagraph. The Secretary shall, by regulations or other guidance, provide for recapturing the benefit of any increase in the credit allowed under subsection
(a)by reason of this subsection with respect to any property which ceases to be property eligible for such increase (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). To the extent provided by the Secretary, such recapture may not apply with respect to any property if, within 12 months after the date the taxpayer becomes aware (or reasonably should have become aware) of such property ceasing to be property eligible for such increase, the eligibility of such property for such increase is restored. The preceding sentence shall not apply more than once with respect to any facility. . The amendments made by this section shall take effect on January 1, 2023.
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Sec. 13103
Increase in energy credit for solar and wind facilities placed in service in connection with low-income communities
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