,,ii #aacth ,,congress #b;d ,session ,s4 #bbhg ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,may #e1 #bjad ,mr4 ,rockefeller 7for himself and ,mr4 ,walsh7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to facilitate the development and commercial deployment of carbon capture and sequestration technologies1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,carbon ,capture and ,sequestration ,deployment ,act of #bjad4 ,i ,carbon ,capture and ,sequestration ,innovation ,program #aja4 ,partnerships for carbon capture and sequestration 7a7 ,establishment of program 7#a7 ,in general ,not later than #a year after the date of enactment of this ,act1 the ,secretary of ,energy 7referred to in this ,act as the ,secretary7 shall establish a cooperative industry-government research and development program1 in addition to and in cooperation with the carbon capture and sequestration research and development program of the ,office of ,fossil ,energy1 to demonstrate novel and innovative technologies-- 7,a7 to capture or prevent carbon dioxide emissions from carbon-based fuels2 7,b7 to enable the beneficial use of carbon dioxide2 or 7,c7 to enable the long-term storage of carbon dioxide4 7#b7 ,participation of national laboratories and universities ,the program-- 7,a7 shall include the participation of the ,national ,energy ,technology ,laboratory2 and 7,b7 may include the participation of other ,national ,laboratories1 institutions of higher education1 and other appropriate entities4 7b7 ,cost sharing ,for purposes of developing and demonstrating the technologies or approaches referred to in subsection 7a77#a7-- 7#a7 the ,secretary shall provide at least #hj percent of the cost of the development projects2 and 7#b7 the industry participant shall provide not more than #bj percent of the cost of the development projects4 7c7 ,authorization of appropriations ,there are authorized to be appropriated to the ,secretary to carry out this section-- 7#a7 #aaj1jjj1jjj for each of fiscal years #bjae through #bjai2 7#b7 #fj1jjj1jjj for each of fiscal years #bjbj through #bjbd2 and 7#c7 #cj1jjj1jjj for each of fiscal years #bjbe through #bjbi4 #ajb4 ,annual ,department of ,energy assessment 7a7 ,in general 7#a7 ,department of ,energy report ,not later than #a year after the date of enactment of this ,act and annually thereafter until the ,secretary determines that technology preventing the emission of1 capturing1 transporting1 permanently storing or sequestering1 or putting to beneficial use carbon dioxide is available to the commercial marketplace1 the ,secretary shall-- 7,a7 conduct an assessment in accordance with subsection 7b7 of the existing ,federal programs supporting the technology2 and 7,b7 submit to the appropriate authorizing and appropriating committees of ,congress a report on the results of the assessment4 7#b7 ,government ,accountability ,office review ,not later than #a year after the first report is provided to the appropriate authorizing and appropriating committees of ,congress under paragraph 7#a77;,b7 and subsequently as needed until technology preventing the emission of1 capturing1 transporting1 permanently storing or sequestering1 and putting to beneficial use carbon dioxide is available to the commercial marketplace1 the ,comptroller ,general of the ,united ,states shall conduct a review of the report described in paragraph 7#a77;,c7 in accordance with subsection 7c74 7b7 ,department of ,energy report requirements ,the ,secretary shall include in the report required under subsection 7a77#a77;,b7-- 7#a7 a detailed description of the existing programs1 including each major program area1 that conduct or support research1 development1 demonstration1 and deployment of technology-- 7,a7 to prevent the emission of carbon dioxide or to capture carbon dioxide from sources1 including fossil fuel-based power plants2 7,b7 to transport carbon dioxide2 7,c7 to store or sequester captured carbon dioxide permanently2 or 7,d7 to put captured carbon dioxide to beneficial use2 7#b7 an assessment1 based on ,federal ,government laboratory research experience1 available industry research experience1 and such other data and information as the ,secretary considers useful and appropriate1 to determine whether each major program area and principal projects within the areas described in paragraph 7#a7 are designed to1 and will advance fundamental knowledge or achieve significant technical advancement and materially improve the technology base to effectively address the prevention of carbon dioxide emissions or capture of carbon dioxide or the transport1 permanent storage1 or beneficial use of captured carbon dioxide2 and 7#c7 an assessment of the estimated timeframe and costs of the ,secretary necessary to reasonably conclude that technology will be available to the commercial marketplace4 7c7 ,government ,accountability ,office review requirements ,the ,comptroller ,general of the ,united ,states shall include in the review required under subsection 7a77#b7-- 7#a7 an analysis of the estimated timeframes and costs of the ,secretary1 as reported pursuant to subsection 7b77#c72 7#b7 any recommendations that the ,comptroller ,general of the ,united ,states considers appropriate and useful to improve the likelihood of achieving technological advancements to mitigate carbon dioxide emissions or to expedite the availability of carbon capture and sequestration technology for the commercial marketplace2 7#c7 an assessment of any legal or regulatory impediment by any ,federal agency or department that has arisen in relation to the deployment of carbon capture and storage technology1 including any delays in the permitting of the technology or the construction or operation of any facility2 and 7#d7 any other analyses the ,comptroller ,general of the ,united ,states considers necessary or appropriate4 7d7 ,budget request report ,in the budget requests for each of fiscal years #bjaf through #bjcj1 the ,president shall include in the budget request of the ,secretary for the ,fossil ,energy ,program a report that assesses-- 7#a7 the progress of the ,secretary in implementing the recommendations of the ,comptroller ,general of the ,united ,states and compares the estimated costs of completing implementation of those recommendations to the requested budget levels2 and 7#b7 the progress made for the preceding fiscal year toward achieving the goals of the program for which funding is requested4 ,,ii ,carbon dioxide sequestration credit #bja4 ,modifications to carbon dioxide sequestration credit 7a7 ,allocation and certification of credit 7#a7 ,in general ,subsection 7e7 of section #de,q of the ,internal ,revenue ,code of #aihf is amended to read as follows3 7e7 ,limitation 7#a7 ,allocation limitation ,no credit shall be allowed under subsection 7a7 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-- 7,a7 the portion of the national limitation allocated with respect to such carbon capture equipment under subsection 7f71 over 7,b7 the amount of qualified carbon dioxide captured by such carbon capture equipment during periods before ,august #a1 #bjae1 for which a credit under subsection 7a7 was allowed4 7#b7 ,national limitation ,for purposes of paragraph 7#a77;,a71 the national limitation is the excess of-- 7,a7 #ge1jjj1jjj metric tons of qualified carbon dioxide1 over 7,b7 the number of metric tons of qualified carbon dioxide captured before ,august #a1 #bjae1 for which a credit under subsection 7a7 was allowed4 4 7#b7 ,allocation and certification ,section #de,q of such ,code is amended by adding at the end the following new subsection3 7f7 ,allocation for and certification of carbon capture projects 7#a7 ,establishment of procedures ,not later than ,july #a1 #bjae1 the ,secretary shall establish1 by regulation1 processes and procedures-- 7,a7 for allocating the national limitation under subsection 7e77#b7 to projects for placing carbon capture equipment in service at qualified facilities1 and 7,b7 for certifying projects for which an allocation has been made under subparagraph 7,a74 7#b7 ,allocations 7,a7 ,application ,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 regulations4 7,b7 ,priority ,the ,secretary shall rank applications received under subparagraph 7,a7 in the following order3 7i7 ,applicants with applications received by the ,secretary on an earlier date shall be given higher priority than applicants with applications received on a later date4 ,for purposes of this clause1 any application received before the date that is #cj days after the procedures and processes described in paragraph 7#a7 are established shall be considered to have been received on such date4 7ii7 ,in the case of applications received on the same date1 those applicants concurrently applying for certification shall be given higher priority4 7iii7 ,in the case of applications received on the same date and concurrently applying for certification1 those projects with the earlier date by which construction commenced shall be given higher priority4 7,c7 ,allocation to applicants ,subject to subparagraph 7,d71 the ,secretary shall allocate tonnage to each applicant-- 7i7 based on the amount requested on the application1 and 7ii7 in order of the rank of the application under subparagraph 7,b71 until the amount of tonnage available under this section is exhausted4 ,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 recaptured4 7,d7 ,limitation ,the ,secretary may not allocate to any project more than the lesser of-- 7i7 the number of metric tons of qualified carbon dioxide projected to be captured at the qualified facility under the project during the #aj-year period beginning on the date on which such project is placed in service1 7ii7 the number of metric tons of qualified carbon dioxide projected to be captured at the qualified facility under the project-- 7,i7 which are subject to a written1 binding contract for disposal in secure geological storage 7whether or not used as a tertiary injectant71 or 7,,ii7 for which there is a plan for such disposal by the applicant1 or 7iii7 #ae1jjj1jjj metric tons of qualified carbon dioxide4 7,e7 ,reduction for prior credits ,the amount of any allocation under subparagraph 7,c7 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 #a1 #bjae1 for which a credit was allowed under subsection 7a74 7#c7 ,certification 7,a7 ,in general ,no credit shall be allowed under subsection 7a7 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 paragraph4 7,b7 ,application for certification ,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 require4 ,such application shall be submitted-- 7i7 not later than-- 7,i7 #f months after the date on which such project receives an allocation1 and 7,,ii7 #cj days after the later of the date on which the regulations1 processes1 and procedures are established under paragraph 7#a7 or the construction start date1 and 7ii7 not earlier than the construction start date4 ,for purposes of this subparagraph1 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 #e percent or more of the total cost of the project has been spent4 7,c7 ,revocation of certification 7i7 ,materially inaccurate representations ,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 project4 7ii7 ,failure to timely place equipment in service ,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-- 7,i7 before the date which is #e years after the date on which the allocation was issued1 in the case of a new industrial facility1 or 7,,ii7 before the date which is #c years after the date on which the allocation was issued1 in the case of a modification of an existing industrial facility4 7,d7 ,reallocation ,in any case-- 7i7 in which a certification is revoked under subparagraph 7,c71 or 7ii7 in which a taxpayer to whom an allocation is made under paragraph 7#b7 fails to obtain certification for a project under this paragraph1 the amount of national limitation which was allocated to such project under paragraph 7#b7 shall be reallocated under such rules as established by the ,secretary under regulations4 7#d7 ,public disclosure 7,a7 ,in general ,the ,secretary shall1 within #cj days of making any allocation1 certification1 revocation1 or change in the ranking of projects1 publicly disclose the amount of such allocation1 a description of the project for which such allocation1 certification1 or revocation was made1 and the change in the ranking of projects1 as the case may be4 7,b7 ,annual report ,the ,secretary shall issue an annual report summarizing credits allocated and available for allocation4 4 7#c7 ,conforming amendments 7,a7 ,paragraph 7#b7 of section #de,q7c7 of such ,code is amended by inserting which is part of a project which is certified under subsection 7f77#c7 after carbon capture equipment4 7,b7 ,paragraph 7#c7 of section #de,q7c7 of such ,code is amended by striking which and inserting at which such carbon capture equipment4 7b7 #aj-,year credit limitation ,section #de,q7a7 of the ,internal ,revenue ,code of #aihf is amended-- 7#a7 in paragraph 7#a77;,a71 by inserting during the #aj-year period beginning on the later of the date on which the carbon capture equipment described in subsection 7c77#a7 is placed in service or the date on which the project with respect to such carbon capture equipment was certified under subsection 7f77#c7 after qualified facility1 and 7#b7 in paragraph 7#b77;,a71 by inserting during the #aj-year period beginning on the later of the date on which the carbon capture equipment described in subsection 7c77#a7 is placed in service or the date on which the project with respect to such carbon capture equipment was certified under subsection 7f77#c7 after qualified facility4 7c7 ,definition of carbon capture equipment ,section #de,q7d7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new paragraph3 7#h7 ,carbon capture equipment ,the term carbon capture equipment means equipment to capture and pressurize qualified carbon dioxide4 4 7d7 ,credit allowed to taxpayer performing carbon capture 7#a7 ,in general ,paragraph 7#e7 of section #de,q7d7 of the ,internal ,revenue ,code of #aihf is amended to read as follows3 7#e7 ,person to whom credit is allowable 7,a7 ,in general ,except as provided in subparagraph 7,b7 or in regulations prescribed by the ,secretary1 any credit under this section shall be allowed to the taxpayer who-- 7i7 captures the qualified carbon dioxide1 and 7ii7 through contract or otherwise1 disposes of the qualified carbon dioxide in a manner meeting the requirements of paragraph 7#a77;,b7 or 7#b77;,c7 of subsection 7a71 as the case may be4 7,b7 ,election to allow credit to person disposing carbon dioxide ,if the person described in subparagraph 7,a7 makes an election under this subparagraph in such manner as the ,secretary may prescribe by regulations1 the credit under this section-- 7i7 shall be allowable to the person that disposes of qualified carbon dioxide in a manner meeting the requirements of paragraph 7#a77;,b7 or 7#b77;,c7 of subsection 7a71 as the case may be1 and 7ii7 shall not be allowable to the person described in subparagraph 7,a74 4 7#b7 ,conforming amendments 7,a7 ,section #de,q7a7 of such ,code is amended by striking by the taxpayer each place it appears in paragraphs 7#a77;,b71 7#b77;,b71 and 7#b77;,c74 7,b7 ,section #de,q7c7 of such ,code1 as amended by subsection 7a71 is amended by striking paragraph 7#a7 and redesignating paragraphs 7#b7 and 7#c7 as paragraphs 7#a7 and 7#b71 respectively4 7e7 ,rules relating ,to credit recapture ,paragraph 7#f7 of section #de,q7d7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new sentence3 ,notwithstanding section #ghje7;b71 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 ,register44 7f7 ,effective date ,the amendments made by this section shall apply to carbon dioxide captured after ,july #ca1 #bjae4 ,,iii ,incentives for carbon capture and sequestration projects #cja4 ,federal financial incentives 7a7 ,eligible projects ,section #agjc of the ,energy ,policy ,act of #bjje 7#db ,u4,s4,c4 #afeac7 is amended-- 7#a7 in subsection 7b77#e71 by inserting and projects described in subsection 7f7 before the period at the end2 and 7#b7 by adding at the end the following3 7f7 ,carbon capture and sequestration projects 7#a7 ,definitions ,in this subsection3 7,a7 ,commercial scale ,the term commercial scale means1 with respect to an electric generation unit1 a unit that is designed-- 7i7 to generate and sell electric power directly to consumers or for resale2 and 7ii7 with a carbon dioxide capture system having a useful life of not fewer than #ae years4 7,b7 ,eligible unit ,the term eligible unit has the meaning given the term in section #hd;,e of the ,internal ,revenue ,code of #aihf4 7,c7 ,permanent geologic storage site ,the term permanent geologic storage site means a site that-- 7i7 the ,secretary determines is capable of storing carbon dioxide2 and 7ii7 is located in saline formations or other deep geologic storage structures4 7#b7 ,guarantees authorized ,notwithstanding subsection 7a77#b71 the ,secretary may make guarantees in amounts totaling not more than #bj1jjj1jjj1jjj for the following carbon capture and sequestration projects3 7,a7 ,the construction of new industrial facility units or commercial scale electric generation units that are eligible units utilizing carbon capture and sequestration technology4 7,b7 ,the retrofit of existing industrial facility units or commercial scale electric generation units that are eligible units providing for carbon capture and sequestration4 7,c7 ,the construction of carbon dioxide transmission pipelines to transport carbon dioxide from carbon capture and sequestration facilities to-- 7i7 sequestration sites2 or 7ii7 sites where the carbon dioxide will be used for hydrocarbon recovery4 7#c7 ,certification of eligible units ,a unit shall not be eligible to receive a guarantee under paragraph 7#b7 unless the ,secretary has certified the unit pursuant to a certification process established by the ,secretary by rule4 4 7b7 ,additional authorization ,section #agjd of the ,energy ,policy ,act of #bjje 7#db ,u4,s4,c4 #afead7 is amended by adding at the end the following3 7c7 ,additional authorization ,in addition to other amounts made available under this section1 there is authorized to be appropriated such sums as are necessary to cover the credit loan subsidy costs associated with the guarantees described in section #agjc7;f74 4 7c7 ,tax credits 7#a7 ,in general ,subpart ,e of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by inserting after section #dh;,d the following new section3 #dh;,e4 ,pioneer ,,ccs facilities 7a7 ,additional qualifying advanced coal project credit ,for purposes of section #df1 the qualifying advanced coal project credit for any taxable year shall also include an additional amount equal to the applicable percentage 7as determined under subsection 7c77 of the incremental cost for carbon capture and sequestration systems for eligible units1 determined as follows3 7#a7 ,for an eligible unit that is a new electric generation unit1 the incremental costs shall be the amount by which the costs incurred by the taxpayer for the unit exceed the costs of construction of a comparable supercritical pulverized coal unit without carbon capture and sequestration technology4 ,to establish incremental costs1 the taxpayer shall obtain a certified report of a qualified independent engineer estimating the differential construction cost between the eligible unit and a comparably sized supercritical pulverized coal unit without carbon capture and sequestration4 ,the independent engineer shall utilize cost estimates for supercritical pulverized coal units available from ,federal agencies1 academia and_/or the private sector1 appropriately adjusted for size1 fuel source and location4 ,an engineering design of a hypothetical supercritical pulverized coal unit shall not be required to establish the incremental costs4 7#b7 ,for an eligible unit that is a new industrial unit1 the incremental costs shall be the amount by which the costs incurred by the taxpayer for the unit exceed the costs of construction of a comparable industrial unit without carbon capture and sequestration4 7#c7 ,for an eligible unit that retrofits a carbon capture1 transportation1 and sequestration system on an existing generation or industrial unit1 the incremental cost shall be the construction costs incurred by the taxpayer for the carbon capture and sequestration system4 7#d7 ,the ,secretary of ,energy shall certify the amount of incremental cost for carbon capture and sequestration systems for eligible units in each case1 based on appropriate information4 7b7 ,eligible unit ,for purposes of this section1 the term eligible unit means an electric generation unit or industrial facility unit located in the ,united ,states that-- 7#a7 uses coal or petroleum coke for at least #ge percent of the fuel used by the unit1 7#b7 uses carbon capture technology to capture and sequester not less than #fe percent of the total carbon dioxide emissions of the unit1 7#c7 transports such captured carbon dioxide to a permanent geologic storage site in the ,united ,states or to a site on the ,north ,american continent for use for hydrocarbon recovery1 and 7#d7 provides for the permanent storage of such carbon dioxide in such site4 7c7 ,applicable percentage 7#a7 ,in general ,for purposes of subsection 7a71 the applicable percentage shall be the amount 7expressed as a percentage7 equal to the sum of-- 7,a7 #ae percent1 and 7,b7 the amount 7expressed as a percentage7 which bears the same ratio to #ae percent as the captured emissions percentage 7as determined under paragraph 7#b77 bears to #ce percent4 7#b7 ,carbon dioxide emissions captured ,for purposes of paragraph 7#a71 the captured emissions percentage shall be equal to-- 7,a7 the percentage of total carbon dioxide emissions of the eligible unit that is captured and sequestered1 minus 7,b7 #fe percentage points4 7d7 ,election ,no costs for which a credit has been provided under section #dh;,a or section #dh;,b shall be eligible for a credit under this section4 7e7 ,recapture ,the ,secretary shall1 by regulations1 provide for recapturing the benefit of any credit allowable under subsection 7a7 with respect to any unit that fails to attain or maintain the requirements under subsection 7b74 4 7#b7 ,clerical amendment ,the table of sections for subpart ,e of part ,,iv of subchapter ,a of chapter #a of such ,code is amended by inserting after the item relating to section #dh;,d the following new item3 #dh;,e4 ,pioneer ,,ccs facilities4 4 7d7 ,effective date ,the amendments made by this section shall apply with respect to-- 7#a7 new facilities placed in service after ,december #ca1 #bjad1 and before ,january #a1 #bjbf2 and 7#b7 the retrofit of existing facilities that commence operation with the retrofit after ,december #ca1 #bjad1 and before ,january #a1 #bjbf4