,i  #aafth ,,congress  #ast ,session    
,h4 ,r4 #eebc  ,,in ,,the ,,house ,,of  
,,representatives  ,december #ai1       
#bjai,mr4 ,reed 7for himself1 ,mr4      
,panetta1 ,mr4 ,la,hood1 ,mr4 ,suozzi1  
,mr4 ,gottheimer1 and ,mr4 ,schweikert7 
introduced the following bill2 which was
 referred to the ,committee on ,ways and
 ,means  ,a ,,bill  ,to amend the       
,internal ,revenue ,code of #aihf to    
provide investment and production tax   
credits for emerging energy             
technologies1 and for other purposes4   
#a4 ,short title ,this ,act may be cited
 as the ,energy ,sector ,innovation     
,credit ,act of #bjai4  #b4 ,purposes   
,the energy sector innovation credit is 
a technology-neutral approach that would
 leverage new private investment in     
nascent clean technologies1 help        
cutting-edge technologies break into the
 market1 and then naturally phasedown as
 each technology proves commercial      
viability4 ,it could bring about the new
 technologies needed to quickly and     

cheaply reduce global emissions4 ,the   
innovation ,,esic incentivizes is key to
 a strong energy supply plus will help  
address the climate and environmental   
challenge of this generation4 ,the      
,united ,states must lead on clean      
energy technology development4  #c4     
,investment credit for emerging energy  
technology  7a7 ,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;,c the following new        
section3  #dh;,d4 ,emerging energy      
technology credit  7a7 ,in general ,for 
purposes of section #df1 the emerging   
energy technology credit for any taxable
 year is an amount equal to #cj percent 
of the basis of any qualified emerging  
energy property placed in service by the
 taxpayer during such taxable year4  7b7
 ,certain qualified progress expenditure
 rules made applicable ,rules similar to
 the rules of subsections 7c77#d7 and   
7d7 of section #df 7as in effect on the 

day before the enactment of the ,revenue
 ,reconciliation ,act of #aiij7 shall   
apply for purposes of this section4  7c7
 ,qualified emerging energy property    
,for purposes of this section-- 7#a7 ,in
 general ,the term qualified emerging   
energy property means property which is 
constructed1 reconstructed1 erected1 or 
acquired by the taxpayer1 and the       
original use of which commences with the
 taxpayer1 which is--  7,a7 a qualified 
production facility 7as defined in      
section #de,t7d71 determined without    
regard to paragraph 7#b7 thereof7 which 
is a tier #a facility 7as defined in    
section #de,t7e77#a771 or  7,b7 property
 which is placed in service at and used 
in connection with an existing electric 
generating facility which is a point    
source of air pollutants and which1 with
 respect to such facility--  7i7        
contains equipment which can separate   
and sequester-- 7,i7 not less than #fj  
percent of such facility's maximum      
hourly carbon oxide emission rate1 and  

7,,ii7 not less than #ajj1jjj metric    
tons of qualified carbon oxide 7as      
defined in section #de,q7c77 annually1  
and  7ii7 places such carbon oxide in   
secure geological storage 7as determined
 under section #de,q7f77#b774  7#b7     
,denial of double benefit ,such term    
shall not include--  7,a7 any property  
which1  7,b7 property any portion of    
which1 or  7,c7 property placed in      
service at and used in connection with a
 facility which1  has been treated as a 
qualified facility for purposes of      
section #de7;d71 as an advanced nuclear 
power facility for purposes of section  
#de;,j1 as a qualified facility for     
purposes of section #de,q1 as a         
qualified production facility for       
purposes of section #de,t1 as energy    
property for purposes of section #dh1 or
 as a qualified investment for purposes 
of section #dh;,a1 #dh;,b1 or #dh;,c1   
for any taxable year4  7#c7 ,point      
source ,for purposes of paragraph       
7#a77;,b71 the term point source means a

 megawatt-scale1 stationary and         
non-mobile1 identifiable source of      
emissions that releases pollutants into 
the atmosphere4  7d7 ,first of its kind 
technology  7#a7 ,in general ,in the    
case of any qualified emerging energy   
property which is the first of its kind1
 subsection 7a7 shall be applied by     
substituting #dj for #cj4  7#b7 ,first  
of its kind ,property shall be treated  
as the first of its kind if such        
property is #a of the first #c original 
demonstrations in the ,united ,states of
 a megawatt-scale electric power        
generation facility which generates     
revenue from sales of electric power to 
an unrelated person 7within the meaning 
of section #de7;e77#d774  7#c7          
,determination  7,a7 ,in general ,the   
,secretary1 in consultation with the    
,secretary of ,energy1 shall develop a  
process to determine whether qualified  
emerging energy property is first of its
 kind4 ,such process shall include a    
certification1 at the request of the    

taxpayer before the commencement of     
construction1 that the property will be 
treated as first of its kind4  7,b7     
,effective period of certification      
,except as provided by the ,secretary1 a
 certification granted under            
subparagraph 7,a7 with respect to any   
property shall be in effect for the     
period1 not to exceed #e years1         
beginning on the date of the            
certification and ending on the date    
construction commences with respect to  
the property4 ,if construction does not 
commence within the #e-year period      
beginning on the date of the            
certification1 the property shall not be
 treated as first of its kind unless the
 certification is renewed4  7e7         
,transfer of credit by certain public   
entities  7#a7 ,in general ,if1 with    
respect to a credit under subsection 7a7
 for any taxable year-- 7,a7 a qualified
 public entity would be the taxpayer    
7but for this paragraph71 and  7,b7 such
 entity elects the application of this  

paragraph for such taxable year with    
respect to all 7or any portion specified
 in such election7 of such credit1 the  
eligible project partner specified in   
such election1 and not the qualified    
public entity1 shall be treated as the  
taxpayer for purposes of this title with
 respect to such credit 7or such portion
 thereof74  7#b7 ,definitions ,for      
purposes of this subsection-- 7,a7      
,qualified public entity ,the term      
qualified public entity means--  7i7 a  
,federal1 ,state1 or local government   
entity1 or any political subdivision1   
agency1 or instrumentality thereof1     
7ii7 a mutual or cooperative electric   
company described in section            
#eja7;c77#ab7 or #acha7;a77#b71 or      
7iii7 a not-for-profit electric utility 
which had or has received a loan or loan
 guarantee under the ,rural             
,electrification ,act of #aicf4  7,b7   
,eligible project partner ,the term     
eligible project partner means any      
person who-- 7i7 is responsible for1 or 

participates in1 the design or          
construction of the qualified emerging  
energy property to which the credit     
under subsection 7a7 relates1  7ii7 is a
 financial institution providing        
financing for the construction or       
operation of such property 7other than  
financing provided in connection with   
becoming eligible for the credit under  
this section by reason of this          
subsection71 or  7iii7 has an ownership 
interest in such property4  7#c7        
,special rules  7,a7 ,application to    
partnerships ,in the case of a credit   
under subsection 7a7 which is determined
 at the partnership level--  7i7 for    
purposes of paragraph 7#a77;,a71 a      
qualified public entity shall be treated
 as the taxpayer with respect to such   
entity's distributive share of such     
credit1 and  7ii7 the term eligible     
project partner shall include any       
partner of the partnership4  7,b7       
,taxable year in which credit taken into
 account ,in the case of any credit 7or 

portion thereof7 with respect to which  
an election is made under paragraph     
7#a71 such credit shall be taken into   
account in the first taxable year of the
 eligible project partner ending with1  
or after1 the qualified public entity's 
taxable year with respect to which the  
credit was determined4  7,c7 ,treatment 
of transfer under private use rules ,for
 purposes of section #ada7;b77#a71 any  
benefit derived by an eligible project  
partner in connection with an election  
under this subsection shall not be taken
 into account as a private business use4
  7f7 ,certain rules not applicable     
,paragraphs 7#c7 and 7#d7 of section    
#ej7;d7 shall not apply for purposes of 
this section4  4  7b7 ,special rule for 
proceeds of transfers for mutual or     
cooperative electric companies ,section 
#eja7;c77#ab77;,i7 of such ,code is     
amended by inserting or #dh;,d7e7 after 
section #de;,j7e77#a74  7c7 ,conforming 
amendments  7#a7 ,section #df of such   
,code is amended by striking and at the 

end of paragraph 7#e71 by striking the  
period at the end of paragraph 7#f7 and 
inserting 1 and1 and by adding at the   
end the following new paragraph3  7#g7  
the emerging energy technology credit4  
4  7#b7 ,section #di7;a77#a77;,c7 of    
such ,code is amended by striking and at
 the end of clause 7iv71 by striking the
 period at the end of clause 7v7 and    
inserting 1 and1 and by adding at the   
end the following new clause3  7vi7 the 
basis of any qualified emerging energy  
property 7as defined in section         
#dh;,d7c77#a774  4  7#c7 ,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;,c the     
following new item3  ,sec4 #dh;,d4      
,emerging energy technology credit4  4  
7d7 ,effective date ,the amendments made
 by this section shall apply to property
 placed in service in taxable years     
beginning after the date of the         
enactment of this ,act1 under rules     

similar to the rules of section #dh7m7  
of the ,internal ,revenue ,code of #aihf
 7as in effect on the day before the    
date of the enactment of the ,revenue   
,reconciliation ,act of #aiij74  #d4    
,production credit for emerging energy  
technology  7a7 ,in general ,subpart ,d 
of part ,,iv of subchapter ,a of chapter
 #a of the ,internal ,revenue ,code of  
#aihf is amended by adding at the end   
the following new section3  #de,t4      
,electricity produced from emerging     
energy technology  7a7 ,general rule    
,for purposes of section #ch1 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--
  7#a7 the annual gross receipts of the 
taxpayer from the sale of electricity   
generated at the qualified production   
facility to an unrelated person 7within 

the meaning of section #de7;e77#d77     
during such taxable year1 or  7#b7 the  
product of-- 7,a7 the national average  
wholesale price of a kilowatt hour of   
electricity in the preceding taxable    
year1 as determined by the ,secretary in
 consultation with the ,administrator of
 the ,energy ,information               
,administration1 and  7,b7 the number of
 kilowatt hours of electricity produced 
at the qualified production facility and
 sold to an unrelated person 7within the
 meaning of section #de7;e77#d77 during 
the taxable year4  7b7 ,applicable      
percentage ,for purposes of subsection  
7a71 the applicable percentage is-- 7#a7
 in the case of a tier #a facility1 #fj 
percent1  7#b7 in the case of a tier #b 
facility1 #de percent1  7#c7 in the case
 of a tier #c facility1 #cj percent1 and
  7#d7 in the case of any other         
facility1 zero percent4  7c7 ,credit    
period ,for purposes of this section1   
the credit period with respect to any   
qualified production facility is the    

#aj-year period beginning with the date 
the facility was originally placed in   
service4  7d7 ,qualified production     
facility ,for purposes of this section--
 7#a7 ,in general ,the term qualified   
production facility means any electric  
generating facility which is certified  
by the ,secretary1 which is located in  
the ,united ,states or a possession of  
the ,united ,states 7as such terms are  
used in section #fch71 and which        
utilizes--  7,a7 any power conversion   
fuel-based technology which captures and
 sequesters at least #fj percent of the 
produced carbon oxide1  7,b7 any reactor
 design licensed by the ,nuclear        
,regulatory ,commission which produces  
electricity through nuclear fission or a
 fusion chain reaction and which--  7i7 
reduces the high-level radioactive waste
 or spent nuclear fuel per unit of      
energy yield1  7ii7 improves fuel       
utilization by not less than #bj        
percent1  7iii7 decreases core damage   
frequency or large early release        

frequency by at least a factor of #aj1  
or  7iv7 increases thermal efficiency by
 not less than #bj percent1 as compared 
to existing nuclear commercial          
technologies1  7,c7 any new technology  
or new improvement to technology which  
generates electricity from renewable    
energy1 as defined in section           
#bjc7;b77#b7 of the ,energy ,policy ,act
 of #bjje1 and which generates at least 
a #bj-percent increase in the conversion
 efficiency or a #bj-percent increase in
 the capacity factor of the facility as 
compared with the commercial technology 
of the same type as such technology     
which is considered to be the best of   
its type in commercial use1  7,d7       
technology which the ,secretary1 in     
consultation with the ,secretary of     
,energy1 determines would increase the  
technical resource potential for        
renewable energy development in the     
,united ,states by at least #ejj        
terawatt hours per year1 or  7,e7       
technology which the ,secretary1 in     

consultation with the ,secretary of     
,energy1 determines could produce       
electricity with an emissions rate less 
than #aej;g ,co#b-;e per k,wh with a    
#ge-percent capacity factor4  7#b7      
,denial of double benefit ,such term    
shall not include any facility which has
 been treated as a qualified facility   
for purposes of section #de7;d71 as an  
advanced nuclear power facility for     
purposes of section #de;,j1 as a        
qualified facility for purposes of      
section #de,q1 as energy property for   
purposes of section #dh1 as a qualified 
investment for purposes of section      
#dh;,a1 #dh;,b1 or #dh;,c1 or as        
qualified emerging energy property for  
purposes of section #dh;,d1 for any     
taxable year4  7#c7 ,co#b-;e ,the term  
,co#b-;e means the quantity of a        
greenhouse gas that has a global warming
 potential equivalent to #a metric ton  
of carbon dioxide1 as determined under  
table ,a-#a of subpart ,a of part #ih of
 title #dj1 ,code of ,federal           

,regulations1 as in effect on the date  
of enactment of this section4  7#d7     
,conversion efficiency ,the term        
conversion efficiency means the         
fraction-- 7,a7 the numerator of which  
is the total useful electrical or       
thermal power produced by an electric   
generating facility at normal operating 
rates1 and expected to be consumed in   
its normal application1 and  7,b7 the   
denominator of which is the incident    
energy1 whether mechanical1 radiation1  
or thermal energy1 which is measurable  
at the input of the electric generating 
facility4  7#e7 ,energy efficiency ,the 
efficiency of an electric generating    
facility is the fraction-- 7,a7 the     
numerator of which is the total useful  
electrical1 thermal1 and mechanical     
power which is produced by the facility 
at normal operating rates and expected  
to be consumed in its normal operation1 
and  7,b7 the denominator of which is   
the lower heating value of the energy   
sources for the facility4  7#f7         

,performance baseline ,not less         
frequently than every #aj years1 the    
,secretary1 in consultation with the    
,secretary of ,energy1 shall establish  
baseline levels with respect to the     
types of electric generating facilities 
and the measures of performance         
described in paragraph 7#a7 which a     
facility must exceed in order to meet   
the requirements of such paragraph4     
7#g7 ,commercial technology ,the term   
commercial technology means a design    
that has been installed in and is being 
used in #c or more projects in the      
,united ,states marketplace in the same 
general application as in the electric  
generating facility1 and has been in    
such use in at least #a of such projects
 for a period of at least #e years4     
7#h7 ,core damage frequency ,the term   
core damage frequency means the         
likelihood that1 given the way a reactor
 is designed and operated1 an accident  
could cause the fuel in the reactor to  
be damaged4  7#i7 ,large early release  

frequency ,the term large early release 
frequency means the likelihood of a     
release into the environment of a       
sufficiently large quantity of fission  
products in an early enough time frame  
to have the potential for a prompt      
fatality4  7#aj7 ,gross recoverable     
resource potential ,the term gross      
recoverable resource potential means the
 subset of total resource potential for 
any given renewable energy resource     
within the boundaries of the ,united    
,states economic exclusion zone that can
 be considered theoretically recoverable
 without allowing for common            
technological constraints that exist as 
of the most recent date on which the    
,secretary has established baseline     
levels described in paragraph 7#f74     
7#aa7 ,technical resource potential ,the
 term technical resource potential means
 the subset of gross recoverable        
resource potential for any given        
renewable energy resource that can be   
considered recoverable under available  

technological performance conditions as 
of the date of the enactment of this    
section while considering land-use and  
environmental siting constraints4  7e7  
,facility ,tiers  7#a7 ,tier #a facility
 ,the term tier #a facility means an    
electric generating facility using a    
type of technology which accounts for   
less than #a percent of annual domestic 
electricity production in the preceding 
taxable year1 as determined by the      
,secretary on the basis of data reported
 by the ,energy ,information            
,administration4  7#b7 ,tier #b facility
 ,the term tier #b facility means an    
electric generating facility using a    
type of technology which accounts for at
 least #a percent but less than #b      
percent of annual domestic electricity  
production in the preceding taxable     
year1 as determined by the ,secretary on
 the basis of data reported by the      
,energy ,information ,administration4   
7#c7 ,tier #c facility ,the term tier #c
 facility means an electric generating  

facility using a type of technology     
which accounts for at least #b percent  
but less than #c percent of annual      
domestic electricity production in the  
preceding taxable year1 as determined by
 the ,secretary on the basis of data    
reported by the ,energy ,information    
,administration4  7f7 ,transfer of      
credit by certain public entities ,rules
 similar to the rules of subsection 7e7 
of section #dh;,d shall apply for       
purposes of this section4  7g7          
,regulations  7#a7 ,in general ,not     
later than #a year after the date of the
 enactment of this section1 the         
,secretary shall prescribe such         
regulations as may be necessary or      
appropriate to carry out the purposes of
 this section4 ,such regulations shall  
include a process for making eligibility
 certifications described in subsection 
7d77#a77;,e74  7#b7 ,certification ,the 
regulations developed under paragraph   
7#a7 shall include a certification      
process under which the ,secretary1 in  

consultation with the ,secretary of     
,energy1 determines the eligibility of  
facilities for purposes of subsection   
7d77#a74  4  7b7 ,credit allowed as part
 of general business credit ,section    
#ch7;b7 of the ,internal ,revenue ,code 
of #aihf is amended by striking plus at 
the end of paragraph 7#ca71 by striking 
the period at the end of paragraph 7#cb7
 and inserting 1 plus1 and by adding at 
the end the following new paragraph3    
7#cc7 the emerging energy technology    
production credit determined under      
section #de,t7a74  4  7c7 ,special rule 
for proceeds of transfers for mutual or 
cooperative electric companies ,section 
#eja7;c77#ab77;,i7 of such ,code1 as    
amended by the preceding provisions of  
this ,act1 is amended by striking or    
#dh;,d7e7 and inserting 1 #de,t7f71 or  
#dh;,d7e74  7d7 ,clerical amendment ,the
 table of sections for subpart ,d of    
part ,,iv of subchapter ,a of chapter #a
 of the ,internal ,revenue ,code of     
#aihf is amended by adding at the end   

the following new item3  ,sec4 #de,t4   
,electricity produced from emerging     
energy technology4  4  7e7 ,effective   
date ,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 ,act1 at facilities   
placed in service after such date of    
enactment4  #e4 ,energy credit for      
energy storage technologies  7a7 ,in    
general ,section #dh7;a77#b77;,a77i7 of 
the ,internal ,revenue ,code of #aihf is
 amended by striking and at the end of  
subclause 7,,iii7 and by inserting after
 subclause 7,,iv7 the following new     
subclause3  7,v7 energy property        
described in paragraph 7#c77;,a77viii71 
and  4  7b7 ,energy storage technologies
 ,section #dh7;a77#c77;,a7 of such ,code
 is amended by striking or at the end of
 clause 7vi71 by adding or at the end of
 clause 7vii71 and by adding at the end 
the following new clause3  7viii7       
equipment which receives1 stores1 and   

delivers energy using batteries1        
compressed air1 pumped hydropower1      
hydrogen storage 7including hydrolysis71
 thermal energy storage1 regenerative   
fuel cells1 flywheels1 capacitors1      
superconducting magnets1 or other       
technologies identified by the          
,secretary1 in consultation with the    
,secretary of ,energy1  4  7c7 ,national
 limitation relating to energy storage  
property ,section #dh7;a77#e7 of such   
,code is amended by adding at the end   
the following new subparagraph3  7,f7   
,national limitation relating to energy 
storage property  7i7 ,in general ,the  
amount of credit which 7but for this    
subsection7 would be allowed with       
respect to all equipment described in   
subsection 7a77#c77;,a77viii7 for any   
taxable year shall not exceed the       
national megawatt capacity limitation   
for energy storage property allocated to
 the project of which such equipment is 
a part4  7ii7 ,amount of national credit
 limitation  7,i7 ,in general ,the      

aggregate amount of national megawatt   
capacity limitation allocated to        
projects under clause 7i7 shall not     
exceed #bj1jjj megawatts4  7,,ii7       
,limitation on lithium ion electric     
storage batteries ,the ,secretary shall 
ensure that not more than #ae1jjj       
megawatts of the national megawatt      
capacity limitation are allocated to    
projects for lithium ion electric       
storage batteries1 in an effort to      
facilitate the deployment of a diverse  
suite of technological designs4  7iii7  
,allocation  7,i7 ,establishment of     
program ,not later than #ahj days after 
the date of enactment of this           
subparagraph1 the ,secretary1 in        
consultation with the ,secretary of     
,energy1 shall develop a process to     
allocate national megawatt capacity     
limitation under this subparagraph4     
7,,ii7 ,applications ,each applicant for
 allocations under this subparagraph    
shall submit an application to the      
,secretary4 ,the ,secretary shall issue 

a determination as whether an applicant 
has been allocated national megawatt    
capacity limitation not later than #fj  
days after the date of the submission of
 a completed application under this     
subclause4  7,,iii7 ,time limit on      
beginning and completing construction   
,an allocation of national megawatt     
capacity limitation under this clause   
shall be void unless the taxpayer begins
 construction of the project not later  
than the date which is #a year after the
 date on which such allocation is made  
and completes construction of such      
project not later than the date which #e
 years after the date on which such     
construction begins4  7,,iv7            
,reallocation of unused limitation ,the 
,secretary shall reallocate national    
megawatt capacity limitation 7and such  
reallocation shall not be taken into    
account in applying the limitation of   
clause 7ii77,i77 to the extent that any 
allocation is void under subclause      
7,,iii7 or to the extent that the credit

 attributable to such allocation is     
recaptured under section #ej7;a74  4    
7d7 ,transfer of energy storage property
 credit by certain public entities      
,section #dh of such ,code is amended by
 adding at the end the following new    
subsection3  7e7 ,transfer of energy    
storage property credit by certain      
public entities ,in the case of any     
property described in subsection        
7a77#c77;,a77viii71 rules similar to the
 rules of subsection 7e7 of section     
#dh;,d shall apply for purposes of this 
section4  4  7e7 ,effective date ,the   
amendments made by this section shall   
apply to property placed in service in  
taxable years beginning after the date  
of the enactment of this ,act1 under    
rules similar to the rules of section   
#dh7m7 of the ,internal ,revenue ,code  
of #aihf 7as in effect on the day before
 the date of the enactment of the       
,revenue ,reconciliation ,act of #aiij74