,,ii #aagth ,,congress #ast ,session ,s4 #ahjg ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,may #be1 #bjba,mr4 ,carper introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to provide for a production and investment tax credit related to the production of clean hydrogen4 #a4 ,short title ,this ,act may be cited as the ,clean ,h#b ,production ,act4 #b4 ,tax credit for production of clean hydrogen 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,u4 ,credit for production of clean hydrogen 7a7 ,amount of credit ,for purposes of section #ch1 the clean hydrogen production credit for any taxable year is an amount equal to the product of-- 7#a7 the applicable amount1 multiplied by 7#b7 the kilograms of qualified clean hydrogen-- 7,a7 produced by the taxpayer at a qualified clean hydrogen production facility during the #aj-year period beginning on the date the facility was placed in service1 and 7,b7 7i7 sold by the taxpayer to an unrelated person during the taxable year1 7ii7 used by the taxpayer or a related person during the taxable year1 or 7iii7 stored during the taxable year for subsequent use by the taxpayer or a related person4 7b7 ,applicable amount 7#a7 ,in general ,for purposes of subsection 7a77#a71 the applicable amount shall be an amount equal to the applicable percentage of #c4jj4 ,if any amount as determined under the preceding sentence is not a multiple of #j4a cent1 such amount shall be rounded to the nearest multiple of #j4a cent4 7#b7 ,applicable percentage ,for purposes of paragraph 7#a71 the term applicable percentage means-- 7,a7 in the case of any qualified clean hydrogen which is produced through a process that1 as compared to hydrogen produced by steam-methane reforming1 achieves a percentage reduction in lifecycle greenhouse gas emissions which is less than #ge percent1 #bj percent1 7,b7 in the case of any qualified clean hydrogen which is produced through a process that1 as compared to hydrogen produced by steam-methane reforming1 achieves a percentage reduction in lifecycle greenhouse gas emissions which is not less than #ge percent and less than #he percent1 #be percent1 7,c7 in the case of any qualified clean hydrogen which is produced through a process that1 as compared to hydrogen produced by steam-methane reforming1 achieves a percentage reduction in lifecycle greenhouse gas emissions which is not less than #he percent and less than #ie percent1 #cd percent1 and 7,d7 in the case of any qualified clean hydrogen which is produced through a process that1 as compared to hydrogen produced by steam-methane reforming1 achieves a percentage reduction in lifecycle greenhouse gas emissions which is not less than #ie percent1 #ajj percent4 7#c7 ,inflation adjustment ,the #c4jj amount in paragraph 7#a7 shall be adjusted by multiplying such amount by the inflation adjustment factor 7as determined under section #de7;e77#b71 determined by substituting #bjbj for #aiib in subparagraph 7,b7 thereof7 for the calendar year in which the sale or use of the qualified clean hydrogen occurs4 ,if any amount as increased under the preceding sentence is not a multiple of #j4a cent1 such amount shall be rounded to the nearest multiple of #j4a cent4 7c7 ,credit reduction ,the amount of the credit determined under subsection 7a7 with respect to any qualified clean hydrogen production facility for any taxable year shall be reduced in a manner similar to the reduction applied under section #de7;b77#c74 7d7 ,definitions ,for purposes of this section-- 7#a7 ,lifecycle greenhouse gas emissions ,for purposes of this section1 the term lifecycle greenhouse gas emissions has the same meaning given such term under subparagraph 7,h7 of section #baa7o77#a7 of the ,clean ,air ,act 7#db ,u4,s4,c4 #gede7o77#a771 as in effect on the date of enactment of this section1 as related to the full fuel lifecycle through the point of hydrogen production4 7#b7 ,qualified clean hydrogen 7,a7 ,in general ,the term qualified clean hydrogen means hydrogen which is produced through a process that1 as compared to hydrogen produced by steam-methane reforming of non-renewable natural gas1 achieves a percentage reduction in lifecycle greenhouse gas emissions which is not less than #ej percent4 7,b7 ,exclusion ,the term qualified clean hydrogen shall not include any hydrogen for which a credit is allowed for the taxable year-- 7i7 under section #ch which is properly allocable to any credit determined under this part 7other than this section71 or 7ii7 under subchapter ,b of chapter #fe of subtitle ,f4 7#c7 ,qualified clean hydrogen production facility 7,a7 ,in general ,the term qualified clean hydrogen production facility means-- 7i7 a facility owned by the taxpayer-- 7,i7 which produces qualified clean hydrogen which1 with respect to any taxable year1 is sold by the taxpayer to an unrelated person or used by the taxpayer1 7,,ii7 which satisfies the requirements under subparagraphs 7,b7 and 7,c71 and 7,,iii7 the construction of which begins before ,january #a1 #bjcj1 and 7ii7 in connection with any facility described in clause 7i71 any property used to convert feedstock to hydrogen1 including any equipment or supporting facility which-- 7,i7 accepts or receives feedstock1 7,,ii7 conditions or stores feedstock or hydrogen1 or 7,,iii7 distributes or redistributes hydrogen4 7,b7 ,wage requirements ,the requirements described in this subparagraph with respect to any facility are that the taxpayer shall ensure that any laborers and mechanics employed by contractors and subcontractors in-- 7i7 the construction of such facility1 or 7ii7 for any year during the period described in subsection 7a77#b77;,a7 which begins after the date of the enactment of this section1 the alteration or repair of such facility1 shall be paid wages at rates not less than the prevailing rates for construction1 alteration1 or repair of a similar character in the locality as determined by the ,secretary of ,labor1 in accordance with subchapter ,,iv of chapter #ca of title #dj1 ,united ,states ,code4 7,c7 ,labor requirements 7i7 ,apprenticeships ,the requirements described in this subparagraph with respect to any facility are that the taxpayer shall ensure that all contractors and subcontractors engaged in the performance of construction1 alteration1 or repair work on any facility shall1 subject to clause 7ii71 ensure that not less than #ae percent of the total labor hours of such work be performed by qualified apprentices4 7ii7 ,apprentice-to-journeyworker ratio ,the requirement under clause 7i7 shall be subject to any applicable requirements for apprentice-to-journeyworker ratios of the ,department of ,labor or the applicable ,state apprenticeship agency4 7iii7 ,participation ,each contractor and subcontractor described in clause 7i7 that employs #d or more individuals to perform construction1 alteration1 or repair work on any facility shall employ #a or more qualified apprentices to perform such work4 7iv7 ,exception ,notwithstanding any other provision in this subparagraph1 this subparagraph shall not apply in the case of a taxpayer who-- 7,i7 demonstrates a lack of availability of qualified apprentices in the geographic area of the construction1 alteration1 or repair work1 and 7,,ii7 makes a good faith effort1 and its contractors and subcontractors make a good faith effort1 to comply with the requirements of this subparagraph4 7#d7 ,steam-methane reforming ,the term steam-methane reforming means a hydrogen production process in which high-temperature steam is used to produce hydrogen from natural gas1 without carbon capture and sequestration4 7e7 ,special rules 7#a7 ,in general ,rules similar to the rules of paragraphs 7#c7 and 7#d7 of section #de7;e7 shall apply for purposes of this section4 7#b7 ,production in the ,united ,states ,no credit shall be allowed under this section with respect to any qualified clean hydrogen which is produced outside of the ,united ,states 7as defined in section #fch7a7 or any possession of the ,united ,states 7as defined in section #fch7b774 7f7 ,guidance ,not later than #a year after the date of enactment of this section1 the ,secretary1 in consultation with the ,secretary of ,energy and ,administrator of the ,environmental ,protection ,agency1 shall publish guidance prescribing methods for determining the credit based on lifecycle greenhouse gas emissions4 ,for purposes of the preceding sentence1 such methods shall consider the emissions associated with any feedstock or energy source which is not co-located at the qualified clean hydrogen production facility if-- 7#a7 such feedstock or energy source is contractually obtained by the taxpayer1 7#b7 the taxpayer provides sufficient legal assurances that no other person can claim credit for the environmental attributes of such feedstock or energy source1 and 7#c7 environmental attributes of the non co-located feedstock or energy source are only considered to the extent the taxpayer consumes an equivalent amount of the feedstock or energy source in the production of hydrogen1 whereas-- 7,a7 in the case of electricity used to produce hydrogen then only an equivalent amount of electricity which is not co-located may be considered1 and 7,b7 in the case of natural gas used to produce hydrogen then only an equivalent amount of biogas which is not co-located may be considered4 4 7b7 ,conforming amendments 7#a7 ,section #ch7;b7 of the ,internal ,revenue ,code of #aihf is amended-- 7,a7 in paragraph 7#cb71 by striking plus at the end1 7,b7 in paragraph 7#cc71 by striking the period at the end and inserting 1 plus1 and 7,c7 by adding at the end the following new paragraph3 7#cd7 the clean hydrogen production credit determined under section #de,u7a74 4 7#b7 ,the table of sections for subpart ,d of part ,,iv of subchapter ,a of chapter #a of such ,code is amended by adding at the end the following new item3 ,sec4 #de,u4 ,credit for production of clean hydrogen4 4 7c7 ,effective date ,the amendments made by this section shall apply to hydrogen used or sold after ,december #ca1 #bjbj4 #c4 ,expansion of energy credit to include clean hydrogen production facilities 7a7 ,in general ,section #dh7;a77#e7 of the ,internal ,revenue ,code of #aihf is amended-- 7#a7 in subparagraph 7,a77ii71 by inserting subject to subparagraph 7,g77i71 before the energy percentage1 7#b7 in subparagraph 7,b71 by inserting or #de,u after section #de1 7#c7 in subparagraph 7,c7-- 7,a7 in clause 7i71 by inserting or1 subject to subparagraph 7,g77ii71 a qualified clean hydrogen production facility 7as defined in section #de,u7d77#c77 which meets the requirements of section #de,u7b77#b77;,c7 after section #de7;d71 7,b7 in clause 7ii71 by inserting 7or1 in the case of a qualified clean hydrogen production facility1 which is placed in service after #bjbj and the construction of which begins before ,january #a1 #bjcj7 after ,january #a1 #bjbb1 and 7,c7 in clause 7iii77,i71 by inserting or #de,u after section #de1 and 7#d7 by adding at the end the following3 7,g7 ,qualified clean hydrogen production facilities 7i7 ,energy percentage 7,i7 ,in general ,for purposes of subparagraph 7,a77ii71 in the case of a qualified investment credit facility which is a qualified clean hydrogen production facility1 the energy percentage with respect to such facility shall be an amount 7expressed as a percentage7 equal to-- 7aa7 in the case of a facility which is estimated to produce qualified clean hydrogen 7as defined in described in section #de,u7d77#b77 which is described in subparagraph 7,a7 of section #de,u7b77#b71 #bj percent of the energy percentage otherwise applicable under subparagraph 7,a77ii71 7bb7 in the case of a facility which is estimated to produce qualified clean hydrogen which is described in subparagraph 7,b7 of section #de,u7b77#b71 #be percent of the energy percentage otherwise applicable under subparagraph 7,a77ii71 7cc7 in the case of a facility which is estimated to produce qualified clean hydrogen which is described in subparagraph 7,c7 of section #de,u7b77#b71 #cd percent of the energy percentage otherwise applicable under subparagraph 7,a77ii71 and 7dd7 in the case of a facility which is estimated to produce qualified clean hydrogen which is described in subparagraph 7,d7 of section #de,u7b77#b71 #ajj percent of the energy percentage otherwise applicable under subparagraph 7,a77ii74 7,,ii7 ,recapture ,the ,secretary shall1 by regulations1 provide for recapturing the benefit of any credit allowable under this section with respect to any qualified clean hydrogen production facility which significantly fails to produce qualified clean hydrogen consistent with the applicable percentage reduction in lifecycle greenhouse gas emissions described in section #de,u7b77#b7 which were estimated for such facility pursuant to subclause 7,i74 7ii7 ,no double benefit ,for purposes of this paragraph1 the term qualified investment credit facility shall not include any qualified clean hydrogen production facility for which a credit is allowed under section #ch for the taxable year or any prior taxable year which is properly allocable to any credit determined under-- 7,i7 this section 7other than pursuant to this paragraph71 or 7,,ii7 section #de1 #de;,j1 or #de,q4 4 7b7 ,effective date ,the amendments made by this section shall apply to property placed in service after ,december #ca1 #bjbj4