,,ii #aaith ,,congress #ast ,session ,s4 #ahdb ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,may #ba1 #bjbe,mr4 ,whitehouse 7for himself and ,mr4 ,schiff7 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 create a credit for carbon removal and storage for forest residues from wildfire management4 #a4 ,short title ,this ,act may be cited as the ,wildfire ,reduction and ,carbon ,removal ,act of #bjbe4 #b4 ,credit for forest residue carbon removal and storage 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;,,bb4 ,forest residue carbon removal and storage 7a7 ,general rule ,for purposes of section #ch1 the forest residue carbon removal and storage credit for any taxable year is an amount equal to the applicable dollar amount per metric ton of qualified carbon dioxide equivalent which is-- 7#a7 captured by the taxpayer from qualified forest residue biomass using biomass equipment which was originally placed in service at a qualified forest residue biomass carbon removal and storage project on or after the date of the enactment of the ,wildfire ,reduction and ,carbon ,removal ,act of #bjbe1 and 7#b7 stored by the taxpayer in secure geological storage or via long-duration utilization4 7b7 ,applicable dollar amount ,for purposes of this section-- 7#a7 ,in general ,the applicable dollar amount is-- 7,a7 #cf1 in the case of qualified carbon dioxide equivalent stored in secure geological storage1 and 7,b7 #ab1 in the case of qualified carbon dioxide equivalent stored via long-duration utilization4 7#b7 ,adjustment for inflation ,in the case of any taxable year beginning in a calendar year after #bjbf1 the #cf and #ab amounts under paragraph 7#a7 shall each be multiplied by the inflation adjustment factor determined under section #dc7;b77#c77;,b7 for such calendar year1 determined by substituting #bjbe for #aiij4 7#c7 ,increased credit amount for certain facilities 7,a7 ,in general ,in the case of qualified carbon dioxide equivalent which is described in subsection 7a77#a7 and which meets the requirements of paragraphs 7#c7 and 7#d7 of section #de,q7h7 7determined after application of the modifications described in subparagraph 7,b771 the amount applicable shall be equal to such amount 7determined without regard to this paragraph7 multiplied by #e4 7,b7 ,modifications ,the modifications described in this subparagraph are as follows3 7i7 ,in section #de,q7h77#c77;,a71 the term qualified forest residue biomass carbon removal and storage project shall be substituted for qualified facility each place it appears1 and such project shall be substituted for such facility each place it appears4 7ii7 ,in section #de,q7h77#c77;,a71 the term biomass equipment shall be substituted for carbon capture equipment in the matter before subparagraph 7,a74 7iii7 ,in section #de,q7h77#c77;,a77ii71 by disregarding the phrase for any portion of such taxable year which is within the period described in paragraph 7#c77;,a7 or 7#d77;,a7 of subsection 7a74 7c7 ,installation of additional biomass system equipment at existing project ,in the case of a qualified forest residue biomass carbon removal and storage project placed in service before the date of the enactment of the ,wildfire ,reduction and ,carbon ,removal ,act of #bjbe at which additional biomass equipment is placed in service on or after the date of the enactment of such ,act1 the amount of captured qualified carbon dioxide equivalent taken into account for purposes of subsection 7a7 is an amount 7not less than zero7 equal to the excess of-- 7#a7 the total amount of qualified carbon dioxide equivalent captured at such project for the taxable year1 over 7#b7 the total amount of the carbon dioxide equivalent capture capacity of the qualified forest residue biomass project in service at such project on the day before the date of the enactment of such ,act4 7d7 ,qualified carbon dioxide equivalent ,for purposes of this section1 the term qualified carbon dioxide equivalent means the net metric tons of carbon dioxide equivalent which-- 7#a7 is captured through the disposal or utilization of the carbon embodied in qualified forest residue biomass1 and 7#b7 is measured and verified at the point of disposal or utilization based on1 in accordance with the rules of subsection 7f7-- 7,a7 project-level lifecycle analysis of greenhouse gas emissions1 and 7,b7 project-level monitoring1 reporting1 and verification4 7e7 ,qualified forest residue biomass carbon removal and storage project ,for purposes of this section-- 7#a7 ,in general 7,a7 ,in general ,the term qualified forest residue biomass carbon removal and storage project means any project which-- 7i7 uses biomass equipment to store qualified carbon dioxide equivalent in secure geological storage or via long-duration utilization1 and 7ii7 stores not less than #a1jjj metric tons of qualified carbon dioxide equivalent as described in clause 7i7 during the taxable year4 7,b7 ,aggregation of facilities ,the term qualified forest residue biomass carbon removal and storage project may include multiple facilities which may be aggregated in order to meet the requirement of subparagraph 7,a77ii74 7#b7 ,qualified forest residue biomass ,the term qualified forest residue biomass means forest residues from the thinning of trees no greater than #h inches in diameter at breast height and other residues 7such as limbs and bark7 which-- 7,a7 meet sustainability standards issued pursuant to section #b7;f7 of the ,wildfire ,reduction and ,carbon ,removal ,act of #bjbe1 and 7,b7 are produced from wildfire hazard reduction or ecological restoration activities identified-- 7i7 in a final ,united ,states ,forest ,service ,land ,management ,plan or ,bureau of ,land ,management ,resource ,management ,plan1 or 7ii7 by the ,united ,states ,forest ,service as occurring in firesheds with significant wildfire hazard potential and vegetation departure4 7f7 ,other definitions and special rules ,for purposes of this section-- 7#a7 ,secure geological storage ,carbon dioxide equivalent shall be treated as stored in secure geological storage only if such carbon dioxide equivalent is stored in such wells or underground storage mechanisms1 including injection of bio-liquids or bio-solids or engineered burial of biomass1 appropriate to the type of biomass carbon removal as the ,secretary shall identify in consultation with the ,secretary of ,energy and the ,administrator of the ,environmental ,protection ,agency as having demonstrated the capability to store such carbon dioxide equivalent securely for at least a #a1jjj-year period4 7#b7 ,long-duration utilization ,carbon dioxide equivalent shall be treated as stored via long-duration utilization if such carbon dioxide equivalent is stored in the form of biochar1 durable building materials1 or other products which remove carbon1 which are determined by the ,secretary in collaboration with the entities described in paragraph 7#a7 to have demonstrated the capability to store such carbon dioxide equivalent securely for at least a #ajj-year period1 as calculated based on a lifecycle analysis4 7#c7 ,biomass equipment ,the term biomass equipment means any equipment used at a qualified forest residue biomass carbon removal and storage project to dispose of qualified forest residue biomass4 7#d7 ,credit not allowed for enhanced recovery operations ,no credit shall be allowed under subsection 7a7 with respect to qualified carbon dioxide equivalent which is used by the taxpayer as a tertiary injectant in an enhanced oil or natural gas recovery project4 7#e7 ,coordination with other credits 7,a7 ,in general ,no credit shall be allowed under this section with respect to any qualifying carbon dioxide removal project for any taxable year for which a credit determined under section #de,q or #dh;,c is allowed for such taxable year4 7,b7 ,special rule for qualified carbon dioxide removal projects integrated with clean energy generation 7i7 ,in general ,in the case of any qualifying carbon dioxide removal project which produces electricity1 hydrogen1 or fuel as an output of its qualifying carbon dioxide removal approach1 no credit shall be allowed with respect to the production of such electricity1 hydrogen1 or fuel under section #dj;,b1 #de1 #de,v1 #de,y1 or #de,z unless such electricity1 hydrogen1 or fuel is consumed by such qualifying carbon dioxide removal project4 7ii7 ,energy credit and clean electricity investment credit ,in the case of any qualifying carbon dioxide removal project which includes-- 7,i7 any energy property 7as defined in section #dh7;a77#c77 which produces electricity or hydrogen from the process of carbon dioxide removal1 or 7,,ii7 any qualified facility 7as defined in section #dh;,e7b77#c77 which produces electricity or hydrogen from the process of carbon dioxide removal1 no credit shall be allowed under section #dh or #dh;,e with respect to such energy property or qualified facility4 7#f7 ,only qualified carbon dioxide equivalent captured and disposed of or used within the ,united ,states taken into account ,the credit under this section shall apply only with respect to qualified carbon dioxide equivalent the capture and storage or disposal of which is within-- 7,a7 the ,united ,states 7within the meaning of section #fch7a771 or 7,b7 a possession of the ,united ,states 7within the meaning of section #fch7b774 7#g7 ,credit attributable to taxpayer 7,a7 ,in general ,except as provided in subparagraph 7,b7 or in any regulations prescribed by the ,secretary1 any credit under this section shall be attributable to the person that owns the biomass equipment and physically or contractually ensures the capture and storage or disposal of the qualified carbon dioxide equivalent4 7,b7 ,election ,if the person described in subparagraph 7,a7 makes an election under this subparagraph in such time and manner as the ,secretary may prescribe by regulations1 the credit under this section-- 7i7 shall be allowable to the person that stores or disposes of the qualified carbon dioxide equivalent1 and 7ii7 shall not be allowable to the person described in subparagraph 7,a74 7#h7 ,recapture ,the ,secretary shall1 by regulations1 provide for recapturing the benefit of any credit allowable under subsection 7a7 with respect to any qualified carbon dioxide equivalent which ceases to be stored or disposed of in a manner consistent with the requirements of this section4 7#i7 ,credit reduced for tax-exempt bonds ,rules similar to the rule under section #de7;b77#c7 shall apply for purposes of this section4 7g7 ,guidance ,not later than ,january #a1 #bjbf1 the ,secretary shall issue guidance regarding implementation of this section1 including standards on qualified forest residue biomass and determination of net qualified dioxide equivalent removals under this section4 4 7b7 ,credit ,to be part of general business credit ,subsection 7b7 of section #ch of the ,internal ,revenue ,code of #aihf is amended by striking plus at the end of paragraph 7#dj71 by striking the period at the end of paragraph 7#da7 and inserting 1 plus1 and by adding at the end the following new paragraph3 7#db7 the forest residue carbon removal and storage credit determined under section #de;,,bb7a74 4 7c7 ,elective payment and transfer of credit 7#a7 ,elective payment ,subsection 7b7 of section #fdag of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new paragraph3 7#ac7 ,the forest residue carbon removal and storage credit determined under section #de;,,bb7a74 4 7#b7 ,transfer ,section #fdah7;f77#a77;,a7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following3 7xii7 ,the forest residue carbon removal and storage credit determined under section #de;,,bb7a74 4 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;,,bb4 ,forest residue carbon removal and storage4 4 7e7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjbe4 7f7 ,sustainability standards rulemaking and public comment period 7#a7 ,rulemaking authority ,the ,secretary of the ,treasury1 in consultation with the ,secretary of ,agriculture and the ,secretary of the ,interior1 shall issue regulations to establish sustainability standards for the identification of qualified forest residue biomass for purposes of the forest residue carbon removal and storage tax credit established by this section4 ,such regulations shall-- 7,a7 using the best available science1 including the #bjbc ,wildfire ,hazard ,potential map produced by the ,forest ,service ,fire ,modeling ,institute and the #bjbc ,vegetation ,condition ,class categorization produced by the ,landscape ,fire and ,resource ,management ,planning ,tools program1 identify firesheds with significant wildfire hazard potential and vegetation departure from a fire-adapted historical baseline from which qualified forest residue biomass can be sourced2 7,b7 identify regional and ecosystem-specific requirements to limit eligibility to practices and sites which-- 7i7 have minimal negative impacts on soil quality1 soil fertility1 soil erosion1 soil carbon sequestration1 and site productivity2 7ii7 have minimal negative impacts on biodiversity1 including soil microbiota1 plants1 and animals2 7iii7 have minimal negative impacts on water quality and hydrological functioning2 7iv7 have minimal impacts on reducing or displacing food production2 and 7v7 have minimal substitution for existing economic uses of forest products1 including considering reducing the maximum diameter of thinned trees considered to be qualified forest residue biomass2 and 7,c7 consider direct and indirect impacts of biomass sourcing and harvest4 7#b7 ,public comment requirement ,not later than #f months after the date of the enactment of this ,act1 the ,secretary of the ,treasury shall publish in the ,federal ,register proposed regulations that include sustainability standards for the forest residue carbon removal and storage tax credit4 7#c7 ,public comment period 7,a7 ,duration ,the ,secretary shall provide for a period of not less than #fj days after the date of publication of the proposed regulations during which the public may submit comments on the proposed regulations4 7,b7 ,consideration of comments ,the ,secretary shall consider all comments received during the public comment period before issuing final regulations4 7#d7 ,final regulations ,the ,secretary shall issue final regulations and establish sustainability standards for the carbon removal tax credit established under this section not later than #ij days after the close of the public comment period1 taking into account feedback from the public and stakeholders4 7#e7 ,consideration of revision ,every #e years1 the ,secretary shall provide for a public comment period to consider whether the sustainability standards should be updated to reflect latest science4 ,the ,secretary shall consider all comments received during the public comment period before determining whether to update the regulations under the same procedures as used to issue the original standards4 7g7 ,carbon determination rulemaking and public comment period 7#a7 ,rulemaking authority ,the ,secretary of the ,treasury1 in consultation with the ,secretary of ,energy and the ,administrator of the ,environmental ,protection ,agency1 shall issue regulations to establish greenhouse gas lifecycle analysis requirements and monitoring1 reporting1 and verification requirements to determine qualified carbon dioxide equivalent for the implementation of the forest residue carbon removal and storage tax credit established by this section4 ,these regulations shall seek to-- 7,a7 to the greatest extent possible1 identify best available tools1 models1 or default values for embodied or lifecycle emissions in order to facilitate consistency and comparability across qualified carbon dioxide removal approaches with respect to-- 7i7 project-level greenhouse gas lifecycle analysis2 7ii7 project-level monitoring1 reporting1 and verification2 and 7iii7 determination of net carbon dioxide removal2 7,b7 include reporting and verification requirements which facilitate transparency and evaluation of the net carbon dioxide removal claimed by the taxpayer2 and 7,c7 take into account best practices and requirements from other carbon dioxide removal accounting programs in order to minimize inefficiencies and conflicting procedures4 7#b7 ,lifecycle analysis ,under the proposed regulations1 the project-level greenhouse gas lifecycle analysis shall-- 7,a7 include all processes1 activities1 and greenhouse gas emissions associated with the capture1 storage1 and utilization of carbon dioxide equivalent1 including-- 7i7 any mass and energy inputs and outputs from raw or processed materials1 including biomass feedstock production1 manufacture1 processing1 transport1 storage1 use1 and disposal2 7ii7 direct land use change1 estimated indirect land use change1 and other ecosystem perturbations that affect carbon uptake of forests2 and 7iii7 long-term retention of carbon dioxide2 7,b7 only exclude any process from such analysis if such process does not significantly change the outcome of such analysis1 with such exclusion to be noted and justified2 7,c7 calculate net carbon dioxide equivalent removal1 including accounting for uncertainty associated with the estimate of net carbon dioxide removal and taking into account any estimated losses during carbon storage over a #ajj-year period2 and 7,d7 be consistent with the ,best ,practices for ,life ,cycle ,assessment of ,biomass ,carbon ,removal and ,storage ,technologies issued by the ,department of ,energy on ,january #ag1 #bjbe4 7#c7 ,monitoring1 reporting1 and verification ,under the proposed regulations1 the project-level monitoring1 reporting1 and verification shall-- 7,a7 develop traceability requirements to verify the source and proportion of qualified forest residue biomass used in a project2 7,b7 utilize independent third-party verifiers and protocols for monitoring1 reporting1 and verification2 7,c7 quantify uncertainty associated with measurements and the resulting estimate of net carbon dioxide removal2 and 7,d7 include requirements for continued monitoring of the qualified project for a period determined by the ,secretary1 in consultation with the ,secretary of ,energy and the ,administrator of the ,environmental ,protection ,agency1 to be appropriate4 7#d7 ,public comment requirement ,not later than #f months after the date of the enactment of this ,act1 the ,secretary of the ,treasury shall publish in the ,federal ,register proposed regulations that include lifecycle analysis and monitoring1 reporting1 and verification requirements for the forest residue carbon removal and storage tax credit4 7#e7 ,public comment period 7,a7 ,duration ,the ,secretary shall provide for a period of not less than #fj days after the date of publication of the proposed regulations during which the public may submit comments on the proposed regulations4 7,b7 ,consideration of comments ,the ,secretary shall consider all comments received during the public comment period before issuing final regulations4 7#f7 ,final regulations ,the ,secretary shall issue final regulations and establish lifecycle analysis and monitoring1 reporting1 and verification for the carbon removal tax credit established under this section not later than #ij days after the close of the public comment period1 taking into account feedback from the public and stakeholders4 7#g7 ,consideration of revision ,every #e years1 the ,secretary shall provide for a public comment period to consider whether the lifecycle analysis and monitoring1 reporting1 and verification requirements should be updated to reflect latest science4 ,the ,secretary shall consider all comments received during the public comment period before determining whether to update the regulations under the same procedures as used to issue the original requirements4 7h7 ,secure geological storage regulations ,the ,secretary of the ,treasury1 in consultation with the ,administrator of the ,environmental ,protection ,agency and the ,secretary of ,energy1 shall establish regulations for determining adequate security measures for the geological storage of qualified carbon dioxide equivalent in the form of injection of bio-liquids or bio-solids or engineered burial of biomass for purposes of section #de;,,bb of the ,internal ,revenue ,code of #aihf such that the qualified carbon dioxide equivalent does not escape into the atmosphere over a #a1jjj-year period4